Laura v. Great Lakes Higher Education Guaranty Corporation et al
Filing
22
///ORDER granting 11 Motion to Dismiss; granting 13 Motion to Dismiss for Failure to State a Claim; granting 17 Motion for Judgment on the Pleadings. Laura's request to amend the complaint is denied. The court also dismisses, without prejudice, Laura's complaint against Goal Financial, LLC. The clerk shall enter judgment accordingly and close the case. So Ordered by Chief Judge Joseph N. Laplante.(jb)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
James F. Laura
v.
Civil No. 17-cv-373-JL
Opinion No. 2018 DNH 023
Great Lakes Higher Education
Guaranty Corporation; Goal
Financial, LLC; American Education
Services Corporation; and
Performant Recovery, Inc.
MEMORANDUM ORDER
In this action arising from an unpaid debt, plaintiff James
F. Laura challenges as predatory the fact that defendants Great
Lakes Higher Education Guaranty Corporation, Goal Financial,
LLC, American Education Services Corporation (“AES”), and
Performant Recovery, Inc., issued loans to Laura to finance his
legal education knowing he would be unable to repay them -which he has, twenty years later, not been able to do.1
Laura
brought this action in Merrimack County Superior Court.
The
As discussed infra, it is unclear from Laura’s complaint which,
if any, of these defendants participated in the loans’
origination. At oral argument, the parties represented, to the
best of their knowledge, that Goal Financial originated the
loan, Great Lakes acted as a guarantor, AES serviced the loan,
and Performant attempted to collect the debt beginning in 2017,
well after Laura defaulted. Laura further indicated that he
believed until recently that Great Lakes was the original
lender.
1
defendants removed it to this court, see 28 U.S.C. § 1441, which
has jurisdiction under 28 U.S.C. § 1332(a) (diversity).
The defendants now move to dismiss this action in its
entirety.
After reviewing the parties’ filings and holding oral
argument, the court grants the defendants’ motions.
Laura’s
claims arising from the origination of his loans are time-barred
by New Hampshire’s three-year statute of limitations.
Even were
they not, Laura has failed to allege facts sufficient to state a
claim for relief against these defendants under the New
Hampshire Consumer Protection Act, or theories of “predatory
lending,” breach of the implied covenant of good faith and fair
dealing, unjust enrichment, and civil conspiracy.
Applicable legal standard
“A pleading that states a claim for relief must contain,”
among other things, “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
P. 8(a)(2).
Fed. R. Civ.
To satisfy this requirement, the plaintiff must
plead “factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.”
Martinez v. Petrenko, 792 F.3d 173, 179
(1st Cir. 2015) (internal quotations omitted).
This standard
“demands that a party do more than suggest in conclusory terms
the existence of questions of fact about the elements of a
2
claim.”2
A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d 77, 81
(1st Cir. 2013).
The court may “grant a motion to dismiss based
on an affirmative defense, such as the statute of limitations
. . . ‘when the pleader’s allegations leave no doubt that an
asserted claim is time-barred.’”
Centro Medico del Turabo, Inc.
v. Feliciano de Melecio, 406 F.3d 1, 6 (1st Cir. 2005) (quoting
LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 509 (1st
Cir. 1998)).
In resolving a motion to dismiss pursuant to Rule 12(b)(6),
the court “begin[s] by identifying and disregarding statements
in the complaint that merely offer legal conclusions couched as
fact or threadbare recitals of the elements of a cause of
action.”
Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12
(1st Cir. 2011) (internal quotations and original alterations
omitted).
The court then treats the “[n]on-conclusory factual
allegations in the complaint . . . as true,” id., and draws all
reasonable inferences in the plaintiff’s favor, Martino v.
Forward Air, Inc., 609 F.3d 1, 2 (1st Cir. 2010).
The following
recitation of facts takes this approach.
The plaintiff misstates the required standard, citing to
superseded authority for the proposition that he need only “show
whether the allegations in the Plaintiff’s pleadings are
reasonably susceptible of a construction that would permit
recovery.” Obj. to Performant’s Mot. (doc. no. 18-1) at 1
(citing Clorox Co. v. Proctor & Gamble Commercial Co., 228 F.3d.
24, 30 (1st Cir. 2000)).
2
3
Background
Laura attended the Franklin Pierce Law Center, now the
University of New Hampshire School of Law, between 1996 and
1999.3
He financed his legal education -- including his tuition
and living expenses -- through loans obtained despite the fact
that, at the time, he “was a ‘subprime borrower’” who “had no
employment; no prospects of employment; no employment history of
any significance; no money; no bank accounts; no credit, no
credit history and no assets.”4
By the time he graduated in
1999, Laura had amassed debt of approximately $165,479.5
Laura
secured employment as an attorney following his graduation,
earning approximately $30,000 per year.6
As a single parent supporting two children, Laura was
granted a forbearance on his payments for financial hardship,
though interest on his loans continued to accrue.7
At some point
after 2003, Laura exhausted his forbearance options with respect
to his private loans and began making scheduled payments which,
3
Compl. (doc. no. 1-3) ¶¶ 14, 16.
4
Id. ¶¶ 15-16.
Id. ¶ 16. Laura alleges that the defendants loaned him
approximately $78,000 in private loans, and $87,479 in
subsidized and unsubsidized consolidated student loans. Id.
5
6
Id. ¶ 17.
7
Id. ¶¶ 18, 21.
4
ultimately, he was unable to pay in full.8
He conceded to the
debt in an action in Hillsborough County Superior Court, and
currently pays $100 per month to satisfy the judgment against
him.9
Laura likewise exhausted his forbearance options with
respect to his subsidized and unsubsidized consolidated student
loans.10
He unsuccessfully attempted to negotiate a settlement
with respect to these loans which, including interest,
penalties, and other fees, carry a present balance of $157,135
-- a sum greater than the initial principal.11
likewise been unable to pay this sum.
Laura has
Following Laura’s
default, he alleges, “[t]he [d]efendants have made negative
reports against [him] to the credit agencies for many years
affecting his credit,” as a result of which he has been denied
“numerous mortgage refinances over the years costing him
8
Id. ¶¶ 19-20.
9
Id. ¶ 20.
10
Id. ¶ 22.
11
Id.
5
hundreds of thousands of dollars in excess interest, as well as
being refused for other types of financing . . . .”12
In June 2017, Laura received a notice from either Great
Lakes or Performant (or both), indicating that his wages would
be garnished to satisfy the debt.13
Laura then filed this action
in Merrimack County Superior Court on July 18, 2017, bringing a
variety of common-law and statutory claims against the
defendants on the theory that the defendants never should have
issued the loans to a “subprime borrower” such as himself, and
seeking to enjoin Great Lakes from garnishing his wages “at the
rate of 15% of his disposable pay each pay period . . . .”14
Defendants Great Lakes and Performant timely removed the
action to this court, citing its diversity jurisdiction.15
28 U.S.C. § 1332.
12
See
All of the defendants who have been served16
Id. ¶ 23.
See id. ¶ 24 (“On June 21, 2017, the Defendant, Great Lakes,
sent the Plaintiff a Notice Prior To Wage Withholding seeking to
garnish the Plaintiff’s wages . . . .”); Laura Aff’t (doc.
no. 18-2) ¶ 2 (“Performant Recovery, Inc. sent me written
notification as agents for the lender within the last three
years and harassed me, telling me they were going to garnish my
wages).
13
14
Compl. (doc. no. 1-3) ¶ 24.
15
See Notice of Removal (doc. no. 1).
Laura has named Goal Financial, LLC, as a defendant in this
action. Goal Financial had not been served at the time of
removal, see Notice of Removal (doc. no. 1) ¶ 2, and the
plaintiff confirmed at oral argument that Goal Financial has
not, to his knowledge, been served since. Because the time for
16
6
have moved either to dismiss the claims against them, see
Fed. R. Civ. P. 12(b)(6), or for judgment on the pleadings, see
Fed. R. Civ. P. 12(c).17
Analysis
Laura brings the following claims against all defendants:
“predatory lending” (Count 1), breach of the implied covenant of
good faith and fair dealing (Count 2), violation of New
Hampshire’s Consumer Protection Act, N.H. Rev. Stat. Ann. § 358A (Count 3), unjust enrichment (Count 4), and civil conspiracy
service has passed, and absent any showing of good cause from
the plaintiff, the court “must dismiss the action without
prejudice against that defendant . . . .” Fed. R. Civ. P. 4(m).
Pursuant to the latter rule, “[a]fter the pleadings are closed
-- but early enough not to delay trial -- a party may move for
judgment on the pleadings.” Fed. R. Civ. P. 12(c). The court
observes that the pleadings in this action are not closed as to
Performant, which brings its motion under this rule, insofar as
Performant has not answered the complaint. The court
accordingly interprets Performant’s motion as one under
Rule 12(b)(6) to dismiss the claims against it.
17
The pleadings are closed, however, as to Great Lakes, the sole
defendant that has answered the complaint (see doc. no. 5). The
court therefore interprets Great Lakes’s motion to dismiss,
which “must be made before pleading if a responsive pleading is
allowed,” Fed. R. Civ. P. 12(b), as one for judgment on the
pleadings under Rule 12(c).
Neither conversion significantly affects the court’s analysis
here. “[T]he two motions are ordinarily accorded much the same
treatment,” with only the “modest difference” that “[a]
Rule 12(c) motion . . . implicates the pleadings as a whole.”
Aponte-Torres v. Univ. of Puerto Rico, 445 F.3d 50, 54 (1st Cir.
2006).
7
(Count 5).
Through these claims, he seeks to discharge his debt
and, on top of that, obtain compensatory damages, punitive
damages, enhanced compensatory damages, and his attorneys’ fees.
Laura’s allegations in this action, distilled to their
essence, amount to this:
between 1996 and 1999, he applied for
and obtained loans that the loan originators and/or their agents
and successors18 knew or should have known that he would not be
able to repay.
In the years since, he has in fact been unable
to repay those loans.
Though he has engaged in negotiations
with the lenders and/or their agents, he has not obtained any
Laura’s complaint poses more questions than it answers as to
his relationship with the defendants. This is exacerbated by
Laura’s failure to delineate which defendants took which alleged
actions, or which, if any, of the present defendants were
involved in originating the loan. This frustrates the court’s
ability to “determine whether, as to each defendant, [the]
plaintiff’s pleadings are sufficient to state a claim on which
relief can be granted.” Sanchez v. Pereira–Castillo, 590 F.3d
31, 48 (1st Cir. 2009) (emphasis in original).
18
For example, Laura describes Performance as “a collection
company,” Compl. (doc. no. 1-3) ¶ 6, but he does not allege that
any defendant engaged in unfair or improper collection
practices, and brings no claims predicated on such actions. At
oral argument, Laura conceded that Performant did not
participate in the loan’s origination. To the contrary, he
admitted that, at least to his knowledge, Performant’s
participation in his loan began and ended with the June 21, 2017
letter informing him that his wages may be garnished.
Accordingly, to the extent that Laura purports to bring claims
against Performant arising from the loan’s origination, even
drawing all reasonable inferences in Laura’s favor, the court
would be hard-pressed to conclude that those claims may proceed
against Performant.
8
loan modification or other relief beyond an unspecified period
of forbearance.
One or more of the defendants attempted to
collect the debt through a notice that his wages may be
garnished.
Laura concedes that he is obligated to repay at
least the private loans, to which he has confessed judgment.
The majority of Laura’s claims thus arise from the
origination of the loans at issue.
Only his claim for breach of
the implied covenant of good faith and fair dealing implicates
actions taken by the defendants after that timeframe.
As the
defendants contend, New Hampshire’s three-year statute of
limitations bars claims arising from the loans’ origination,
which occurred between eighteen and twenty-one years ago.
Even
if it did not, Laura’s complaint fails to set forth facts that,
even with all inferences drawn in his favor, would permit the
court to conclude that these defendants may be liable for the
misconduct alleged in any of his claims.19
The court notes that Laura, himself an attorney, is
represented here by counsel. As Judge DiClerico has explained,
parties represented by counsel “are not entitled to any special
consideration that might be afforded pro se parties. The court
cannot be expected either to divine or provide legal theories on
behalf of any party represented by counsel.” Grand Encampment
of Knights Templar of the U.S. v. Conference of Grand Masters of
Masons in N. Am., Inc., No. 11-CV-463-JD, 2012 WL 781007, at *3
(D.N.H. Mar. 6, 2012).
19
9
A.
Statute of limitations
In New Hampshire, “all personal actions,” with some
exceptions not relevant here, “may be brought only within 3
years of the act or omission complained of . . . .”
Stat. Ann. § 508:4, I.
N.H. Rev.
Its discovery rule provides that,
when the injury and its causal relationship to the act
or omission were not discovered and could not
reasonably have been discovered at the time of the act
or omission, the action shall be commenced within 3
years of the time the plaintiff discovers, or in the
exercise of reasonable diligence should have
discovered, the injury and its causal relationship to
the act or omission complained of.
Id.
New Hampshire similarly imposes a three-year statute of
limitations on claims brought under its Consumer Protection Act.
Id. § 358-A:3, IV-a (exempting “[t]ransactions entered into more
than 3 years prior to the time the plaintiff knew, or reasonably
should have known, of the conduct alleged to be in violation of
this chapter” from its provisions).
Laura’s recitation of facts
in his complaint grounds his claims for “predatory lending”
(Count 1), unjust enrichment (Count 4), and civil conspiracy
(Count 5), as well as his claim under the Consumer Protection
Act (Count 2), squarely in the time period during which he
obtained the loans in question.
Predatory lending.
By the terms of the complaint,
“predatory lending” encompasses “any lending practice that
imposes unfair or abusive loan terms on a borrower” and “any
10
practice that convinces a borrower to accept unfair terms
through deceptive, coercive, exploitative or unscrupulous
actions for a loan that the borrower doesn't need, doesn't want
or cannot afford.”20
The defendants engaged in such a practice,
Laura contends, because “[i]t was undoubtedly obvious to the
Defendants at the time they disbursed funds to the Plaintiff
that he would be unable to repay such amounts . . . .”21
Under
the facts set forth in the complaint, these loans originated
between 1996 and 1999.
Accordingly, under these facts, even if
New Hampshire recognized “predatory lending” as a cause of
action (and it is not clear to the court, as discussed infra
Part III.B.1, that it does), Laura’s claim is time-barred.
Consumer Protection Act.
The same is true of Laura’s claim
under the Consumer Protection Act.
He alleges that, though he
“contracted with the Defendants for certain services to be
provided and performed in a legal and professional manner,” to
wit, “provid[ing] financing within [his] means,” they instead
“deceptively made [him] believe he was eligible to receive the
loans the Defendants[] provided when it fact he was not.”22
He
Compl. (doc. no. 1-3) ¶ 30. Laura provides no legal
authority, either in his complaint or his memoranda, in support
of these definitions.
20
21
Id. ¶ 31 (emphasis added).
22
Id. ¶¶ 53-54.
11
further alleges that the defendants issued to him loans “that
they knew [he] was not eligible for and could not repay,”
knowing and expecting that he would default, allowing them to
“charge the Plaintiff interest, fees and penalties to benefit
themselves.”23
Finally, he contends that the defendants
“misrepresented several material issues” and “failed to disclose
all terms and conditions of the loans,” though he does not
specify which material issues were misrepresented and what terms
and conditions the defendants failed to disclose.24
All of these
allegations refer to the origination of the loan and the
circumstances surrounding, and representations made in
connection with, that origination between 1996 and 1999.
This
claim is, therefore, also time-barred.
At oral argument, Laura contended that the June 21, 2017
letter concerning wage garnishment constituted an actionable
violation of the Consumer Protection Act within the three-year
limitations period.
Specifically, he clarified that he intended
to bring his claim under the Consumer Protection Act through New
Hampshire’s Unfair, Deceptive, or Unreasonable Collection
Practices Act (UDUCPA), N.H. Rev. Stat. Ann. § 358-C, invoking
the provision of that statute under which “[a]ny violation of
23
Id. ¶ 55.
24
Id. ¶¶ 56-57.
12
the provisions of this chapter shall also constitute an unfair
and deceptive act or practice within the meaning of RSA 358-A:2
and may be enforced by the attorney general pursuant to RSA 358A.”
Id. § 358-C:4, VI.
The June 21, 2017 wage garnishment
letter, he contended, constituted a UDUCPA violation sufficient
to trigger liability under the Consumer Protection Act.
Courts
in this district have expressed skepticism about whether this
provision allows for a private right actions.
See Gustafson v.
Recovery Servs., No. 14CV305-JD, 2015 WL 5009108, at *4 (D.N.H.
Aug. 21, 2015) (collecting cases).
Even if it did, Laura has
not pleaded any claim under the UDUCPA, alleged that the
June 21, 2017 letter violated the UDUCPA, or included any
allegations in his complaint that the UDUCPA provided a
predicate for his Consumer Protection Act claim.
Unjust enrichment.
Laura’s claim for unjust enrichment is
predicated on his “predatory lending” and Consumer Protection
Act claims.
Specifically, he alleges that the Defendants
purposefully engaged in “predatory lending” and the behavior
allegedly underlying his Consumer Protection Act claim “in a
deceptive attempt to pray [sic] upon unsuspecting borrowers like
the plaintiff to unjustly enrichment themselves.”25
Because it
relies on the allegations underlying those two time-barred
25
Id. ¶ 65.
13
claims, New Hampshire’s three-year statute of limitations on
personal actions similarly bars Laura’s claim for unjust
enrichment.
Good faith and fair dealing and civil conspiracy.
It is
not so clear to the court that Laura’s claim for breach of the
implied covenant of good faith and fair dealing (Count 2) is
time-barred.
To the extent that he invokes contract formation
as the basis for his claim, see Birch Broad., Inc. v. Capitol
Broad. Corp., 161 N.H. 192, 198 (2010) (implied good-faith
obligations include the category of “contract formation”), those
claims would be time-barred because the contract formation
occurred between 1996 and 1999, more than three years before
Laura filed his complaint.
He predicates this claim not only on the loan’s
origination, however, but also on the defendants’ refusal to
modify the terms of his loan or negotiate some alternative
resolution and on defendants’ attempts to garnish his wages.26
The complaint offers no clarity on the timeframe in which those
actions occurred.
To the extent that any occurred within the
three years before Laura filed his complaint, the statute of
limitations would not bar that claim.
The same may be said of
Laura’s civil conspiracy claim (Count 5).
26
See id. ¶¶ 49-50.
14
The court concludes,
however, that both of these claims must be dismissed for other
reasons, as discussed infra Part III.B.2, 5.27
The discovery rule.
In objecting to Performant’s motion,
Laura invokes the discovery rule, arguing that the court must
hold an evidentiary hearing before dismissing his claims on
statute of limitations grounds.28
“Once the defendant has
established that the statute of limitations would bar the
action, the plaintiff has the burden of raising and proving that
the discovery rule is applicable to an action otherwise barred
by the statute of limitations.”
181 (1995).
Glines v. Bruk, 140 N.H. 180,
Laura has not met that burden here.
Laura does not
plead any facts -- or assert in his objections any facts, or
indicate what facts may come to light through discovery -- that
suggest that the court should, or even permit that the court
Laura took the position at oral argument that, insofar as one
or more of his claims is not time-barred, the court should not
dismiss any of his claims that are. He has not offered, and the
court is unaware of, authority for the proposition that timebarred claims may proceed solely on the basis that other,
unrelated claims fall within the statute of limitations. Nor
has he provided any authority for the proposition that, because
the statute of limitations does not bar claims against one
defendant based on its recent actions, otherwise time-barred
claims against different defendants should be allowed to
proceed.
27
28
Obj. to Performant’s Mot. (doc. no. 18-1) at 4.
15
may, draw the inference that Laura may have been unaware of the
alleged misconduct at the time he obtained the loans.29
The terms of the complaint compel, instead, the opposite
conclusion.
His claims are premised on the conclusion that the
defendants knew or should have known, at the time they (or their
predecessors or agents) lent him money, that he would not be
able to repay it.
The bases pleaded for this knowledge -- his
lack of employment or prospects for employment, bank accounts,
credit, credit history, or assets, and the fact that he was a
single parent with minor children to support30 -- were as
available to the plaintiff as to the defendants at that time, as
was the fact that he did obtain the loans despite these
considerations.31
Thus, the complaint, even read in the light
most favorable to the plaintiff, does not support a conclusion
that the discovery rule precludes dismissal of these claims, or
Indeed, Laura did not even raise the discovery rule in his
objections to AES’s and Great Lakes’s motions. See Obj. to
AES’s Mot. (doc. no. 14-1) ¶ 11; Obj. to Great Lakes’ Mot. (doc.
no. 15-2) ¶ 10.
29
30
Compl. (doc. no. 1-3) ¶¶ 15, 18.
It may be that lenders possess algorithms or metrics to assess
loanworthiness unavailable to borrowers at the time of loan
origination. Laura did not contend, however, either in his
memoranda or at oral argument, that the defendants decided to
issue his loan despite an unfavorable assessment under any such
metrics; he bases his allegations solely on information clearly
known to him.
31
16
that Laura is entitled to an evidentiary hearing before their
dismissal.
B.
Failure to state a claim
Even setting aside the statute of limitations, Laura’s
complaint must be dismissed because he fails to plead “factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged” with
respect to any claim.
Martinez, 792 F.3d at 179.
Notably,
Laura does not object to any of the defendants’ motions to
dismiss or for judgment on the pleadings on the merits.
He
objects solely on the grounds that he has not yet conducted
discovery in this case, and thus the motions are premature.32
But the court’s task in resolving a motion to dismiss under
Rule 12(b)(6) is to decide “whether [the plaintiff] is entitled
to undertake discovery in furtherance of the pleaded claim.”
Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5, 13 (1st Cir. 2004).
That discovery has not yet commenced does not alleviate the
plaintiff of his burden of setting forth facts in his complaint
from which a court may reasonably conclude that he may be
entitled to undertake that discovery.
Here, Laura has not
carried that burden as to any claim.
See Obj. to AES’s Mot. (doc. no. 14-1) ¶ 11; Obj. to Great
Lakes’ Mot. (doc. no. 15-2) ¶ 10; Obj. to Performant’s Mot.
(doc. no. 18-1) at 4.
32
17
1.
“Predatory lending” (Count 1)
As discussed supra, Laura captions his first claim as
“Predatory Lending.”
He alleges, in effect, that the
defendants33 tortuously lent him money despite knowing or having
reason to know he could not repay it, thus opening him up to
“exorbitant interest, penalties and fees.”34
He has not,
however, offered an authority to establish “predatory lending”
as a recognized common-law cause of action under New Hampshire
law.
Nor can he ground such a claim on federal regulations
concerning registration of national banks that deal in municipal
securities, see 12 C.F.R. § 10, or on Regulation Z promulgated
under the Truth in Lending Act, see 12 C.F.R. §§ 1026.37 and
1026.38, and the Home Mortgage Disclosure Act, 12 U.S.C. § 2801
et seq., which concern mortgage lenders and mortgage loans, the
existence of which Laura has not alleged.35
On the facts
alleged, therefore, Laura has not established the availability
of, or stated a claim for, “predatory lending.”
Though just which defendants Laura charges with this action,
as discussed supra, it is not clear.
33
34
Compl. (doc. no. 1-3) ¶ 41.
35
Compl. (doc. no. 1-3) ¶¶ 33, 40 (citing these regulations).
18
2.
Breach of the covenant of good faith and fair
dealing (Count 2)
New Hampshire law recognizes the applicability of the
implied covenant of good faith and fair dealing in three
circumstances:
“(1) contract formation; (2) termination of at-
will employment agreements; and (3) limitation of discretion in
contractual performance.”
Birch Broad, 161 N.H. at 198.
Invoking the first and third of these categories, Laura contends
that the defendants breached this covenant by rejecting his
efforts to “work out an affordable repayment plan,” “refus[ing]
to accept anything except the amounts they demand,” and
otherwise “contracting with [him] in an unfair, unethical,
unprofessional and predatory manner . . . .”36
As to the limitation of discretion in performance, however,
“[c]ourts have generally concluded . . . that the covenant of
good faith and fair dealing in a loan agreement cannot be used
to require the lender to modify or restructure the loan.”
Moore
v. Mortgage Electronic Registration Systems, 848 F. Supp. 2d
107, 130 (D.N.H. 2012).
That is precisely what Laura asks here,
alleging a breach of the covenant in the defendants’ refusal to
accept a lump-sum payment or to negotiate more favorable terms
for repayment after Laura received the benefit of his bargain.
36
Compl. (doc. no. 1-3) ¶ 49.
19
And as to the contract’s formation, Laura has offered, and the
court has found, no authority suggesting that the facts alleged
by Laura underlying his theory of predatory lending bring his
claims within this category.
This claim must therefore be
dismissed.
3.
Consumer Protection Act (Count 3)
New Hampshire’s Consumer Protection Act renders it
“unlawful for any person to use any unfair method of competition
or any unfair or deceptive act or practice in the conduct of any
trade or commerce within this state.”
§ 358-A:2.
N.H. Rev. Stat. Ann.
The New Hampshire Supreme Court recognizes, however,
that, “although this provision is broadly worded, not all
conduct in the course of trade or commerce falls within its
scope.
‘An ordinary breach of contract claim, for example, is
not a violation of the CPA.’”
Turner v. Shared Towers VA, LLC,
167 N.H. 196, 209 (2014) (quoting Axenics, Inc. v. Turner Const.
Co., 164 N.H. 659, 675 (2013)).
Laura alleges that the defendants have violated this
statute in that they:
(1) “made the Plaintiff believe he was
eligible to receive the loans [they] provided when in fact he
was not”; (2) “provided loans to the Plaintiff that they knew
[he] was not eligible for and could not repay”;
(3) “misrepresented several material issues”; and (4) “failed to
20
disclose all terms and conditions of the loans.”37
Laura has not
indicated which of the prohibited offenses enumerated in the
Consumer Protection Act he accuses the defendants of committing,
see N.H. Rev. Stat. Ann. 358-A:2, I-XVII, and it does not appear
to the court that his allegations fall into any of those
categories.
When faced with determining whether “commercial actions not
specifically delineated are covered by the CPA,” the court
employs a “rascality test,” under which “the objectionable
conduct must attain a level of rascality that would raise an
eyebrow of someone inured to the rough and tumble of the world
of commerce.”
Turner, 167 N.H. at 209 (quoting Axenics, 164
N.H. at 675-76).
“[A] defendant who induces the plaintiff to
enter a contract based on a knowing misrepresentation of the
promisor’s intent to perform under the contract” and
“misrepresentations made by a defendant in an ongoing effort to
avoid performing under an agreement, when the defendant did not
intend to perform,” for example, may violate the Consumer
Protection Act.
Moulton v. Bane, 2016 DNH 58, 33-34
(DiClerico, J.) (internal quotations and citations omitted).
The present circumstances differ from these scenarios in
that Laura does not allege that the defendants misled him as to
37
Id. ¶¶ 54-57.
21
their intent to perform under the loan agreement.
Rather, he
alleges that they should have known he would be unable to
perform.
The court cannot conclude, under the facts alleged
here, that issuing a loan requested by the plaintiff to obtain
an education that, presumably as well as reasonably, he as well
as the lenders believed would increase his earning potential,
rises to the level of rascality required for a claim to lie
under New Hampshire’s Consumer Protection Act.
Furthermore,
Laura fails to allege just which “material issues” the
defendants misrepresented or what “terms and conditions of the
loans” they failed to disclose.38
Nor does he allege that he
would not have agreed to the loan or accepted the loaned funds
had he been aware of those “material issues” or “terms and
conditions.”
Accordingly, he has failed to state a claim under
New Hampshire’s Consumer Protection Act.
4.
Unjust enrichment (Count 4)
“Unjust enrichment is an equitable remedy that is available
when an individual receives a benefit which would be
unconscionable for him to retain.”
(citations and quotations omitted).
Axenics, 164 N.H. at 669
Such a claim is limited,
however, in that “the court cannot allow recovery under a theory
of unjust enrichment when there is a valid, express contract
38
See Compl. (doc. no. 1-3) ¶¶ 56-57.
22
covering the subject matter at hand.”
Id.
Here, Laura alleges
the existence of a contract between himself and his lender.39
Under the particular circumstances and facts pleaded (and not
pleaded) here, a claim for unjust enrichment does not lie in
light of such a contract’s existence.
Laura’s claim for unjust
enrichment must therefore be dismissed.
5.
Civil Conspiracy (Count 5)
To state a claim for civil conspiracy, the plaintiff must
allege:
(1) two or more persons (including corporations);
(2) an object to be accomplished (i.e., an unlawful
object to be achieved by lawful or unlawful means or a
lawful object to be achieved by unlawful means);
(3) an agreement on the object or course of action;
(4) one or more unlawful overt acts; and
(5) damages as the proximate result thereof.
Jay Edwards, Inc. v. Baker, 130 N.H. 41, 47 (1987) (internal
citations omitted).
Laura alleges no facts in support of these
elements; he relies, instead, only on unsupported conclusions
that, for example, “[t]he Defendants conspired, connived and
arrived at and acted in an agreement to accomplish their
objections,” which were “to commit all of the violations of law
stated [in the complaint] against the Plaintiff . . . .”40
Compl. (doc. no. 1-3) ¶¶ 44, 53; see also id. ¶¶ 15-16
(alleging that defendants loaned funds to plaintiff).
39
40
Compl. (doc. no. 1-3) ¶¶ 68-69.
23
He
does not, however, allege the existence of any agreement
between, or even communication among, the defendants, and for
the several reasons discussed in the preceding actions, he has
not alleged any violations of law.
Laura “merely offers legal
conclusions couched as fact or threadbare recitals of the
elements of [this] cause of action,” which the court must
disregard.
Ocasio-Hernández, 640 F.3d at 12 (internal
quotations and original alterations omitted).
Furthermore,
“[b]ecause the underlying tort upon which the civil conspiracy
claim is premised is dismissed, the conspiracy claim also
fails.”
Judge v. Moving Into Maths, No. 93-cv-213, 1994 WL
262883, at *6 (D.N.H. Jan. 11, 1994) (Diclerico, J.).
The court
therefore also dismisses Laura’s civil conspiracy claim.
C.
Laura’s affidavits
Laura has submitted several affidavits in support of his
objections.41
In resolving motions to dismiss under Rule
12(b)(6) and motions for judgment on the pleadings under Rule
12(c), the court considers only the allegations set forth in the
pleadings and “facts extractable from documentation annexed to
or incorporated by reference in the complaint and matters
susceptible to judicial notice.”
41
Rederford v. U.S. Airways,
See doc. nos. 14-2, 15-1, and 18-2.
24
Inc., 589 F.3d 30, 35 (1st Cir. 2009) (internal quotations and
citations omitted).
The court may consider facts external to these sources only
by converting the present motions to motions for summary
judgment.
See Fed. R. Civ. P. 12(d).
It is disinclined to do
so here, where the complaint was recently filed, the parties (by
their own representation) have not engaged in significant
discovery, and it is the plaintiff -- the nonmoving party -- who
seeks to introduce facts that he could have, but decided not to,
include in his complaint.
See United States v. Kattar, No. 95-
cv-221, 1996 WL 784587, at *3 (D.N.H. Dec. 31, 1996) (DiClerico,
J.) (“The court declines to convert the instant motion [to
dismiss] into a motion for summary judgment based on materials
that have been submitted by the nonmoving party and to which the
defendants have not responded.”); cf. Rubert-Torres v. Hosp. San
Pablo, Inc., 205 F.3d 472, 475 (1st Cir. 2000) (affirming
conversion where, nearly a year after the complaint was filed
and following substantial discovery, the plaintiff incorporated
extrinsic material into opposition to motion for judgment on the
pleadings).
Even were the court inclined to consider this external
information, the facts set forth in those affidavits would not
alter the court’s analyses supra Parts III.A and B.
He relies
on them to establish that (1) these defendants contacted him and
25
attempted to collect on the debts at issue; (2) he attempted to
negotiate a resolution; and (3) he was unsuccessful.
These
allegations largely address the defendants’ arguments that the
plaintiff has failed to plead with specificity just which
defendant has engaged in which acts of alleged misconduct.42
Though this deficiency does infect the complaint, the court
concludes that dismissal is warranted for other reasons, as
discussed supra Parts III.A and B.
To the extent that Laura relies on his affidavits to
“further clarif[y] some of the allegations” in his complaint,43
these allegations offer only minimal additional detail with
respect to Laura’s attempts to negotiate repayment plans,44 AES’s
acceleration of payment in light of Laura’s default,45 and
Performant Recovery’s attempt to attach his wages.46
Laura made
See, e.g., Great Lakes’s Mem. (doc. no. 13-1) at 3, 5; AES’s
Mem. (doc. no. 11-1) at 7; Performant’s Mem. (doc. no. 17-1) at
3.
42
Obj. to Performant Mot. (doc. no. 18-1) at 4. He does not
elaborate on the intended purpose of his affidavits in support
of his objections to AES’s and Great Lakes’s motions, referring
the court to them without argumentation or explanation. See
Obj. to AES’s Mot. (doc. no. 14-1) ¶ 12 (“See attached Affidavit
of James F. Laura.”); Obj. to Great Lakes’s Mot. (doc. no. 15-2)
¶ 11 (same).
43
Laura Aff’t (doc. no. 14-2) ¶¶ 4-7; Laura Aff’t (doc. no. 151) ¶¶ 5-8.
44
45
Laura Aff’t (doc. no. 14-2) ¶¶ 2-7.
46
Laura Aff’t (doc. no. 18-2) ¶¶ 2-3, 5-6.
26
each of these allegations more generally in his complaint,47
however, and the court addressed them in its analysis.
He has
offered no explanation or argument as to how these facts would
or should alter that analysis.
D.
Nor would they.
Request to amend the complaint
In his objection to Performant’s motion, Laura argues that
he ought to be afforded an opportunity to amend his complaint to
offer “more information on [Performant’s] specific role.”48
This
request runs afoul of this court’s local rules, which provide
that “[o]bjections to pending motions and affirmative motions
for relief shall not be combined in one filing.”
LR 7.1(a)(1).
Even if it did not, permitting Laura to amend his complaint with
respect to the claims barred by the statute of limitations would
be futile.
See Rife v. One W. Bank, F.S.B., 873 F.3d 17, 21
(1st Cir. 2017) (upholding denial of motion to amend complaint
where predatory lending claims were barred by statute of
limitations).
Such an amendment would also be futile as to
Laura’s claim for breach of the covenant of good faith and fair
dealing.
Increased clarity on Performant’s role in rejecting
Laura’s efforts to modify the loan would not clear the hurdle
that such a claim “cannot be used to require the lender to
47
Compl. (doc. no. 1-3) ¶¶ 20, 22.
48
Obj. to Performant Mot. (doc. no. 18-1) at 3-4.
27
modify or restructure the loan.”
Moore, 848 F. Supp. 2d at 130.
Finally, additional allegations as to the actions of a single
defendant would not save Laura’s civil conspiracy claim, which
depends on the actions of more than one party.
Conclusion
Laura’s claims for “predatory lending,” unjust enrichment,
and violations of New Hampshire’s Consumer Protection Act
arising out of events occurring between 1996 and 1999 are barred
by New Hampshire’s three-year statute of limitations.
He
further fails to recite facts sufficient to state those claims,
as well as his claims for breach of the covenant of good faith
and fair dealing and civil conspiracy, against the defendants.
The defendants’ motions to dismiss49 and for judgment on the
pleadings50 are, accordingly, GRANTED.
the complaint51 is DENIED.
Laura’s request to amend
The court also dismisses, without
prejudice, Laura’s complaint against Goal Financial, LLC.
Fed. R. Civ. P. 4(m).
The clerk shall enter judgment
accordingly and close the case.
49
Doc. nos. 11, 13.
50
Doc. no. 17.
51
Doc. no. 18-1 at 3-4.
28
See
SO ORDERED.
Joseph N. Laplante
United States District Judge
Dated:
cc:
February 1, 2018
Peter G. McGrath, Esq.
Lisa Snow Wade, Esq.
Scott H. Harris, Esq.
Ashley B. Scott, Esq.
Dianne E. Ricardo, Esq.
John J. O’Connor, Esq.
Robert A. McCall, Esq.
29
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