Martin et al v. Wells Fargo Bank, N.A. et al
Filing
18
ORDER denying 12 Motion for Reconsideration re: Order on Motion to Dismiss for Failure to State a Claim. 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. 18-cv-489-LM
Opinion No. 2018 DNH 173
Wells Fargo Bank, N.A. and Amy Azza
O R D E R
Michael and Julie Martin brought suit against Wells Fargo
Bank, N.A. (“Wells Fargo”) and Amy Azza asserting claims for
wrongful foreclosure and intentional infliction of emotional
distress against Wells Fargo, and a claim for fraud against both
defendants.
Defendants moved to dismiss, arguing that all the
claims were barred by res judicata.
motions.1
Judge Barbadoro denied the
Wells Fargo moves for partial reconsideration of Judge
Barbadoro’s order, arguing that he erred in finding that
plaintiffs’ claim for intentional infliction of emotional
distress was not barred by res judicata.
STANDARD OF REVIEW
Granting reconsideration of an order is “‘an extraordinary
remedy which should be used sparingly.’”
Palmer v. Champion
Mtg., 465 F.3d 24, 30 (1st Cir. 2006) (quoting 11 Charles Alan
After Judge Barbadoro ruled on defendants’ motions to
dismiss, he recused himself from the case and the matter was
reassigned to the undersigned judge.
1
Wright et al., 11 Federal Practice and Procedure § 2810.1 (2d
ed. 1995)).
For that reason, reconsideration is “appropriate
only in a limited number of circumstances: if the moving party
presents newly discovered evidence, if there has been an
intervening change in the law, or if the movant can demonstrate
that the original decision was based on a manifest error of law
or was clearly unjust.”
United States v. Allen, 573 F.3d 42, 53
(1st Cir. 2009).
BACKGROUND
Prior to this case, plaintiffs brought two lawsuits against
Wells Fargo.
Plaintiffs asserted a claim for intentional
infliction of emotional distress in both of those cases.
Wells
Fargo contends that in light of the court’s orders dismissing
those claims in both cases, the doctrine of res judicata bars
that same claim in this lawsuit.
I.
Plaintiffs’ Prior Lawsuits Against Wells Fargo
In Martin v. Wells Fargo Bank, N.A. et al., 15-cv-447-LM
(“Martin I”), plaintiffs asserted claims against Wells Fargo for
wrongful foreclosure, intentional infliction of emotional
distress, and declaratory relief.
The court granted Wells
Fargo’s motion to dismiss, noting that all of plaintiffs’
“claims against Wells Fargo are based on the allegation that
Wells Fargo does not have the legal authority to foreclose on
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their home.”
Martin v. Wells Fargo Bank, N.A., No. 15-cv-447-
LM, 2016 WL 1611113, at *3 (D.N.H. Apr. 21, 2016).
The court
held that because the exhibits attached to plaintiffs’ complaint
showed that Wells Fargo had the authority to foreclose on their
home, plaintiffs failed to state any plausible claims for relief
against Wells Fargo.
Plaintiffs then brought a second suit against Wells Fargo.
See Martin v. Wells Fargo Bank, N.A. et al., 17-cv-538-PB
(“Martin II”).
In Martin II, plaintiffs asserted claims against
Wells Fargo for fraudulent concealment, intentional infliction
of emotional distress, and declaratory relief.
Wells Fargo
moved to dismiss, arguing that plaintiffs’ claims were barred by
the doctrines of res judicata and collateral estoppel.
With
respect to plaintiffs’ claim for intentional infliction of
emotional distress, Wells Fargo argued: “Essentially, Plaintiffs
allege that Wells Fargo caused emotional distress when it
attempted to foreclose on Plaintiffs’ Property in which Wells
Fargo purportedly had ‘no right, title, or interest.’”
II, doc. no 4-1 at 15.
Martin
Wells Fargo contended that all of the
claims asserted in both Martin I and Martin II were “predicated
on the same nucleus of operative (alleged) facts, including that
Plaintiffs’ mortgage loan was allegedly fraudulently and
improperly originated and sold in 2009 and that Wells Fargo
lacks any interest in the Property and has no power to foreclose
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because it does not hold the Mortgage or Note.”
Id. at 6.
On
December 20, 2017, the court in Martin II granted Wells Fargo’s
motion to dismiss, stating in an endorsed order that for “the
reasons set forth in the memorandum of law filed in support of
defendants’ motion to dismiss, the plaintiffs’ claims are barred
by res judicata.”
II.
The Instant Case
Plaintiffs then brought this lawsuit against Wells Fargo
and Azza asserting claims for wrongful foreclosure and
intentional infliction of emotional distress against Wells
Fargo, and a claim for fraud against both defendants.
Defendants moved to dismiss all claims, arguing that they were
barred by res judicata in light of both Martin I and Martin II.
On July 3, 2018, Judge Barbadoro denied the motions to dismiss
in an endorsed order, stating:
Although I agree that Plaintiffs are barred by res
judicata from relitigating claims that were resolved
by the dismissal of the prior lawsuits, I am not
persuaded on the present record that res judicata
requires the dismissal of the current action. The
current action challenges the November 7, 2017
foreclosure sale and a subsequent eviction proceeding.
These proceedings were not at issue in the prior
lawsuits and the record does not reveal whether
plaintiffs were even aware of the proceedings at any
point prior to the dismissal of the prior actions.
Accordingly, I cannot conclude on this record that
Plaintiffs had a full and fair opportunity to litigate
their current claims in the prior actions.
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Wells Fargo moves for partial reconsideration of that order,
arguing that Judge Barbadoro committed a manifest error of law
in failing to find that plaintiffs’ claim for intentional
infliction of emotional distress is barred by res judicata.
DISCUSSION
Res judicata precludes parties from relitigating claims
that were raised or could have been raised in an action for
which a final judgment has been issued.
Bay State HMO Mgmt.,
Inc. v. Tingley Sys., Inc., 181 F.3d 174, 177 (1st Cir. 1999).
Under the federal law standard,2 three elements must exist for
res judicata to apply: (1) a final judgment on the merits in an
earlier suit; (2) sufficient identity between the causes of
action asserted in the earlier and later suits; and (3)
sufficient identity between the parties in the earlier and later
suits.
Havercombe v. Dep’t of Educ. of P.R., 250 F.3d 1, 3 (1st
Cir. 2001) (citing Kale v. Combined Ins. Co. of Am., 924 F.2d
1161, 1166 (1st Cir. 1991)).
To determine whether there is
sufficient identity between two causes of action, the court asks
whether they “were sufficiently related, that is, if they were
“Federal law principles of res judicata govern the
preclusive effect of a prior federal court’s judgment on a
subsequent action brought in federal court.” Apparel Art Int'l,
Inc. v. Amertex Enters. Ltd., 48 F.3d 576, 582 (1st Cir. 1995).
Because the earlier judgment in this case was rendered by a
federal court, the preclusive effect of that judgment in the
instant case is governed by federal res judicata principles.
2
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founded upon the same transaction, arose out of the same nucleus
of operative facts, and sought redress for essentially the same
basic wrong.”
Kale, 924 F.2d at 1166.
The party asserting the
defense of res judicata bears the burden of proof as to the
defense.
See Dillon v. Select Portfolio Servicing, 630 F.3d 75,
80 (1st Cir. 2011).
Wells Fargo asserts that plaintiffs’ intentional infliction
of emotional distress claim in this case is based on the
allegation that Wells Fargo made several “robo-calls” in 2015 to
their cell phones, even after plaintiffs told Wells Fargo to
stop.
It states that this allegation formed the basis of
plaintiffs’ intentional infliction of emotional distress claim
in Martin II, which the court dismissed.
Wells Fargo contends,
therefore, that dismissal of plaintiffs’ intentional infliction
of emotional distress claim on res judicata grounds is
appropriate.
Wells Fargo’s argument is misplaced.
As discussed supra,
Wells Fargo successfully moved to dismiss plaintiffs’
intentional infliction of emotional distress claim in Martin II
on res judicata grounds based on Martin I, arguing that the
claim in both cases was premised on Wells Fargo’s lack of
authority to foreclose.
In both its motion to dismiss and its
motion for reconsideration in this case, Wells Fargo
conveniently ignores that fact.
Instead, it seizes on a single
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allegation in plaintiffs’ complaint in Martin II that references
Wells Fargo’s alleged robo-calls.
Ignoring its own arguments
and the holdings of the courts’ orders in Martin I and Martin
II, Wells Fargo now argues that allegations concerning its 2015
robo-calling “formed the basis of Plaintiffs’ [intentional
infliction of emotional distress] claim in Martin II” which the
court dismissed “based on the res judicata effect of Martin I.”
Doc. no. 6-1 at 8; see doc. no. 12-1 at 2-3.
That is simply not
the case.
Plaintiffs’ intentional infliction of emotional distress
claim does not arise out of the same nucleus of operative fact
as the claims asserted in Martin I and Martin II.
Therefore,
Wells Fargo has not demonstrated that Judge Barbadoro made a
manifest error of law in denying its motion to dismiss as to
plaintiffs’ intentional infliction of emotional distress claim.
CONCLUSION
For the foregoing reasons, Wells Fargo’s motion for
reconsideration (doc. no. 12) is denied.
SO ORDERED
__________________________
Landya McCafferty
United States District Judge
August 29, 2018
cc: Julie A. Martin pro se
Michael C. Martin, pro se
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Derek Anthony Castello, Esq.
David D. Christensen, Esq.
William A. Staar, Esq.
Brian Andrew Suslak, Esq.
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