Burke, III v. Wells Fargo Bank. N.A., Trustee
Filing
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///ORDER granting with prejudice 11 Motion to Dismiss. Clerk is directed to enter judgment in favor of Wells Fargo and to close the case. So Ordered by Judge Landya B. McCafferty.(gla)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
John C. Burke, III
v.
Civil No. 14-cv-326-LM
Opinion No. 2015 DNH 091
Wells Fargo Bank, N.A., as
Trustee on behalf of the holders
of Harborview Mortgage Loan PassThrough Certificates 2006-12
ORDER
The above-captioned matter involves a foreclosure dispute
between the plaintiff, John C. Burke, III, and the defendant,
Wells Fargo Bank, N.A. (“Wells Fargo”).
Wells Fargo has filed a
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6).
For the reasons that follow, Wells Fargo’s motion is
granted, and the case is dismissed with prejudice.
Background
I.
Factual Allegations1
Pursuant to a 2006 loan agreement, Mr. Burke granted a
mortgage on his home in Derry, New Hampshire to Mortgage
The facts are summarized from Mr. Burke’s Amended
Complaint in Plea of Title and for Other Equitable Relief and
Damages (doc. no. 10), as well as the exhibits attached thereto.
See Trans-Spec Truck Serv. v. Caterpillar, Inc., 524 F.3d 315,
321 (1st Cir. 2008) (noting that “[e]xhibits attached to the
complaint are properly considered part of the pleading”). Mr.
Burke is proceeding pro se, and thus the court construes his
Amended Complaint liberally. Erikson v. Pardus, 551 U.S. 89, 94
(2007) (per curiam).
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Electronic Registration Systems, Inc. (“MERS”).2
At some point
after 2006, MERS assigned the mortgage to Bank of America.
Then, on March 7, 2012, Bank of America assigned it to Wells
Fargo.
After Mr. Burke defaulted on the loan agreement, Wells
Fargo foreclosed on the property and sold it to itself at a
public auction in February of 2013.
Approximately a year later,
Wells Fargo recorded the foreclosure deed in the Rockingham
County Registry of Deeds, along with an affidavit, as required
by New Hampshire law.
See N.H. Rev. Stat. Ann. § 479:26(I).
Both the foreclosure deed and the accompanying affidavit
were executed by Select Portfolio Servicing, Inc. (“Select
Portfolio”), which the documents describe as Wells Fargo’s
attorney-in-fact.
The foreclosure deed and the affidavit both
reference a power of attorney “recorded herewith.”
Mr. Burke lodges what seem to be contradictory allegations
with respect to the referenced power of attorney.
In paragraphs
five and seven of his Amended Complaint, Mr. Burke alleges that
no power of attorney was filed with the foreclosure deed or the
affidavit.
Then, in paragraph nine, he alleges that
“notwithstanding [his previous] factual allegations,” a power of
Mr. Burke’s wife, Derika Burke, was also listed on the
mortgage. The record indicates that she has not lived at the
property for some time, and she is not a party to this case.
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attorney authorizing Select Portfolio to act on Wells Fargo’s
behalf was filed with the Registry of Deeds on the two pages
immediately preceding the foreclosure deed.
Mr. Burke lodges a second allegation regarding the power of
attorney.
He alleges that, at the time Bank of America conveyed
the mortgage to Wells Fargo, Select Portfolio was serving as
attorney-in-fact for both entities.
Based on these allegations – the purported failure to file
a referenced power of attorney, and the fact that Select
Portfolio engaged in “simultaneous co-representation of
successive title-holders” – Mr. Burke alleges in his Amended
Complaint that he was irreparably harmed.
The Amended Complaint
asserts claims for: (1) wrongful foreclosure; (2) plea of title
and wrongful commencement of eviction proceedings; (3) violation
of New Hampshire consumer protection law, N.H. Rev. Stat. Ann.
§ 358-A; (4) breach of the implied covenant of good faith and
fair dealing; and (5) fraud.
II.
Procedural Backdrop
Mr. Burke originally brought this suit in the Rockingham
County Superior Court in June of 2014, seeking to invalidate the
foreclosure and to enjoin a separate eviction proceeding that
Wells Fargo had commenced.
Wells Fargo then removed the suit to
this court based on diversity jurisdiction.
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In a prior order dated December 16, 2014, this court
dismissed Mr. Burke’s complaint, but did so without prejudice
because Mr. Burke was proceeding pro se, and because he had
sought leave to “include additional claims and/or defendants.”
The court granted Mr. Burke time to file an amended complaint,
and he did so, prompting Wells Fargo to again move for
dismissal.
Legal Standard
Under Rule 12(b)(6), the court must accept the factual
allegations in the complaint as true, construe reasonable
inferences in the plaintiff’s favor, and “determine whether the
factual allegations in the plaintiff’s complaint set forth a
plausible claim upon which relief may be granted.”
Foley v.
Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014)
(citations omitted) (internal quotation marks omitted).
A claim
is facially plausible “when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. 662, 678 (2009).
Ashcroft v.
Analyzing plausibility is “a
context-specific task” in which the court relies on its
“judicial experience and common sense.”
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Id. at 679.
Discussion
Mr. Burke’s Amended Complaint, construed liberally in his
favor, asserts that Wells Fargo committed the following wrongful
acts: (1) it failed to record a power of attorney with the
foreclosure deed and the affidavit, despite reference in those
documents to an accompanying power of attorney; and (2) it
engaged Select Portfolio as its attorney-in-fact while Select
Portfolio was simultaneously acting as attorney-in-fact for Bank
of America, the entity that previously held the mortgage on Mr.
Burke’s home.
Based on these allegations, the Amended Complaint
asserts that Wells Fargo lacked standing to foreclose, and that
Wells Fargo engaged in unfair and deceptive practices.
I.
Failure to File Referenced Power of Attorney
Wells Fargo is entitled to dismissal of the Amended
Complaint insofar as it alleges that Wells Fargo failed to file
a power of attorney with the foreclosure deed and the affidavit
in the Rockingham County Registry of Deeds.
As an initial
matter, Mr. Burke’s allegations that Wells Fargo failed to file
a power of attorney are directly refuted by a subsequent
allegation which plainly states that Wells Fargo did, in fact,
file a power of attorney.
See Am. Compl. (doc. no. 10) ¶ 9
(“Notwithstanding the factual allegations in the above
paragraphs . . . a Power of Attorney authorizing [Select
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Portfolio] to act on behalf of Wells Fargo . . . was recorded in
the Rockingham County Registry of Deeds on the two pages
immediately prior to . . . the subject foreclosure deed.”).
Even if the court were to overlook this contradiction,
Wells Fargo would nevertheless be entitled to dismissal of these
allegations.
In the court’s December 16, 2014 order, it
dismissed identical allegations on the grounds that New
Hampshire law permits, but does not require, that a mortgagee
record a power of attorney.
As the court noted, “New Hampshire
law provides that a power of attorney may be recorded . . . but
does not require recording.”
Calef v. Citibank, N.A., No. 11-
cv-526-JL, 2013 U.S. Dist. LEXIS 23881, at *17-18 (D.N.H. Feb.
21, 2013) (citations omitted) (internal quotation marks
omitted); see also N.H. Rev. Stat. Ann. § 477:9 (“Every power of
attorney to convey real estate must be signed and acknowledged,
and may be recorded . . . .”) (emphasis added).
In the December 16, 2014 order, the court granted Mr. Burke
leave to amend his original complaint to add additional claims
or defendants, but instead the Amended Complaint merely rehashes
these same allegations.
As the court concluded in its prior
order, Wells Fargo’s decision not to file a power of attorney
does not amount to actionable conduct because Wells Fargo was
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under no obligation to do so.3
In other words, even if Wells
Fargo did fail to file a power of attorney with the foreclosure
deed and the affidavit, this omission could not give rise to any
of the five claims for relief that Mr. Burke asserts.
Therefore, Mr. Burke’s allegations regarding the power of
attorney have failed to state a plausible claim upon which
relief may be granted.
II.
Simultaneous Co-Representation by Select Portfolio
The Amended Complaint next alleges that Wells Fargo acted
improperly be engaging Select Portfolio to act as its attorneyin-fact.
Mr. Burke asserts that Select Portfolio was
simultaneously engaged as attorney-in-fact by Bank of America,
and he implies that a conflict of interest arose because Bank of
America held the mortgage before assigning it to Wells Fargo.
Wells Fargo is entitled to dismissal of these allegations
because Mr. Burke lacks standing to assert them.
“New Hampshire
law recognizes the general rule that a debtor cannot interpose
defects or objections [to an assignment] which merely render the
assignment voidable at the election of the assignor or those
standing in his shoes.
And it has long been recognized that a
conflict of the nature alleged here – i.e., the signatory’s
Of course, given the contrary allegations, it is an open
question whether or not the power of attorney was filed.
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employment by both the assignor and assignee – at most makes an
assignment voidable by the assignor.”
Castagnaro v. Bank of
N.Y. Mellon, No. 13-cv-455-JD, 2014 U.S. Dist. LEXIS 7719, at
*6-7 (D.N.H. Jan. 21, 2014) (quoting Galvin v. EMC Mortg. Corp.,
No. 12-cv-320-JL, 2013 U.S. Dist. LEXIS 48961, at *28-29 (D.N.H.
Apr. 2, 2013)); see also Bradley v. Wells Fargo Bank, N.A., No.
12-cv-127-PB, 2014 U.S. Dist. LEXIS 26750, at *7-8 (D.N.H. Mar.
3, 2014) (“A mortgagor may not challenge an assignment of the
mortgage to a third party based on alleged deficiencies that
merely make the assignment voidable at the election of a party
to the assignment. . . . Because [plaintiff] was not a party to
[the] assignment, he lacks standing to challenge the foreclosure
based on [] the alleged deficiencies.”).
The rule denying standing to a mortgagor who seeks to
challenge the validity of an assignment of his mortgage from one
third party to another applies here.
In his Amended Complaint,
Mr. Burke merely identifies a potential conflict of interest
that might have arisen because Select Portfolio represented both
Bank of America and Wells Fargo.
At most, this conflict of
interest would have affected those entities, the assignor and
assignee respectively.
However, Mr. Burke has not alleged facts
explaining how the potential conflict of interest might have
adversely affected him as the mortgagor.
It is for this reason
that Mr. Burke does not have standing to contest the validity of
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the assignment from Bank of America to Wells Fargo.
Thus, these
allegations do not state a plausible claim for relief and are
dismissed.
Conclusion
The court need go no further.
Mr. Burke has asserted five
claims (wrongful foreclosure, wrongful eviction, violation of
state consumer protection law, breach of the implied covenant,
and fraud), but they are each premised only on the allegations
regarding the power of attorney and the simultaneous
representation by Select Portfolio.
For the reasons described,
Mr. Burke has not stated a plausible claim entitling him to
relief, despite having been granted an opportunity on the basis
of his pro se status to amend his original complaint.
Thus, the
court grants Wells Fargo’s motion to dismiss (doc. no. 11) with
prejudice.
The clerk of the court is directed to enter judgment
in favor of Wells Fargo and to close the case.
SO ORDERED.
__________________________
Landya McCafferty
United States District Judge
May 5, 2015
cc:
John C. Burke, III, pro se
Nathan Reed Fennessy, Esq.
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