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Suzette Mckenna v. Wells Fargo Bank


March 21, 2011


The opinion of the court was delivered by: Tauro, J.


I. Introduction

This action arises out of a refinance loan that Defendant Wells Fargo Bank, N.A. extended to Plaintiff Suzette McKenna on November 9, 2006. Presently at issue is Defendant's Motion to Dismiss [#10]. For the following reasons, the Motion is ALLOWED.

II. Background*fn1

Plaintiff owns a piece of real property ("Property") in South Orleans, Massachusetts.*fn2 On November 9, 2006, Plaintiff entered into a loan refinancing agreement with Defendant in the amount of $360,000.*fn3 As part of the refinancing, Plaintiff granted a mortgage to Defendant to secure the refinance loan.*fn4 During the refinancing closing, Defendant provided Plaintiff with a Truth-in-Lending Disclosure Statement and at least one copy of the Notice of Right to Cancel.*fn5

On November 15, 2006, the mortgage upon the Property was recorded at the Barnstable County Registry of Deeds.*fn6

On May 24, 2009, Plaintiff's husband passed away.*fn7 Plaintiff defaulted on her loan and Defendant sought to enforce the power of the sale in the mortgage upon the Property.*fn8 On February 6, 2010, Plaintiff sent a Notice of Rescission letter to Defendant.*fn9 The letter stated that Plaintiff wished to rescind her loan because she had been provided at closing with one Notice of Right to Cancel rather than two. Plaintiff further wished to rescind because the finance charge on the Truth-in-Lending Disclosure Statement was inaccurate because "the closing attorney overcharged [Plaintiff] for title insurance."*fn10

Plaintiff asserts seven "causes of action" against Defendant: (1) preliminary and permanent relief; (2) "Defendant Lacks Standing"; (3) "Defendant Is Not A Real-Party In Interest Under Fed. R. Civ. P. 17"; (4) "[Defendant] Has Failed To Comply With G.L. c. 244 § 14";*fn11 (5) "Rescission Under G.L. c. 140D § 10"; (6) violation of Massachusetts General Laws chapter 93A; and (7) intentional misrepresentation.*fn12

III. Discussion

Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a complaint that fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, a complaint must plead sufficient facts to "'state a claim to relief that is plausible on its face.'"*fn13

On a motion to dismiss, a court must accept all factual allegations in the complaint as true.*fn14 A court may also properly consider any documents attached to the complaint.*fn15 But a court will not accept as true any facts that are "conclusively contradicted by plaintiffs' concessions or otherwise."*fn16

A. Count I

Because Plaintiff has failed to allege any unlawful conduct on the part of Defendant,*fn17 injunctive relief is unavailable as a matter of law. For that reason, Count I is dismissed for failure to state a claim upon which relief may be granted.

B. Count II

In Count II, Plaintiff alleges that Defendant "[l]acks [s]tanding."*fn18 Constitutional standing exists if a plaintiff has suffered an injury-in-fact that is both traceable to the defendant's conduct and likely to be redressed by a favorable judicial decision.*fn19

Here, it is Plaintiff, not Defendant, who must have standing to bring this action. For that reason, Count II is dismissed.

C. Count III

In Count III, Plaintiff argues that Defendant is not a real party in interest pursuant to Federal Rule of Civil Procedure 17 and that "Defendant has failed to provide evidence that it is in fact a real party in interest in this matter."*fn20 Rule 17(a)(1) provides that an "action must be prosecuted in the name of the real party in interest."

Here, Plaintiff's argument is illogical. Plaintiff may not file a complaint against Defendant and then maintain that Defendant is not a real party to that complaint. And so, Count III fails to state a claim upon which relief may be granted and therefore is dismissed.

D. Count IV

In Count IV, Plaintiff argues that Defendant has failed to comply with Massachusetts General Laws chapter 244, section 14*fn21 because Defendant does not have the authority to foreclose upon the Property. To support this argument, Plaintiff makes two arguments. First, she alleges that Defendant is not the current holder of the mortgage on the Property.*fn22 But Plaintiff directly contradicts this assertion by alleging that Defendant does possess a written mortgage upon the Property.*fn23 The recorded mortgage in the Barnstable County Registry of Deeds also contradicts Plaintiff's assertion.*fn24 Because Plaintiff has directly contradicted her allegation that Defendant is not the current holder of the Property, this court need not accept that allegation as true.*fn25

Second, Plaintiff alleges that Defendant cannot foreclose upon the Property because Defendant must possess the promissory note for the Property.*fn26

Under Massachusetts law, the current record mortgagee and holder of the mortgage is the proper party to foreclose upon a property.*fn27 The Massachusetts statute governing foreclosures makes no mention of note holders.*fn28

Here, because Defendant is the current holder of the mortgage, Defendant is the proper party to foreclose, and Count IV is dismissed for failure to state a claim upon which relief may be granted.

E. Count V

In Count V, Plaintiff seeks rescission pursuant to the Massachusetts Consumer Credit Cost Disclosure Act ("MCCCDA").*fn29 Under the MCCCDA, a borrower has the right to rescind a loan transaction for three days after the loan closing.*fn30 If, however, the lender does not provide the borrower with required disclosures, the right to rescind does not expire until "four years after the occurrence giving rise to the right of rescission."*fn31 The required disclosures include two copies of the notice of the right to rescind.*fn32 But as long as a borrower receives one such notice, the rescission period is not extended.*fn33 The required disclosures also include disclosure of the finance charge.*fn34 The finance charge is "the cost of consumer credit as a dollar amount,"*fn35 and fees for title insurance are not finance charges.*fn36

Plaintiff argues first that Defendant did not provide Plaintiff with the required number of copies of the notice of the right to cancel because Defendant provided Plaintiff with one notice instead of two.*fn37 It is undisputed that Plaintiff received at least one copy of the notice of her right to rescind.*fn38 As such, Plaintiff's allegation that she did not receive two such notices cannot form the basis of an extension of Plaintiff's right to rescind.

Plaintiff next argues that Defendant misstated the finance charge in the Truth in Lending Disclosure Statement.*fn39 Specifically, Plaintiff argues that "the closing attorney overcharged [her] for title insurance."*fn40 But the state implementing statute specifically exempts title insurance from the definition of a finance charge.*fn41 For that reason, Plaintiff's allegation that Defendant misstated the fee for title insurance cannot form the basis for extending the rescission period. For the reasons above, Count V is dismissed.

F. Count VI

Under Count VI, Plaintiff alleges a violation of Massachusetts General Laws chapter 93A.*fn42 At least thirty days before filing a Chapter 93A claim, a party must serve a written demand letter on any prospective respondent.*fn43 The demand letter is an essential element of a 93A claim.*fn44

Here, it is undisputed that Plaintiff failed to send a demand letter to Defendant.*fn45 Because a demand letter is an essential element of any claim under Chapter 93A, Count VI is dismissed and this court need not review Plaintiff's substantive claim under Chapter 93A.

G. Count VII

In Count VII, Plaintiff asserts a claim of intentional misrepresentation.*fn46 To rescind a conveyance on the basis of fraudulent misrepresentation, a plaintiff must prove that the defendant "made a false misrepresentation of a material fact with knowledge of its falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff relied upon the misrepresentation as true and acted upon it to his damage."*fn47 In so pleading instances of fraud, the plaintiff must meet a heightened pleading requirement and state with particularity the circumstances constituting the fraud.*fn48

Here, Plaintiff has alleged that she was overcharged for title insurance and that Defendant therefore misrepresented the total finance charge associated with the refinancing of the loan.*fn49

For the above-mentioned reasons, however, the alleged misrepresentations relating to the title insurance were not representations of the overall finance charge, because title insurance is specifically excluded from the calculation of a finance charge.*fn50

Additionally, Plaintiff's other allegations of misrepresentation are too vague to meet the particularity requirement of Rule 9.*fn51 For these reasons, Count VII is dismissed.

IV. Conclusion

For the foregoing reasons, Defendant has failed to state a claim upon which relief may be granted. For that reason, Defendant's Motion toDismiss [#10] is ALLOWED.


Joseph L. Tauro United States District Judge

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