Frangos v. The Bank of New York Mellon et al

Filing 48

ORDER denying 34 Motion to Stay; denying 40 Motion to Join Frances Ann Frangos 2002 Revocable Trust. So Ordered by Judge Landya B. McCafferty.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Thomas Frangos
v.

Civil No. 16-cv-436-LM
Opinion No. 2017 DNH 216

The Bank of New York Mellon,
as Trustee for the Certificateholders of
CWABS, Inc., Asset Back Certificates,
Series 2005-AB2, et al.
O R D E R
Plaintiff Thomas Frangos brought suit in state court
against Defendants The Bank of New York Mellon, as trustee for
the Certificateholders of CWABS, Inc., Asset Back Certificates,
Series 2005-AB2 (“BNY”), and New Penn Financial, LLC d/b/a
Shellpoint Mortgage Servicing (“Shellpoint”), seeking to enjoin
the foreclosure sale of his home.
the case to this court.

BNY and Shellpoint removed

Plaintiff subsequently amended his

complaint to include additional allegations and claims, and to
add Bank of America, N.A. (“BOA”) as a defendant.

Plaintiff has

filed a motion to stay proceedings and a motion to join the
Frances Ann Frangos 2002 Revocable Trust u/t/d March 12, 2002
(“Trust”) as an indispensable party.

Defendants object.

For

the reasons that follow, the court denies both of plaintiff’s
motions.

BACKGROUND
In late April 2005, plaintiff executed a promissory note in
favor of Optima Mortgage Corporation (“Optima”) in exchange for
a loan of $599,000.

The note was secured by a mortgage, which

plaintiff and Frances Frangos, his wife, executed in favor of
Mortgage Electronic Registration Systems, Inc. (“MERS”), as
nominee for Optima.

The mortgaged property is located in

Portsmouth, New Hampshire.
The parties disagree over the chain of title to the
property.

In his complaint, plaintiff alleges that, by virtue

of an April 2003 deed, the Trust holds title to the property.
Disputing this allegation, BNY and Shellpoint point to a
quitclaim deed dated May 2, 2005, in which plaintiff, as trustee
of the Trust, conveys the property to plaintiff, “a married
man.”

Doc. no. 27-6 at 2 of 5.

Based on this quitclaim deed,

it appears that plaintiff obtained title to the property shortly
after the mortgage was executed.

In response, however,

plaintiff claims that (1) he was never trustee of the Trust, so
the May 2, 2005 deed is invalid; and (2) regardless, there is a
third deed, dated May 15, 2005, “return[ing] the real estate
from [plaintiff] individually to himself as trustee of the
Trust.”

Doc. no. 46 at 2.

In any case, in November 2007, plaintiff filed for Chapter
7 bankruptcy.

During that proceeding, plaintiff and Countrywide
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Home Loans, Inc. (“Countrywide”), then the servicer of
plaintiff’s loan, executed a reaffirmation agreement.

In the

agreement, plaintiff reaffirmed the outstanding debt on his
mortgage loan.
2009.

The bankruptcy proceeding closed in January

At some point in 2009, plaintiff stopped making mortgage

payments.

See Frangos v. Bank of America, N.A., 826 F.3d 594,

595 (1st Cir. 2016).
In 2011, BNY came to hold both the note and mortgage.
Meanwhile, the servicer of plaintiff’s loan changed from
Countrywide to BOA, and then, finally, to Shellpoint.

In 2013,

after negotiations over loan restructuring failed, BNY attempted
to foreclose on the property.

Id.

In response, plaintiff and

Frances Frangos filed suit against defendants in state court and
obtained a preliminary injunction barring the sale.

Id.

Defendants removed the case to this court, and Judge Barbadoro
granted summary judgment in favor of defendants.
595-96.

See id. at

In June 2016, the First Circuit affirmed the grant of

summary judgment.

Id. at 594, 597-98.

The court refers to this

first action as “Frangos I.”
In August 2016, BNY and Shellpoint notified plaintiff that
a foreclosure sale was scheduled for September 23.

Plaintiff

again filed suit in state court and obtained an ex parte
injunction barring the sale.

Defendants removed the case to

this court and then filed motions to dismiss.
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Plaintiff

thereafter filed the instant motions to stay and to join the
Trust as an indispensable party.
DISCUSSION
Both of plaintiff’s motions are founded on his argument
that the mortgage is void because the Trust held title to the
property at the time the mortgage was executed.

He moves to

stay proceedings so that, in the bankruptcy court, he can seek
to invalidate the mortgage and reaffirmation agreement.

He

notes that the bankruptcy court has already granted his motion
to reopen his 2007 case on this ground.

Plaintiff further moves

to join the Trust as an indispensable party under Rule 19 of the
Federal Rules of Civil Procedure.

The court considers each

motion in turn.
I.

Motion to Stay Proceedings
Federal courts “possess the inherent power to stay [a case]

for prudential reasons.”

Microfinancial, Inc. v. Premier

Holidays Int’l, Inc., 385 F.3d 72, 77 (1st Cir. 2004).

The

pendency of related proceedings “can constitute such a reason.”
Id.

A district court’s discretionary power to stay “should be

invoked when the interests of justice counsel in favor of such a
course.”

Id. at 78.

Relevant factors include “(1) potential

prejudice to the non-moving party; (2) hardship and inequity to
the moving party without a stay; and, (3) judicial economy.”
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Good v. Altria Grp., Inc., 624 F. Supp. 2d 132, 134 (D. Me.
2009); see also Microfinancial, Inc., 385 F.3d at 78.

The

movant bears the burden of demonstrating that “a stay is
appropriate.”

Emseal Joint Sys., Ltd. V. Schul Int’l Co., LLC,

No. 14-cv-358-SM, 2015 WL 1457630, at *1 (D.N.H. Mar. 27, 2015);
see also Microfinancial, Inc., 385 F.3d at 77.
Plaintiff has failed to establish that a stay is
appropriate under these circumstances.

He has not argued that

he will suffer either hardship or inequity in the absence of a
stay.

His sole argument is one of judicial economy.

He asserts

that if the bankruptcy court determines that “the reaffirmation
agreement and the mortgage are invalid, many of [his] claims in
this litigation will be or could be affected.”
¶ 3.

Doc. no. 34 at

However, plaintiff does not explain how the bankruptcy

court’s determination on the invalidity of the reaffirmation
agreement will resolve any of his claims before this court.

Nor

does plaintiff provide any reason why the bankruptcy court is
the more appropriate or convenient forum in which to litigate
the validity of the mortgage, especially given that BNY and
Shellpoint are actively litigating that very issue as part of
their pending motion to dismiss, see doc. no. 27-1 at 13-19.
Plaintiff’s argument regarding judicial economy is conclusory
and therefore unpersuasive.

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Moreover, there is a potential for a stay to cause
prejudice to defendants, each of whom asserts an interest in the
expeditious resolution of the action.
not made a mortgage payment since 2009.
at 595.

Plaintiff has apparently
See Frangos, 826 F.3d

When BNY attempted to foreclose in 2013, plaintiff

instituted Frangos I.

See id.

Defendants waited until June

2016 to receive a favorable decision from the First Circuit.
Because defendants have already proceeded through a full round
of litigation relating to the same loan obligation, their desire
to reach the merits and to avoid further delay weighs against
the issuance of a stay.
In contrast, the record shows that plaintiff has had
approximately eight years since his discharge to seek relief in
the bankruptcy court.

Yet he only sought such relief after

defendants filed their motions to dismiss.

Considering this

history, the court is disinclined to prolong this action while a
new, parallel proceeding takes its course.

Cf. Microfinancial,

Inc., 385 F.3d at 79 (noting that “the foot-dragging that
already had occurred gave the [district] court good reason for
skepticism about the requested stay”).

Because the interests of

justice do not favor a stay, plaintiff’s motion is denied.

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II.

Motion to Join the Trust under Rule 19
Rule 19 of the Federal Rules of Civil Procedure governs the

joinder of required parties.

See Picciotto v. Continental Cas.

Co., 512 F.3d 9, 15 (1st Cir. 2008).

“The Rule provides for

joinder of required parties when feasible, Fed.R.Civ.P. 19(a),
and for dismissal of suits when joinder of a required party is
not feasible and that party is indispensable, Fed.R.Civ.P.
19(b).”

Bacardi Int’l Ltd. v. Suarez & Co., Inc., 719 F.3d 1, 9

(1st Cir. 2013).

“In a Rule 19 analysis, a court must first

determine if an absent party is a ‘required party’ under Rule
19(a).”
issue.

Id. at 10.

The moving party bears the burden on this

See McCann v. Ruiz, 788 F. Supp. 109, 121 (D.P.R. 1992)

(quotation omitted)); cf. J & J Sports Prods. Inc. v. Cela, 139
F. Supp. 3d 495, 499 (D. Mass. 2015) (stating that party moving
to dismiss claim under Rule 12(b)(7) for failure to join a
required party bears the burden of proving that absent party
should be joined).
Here, plaintiff invokes two provisions of Rule 19(a) to
argue that the Trust is a required party.

Plaintiff first

argues that in the Trust’s absence, “the court cannot accord
complete relief among existing parties.”
19(a)(1)(A).

Fed. R. Civ. P.

Plaintiff next argues that the Trust claims an

interest relating to the subject of this action such that
disposing of the action without the Trust may “impair or impede
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the [Trust’s] ability to protect [its] interest.”

Fed. R. Civ.

P. 19(a)(1)(B)(i).
With respect to Rule 19(a)(1)(A), “[r]elief is
complete when it meaningfully resolves the contested matter
as between the affected parties.”

Watchtower Bible & Tract

Soc’y of N.Y., Inc. v. Municipality of San Juan, 773 F.3d
1, 13 (1st Cir. 2014).

Put differently, if relief can be

effectuated between the existing parties without the
involvement of the absent party, the absent party is not
required under Rule 19(a)(1)(A).

Id. (citing Williams v.

Fanning, 332 U.S. 490, 494 (1947)).
Although not entirely clear, plaintiff appears to be
arguing that, because the Trust owned the property at the
time the mortgage was executed, the court cannot
definitively resolve the issue of the mortgage’s validity
without the Trust.

But regardless of how that issue is

ultimately resolved, the remedies that plaintiff requests—
from the injunctive and declaratory relief to the requested
money damages—can be implemented without the Trust’s
involvement.

See id. at 14 (concluding that, because

remedial scheme crafted by court to address municipalities’
constitutional violations could be accomplished without
involvement of certain defendants, those defendants were

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not required under Rule 19).

The Trust is therefore not a

required party under Rule 19(a)(1)(A).
Likewise, with respect to plaintiff’s argument under
Rule 19(a)(1)(B)(i), the court does not agree that
disposing of the action in the Trust’s absence would, as a
practical matter, impair or impede the Trust’s ability to
protect its interest in the property.

The First Circuit

has held that “an absent party's interests cannot be harmed
or impaired if they are identical to those of a present
party.”

Bacardi Int’l Ltd., 719 F.3d at 11.

“In other

words, an absentee is unlikely to be a [required] party if
there is another party in the suit with virtually identical
interests who would be advancing virtually the same legal
and factual positions.”

Fed. Ins. Co. v. SafeNet, Inc.,

758 F. Supp. 2d 251, 258 (S.D.N.Y. 2010); see, e.g.,
Bacardi Int’l Ltd., 719 F.3d at 11 (absent party not
required because present party had identical interest in
the confirmation of arbitration award); Charest v. Fed.
Nat’l Mortg. Ass’n, 9 F. Supp. 3d 114, 132 (D. Mass. 2014)
(mortgage servicer not required party under Rule
19(a)(1)(B)(i) where present party—the holder of the
mortgage—had same interest “in avoiding Chapter 93A
liability”).

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This principle applies here.

As plaintiff’s

allegations suggest, the Trust’s interest would be in
proving that the mortgage is invalid and that it holds
title to the property.

Plaintiff shares the same interest:

he seeks to invalidate the mortgage and avoid foreclosure
by arguing that he did not, and does not, own the property.
Plaintiff offers no other evidence or argument that
indicates that his interests diverge materially from those
of the Trust.
Accordingly, the Trust is not a required party under
either provision of Rule 19.
CONCLUSION
For the reasons stated herein, plaintiff’s Motion to Stay
Proceedings Pending a Resolution in the Bankruptcy Court (doc.
no. 34) and his Motion to Join Frances Ann Frangos 2002
Revocable Trust U/T/D March 12, 2002 (doc. no. 40) are denied.
SO ORDERED.
__________________________
Landya McCafferty
United States District Judge
October 5, 2017
cc:
Kristina Cerniauskaite, Esq.
Jonathan M. Flagg, Esq.
Mary Ellen MacDonald, Esq.
John Harold McCann, Esq.
Joseph J. Patry, Esq.
Michael P. Trainor, Esq.
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