Baran et al v. Hoegen et al

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Matthew Baran
Richard Koester
v. Civ. No. 23-cv-296-SE-AJ
Charles Hoegen
(Redfern PMC, LLC) and
Tonya Roux
(Keller-Williams Realty)
REPORT AND RECOMMENDATION
Plaintiffs Matthew Baran and Richard Koester have sued
Charles Hoegen and Tonya Roux, claiming that the defendants
failed to disclose the existence of a lead paint hazard at
property in Claremont, New Hampshire the plaintiffs had agreed
to purchase in December 2021. All parties are proceeding pro
se. The defendants were the owner and real estate agent
involved in the sale of the property at issue. Invoking federal
laws regarding lead paint disclosure, the plaintiffs seek the
return of their five thousand dollar deposit and treble damages.
See Complaint (Doc. No. 1). The defendants have filed a motion
to dismiss,1 which has been referred to the undersigned
1 Hoegen first filed a motion to dismiss (Doc. No. 6) and
later filed a supplement (Doc. No. 17) at the same time Roux’s
motion was filed. (Doc. No. 18).
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Magistrate Judge for proposed findings of fact and a recommended
disposition. See LR 72.1. As explained more fully below, the
defendants’ motion should be granted on the basis of res
judicata, as the plaintiffs have already lost two state court
suits in which they alleged nearly identical misconduct.
Motion to Dismiss Standard
To survive a Rule 12(b)(6) motion to dismiss for failure to
state a claim, a plaintiff must make factual allegations
sufficient to “state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
facially plausible if it pleads “factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. Courts may augment those
pleaded facts and inferences with information from “documents
incorporated by reference into the complaint, matters of public
record, and facts susceptible to judicial notice.” Haley v. City
of Boston, 657 F.3d 39, 46 (1st Cir. 2011).
To test a complaint's sufficiency, the court must first
identify and disregard statements that “merely offer ‘legal
conclusions couched as fact’ or ‘threadbare recitals of the
elements of a cause of action.’” Ocasio–Hernández v. Fortuño-
Burset, 640 F.3d 1, 12 (1st Cir. 2011) (quoting Iqbal, 556 U.S.
at 678 (alterations omitted)). Second, the court must credit as
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true all nonconclusory factual allegations and the reasonable
inferences drawn from those allegations, and then determine if
the claim is plausible. See id. In light of the plaintiffs’ pro
se status, the court liberally construes their pleadings.
Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam).2
State Court Proceedings
On January 14, 2022 plaintiff Baran sued defendant Roux and
Redfern Property Management – of which defendant Hoegen is a
principal – in New Hampshire small claims court. See Baran v.
Roux, No. 427-2022-SC-00014 (N.H. Cir Ct., Dist. Div. Claremont
filed Jan. 14, 2022). Baran claimed he was entitled to get his
deposit returned because the defendants failed to disclose a
lead paint risk as required by federal law. (Doc. No. 17-2 at
9). On February 1, 2023, the court, after conducting a hearing
on the merits, dismissed the case. (Doc. No. 17-2 at 2).
Because it is central to the disposition of this case, the court
quotes at length from Judge Swegart’s Order:
The parties negotiated a Purchase and Sale Agreement
(hereinafter "Agreement") for property in Claremont
New Hampshire. The effective date of the Agreement was
December 23, 2021. Within this Agreement, the buyer
acknowledged receipt of the property disclosure and
waived all inspection contingencies. See Respondent's
Exhibit A, pg. 2 of Agreement. Per the agreement, Mr.
Baran was required to place a $5000 deposit down on
the sale. Id. The price of the home, which included
two rental units, was $45,000. Subsequent to the
2 As all parties to this suit are proceeding pro se, the
court has liberally construed all relevant filings.
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signing of the Agreement, Mr. Baran obtained a
detailed assessment drafted by the State of New
Hampshire describing an issue relating to lead based
hazards on the property. See Petitioner's Exhibit 2.
Mr. Baran received this assessment from the
defendant's real estate agent after attempting to
obtain it from the State of New Hampshire. He
testified that he did not receive this assessment in
the initial correspondence prior to signing the
purchase and sale agreement. Mr. Hoegen, appearing for
Redfern LLC, testified that the initial round of
disclosures did include this assessment. After
receiving a remediation estimate of $145,000 sometime
in the beginning of January, 2022, Mr. Baran informed
the defendant that he did not wish to purchase the
property and backed out of the contract. See
Petitioner's Exhibit 2.
The property disclosure listed the existence of lead-
based paint, the existence of a NH Dept. of Health
Order relating to lead, and a positive test from
October 2021 for soil lead above the hazard level for
lead. See Respondent's Exhibit A, pg. 3 of Property
Disclosure - Residential Only. The buyers also signed
and initialed a "Disclosure of Information on Lead-
Based Paint and/or Lead- Based Hazards for Housing
Sales" on December 21, 2021. See Respondent's exhibit
A. This document specifically listed a known "Lead
Hazard Order for Reduction" and further identified the
specific identifying numbers associated with the State
of New Hampshire Lead Hazard Order. Finally, the MLS
listing contained a non-public remark viewable by the
agents in this matter that reads "There is currently
an order in place for a Lead hazard reduction. Buyer
to do due diligence on cost reduction. Property is
priced accordingly." See Respondent's Exhibit A.
The defendant remained intent on fulfilling his end of
the contract signed on December 23, 2021. Mr. Baran
terminated the contract unilaterally based on the
discovery of cost of remediation. The facts did not
establish any willful misrepresentation of material
fact or failures to disclose by the defendant that
would justify relief outside the terms of the
contract. The contract did not allow for return of the
$5000 deposit if the cost of remediation was
unacceptable to the buyer. Mr. Baran signed a document
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that stated he received the disclosures regarding
lead. The significance of the lead hazard issue was
disclosed in several different ways and was obviously
reflected in the steep discount placed on the listing
price of the house. Therefore, there is no legal basis
upon which Mr. Baran could receive his $5000 deposit
back. The loss of the deposit is the cost of his
decision to unilaterally terminate the contract on
terms not justified by the contract itself. For these
reasons, Mr. Baran's claims are dismissed.
February 1, 2023 Small Claims Order (Doc. No. 17-2) at 1-2.
On March 14, 2023 Baran and Koester filed an identical
small claims complaint against Redfern and Roux’s real estate
agency, again alleging that the “defendants did not disclose
lead report, did not return deposit.” See Baran and Koester v.
Redfern and Keller Williams, No. 427-2-23-SC-0054, (N.H. Cir
Ct., Dist. Div. Claremont filed Mar. 14, 2023) (Doc. No. 17-2 at
14). The defendants’ moved to dismiss the second small claims
action on the basis that the matter had already been decided.
The court granted the motion to dismiss without a written order
on May 9, 2023.
Discussion
The defendants argue that plaintiffs’ suit is barred by the
doctrine of res judicata because the plaintiffs are trying to
re-litigate the identical cases they lost in state court. The
court agrees. New Hampshire law provides that:
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. For the
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doctrine to apply, three elements must be met: (1) the
parties must be the same or in privity with one
another; (2) the same cause of action must be before
the court in both instances; and (3) a final judgment
on the merits must have been rendered in the first
action.
Brooks v. Trs. of Dartmouth Coll., 161 N.H. 685, 690 (2011). See
Dillon v. Select Portfolio Servicing, 630 F.3d 75, 80 (1st Cir.
2011). (“Under federal law, a state court judgment receives the
same preclusive effect as it would receive under the law of the
state in which it was rendered.”). The defendant bears the
burden of demonstrating that res judicata applies. Dillon, 630
F.3d at 80.
Here, all three elements of res judicata are satisfied.
First, the parties or those in privity with them – plaintiffs
Baran and Koester and defendants Hoegen and Roux – are the same.3
Second, the cause of action – lead paint non-disclosure – is
identical. And two final judgments were rendered against the
plaintiffs. The defendants do not dispute that the elements of
3 That Koester was only a plaintiff in the second
unsuccessful small claims action does not alter the court’s
conclusion. Similarly, the pleadings make clear that Hoegen is
in privity with Redfern – a defendant in both small claims
actions -- and that Roux, a defendant in the first small claims
action is in privity with Keller Williams Realty, a defendant in
the second. See Sleeper v. Hoban Family P'ship, 955 A.2d 879,
883 (N.H. 2008). (“The substantive legal relationships
justifying preclusion are sometimes collectively referred to as
privity, although we have used the term more broadly to refer to
a functional relationship, in which, at a minimum, the interests
of the non-party were in fact represented and protected in the
prior litigation.”) (quotations and citation omitted).
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res judicata are satisfied. Instead, they take issue with the
substance of the two adverse state-court decisions. See, e.g.,
Pltf. Obj. (Doc No. 15) (asserting, contrary to the state-court
Order, that “lead reports were not disclosed.”) This is plainly
insufficient to overcome the fact that two different state court
judges have found that no lead paint disclosure violations
occurred in connection with plaintiff’s purchase of the
Claremont property. The appropriate course for trying to
reverse either of the small claims courts’ rulings was an appeal
to the New Hampshire Supreme Court, not lawsuit in this court.
See N.H. Sup. Ct. R. 7. Accordingly, the doctrine of res
judicata applies and defendants’ motions to dismiss should be
granted.4
4 Even if Hoegen’s privity with Redfern was disputed (which
it is not), plaintiffs’ claim would likely fail due to the
application of collateral estoppel, which may “bar a party to a
prior final judgment from relitigating any fact actually
determined in the prior litigation.” Petition of Breau, 565 A.2d
1044, 1049 (N.H. 1989) For it to apply in a particular
proceeding, the issue subject to estoppel must be identical in
each action, the first action must have resolved the issue
finally on the merits, and the party to be estopped must have
appeared in the first action, or have been in privity with
someone who did so. Simpson v. Calivas, 650 A.2d 318, 323 (N.H.
1994) (quotation and citations omitted). Here, the plaintiffs
are the same, the small claims cases were resolved on the
merits, and the ”fact actually determined” in the prior
litigation was that there no failure to disclose the lead paint
issue. Such a finding, applied to this case, would be fatal to
plaintiffs’ claim.
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Conclusion
Based on the foregoing, the district judge should grant the
defendants’ motions to dismiss. (Doc. Nos. 6, 17 and 18). 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. Only those issues raised in the objection(s) to this
Report and Recommendation are subject to review in the district
court. See Sch. Union No. 37 v. United Nat'l Ins. Co., 617 F.3d
554, 564 (1st Cir. 2010). Any issues not preserved by such
objection(s) are precluded on appeal. See id. Failure to file
any objections 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).
_____________________________
Andrea K. Johnstone
United States Magistrate Judge
November 16, 2023
cc: Matthew Baran, pro se
Richard Koester, pro se
Charles Hoegen, pro se
Tonya Roux, pro se
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