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Goodrow v. Bank of America, N.A.

Supreme Court of Rhode Island

June 8, 2018

Richard Goodrow
Bank of America, N.A., Successor by Merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP, et al.

          Newport County Superior Court, No. NC 16-2 Walter R. Stone Associate Justice

          For Plaintiff: Jeanne M. Scott, Esq.

          For Defendants: Connie Flores Jones, Pro Hac Vice John H. McCann, Esq. Dean J. Wagner, Esq.

          Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.


          Gilbert V. Indeglia, Associate Justice

         The plaintiff, Richard Goodrow (Goodrow), appeals from a Newport County Superior Court order granting the motions to dismiss of the defendants, Bank of America, N.A. (BOA), and EverBank Mortgage[1] (EverBank) (collectively defendants). This matter came before the Supreme Court on April 5, 2018, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After considering the arguments set forth in the parties' memoranda and at oral argument, we are convinced that cause has not been shown. For the reasons outlined below, the order of the Superior Court is affirmed.


         Facts and Travel

         This appeal centers on a purported procedural flaw, and our rendition of the facts focuses accordingly. On March 5, 2003, Goodrow executed a mortgage on his Newport property in favor of Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for the lender, E*Trade Mortgage Corporation (E*Trade), and the lender's successors and assigns; the mortgage was later assigned to BOA. Goodrow averred that, from 2003 until 2011, he "made monthly payments faithfully via automatic bank payments" in the amount of $1, 890.47.

         However, in November 2010, BOA "adjusted [his] monthly mortgage payment from $1, 890.47 to $1, 970.49" without notifying him. Goodrow explained that BOA "wrongfully sent a notice of default and intent to accelerate" to him in January 2011. Goodrow responded by sending, by certified mail, correspondence disputing that his account was in arrears and "requesting reconciliation with [BOA's] accounting." Goodrow stated that BOA never responded to his request for account information. According to Goodrow, since January 2011, he had made numerous attempts to contact BOA to "rectify the discrepancy" between his records and BOA's records, all to no avail.

         Goodrow further alleged that he continued to make timely mortgage payments, until June 2011, at which time "[BOA] refused to accept" Goodrow's payment and informed him that his mortgage was in foreclosure. Further, Goodrow claimed that in May 2011, BOA "began publishing false negative credit information" about him and that BOA "continues to publish false negative information to Goodrow's detriment."

         In August 2013, Goodrow filed a complaint in the United States District Court for the District of Rhode Island, naming as defendants EverBank, MERS, E*Trade, and BOA. The complaint alleged, inter alia, that (1) the assignment of the mortgage from MERS to BOA was void; (2) BOA, MERS, and EverBank "had no standing to foreclose" on his property; (3) "[t]he mortgage is void due to fraud"; (4) BOA never notified him that his monthly payment amount had increased; (5) BOA "maliciously reported negative credit reports" about him; and (6) the failure to hold both the promissory note and the mortgage prohibited MERS from exercising the statutory power of sale. In three separate counts, Goodrow requested the following relief: (1) that the court issue a declaratory judgment stating that he owns the property outright; (2) that the court enter an order quieting title to the property and specifying that he owns a fee simple interest in it; and (3) that the court award him $10 million in punitive damages because of defendants' "criminal" actions.

         The defendants filed a motion to dismiss the complaint. On April 23, 2015, the federal court granted defendants' motion to dismiss based on the following determinations: (1) Goodrow lacked standing to challenge the assignment of the mortgage; (2) MERS had the power to foreclose as mortgagee; and (3) BOA, as the assignee of the mortgage, also had the power to foreclose as mortgagee. With respect to Goodrow's claims about BOA's alleged breach of its contractual duties of good faith and fair dealing, the federal court held that Goodrow "did not make any of these legal claims in his [c]omplaint" and, as such, found that Goodrow was barred from "assert[ing] them in the face of [d]efendants' motions [to dismiss]."

         In January 2016, Goodrow filed a three-count complaint in Newport County Superior Court. That complaint sought monetary damages for breach of contract and breach of the implied covenant of good faith and fair dealing, as well as a preliminary injunction to stop a foreclosure. Thereafter, EverBank removed the case to the United States District Court for the District of Rhode Island, but the case was ultimately remanded to Newport County Superior Court due to a lack of subject-matter jurisdiction in the federal district court.

         In May 2016, EverBank and BOA each filed motions to dismiss Goodrow's complaint on res judicata grounds. At an October 5, 2016 hearing on those motions, defendants first argued that the breach-of-contract claim "was dealt with or should have been dealt with in a federal court action which was dismissed * * * in April 2015." The defendants asserted that, in his decision, the federal district court judge did not exclude the breach-of-contract issues, but rather explained that he was "not going to address those issues that are being brought for the first time by the plaintiff in response to our motion to dismiss." Second, defendants contended that, "in the four corners of the complaint [Goodrow] has failed to demonstrate that EverBank breached the terms of the mortgage agreement, and as a consequence the complaint should be dismissed."

         The Superior Court hearing justice rendered a bench decision wherein he found that res judicata warranted the granting of defendants' motions to dismiss. That decision was memorialized in an October 24, 2016 order granting the motions and dismissing Goodrow's complaint, with ...

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