Court Opinion

ID: 3215366
Source: CourtListenerOpinion
Date Created: 2016-06-21 18:00:38.260491+00
Date Added: 2024-06-11T07:39:38.112825
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 15-2494

                THOMAS FRANGOS; FRANCES FRANGOS,

                     Plaintiffs, Appellants,

                               v.

  BANK OF AMERICA, N.A.; THE BANK OF NEW YORK MELLON; NEW PENN
      FINANCIAL, LLC, d/b/a Shellpoint Mortgage Servicing,

                     Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF NEW HAMPSHIRE

          [Hon. Paul J. Barbadoro, U.S. District Judge]

                             Before

                   Lynch, Stahl, and Kayatta,
                         Circuit Judges.

     John L. McGowan on brief for appellants.
     Phoebe N. Coddington, Elizabeth T. Timkovich, and Winston &
Strawn LLP on brief for appellees Bank of America, N.A. and The
Bank of New York Mellon.
     Joseph J. Patry and Blank Rome LLP on brief for appellee New
Penn Financial, LLC.

                          June 21, 2016
          STAHL, Circuit Judge.    After twice defaulting on their

mortgage, Thomas and Frances Frangos brought suit against the

defendants, Bank of America, N.A. ("BoA"), The Bank of New York

Mellon ("BoNYM"), and New Penn Financial, LLC, seeking to forestall

a planned foreclosure sale of their home. The Frangoses now appeal

from the district court's entry of summary judgment in favor of

the defendants.   Discerning no error, we AFFIRM.

                         Facts & Background

          In 2005, the Frangoses borrowed $599,000 to refinance an

existing mortgage on their Portsmouth, New Hampshire home.       In

exchange, the Frangoses pledged the home as collateral to secure

a promissory note issued to the lender in the same amount.

          Beginning in 2007, the Frangoses suffered financially as

Mr. Frangos battled cancer and as the recession battered his

construction business.    The Frangoses defaulted on the mortgage

twice, first in 2007 and again in 2009.   After the first default,

the loan was restructured, but, notwithstanding the restructuring,

the Frangoses again fell into default.        It is undisputed that

although the Frangoses' last mortgage payment was made in 2009,

they continue to reside in the home to this day.

          As often occurred during this period of time, after their

initial issuance, the mortgage and the promissory note changed

hands repeatedly in the secondary mortgage market.    In 2011, both

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came to be held by BoNYM.1           From 2011 until 2013, BoNYM and the

Frangoses engaged in protracted negotiations aimed at further

restructuring the loan.          When these negotiations ultimately proved

unsuccessful, a foreclosure sale was scheduled for September 2013.

On the eve of the sale, however, the Frangoses filed suit in New

Hampshire     state     court,    where   they   successfully   obtained   a

preliminary injunction barring the sale from moving forward.

             Although     the     foreclosure    proceedings    were   later

cancelled, the lawsuit remained pending.          After the removal of the

action to the federal court, the Frangoses filed an amended

complaint.     They sought an injunction permanently barring the

defendants from foreclosing, as well as damages premised on BoA's

alleged breach of a provision in the mortgage agreement obligating

the lender to provide the borrower with a detailed notice of

default and right to cure prior to foreclosing.

             Ultimately, the district court granted summary judgment

in favor of the defendants.          See Frangos v. Bank of Am., N.A., No.

13-CV-472-PB, 2015 WL 6829104 (D.N.H. Nov. 6, 2015).            With respect

to the request for a permanent injunction, the district court found

that because the foreclosure had been cancelled, the Frangoses

could not make the necessary showing that they would suffer

irreparable harm in the absence of injunctive relief.             Id. at *2

     1 The other defendants, BoA and New Penn Financial, serviced
the loan (at separate times) on BoNYM's behalf.

                                      - 3 -
(citing Global Naps, Inc. v. Verizon New Eng., Inc., 706 F.3d 8,

13-14 (1st Cir. 2013) (per curiam)).            And, as to the claim for

breach of the mortgage agreement's notice provision, the district

court   found   that   the   Frangoses   had    not   suffered    compensable

monetary damages.      Id. at *2-3.   This appeal followed.

                                Discussion

           We review de novo the district court's entry of summary

judgment, assessing the record in the light most favorable to the

Frangoses and resolving all reasonable inferences in their favor.

Bingham v. Supervalu, Inc., 806 F.3d 5, 9 (1st Cir. 2015).                The

entry of summary judgment is appropriate where "there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law."     Id. (quoting Fed. R. Civ. P. 56(a)).

           We conclude, with little difficulty, that the Frangoses'

enumerated bases for reversal are without merit.                 For one, the

Frangoses claim that the district court erred by denying their

request for a permanent injunction.            The Frangoses contend that

they are entitled to such an injunction because a foreclosure might

occur at any time even though the defendants have not yet complied

with the notice requirements contained in the mortgage agreement.

           This argument, however, overlooks the undisputed fact

that the foreclosure commenced in 2011 was cancelled.             In point of

fact, the district court was presented with an uncontroverted sworn

affidavit to this effect by an assistant vice president of BoA.

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Thus, the district court correctly found that the Frangoses did

not face irreparable harm in the absence of injunctive relief.

See Global Naps, Inc., 706 F.3d at 13.

             As    a    separate       point,   the   Frangoses   claim    that   the

district court erred by relying "exclusively" on representations

made by counsel for BoA and BoNYM at oral argument to the effect

that, if the defendants were to recommence foreclosure proceedings

in the future, they would do so only after complying with the

notice requirements.              According to the Frangoses, the district

court      could       not   rely       on    these    "inherently      speculative"

representations because they were not part of the summary judgment

record.     See Fed. R. Civ. P. 56(c)(1)(A) ("A party asserting that

a   fact   cannot      be    or   is   genuinely      disputed   must   support   the

assertion by . . . citing to particular parts of materials in the

record . . . ."). The Frangoses draw our attention to the following

exchange between the district court and the attorney representing

BoA and BoNYM:

             The Court: [I]f I were to . . . grant summary
                        judgment, . . . you would be free to
                        reinstitute foreclosure proceedings?

             Counsel:         Yes, sir, upon sending them notice
                              required under the mortgage . . . .

             The Court: [W]ill you concede that you're not going
                         to rely in any way, shape, or form on
                         the prior notices before instituting
                         foreclosure in this case?

             Counsel:         Yes, sir.

                                             - 5 -
           We need not decide whether the representations were

eligible   for     consideration     because    the   Frangoses'   argument

simultaneously mischaracterizes the nature of the colloquy and

overstates the import attached to counsel's representations by the

district court. In our view, far from serving as the "exclusive[]"

basis for the entry of summary judgment, this exchange was merely

an attempt by the district court to clarify its understanding of

the posture of the foreclosure proceedings.             What is more, any

suggestion that the district court improperly relied on counsel's

representations is belied by the summary judgment record, which

- independent of oral argument - established the following facts

beyond dispute: (1) the Frangoses had defaulted on their mortgage

(indeed, they had not made a payment in at least six years); (2)

foreclosure proceedings had been commenced in 2011, but later

cancelled; and (3) BoNYM, as the holder of both the mortgage and

the   promissory    note,   was    eligible    to   recommence   foreclosure

proceedings in the future, provided, of course, that in doing so

it complied with the terms of the mortgage agreement and New

Hampshire law.2     Under these circumstances, the entry of summary

judgment in favor of the defendants was well founded.

      2We acknowledge, but find meritless, the Frangoses' claim
that the record is inconsistent on the issue of whether BoNYM
currently holds both the promissory note and the mortgage.

                                    - 6 -
              Next, the Frangoses contend that the district court

erred by awarding summary judgment to the defendants on their claim

for breach of the mortgage agreement's notice provision.                The

district court rejected this claim on grounds that the Frangoses

failed   to    present   evidence   of   compensable    monetary    damages

resulting from the alleged breach.          See Concord Hosp. v. N.H. Med.

Malpractice Joint Underwriting Ass'n, 694 A.2d 996, 998 (N.H. 1997)

("The party seeking damages in a contract action has the burden of

proving the extent and amount of damages sustained as a result of

the breach.").      This was error, the Frangoses maintain, because

although they admittedly do not seek monetary damages, they could

have sought nominal damages at a later stage of the litigation.

              We need not consider whether, under New Hampshire law,

nominal damages alone are sufficient to support a claim for breach

of contract because we conclude that the issue was waived.              The

Frangoses did not seek nominal damages before the district court,

even when presented with a motion seeking summary judgment on

grounds that they had failed to prove triable damages.              Indeed,

when asked repeatedly by the district court at oral argument

whether his clients were seeking nominal damages, counsel for the

Frangoses appeared to indicate that they were not.                 Thus, by

advancing this newly minted theory of recovery for the first time

on appeal, the Frangoses have waived the right, if any, to seek

nominal damages.      See Iverson v. City of Bos., 452 F.3d 94, 102-

                                    - 7 -
03 (1st Cir. 2006) (noting that a theory of recovery "not squarely

and timely raised in the trial court cannot be pursued for the

first time on appeal[,]" particularly where the plaintiff failed

to raise the theory in opposition to a dispositive motion).

                           Conclusion

          The judgment of the district court is AFFIRMED.3

     3 We reject out of hand as utterly frivolous the Frangoses'
claim that they are entitled to attorney's fees under N.H. Rev.
Stat. Ann. § 361-C:2, which provides for an award of fees in
certain consumer cases to "prevail[ing]" parties.

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