Dillon v. Select Portfolio Servicing
2011 U.S. App. LEXIS 653
| 1st Cir. | 2011Background
- Dillon borrowed $100,300 in 2001 secured by a New Hampshire mortgage on his home.
- SPS acquired servicing rights (Oct 1, 2001) and imposed late fees, added charges, and misapplied payments.
- Dillon challenged SPS's practices through NH state court litigation, including an injunction against foreclosure.
- A class action against Harmon and SPS overlapped with these disputes; Dillon opted out of Harmon but remained in the SPS action until settlement.
- NH Superior Court issued a permanent injunction (July 1, 2005) limiting foreclosure and ordering accounting and reinstatement options.
- In 2006, Dillon and Kresge filed a subsequent action in NH Superior Court, removed to federal court, asserting multiple damages claims; district court held res judicata barred them.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the class settlement bar Dillon from adding damages claims in the first action? | Dillon argues the settlement prevented filing those claims in the first action. | Defendants contend the claims were barred by res judicata or by the settlement terms. | Waived; not preserved for appeal. |
| Are Dillon's damages claims a separate cause of action from the earlier suit under New Hampshire res judicata? | Dillon claims post-complaint allegations create a new transaction. | Defendants assert the new facts arise from the same transaction. | Precluded; same transaction. |
| Do post-complaint allegations that continue the same conduct constitute the same transaction? | Post-complaint conduct should be treated as new grounds for relief. | Post-complaint allegations reflect ongoing conduct within the same transaction. | Held the same transaction; barred. |
| Does the purported avoidance-of-note claim fall under an exception to res judicata? | SPS's ownership misrepresentations justify the avoidance-of-note claim under fraud exception. | No exception; claim waived and precluded. | Waived; not viable. |
Key Cases Cited
- Sutliffe v. Epping Sch. Dist., 584 F.3d 314 (1st Cir. 2009) (res judicata transactional analysis; post-complaint evidence may form part of same transaction)
- SBT Holdings, LLC v. Town of Westminster, 547 F.3d 28 (1st Cir. 2008) (burden on defense to show preclusion; same-or-different actions)
- Patterson v. Patterson, 306 F.3d 1156 (1st Cir. 2002) (same transaction inquiry; relatedness of facts for res judicata)
- In re New Motor Vehicles Canadian Export Antitrust Litig., 533 F.3d 1 (1st Cir. 2008) (claims may be precluded even where procedural posture differs)
- E. Marine Const. Corp. v. First S. Leasing, Ltd., 129 N.H. 270, 525 A.2d 709 (N.H. 1987) (res judicata includes transactions postdating complaint; economic relief differs not)