Martin et al v. Wells Fargo Bank, N.A. et al

Filing 19

///ORDER granting 16 Motion to Dismiss for Failure to State a Claim. To the extent the Martins intend to pursue claims against NASB, they shall file a second amended complaint on or before May 23, 2016, and serve NASB in acc ordance with Rule 4(m). Failure to file a second amended complaint within this time frame and serve NASB in accordance with Rule 4(m) will result in the dismissal of this action in its entirety with prejudice. So Ordered by Judge Landya B. McCafferty.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Michael Martin
and Julie Martin
v.

Civil No. 15-cv-447-LM
Opinion No. 2016 DNH 084

Wells Fargo Bank, N.A.
and North American Savings
Bank, FSB
O R D E R
Michael and Julie Martin, proceeding pro se, brought suit
in state court against Wells Fargo Bank, N.A. (“Wells Fargo”)
and North American Savings Bank, FSB (“NASB”), alleging claims
that arose from defendants’ conduct in handling the Martins’
promissory note and mortgage and in attempting to foreclose on
their home.
2015.

The case was removed to this court on October 30,

The court granted Wells Fargo’s motion to dismiss the

complaint without prejudice to the Martins’ opportunity to file
an amended complaint setting forth facts sufficient to state
plausible claims against Wells Fargo.1

See doc. no. 11.

The

Martins filed an amended complaint (doc. no. 12), and Wells
Fargo moves to dismiss (doc. no. 16).

The Martins object.

NASB has not filed a response to the complaint or
otherwise appeared in this action.
1

For

the reasons that follow, Wells Fargo’s motion to dismiss is
granted.
Standard of Review
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)
(citation 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.”
(2009).

Ashcroft v. Iqbal, 556 U.S. 662, 678

Analyzing plausibility is “a context-specific task” in

which the court relies on its “judicial experience and common
sense.”

Id. at 679.

Because the Martins are proceeding pro se, the court is
obliged to construe their complaint liberally.

See Erikson v.

Pardus, 551 U.S. 89, 94 (2007) (per curiam) (internal citations
omitted) (“[A] pro se complaint, however inartfully pleaded,
must be held to less stringent standards than formal pleadings
drafted by lawyers.”).

However, “pro se status does not

insulate a party from complying with procedural and substantive
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law.

Even under a liberal construction, the complaint must

adequately allege the elements of a claim with the requisite
supporting facts.”

Chiras v. Associated Credit Servs., Inc.,

12-10871-TSH, 2012 WL 3025093, at *1 n.1 (D. Mass. July 23,
2012) (quoting Ahmed v. Rosenblatt, 118 F.3d 886, 890 (1st Cir.
1997) (internal citation and quotation marks omitted)).
Where, as here, written instruments are provided as
exhibits to a pleading, the exhibits are “part of the pleading
for all purposes.”2

Fed. R. Civ. P. 10(c); see also Trans-Spec

Truck Serv. v. Caterpillar, Inc., 524 F.3d 315, 321 (1st Cir.
2008).

When “a written instrument contradicts allegations in

the complaint to which it is attached, the exhibit trumps the
allegations.”

Clorox Co. P.R. v. Proctor & Gamble Commercial

Co., 228 F.3d 24, 32 (1st Cir. 2000) (internal quotation marks
and citation omitted).
Background
On November 25, 2009, Michael Martin executed a promissory
note in favor of NASB, in exchange for a loan of $217,979.

That

same date, Michael and Julie Martin granted a mortgage to NASB
to secure the loan.

The mortgage encumbered the Martins’ home

at 79 Ford Farm Road in Milton, New Hampshire.
The Martins attached as exhibits to their complaint the
promissory note, the mortgage, and the assignment of the
mortgage, as well as various other documents.
2

3

The mortgage states that Mortgage Electronic Registration
Systems, Inc. (“MERS”) is the mortgagee as nominee for the
lender, NASB.

On November 2, 2012, MERS, acting as nominee for

NASB, assigned the mortgage to Wells Fargo.
On September 10, 2015, the law firm of Bendett & McHugh,
acting on Wells Fargo’s behalf, sent the Martins a notice of
foreclosure, informing them that a foreclosure auction would
occur on November 4, 2015.

Before the scheduled date of the

foreclosure auction, the Martins brought this action.
Discussion
The Martins assert three claims against Wells Fargo in
their amended complaint: Wrongful Foreclosure (Count I);
Intentional Infliction of Emotional Distress (Count II); and
Declaratory Relief (Count III).

Wells Fargo moves to dismiss

all claims.3
As with the Martins’ claims alleged against Wells Fargo in
the original complaint, the claims in the amended complaint are
based on the allegation that Wells Fargo does not have the legal
authority to foreclose on the Martins’ home.

As the court laid

The Martins brought this case against NASB and Wells
Fargo, and their original complaint asserted six claims against
both defendants. The amended complaint lists NASB and Wells
Fargo as defendants, but the “parties” section of the amended
complaint lists only Wells Fargo as a defendant, and the
allegations are all directed at Wells Fargo.
3

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out in detail in its previous order, however, the mortgage
expressly grants MERS (solely as nominee for Lender and Lender’s
successors and assigns) the power of sale and “the right to
foreclose and sell the Property; and to take any action required
of Lender.”

The mortgage assignment, which was recorded on

November 2, 2012, states that MERS, as nominee for NASB, its
successors and assigns, conveys the mortgage to Wells Fargo.
Thus, the mortgage authorizes MERS to act on behalf of the
noteholder, and MERS assigned the mortgage to Wells Fargo.
The Martins argue that, despite the assignment of the
mortgage, Wells Fargo does not have the authority to foreclose
for two reasons.

First, they contend that Wells Fargo does not

hold the note, and cannot foreclose without holding both the
note and the mortgage.

As the court explained in its previous

order, however, regardless of whether Wells Fargo holds the
note, the plain language of the mortgage gives the holder of the
mortgage “the authority, as agent of the noteholder, to exercise
the power of sale.”

Bergeron v. N.Y. Cmty. Bank, 168 N.H. 63,

71 (N.H. 2015) (noting that if the language of the mortgage
establishes an agency relationship between the assignee of MERS
and the holder of the note, the assignee of MERS has the
authority to foreclose regardless of whether that entity holds

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the note at the time of the foreclosure).

Therefore, Wells

Fargo does not need to hold the note in order to foreclose.4
Second, the Martins contend that the assignment of the
mortgage was invalid because NASB did not hold the mortgage at
the time of the assignment.

They base that argument on the

allegation in their amended complaint that prior to the
assignment of the mortgage, NASB “sold its personal property
interest in the Plaintiffs Accommodation Note as a transferable
record to Guaranteed REMIC Pass-Through Securities and MX
Securities, Ginnie Mae REMIC Trust 2009-117.”

Doc. no. 12 at ¶

8.
Assuming the truth of that allegation, the assignment of
the mortgage was valid.

The mortgage assignment plainly states

that MERS is acting as nominee for NASB and its successors and
assigns.

Therefore, even if NASB sold the note in 2009 as

alleged in the complaint, MERS had the authority to assign the
mortgage on behalf of the successor noteholder.

Accordingly,

In addition, as the court noted in its previous order, the
underlying documents show that Wells Fargo does hold the note.
Because the Martins dispute that fact, and because Wells Fargo
may foreclose even if it does not hold the note, the court need
not address in this order whether Wells Fargo properly holds the
note.
4

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the amended complaint does not plausibly allege that the
assignment of the mortgage to Wells Fargo was invalid.5
All of the Martins’ claims against Wells Fargo are based on
the allegation that Wells Fargo does not have the legal
authority to foreclose on their home.

See doc. no. 12 at ¶ 20

(basing claim for wrongful foreclosure on allegation that “Wells
Fargo Bank, N.A., did not have the legal authority to foreclose
on the Subject Property”); id. at ¶ 26 (basing claim for
intentional infliction of emotional distress on allegation that
Wells Fargo “misrepresented to the Plaintiffs that [it] was
entitled to exercise the power of sale provision contained in
the Mortgage . . . [despite having] no legal, equitable, or
actual beneficial interest whatsoever in the Property”); id. at
¶ 37 (seeking to quiet title in the property and that Wells
Fargo “be declared to have no interest estate, right, title or
interest in the subject property”).

Because that allegation is

contradicted by exhibits attached to the Martins’ amended

The Martins also reference a “Report of Condition” for
2015, which they assert shows that Wells Fargo is holding
certain securities “Guaranteed by Ginnie Mae (GNMA).” Doc. no.
17 at 5; doc. no. 12 at ¶ 19. They assert that the Report of
Condition shows that Wells Fargo has sold more of those same
securities than it held. According to the Martins, this
“overage” demonstrates that Wells Fargo “could not own [their]
Mortgage/Note, because all securities Guaranteed by GNMA, to
date, have been sold . . . .” Doc. no. 17 at 5. That
allegation is insufficient to contradict the plain language of
the mortgage and the mortgage assignment.
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complaint, the Martins fail to state any plausible claims for
relief against Wells Fargo.

Therefore, the court grants Wells

Fargo’s motion to dismiss.
The court notes that the only claims brought in the amended
complaint are asserted against Wells Fargo.

To the extent the

Martins intend to bring claims against NASB, they must file a
second amended complaint asserting claims against NASB, and
serve NASB in accordance with Federal Rule of Civil Procedure
4(m).
Conclusion
For the foregoing reasons, Wells Fargo’s motion to dismiss
(doc. no. 16) is granted.

To the extent the Martins intend to

pursue claims against NASB, they shall file a second amended
complaint on or before May 23, 2016, and serve NASB in
accordance with Rule 4(m).

Failure to file a second amended

complaint within this time frame and serve NASB in accordance
with Rule 4(m) will result in the dismissal of this action in
its entirety with prejudice.
SO ORDERED.
__________________________
Landya McCafferty
United States District Judge
April 21, 2016
cc:
Michael C. Martin, pro se
Julie A. Martin, prose
David D. Christensen, Esq.
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