Karlsen et al v. The Money Source, Inc. d/b/a TMS

UNITED STATES DISTRICT COUR T
FOR THE DISTRICT OF NEW HAMPSHIRE
Janic e Karlsen and
Ro y Karlsen
v. 	Case No. 22-cv-157-PB
Opinion No. 2022 DNH 140
The Mo ney So urc e, Inc .
d/b/a TMS
MEMOR ANDUM AND OR DER
Roy and Janice Karlsen filed a state court petition to enjoin the
transfer of title to their personal residence following a foreclosure sale. The
defendant, The Money Source, Inc., removed the case to this court and filed a
motion to dismiss.
The Karlsens assert that they are entitled to relief because they did not
receive advance notice of the foreclosure sale. As The Money Source notes,
however, the pertinent foreclosure statute, N.H. Rev. Stat. Ann. § 479:25, II,
does not require that a mortgagor receive actual notice of the proposed sale if
the mortgagee follows the statute’s notice requirements. See Dugan v.
Manchester Fed. Sav. & Loan Ass’n, 92 N.H. 44 (1942) (construing P.L. Ch.
215, § 23); Butterfield v. Deutsche Bank Nat’l Tr., 2017 D.N.H. 54, 2017 WL
1066579, at *2 (D.N.H. 2017); Bradley v. Wells Fargo Bank, N.A., 2014 DNH
41, 2014 WL 815333, at *3 (D.N.H. 2014). The Karlsens do not allege that
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The Money Source failed to comply with the statutory notice requirements.
Therefore, their petition cannot survive in its current form.
As The Money Store argues, the Karlsens’ petition also may be barred
by N.H. Rev. Stat. Ann. § 479:25, II(c), because they did not file it prior to the
foreclosure sale. See Bank of N.Y. Mellon v. Dowgiert, 169 N.H. 200, 205-06
(2016); Moody v. PennyMac Loan Servs., LLC, 2018 WL 10812614, at *6
(D.N.H. 2008). The New Hampshire Supreme Court has determined that this
bar to suit applies only to the extent that the plaintiff’s claim is “based on
facts which the mortgagor knew or should have known soon enough to
reasonably permit the filing of a petition prior to the sale.” Murphy v. Fin.
Dev. Corp., 126 N.H. 536, 540 (1985). The Karlsens allege that they did not
have advance knowledge of the foreclosure sale, but their petition does not
contain any factual allegations about whether, under the circumstances, they
should have known of the sale. Accordingly, I cannot determine on the
present record whether their claim is barred by N.H. Rev. Stat. Ann.
§ 479:25, II(c).
For the reasons set forth in this Memorandum and Order, the
defendant’s motion to dismiss is granted. Within 14 days, the defendant shall
provide plaintiffs with any evidence in its possession supporting its claim
that it provided plaintiffs with statutory notice of the foreclosure sale.
Plaintiffs shall have 14 days from the receipt of the defendant’s evidence to
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file an amended complaint correcting the deficiencies identified in this
Memorandum and Order.
SO ORDERED.
/s/ Paul J. Barbadoro
Paul J. Barbadoro
United States District Judge
November 9, 2022
cc: 	Counsel of Record
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