Sanford Woodmansee & a. v. Federal National Mortgage Association

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2017-0109, Sanford Woodmansee & a. v.
Federal National Mortgage Association, the court on September
19, 2017, issued the following order:

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

The plaintiffs, Sanford Woodmansee and Betty Woodmansee, appeal the
order of the Superior Court (Delker, J.) entering summary judgment in favor of
the defendant, Federal National Mortgage Association (Fannie Mae). The trial
court ruled that the plaintiffs’ complaint, which challenges the defendant’s
right to obtain ownership of the subject property through foreclosure, is barred
by the doctrine of res judicata. The plaintiffs argue that trial court erred
because, they claim: (1) no court of competent jurisdiction has ruled that the
defendant owns the property; (2) the defendant’s affidavit in support of
summary judgment is not based upon personal knowledge of the facts; and
(3) there are genuine issues of material fact.

When reviewing a trial court’s grant of summary judgment, we consider
the affidavits and other evidence, and the inferences properly drawn from
them, in the light most favorable to the non-moving party. Sabinson v.
Trustees of Dartmouth College, 160 N.H. 452, 455 (2010). If this review does
not reveal any genuine issues of material fact, i.e., facts that would affect the
outcome of the litigation, and if the moving party is entitled to judgment as a
matter of law, we will affirm. Id. We review the trial court’s application of the
law to the facts de novo. Id.

The record shows that the plaintiffs initiated a prior action against the
defendant to enjoin the foreclosure. On April 10, 2014, after a hearing, the
superior court noted that there was no dispute that the plaintiffs were in
default on their mortgage. Although the court also noted that the defendant
“presented compelling arguments that [an] injunction should not be granted,” it
nevertheless enjoined the scheduled foreclosure sale for 90 days to allow the
plaintiffs to apply for a loan modification, on the condition that they pay
$1,782 per month in escrow as security. On July 15, 2014, after a hearing at
which the plaintiffs failed to appear, the court found that they had failed to
comply with the conditions of its order. The court lifted the injunction and
allowed the defendant to proceed with the foreclosure sale the following day.
Fannie Mae, as the highest bidder, purchased the property at foreclosure, and
on December 2, 2014, filed its foreclosure deed and affidavit, as required by
RSA 479:26 (2013).
 On June 4, 2015, Fannie Mae filed a landlord and tenant writ in the
circuit court to obtain possession of the property. See RSA chapter 540 (2007
& Supp. 2016). The Woodmansees filed a plea challenging Fannie Mae’s title.
On July 8, 2015, the circuit court ordered the Woodmansees to file their title
action in the superior court by the next return day and to pay a recognizance of
$1,000 and rent of $1,000 per month. See RSA 540:17 (2007) (“If the
defendant shall plead a plea which may bring in question the title to the
demanded premises he shall forthwith recognize to the plaintiff, with sufficient
sureties, in such sum as the court shall order, to enter his action in the
superior court for the county at the next return day, and to prosecute his
action in said court, and to pay all rent then due or which shall become due
pending the action, and the damages and costs which may be awarded against
him.”). The circuit court further ordered that it would enter judgment for
Fannie Mae if the Woodmansees failed to comply with its order. See RSA
540:19 (2007) (“If the defendant neglects or refuses to recognize, judgment
shall be rendered against him in the same manner as if he had refused to make
answer to the suit.”). On December 1, 2015, after a hearing, the circuit court
found that the Woodmansees failed to pay the recognizance as ordered and
failed to file their title action in the superior court. Accordingly, the court
entered judgment for the Fannie Mae. We declined the Woodmansees’ appeal,
see Fannie Mae v. Woodmansee, No. 2016-0001 (N.H. Feb. 12, 2016), and the
circuit court’s judgment thus became final.

On March 1, 2016, the plaintiffs filed the present action in the superior
court alleging that the defendant’s foreclosure deed is fraudulent and invalid
pursuant to RSA 478:42 (Supp. 2016) because its supporting affidavit contains
material misrepresentations regarding the procedural history of the foreclosure
process. In granting summary judgment, the trial court ruled that the claim is
barred by res judicata.

The plaintiffs first argue that res judicata does not apply because no
court of competent jurisdiction has expressly ruled that the defendant owns
the property. The applicability of res judicata is a question of law that we
review de novo. Sleeper v. Hoban Family P’ship, 157 N.H. 530, 533 (2008).
Res judicata precludes the litigation in a later case of matters actually decided,
and matters that could have been litigated, in an earlier action between the
same parties for the same cause of action. Id.

RSA 478:42 provides that a person may not knowingly record a
document that fraudulently purports to memorialize an act creating a lien
without legal authority. Here, however, the record shows that, in the prior
superior court action, the court authorized the defendant to foreclose, and to
record its foreclosure deed and affidavit, by lifting the injunction. We conclude
that the plaintiffs’ new action, which also challenges the defendant’s right to
obtain ownership of the property through foreclosure, constitutes the same
cause of action for purposes of res judicata. See Sleeper, 157 N.H. at 533.
Although in the prior superior court action the plaintiffs could not have
2
challenged the post-foreclosure affidavit, see RSA 479:26 (2013) (requiring
foreclosing entity to record deed and affidavit within 60 days of sale), the
purported misrepresentations in the affidavit concern issues that the superior
court resolved in the prior action. Moreover, even assuming, without deciding,
that the plaintiffs could have raised this claim by filing a plea of title in the
eviction action, and subsequently prosecuting their claim in the superior court,
see RSA 540:17, the record shows that the plaintiffs failed to meet the
conditions of the statute and the circuit court’s order that would have allowed
them to do so. For these reasons, we conclude that the plaintiffs’ new action is
barred by res judicata.

The plaintiffs next argue that the defendant’s affidavit in support of
summary judgment is not based upon the affiant’s personal knowledge of the
facts, but upon knowledge obtained from pleadings and from the affiant’s
discussions with an attorney familiar with the case. RSA 491:8-a, II (2010)
provides: “Any party seeking summary judgment shall accompany his motion
with an affidavit based upon personal knowledge of admissible facts as to
which it appears affirmatively that the affiants will be competent to testify.”
The affidavit in this case was prepared by an attorney in the law firm that has
represented the defendant in these actions. Many of the facts supporting the
applicability of res judicata are based upon the pleadings. Based upon our
review of the affidavit, we conclude that it meets the requirements of RSA
491:8-a, II.

Finally, the plaintiffs argue that they have raised genuine issues of
material fact, including whether the foreclosure affidavit contains material
misrepresentations. However, for the reasons previously stated, the plaintiffs’
challenge to the defendant’s right to obtain ownership through foreclosure is
barred as a matter of law. Thus, the plaintiffs have failed to raise a genuine
issue of material fact. See Sabinson, 160 N.H. at 455.

Given our decision, we need not address whether RSA 479:25, II-a (2013)
provides a separate basis to affirm the trial court’s summary judgment order.
See Antosz v. Allain, 163 N.H. 298, 302 (2012) (declining to address parties’
other arguments where holding on one issue is dispositive).

We have considered the plaintiffs’ remaining arguments, and have
concluded that they do not warrant further discussion. See Vogel v. Vogel, 137
N.H. 321, 322 (1993).

Affirmed.

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

Eileen Fox,
Clerk
3