Wells Fargo Bank, N.A. v. Barbara Hagan

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2021-0219, Wells Fargo Bank, N.A. v. Barbara
Hagan, the court on August 24, 2023, issued the following
order:

The court has reviewed the written arguments and the record submitted
on appeal, and has determined to resolve the case by way of this order. See
Sup. Ct. R. 20(2). The defendant, Barbara Hagan, and the intervenors, Peter
and Janet Saunders (the Saunders), appeal orders of the Superior Court
(Nicolosi, J.) relating to the granting of a declaratory judgment in favor of the
plaintiff, Wells Fargo Bank, N.A. (Wells Fargo). We affirm.

The trial court found the following facts undisputed or “not adequately
contested with contradictory facts” on summary judgment. We recite only the
facts relevant to disposition of this appeal. In March 2004, the Saunders
bought the property at issue (the Property). In February 2005, the Saunders
executed a mortgage on the Property identifying First Magnus as the lender
and MERS as the mortgagee, as nominee. Janet Saunders executed the
corresponding note to First Magnus the same day. In December 2009, MERS
assigned its interest in the mortgage to Wachovia Bank, N.A., which entity later
merged with Wells Fargo.

In 2010, Wells Fargo began foreclosure proceedings on the Property,
which the Saunders sought to enjoin. After an initial grant of temporary relief,
the Saunders were denied an injunction and their claim for promissory
estoppel was decided against them on summary judgment. We affirmed. See
Saunders v. Wells Fargo Bank, N.A., No. 2014-0265 (non-precedential order),
2015 WL 11071265 (N.H. Feb. 12, 2015).

Wells Fargo then began the foreclosure process again, and bought the
Property at the foreclosure sale on December 4, 2015. On November 30,
however — four days prior to the foreclosure sale — the Saunders deeded the
Property to Hagan for “Love and Affection and No Other Consideration.” Hagan
has allowed the Saunders to continue to live at the Property.

In 2016 and 2017, the Saunders sued Wells Fargo and others in federal
court, raising challenges related to the 2005 note and mortgage. After the first
federal suit was dismissed voluntarily, the second was dismissed for failure to
state a claim.
 On May 14, 2018, Wells Fargo filed the instant action against Hagan
alleging claims for a plea of title, abuse of process, conversion, tortious
interference with contractual relations, civil conspiracy, and slander of title.
The trial court dismissed the claims for abuse of process, conversion, and
tortious interference with contractual relations, but found the remaining claims
sufficiently pled. The court also allowed the Saunders to intervene.

In March 2020, the trial court granted Wells Fargo’s motion for summary
judgment on its claim for a plea of title, “declar[ing] Wells Fargo’s title to the
Property free and clear of any interest or claim of Ms. Hagan.” Citing the
previous state and federal lawsuits, the court found that the doctrines of res
judicata and collateral estoppel barred Hagan and the Saunders from
relitigating issues related to the 2005 note and mortgage, and that “any
complaints about the noticing of the sale or the validity of [the] foreclosure
process” were barred as untimely.

In April 2021, the court granted Wells Fargo’s request for a voluntary
nonsuit of its remaining claims with prejudice, allowing the case to proceed to
an appealable final judgment. Following denial of their motions to reconsider,
Hagan and the Saunders brought the instant appeal.

Hagan and the Saunders argue that the trial court erred in finding that
Wells Fargo had standing to bring the instant action, and, as a result, erred in
finding that the court had jurisdiction. “Standing under the New Hampshire
Constitution requires parties to have personal legal or equitable rights that are
adverse to one another, with regard to an actual, not hypothetical, dispute,
which is capable of judicial redress.” Avery v. Comm’r, N.H. Dep’t of Corr., 173
N.H. 726, 737 (2020). “In evaluating whether a party has standing to sue, we
focus on whether the party suffered a legal injury against which the law was
designed to protect.” Id.

Hagan and the Saunders assert that Wells Fargo “cannot demonstrate
concrete injury” because “at no time had there been any nexus between [the
Saunders and Wells Fargo] through any assignment of the debt.” (Bolding
omitted.) The trial court found, however, that “the doctrines of res judicata and
collateral estoppel bar the Saunders and their successor in interest, Ms.
Hagan, from relitigating issues relative to events that happened before the
resolution of the prior lawsuits.” As the United States District Court found
when it ruled that the Saunders were “collaterally estopped from re-litigating
the propriety of the loan transaction” in the federal litigation, “the validity of
the transfer of the note and mortgage assignment . . . were considered and
rejected by the New Hampshire Superior and Supreme Courts.” Saunders v.
First Magnus Fin. Corp., No. 17-CV-27-JL, 2018 WL 3432721, at *8 n.37
(D.N.H. July 16, 2018); see also Saunders, No. 2014-0265 (non-precedential
order), 2015 WL 11071265.

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 Hagan and the Saunders do not challenge the merits of the trial court’s
res judicata and collateral estoppel rulings. Accordingly, those same doctrines
preclude Hagan and the Saunders from relitigating the validity of the
assignment in this appeal. For the same reason, we reject Hagan’s and the
Saunders’ argument that Wells Fargo “had no legal interest to protect as a
result of the void assignment, and, thus, no standing.” (Bolding omitted.)

Hagan and the Saunders next argue that the trial court “erred in failing
to address rescission effected under the Truth in Lending Act (TILA), pursuant
to 15 U.S.C. § 1635 et seq.” See 15 U.S.C. § 1635 (2018) (providing right of
rescission with respect to certain transactions). The court did address that
issue, however, and was “unpersuaded that the mortgage on the property was
validly rescinded,” because “the Saunders’ right to rescind the mortgage
expired, at the latest, on or about February 8, 2008,” but “their rescission letter
was not submitted until May 4, 2015.”

On appeal, Hagan and the Saunders assert that shortly after February
2015, Janet Saunders learned that a two percent yield spread premium had
been charged and “concealed through the hiking of the locked interest rate.”
Hagan and the Saunders contend that rescission was effected “within the time
frame specified in the implementing regulations” because “Janet received
monthly statements bearing the manipulated interest rate until November,
2015” and that “[t]hose statements constituted discrete continuing violations
as to concealment, even under NH ‘debt’ law.” We disagree.

The TILA’s “conditional right to rescind does not last forever. Even if a
lender never makes the required disclosures, the ‘right of rescission shall
expire three years after the date of consummation of the transaction or upon
the sale of the property, whichever comes first.’” Jesinoski v. Countrywide
Home Loans, Inc., 574 U.S. 259, 262 (2015) (quoting 15 U.S.C. § 1635(f)).
Accordingly, “the three year period for TILA rescission claims is an ‘absolute’
statute of repose that cannot be tolled,” Pratap v. Wells Fargo Bank, N.A., 63 F.
Supp. 3d 1101, 1112 (N.D. Cal. 2014), or “prolong[ed] . . . under a ‘continuing
violation’ theory,” King v. State of Cal., 784 F.2d 910, 914 (9th Cir. 1986)
(rejecting continuing violation theory with respect to statute of limitations for a
damages claim under the TILA based, in part, on ground that it is unavailable
under § 1635(f)).

Hagan and the Saunders next assert that the trial court erred in denying
Hagan’s pleas in bar, in which she claimed that “[o]wnership and possession
are vested in [her]” by virtue of a writ of possession issued to her in 2017.
Specifically, on April 14, 2017, Hagan brought a landlord and tenant action
against Wells Fargo in the circuit court, alleging that Wells Fargo was in
possession of the Property without right and certifying, in an “affidavit of
ownership,” that she owned the Property. Wells Fargo apparently either failed
to appear or failed to file an answer, and a notice of default issued.

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 Subsequently, Wells Fargo moved to vacate the default, arguing that the
court lacked jurisdiction because Wells Fargo was not a tenant, but rather, was
the owner of the property. On August 24, 2017, the circuit court issued an
order striking the default. The court concluded that Wells Fargo had asserted
a plea of title pursuant to RSA 540:17 and, accordingly, ordered the case
transferred to superior court. See RSA 540:17 (2021). The complaint in this
case followed.

The trial court in the instant action denied Hagan’s special plea in bar
and her motion to dismiss for lack of subject matter jurisdiction pursuant to a
special plea in bar on the following grounds: “1. There is no final judgment in
the possessory action as a result of the Circuit Court’s orders in August, 2017
and thereafter; and 2. the Circuit Court could not and did not render judgment
on the issue of title, a decision which rests exclusively with this Court.”

On appeal, Hagan and the Saunders appear to challenge both grounds,
but we need only address the second, as it is dispositive. Citing Deutsche
Bank National Trust Co. v. Kevlik, 161 N.H. 800 (2011), Hagan and the
Saunders assert that “[t]o prevail in a 540:12 action, Hagan had to establish
ownership.” They then argue that “[w]hile the superior court may have
jurisdiction over title cases, that doesn’t prevent Hagan’s ownership status
from being established as a result of the final-decision-on-the-merits outcome
of the possessory action.” They are mistaken.

The district division of the circuit court does not have jurisdiction to
determine title to real property; that jurisdiction lies with the superior court.
See RSA 491:7 (Supp. 2022) (providing, in relevant part, that “[t]he superior
court shall take cognizance of civil actions and pleas, real, personal, and
mixed” (emphasis added)); RSA 502-A:14, I, II (2010) (providing district court
with jurisdiction, either exclusive or concurrent with the superior court, over
specified matters in which “the title to real estate is not involved”); see also RSA
490-F:3 (Supp. 2022) (providing, in relevant part, that “[t]he circuit court shall
have the jurisdiction, powers, and duties conferred upon the former . . . district
courts . . . by . . . RSA 502-A”). Our discussion in Kevlik of the “possessory
plaintiff[’s] . . . obligation to establish ownership of the subject property” was
related to the plaintiff’s statutory standing to bring a possessory action under
RSA 540:12. Kevlik, 161 N.H. at 803; see RSA 540:12 (2021). As we noted,
that statute specifically authorizes “‘[t]he owner, lessor, or purchaser at a
mortgage foreclosure sale of any [property]’” to bring such an action. Kevlik,
161 N.H. at 803 (quoting RSA 540:12). Nothing in Kevlik suggests that either a
showing of ownership sufficient to establish standing or a writ of possession
issued in a landlord and tenant action establishes title to property. Indeed, we
explicitly noted that “the statute requires title issues to be resolved in superior
court” and that “[t]he defendants would not have been able to pursue their
challenge to the plaintiff’s title in the district court.” Id. at 803, 804.

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Accordingly, Hagan’s pleas in bar based on the 2017 writ of possession were
properly denied.

Hagan and the Saunders also assert, “[s]tanding issues aside, the court
did not dismiss the action as it should have for lack of subject matter
jurisdiction pursuant to RSA 498:5-a.” (Bolding omitted.) They cite two cases,
but provide no explanation of how the trial court allegedly erred. Accordingly,
we decline to address this argument. See White v. Auger, 171 N.H. 660, 665
(2019) (“[W]e will not address arguments that a party has not sufficiently
developed in its brief.”).

Finally, Hagan and the Saunders raise constitutional claims under a
number of provisions of the United States and New Hampshire Constitutions.
They first assert that the trial court denied them due process by allowing Wells
Fargo, “which had no standing, to invoke its jurisdiction.” Having rejected
their standing argument, however, we necessarily reject this argument as well.

Hagan and the Saunders further argue that the trial court “continuously
compromised [their] right to be heard in the right manner and at the right time
(e.g., going so far as to Order that MTRs not be filed — they were not needed to
preserve exceptions for appeal.)” (Citation omitted.) As the appealing parties,
Hagan and the Saunders have the burden of demonstrating reversible error.
Id. at 663. “For an error to require reversal on appeal, it must have been
prejudicial to the party claiming it.” In the Matter of Sweatt & Sweatt, 170 N.H.
414, 421 (2017) (quotation omitted). Hagan and the Saunders do not explain
how their single example of alleged error prejudiced them, particularly given
that they acknowledge their ability to appeal was not impaired. To the extent
they raise other constitutional claims, those claims are not sufficiently
developed for our review and we decline to address them. See White, 171 N.H.
at 665.

For the foregoing reasons, we affirm.

Affirmed.

HICKS and BASSETT, JJ., concurred; ABRAMSON, J., retired superior
court justice, specially assigned under RSA 490:3, concurred.

Timothy A. Gudas,
Clerk

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