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Beaulieu v. Bank of America, N.A.

United States District Court, D. Maine

September 29, 2014

BANK OF AMERICA, N.A., Defendant.


GEORGE Z. SINGAL, District Judge.

Before the Court is Defendant Bank of America Corporation, N.A.'s Motion to Dismiss Plaintiff's First Amended Complaint with Incorporated Memorandum of Law (ECF No. 11). For the reasons explained herein, the Court GRANTS IN PART AND DENIES IN PART the Motion.


The Federal Rules of Civil Procedure require only that a complaint contain "a short and plain statement of the grounds for the court's jurisdiction... a short and plain statement of the claim showing that the pleader is entitled to relief; and a demand for the relief sought[.]" Fed.R.Civ.P. 8(a)(1)-(3). The Court assumes the truth of the complaint's well-pleaded facts and draws all reasonable inferences in plaintiff's favor. Schatz v. Republican State Leadership Comm. , 669 F.3d 50, 55 (1st Cir. 2012). Under Rule 12(b)(6), the Court generally "may consider only facts and documents that are part of or incorporated into the complaint." United Auto., Aero., Agric. Impl. Workers of Am. Int'l Union v. Fortuno , 633 F.3d 37, 39 (1st Cir. 2011) (internal citations omitted). However, the Court may "augment" the factual allegations pled in the complaint with "matters of public record and facts susceptible to judicial notice." Haley v. City of Boston , 657 F.3d 39, 46 (1st Cir. 2011) (citing In re Colonial Mortg. Bankers Corp. , 324 F.3d 12, 15 (1st Cir. 2003); see also Giragosian v. Ryan , 547 F.3d 59, 65 (1st Cir. 2008) ("A district court may also consider documents incorporated by reference in [the complaint], matters of public record, and other matters susceptible to judicial notice.'") (quoting In re Colonial Mortgage Bankers Corp. , 324 F.3d at 20 (1st Cir. 2003)).

A viable complaint generally must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007); see also Bodman v. Maine, Dept. of Health & Human Servs. , 720 F.Supp.2d 115, 121 (D. Me. 2010) (denying motion to dismiss a hostile work environment claim and explaining that "the determination of whether an issue is trialworthy simply is not the same as the determination of whether a plaintiff states a claim upon which relief can be granted"). In considering a motion to dismiss, the Court should "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Ashcroft v. Iqbal , 556 U.S. 662, 679 (2009). Plaintiff must include enough facts supporting a claim for relief that "nudge[s] [his] claims across the line from conceivable to plausible." Twombly , 550 U.S. at 570. "If the factual allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal." Haley v. City of Boston , 657 F.3d 39, 46 (1st Cir. 2011) (quoting SEC v. Tambone , 597 F.3d 436, 442 (1st Cir. 2010)); see also Iqbal , 556 U.S. at 678 (stating that the Court need not accept "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements").


A. Plaintiff Obtains A Loan Guaranteed by the U.S. Department of Veterans' Affairs

Plaintiff Mark Beaulieu is a resident of Gardiner, Maine and is a disabled veteran of the United States Army.[1] (Am. Compl. ¶¶ 1, 6.) Defendant Bank of America Corporation ("BANA") is a duly organized and existing Delaware corporation with its headquarters in Charlotte, North Carolina. ( Id. ¶ 2.)

On April 16, 2008, Plaintiff purchased a single-family residence in Augusta, Maine (the "Residence"). ( Id. ¶ 8.) Plaintiff obtained the loan through the Department of Veterans Affairs' loan guarantee program, established by 38 U.S.C. §§ 3701 to 3736. ( Id. ¶ 18.) To finance the purchase of his home, Plaintiff executed a promissory Note in favor of Countrywide Bank, FSB ("Countrywide"). ( Id. ¶ 9.) To secure the promissory Note ("Note") (ECF No. 11-1), Plaintiff granted Countrywide a Mortgage ("Mortgage") (ECF No. 11-2) on the Residence. ( Id. ¶ 10.)

The Department of Veterans Affairs guaranteed Plaintiff's obligations pursuant to the Note and Mortgage. ( Id. ¶ 11.) Pursuant to paragraph 11 of the Note, "the rights, duties, and liabilities of the parties to this Note are governed by [Title 38, Part 36 of the Code of Federal Regulations in effect on the date of the loan]." ( Id. ¶ 12.) The Veterans Administration Guaranteed Loan and Policy Rider attached to the Mortgage provided:

THIS VA GUARANTEED LOAN AND ASSUMPTION POLICY RIDER is made this SIXTEENTH day of APRIL, 2008, and is incorporated into and shall be deemed to amend and supplement the Mortgage... (herein "Security Instrument") dated of even date herewith, given by the undersigned (herein "Borrower") to secure Borrower's Note to COUNTRYWIDE BANK, FSB (herein "Lender")...

If the indebtedness secured hereby be guaranteed or insured under Title 38, United States Code, such Title and Regulations issued thereunder and in effect on the date hereof shall govern the rights, duties and liabilities of Borrower and Lender. Any provisions of the Security Instrument or other instruments executed in connection with said indebtedness which are inconsistent with said Title or Regulations, including, but not limited to, the provision for payment of any sum in connection with prepayment of the secured indebtedness and the provision that the Lender may accelerate payment of the secured indebtedness pursuant to Covenant 18 of the Security Instrument, are hereby amended or negated to the extent necessary to conform such instrument to said Title or Regulations.

(Id. ¶ 13.) Plaintiff alleges that the requirements of the Veterans Affairs' loan guarantee program were explicitly incorporated into both the Note and Mortgage. ( Id. ¶ 19.) He further alleges that 38 U.S.C. § 3732 requires a notice of default to be sent to the Secretary for the Department of Veterans Affairs ("VA Secretary") in the event of a default in the payment of the loan. ( Id. ¶ 20.)

B. Plaintiff Defaults and Vacates the Residence

Plaintiff defaulted on the payments due under the Note and Mortgage. (Am. Compl. ¶ 15.) After Plaintiff's default, on August 10, 2009, acting through Mortgage Electronic Registration Systems, Inc., its nominee on the Mortgage, Countrywide assigned the Mortgage to BAC Home Loans Servicing, L.P. (Am. Compl. ¶ 14.) Defendant did not provide to the VA Secretary the required notice of default. ( Id. ¶ 21.) Plaintiff alleges that pursuant to section 3732(a)(4), receipt of the default notice would have triggered the Department of Veterans Affairs to provide foreclosure-avoidance counseling. ( Id. ¶ 23.) After his default, Plaintiff did not receive any counseling from Defendant or the Veterans Administration about alternatives to foreclosure. ( Id. ¶ 41.)

Shortly after Plaintiff's default, he was served with a summons and complaint in the Augusta District Court Foreclosure Action, detailed below. ( Id. ¶ 42.) Because Plaintiff had not received the requisite counseling due to Defendant's failure to provide the required notice of default to the VA Secretary, Plaintiff immediately moved from his Residence. ( Id. ¶ 43.) Plaintiff believed that upon being served with the foreclosure summons and complaint, he was required to immediately vacate his Residence. ( Id. ¶ 44.) Plaintiff believed that once he moved from his Residence, the Defendant would secure and maintain that property. ( Id. ¶ 45.) Plaintiff maintained this belief because he was not provided the counseling required upon notice of default to the VA Secretary. ( Id. ¶ 46.)

After Plaintiff moved from his Residence, as he believed he was required to do, Defendant did not secure and maintain the property. ( Id. ¶ 47.) As a consequence, Plaintiff's former Residence has been rendered valueless because the pipes froze, the house flooded and the entire Residence was left vacant and open to the vagaries of Maine weather for more than four years. ( Id. ¶ 48.) Prior to the service of the summons and complaint, the value of Plaintiff's Residence was approximately $175, 000. ( Id. ¶ 49.)

After his service in the United States Army in Iraq, Plaintiff suffered from post-traumatic stress disorder. ( Id. ¶ 50.) As a direct consequence of Defendant's failure to provide the required notice of default to the VA Secretary, Plaintiff suffered increased stress and distress, which caused his post-traumatic stress disorder to become substantially more severe, painful and harmful to him. ( Id. ¶ 54.)

C. The State Foreclosure Action

On September 22, 2009, BAC Home Loans Servicing, L.P.[2] commenced a civil foreclosure proceeding in Augusta District Court, in Augusta, Maine (the "Foreclosure Action"). (Am. Compl. ¶ 16.) In October of 2009, Attorney Mark A. Kearns entered his appearance for Mark Beaulieu in the Foreclosure Action. ( Id. ¶ 55.) Upon the appearance by Attorney Kearns, Beaulieu informed Defendant that he was ...

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