Johnson et al v. Shields et al

Filing 8

///ORDER granting 4 Motion to Dismiss for Failure to State a Claim. All claims against Bank of America are dismissed. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Eugene and Christine Johnson
v.

Civil No. 16-cv-229-JD
Opinion No. 2016 DNH 117

Joan Shields and Bank of America

O R D E R
Eugene and Christine Johnson, proceeding pro se, brought
suit in state court against Joan Shields and Bank of America,
N.A. after Bank of America attempted to repossess a sailboat
that the Johnsons bought with Shields.1

The purchase was

financed through a loan from Bank of America.

The Johnsons

brought claims of misrepresentation and breach of contract
against Shields and sought an injunction against Bank of America
to prevent repossession of the boat.

Bank of America defaulted.

Shields filed an answer and counterclaim.
On April 26, 2016, the state court granted the Johnsons a
ten-day injunction against Bank of America to prevent
repossession of the boat.

The court held a hearing on the

injunction on May 5, 2016, and the Johnsons, Shields, and Bank
of America signed an agreement to address certain issues in the
Bank of America states that it is improperly identified in
the complaint as Bank of America rather than Bank of America,
N.A.
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case.

The court approved the agreement and set a status

conference for July 5, 2016.
Under the agreement, BOA was required to identify the
arrearages on the mortgage within ten business days of May 5.
The Johnsons and Shields were ordered to split the amount
equally and to forward their shares to counsel for BOA within
ten business days after receiving notice of the amount owed.
The boat was to remain in storage at Rye Harbor.

The Johnsons

and Shields were ordered to list the boat for sale within ten
business days of May 5.

The Johnsons and Shields were also

ordered to share all expenses incurred for the boat.

Based on

that agreement, Bank of America’s motion to set aside default
and vacate the ex parte injunction was granted.
Bank of America removed the case to this court on June 2,
2016, and moves to dismiss the claim seeking an injunction on
the ground that the Johnsons have failed to allege a plausible
basis for enjoining the Bank from repossessing the boat.
Neither the Johnsons nor Shields filed a response to the motion
to dismiss.
Standard of Review
A motion to dismiss for failure to state a claim is
governed by Federal Rule of Civil Procedure 12(b)(6).

In

considering a motion under Rule 12(b)(6), the court assumes the

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truth of the properly pleaded facts and takes all reasonable
inferences from those facts that support the plaintiff’s claims.
Mulero-Carrillo v. Roman-Hernandez, 790 F.3d 99, 104 (1st Cir.
2015).

Based on the properly pleaded facts, the court

determines whether the plaintiff has stated “a claim to relief
that is plausible on its face.”

Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007).
Background2
The Johnsons provide few facts to support the claims in the
complaint.

In support of the motion to dismiss, Bank of America

adds information from the loan and security agreement on the
boat and the mortgage.

Those documents may be considered for

purposes of the motion to dismiss because the complaint, along
with the Johnsons’ motion for injunctive relief in state court,
references financing of the boat through Bank of America.

See

Freeman v. Town of Hudson, 714 F.3d 29, 36 (1st Cir. 2013).
The Johnsons and Shields bought a thirty-eight foot
sailboat in March of 2007, with a $100,000 loan through Bank of
America.

The Johnsons expected Shields to pay part of the

financing costs and expenses for the boat.

In the fall of 2015,

The background information is summarized from the state
court pleadings and the documents provided by Bank of America.
For that reason, the information provided in this section serves
as background for this order only, not as findings of fact.
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Shields stopped making mortgage payments and stopped reimbursing
the Johnson for expenses.
In early February of 2016, Bank of America hired
Commonwealth Boat Brokers, located in Virginia, to repossess the
sailboat owned by the Johnsons and Shields.

Eugene Johnson

stopped the repossession effort because he believed the employee
of Commonwealth Boat Brokers sent to get the boat with a pickup
truck did not know anything about transporting large sailboats
and because the Johnsons still held title to the boat.

The

Johnsons then filed suit to prevent repossession and to state
claims against Shields.
The loan agreement states that if the borrowers fail to
make the payments as required on the payment schedule or if they
default, Bank of America can repossess the boat.

Bank of

America is required to provide written notice before selling the
boat.

To get the boat back after repossession, the borrowers

would have to pay the entire amount owed on the loan, along with
late charges and the costs of repossession.
The mortgage agreement also provides remedies for default.
In that event, Bank of America may choose to do one or more of
the listed remedies.

The remedies provided include the right to

demand that the mortgagors deliver the boat to a reasonable
location while still requiring payment of any deficiency
following sale, to repossess the boat with anything in or on the
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boat “with or without legal process or judicial decree and with
or without previous notice or demand for performance,” and to
sell or otherwise dispose of the boat.

Discussion
Bank of America moves to dismiss the Johnsons claims
against it.

In support, Bank of America contends that the

complaint lacks facts to support any claim against it and that
the Johnsons have no legitimate claim to challenge Bank of
America’s right to repossess the boat.

The Johnsons did not

respond to the motion to dismiss.3
As a preliminary matter, Bank of America does not explain
the status of the boat with respect to the requirements of the
agreement, as ordered by the state court.

Because neither the

Johnsons nor Shields responded to the motion, they also failed
to provide any information about the boat’s status.

The

deadlines in the court-ordered agreement have now lapsed and had
lapsed by the time the motion to dismiss was filed.

Therefore,

the court will assume that the Johnsons and Shields have not
sold the boat or paid the arrearages on the mortgage.
The Johnsons allege claims of misrepresentation and breach
of contract against Shields.

They do not provide any

Although the Johnsons are proceeding pro se, Shields
represents in her answer that Eugene Johnson is a lawyer.
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allegations to support those claims as against Bank of America.
Therefore, to the extent the Johnsons intended to allege
misrepresentation or breach of contract against Bank of America,
those claims are dismissed.
Instead, it appears that the Johnsons seek a preliminary
injunction to avoid repossession of the boat by Bank of America
until after their claims against Shields are resolved.

Bank of

America does not address the applicable standard for an
injunction in this context.

Because the parties do not argue

that New Hampshire provides a different standard, the court will
follow the federal preliminary injunction standard.4

See

Corporate Techs., Inc. v. Harnett, 731 F.3d 6, 9 n.1 (1st Cir.
2013); Lanier Prof’l Servs. v. Ricci, 192 F.3d 1, 3 (1st Cir.
1999).
To be entitled to a preliminary injunction under federal
law, the moving party must show:

“(1) the movant’s likelihood

of success on the merits of its claims; (ii) whether and to what
extent the movant will suffer irreparable harm if the injunction
Under New Hampshire law, “[t]he issuance of injunctions,
either temporary or permanent, has long been considered an
extraordinary remedy.”4 N.H. Dep’t of Envtl. Servs. V. Mottolo,
155 N.H. 57, 63 (2007). The purpose of a preliminary injunction
is to preserve the status quo until the case is resolved on the
merits. Id. To be entitled to injunctive relief, the moving
party must show that it is likely to succeed on the merits of
the case and that “there is an immediate danger of irreparable
harm” with no adequate remedy at law. Id.
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is withheld; (iii) the balance of the hardships as between the
parties; and (iv) the effect, if any, that an injunction (or the
withholding of one) may have on the public interest.”

Corporate

Techs., 731 F.3d at 9.

The most important factor is the

likelihood of success.

Id. at 10.

The Johnsons allege only that the default in mortgage
payments is Shields’s fault and that they hope to remedy the
situation through this action.

They do not dispute that the

loan is in default or that Bank of America has the right under
the loan agreement and the mortgage to repossess the boat.
Assuming the boat has not been sold, Bank of America is
entitled to repossess the boat now, without waiting for the
Johnsons to attempt to recover payments from the Shields.

Given

the right to repossess, which is unchallenged by the Johnsons,
they have not shown a likelihood of success in avoiding
repossession.
Further, the Johnsons have not shown irreparable harm that
would be caused by repossession or that the lack of an
injunction would cause them more hardship.

The Johnsons have

not carried their burden of showing they are entitled to a
preliminary injunction.

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Conclusion
For the foregoing reasons, Bank of America’s motion to
dismiss (document no. 4) is granted.

All claims against Bank of

America are dismissed.
SO ORDERED.
__________________________
Joseph DiClerico, Jr.
United States District Judge
July 19, 2016
cc:

Christine Johnson, pro se
Eugene Johnson, pro se
Thomas J. Pappas, Esq.
John P. Sherman, Esq.

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