June 8, 2018
June 8, 2018
Supreme Court
No. 2017-31-Appeal.
(NC 16-2)
Richard Goodrow :
v. :
Bank of America, N.A., Successor by :
Merger to BAC Home Loans Servicing,
LP, f/k/a Countrywide Home Loans
Servicing, LP, et al.
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island,
250 Benefit Street, Providence, Rhode Island 02903, at Telephone
222-3258 of any typographical or other formal errors in order that
corrections may be made before the opinion is published.
Supreme Court
No. 2017-31-Appeal.
(NC 16-2)
Richard Goodrow : Concurrence begins on Page 11
v. :
Bank of America, N.A., Successor by :
Merger to BAC Home Loans Servicing,
LP, f/k/a Countrywide Home Loans
Servicing, LP, et al.
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
OPINION
Justice Indeglia, for the Court. 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 Mortgage1 (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.
I
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
1
The order dismissing plaintiff’s action recognizes that EverBank is incorrectly identified as
EverHome Mortgage in the complaint. Accordingly, we will refer to this defendant by its proper
name, EverBank.
-1-
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
-2-
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
-3-
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 prejudice. On November 4, 2016, Goodrow timely appealed that order to this
Court.
II
Standard of Review
“In reviewing the grant of a motion to dismiss[,] * * * this Court applies the same
standard as the hearing justice.” Warfel v. Town of New Shoreham, 178 A.3d 988, 991 (R.I.
2018) (quoting Audette v. Poulin, 127 A.3d 908, 911 (R.I. 2015)). “Such a motion ‘is properly
granted when it is clear beyond a reasonable doubt that the plaintiff would not be entitled to
relief from the defendant under any set of facts that could be proven in support of the plaintiff’s
claim.’” Id. (quoting Audette, 127 A.3d at 911). “In our review, ‘[w]e will assume[ ] the
allegations contained in the complaint to be true and view [ ] the facts in the light most favorable
to the plaintiffs.’” Id. (quoting Audette, 127 A.3d at 911).
-4-
III
Analysis
Goodrow raises three arguments on appeal. First, he contends that res judicata is not
applicable because the federal court action and the instant action “did not stem from the same
transaction or series of transactions.” Goodrow argues that the federal court dismissal was not a
final judgment for res judicata purposes. Moreover, he submits that the federal court lacked
subject-matter jurisdiction to adjudicate his claims once it determined that he did not have
standing.
Second, Goodrow argues that his breach-of-contract claims were not appropriate for
dismissal pursuant to Rule 12(b)(6) of the Superior Court Rules of Civil Procedure because he
“allege[d] numerous instances of [d]efendants’ failure to perform the obligations of servicing his
mortgage.”
Finally, Goodrow asserts that the hearing justice erred by effectively converting
defendants’ motions to dismiss into motions for summary judgment by relying on documents
outside of the complaint.
A
Conversion to a Motion for Summary Judgment
Because it is determinative of the standard of review that applies in this case, we first
address Goodrow’s argument that the hearing justice erred by converting the motions to dismiss
into motions for summary judgment by relying on the federal court’s dismissal order.
“Ordinarily, when ruling on a motion to dismiss brought under Rule 12(b)(6) or Rule
12(c), ‘a court may not consider any documents that are outside of the complaint, or not
expressly incorporated therein, unless the motion is converted into one for summary judgment.’”
-5-
Chase v. Nationwide Mutual Fire Insurance Co., 160 A.3d 970, 973 (R.I. 2017) (quoting
Alternative Energy, Inc. v. St. Paul Fire & Marine Insurance Co., 267 F.3d 30, 33 (1st Cir.
2001)). “There is, however, a narrow exception for documents the authenticity of which are not
disputed by the parties; for official public records; for documents central to plaintiffs’ claim; or
for documents sufficiently referred to in the complaint.” Id. (quoting Alternative Energy, Inc.,
267 F.3d at 33).
While we have never defined “official public record” for purposes of this exception, the
United States Court of Appeals for the First Circuit, recognizing that the term “public records” is
overly broad, has equated that term with documents susceptible to judicial notice. Freeman v.
Town of Hudson, 714 F.3d 29, 36-37 (1st Cir. 2013). In Rhode Island, “a court may take judicial
notice of court records” and, while “[n]ot every document that may have been placed in a court
file * * * may properly be regarded as part of the record[,]” we have demarcated examples of
those that would be considered as such. Curreri v. Saint, 126 A.3d 482, 485-86 (R.I. 2015).
“These would include judgments previously entered by the court that have the effect of res
[]judicata * * * pleadings or answers to interrogatories by a party, which pleading or answer
might constitute an admission * * *.” Id. at 486 (emphasis added) (quoting In re Michael A., 552
A.2d 368, 370 (R.I. 1989)). Goodrow’s argument that the hearing justice improperly considered
his 2013 federal district court complaint and the order dismissing it is snuffed out by the
aforementioned exception. See Chase, 160 A.3d at 973. Accordingly, we proceed to his
remaining arguments within the confines of the standard of review applied to motions to dismiss.
-6-
B
Res Judicata
Res judicata “serves as a bar to a second cause of action where there exists: (1) ‘identity
of parties’; (2) ‘identity of issues’; and (3) ‘finality of judgment in an earlier action.’” Torrado
Architects v. Rhode Island Department of Human Services, 102 A.3d 655, 658 (R.I. 2014)
(quoting Huntley v. State, 63 A.3d 526, 531 (R.I. 2013)). “The policy underlying res judicata is
to economize the court system’s time and lessen its financial burden. ‘This doctrine ensures that
judicial resources are not wasted on multiple and possibly inconsistent resolutions of the same
lawsuit.’” ElGabri v. Lekas, 681 A.2d 271, 275 (R.I. 1996) (quoting Gaudreau v. Blasbalg, 618
A.2d 1272, 1275 (R.I. 1993)).
In this case, there is no claim that res judicata fails for want of identity of parties;
therefore, we need not address that factor here and instead focus only on whether an identity of
the issues and a final judgment on the merits exist.
1
Identity of Issues
“An identity of issues requires ‘first, [that] the issue sought to be precluded must be
identical to the issue decided in the prior proceeding; second, the issue must actually [have been]
litigated; and third, the issue must necessarily have been decided.’” State v. Pacheco, 161 A.3d
1166, 1173 (R.I. 2017) (quoting State v. Godette, 751 A.2d 742, 746 (R.I. 2000)).
“[T]his Court has adopted the transactional rule governing the preclusive effect of the
doctrine of res judicata * * *.” Bossian v. Anderson, 991 A.2d 1025, 1027 (R.I. 2010) (quoting
DiBattista v. State, 808 A.2d 1081, 1086 (R.I. 2002)). “The transactional rule provides that ‘all
claims arising from the same transaction or series of transactions which could have properly been
-7-
raised in a previous litigation are barred from a later action.’” Id. (quoting DiBattista, 808 A.2d
at 1086). “What constitutes a transaction or a series of connected transactions is ‘to be
determined pragmatically, giving weight to such considerations as whether the facts are related
in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their
treatment as a unit conforms to the parties’ expectations * * *.’” Town of Warren v. Bristol
Warren Regional School District, 159 A.3d 1029, 1036 (R.I. 2017) (quoting Ritter v. Mantissa
Investment Corporation, 864 A.2d 601, 605 (R.I. 2005)).
The defendants assert that Goodrow made the same allegations in the 2016 state court
complaint as he did in the 2013 federal court complaint, which “pertain[] to an increase in
Goodrow’s monthly payment due to the addition of escrow charges[.]” We agree. “A final
judgment on the merits * * * precludes the parties or their privies from relitigating issues that
were or could have been raised in that action.” Federated Department Stores, Inc. v. Moitie,
452 U.S. 394, 398 (1981) (emphasis added). Goodrow’s 2016 complaint references facts
stemming from the same transaction as his 2013 complaint—that is, as the hearing justice aptly
summarized those facts, “the execution and service of plaintiff’s mortgage”—and what was not
alleged in the 2013 complaint certainly could have been alleged.2 See Palazzo v. Alves, 944 A.2d
144, 152 (R.I. 2008) (“[T]he doctrine of res judicata extinguishes a party’s claims even if that
party is ‘prepared in a second action to present evidence or grounds or theories of the case not
presented * * * in the first action, or to seek remedies or forms of relief not demanded in that
action.’”) (quoting ElGabri, 681 A.2d at 276).
2
While Goodrow argues that “[t]he order granting dismissal of the 2013 [c]ase by the federal
court is ambiguous regarding whether the [b]reach of [c]ontract claims could have and should
have been brought in that action[,]” we disagree and discern no such ambiguity.
-8-
Goodrow also argues that he did not have the opportunity to litigate his breach-of-
contract claims because the federal court “explicitly declined to consider” them. The federal
district court judge determined that, as to Goodrow’s claims of breach of contract and breach of
the duty of good faith and fair dealing, “[b]ecause [Goodrow] did not make any of these legal
claims in his [c]omplaint, * * * he cannot now assert them in the face of [d]efendants’ motions.”
The judge further elaborated that “[t]he [c]ourt rules on the [m]otion to [d]ismiss based on the
content of the [c]omplaint, not on new assertions made for the first time in response to the
motion.” This only reinforces our opinion that, while Goodrow did not raise these claims in the
first action, he should have, and he should have done so in accordance with the procedural
guidelines provided by the relevant rules.3
Therefore, we hold that the trial justice correctly determined that an identity of issues
existed.4
2
Final Judgment on the Merits
“Finally, the application of res judicata requires that there be ‘finality of judgment in the
earlier action.’” Reynolds v. First NLC Financial Services, LLC, 81 A.3d 1111, 1116 (R.I. 2014)
(quoting Huntley, 63 A.3d at 531).
3
Significantly, Goodrow never sought to amend his complaint in federal court.
4
Goodrow’s argument that the federal court no longer had subject-matter jurisdiction over the
state law claims once the court dismissed Goodrow’s federal claims is of no consequence,
because in our present review we are concerned with the content of the complaint prior to the
claims being dismissed.
In addition, Goodrow argues that he “did not have the opportunity to fully litigate his
claims as the [f]ederal [c]omplaint was subjected to limited procedure and in fact was stayed for
most of the time it was part of the federal court docket.” Our review of the relevant caselaw in
this jurisdiction does not indicate that a stay of a party’s case in advance of a grant of a motion to
dismiss would stunt that party’s ability to litigate his or her claims.
-9-
We lead with the principle that “[a] dismissal, with prejudice, constitutes a final judgment
on the merits.” DiPinto v. Sperling, 9 F.3d 2, 4 (1st Cir. 1993) (reviewing the Rhode Island
doctrine of res judicata). Still, Goodrow alludes to the following notion to support his position
that the federal court dismissal was not an adjudication on the merits:
“If the first suit was dismissed for defect of pleadings, or parties, or
a misconception of the form of proceeding, or the want of
jurisdiction, or was disposed of on any ground which did not go to
the merits of the action, the judgment rendered will prove no bar to
another suit.” Costello v. United States, 365 U.S. 265, 286 (1961)
(quoting Hughes v. United States, 71 U.S. 232, 237 (1866)).
Goodrow’s argument, however, leaves much to be desired. The lack of standing was but one of
many reasons that the federal district court judge granted defendants’ motions to dismiss. The
judge, after determining that Goodrow lacked standing to pursue his claims, also ruled that
Goodrow’s allegations “fail in the face of” the relevant “exemplar cases” from that court, the
First Circuit Court of Appeals, and this Court.
Goodrow is correct that he was “prohibited from undertaking the procedures usually
employed in litigating a case,” such as “conducting discovery, preparing pre-trial documents,
participating in trial, objecting to and offering evidence and exhibits, [and] conducting
examinations and cross examinations of witnesses.” However, because “[d]ismissal with
prejudice * * * constitutes a full adjudication of the merits as if the order had been entered
subsequent to trial[,]” we hold that this element is also satisfied.5 School Committee of Town of
5
Goodrow also claims that “[t]he [federal] dismissal order was silent as to whether dismissal
was granted with or without prejudice.” However, “Rule 41(b) of the Federal Rules of Civil
Procedure governs the effect of involuntary dismissals” and that rule notes that “[u]nless the
dismissal order states otherwise, a dismissal under this subdivision (b) and any dismissal not
under this rule—except one for lack of jurisdiction, improper venue, or failure to join a party
under Rule 19—operates as an adjudication on the merits.” Huntley v. State, 63 A.3d 526, 532
(R.I. 2013) (quoting Fed. R. Civ. P. 41(b)).
- 10 -
North Providence v. North Providence Federation of Teachers, Local 920, American Federation
of Teachers (AFL-CIO), 122 R.I. 105, 108, 404 A.2d 493, 495 (1979).
IV
Conclusion
For the reasons stated herein, we affirm the order of the Superior Court. The record shall
be returned to that tribunal.
Justice Robinson, concurring. I concur in the judgment of the Court and in its opinion
except for its statements to the effect that there must be finality of judgment in the earlier action
for the doctrine of res judicata to apply. As I explained at some length in my recent dissenting
opinion in the case of Nugent v. State of Rhode Island Public Defender’s Office, No. 2016-248-
Appeal, 2018 WL 2708916, at *3-7 (R.I. June 6, 2018), there can be particular exceptional
situations (as I believe were present in Nugent) where res judicata is applicable even absent a
final judgment on the merits in the earlier action. However, the instant case does not involve
such an exceptional situation; and I submit this concurrence simply for the sake of clarity and
personal consistency.
Moreover, our holding that Goodrow’s complaint was properly dismissed based on res
judicata grounds renders it unnecessary for us to address his final argument that the hearing
justice otherwise improperly dismissed it.
- 11 -
STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
SUPREME COURT – CLERK’S OFFICE
OPINION COVER SHEET
Richard Goodrow v. Bank of America, N.A.,
Successor by Merger to BAC Home Loans Servicing,
Title of Case
LP, f/k/a Countrywide Home Loans Servicing, LP, et
al.
No. 2017-31-Appeal.
Case Number
(NC 16-2)
Date Opinion Filed June 8, 2018
Suttell, C.J., Goldberg, Flaherty, Robinson, and
Justices
Indeglia, JJ.
Written By Associate Justice Gilbert V. Indeglia
Source of Appeal Newport County Superior Court
Judicial Officer From Lower Court Associate Justice Walter R. Stone
For Plaintiff:
Jeanne M. Scott, Esq.
For Defendants:
Attorney(s) on Appeal
Connie Flores Jones, Pro Hac Vice
John H. McCann, Esq.
Dean J. Wagner, Esq.
SU-CMS-02A (revised June 2016)