1

Though Chief Judge McAuliffe subsequently vacated that

order, when he recused himself from the case, he did so without

prejudice to the refiling of the motion and objection. After

those papers were refiled, this court granted the motion to

dismiss again, adopting the reasoning of Chief Judge McAuliffe’s

order. 

UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Michael C. Dillon

v. Civil No. 07-cv-0070-JL

Opinion No. 2009 DNH 012

Select Portfolio

Servicing, Inc. et al.

O R D E R

Michael C. Dillon and his fiancée, Jennifer Kresge, brought

a twenty-four count complaint against a number of defendants,

alleging a variety of misfeasance in their handling of Dillon’s

mortgage loan. Certain of these claims, including all claims by

Kresge and all claims against defendant PMI Group, Inc., were

dismissed upon motion by a prior order of this court. 2008 DNH

019 (McAuliffe, C.J.).1 The remaining defendants now seek

summary judgment on the rest of the second amended complaint,

arguing, among other things, that they are barred by res judicata

as the result of the final disposition of a prior action Dillon

brought against many of the same parties in New Hampshire state

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 1 of 21
2

The Superior Court’s ultimate findings are not binding on

defendant Harmon Law Offices, P.C., which was dismissed from that

action before the findings were made, see 18A Charles Alan Wright

et al., Federal Practice and Procedure § 4449, at 338-39 (2d ed.

2002), absent some basis for privity between Harmon and the other

defendants, which has not been urged. Given this court’s

ultimate disposition of the summary judgment motion, however,

there is no prejudice to Harmon in binding it to the Superior

2

court, Dillon v. Fairbanks Capital Corp., No. 04-E-25 (N.H.

Super. Ct. July 1, 2007) (“Superior Court Judgment”).

 This court has diversity jurisdiction over this matter

between the plaintiffs, citizens of New Hampshire, and the

defendants, various out-of-state corporations, under 28 U.S.C. 

§ 1332. The court also has jurisdiction under 28 U.S.C. § 1331

(federal question) and 1367 (supplemental jurisdiction) by virtue

of the plaintiffs’ claims under various federal statutes. After

hearing oral argument, and for the foregoing reasons, the

defendants’ motion for summary judgment is granted.

I. Background

The following facts are set forth in the light most

favorable to Dillon. They are derived largely from the findings

in the Superior Court’s final order, on which Dillon heavily

relies and which, as this tactic implies, are binding on the same

defendants here by virtue of collateral estoppel. See, e.g.,

Stewart v. Bader, 154 N.H. 75, 80-81 (2006).2

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 2 of 21
Court’s findings. And Harmon’s pretrial dismissal still has res

judicata effect, as discussed infra.

3For clarity’s sake, the court will henceforth refer to this

entity as “SPS,” regardless of its name at the time of the events

in question.

3

In April 2001, Dillon borrowed just over $100,000 from a

division of Superior Bank, securing the debt with a mortgage on

his home in Manchester, New Hampshire. He later received a

notice from defendant Select Portfolio Servicing (“SPS”)--known

at the time as “Fairbanks Capital Corporation”3

--that it had

acquired Superior’s rights to the loan, effective October 1,

2001. At that point, however, Dillon had already submitted

checks for his September and October payments on the loan to

Superior. He was able to stop payment on these checks, but by

the time he resubmitted the payments to SPS, they were late.

In November 2001, before Dillon had resubmitted both of

these payments to SPS, it demanded that he remit more than $2,000

in allegedly overdue payments on the loan. Dillon began

communicating with SPS to resolve this demand, which he believed

to be the product of an accounting error, possibly arising from

the transfer of the debt from Superior to SPS. SPS also demanded

that Dillon provide proof of property insurance on his home,

though he had previously given that documentation to Superior. 

Dillon resubmitted the proof of insurance to SPS, but it

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 3 of 21
4

nevertheless secured a policy on his home against his will and

began charging him for the premiums.

Then, after Dillon had submitted his November and December

payments, SPS notified him in January 2002 that he was one month

in arrears on the loan--inaccurately, because, by that point,

Dillon had submitted a payment to SPS for each month. This

commenced a series of correspondence from SPS that often

contradicted itself on the amount of Dillon’s allegedly overdue

payments. Dillon did not make his payments for February or March

2002 until mid-April 2002, due to unrelated problems, but that

remission included all required late payment fees, as well as the

April installment.

Dillon went on to make the monthly payments for May and

June, but SPS returned the June payment to him, claiming that he

was in default. Dillon later resubmitted that payment, together

with his July payment, but SPS refused those sums as well,

leading him to give up on making payments altogether. Through a

June 2002 letter from its counsel, Harmon Law Offices, SPS

notified Dillon that it intended to accelerate the balance due on

the loan and foreclose on the mortgage. Dillon enlisted the help

of the New Hampshire Banking Commission, which convinced SPS to

hold off on foreclosure proceedings in light of the dispute over

his payment history. On December 23, 2003, however, SPS, through

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 4 of 21
4

It appears, based on a filing in the Superior Court, that

the name of this entity is actually “Merrill Lynch Mortgage

Investors Trust, Series 2002-AFC1.” Though the connection of

defendant Merrill Lynch Mortgage Investors, Inc. to the events at

issue here is not apparent from the materials on file, counsel

for defendants explained at oral argument that the entity was the

settlor of the trust and, as such, a holder of Dillon’s debt at

one point. Dillon agreed with this characterization.

5

Harmon, notified Dillon that his home was to be sold at a

foreclosure auction on January 26, 2004.

Dillon, through counsel, promptly filed the aforementioned

action in New Hampshire Superior Court, seeking, among other

remedies, to enjoin the foreclosure. His petition named the

following defendants: Fairbanks Capital Corporation (which, as

previously noted, was the former name of SPS, a defendant here),

“LaSalle National Bank Association” (which is a transposition of

the name of LaSalle Bank National Association, a defendant here),

“Merrill Lynch Mortgage Capital Investors” (which is a

misrecitation of the name of Merrill Lynch Mortgage Capital,

Inc., a defendant here), and Harmon Law Offices. Merrill Lynch

Mortgage Capital bought Dillon’s debt from SPS in 2001 and, in

2003, transferred it to LaSalle in its capacity as trustee for an

entity Dillon calls “MLMI REMIC Series 2002-AFC1.”4

The petition alleged, among other things, that SPS had

misapplied Dillon’s payments, wrongfully assessed late fees, and

engaged in unfair and improper accounting practices; that its

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 5 of 21
6

representatives “called [his] home and cell phone almost

continuously during the day and evening” about his allegedly

overdue payments; that the pending foreclosure action had caused

paying tenants at Dillon’s home to move out, leaving him without

income; and that the defendants “failed to take reasonable steps

to insure that a reasonable and fair price is obtained” at the

pending foreclosure auction, “thereby causing irremediable harm.” 

The petition asked the Superior Court to enjoin the foreclosure

sale, both preliminarily and permanently, order the defendants to

provide Dillon with an accounting of any arrearage on his loan

and an opportunity to cure, and for “such other and further

relief as [the] court deems equitable and just.”

The Superior Court issued an ex parte restraining order and,

following a hearing, a preliminary injunction against the

foreclosure sale. Between the issuance of these decrees,

however, Harmon sent multiple notices to Dillon telling him that

the foreclosure sale had been rescheduled for the day after the

scheduled injunction hearing. Following the entry of the

preliminary injunction, Harmon filed a motion to dismiss, arguing

that the petition failed to allege any wrongdoing on its part

aside from its actions as SPS’s “legal representative,” viz.,

Harmon’s attempts to conduct the foreclosure sale that had

already been enjoined. The Superior Court granted the motion,

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 6 of 21
5

Before trial, the parties filed cross-motions for summary

judgment, which were denied. In his briefing on those motions,

Dillon argued that he was entitled to attorneys’ fees and “all

other damages incurred as a result of the Defendant’s breach of

its obligations to accept monthly payments,” though he allowed

that “the instant claim is not a claim for damages.”

7

ruling, “As there are no substantive claims against [Harmon] and

because [it] cannot take any further action until this issue is

resolved, [it is] not a necessary party to the litigation.” 

Dillon v. Fairbanks Capital Corp., No. 04-E-0025, slip op. at 2-3

(N.H. Super. Ct. June 10, 2005) (“Dismissal Order”).

The case against the remaining defendants proceeded to trial

on the merits on June 16 and 24, 2005.5

 On July 10, 2005, the

Superior Court issued a written order noting, at the outset, that

“[a]ll parties appeared with counsel” at trial and that Dillon’s

“Petition was never amended.” Superior Court Judgment at 1. In

this order, the Superior Court found:

There is no doubt that [SPS’s] sleight of accounting

resulted in improper assessments against [Dillon] that,

in turn, resulted in the ‘default’ and the acceleration

of his mortgage . . . . [He] never should have been

placed in default to begin with, and he certainly

should not have been penalized as he was with

additional fees and costs for which he did not receive

any notice at all, as required by the mortgage

documents. Defendant created a predatory scheme of

penalties generating the default, contrary to the

documents signed by the parties.

Id. at 2 (footnote and parenthetical omitted).

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 7 of 21
8

The Superior Court therefore issued a permanent injunction

under which, in relevant part:

defendant is enjoined from pursuing any foreclosure of

[Dillon’s] property based on the default declared in

June, 2002 and must allow [him] an opportunity to

reinstate the loan by resuming payments without

penalties as of August 1, 2005. In addition, defendant

must send a separate accounting to the plaintiff, again

without penalties, of the amounts it has paid for force

placed insurance from March, 2002 through the present

for taxes paid on the property, which plaintiff

concedes he has not paid. All other requests by the

parties are denied, as they have not been pleaded.

Id. at 4. In some of these “other requests,” Dillon had asked

the Superior Court to discharge the mortgage or, alternatively,

to relieve him of his obligation “to pay any monies to the

Defendant for the period in which the Defendant has refused

payments” or any interest on those sums “due to its breach due to

the Defendant’s unclean hands.” The Superior Court did rule,

however, that Dillon had adequately pled a claim for attorneys’

fees and that, as the prevailing party, he was entitled to them.

Despite Dillon’s near-complete victory, SPS was soon up to

its old tricks again, forcing him to return to Superior Court to

ask that SPS be held in contempt of the permanent injunction. In

its order of August 25, 2006 adjudging SPS in contempt, the

Superior Court found, inter alia, that SPS had “failed to provide

[Dillon] with the opportunity to reinstate his loan by failing to

provide any accurate statements” since the permanent injunction

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 8 of 21
9

issued. Dillon v. Select Portfolio Servicing, No. 04-E-0025,

slip op. at 1 (N.H. Super. Ct. Aug. 25, 2006).

In December 2006, Dillon commenced the instant case as a new

action in Superior Court; the defendants duly removed the case

here. His second amended complaint presses a number of claims,

including violations of the Fair Debt Collection Practices Act,

15 U.S.C. §§ 1692 et seq., the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. §§ 1961 et seq., breach of contract,

breach of fiduciary duty, negligence, interference with

advantageous relations, infliction of emotional distress,

defamation, misrepresentation, and conspiracy. He seeks money

damages and a variety of equitable relief.

II. Applicable legal standard

Summary judgment is appropriate where the “pleadings, the

discovery and disclosure materials on file, and any affidavits

show that there is no genuine issue as to any material fact and

that the movant is entitled to a judgment as a matter of law.” 

Fed. R. Civ. P. 56(c). In making this determination, the “court

must scrutinize the record in the light most flattering to the

party opposing the motion, indulging all reasonable inferences in

that party’s favor.” Mulvihill v. Top-Flite Golf Co., 335 F.3d

15, 19 (1st Cir. 2003).

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 9 of 21
10

As noted at the outset, the defendants move for summary

judgment on res judicata grounds, among others. This is an

affirmative defense on which the defendants bear the burden of

proof. See Fed. R. Civ. P. 8(c)(1). As a result, the defendants

are not entitled to summary judgment on their res judicata

defense unless they provide conclusive evidence that it applies. 

See EEOC v. Union Independiente de la Autoridad de Acueductos y

Alcantarillados de P.R., 279 F.3d 49, 55 (1st Cir. 2002).

III. Analysis

The defendants argue that Dillon’s claims are barred by the

res judicata effect of the Superior Court’s decisions. A federal

court applies the law of the state whose courts issued the

judgment in determining its preclusive effect. See Migra v.

Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). 

Under New Hampshire law, the doctrine of res judicata provides

that a prior lawsuit precludes a subsequent one when (1) the

parties or their privies in both actions are the same, (2) the

cases present the same cause of action, and (3) the first action

concluded with the issuance of a final judgment on the merits. 

Meier v. Town of Littleton, 154 N.H. 340, 341 (2006). The

Superior Court proceedings meet each of these criteria.

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 10 of 21
6As noted supra, LaSalle and Merrill Lynch Mortgage Capital

were sued in Superior Court by the wrong names, but that does not

affect the res judicata analysis. See Restatement (Second) of

Judgments § 34 cmt. d (1982). 

7At a minimum, Merrill Lynch Mortgage Investors is in

privity with Merrill Lynch Mortgage Capital: the former is the

latter’s wholly owned subsidiary and the two appear to have

identical interests in this matter, which seeks the same relief

against both of them based on the handling of a debt each held at

some point. See Doe v. Urohealth Sys., Inc., 216 F.3d 157, 162

(1st Cir. 2000).

11

First, there is no question that this action involves the

same parties as the prior state-court action or, in one instance,

a party in privity with them. In both lawsuits, Dillon was or is

the plaintiff, and SPS (then known as Fairbanks), LaSalle,

Harmon, and Merrill Lynch Mortgage Capital were or are the

defendants.6 This action also includes an additional defendant,

Merrill Lynch Mortgage Investors, but Dillon conceded at oral

argument that Merrill Lynch Mortgage Investors was in privity

with at least one defendant to his Superior Court lawsuit.7

Dillon argues that Merrill Lynch Mortgage Capital and

LaSalle “were at best nominal participants in the state court

action” who did not submit any evidence or argument at trial. 

That is inaccurate: as previously noted, the state court’s final

order on the merits specifically stated that “[a]ll parties

appeared with counsel” at trial, and proposed finding and rulings

were filed by SPS “as attorney in fact for LaSalle Bank National

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 11 of 21
8

Dillon states that he made “no specific claims of

wrongdoing” against Merrill Lynch Mortgage Capital or LaSalle in

the Superior Court action. This, too, is inaccurate and

irrelevant: in his proposed findings and rulings, Dillon alleged

a variety of wrongdoing by “Defendant,” without bothering to

differentiate among the various parties he had named in the suit,

and, again, it was the act of naming them that bound them to the

judgment, regardless of their centrality to the case. See

Restatement (Second) of Judgments § 34 (1982). Dillon does not

argue that Merrill Lynch Mortgage Capital and LaSalle were

“nominal parties” (only “nominal participants”) but, even if he

did, nominal parties may invoke res judicata as well, at least

under the circumstances present here. See id. § 37.

12

Association as Trustee of Merrill Lynch Mortgage Investors Trust,

Series 2002-AFC 1.”

Moreover, whatever their level of participation in the

proceedings, Merrill Lynch Mortgage Capital and LaSalle were

named as defendants in state court by Dillon. Just as this

imposes on them the burdens of the judgment, it also entitles

them to take advantage of its benefits, including its res

judicata effect. See Restatement (Second) of Judgments § 34

(1982). Dillon--who, at oral argument, acknowledged that these

defendants would not of course be free to ignore the Superior

Court’s final order by virtue of their “nominal participation” at

trial--offers no authority to the contrary.8

Dillon further argues that Harmon was not a party to the

state-court suit because it was “dismissed from the action

without prejudice before trial.” While, as previously noted, a

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 12 of 21
9At oral argument, Dillon characterized Dillon’s pre-trial

dismissal as a “release” to which he had assented based on

Harmon’s acknowledgment that it could not proceed with the

foreclosure in light of the Superior Court’s preliminary

injunction. That is not what the dismissal order says, but even

if Dillon is correct, it does not appear that he reserved his

rights to seek other relief against Harmon notwithstanding the

“release,” so its res judicata effect is undiminished. See

Restatement (Second) of Judgments §§ 26(1)(a), (b) (1982).

13

party’s pre-trial dismissal relieves it of the collateral

estoppel effect of trial findings, see note 2, supra, it has no

effect on the res judicata effect of the resulting judgment,

unless the dismissal was “purely procedural.” Jenks v. Menard,

145 N.H. 236, 238 (2000). And “[t]he dismissal of a writ for

failing to state a claim on which relief may be granted” is not

purely procedural. Id. at 239.

Harmon was dismissed from the state action when the Superior

Court granted its motion to dismiss for failure to state a claim,

ruling that “there [were] no substantive claims against” it. 

Dismissal Order at 2-3. This is a “substantive decision based on

the merits of the case” and entitled to res judicata effect,

Jenks, 145 N.H. at 239, not, as Dillon says, a dismissal “without

prejudice.”9 Dillon does not question that the Superior Court’s

disposition of his claims against the other defendants, by way of

a permanent injunction issued after a trial on the merits, was

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 13 of 21
14

also a “final judgment on the merits” for res judicata purposes. 

See, e.g., Restatement (Second) of Judgments § 13 cmt. c (1982).

This case also presents “the same cause of action” as the

Superior Court litigation. New Hampshire defines “cause of

action” in this context to include “all rights to remedies with

respect to all or any part of the transaction, or series of

connected transactions, out of which the [first] action arose.” 

Grossman v. Murray, 141 N.H. 265, 269 (1996) (quoting Dennis v.

R.I. Hosp. Trust Nat’l Bank, 744 F.2d 893, 898 (1st Cir. 1984)). 

Dillon argues that “the gravamen of [his] claims in this action

are [sic] substantially different from the claims raised or--as a

practical matter--capable of being raised in the prior State

Court proceeding,” (emphasis omitted), which, he says, was “no

more than an action to enjoin foreclosure.” The court disagrees.

First, the substance of Dillon’s claims here is the same as

the substance of his claims in the Superior Court action: a

series of wrongful actions by the defendants in servicing his

loan and attempting to foreclose on his mortgage. Compare

Superior Court Petition ¶¶ 1-21, 33-35, 41 with Second Amended

Complaint ¶¶ 8-13, 17-21, 28. Dillon’s federal complaint does

newly allege arrangements between SPS and the other defendants

which “provided incentives to SPS to manipulate Mr. Dillon’s

accounts” to generate penalties and, ultimately, a foreclosure.

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 14 of 21
10This rule is fatal to Dillon’s point, made for the first

time at oral argument, that the defendants’ continued failure to

produce the note underlying his debt creates a new cause of

action for wrongful foreclosure, since a mortgagee cannot

foreclose on a mortgage he does not hold. This is simply a

different theory supporting Dillon’s claim that the foreclosure

was wrongful--a claim on which he prevailed in the Superior Court

despite not knowing at that point, he says, that the defendants

could not produce the note. (And even that is doubtful, given

Dillon’s representation at oral argument that he had been asking

to see the note since 2001, to no avail, which begs an

explanation as to how a claim arising out of the missing note

could not have been brought in the Superior Court proceedings

before June of 2004.)

15

But this changes only his allegations about the defendants’

motives, not their actionable conduct, and so does not amount to

a different “cause of action” for res judicata purposes. “[A]

subsequent suit based upon the same cause of action as a prior

suit is barred ‘even though the plaintiff is prepared in the

second action . . . to present evidence or grounds or theories of

the case not presented in the first action.’” E. Marine Constr.

Corp. v. First S. Leasing, Ltd., 129 N.H. 270, 275 (1987)

(quoting Restatement (Second) of Judgments § 25 (1982)).10 The

surest indication that this case asserts the same “cause of

action” as its state-law antecedent is Dillon’s exclusive

reliance on the Superior Court’s findings and rulings on his

claims there as sufficient proof of each of his claims here.

Second, Dillon does not convincingly explain why, as “a

practical matter” or otherwise, he could not have brought his

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 15 of 21
11Dillon is mistaken to characterize his Superior Court suit

as a “statutory action” authorized by N.H. Rev. Stat. Ann. 

§ 479:25, II. That statute does create such a right of action;

it requires a foreclosure notice to include particular language

informing the mortgagor of that right, which exists as a

corollary to the mortgagee’s right to foreclose by exercising its

statutory power of sale. Bolduc v. Beal Bank, SSB, 994 F. Supp.

82, 90 (D.N.H. 1998). Though Dillon now says that his Superior

Court action “was filed under the authority of” RSA 479:25, II,

his petition there did not so much as mention the statute. And,

even if a claim for relief from a pending foreclosure were

statutory in nature, it does not follow that other claims could

not be joined with it. In Eastern Marine Construction, in fact,

the New Hampshire Supreme Court upheld giving res judicata effect

to a judgment rendered in an action brought to dissolve a

statutory mechanic’s lien to preclude the plaintiff’s subsequent

tort claims arising from the same transaction. 129 N.H. at 272-

76. Given the substantial similarities between an action to

prevent foreclosure on a mechanic’s lien and an action to prevent

foreclosure of a mortgage, that case is highly analogous, if not

controlling, in disposing of Dillon’s arguments against res

judicata here. See also infra.

16

present claims against the defendants as part of the Superior

Court action. While “[c]laim preclusion should ordinarily be

denied when the remedies sought in the second action could not

have been sought in the first action,” 18 Wright, supra, § 4412,

at 285, this rule generally applies only to proceedings of

“inherently limited character” such as habeas corpus and

bankruptcy, id. at 281-82. There was nothing “inherently

limited” about the suit in the Superior Court.11 In New

Hampshire, “[a] litigant is free to join all claims and seek all

forms of relief, whether they be legal or equitable, in one suit. 

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 16 of 21
17

There is no separate chancery docket.” E. Marine Constr. Corp.,

129 N.H. at 276 (internal quotation marks omitted). 

Indeed, Dillon’s state-court action, by the time it went to

trial if not from its commencement, was in fact “more than an

action to enjoin foreclosure.” Dillon requested a variety of

other relief, e.g., an accounting, discharge of the mortgage,

cancellation of the payments that became due after SPS began

refusing them, and “such other and further relief as [the] court

deems equitable and just.” Furthermore, as just discussed,

Dillon could have sought other relief, including money damages. 

See Murphy v. Fin. Dev. Corp., 126 N.H. 536, 542-43 (1985)

(upholding monetary award for wrongful foreclosure); Silver v.

First Nat’l Bank of Hillsborough, 108 N.H. 390, 392-93 (1967)

(same). It is black-letter law that “[w]here the plaintiff may

in one action claim two or more remedies . . . arising from the

same transaction, but seeks fewer than all of these remedies, and

a judgment is entered that extinguishes the claim . . . he is

precluded from maintaining another action for the other

remedies.” Restatement (Second) of Judgments § 25 cmt. j (1982);

see also E. Marine Constr. Corp., 129 N.H. at 276.

Dillon objects to applying this rule here as placing “an

insurmountable burden on homeowners to discover all potential

related parties and to bring all conceivable actions against them

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 17 of 21
12At oral argument, Dillon explained that he was forced to

name all of the defendants in the state court action because he

did not know, due largely to the defendants’ own stonewalling,

which of them held his mortgage and was therefore the proper

party to enjoin from foreclosing. While the court sympathizes

with this predicament, naming all of the defendants provided

Dillon with the advantage of a judgment enforceable against all

of them; with that benefit necessarily comes the burden of res

judicata, as already discussed. Furthermore, if Dillon came to

realize during the Superior Court proceedings that certain of the

defendants were not necessary to his objectives, he could have

moved to dismiss them from the case without prejudice; this would

have prevented the eventual judgment from being res judicata as

to them, as noted supra. Dillon did not do so.

18

in [the homeowner’s] original statutory and equitable action to

enjoin foreclosure[,] or forever lose the capacity for redress.” 

As an initial matter, res judicata does not require a plaintiff

“to discover all potential related parties” to the wrongdoing by

the time of filing suit, because, as just discussed, its

protections extend only to the parties to that suit and their

privies. So a plaintiff does not lose his right to proceed

against other parties in a second action by omitting them from

the first. See Restatement (Second) of Judgments § 34(3) (1982). 

Dillon chose to name all of the defendants remaining here

(or, in one case, its privies) in the Superior Court suit and,

having made that choice, he was indeed obligated by fundamental

principles of res judicata to assert all claims against them

which arose out of the same transaction or series of related

transactions, or to forever hold his peace.12 See Restatement

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 18 of 21
19

(Second) of Judgments § 24 cmt. a (1982). Any other result would

fly in the face of the principal purpose of res judicata “that at

some point litigation over a particular controversy must come to

an end.” E. Marine Constr. Corp., 129 N.H. at 273 (internal

quotation marks omitted); see also, e.g., Federated Dep’t Stors,

Inc. v. Motie, 452 U.S. 394, 401 (1981). 

Furthermore, while Dillon cannot be faulted for focusing his

initial state-court petition on staving off the imminent

foreclosure on his home, the fact remains that, after he was

immediately awarded that relief on a temporary basis, he could

have amended his petition to include other claims against the

defendants. As the Superior Court observed, he did not, despite

the passage of some eighteen months between the filing of the

petition and the trial, and went so far as to disclaim money

damages in his summary judgment briefing there. The New

Hampshire Supreme Court has rejected the notion that the filing

of a lawsuit on an “emergency basis” would negate the res

judicata effect of the eventual judgment under nearly identical

circumstances, i.e., the suit was commenced as an action for

temporary relief to protect the plaintiff’s property, but the

plaintiff failed to take advantage of the opportunity to press

claims for other relief arising out of the same transaction as

the litigation progressed. Eastern Marine Construction, 129 N.H.

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 19 of 21
13The court observes that some of the events alleged in the

second amended complaint here did not occur until after the

Superior Court entered its order granting the permanent

injunction, which theoretically could bring them outside of its

res judicata effect. See Wright, supra, § 4409, at 221

(proposing that the preclusive effect of an action for equitable

relief extend only to “matters arising prior to trial”). Dillon,

however, used those events as the basis for his motion for

contempt of the permanent injunction in the Superior Court; that

motion was granted in an order which amounts to a “final judgment

on the merits” in its own right for res judicata purposes. See

United States v. Ryan, 810 F.2d 650, 654 (7th Cir. 1990); I.A.

Durbin, Inc. v. Jefferson Nat’l Bank, 793 F.2d 1541, 1548 n.2

(11th Cir. 1986). The only event occurring after the contempt

order which Dillon alleges is SPS’s transmission of a statement

to him in September 2007 that included a charge for a “property

valuation,” which he says is SPS’s responsibility under the terms

of the loan; because Dillon’s objection to the res judicata

defense nowhere refers to this, however, the court will disregard

it, see Beltran v. O’Mara, 405 F. Supp. 2d 140, 150 n.13 (D.N.H.

2005), but notes that it could not possibly sustain any of

Dillon’s claims on the merits anyway.

14The court does not reach any of the defendants’ other

arguments for summary judgment.

20

at 277. Dillon offers no explanation why he did not amend his

Superior Court petition to include the claims he asserts here.13

Because the defendants have shown by conclusive evidence

that Dillon’s claims are barred by the res judicata effect of the

Superior Court judgment, they are entitled to summary judgment.14

Dillon objects to the disposition of this action without “an

examination by trial of [the defendants’] various

responsibilities for SPS[‘s] illegal conduct and the injuries

inflicted on [him] by that conduct,” but the fact is those issues

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21

was already examined in the Superior Court trial--or at least

they might have been, which is all that is required to satisfy

the “same cause of action” aspect of the res judicata test, see

Grossman, 141 N.H. at 269. This is not to condone what the

Superior Court found to be the “predatory scheme of penalties”

employed against Dillon; it is merely to recognize that, just as

res judicata prevents the defendants from continuing to litigate

that point, it likewise prevents Dillon from doing the same.

III. Conclusion

For the foregoing reasons, the defendants’ motion for

summary judgment (document no. 97) is GRANTED. Dillon’s motion

to compel (document no. 124), which, if successful, would not

affect the outcome of the summary judgment motion, is DENIED as

moot. The clerk shall enter judgment accordingly and close the

case.

SO ORDERED.

____________________________

Joseph N. Laplante

United States District Judge

Dated: February 2, 2009

cc: Walter L. Maroney, Esq.

William P. Breen, Esq.

Dorothy A. Davis, Esq.

Case 1:07-cv-00070-JL Document 125 Filed 02/02/09 Page 21 of 21