Campbell v. Specialized Loan Servicing, LLC et al

Filing 22

AMENDED ORDER granting in part and denying in part 10 Motion to Dismiss for Failure to State a Claim. So Ordered by Judge Paul J. Barbadoro.(vln) Amended to correct the date the order was signed .

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Timothy J. Campbell
v.

Case No. 13-cv-278-PB
Opinion No. 2014 DNH 014

Specialized Loan Servicing,
LLC, et al.
MEMORANDUM AND ORDER
Timothy Campbell has sued the Bank of America, N.A., the
current holder of his mortgage note, and Specialized Loan
Servicing, LLC (“SLS”), his loan servicer.

Bank of America has

filed a motion to dismiss for failure to state a claim.

For the

reasons set forth in this Memorandum and Order, I grant the
motion to dismiss in part and deny it in part.

I.

BACKGROUND1

Campbell borrowed $50,000 from Countrywide Home Loans, Inc.
in 2006.

The note evidencing the loan is secured by a mortgage

on Campbell’s primary residence that names Mortgage Electronic
1

Unless otherwise specified, the background is taken from
Campbell’s complaint or from the note and mortgage attached to
Bank of America’s motion to dismiss. See Doc. Nos. 1-1, 10-2,
10-3. I consider the latter documents at this stage of
litigation because they are “documents central to the
plaintiff’s claim.” Worrall v. Fed. Nat. Mortg. Ass’n, 2013 DNH
158, 3 (quoting Rivera v. Centro Medico de Turabo, Inc., 575
F.3d 10, 15 (1st Cir. 2009)).

Registration Systems, Inc. (“MERS”) as mortgagee and states that
it is acting “as nominee for Lender.”

Countrywide failed in

2008 and the note was subsequently assigned to Bank of America.
The loan is currently being serviced by SLS.
For reasons that are not specified in the complaint,
defendants initiated foreclosure proceedings against Campbell in
2009 and 2010, but each sale was cancelled for unstated reasons.
Campbell is current on his mortgage and no further actions have
been taken with respect to the foreclosure.

Nevertheless,

defendants informed several credit reporting agencies that
Campbell had a foreclosure in his credit history.
Campbell complains about alleged irregularities with
respect to his loan agreement, including unexplained
fluctuations in a principal balance that currently exceeds
$47,000, although he “has no idea why it is so high after paying
it for seven years.”2

He claims that his monthly payments have

tripled and that defendants improperly obtained hazard insurance
on the property and passed the cost to him.

Campbell has

“repeatedly” requested an accounting, and he claims never to
have received a “legible, understandable and clear explanation”
2

Campbell’s loan agreement provides for adjustable rate loan of
10.125% and the possibility that the rate would increase to as
high as 17.125%. It has a term of thirty years with initial
monthly payments of $443.41. Doc. No. 10-2.
2

of how much he owes.
Campbell also alleges in general terms that defendants
mishandled his loan modification requests.

He claims that Bank

of America participated “half-heartedly” and without good faith
in government loan modification programs aimed at providing debt
relief to homeowners.

He also claims to be eligible for these

programs and to have submitted applications with supporting
documentation on numerous occasions, only to be told by
defendants that the paperwork was either never received or was
“lost.”
On May 13, 2013, Campbell filed suit in Cheshire County
Superior Court against SLS and Bank of America for declaratory
relief, an accounting, and an injunction barring the defendants
from foreclosing on his home.

He also seeks damages resulting

from adverse credit reporting regarding the foreclosure
proceedings.

Bank of America later removed the case to this

court and filed the present motion to dismiss.

II.

STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff
must make factual allegations sufficient to “state a claim to
relief that is plausible on its face.”

Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
3

U.S. 544, 570 (2007)).

A claim is facially plausible when it

pleads “factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.

The plausibility standard is not akin to a

‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”

Id.

(citations omitted).
In deciding a motion to dismiss, I employ a two-step
approach.

See Ocasio–Hernández v. Fortuño–Burset, 640 F.3d 1,

12 (1st Cir. 2011).

First, I screen the complaint for

statements that “merely offer legal conclusions couched as fact
or threadbare recitals of the elements of a cause of action.”
Id. (citations, internal quotation marks, and alterations
omitted).

A claim consisting of little more than “allegations

that merely parrot the elements of the cause of action” may be
dismissed.

Id.

Second, I credit as true all non-conclusory

factual allegations and the reasonable inferences drawn from
those allegations and then determine if the claim is plausible.
Id.

The plausibility requirement “simply calls for enough fact

to raise a reasonable expectation that discovery will reveal
evidence” of illegal conduct.

Twombly, 550 U.S. at 556.

The

“make-or-break standard” is that those allegations and
inferences, taken as true, “must state a plausible, not a merely
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conceivable, case for relief.”

Sepúlveda–Villarini v. Dep’t of

Educ., 628 F.3d 25, 29 (1st Cir. 2010); see Twombly, 550 U.S. at
555 (“Factual allegations must be enough to raise a right to
relief above the speculative level.”).

III.
A.

ANALYSIS

Entitlement to a Loan Modification
Campbell seeks a declaration that he has a right to a loan

modification under “terms previously proposed” by Bank of
America.

This court has consistently held that lenders

generally have no duty to modify loan terms absent express
contractual language to the contrary.

See, e.g., Moore v.

Mortg. Elec. Reg. Sys., Inc., 848 F. Supp. 2d 107, 130 (D.N.H.
2012); Gikas v. JPMorgan Chase Bank, N.A., 2013 DNH 057, 8;
Ruivo v. Wells Fargo Bank, N.A., No. 11-cv-466-PB, 2012 WL
5845452, at *3 (D.N.H. Nov. 19, 2012).

This is so because

“[p]arties are bound by the agreements they enter into and the
court will not . . . force a party to rewrite a contract so as
to avoid a harsh or inequitable result.”

Ruivo, 2012 WL 5845452

at *4 (citing Moore, 848 F. Supp. 2d at 130; Olbres v. Hampton
Co-op. Bank, 142 N.H. 227, 233 (1997)).

Campbell does not argue

that a contractual provision entitles him to a loan
modification.

Nor has he sufficiently pleaded a claim that any
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state or federal law gives him a statutory right to seek a
modification.

Accordingly, I dismiss his loan modification

claims against Bank of America.
B.

UDUCPA
Campbell next argues that defendants violated New

Hampshire’s Unfair, Deceptive or Unreasonable Collection
Practices Act (“UDUCPA”) by falsely reporting that he had
suffered a foreclosure.

UDUCPA states that “[n]o debt collector

shall collect or attempt to collect a debt in an unfair,
deceptive or unreasonable manner.”
C:2.

N.H. Rev. Stat. Ann. § 358-

Campbell asserts that Bank of America violated UDUCPA

section 358-C:3(III) by taking actions “which the debt collector
in the regular course of business does not take.”

Although

Campbell acknowledges that Bank of America twice initiated
foreclosure proceedings, he argues that his home was never
actually foreclosed upon.

By reporting a foreclosure to credit

agencies and refusing Campbell’s request to remove the
misinformation, Campbell’s argument goes, Bank of America
engaged in deceptive conduct in violation of UDUCPA.
The only argument Bank of America presents in support of
its motion to dismiss the UDUCPA claim is that the claim is
defective because it fails to sufficiently allege that Bank of
America falsely reported that Campbell had suffered a
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foreclosure.

According to Bank of America, Campbell’s complaint

alleges only that defendants reported that a foreclosure
proceeding had been commenced against Campbell.

Since Campbell

acknowledges in his complaint that defendants initiated a
foreclosure proceeding against him, Bank of America reasons,
his UDUCPA claim necessarily fails because its report was not
false.

I reject this argument because it is based on a

misreading of Campbell’s complaint.

Read generously, the

complaint alleges that Bank of America falsely reported that
Campbell had suffered a foreclosure - not merely that a
foreclosure proceeding had been commenced against him.

Since

Bank of America does not challenge the UDUCPA claim on any other
ground, I deny its motion to dismiss this count.
C.

CPA
Campbell also argues that Bank of America violated the New

Hampshire Consumer Protection Act (“CPA”) by (1) refusing his
loan modification requests with the “express intent and purpose”
to initiate foreclosure; and (2) entering into a contract with
Campbell while knowing that he would not be able to afford his
monthly payments.
Bank of America responds by invoking section 358-A:3(I) of
the New Hampshire Revised Statutes, which exempts from the CPA
“[t]rade or commerce that is subject to the jurisdiction of the
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bank commissioner . . . or federal banking or securities
regulators who possess the authority to regulate unfair or
deceptive trade practices.”

As a national bank, Bank of America

argues that it is subject to the comprehensive regulations of
the Office of the Comptroller of the Currency (“OCC”) and is
therefore exempt from the CPA’s requirements.
Business activities of national banks and their operating
subsidiaries are controlled by the National Bank Act (“NBA”) and
OCC regulations.

Atkins v. U.S. Bank Nat’l Ass’n, 2014 DNH 001,

7-8. (citing Watters v. Wachovia Bank, N.A., 550 U.S. 1, 6, 21
(2007)).

These business activities include real estate lending.

12 U.S.C. § 371.

National banks can make real estate loans

“without regard to state law limitations concerning,” among
other things, the terms of a loan, including “the circumstances
under which a loan may be called due and payable” and the
“processing, origination, servicing, sale or purchase of, or
investment or participation in, mortgages.”

12 C.F.R. §

34.4(a)(4, 10).

Bank of America is registered with the OCC as a

national bank.3

The OCC’s power to regulate national banks is

3

U.S. Dep’t of the Treasury, Office of the Comptroller of the
Currency, National Banks Active as of 11/30/2013,
http://www.occ.gov/topics/licensing/national-banklists/national-by-name-pdf.pdf (listing Bank of America as a
national bank).
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comprehensive, and the OCC “plainly has the authority to protect
consumers from the same kinds of fraudulent, deceptive, and
unfair practices that are targeted by the Consumer Protection
Act.”

Aubertin v. Fairbanks Capital Corp., 2005 DNH 021, 6

(citing OCC Advisory Letter, Guidance on Unfair or Deceptive
Acts or Practices, AL 2002-3, 2002 WL 521380 at * 2-3 (March 22,
2002)).

Bank of America invoked the OCC’s power in its motion

to dismiss, and cited relevant law to support its exemption
argument.
D.

It need do no more.

See Atkins, 2014 DNH 001, 8.

Misrepresentation
Campbell also asserts claims for intentional and negligent

misrepresentation, arguing that “neither [defendant] ever
seriously entertained” his loan modification applications.
Rather, they “intentionally misled” him into believing they
would consider his applications, then repeatedly “lost” the
applications with the goal of foreclosing on his home.
Claims asserting intentional or negligent representation
are subject to Federal Rule of Civil Procedure 9(b)’s heightened
pleading standard.

Moore, 848 F. Supp. 2d at 132.

As such, any

allegation “must specify the who, what, where, and when of the
allegedly false or fraudulent representations.”

Id.

Under New

Hampshire law, a plaintiff must show “that the representation
was made with knowledge of its falsity or with conscious
9

indifference to its truth.”

LeDoux v. JP Morgan Chase, N.A.,

No. 12-cv-260-JL, 2012 WL 5874314, at *11 (D.N.H. Nov. 20, 2012)
(citing Tessier v. Rockefeller, 162 N.H. 324, 332 (2011)).
Here, Campbell fails to plead his misrepresentation claims
with anything resembling the required specificity.

Aside from

generalities, he submits no evidence of any specific
representations by Bank of America.

He does not allege who made

particular statements or when they were made, and he makes only
general allegations as to content.

Campbell’s misrepresentation

claims thus fail due to lack of specificity.
E.

Interference with a Valid Business Relationship
Using the same general allegations as above, Campbell

alleges that each defendant “intentionally, recklessly and
negligently interfered with a valid business relationship
existing between” himself and the other defendant.

In essence,

he argues that Bank of America intentionally interfered with his
business relationship with SLS, and vice versa.
To assert such a claim against Bank of America, Campbell
must allege that (1) he had an economic relationship with SLS;
(2) Bank of America knew of this relationship; (3) Bank of
America intentionally and improperly interfered with the
relationship; and (4) Campbell was damaged by the interference.
See Johnson v. Capital Offset Co., Inc., No. 11-cv-459-JD, 2013
10

WL 3930694, at *3 (D.N.H. Jul. 30, 2013) (citing Singer Asset
Fin. Co., LLC v. Wyner, 156 N.H. 468, 478 (2007)).

Any such

interference must be motivated by an improper purpose.

Id.

(citing Nat’l Emp’t Serv. Corp. v. Olsten Staffing Serv., Inc.,
145 N.H. 158, 162 (2000)).
Campbell alleges no facts that would permit a plausible
inference that Bank of America intentionally and improperly
interfered with his business relationship with SLS.

This is a

threadbare recital that fails to state a viable claim for
relief.
F.

See Ocasio-Hernandez, 640 F.3d at 12.

Request for Accounting
Campbell requests that SLS and Bank of America “provide an

accurate, complete and current accounting of his entire payment
history on the mortgage,” including disbursements from escrow
for tax, insurance, and other payments made on his behalf.

He

also requests that I issue a declaratory judgment of the amount
he owes on the mortgage.

Campbell alleges that he “repeatedly

requested an accounting of his payment history on the mortgage
and an accounting of his disbursements made from escrow, yet he
has not received legible, understandable and clear explanation

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as to applications of the payments he has made and the
disbursements from his account that have been made on his
behalf.”

Bank of America allots a mere footnote to this

allegation, arguing, without providing supporting authority,
that only the current servicer, SLS, is able to provide a full
accounting.
Any accounting obligations that SLS conceivably owes to
Campbell are derivative of Bank of America’s contractual
obligations as note holder.

I thus reject Bank of America’s

challenge to Campbell’s request for an accounting.

For similar

reasons, I deny Bank of America’s motion to dismiss Campbell’s
request for declaratory relief stating the amount he owes on the
mortgage.

IV.

CONCLUSION

For the reasons discussed above, I grant Bank of America’s
motion to dismiss (Doc. No. 10) with respect to all of
Campbell’s claims against Bank of America except his claim for a
declaratory judgment stating the amount he owes on his loan
(Count I), an accounting (Count II), and his UDUCPA claim (Count
III).

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SO ORDERED.
/s/Paul Barbadoro
Paul Barbadoro
United States District Judge
January 23, 2014
cc:

Timothy J. Campbell, pro se
Michael P. Robinson, Esq.
John Harold McCann, Esq.
Thomas J. Pappas, Esq.

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