Hamilton v. Fed. Home Loan Mortg. Corp., 2:13-cv-00414-JAW

Decision Date15 September 2014
Docket Number2:13-cv-00414-JAW
PartiesRICHARD E. HAMILTON, JR., et al., Plaintiffs, v. FEDERAL HOME LOAN MORTGAGE CORPORATION D/B/A FREDDIE MAC, et al., Defendants.
CourtUnited States District Courts. 1st Circuit. United States District Court (Maine)

RICHARD E. HAMILTON, JR., et al., Plaintiffs,
v.
FEDERAL HOME LOAN MORTGAGE CORPORATION
D/B/A FREDDIE MAC, et al., Defendants.

2:13-cv-00414-JAW

UNITED STATES DISTRICT COURT DISTRICT OF MAINE

September 15, 2014


ORDER AFFIRMING IN PART AND REJECTING IN PART THE RECOMMENDED DECISION OF THE MAGISTRATE JUDGE

Richard E. Hamilton, Jr. and Richard E. Hamilton, Sr. brought this seventeen-count civil case against numerous Defendants with connections to Richard Hamilton, Jr.'s now-defaulted home loan and the efforts of various creditors to foreclose his mortgage. Before the Court are motions to dismiss by Nationstar Mortgage, LLC (Nationstar); the Federal Home Loan Mortgage Corporation (Freddie Mac); Phillips, Olore, Dunlavey & York, P.A. (PODY), a law firm; and Attorney Brent A. York (Attorney York). The Magistrate Judge recommended dismissal of a number of the claims against these Defendants. With the exception of one issue not before the Magistrate Judge, the Court affirms the Magistrate Judge's recommendations.

I. LEGAL STANDARD

When evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, a court must

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determine "whether, construing the well-pleaded facts of the complaint in the light most favorable to the plaintiffs, the complaint states a claim for which relief can be granted." Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 7 (1st Cir. 2011). A court need not assume the truth of conclusory allegations, and the complaint must state at least a "plausible claim for relief." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). However, "[n]on-conclusory factual allegations in the complaint must . . . be treated as true, even if seemingly incredible." Ocasio-Hernández, 640 F.3d at 12. A court may not "attempt to forecast a plaintiff's likelihood of success on the merits." Id. at 13. Furthermore, courts should be "solicitous of the obstacles that pro se litigants face, and . . . endeavor, within reasonable limits, to guard against the loss of pro se claims due to technical defects." Dutil v. Murphy, 550 F.3d 154, 158-59 (1st Cir. 2008). In deciding a Rule 12(b)(6) motion, a court may consider any documents attached to the complaint as well as any other documents "integral to or explicitly relied upon in the complaint, even though not attached to the complaint." Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008) (quoting Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000)).

II. FACTUAL BACKGROUND

A. Facts Alleged in the Complaint

1. The Parties

Richard E. Hamilton, Jr. (REH, Jr.) is a resident of Merritt Island, Florida and New Gloucester, Maine, Aff. of Paula Lee-Chambers Attach. 18 Compl. ¶ 1 (ECF No. 40) (Compl.); Richard E. Hamilton, Sr. (REH, Sr.) is a resident of Turner, Maine. Id. ¶ 2.

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Freddie Mac is a private corporation that purchases and guarantees mortgages, with headquarters in McLean, Virginia. Id. ¶ 3. Nationstar is a mortgage servicing company with headquarters in Lewisville, Texas. Id. ¶ 7.

PODY is a law firm with headquarters in Presque Isle, Maine. Id. ¶ 8. Attorney York practices law in Presque Isle, Maine. Id. ¶ 9. Nationstar, PODY, and Attorney York provided services to Freddie Mac. Id. ¶ 11.

2. The Purchase and Sale

On May 19, 2000, REH, Jr., then 28 years old, signed a contract to purchase a mobile home and land in New Gloucester, Maine for $99,000.00. Id. ¶¶ 12, 16. REH, Jr. financed the purchase through a loan from Bank of America (BOA). Id. ¶¶ 13-15. On July 21, 2000, as part of the transaction, REH, Jr. granted a mortgage on the property to BOA. Id. ¶ 15. The Plaintiffs allege that REH, Jr. received numerous unsigned documents related to the loan at the closing. Id. They also allege that he "[r]equested an owner's policy of title insurance which has not been received," id. ¶ 15(B), though the unsigned Settlement Statement showed a fee paid for owner's coverage. Id. ¶ 15(I).

In July 2005, REH, Jr. moved to Florida. Id. ¶ 47(C). However, he "has maintained a residence in both Maine and Florida," id. ¶ 47(D), and has not abandoned his property in Maine. Id. ¶ 47(E). On a routine basis, REH, Sr. would perform yard maintenance, repairs, snow removal, and security checks at the New Gloucester property. Id. ¶ 27. They have maintained the property in good order. Id. ¶ 47(F).

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3. Mr. Hamilton, Jr.'s Private Mortgage Insurance

The mortgage contract—REH, Jr.'s copy of which was unsigned—called for a monthly payment of $61.13 for private mortgage insurance (PMI) premiums. Id. ¶ 32(A). At the closing, no one told REH, Jr. that his PMI could be terminated. Id. ¶ 32(B). Between 2000 and 2010, REH, Jr. never received a notice from BOA that his PMI could be terminated and cancelled, nor any telephone number that he could call to inquire about this topic; however, he did receive such notices and telephone number(s) in 2011 and 2012. Id. ¶ 32(C), (D), (G). Between January 2004 and September 2013, the PMI premium changed from $61.13 to $15.68. See id. ¶ 32(I)-(K).

4. Toxic Waste and Mr. Hamilton, Jr.'s Default

An automobile junkyard abuts REH, Jr.'s property in New Gloucester. Id. ¶ 18. A portion of this junkyard encroached onto REH, Jr.'s property by approximately twenty-five feet. Id. ¶ 19(F). The Plaintiffs allege that BOA, the surveyor, and the appraiser hired by BOA knew of this encroachment before the closing but concealed this fact from REH, Jr. Id. ¶¶ 23-24. Toxic waste from the automobile junkyard has leaked onto REH, Jr.'s property, causing damage to the land. Id. ¶ 20. REH, Jr. cannot rent out his property because of the hazardous waste problem. Id. ¶ 47(H). In addition, the presence of toxic waste scuttled a sale of the land that would have closed on October 1, 2007. Id. ¶¶ 20-22, 25-26. Thereafter, REH, Jr. ceased making any payments on the mortgage. Id. ¶ 17.1

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5. Foreclosure Proceedings Commence in 2008

Beginning on March 12, 2008, and continuing through May 28, 2013, REH, Sr. learned that a company called Safeguard Properties had changed the locks on the New Gloucester mobile home. Id. ¶ 27. He also found a variety of notices posted on the property indicating that foreclosure proceedings were in progress and that unauthorized persons were prohibited from entering the premises. Id.

REH, Jr. received numerous letters during this period threatening foreclosure. Id. ¶ 36. These included letters from PODY and Attorney York on March 4, 2010 and August 22, 2011. Id. ¶ 36(B), (C). Nationstar also sent a letter threatening foreclosure on July 26, 2013. Id. ¶ 36(F).

On March 11, 2010, REH, Jr. received a "Notice Of Default" from Attorney York, dated March 4, 2010. Id. ¶ 37. On March 16, 2010, REH, Jr. replied by letter to Attorney York with a proposed settlement offer. Id. ¶ 37(B). Attorney York did not respond to this letter. Id. REH, Jr. sent another letter to Attorney York on May 28, 2010, indicating that there were errors in the notice of default and requesting "the status of foreclosure regarding me and my property." Id. ¶ 37(C). Attorney York did not reply to this letter either. Id.

Over a year later, on September 8, 2011, REH, Jr. received a letter from Attorney York. Id. ¶ 37(D). The Complaint alleges that this letter recited an incorrect amount of debt, but the letter did state that if REH, Jr. wrote back indicating the debt was disputed, Attorney York would provide him with verification of the debt. Id.

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On October 3, 2011, REH, Jr. wrote back to Attorney York disputing the debt, but Attorney York did not respond. Id. ¶ 37(E).

6. Mr. Hamilton, Jr.'s Mortgage Changes Hands in 2009 and 2013

On November 2, 2009, REH, Jr. received a letter dated October 21, 2008 from BOA, stating that Bank of America Corporation d/b/a BAC Home Loans Servicing, LP would be the new servicer for his mortgage. Id. ¶¶ 5, 34.

On March 7, 2013, REH, Jr. received a letter dated March 1, 2013 from Nationstar, stating that as of February 16, 2013, Nationstar would be servicing the mortgage. Id. ¶ 35. Nationstar is now listed as "Lienholder #1" on REH, Jr.'s homeowner's insurance policy. Id. ¶ 35(A).

7. Bank of America's 2011 Foreclosure Proceeding

BOA, through PODY and Attorney York, filed a complaint for foreclosure in the Maine District Court on September 6, 2011. Id. ¶ 38; see also id. ¶¶ 11, 38(E)-(G).2 REH, Sr., who was apparently a party in interest to the foreclosure, was served with the foreclosure complaint on March 21, 2012. Id. ¶ 38(A). REH, Jr. was served with the complaint on July 16, 2012. Id. ¶ 38(C). The Maine Superior Court, to which the case was removed, dismissed the complaint without prejudice on July 25, 2012. Id. ¶ 38(D).

On September 22, 2011, a foreclosure document was filed in the Cumberland County Registry of Deeds in the names of REH, Jr. and REH, Sr. Id. ¶ 38(H).

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However, following the dismissal of the foreclosure action, the foreclosure document remains in effect and no release has been filed. Id. ¶ 38(I).

The Complaint further alleges that "PODY and [Attorney York] caused REH, Jr. and REH, Sr. a lot of grief, lost time, expenses, and money, to defend this vexatious...

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