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Gould v. Bank of New York Mellon

United States District Court, D. Massachusetts

August 18, 2015

KAREN M. GOULD f/k/a KAREN M. JOYCE, ALBERT IRA GOULD and NORTH VILLAGE TOWN HOMES LLC, Plaintiffs,
v.
BANK OF NEW YORK MELLON as TRUSTEE FOR CWALT, BANK OF AMERICA, and RESIDENTIAL CREDIT SOLUTIONS, Defendants

Page 198

          For Karen M. Gould, formerly known as Karen M. Joyce, North Village Towne Homes, LLC, Plaintiffs: Sherrill R. Gould, LEAD ATTORNEY, Gould Law Offices, Littleton, MA.

         Pro Se Party Albert Ira Gould, Plaintiff, Pro se, Lancaster, MA.

         For The Bank of New York Mellon, as trustee for CWALT, Inc., Residential Credit Solutions, Inc., Defendants: Peter V. Guaetta, LEAD ATTORNEY, Guaetta and Benson, LLC, Chelmsford, MA.

         For Bank Of America, Defendant: Stephen C. Reilly, LEAD ATTORNEY, Sally & Fitch LLP, Boston, MA; Jennifer E. Greaney, Sally & Fitch, Boston, MA.

Page 199

         MEMORANDUM AND ORDER ON DEFENDANTS RESIDENTIAL CREDIT SOLUTIONS' AND BANK OF NEW YORK MELLON'S MOTION TO DISMISS (Docket No. 46) AND DEFENDANT BANK OF AMERICA'S MOTION TO DISMISS (Docket No. 48)

         TIMOTHY S. HILLMAN, DISTRICT JUDGE.

         Plaintiffs Karen Gould, Albert Gould, and North Village Towne Homes, LLC (" Plaintiffs" ) assert claims against Defendants Bank of New York Mellon, Bank of America, and Residential Credit Solutions, Inc. (" Defendants" ), arising out of the attempted foreclosure of the Goulds' home. Originally filed in Massachusetts Superior Court, Defendants removed the action pursuant to this Court's diversity jurisdiction. Defendants have filed motions to dismiss the amended complaint for failure to state a claim. (Docket Nos. 46 & 48). For the following reasons, Defendants' motions to dismiss are granted.

         Background

         The following facts, taken as true for purposes of this motion to dismiss, are alleged in the complaint and its incorporated documents. Plaintiff Karen Gould (" Karen Gould" ) is the sole obligor on a promissory note secured by a mortgage on a home at 20 Fire Road 10, Lancaster, Massachusetts (the " Property" ). See Pl.'s Am. Compl., Docket No. 42, ¶ 1. Plaintiff Albert Gould (" Albert Gould" ) is Karen Gould's husband, and they reside together at the home in Lancaster. Id. at 1-2. Plaintiff North Village Town Homes LLC (" North Village" ) is a Massachusetts limited liability company with a principal place of business in Lancaster, Massachusetts. Id. at 3. Albert Gould is its duly authorized Manager. Id. North Village is the assignee, successor in interest and current holder of all rights of Spectacle Pond Investors, Inc.

Page 200

(" SPI" ). Id. at 3; Pl.'s Am. Compl., Docket No. 42, Ex. 1 at 5.

         Defendant Bank of New York Mellon (" BNY Mellon" ) is a bank organized under the laws of New York with a principal place of business in New York, New York. See Notice of Removal, Docket No. 1, ¶ 4.[1] BNY Mellon claims to hold both the promissory note and the mortgage encumbering the Goulds' property. See Pl.'s Am. Compl., ¶ ¶ 4, 10. Defendant Bank of America (" Bank of America" ) is a nationally chartered bank with a principal place of business in Charlotte, North Carolina. See Notice of Removal, ¶ 6. Bank of America serviced the loan on behalf of BNY Mellon until December 2012, at which point Defendant Residential Credit Solutions (" Residential" ) took over as the servicing agent. See Pl.'s Am. Compl., ¶ ¶ 5, 6. Residential is a Delaware corporation with a principal place of business in Fort Worth, Texas. See Notice of Removal, ¶ 5.

         Karen Gould has been delinquent in her mortgage payments for several years and the Property is worth significantly less than the outstanding balance due on the promissory note. See Pl.'s Am. Compl., ¶ 11. With the threat of foreclosure looming in 2012, the Goulds decided to execute a short sale of the Property through Bank of America, the servicing agent at the time.[2] Id. at ¶ ¶ 14-15. The Goulds understood that if they found a buyer willing to purchase the Property at a sales price approved by Bank of America, the mortgage would be discharged. Id. at ¶ ¶ 15, 18. During the negotiation of the short sale, Plaintiffs communicated with Bank of America exclusively through Bank of America's electronic email platform known as " EQUATOR." Id. at ¶ ¶ 8, 38-39.

         To skirt Bank of America's requirement that a short sale buyer be " unrelated" to the seller, Albert Gould formed SPI, Inc. to purchase the Property. Id. at ¶ ¶ 43-45. In June 2012, Karen Gould and SPI executed a purchase and sale agreement and submitted it to Bank of America for approval. See Pl.'s Am. Compl., Ex. 1 at 5-8, Ex. 8.[3] The agreement provided that SPI would purchase the Property for $410,000. Id. Albert Gould signed the agreement on behalf of SPI in his capacity as President, and Karen Gould signed the agreement under her former name " Karen M. Joyce." Id. The " Short Sale Purchase Contract Addendum" signed by the Goulds includes the following provision:

The Parties acknowledge and agree that the Subject Property must be sold through an " Arm's-Length" Transaction. " Arm's length" means two unrelated parties characterized by a selling price and other terms and conditions that would prevail in a typical real estate sales transaction. No party to this contract

Page 201

is a family member, related by blood or marriage, business associate or shares a business interest with the mortgagor (Sellers).

See id. at Ex. 8. In August 2012, Bank of America returned a " counter-offer," requesting that the parties to the short sale agreement increase the sales price from $410,000 to $422,500. See id. at Ex. 5. Karen Gould and SPI accepted the counter-offer by executing a Price Change Addendum on August 23, 2012 (with Albert Gould again signing as President of SPI and Karen Gould signing as " Karen M. Joyce" ), raising the sales price as requested by Bank of America. See id. at ΒΆ 16; Ex. 1 at 9. On October 3, 2012 Bank of America notified Plaintiffs by letter that it would not approve the short sale to ...


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