17-1936 DEUTSCHE BANK NATIONAL TRUST COMPANY, Trustee for FFMLT Trust 2005-FF2,… v. Jennifer L. Pike

United States Court of Appeals
For the First Circuit
Nos. 17-1815, 17-1936
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee for FFMLT Trust 2005-FF2,
Mortgage Pass-Through Certificates, Series 2005-FF2,
Plaintiff, Appellant/Cross-Appellee,
v.
JENNIFER L. PIKE,
Defendant, Appellee/Cross-Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Joseph A. DiClerico, Jr., U.S. District Judge]
Before
Torruella, Lipez, and Thompson,
Circuit Judges.
Kevin P. Polansky, with whom Christine M. Kingston and Nelson
Mullins Riley Scarborough LLP were on brief, for appellant.
Stephen T. Martin, with whom The Law Offices of Martin &
Hipple, PLLC was on brief, for appellee.
February 19, 2019

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LIPEZ, Circuit Judge. In this diversity case, Deutsche
Bank National Trust Company contends that the district court erred
in concluding that its mortgage interest in a property in New
London, New Hampshire, is subject to a homestead right of the
property's resident, Jennifer Pike. In a cross-appeal, Pike
contends that the district court erred in denying her post-judgment
motion for attorney's fees. After careful review, we affirm both
the rejection of Deutsche Bank's claims and the denial of Pike's
request for attorney's fees.
I.
A. Factual Background
William and Jennifer Pike were married in 2000. 1 In
2001, William bought the property at 34 Dogwood Lane in New London
("the Property"). Only William was listed on the deed, but
Jennifer continuously resided at the address from the time of
purchase through the filing of the present suit. In 2003, William
obtained a loan from New Century Mortgage Corporation secured by
a mortgage on the Property. Both William's and Jennifer's
signatures were on this mortgage, which included a provision
stating that "[b]orrower[] and [b]orrower's spouse . . . release
all rights of homestead in the Property." Jennifer disputes that
1 For ease of reference, we will refer to William Pike as
"William" and Jennifer Pike as "Jennifer."

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she signed the New Century mortgage and asserts that she only later
became aware of its existence.
In late 2004, William obtained another loan, secured by
the Property, from First Franklin Financial Corporation, pursuant
to which he again waived his homestead right. The parties agree
that William did not obtain the First Franklin loan through fraud
or other egregious misconduct. Jennifer did not sign the note or
mortgage. 2 A few months later, the New Century loan balance was
paid off and that mortgage was discharged.
The Pikes subsequently executed several transfers of the
Property between William, Jennifer, and a family trust. The
Property was deeded back to William in 2007.3 The First Franklin
mortgage was assigned to Deutsche Bank in 2009. 4
The Pikes were divorced by decree on July 3, 2013. The
decree included the following provision regarding the Property
2 Although the First Franklin mortgage document stipulates
that the borrower and the "borrower's spouse" release their
homestead rights, the parties appear to assume that this provision
would not be effective against a non-signatory spouse, and we
proceed on that assumption.
3 William filed for bankruptcy subsequent to these transfers,
but the parties do not contend that his bankruptcy is relevant to
the issues on appeal.
4 The appellant's full name is Deutsche Bank National Trust
Company, Trustee for FFMLT Trust 2005 FF2, Mortgage Pass-Through
Certificates, Series 2005-FF2.

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(strikethroughs in original; initialed, handwritten addition in
italics):
14. Marital Homestead:
A. Jennifer Pike is awarded the exclusive use and
possession of the marital homestead located at 34
Dogwood Lane, New London, New Hampshire free and clear
of any interest of William Pike.
B. Jennifer may remain in the home until it goes
into foreclosure, or [their son] graduates high school.
C. If the house does not go [into] foreclosure and
the parties can sell the home, the parties shall list
the house for sale once [their son] graduates high
school. The Parties will share equally any equity in
the home.
D. The Parties will share equally the cost of any
necessary home repairs over $500. If a repair is
necessary, Jennifer will inform William of the repair
via email and provide him an explanation of the repair
needed and include a quote for the work, if possible.
William will forward his share of the repair cost to the
contractor directly if possible. If that is not
possible, he will give his share of the repair cost to
Jennifer within 30 days of the repair. [With respect to
repairs necessary to preserve the habitability of the

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house, Jennifer will give notice to Bill of the need,
and upon Bill's review, and inspection, and agreement
that the repair is necessary, Bill shall share up to 50%
of the cost of the Repair.]
The decree also provides, "[e]xcept as otherwise provide[d]
herein, each party shall sign and deliver to the other party any
document that is needed to fulfill or accomplish the terms of this
Decree within thirty (30) days of the request to do so."
Deutsche Bank began foreclosure proceedings on the
Property on July 11, 2013. About two weeks later -- on July 26 -
- William deeded the Property to Jennifer, and the deed was
recorded shortly thereafter. The deed states, "[t]his conveyance
is in conformance with [the] divorce decree in the Matter of
Jennifer Pike and William T. Pike, Jr."
Jennifer subsequently filed a complaint in state court
asserting a homestead right in the Property and seeking to enjoin
Deutsche Bank from foreclosing. The state court entered summary
judgment in Deutsche Bank's favor after determining that the Bank
had standing to foreclose, and that Jennifer's assertion of a
homestead right was premature. The New Hampshire Supreme Court
affirmed. See Pike v. Deutsche Bank Nat'l Tr. Co., 121 A.3d 279
(N.H. 2015).

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B. Procedural Background
Shortly after the conclusion of the litigation in state
court, Deutsche Bank filed this suit in federal court seeking a
declaratory judgment either that its interest in the Property is
not subject to Jennifer's homestead right (Count I), or that it is
entitled to equitable subrogation "as to the amount it paid to
discharge the prior mortgage" (Count II). In support of its
equitable subrogation claim, Deutsche Bank contends that, as
successor to First Franklin, it is entitled to step into the shoes
of New Century -- the 2003 lender -- and benefit from Jennifer's
waiver of her homestead right in the New Century mortgage because
funds from the First Franklin loan -- obtained in 2004 -- were
used to pay off the New Century loan. Jennifer pleaded
counterclaims asserting the priority of her homestead right over
Deutsche Bank's interest. 5 The parties eventually cross-moved for
summary judgment.
Jennifer argued that she had a homestead right in the
Property from the date of its purchase by virtue of her marriage
to William and that the divorce decree did not automatically
terminate her right. She also argued that Deutsche Bank could not
demonstrate the presence of every element required for equitable
subrogation under New Hampshire law. In particular, Jennifer
5 Jennifer later voluntarily dismissed counterclaims for
intentional and negligent infliction of emotional distress.

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asserted that there was a material factual dispute concerning
whether the First Franklin loan funds were used to pay off the New
Century loan. She further argued that it would be unjust for
Deutsche Bank to rely on the homestead waiver in the New Century
mortgage given her contention that she had not in fact signed that
mortgage.
For its part, Deutsche Bank argued that Jennifer's
homestead right in the Property was extinguished or waived by the
transfers after its purchase -- that is, the transfers of the
Property between William, Jennifer, and a family trust before it
was deeded back to William in 2007 -- or by the divorce decree.
As to equitable subrogation, Deutsche Bank contended that all
necessary elements were satisfied, and that Jennifer could not
contest her signature on the New Century mortgage because she had
not done so in the prior state litigation.
The district court concluded that factual disputes
remained concerning the effect of the divorce decree, and it
therefore denied the parties' cross-motions for summary judgment
and scheduled a bench trial. In her pretrial briefing, Jennifer
argued for the first time that Deutsche Bank could not invoke
equitable subrogation because it had not shown that William
obtained the First Franklin loan by fraud or other egregious
misconduct. In response, Deutsche Bank argued that fraud is not
a precondition to equitable subrogation under New Hampshire law.

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In a pretrial order issued without prior notice to the
parties, the district court explained that it viewed the
applicability of equitable subrogation as "an issue of law that
can be resolved without further factual development."
Accordingly, the court ruled that, "as a matter of [New Hampshire]
law, the circumstances in this case do not meet the threshold
requirement of fraud or misconduct that would support the use of
equitable subrogation to overcome the protections provided by" the
homestead right.
The district court also cancelled the bench trial on the
remaining issue concerning the effect of the divorce decree on
Jennifer's homestead right. However, it granted Deutsche Bank's
request to further brief the equitable subrogation issue and agreed
to reconsider the viability of the claim. The court further stated
that the bench trial would be rescheduled "[i]f the equitable
subrogation claim is found to be viable."
Deutsche Bank then moved for reconsideration of the
equitable subrogation decision, arguing that fraud is not an
element of equitable subrogation and that, in any event, Jennifer
had forfeited the fraud argument by not raising it earlier. The
district court denied the motion. Notably, the court directly
engaged with Deutsche Bank's arguments instead of taking the
standard approach to a motion for reconsideration and considering

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only whether the Bank had identified flaws in the original
decision.
After the parties submitted briefs on whether the
divorce extinguished Jennifer's homestead right, the district
court issued a final order holding that (1) Jennifer's homestead
right was not extinguished by the divorce, (2) her homestead right
takes priority over Deutsche Bank's mortgage, and, hence, (3)
"Jennifer may assert her homestead interest in the [P]roperty
. . . if and when Deutsche Bank forecloses." The court, however,
dismissed Jennifer's quiet title counterclaim because she had not
demonstrated that "title to the [P]roperty can be settled in her
exclusive of Deutsche Bank's mortgage interest." Deutsche Bank
timely appealed, contending that the district court erred in (1)
"sua sponte" dismissing the Bank's equitable subrogation claim on
the basis that it had not demonstrated the First Franklin mortgage
was acquired by fraud, and (2) ruling that Jennifer has a homestead
right superior to the Bank's mortgage.
Jennifer subsequently moved for attorney's fees and
costs pursuant to Federal Rule of Civil Procedure 54(d). The court
granted her uncontested request for costs but denied her request
for attorney's fees. We consolidated Jennifer's timely appeal
with Deutsche Bank's appeal.

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II.
A. The District Court's "Sua Sponte" Rulings
Deutsche Bank contends that the district court erred in
"sua sponte" (1) dismissing its claim for a declaratory judgment
that it is entitled to equitable subrogation, and (2) cancelling
the bench trial. In other words, Deutsche Bank faults the court
for taking these actions on its own initiative and without prior
notice to the parties.
The district court arguably caught Deutsche Bank
unawares when it dismissed the equitable subrogation claim based
on the pretrial briefing. However, even assuming error, we discern
no prejudice to the Bank. See Watchtower Bible & Tract Soc'y of
N.Y., Inc. v. Municipality of San Juan, 773 F.3d 1, 13 (1st Cir.
2014) ("[A] sua sponte dismissal will not be set aside where the
aggrieved party cannot show any prejudice."). Deutsche Bank
addressed Jennifer's argument that fraud was required to apply
equitable subrogation in its pretrial briefs and was given the
opportunity to provide additional briefing after the court
dismissed the equitable subrogation claim. Although Deutsche
Bank's post-dismissal brief was styled as a motion for
reconsideration, the district court did not hold Deutsche Bank to
the stringent standard for this type of motion. See Palmer v.
Champion Mortg., 465 F.3d 24, 30 (1st Cir. 2006) (noting that a
party seeking reconsideration of a legal ruling must demonstrate

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that "the rendering court committed a manifest error of law").
Rather, the district court addressed the merits of Deutsche Bank's
arguments and again concluded that equitable subrogation did not
apply as a matter of law. Thus, even assuming the arguable
proposition that the court erred by initially dismissing the
equitable subrogation claim sua sponte, the court adequately
corrected any error. 6
Regarding the district court's decision to cancel the
bench trial, the simple fact is that the district court did so
after a pretrial conference at which, according to the district
court, "counsel and the court agreed that there are no factual
issues remaining in the case for the bench trial." To the extent
Deutsche Bank now contends that the court misunderstood or
misrepresented the Bank's position, it has waived that argument by
failing to raise it before the district court and by failing to
properly develop the record on appeal. See Barilaro v. Consol.
Rail Corp., 876 F.2d 260, 263 (1st Cir. 1989) (stating that we
"cannot use counsel's allegations regarding what occurred at the
pretrial conference as grounds for appeal").
6 We are unconvinced by Deutsche Bank's analogy of the
district court's actions to those of the court in Berkovitz v.
HBO, Inc., 89 F.3d 24 (1st Cir. 1996). Unlike in Berkovitz, the
district court did not substantially change the rationale for its
ruling from the initial dismissal to the denial of Deutsche Bank's
motion for reconsideration. See id. at 30-31.

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B. Jennifer's Homestead Right
Deutsche Bank argues that the district court erred in
determining that its mortgage interest is subject to Jennifer's
homestead right in the Property. Before this court, the parties
do not appear to dispute, putting aside the equitable subrogation
issue, that Jennifer had a homestead right in the Property, by
virtue of her marriage to William and continuous occupancy, at
least until the date of the divorce decree. 7 Deutsche Bank contends
that she lost her homestead right either because it was terminated
by the divorce decree or because she waived the right through her
acceptance of certain language in the decree. The district court
in effect concluded that Jennifer retained her homestead right
because the decree transferred ownership of the Property to her,
without the need for any subsequent conveyance. We review the
district court's conclusion, based on its interpretation of the
divorce decree and New Hampshire law, de novo. 8
7 The district court determined that none of the transfers
prior to the divorce extinguished Jennifer's homestead right.
Deutsche Bank does not press the issue on appeal.
8 Under New Hampshire law, "[q]uestions of intent [in a
divorce decree] are to be resolved by the trier of fact, whose
findings will be upheld if supported by the evidence, while the
meaning of the language in the agreement is a matter of law."
Miller v. Miller, 578 A.2d 872, 873 (N.H. 1990) (citation omitted)
(internal quotation marks omitted). We take this to mean that
where, as here, the trial court's interpretation of the parties'
intent is based on the face of the agreement, the appellate court
reviews this interpretation de novo as a conclusion of law.

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1. New Hampshire's Homestead Law
The New Hampshire homestead right, or homestead
exemption, protects $120,000 of the value of a person's homestead
from creditors, N.H. Rev. Stat. Ann. § 480:1, with certain
statutorily defined exceptions, see id. § 480:4, which the parties
do not contend are relevant to this appeal. 9 A homestead is the
place a person occupies as his or her home; "actual residency or
occupancy," excluding temporary absences, is essential to the
creation of a homestead because "[t]he purpose of the homestead
exemption is 'to secure to debtors and their families, the shelter
of the homestead roof[,] not to exempt mere investments in real
estate, or the rents and profits derived therefrom.'" Stewart v.
Bader, 907 A.2d 931, 943 (N.H. 2006)(quoting Austin v. Stanley, 46
N.H. 51, 52 (1865)). The "shelter of the homestead roof" does not
mean a person is entitled to keep his or her home in all
circumstances. Rather, in the event of a forced sale, a person
9 Before the district court, the parties appeared to dispute
whether Jennifer could claim $120,000 or only the lesser amount --
$30,000 -- that applied at the time she first acquired a homestead
right in the Property. See In re Bartlett, 168 B.R. 488, 494-98
(Bankr. D.N.H. 1994) (discussing whether an increase in the
statutory homestead amount can be "retroactively" applied). We
leave that issue for the appropriate court to decide if and when
Jennifer seeks a set-off in the amount of her homestead right.

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with a homestead right is entitled to a set-off in the statutorily
defined amount. 10 See N.H. Rev. Stat. Ann. § 480:7.
When a married couple resides together in a home, the
homestead right "extends to . . . both spouses, even when only one
spouse legally owns the homestead." Maroun v. Deutsche Bank Nat'l
Tr. Co., 109 A.3d 203, 208 (N.H. 2014) (citing N.H. Rev. Stat.
Ann. § 480:3-a); see also N.H. Rev. Stat. Ann. § 529:20-a. The
homestead right of a property owner's spouse is established once
he or she physically occupies the subject property. Walbridge v.
Estate of Beaudoin, 48 A.3d 964, 966 (N.H. 2012). The spouse's
homestead right is then ordinarily exempt from any subsequent
attachment or encumbrance; however, the right is not exempt from
any attachment or encumbrance that predates its establishment.
Id.; see also Mason v. Wells Fargo Bank, N.A., No. 14-cv-77-JL,
2014 WL 2737601, at *3 (D.N.H. June 17, 2014) (concluding that a
person who established a homestead right after the execution of a
mortgage on a property "took the property subject to" the mortgage
and "cannot invoke her homestead right as a defense to enforcement
of the mortgage").
10 Alternatively, a person with a homestead right can seek an
injunction to prevent a forced sale if the equity in the home is
not sufficient to cover both the creditor's claim and the homestead
right. See, e.g., Deyeso v. Cavadi, 66 A.3d 1236, 1238 (N.H.
2013).

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The homestead right also can be waived, that is,
voluntarily or intentionally relinquished. Maroun, 109 A.3d at
228. Although evidence of waiver must be "unequivocal," "if a
mortgage document is signed by both spouses, 'with the formalities
required for the conveyance of land,' no further evidence of waiver
is required." Id. (quoting N.H. Rev. Stat. Ann. § 480:5-a).
2. Property Distribution by Divorce Decree
In New Hampshire, "[t]he question of whether and to what
extent property rights have been transferred from one person to
another generally is resolved upon a determination of the
transferor's intent." Mamalis v. Bornovas, 297 A.2d 660, 662 (N.H.
1972). When property rights are transferred in a stipulated
agreement, such as in the form of a stipulated divorce decree,
"absent fraud, duress, mutual mistake, or ambiguity, the parties'
intentions will be gleaned from the face of the agreement." Miller
v. Miller, 578 A.2d 872, 873 (N.H. 1990). Courts consider "the
plain meaning of the language viewed in the context of the entire
decree[,]" Matter of Oligny, 153 A.3d 194, 196 (N.H. 2016), and
construe "[s]ubsidiary clauses . . . so as not to conflict with
the primary purpose of the decree," id. (quoting Bonneville v.
Bonneville, 702 A.2d 823, 825 (N.H. 1997)). See also Sommers v.
Sommers, 742 A.2d 94, 99 (N.H. 1999) ("We consider the intent of
the parties as expressed in the language of the stipulation.").

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Broadly speaking, a major purpose of a divorce decree
"is to establish a final and equitable distribution of the marital
property." Bonneville, 702 A.2d at 825; see also McSherry v.
McSherry, 606 A.2d 311, 313 (N.H. 1992) ("[A] property settlement
in a divorce decree is 'a final distribution of a sum of money or
a specific portion of the spouses' property . . . [and] is not
subject to judicial modification on account of changed
circumstances." (alteration in original) (quoting Stebbins v.
Stebbins, 438 A.2d 295, 297 (N.H. 1981))); see also N.H. Rev. Stat.
Ann. § 458:16-a (providing that "[w]hen a dissolution of a marriage
is decreed, the court may order an equitable division of property
between the parties" and specifying that "[p]roperty shall include
all tangible and intangible property and assets, real or personal,
belonging to either or both parties, whether title to the property
is held in the name of either or both parties"). Given that
divorce decrees establish a final division of property, it is
unsurprising that such decrees can effectuate a conveyance of
personal or real property. See Swett v. Swett, 49 N.H. 264, 264
(1870) (holding that an interest in real estate "vested in the
wife, 'by the mere force of the [divorce] decree,' 'as effectually
as the same could be done by any conveyance of the husband
himself'" (quoting Whittier v. Whittier, 31 N.H. 452, 458 (1855)));
see also Johnson v. Coe, 697 A.2d 939, 943 (N.H. 1997) ("The award
of the . . . house to the plaintiff in the divorce decree was a

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property settlement and, as such, not modifiable."); Bonneville,
702 A.2d at 826 (holding that a stock transfer in a divorce decree
occurred "by operation of law"); Sommers, 742 A.2d at 99 (holding
that language in a divorce decree "creat[ed] an immediate property
interest" in a vehicle).
Not all conveyances in a divorce decree are
self-executing. That is, a stipulated conveyance in a divorce
decree may require a future occurrence or further action by the
parties (a condition precedent) to take effect. See Spellman v.
Spellman, 614 A.2d 1054, 1055 (N.H. 1992). However, "[b]ecause
conditions precedent are disfavored, [courts] infer that the
parties intended a condition precedent only where the plain
language of the decree or stipulation requires such a
construction." Sommers, 742 A.2d at 99 (emphasis added); see also
United States v. Baker, No. 13-cv-213-PB, 2014 WL 4199120, at *3
(D.N.H. Aug. 22, 2014)("The husband and wife's subsequent failure
to comply with a provision of the divorce judgment -- in this case,
the execution and recording of a deed to the . . . properties --
will not invalidate or delay the conveyance unless the parties
clearly intended for the provision to serve as a condition
precedent."). Therefore, under New Hampshire law, a divorce decree
may effectuate an immediate property transfer where its language
plainly demonstrates an intention to do so. See Baker,
2014 WL 4199120, at *3 ("When a 'stipulation between the parties

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. . . incorporated and merged into the divorce decree' 'clearly
and affirmatively expresse[s] their intention' to convey a real
property interest, that interest vests in the grantee 'on the
effective date of the divorce decree.'" (alteration and omission
in original) (quoting Mamalis, 297 A.2d at 663)).
3. Application of the Law
The district court correctly determined that Jennifer
retained her homestead right under the plain language of the
divorce decree, which clearly indicates the parties' intention
that ownership of the Property immediately transfer to Jennifer:
"Jennifer Pike is awarded the marital homestead located at 34
Dogwood Lane, New London, New Hampshire[,] free and clear of any
interest of William Pike." This declarative statement, with no
mention of any contingency or condition precedent, is the type of
language that the New Hampshire Supreme Court has read to
effectuate an immediate property transfer. See Bonneville, 702
A.2d at 826; Sommers, 742 A.2d at 99; cf. Spellman, 614 A.2d at
236-37 (concluding that a stipulated award of the marital home was
not "self-executing" because the language of the stipulation
specifically made the transfer contingent on, among other things,
an appraisal of the home).
The other provisions regarding the "marital homestead"
do not negate the parties' clear intent to transfer ownership to
Jennifer. See Matter of Oligny, 153 A.3d at 196 (stating that

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"[s]ubsidiary clauses" must be read "so as not to conflict with
the primary purpose of the decree") (quoting Bonneville, 702 A.2d
at 825). Agreeing to share the proceeds from a potential sale of
the home once their son graduates high school, for example, is not
incompatible with Jennifer's ownership. Nor does the decree's
general provision that the parties "shall sign and deliver to the
other party any document that is needed to fulfill or accomplish
the terms of this Decree" evince an intention to make a deed
transfer a condition precedent to Jennifer's ownership of the
Property. 11
There also is no unequivocal evidence that Jennifer
waived her homestead right by agreeing to certain language in the
decree. See Maroun, 109 A.3d at 228-29. Deutsche Bank makes much
of the fact that the divorce decree mentions the possibility of a
foreclosure on the Property. As discussed above, however, a
potential foreclosure does not necessarily negate a property
owner's homestead right. Rather, a homestead right superior to a
mortgage may simply require the mortgagee to pay the holder of the
11 The district court noted that William later deeded the
Property to Jennifer in support of its conclusion that the parties
intended to transfer ownership of the Property to her. However,
contrary to Deutsche Bank's contention, the district court did not
suggest that the deed transfer was a condition precedent. It
expressly held that "Jennifer's right to the [P]roperty became
effective immediately when the divorce decree issued on July 3,
2013."

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right from the proceeds of a foreclosure sale. See supra section
II.B.1. Therefore, the decree's mention of a possible foreclosure
does not indicate that Jennifer relinquished her homestead right.
For these reasons, the district court did not err in concluding
that Jennifer enjoys a homestead right in the Property with
priority over Deutsche Bank's mortgage.
C. Equitable Subrogation
Deutsche Bank's equitable subrogation argument
essentially goes as follows: First Franklin discharged the debt
owed to New Century and thus stood to benefit from Jennifer's
waiver of her homestead right in the New Century mortgage. As
successor to First Franklin, Deutsche Bank can stand in First
Franklin's shoes, and thus benefit from Jennifer's waiver. In
other words, Deutsche Bank does not have to recognize Jennifer's
claimed homestead right. 12
Deutsche Bank further contends that the district court
erred in dismissing the Bank's equitable subrogation claim because
(1) Jennifer waived the argument that equitable subrogation cannot
be applied to defeat a homestead right in the absence of fraud,
and (2) New Hampshire law does not, in fact, require fraud. As to
12 To be precise, Deutsche Bank argues that it is entitled
to equitable subrogation "as to the amount that [First Franklin]
paid to discharge the [New Century] [m]ortgage." In practical
terms, this would mean that Deutsche Bank does not have to pay
Jennifer anything in the event of a foreclosure.

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"waiver," we are unconvinced that Jennifer "waived" or "forfeited"
her legal argument given that she raised it at a time when Deutsche
Bank still had an opportunity to meaningfully respond and before
the district court had rendered judgment. 13 As to the merits of
her claim, we must first outline the relevant law in New Hampshire.
1. Background Law
Under New Hampshire law, equitable subrogation "is a
broad doctrine [that] 'applies where one who has discharged the
debt of another may, under certain circumstances, succeed to the
rights and position of the satisfied creditor.'" Chase v.
Ameriquest Mortg. Co., 921 A.2d 369, 376 (N.H. 2007) (quoting 73
Am. Jur. 2d Subrogation § 5 (2001)). For equitable subrogation to
apply, certain conditions "must be met: (1) the subrogee [the
entity who discharged the debt] cannot have acted as a volunteer;
(2) the subrogee must have paid a debt upon which it was not
primarily liable; (3) the subrogee must have paid the entire debt;
and (4) subrogation may not work any injustice to the rights of
others." Id.
13 Deutsche Bank specifically argues that Jennifer forfeited
the fraud contention by failing to plead it as an affirmative
defense, but the Bank forfeited this argument by failing to raise
it in its opening brief. See Sparkle Hill, Inc. v. Interstate Mat
Corp., 788 F.3d 25, 29 (1st Cir. 2015) (noting that arguments first
asserted in a reply brief ordinarily are deemed waived or
forfeited).

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The subrogee has the burden of demonstrating an
entitlement to equitable subrogation, "which generally includes
pro[ving] . . . [t]he existence and applicability of equitable
principles or contractual provisions as to subrogation and
reimbursement." Wolters v. Am. Republic Ins. Co., 827 A.2d 197,
200 (N.H. 2003) (second alteration in original) (quoting 16 L.
Russ & T. Segalla, Couch on Insurance 3d § 222:7 (2000)).
Crucially, the New Hampshire Supreme Court has held that equitable
principles, such as equitable subrogation, "may be applied to reach
beyond the literal language of the exceptions" to the homestead
right -- that is, to create a new exception to application of the
homestead right -- "only when there has been fraud, deception, or
other misconduct in the procurement of funds spent on a homestead."
Deyeso v. Cavadi, 66 A.3d 1236, 1241 (N.H. 2013)(emphasis added).
2. Application of the Law
On de novo review, we conclude that the district court
correctly applied New Hampshire law and declined to apply equitable
subrogation to defeat Jennifer's homestead right because there was
no "fraud, deception, or other misconduct in the procurement of
funds spent on [the] homestead." Deyeso, 66 A.3d at 1241. 14
14 Although Deutsche Bank faults the district court for
offering a shifting rationale for its ruling, we disagree with
this characterization. In both of its orders, the district court
read Deyeso to hold that equitable principles cannot be invoked to
"reach beyond the literal language of the homestead exceptions" in
the absence of fraud. Contrary to Deutsche Bank's suggestion, the

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Deutsche Bank's fallback argument is that even if the district
court correctly interpreted New Hampshire law, it could have --
and should have -- exercised its equitable powers to apply
equitable subrogation in the Bank's favor. We need not address
the complex question of whether and in what circumstances a federal
court sitting in diversity may order equitable relief that is not
authorized under state law. See Guar. Tr. Co. of N.Y. v. York,
326 U.S. 99, 106 (1945) ("[A] federal court may afford an equitable
remedy for a substantive right recognized by a State even though
a State court cannot give it."); Bogosian v. Woloohojian Realty
Corp., 923 F.2d 898, 904 (1st Cir. 1991) (noting conflicting
circuit authority regarding the source of law for determining the
equitable powers of a federal court sitting in diversity). Even
assuming the district court had the ability to apply equitable
subrogation outside the parameters of New Hampshire law, it was
not compelled to do so, and it certainly did not abuse its
discretion by declining to use its equitable powers in a manner at
odds with state law. See Morgan v. Kerrigan, 523 F.2d 917, 921
(1st Cir. 1975) (per curiam) ("This court's review of orders issued
in the exercise of the district court's equitable powers is limited
district court never held that fraud is an element of equitable
subrogation or a precondition to applying equitable subrogation in
all situations.

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to a determination whether there has been an abuse of
discretion."). 15
III.
In her cross-appeal, Jennifer contends that she is
entitled to attorney's fees based on a state statute and a
provision in the Deutsche Bank mortgage. The statute provides, in
relevant part, as follows:
If a retail installment contract or evidence of
indebtedness provides for attorney's fees to be awarded
to the retail seller, lender or creditor in any action,
suit or proceeding against the retail buyer, borrower or
debtor involving the sale, loan or extension of credit,
such contract or evidence of indebtedness shall also
provide that:
I. Reasonable attorney's fees shall be awarded to the
buyer, borrower or debtor if he prevails in
(a) Any action, suit or proceeding brought by the retail
seller, lender or creditor; or
(b) An action brought by the buyer, borrower or debtor[.]
N.H. Rev. Stat. Ann. § 361-C:2 (emphases added). The Deutsche
Bank mortgage provides:
15 We recognize that the district court, at various places in
its two orders related to equitable subrogation, seems to suggest
that its hands were tied by state law. However, we understand the
district court's rulings ultimately to rest on its determination
that equity would not be served by applying equitable subrogation
in a situation where it would not be applied by state courts. See,
e.g., Deutsche Bank Nat'l Tr. Co. v. Pike, No. 15-cv-304-JD, 2017
WL 2608727, at *3 (D.N.H. Feb. 12, 2017) ("Contrary to Deutsche
Bank's theory, [Jennifer] would not receive a windfall through her
homestead interest but instead would receive the protection
intended and provided by [the homestead statute].").

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25. Attorneys' Fees. Pursuant to . . . § 361-C:2, in
the event that Borrower shall prevail in (a) any action,
suit or proceeding, brought by Lender, or (b) an action
brought by Borrower, reasonable attorneys' fees shall be
awarded to Borrower.
(Emphases added.) Jennifer did not sign the First Franklin, now
Deutsche Bank, mortgage, and William is listed as the sole
"borrower." The term is not defined in the mortgage or in section
361-C, but Jennifer concedes that she is not the "borrower" for
purposes of the mortgage.
The district court concluded that Jennifer is not
entitled to attorney's fees under the statutory provision and the
mortgage precisely because she "is not the borrower." The court
further held that even if Jennifer could be considered a "debtor,"
the statute and the mortgage provision do not apply because
Deutsche Bank did not sue her for breach of the note or mortgage.
Nevertheless, on appeal, Jennifer presses the argument that she is
a "debtor" for purposes of the mortgage and, as such, is entitled
to attorney's fees pursuant to the mortgage provision and section
361-C:2. We generally review the district court's denial of
attorney's fees for abuse of discretion but review any underlying
conclusions of law de novo. In re Volkswagen & Audi Warranty
Extension Litig., 692 F.3d 4, 13 (1st Cir. 2012).
Deutsche Bank raises a plethora of reasons why Jennifer
is not entitled to attorney's fees under section 361-C:2 and the
mortgage. It suffices to say, however, that we essentially agree

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with the district court's straightforward analysis. 16 The court
correctly determined that Jennifer is not entitled to the benefit
of the mortgage's attorney's fees provision, which is expressly
limited to the "borrower." Section 361-C:2 requires reciprocal
treatment of both sides of a debt contract -- here, the mortgagee
and William -- but does not rewrite the mortgage's terms to render
the Bank responsible for the attorney's fees of a third party.
The district court did not commit legal error or otherwise abuse
its discretion in denying her fee request.17
16 Among its other arguments, Deutsche Bank contends that the
district court did not have jurisdiction to consider Jennifer's
fee request. Because Jennifer's entitlement to attorney's fees is
easily resolved on the merits, we do not address the jurisdictional
issue. See Cozza v. Network Assocs., Inc., 362 F.3d 12, 15 (1st
Cir. 2004) ("The rule is well established in this Circuit that
resolution of a complex jurisdictional issue may be avoided when
the merits can easily be resolved in favor of the party challenging
jurisdiction.").
17 We note that it is somewhat disingenuous for Jennifer to
contend she has rights arising under the mortgage given that she
has repeatedly disavowed any connection to the mortgage, both in
state court and before the district court. Courts generally do
not approve of such attempts to have it both ways. See RFF Family
P'ship, LP v. Ross, 814 F.3d 520, 527 (1st Cir. 2016) (discussing
the doctrine of judicial estoppel, which "prevent[s] a litigant
from taking a litigation position that is inconsistent with a
litigation position successfully asserted by him in an earlier
phase of the same case or in an earlier court proceeding"
(alteration in original) (quoting Perry v. Blum, 629 F.3d 1, 8
(1st Cir. 2010))).

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***
For the foregoing reasons, we affirm as to both appeals.
Each side shall bear its own costs.
So ordered.

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