Norman L. Lesser v. Wells Fargo Bank, N.A.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2015-0663, Norman L. Lesser v. Wells Fargo
Bank, N.A., the court on May 31, 2016, issued the following
order:

Having considered the briefs and record submitted on appeal, we conclude
that oral argument is unnecessary in this case. See Sup. Ct. R. 18(1). We affirm.

The plaintiff, Norman L. Lesser (owner), appeals an order of the Superior
Court (Temple, J.) granting summary judgment in favor of the defendant, Wells
Fargo Bank, N.A. (bank). He contends that the trial court erred by: (1) finding
that the bank did not owe him a fiduciary duty in connection with his application
to modify his mortgage loan; and (2) denying his claim for injunctive relief
“without looking at the merits.”

We review the trial court’s grant of summary judgment by considering the
summary judgment record, and all inferences properly drawn from it, in the light
most favorable to the non-moving party. Pike v. Deutsche Bank Nat’l Trust Co.,
168 N.H. 40, 42 (2015). If our review of that evidence discloses no genuine issue
of material fact, and if the moving party is entitled to judgment as a matter of
law, we will affirm the grant of summary judgment. Id. We review the trial
court’s application of the law to the facts de novo. Id.

We first address whether the bank owed the owner a fiduciary duty in
connection with his application to modify his mortgage loan. A fiduciary
relationship has been defined to exist wherever influence has been acquired and
abused or confidence has been reposed and betrayed. Bascom Construction v.
City Bank and Trust, 137 N.H. 472, 476 (1993). Whether a duty exists in a
particular case is a question of law. Ahrendt v. Granite Bank, 144 N.H. 308, 314
(1999).

As a general rule, the relationship between a bank and a customer is not a
fiduciary one, unless the law otherwise specifies. Id. at 311. The relationship
between a bank and its borrower is a creditor-debtor relationship and
contractual in nature. Cf. id. (stating relationship between bank and depositor is
contractual debtor-creditor relationship). The mere fact that a relationship is
long-standing does not create a fiduciary duty. Id. at 312.

When a bank sells a mortgagor’s property at foreclosure, it has a duty of
good faith and due diligence to the mortgagor that is essentially that of a
fiduciary. First NH Mortgage Corp. v. Greene, 139 N.H. 321, 323 (1995). This
duty arises from the contractual relationship between the two parties. DeLellis v.
Burke, 134 N.H. 607, 612 (1991). However, the existence of a fiduciary
relationship in this context does not mean that a fiduciary relationship always
exists. Ahrendt, 144 N.H. at 311. We have declined to extend even this fiduciary
duty. See Bascom, 137 N.H. at 476 (stating fiduciary duty does not extend to
material lien holders); DeLellis, 134 N.H. at 612 (stating fiduciary duty does not
extend to creditors).

We agree with the trial court that the owner “does not articulate how the
facts established support an inference that an influence has been acquired and
abused, or a confidence has been reposed and betrayed” by the bank in
connection with his application to modify his mortgage loan. See Bascom, 137
N.H. at 476. The owner argues that, given that the bank’s fiduciary duty in
connection with a foreclosure sale is rooted in contract, “there is no valid reason
to circumscribe the scope of the duty to one particular section of the contract.”
However, this argument begs the question whether his contract with the bank
includes an obligation regarding the modification of his mortgage loan.

To the extent that the owner alleges that the bank promised to modify his
home equity line of credit, he did not plead a claim in connection with that loan.
See Morancy v. Morancy, 134 N.H. 493, 497 (1991) (stating defendant entitled to
have case tried and decided on the grounds alleged in the complaint). Nor does
he explain how such a promise would establish a duty in connection with the
modification of the mortgage loan.

Although the owner’s complaint stated that the bank owed him “a fiduciary
duty of good faith and due diligence,” and his count was captioned “Breach of
Fiduciary Duty/Damages,” he contends that the trial court engaged in a “hyper-
technical interpretation of [his] complaint” by limiting its consideration to
fiduciary duties. He argues that such reading “is not warranted by the
procedural history of this case” because the bank “knew of [his] entire claim at
the preliminary injunction hearing” as evidenced by its reference to his theory
that he was forced into default on his mortgage loan as a result of the bank
failing to “work with him to modify his equity loans.” However, he does not
explain how this shows that the bank owed him a duty in connection with his
application to modify his mortgage loan.

The owner argues that “[h]owever defined by this Court, [the bank] owes a
duty to its mortgagor” and that, if we disagree that this duty is fiduciary, then we
should “simply” apply “another standard of conduct.” However, the only source
that he posits for such a duty is contract, which he has not alleged in connection
with his application to modify his mortgage loan.

To the extent that the owner argues that the bank did not deal with him
“in a fair and reasonable manner” in connection with his application to modify
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his mortgage loan, he does not establish that it had a duty to do so. Accordingly,
we need not address the owner’s arguments regarding the parameters of such a
duty. To the extent that the owner invites us to create a new duty, on this record
we decline to do so. We conclude that, viewed in the light most favorable to the
owner, the evidence discloses no genuine issue of material fact, and that the
bank was entitled to judgment as a matter of law on this issue. See Pike, 168
N.H. at 42.

We next address the denial of the owner’s request for an injunction. The
issuance of an injunction is an extraordinary remedy. Pike, 168 N.H. at 45. A
trial court may grant an injunction when it is “necessary to prevent fraud or
injustice.” RSA 498:2 (2010). The decision to do so rests within the trial court’s
sound discretion, after consideration of the facts and established principles of
equity, and depends upon the factual circumstances in each case. City of Keene
v. Cleaveland, 167 N.H. 731, 742 (2015). Courts have considerable discretion in
determining whether equity should intervene to aid litigants in the protection of
their legal rights. Id. We will uphold the decision of the trial court with regard to
the issuance of an injunction absent an error of law, an unsustainable exercise of
discretion, or clearly erroneous findings of fact. Id.

In this case, the owner argues that the trial court should have enjoined
foreclosure by the bank because, when taken in the light most favorable to him,
the facts alleged show that the bank lacked “standing” to do so. He argues that
affidavits and depositions of bank employees show that the bank did not “own
either the note or mortgage.” (Emphasis in original.) However, the owner did not
plead this claim, nor did he seek to amend his complaint to include it. See
Morancy, 134 N.H. at 497. As a result, the trial court concluded that “the issue
of whether [the bank held] the note and mortgage has no bearing on . . . [the]
determination on summary judgment.”

The owner argues that he was not required “to amend the complaint each
time [he] discover[ed] additional evidence which supports his original claim.” He
contends that his complaint was sufficient because it sought an injunction. We
disagree. Although a request for permanent injunctive relief need not be
accompanied by a claim for damages, it must be predicated upon some
underlying claim. See Meredith Hardware, Inc. v. Belknap Realty Trust, 117 N.H.
22, 24 (1977) (dissolving injunction when defendant did not violate his lease and
had no actual or constructive notice of restrictions imposed upon his premises by
covenant in plaintiff’s lease); cf. DuPont v. Nashua Police Dep’t, 167 N.H. 429,
434 (2015), cert. denied sub nom. McDonough v. Dupont, 136 S. Ct. 533 (2015)
(stating party seeking preliminary injunction must show, among other things,
that it would likely succeed on merits).

Unlike the plaintiff in Cleaveland, who specifically alleged facts that
supported its request for an injunction although they were not included in
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express claims, 167 N.H. at 742-43, in this case the owner did not allege any
facts in the complaint regarding the bank’s lack of possession of the note and
mortgage in his complaint. The owner argues that he failed to include such
allegations because he learned of them only during discovery. However, he
represents that he had at least three months between discovering these facts and
filing his motion for summary judgment on this issue, yet he did not seek to
amend his complaint in that time.

The owner argues that the bank was not prejudiced by his failure to amend
his complaint to add this new underlying claim because it “knew the underlying
facts, was cognizant of the request for injunctive relief, and was able to defend
the same.” Although New Hampshire is a notice pleading jurisdiction, and, as
such, we take a liberal approach to the technical requirements of pleadings,
Cleaveland, 167 N.H. at 743, the bank’s alleged knowledge of the facts does not
alter our requirement that it was entitled to have the case decided upon the
grounds for relief alleged in the complaint. See Morancy, 134 N.H. at 497.
Furthermore, we note that the complaint sought a “preliminary and permanent
injunction to foreclosure pending modification and/or refinance,” but the owner
argues that he is now entitled to an injunction barring the bank “from foreclosing
the mortgage . . . until it obtained standing to foreclose.”

We conclude that, viewed in the light most favorable to the owner, the
evidence discloses no genuine issue of material fact and that the bank was
entitled to judgment as a matter of law. See Pike, 168 N.H. at 42.

Affirmed.

Dalianis, C.J., and Hicks, Lynn, and Bassett, JJ., concurred.

Eileen Fox,
Clerk

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