Gehrke v. Specialized Loan Servicing, LLC
1:16-cv-00484
D.N.H.Apr 14, 2017Background
- In 2006 Gehrke executed a $180,000 note and mortgage with Countrywide; MERS was nominal mortgagee and the mortgage was later assigned to Bank of New York Mellon.
- Gehrke applied for a loan modification in 2009; a signed modification dated August 27, 2009, appears in the record, but Gehrke alleges the signature (or the notary) is forged.
- Gehrke filed Chapter 7 bankruptcy in April 2014, listing Specialized Loan Servicing as a secured creditor; Bank of New York moved for relief from the automatic stay for mortgage arrears, and the bankruptcy court granted relief.
- Gehrke sued Specialized Loan in state court (removed to federal court), alleging the foreclosure is based on a forged loan modification and seeking a modification to remain in his home.
- Specialized Loan moved to dismiss under Fed. R. Civ. P. 12(b)(6); the district court found Gehrke’s complaint did not plausibly plead viable claims and granted dismissal without prejudice, giving leave to amend by a deadline.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint plausibly alleges forgery or fraud sufficient to state a claim | Gehrke alleges the August 2009 modification (or notary) was forged | Specialized Loan argues complaint lacks plausible factual basis and is contradicted by bankruptcy filings showing defaults and modification process | Court: Allegation implausible as pleaded; complaint fails to state a plausible claim |
| Whether alleged forgery would entitle plaintiff to the requested relief (forcing a loan modification/stay in home) | Gehrke seeks a loan modification to remain in his home | Specialized Loan argues even proven forgery would not obligate servicer to grant a modification or prevent foreclosure under the mortgage’s power of sale for default | Court: Even if forgery proven, relief sought (forcing modification/continued occupancy) would not follow from that claim |
| Whether the complaint adequately identifies defendant’s role and grounds for relief | Gehrke broadly challenges mortgage documents and seeks to determine ownership/obtain modification | Specialized Loan contends complaint does not connect it to the alleged misconduct and lacks necessary factual detail | Court: Complaint unclear and fails to plead elements; dismissal without prejudice with leave to amend |
Key Cases Cited
- Foley v. Wells Fargo Bank, N.A., 772 F.3d 63 (1st Cir. 2014) (pleading standard and plausibility inquiry on Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for federal pleadings)
- Erikson v. Pardus, 551 U.S. 89 (2007) (pro se complaints are construed liberally)
- Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5 (1st Cir. 2004) (leave to amend and pro se pleading principles)
- Trans-Spec Truck Serv. v. Caterpillar, Inc., 524 F.3d 315 (1st Cir. 2008) (consideration of complaint attachments on a motion to dismiss)
- Rivera v. Centro Medico de Turabo, Inc., 575 F.3d 10 (1st Cir. 2009) (court may consider public records and documents referred to in the complaint on a motion to dismiss)