DEUTSCHE BANK NATIONAL TRUST COMPANY, Trustee for FFMLT Trust 2005-FF2, Mortgage Pass-Through Certificates, Series 2005-FF2, Plaintiff, Appellant/Cross-Appellee,
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]
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.
Torruella, Lipez, and Thompson, Circuit Judges.
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.
and Jennifer Pike were married in 2000. 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 she signed the New Century mortgage and asserts
that she only later became aware of its existence.
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. A few months later, the New Century loan
balance was paid off and that mortgage was discharged.
Pikes subsequently executed several transfers of the Property
between William, Jennifer, and a family trust. The Property
was deeded back to William in 2007. The First Franklin mortgage
was assigned to Deutsche Bank in 2009.
Pikes were divorced by decree on July 3, 2013. The decree
included the following provision regarding the Property
(strikethroughs in original; initialed, handwritten addition
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 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.]
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."
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."
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.
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. The parties eventually
cross-moved for summary judgment.
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 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.
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.
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.
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