Lath v. PennyMac Loan Services LLC et al

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Sanjeev Lath
v. 	Case No. 18-cv-928-PB
PennyMac Loan Services LLC
REPORT AND RECOMMENDATION
Pro se plaintiff Sanjeev Lath filed this suit for a
declaratory judgment (Count 1) and state claims of conversion
(Counts 2 and 5), trespass (Count 3), and unjust enrichment
(Count 4). 	Defendant PennyMac Loan Services LLC filed a motion
to dismiss Counts 1, 2, and 3. 	Doc. 15. 	Lath opposes
dismissal. 	PennyMac’s motion has been referred to the
undersigned magistrate judge for a report and recommendation.
As discussed below, the court recommends that the district judge
grant the motion in part and deny it in part.
Standard of Review
A. 	Judgment on the Pleadings
Because PennyMac filed its answer before filing the motion
to dismiss, the motion to dismiss is construed as a motion for
judgment on the pleadings under Federal Rule of Civil Procedure
12(c). 	See e.g., Weeks v. Five Bros. Mortg. Servs. & Securing,
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Inc., 2014 WL 1379335, at *3 (D.N.H. April 9, 2014). 	Rule 12(c)
implicates the pleadings as a whole, as opposed to merely the
complaint as in a Rule 12(b)(6) motion. 	Aponte-Torres v. Univ.
of P.R., 445 F.3d 50, 54-55 (1st Cir. 2006). 	Thus, to the
extent the facts alleged in the answer do not contradict the
facts in the complaint, the court may consider them. 	Goodman v.
Williams, 287 F. Supp. 2d 160, 161 (D.N.H. 2003).
When a motion for a judgment on the pleadings is used to
attack the plausibility of a complaint, the motion is evaluated
under the same standard as a motion to dismiss under Federal
Rule of Civil Procedure 12(b)(6). 	Diaz-Nieves v. United States,
858 F.3d 678, 689 (1st Cir. 2017); Grajales v. P.R. Ports Auth.,
682 F.3d 40, 44 (1st Cir. 2012). 	Judgment on the pleadings,
therefore, is appropriate if the facts from the pleadings, taken
in the light most favorable to the nonmovant, fail to allege a
plausible entitlement to relief. 	Perez-Acevedo v. Rivero-
Cubano, 520 F.3d 26, 29 (1st Cir. 2008) (citing Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555-58 (2007)). 	The court, however,
disregards conclusory allegations. 	Manning v. Boston Med. Ctr.
Corp., 725 F.3d 34, 43 (1st Cir. 2013). 	The complaint must
allege “factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged[.]” 	Ashcroft v. Iqbal, 556 U.S. 662, 678
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(2009) (citing Twombly, 550 U.S. at 556).
B. 	Facts and Documents Outside the Pleadings
Lath filed 54 exhibits with his objection to PennyMac’s
motion. 	When evaluating a motion for judgment on the pleadings,
“[t]he court may supplement the facts contained in the pleadings
by considering documents fairly incorporated therein and facts
susceptible to judicial notice.” 	R.G. Fin. Corp. v. Vergara-
Nuñez, 446 F.3d 178, 182 (1st Cir. 2006). 	The court may also
consider “documents the authenticity of which are not disputed
by the parties,” official public records, documents central to
the plaintiff’s claim, and documents sufficiently referred to in
the complaint. 	Watterson v. Page, 987 F.2d 1, 3-4; see also
Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007).
Generally, the exhibits Lath attached to his objection do
not meet that standard or are not relevant to PennyMac’s motion.
Having reviewed the exhibits, the court has found that only one
exhibit, doc. no. 16-25, Exhibit 25, which is a photograph of
the abandonment notice that Lath alleges PennyMac posted to the
door of his condominium unit, is both relevant to the issues
before the court and warrants consideration under Watterson.
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Background
Lath owned a condominium unit in a “secured building” in
Manchester, New Hampshire. 	Doc. 8 (“Compl.”) ¶¶ 10, 29, 39. 	He
alleges that PennyMac was the mortgagee1 on the unit between 2015
and 2017. 	Id. ¶ 2.
On February 2, 2017, Lath applied for a “Certificate of
Compliance” under the Housing Code of the City of Manchester
(“Housing Code”)2 to rent out the unit. 	Id. ¶ 10.3 	The unit was
inspected the same day.
On February 17, 2017, a violation notice was issued.
Lath’s unit was found in violation of Housing Code §§ 150.050
(smoke and fire damage to interior surfaces), 150.084 (plumbing
fixtures in need of repair), 150.088 (missing kitchen
appliances), and 150.090 (missing smoke and carbon monoxide
detector). 	Doc. 8-1, Compl. Exh. 1. 	A reinspection was
scheduled for April 12, 2017.
1 Lath alleges that PennyMac was the “mortgagor”, but the
court assumes that he meant “mortgagee”.
2 The Housing Code is available online at
https://www.manchesternh.gov/pcd/Regulations/HousingCodeOrdinanc
e.pdf.
3 “It shall be unlawful for anyone . . . to rent, offer for
rent, or allow any person to occupy any dwelling, dwelling unit,
or condominium unit without a certificate of compliance . . . .”
Housing Code § 150.100.
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On July 27, 2017,4 with his apartment still not in
compliance with the Housing Code, Lath rented his unit to Peter
Fiasconaro. 	However, on July 30, Manchester removed Fiasconaro
“and imposed a health code violation” on the unit. 	Compl. ¶ 16.
The city Health Department issued an abatement letter to Lath on
August 4, 2017. 	The abatement letter stated as follows:
Dear Mr. Lath:
You are hereby notified that a condition . . . has
been 	identified 	and 	is 	existent 	on 	the 	premises 	at
[Lath’s condominium unit] in the form of a broken sewer
pipe(s) 	and 	resultant 	discharge 	of 	effluent 	into 	[the
unit 	below] 	and 	potentially 	other 	units. 	This 	was
determined 	during 	a 	site 	visit 	on 	July 	31, 	2017 	and
similar notice was given to the occupant of the unit at
the time of the visit.
You are hereby ordered to abate the nuisance caused
as 	a 	result 	of 	the 	violation, 	through 	repair 	of 	faulty
plumbing, obtaining a valid plumbing permit as required
by 	the 	City 	of 	Manchester 	Planning 	and 	Community
Development 	Department. 	. 	. 	. 	Until 	the 	violation 	is
corrected 	and 	per 	the 	statute, 	no 	person 	shall 	occupy
the 	dwelling, 	unless 	for 	the 	purposes 	of 	abating 	the
violation.
. . .
Additionally, 	per 	discussion 	with 	City 	of
Manchester 	Planning 	and 	Community 	Development
Department, a Certificate of Compliance may be required
when renting and/or subletting this unit. . . .
4 In the complaint, Lath states that he rented the unit to
Peter Fiasconaro on July 27, 2018. 	Compl. ¶ 15. 	Lath, however,
references Exhibit 2 of his Amended Complaint, which indicates
that he rented the unit on July 27, 2017. 	Doc. 8-2, Compl. Exh.
2.
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Failure 	to 	correct 	this 	violation 	and 	comply 	with
this 	Order 	may 	result 	in 	further 	action 	as 	allowed 	by
statute.
Doc. 8-3, Compl. Exh. 3.
Lath alleges that, in November 2017, he “believes” PennyMac
posted an abandonment notice on the door of the unit. 	Compl.
¶ 29. 	The notice stated as follows:
This 	property 	has 	been 	determined 	to 	be
vacant/abandoned. 	This 	has 	been 	reported 	to 	the
mortgage 	servicer. 	The 	mortgage 	servicer 	intends 	to
protect this property from waste and/or deterioration.
This 	property 	may 	have 	its 	locks 	replaced 	and/or
plumbing systems winterized in the next few days.
If 	this 	property 	is 	NOT 	VACANT 	and 	ABANDONED, 	please
call MCS immediately . . . .
Doc. 	16-25.5 	In 	the 	Amended 	Complaint, 	Lath 	states 	that 	he
“believes 	and 	on 	that 	basis 	alleges 	that” 	PennyMac 	“actually
changed 	the 	locks” 	on 	the 	unit, 	preventing 	him 	from 	entering 	it.
Compl. 	¶ 	31. 	Lath 	alleges 	that 	he 	also 	had 	furniture, 	clothes,
and electronics inside the unit.
On February 9, 2018, a foreclosure notice on the unit was
issued. 	Id. ¶ 18; Compl. Exh. 4. 	The foreclosure notice stated
that the unit was to be sold at a foreclosure sale on March 30,
5 The court has considered and referred to Exhibit 25,
attached to Lath’s objection to PennyMac’s motion, because it is
central to his claims of trespass and conversion and is
sufficiently referred to in the complaint. 	See Compl. ¶¶ 29-31,
33, 39, 41-42
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2018. 	A notice was published in a newspaper beginning on
February 16, 2018. 	The auction was conducted on March 30, and
the unit was auctioned for $90,000. 	However, the buyer backed
out of the sale because of “the ongoing litigation.” 	Doc. 14,
PennyMac Answer ¶¶ 20, 45.
In his Amended Complaint, Lath brings claims for a
declaratory judgment (Count 1); conversion (Counts 2 and 5);
trespass (Count 3); and unjust enrichment (Count 4). 	In Count
1, Lath seeks a declaratory judgment that he “was under a
certificate of compliance or violations thereof for such
compliance as of March 30, 2018.” 	Compl. ¶ 25. 	He states that,
if the court declares this, then “any foreclosure sale of Lath’s
property . . . without a transfer permit or certificate of
compliance is unlawful.” 	Id. ¶ 26. 	Thus, Lath concludes, he
seeks a declaration “that the transfer of property from PennyMac
Loan Services, LLC to Credit Suisse without a transfer permit is
unlawful pursuant to [Housing Code] § 150.109(B).”6 	Id. ¶ 27.
In Count 2, Lath asserts that PennyMac converted his
6 “No rental property being rented, offered for rent, or
otherwise occupied under a certificate of compliance shall be
bought, sold, or otherwise transferred without an application
for assignment of certificate of compliance, including the fee,
required by this subchapter, having first been filed with the
Department.” 	Housing Code § 150.109(B).
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property, including the unit and the personal property inside,
by changing the locks. 	In Count 3, Lath alleges that PennyMac
trespassed on a “limited common area” by posting the abandonment
notice on his door. 	Lath states that PennyMac did not have a
key to the secured building where his unit was located and that
he did not give PennyMac permission to post the notice. 	Citing
RSA 356-B:12, V, Lath asserts that the door to his unit was
“within the apparatus designed to serve Lath’s unit exclusively
and is therefore deemed as a limited common area appertaining to
that unit exclusively.” 	Id. ¶ 41.
Discussion
PennyMac filed a motion to dismiss Counts 1, 2, and 3 of
Lath’s Amended Complaint. 	Lath objects.7 	PennyMac did not file
a reply.
A. 	Declaratory Judgment (Count 1)
PennyMac argues that Lath cannot challenge the foreclosure
7 In his objection, Lath also offers a profusion of new
allegations against PennyMac, including constructive eviction
(doc. no. 16 at 17) and additional instances of alleged trespass
(doc. no .16 at 14). 	He alleges that his property was not in
default. 	Doc. 16 at 13. 	The allegations were not in the
Amended Complaint, and the arguments related to the new
allegations are not responsive to PennyMac’s motion to dismiss.
Therefore, the court does not consider them further.
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sale because he failed to petition the New Hampshire Superior
Court to enjoin the sale prior to foreclosure. 	PennyMac also
contends that Lath lacks standing to enforce the Housing Code
because there is no private right of action for violations of
the Housing Code. 	Finally, PennyMac argues that the court
cannot deem past conduct illegal through a declaratory judgment
because it would be an improper advisory opinion.8
1. 	Petition to Enjoin Sale
RSA 479:25, II “bars any action based on facts which the
mortgagor knew or should have known soon enough to reasonably
permit the filing” of a petition to enjoin the foreclosure sale
in the superior court before the sale occurs. 	Murphy v. Fin.
Dev. Corp., 126 N.H. 536, 540 (1985). 	Lath does not dispute
that he received the notice required by RSA 479:25 or that he
failed to file a petition to enjoin the sale. 	Instead, he
argues that he was unable to challenge the foreclosure sale
before it occurred because the violation of § 150.109 did not
occur until the unit was sold. 	Doc. 16 at 17-18. 	Before the
8 Given that the court recommends judgment on the pleadings
as to Count 1 because Lath failed to petition to enjoin the sale
and because the Housing Code does not contain a private right of
action, the court does not reach this alternative argument.
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sale occurred, however, Lath could have sought to enjoin the
sale by presenting to the superior court the theory that the
proposed sale could not go forward until PennyMac met the
requirements of § 150.109. 	Because Lath failed to do so, RSA
479:25, II bars Count 1 of the Amended Complaint.
2. 	Private Right of Action
Even if Count 1 was not barred by RSA 479:25, Lath cannot
pursue a claim that PennyMac violated a local ordinance without
a private right of action to enforce the ordinance. 	See
Goldstein v. Town of Bedford, 154 N.H. 393, 395 (2006); see also
Gonzaga Univ. v. Doe, 536 U.S. 273, 281-82 (2002) (“Since the
Act conferred no specific, individually enforceable rights,
there was no basis for private enforcement, even by a class of
the statute’s principal beneficiaries.”); San Juan Cable LLC v.
P.R. Tel. Co., 612 F.3d 25, 30-34 (1st Cir. 2010); BK v. N.H.
Dep’t of Health and Hum. Servs., 814 F. Supp. 2d 59, 64 (D.N.H.
2011). 	A private right of action must be either express or
implied from the relevant legal source. 	See San Juan Cable LLC,
612 F.3d at 30; Blagbrough Family Realty Trust v. A&T Forest
Prods., Inc., 155 N.H. 29, 45 (2007) (“Where there is no
explicit or implicit private right of action to seek a
declaration of the statute’s violation, we will conclude that
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the statute does not do so.”).
RSA 48-A:2 and 48-A:3 empower municipal authorities to
adopt ordinances such as those in the Housing Code. 	Consistent
with those statutes, the Housing Code vests enforcement powers
to the Planning and Community Development Department, with a
limited ability of city residents to petition the Department to
investigate alleged violations. 	See Housing Code §§ 150.142
(“Whenever the Department determines that there has been or is a
violation . . . he may give or cause to be given notice of such
violation . . . .”), 150.143 (“The Planning and Community
Development Department and its delegated officers shall exercise
the powers that may be necessary and convenient to carry out and
effectuate the purposes and provisions of this chapter . . .
.”), 150.146 (permitting certain petitions by residents about
violations to be made to the Planning and Community Development
Department); see also Housing Code §§ 150.147 (providing that,
under appropriate circumstances, the Planning and Community
Development Department has the power to issue orders requiring
property owners to repair, alter, or improve dwellings), 150.149
(“If the owner fails to comply with an order [under § 150.147]
the Planning and Community Development Department may file a
petition in the Superior Court in which it shall set forth the
charges . . . .”).
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Lath contends that he can enforce the Housing Code because
tax notices continue to be addressed to him and because he may
become liable for damages resulting from the nuisances in the
unit. 	Doc. 16 at 20-21. 	These facts were not alleged in the
Amended Complaint. 	Further, there are no provisions in the
Housing Code that permit a person to enforce the Housing Code on
those grounds. 	Lath also cites Bagley v. Controlled Env’t
Corp., 127 N.H. 556, 563-64 (1986) (holding that a private right
of action existed to enforce certain provisions of RSA Chapter
147-A (hazardous waste disposal)), in support of his argument
that a private right of action exists to enforce the Housing
Code, but Bagley is inapposite to Lath’s claim.
Because no private right of action exists to enforce the
Housing Code, Lath cannot obtain a declaratory judgment stating
that PennyMac violated the Housing Code.
B. 	Conversion (Count 2)
PennyMac argues that Lath fails to allege any concrete
basis for his allegation that he “believes” PennyMac posted the
abandonment notice on the door of the unit and changed its
locks. 	PennyMac argues that the court must disregard Lath’s
allegation as speculative.
In evaluating a motion for judgment on the pleadings, the
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court ordinarily assumes the complaint’s factual allegations to
be true, but “some allegations, while not stating ultimate legal
conclusions, are nevertheless so threadbare and speculative that
they fail to cross the line between the conclusory and factual.”
Peñalbert-Rosa v. Fortuño-Burset, 631 F.3d 592, 595 (1st Cir.
2011). 	In the Amended Complaint, Lath alleges that PennyMac was
the unit’s mortgagee. 	The abandonment notice states that “[t]he
mortgage servicer intends to protect this property from waste
and/or deterioration,” and “[t]his property may have its locks
replaced . . . .”9 	It can be reasonably inferred from the notice
that the mortgage servicer or mortgagee, i.e., PennyMac, was
contemplating changing the unit’s locks and ordered the notice
to be placed on the door. 	Therefore, PennyMac has not shown
that it is entitled to judgment on the pleadings as to Count 2.
C. 	Trespass (Count 3)
Lath alleges that PennyMac committed a trespass when it
posted the abandonment notice on the door of the unit. 	Compl.
¶¶ 38, 42. 	Trespass is the intentional invasion of the property
of another. 	Case v. St. Mary’s Bank, 164 N.H. 649, 658 (2013).
9 As noted above, the court has considered Exhibit 25 to
Lath’s objection, which detailed the text of the notice, because
it is sufficiently referred to in the complaint and central to
Lath’s allegations.
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“One is subject to liability to another for trespass,
irrespective of whether he thereby causes harm to any legally
protected interest of the other, if he intentionally . . .
enters land in the possession of the other . . . .” 	Id.
(quoting Restatement (Second) of Torts § 158).
1. 	Intent
Citing Brown v. Saint-Gobain Perf. Plastics Corp., 2017 WL
6043956 (D.N.H. Dec. 6, 2017), PennyMac argues that trespass
requires the defendant’s knowledge that his trespass is
“substantially certain” to “result in harm to the plaintiff.”
Doc. 15-1 at 9. 	PennyMac asserts that the abandonment notice
that was posted was intended to protect the unit, not harm it.
PennyMac’s reliance on Saint-Gobain is misplaced. 	An
intent to cause harm to the property is not a necessary element
of trespass. 	See Case, 164 N.H. at 658; cf. Restatement
(Second) of Torts § 163 (“One who intentionally enters land in
the possession of another is subject to liability to the
possessor for trespass, although his presence on the land causes
no harm to the land, its possessor, or to any thing or person in
whose security the possessor has a legally protected
interest.”). 	In Saint-Gobain and the cases cited by Saint-
Gobain, the issue was whether a trespass was intended, as
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opposed to involuntary or accidental, not whether harm to the
property was intended. 	Saint-Gobain, 2017 WL 6043956, at *8;
see also Thompson v. Forest, 136 N.H. 215, 219 (1992) (“The
intent with which tort liability is concerned is not necessarily
a hostile intent, or a desire to do any harm. 	Rather, it is an
intent to bring about a result which will invade the interests
of another in a way that the law forbids.”) (quoting W.P. Keeton
et al., Prosser and Keeton on the Law of Torts § 8, at 36 (5th
ed. 1984)). 	Because the allegations here are that the alleged
trespass was intentional rather than involuntary or accidental,
Saint-Gobain is not applicable.
2. 	Standing to Assert Trespass
Next, PennyMac argues that Lath fails to allege a trespass
onto his own property. 	PennyMac contends that the entryway into
the condominium building is a “common area.” 	Doc. 15-1 at 8.
PennyMac asserts that only the condominium association has
standing to allege that PennyMac trespassed on the common area.
Id. at 8-9. 	Lath responds that, under RSA 356-B:12, II, the
door of his unit was considered part of his unit and therefore
was for his exclusive use.
PennyMac did not address Lath’s contention that the
exterior of the door to the unit was his property, which is
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alleged in the Amended Complaint. 	Compl. ¶ 41 (“[T]his entry
door, upon which the Defendants posted this notice was within
the apparatus designed to serve Lath’s unit exclusively . . .
.”). 	Furthermore, whether or not the exterior of the door to
Lath’s unit was part of the condominium’s common area is a
question that must be determined by first consulting the
condominium instruments, which designate the boundaries of
condominium units. 	See RSA 356-B:12 (“Except to the extent
otherwise provided by the condominium instruments . . . . 	To
the extent that walls, floors, and/or ceilings are designated as
the boundaries of the units or of any particular units without
further specification, all doors and windows therein . . . shall
be deemed a part of such units . . . while all other portions of
such walls, floors, and/or ceilings shall be deemed a part of
the common area.”). 	The relevant condominium instruments are
not part of the record before the court.
Construing the complaint in the light most favorable to
Lath, the court assumes that the door was part of Lath’s unit
for the purposes of the present motion. 	Thus, PennyMac has not
shown that judgment in its favor on Count 3 is warranted on the
limited record before the court.
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Conclusion
For the foregoing reasons, the court recommends that the
district judge grant PennyMac’s partial motion for judgment on
the pleadings (doc. no. 15) in part and deny it in part. 	The
court recommends that the district judge grant the motion as to
Count 1 and deny it as to Counts 2 and 3.
Any objections to this Report and Recommendation must be
filed within fourteen days of receipt of this notice. 	See Fed.
R. Civ. P. 72(b)(2). 	The fourteen-day period may be extended
upon motion. 	Failure to file specific written objections to the
Report and Recommendation within the specified time waives the
right to appeal the district court’s order. 	See Santos-Santos
v. Torres-Centeno, 842 F.3d 163, 168 (1st Cir. 2016); Fed. R.
Civ. P. 72(b)(2).
__________________________
Andrea K. Johnstone
United States Magistrate Judge
June 4, 2019
cc: 	Sanjeev Lath, pro se
Kevin P. Polansky, Esq.
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