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Proal v. JPMorgan Chase

United States District Court, D. Massachusetts

June 9, 2015

CAROL PROAL, Plaintiff,
JPMORGAN CHASE, et al. Defendants.


DAVID H. HENNESSY, Magistrate Judge.

This matter is before the court on Defendant JP Morgan Chase Bank, N.A.'s (improperly sued as JPMorgan Chase) ("JPMC") Motion to Dismiss pursuant to Federal Rules of Procedure 12(b)(1) and 12(b)(6).[1] (Docket #17). Plaintiff Carol Proal has filed a response (Docket #23). Pursuant to court order, (Docket #28), the parties filed additional submissions concerning the manner in which notice was given pursuant to 12 U.S.C. § 1821(d)(3)(b). (Dockets #29, 30). This matter is now ripe for adjudication. For the reasons that follow, JPMC's Motion is ALLOWED.


Proal is the record owner of real property located at 317 Ridge Road, Hardwick, Massachusetts (the "Property"). (Compl. at ¶ 3).[2] On January 17, 2007, Proal obtained a loan with SouthStar Funding, LLC ("SouthStar"), the repayment of which was secured by the Property. (Id. at ¶ 16). In connection with this transaction, Proal executed a promissory note in the original principal amount of $875, 000 in favor of SouthStar (the "Note") and granted a mortgage on the Property to SouthStar (the "Mortgage" and collectively with the Note, the "Loan"). (Dockets #19-2; 19-3). On April 3, 2008, the Note was acquired by and the Mortgage was assigned to Washington Mutual Bank ("WaMu"). (Compl. at ¶¶ 18, 23; Docket #19-4).

In 2008, WaMu was placed into receivership by the Federal Deposit Insurance Corporation ("FDIC"). (Compl. at ¶ 32). On September 25, 2008, JPMC acquired certain of WaMu's assets and liabilities, including the Loan, as set forth in a Purchase and Assumption Agreement among the FDIC, the FDIC receiver, and JPMC. (Compl. at ¶ 2, 32; Docket #19-7).

On November 20, 2014, Proal filed the instant action in Worcester Superior Court. (Compl.). JPMC removed the action to this court on December 2, 2014. (Docket #1).


Federal courts are courts of limited jurisdiction; they possess only those powers granted by either the Constitution or statute, and cannot adjudicate claims absent such power. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "The existence of subject-matter jurisdiction is never presumed.'" Fafel v. DiPaola, 399 F.3d 403, 410 (2005) (quoting Viqueira v. First Bank, 140 F.3d 12, 16 (1st Cir. 1998)). Once challenged, the party invoking the jurisdiction of a federal court carries the burden of proving its existence by a preponderance of the evidence. Padilla-Mangual v. Pavia Hosp., 516 F.3d 29, 31 (1st Cir. 2008); Murphy v. United States, 45 F.3d 520, 522 (1st Cir. 1995).

On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), the court must credit the plaintiff's well-pled factual allegations and draw all reasonable inferences in the plaintiff's favor. Merlonghi v. United States, 620 F.3d 50, 54 (1st Cir. 2010). The court may also "consider whatever evidence has been submitted, such as the depositions and exhibits submitted." Id. (quoting Aversa v. United States, 99 F.3d 1200, 1210 (1st Cir. 1996)). In doing so, the court does not convert the motion to dismiss into a motion for summary judgment. Gonzalez v. United States, 284 F.3d 281, 288 (1st Cir. 2002).


A. Claims

Proal alleges that SouthStar engaged in predatory home loan practices by entering into a consumer credit transaction with Proal that was a high cost home mortgage loan.[3] (Compl. at ¶ 10). In Count I of her Complaint, Proal asserts that JPMC is liable under the Massachusetts Predatory Home Loan Practices Act, Mass. Gen. Laws ch. 183C, §§ 1 et seq., as a purchaser of SouthStar's high-cost home mortgage loan to Proal. (Compl. at ¶ 48). As admitted by Proal in her response, the remaining substantive counts of her Complaint are derivative of Count I and asserted against JPMC pursuant to Massachusetts General Laws chapter 183C, section 15.[4] (Docket #22 at 6-8). Count II asserts a claim for violation of Massachusetts General Laws chapter 93A, Count III a claim for unconscionable contract, and Count IV a claim for negligent and intentional infliction of emotional distress. (Compl. at ¶¶ 53-72).

Proal also asserts a claim for a declaratory judgment in Count V of the Complaint. (Compl. at ¶¶ 73-80). "[T]he operation of the Declaratory Judgment Act is procedural only." Aetna Life Ins. Co. v. Hayworth, 300 U.S. 227, 240 (1937). A court cannot declare the rights of parties without reference to the applicable substantive law; if the applicable substantive law requires dismissal, a claim for declaratory relief must be dismissed as well. See John Beaudette, Inc. v. Sentry Ins., 94 F.Supp.2d 77, 98-99 (D. Mass. 1999) (holding that action for declaratory relief is time-barred to the extent the underlying substantive claim is time-barred).

In her Complaint, Proal seeks an order rescinding the Note, an order barring foreclosure or any lender action under the Mortgage, an order stating that she owns the Property in fee simple, damages, punitive ...

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