1Gilroy names Kasper and the Ponemah Trust as defendants to

this action. I find, however, that a fair reading of Gilroy’s

complaint indicates that she also intended to sue the named

defendants’ attorneys, Alan Segal and Kurt McHugh. Accordingly,

I find that all four of these individuals are to be considered

properly named defendants to this action for all purposes.

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

Rosemary A. Gilroy

v. Civil No. 07-cv-300-JL

James Kasper, et al.1

REPORT AND RECOMMENDATION

Before the Court is the complaint (document no. 1) of

Rosemary Gilroy, proceeding pro se and in forma pauperis. Gilroy

is seeking relief under the diversity jurisdiction of this Court,

alleging that the defendants, a Massachusetts mortgage company

and broker and their attorneys, violated New Hampshire’s Consumer

Protection Act, N.H. Rev. Stat. Ann. (“RSA”) 358-A (2006) (“CPA”)

by engaging in unfair, deceptive, and predatory lending

practices, as well as fraud. Gilroy further alleges that the

defendants committed additional violations of state tort law. 

Because Gilroy is proceeding pro se and in forma pauperis, the

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2

matter is before me for preliminary review to determine, among

other things, whether or not she has stated any claim upon which

relief might be granted. See United States District Court of the

District of New Hampshire Local Rule (“LR”) 4.3(d)(1)(B). 

For the reasons discussed herein, I find that Gilroy has

stated claims upon which relief might be granted for violations

of the CPA, fraud, and intentional infliction of emotional

distress, and I direct, in an Order issued simultaneously with

this Report and Recommendation (hereinafter, the “Simultaneous

Order”), that those claims be served on defendants. I also

recommend that the harassment and discrimination claims be

dismissed for failure to state a claim. 

Standard of Review

Under this Court’s local rules, when a plaintiff commences

an action pro se and in forma pauperis, the magistrate judge is

directed to conduct a preliminary review. LR 4.3(d)(1)(B). In

conducting the preliminary review, the Court construes pro se

pleadings liberally, however inartfully pleaded. See Erickson v.

Pardus, ___ U.S. ___, 127 S. Ct. 2197, 2200 (2007) (following

Estelle v. Gamble, 429 U.S. 97, 106 (1976) and Haines v. Kerner,

404 U.S. 519, 520-21 (1972) to construe pro se pleadings

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3

liberally in favor of the pro se party). “The policy behind

affording pro se plaintiffs liberal interpretation is that if

they present sufficient facts, the court may intuit the correct

cause of action, even if it was imperfectly pled.” See Castro v.

United States, 540 U.S. 375, 381 (2003) (noting that courts may

construe pro se pleadings so as to avoid inappropriately

stringent rules and unnecessary dismissals of claims); Ahmed v.

Rosenblatt, 118 F.3d 886, 890 (1st Cir. 1997). All of the

factual assertions made by a pro se plaintiff and inferences

reasonably drawn therefrom must be accepted as true. See id.

This review ensures that pro se pleadings are given fair and

meaningful consideration.

Background

In 1999, Rosemary Gilroy moved from Newton, Massachusetts,

where she had lived for thirty-five years, to Amherst, New

Hampshire. Presumably using the proceeds from the sale of her

home in Newton, Gilroy rented an apartment and, on March 1, 2000,

purchased five office condominium units (“Units 1-5") in Amherst. 

Gilroy received permission from the local zoning board to turn

Unit 1 into a residential unit for herself, where she has lived

since May 1, 2000. Gilroy intended to rent or sell Units 2-5 and

Case 1:07-cv-00300-JL Document 6 Filed 02/04/08 Page 3 of 14
2Gilroy’s first and second mortgages, used to purchase the

property and then to improve it, were held by Ameriquest Mortgage

Company. The Ameriquest Mortgage Company mortgages are not at

issue in this action but are the subject of another pending

lawsuit before this Court. See Gilroy v. Ameriquest Mortgage

Co., Civ. No. 07-cv-074-JD. In addition, Gilroy filed a third

action in this Court that concerns the facts, circumstances, and

parties at issue in this matter, In Re: Rosemary Ann Gilroy,

Debtor, Civ. No. 07-cv-297-SM (filed Sept. 20, 2007 and closed

Nov. 16, 2007).

4

to use that income to support herself and to pay her mortgage on

the property.2 Gilroy, a woman now in her sixties, had no

experience in financing and developing real estate before

purchasing the property in Amherst. 

Gilroy was unable to rent or sell any of the office

condominiums and, in 2002, decided to convert them into

residential condominium units. The Amherst Zoning Board granted

Gilroy a variance for this plan in March 2003, and, in March

2004, also granted final approval for her site plan for the

conversion. Gilroy’s initial mortgage was with Ameriquest

Mortgage Company, and in July 2004, and again in March 2005, she

refinanced with that company. Those loans were secured by Units

1, 2 and 4, but left Units 3 and 5 unencumbered. 

At some point, Gilroy determined that she needed additional

money to finish the conversion of the condominiums. Gilroy

sought to finish the conversion by obtaining a loan secured by

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5

one of the unencumbered condominiums, as, Gilroy asserts, she had

enough equity in each of these two units alone to secure the loan

she required. Defendants gave Gilroy $150,000 in financing, but

insisted on placing liens on both Unit 3 and Unit 5. 

Within four months of receiving the loan from defendants,

Gilroy was out of cash and in need of more funding to complete

the conversions and to obtain occupancy certificates that she

needed to rent or sell the condominiums. In addition, the three

mortgages held by Ameriquest on Units 1, 2 and 4 were going into

arrears, and she needed cash to bring those loans current. 

Defendants refused to advance additional money to Gilroy, despite

the fact that she claims to have had more than adequate equity in

the secured property to cover the loans. 

Gilroy states that between December of 2006 and April of

2007, defendants’ attorneys led her to believe that the

defendants would provide her with additional funding so that she

could obtain occupancy certificates for the property. The

defendants’ attorney, however, dragged out the process of

actually approving and distributing the additional funds by

requiring plaintiff to provide defendants with copies of a number

of documents, some of which had to be specially prepared to

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6

comply with the request, all the while communicating that once

the documents were provided, the loan would be approved. The

loan, however, was ultimately refused as “not in [defendants’]

best interest.” 

Gilroy alleges that the defendants deceived and defrauded

her by delaying the processing of the loan to assure that Gilroy

would not be in a position to obtain funding from any other

source, allowing defendants to foreclose on Units 3 and 5. 

Gilroy further asserts that defendants engaged in predatory

lending practices by: (1) intentionally exploiting her lack of

prior experience in obtaining financing and developing real

estate; (2) by lending her money on repayment terms they knew she

would be unable to meet; (3) by setting her up for failure by

denying her the means to complete the conversion; and (4) by

encumbering all of her available property so that plaintiff could

not obtain funding from any other source. Gilroy claims this

exploitation was motivated, at least in part, by the defendants’

intent to discriminate against her based on the fact that she was

a single woman in her sixties. Gilroy alleges that, using these

unfair methods, defendants availed themselves of Gilroy’s cash

investment in the property, the additional equity the property 

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7

had acquired since her purchase, and her sweat equity, all

without recompense.

Discussion

I. Jurisdiction

Gilroy brings this action, arising out of state tort law,

under the diversity jurisdiction of this Court. See 28 U.S.C. §

1332 (establishing the jurisdiction of the federal district

courts over actions based on state law where the parties are of

diverse citizenship and the amount in controversy exceeds

$75,000). Gilroy alleges that all of the defendants are citizens

of Massachusetts, while she is a citizen of New Hampshire, and

the amount alleged to be in controversy far exceeds $75,000. 

Accordingly, Gilroy has properly invoked this Court’s subject

matter jurisdiction.

II. State Law Claims

A. The Fraud Claim (Count I)

In order to prove a fraud claim, a plaintiff must

demonstrate: (1) that defendants intentionally made material

false statements, (2) which the defendants knew to be false, (3)

with the intention to induce the plaintiff to rely on the false

statements, and (4) that the plaintiff reasonably relied on the

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8

statements to her detriment. See Snow v. Am. Morgan Horse Ass’n,

141 N.H. 467, 468, 686 A.2d 1168, 1170 (1996). “‘The essence of

fraud is a fraudulent misrepresentation. [In order to sustain a

fraud claim] plaintiff must specify the essential details of the

fraud, and specifically allege the facts of the defendant’s

fraudulent actions. It is not sufficient for the plaintiff

merely to allege fraud in general terms.’” Brzica v. Trs. of

Dartmouth Coll., 147 N.H. 443, 449, 791 A.2d 990, 995 (2002)

(quoting Jay Edwards, Inc. v. Baker, 130 N.H. 41, 46-47, 534 A.2d

706 (1987)). Here, plaintiff has set forth specific facts which

she claims demonstrate that the defendants acted deceptively. 

Further, she has alleged that, in reliance on the deceptive

representations of defendants, she was unable to obtain financing

from any other source, and that she was in many ways worse off

for her reasonable reliance on defendants’ assertions and

promises. While her statements, at this point in the litigation,

are somewhat conclusory, she does make specific allegations

regarding defendants’ conduct that are sufficient to allow me to

find, for purposes of preliminary review, that the defendants

engaged in fraudulent misrepresentation when they intentionally

led her to believe that they would lend her money, when they had

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3In her complaint, Gilroy alleges a claim of “Violation of

Personal Injury Law, Causing Financial Losses to Plaintiff” as

Count III. This claim simply spells out damages to which she

believes she will be entitled if she prevails in this action. 

Because she does not allege any additional legal theory

supporting her request in this section of her complaint, I will

not consider it to be a separate cause of action for purposes of

preliminary review.

9

no intention of doing so. I will therefore direct that this

claim be served on defendants in my Simultaneous Order.

B. The Discrimination Claim (Count II)

Plaintiff broadly asserts that the defendants would not have

engaged in the tortious behavior alleged if she were a man,

married, an experienced developer, or if she were younger. 

Plaintiff has not offered any facts at all to support this

conclusion. Gilroy’s claim amounts to nothing more than pure

speculation as to what might have motivated defendants in this

matter. I find, therefore, that Gilroy has failed to allege

sufficient facts to state a discrimination claim, and I recommend

that the claim be dismissed.

C. The Intentional Infliction of Emotional Distress Claim 

(Count IV)3

Plaintiff alleges that defendants intentionally inflicted

emotional distress on her by subjecting her to the deceptive and

fraudulent practices described above. “‘[O]ne who by extreme and

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outrageous conduct intentionally causes severe emotional distress

to another is subject to liability for that emotional distress.’” 

Amatucci v. Hamilton, Civ. No. 05-cv-259-SM, 2007 WL 1825177 at

*6 (D.N.H. June 25, 2007) (quoting Konefal v. Hollis/Brookline

Coop. Sch. Dist., 143 N.H. 256, 260, 723 A.2d 30, 33 (1998)). A

plaintiff must “point to conduct on the part of the defendant

that is so outrageous in character, and so extreme in degree, as

to go beyond all possible bounds of decency, and to be regarded

as atrocious, and utterly intolerable in a civilized community.” 

Id. (internal citations omitted). Plaintiff claims that the

stress she has endured as a result of defendants’ conduct has

caused her to suffer both physical and emotional harm.

While plaintiff will have to prove that the conduct of the

defendants was truly outrageous and egregious, and that it

actually caused the harm of which she complains, in order to

prevail at trial, I find that, construing the allegations

liberally, Gilroy has alleged the minimum facts necessary to

state a claim that the defendants engaged in intentional

deceptive, fraudulent, and predatory acts that caused her extreme

distress. Accordingly, I will direct that this claim be served

on defendants in my Simultaneous Order.

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D. The Harassment Claim (Count V)

Gilroy claims that defendants engaged in harassing conduct

when, during the first several months of 2007, they required her

to spend a great deal of time obtaining copies of contractor

contracts and a detailed letter from the Town of Amherst before

she could get financing from defendants which, she believed, they

had promised to provide upon receipt of those documents. 

Instead, Gilroy claims, she was ultimately denied financing,

despite her compliance with the defendants’ burdensome requests. 

Gilroy claims the burden imposed by the requests was designed to

harass her. 

Construed liberally, I find that Gilroy’s harassment claim

restates her claim that the defendants used unfair and deceptive

business practices in their dealings with her. Gilroy has failed

to state any theory of harassment which would give rise to an

additional separate cause of action arising out of these

allegations. Accordingly, I recommend that the harassment claim,

as alleged, be dismissed as entirely subsumed by other claims

raised in the action.

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E. The Consumer Protection Act Claim (Count VI)

Plaintiff alleges that defendants violated her rights under

the CPA by engaging in unfair and deceptive trade practices. “RSA

358-A:2 declares it ‘unlawful for any person to use any unfair

method of competition or any unfair or deceptive act or practice

in the conduct of any trade or commerce in this state.’” Hughes

v. DiSalvo, 143 N.H. 576, 577, 729 A.2d 422, 424 (1999). The CPA

defines trade and commerce as follows:

“Trade” and “commerce” shall include the advertising,

offering for sale, sale, or distribution of any services and

any property, tangible or intangible, real, personal or

mixed, and any other article, commodity, or thing of value

wherever situate, and shall include any trade or commerce

directly or indirectly affecting people of this state. 

Id. “A practice is unfair if (1) it is within at least the

penumbra of some common-law, statutory, or other established

concept of unfairness, (2) it is immoral, unethical, oppressive,

or unscrupulous, or (3) it causes substantial injury to

consumers.” Chroniak v. Golden Inv. Corp., 983 F.2d 1140, 1146

(1st Cir. 1993) (citations omitted).

Here, plaintiff alleges that the defendants engaged in

“trade” and “commerce,” and violated the CPA by engaging in

fraudulent and deceptive lending practices when they: (1)

provided her with a mortgage on her properties knowing that she

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did not have the means to make the required payments; (2) refused

to extend her additional funds knowing that would prevent her

from being able to repay the loans by sale of her condominiums;

(3) and conducted the transaction in an intentionally deceptive

manner to prevent her from seeking alternative financing. For

purposes of preliminary review, I find that, as alleged,

plaintiff has stated sufficient facts to state a CPA claim

against the defendants upon which relief might be granted, and I

will direct service of this claim in my Simultaneous Order.

Conclusion

For the foregoing reasons, I recommend the discrimination

and harassment claims be dismissed from this action. Any

objections to this report and recommendation must be filed within

ten (10) days of receipt of this notice. Failure to file

objections within the specified time waives the right to appeal

the district court’s order. See Unauthorized Practice of Law

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Comm. v. Gordon, 979 F.2d 11, 13-14 (1st Cir. 1992);

United States v. Valencia-Copete, 792 F.2d 4, 6 (1st Cir. 1986). 

_________________________________

James R. Muirhead

United States Magistrate Judge

Date: February 4, 2008

cc: Rosemary A. Gilroy, pro se

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