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Romanoff v. CitiMortgage Inc.

United States District Court, D. Massachusetts

May 23, 2016

DAVID M. ROMANOFF AND KAREN LOWE-ROMANOFF, Plaintiffs,
v.
CITIMORTGAGE, INC., AND WILMINGTON SAVINGS FUND SOCIETY, FSB, TRUSTEE FOR THE PRIMESTAR-H FUND TRUST I, Defendants.

          MEMORANDUM AND ORDER ON PLAINTIFFS AND CITIMORTGAGE’S PARTIAL MOTION TO DISMISS (Docket No. 45) AND WILMINGTON’S MOTION FOR JUDGMENT ON THE PLEADINGS (Docket No. 51)

          TIMOTHY S. HILLMAN DISTRICT JUDGE

         Two motions are pending in this dispute over a mortgage interest rate change that occurred in 2010. David Romanoff and Karen Lowe-Romanoff (Plaintiffs) and CitiMortgage, Inc. (CitiMortgage) jointly move to dismiss the claims against CitiMortgage pursuant to a settlement agreement. Wilmington Savings Fund Society, FSB, Trustee for the Primestar-H Fund Trust I (Wilmington), which is by assignment the current holder of the mortgage, moves for judgment on the pleadings. For the reasons set forth below, CitiMortgage and Plaintiffs’ motion to dismiss (Docket No. 45) is granted and Wilmington’s motion for judgment on the pleadings (Docket No. 51) is granted.

         Background

         In December of 1998, Plaintiffs purchased real property in Shrewsbury, Massachusetts. They executed a promissory note and mortgage in favor of Mellon Mortgage Company. In April of 1999, Mellon assigned the mortgage to CitiCorp Mortgage, Inc. In April of 2000, CitiCorp Mortgage, Inc. was renamed CitiMortgage. In March of 2003, Plaintiffs entered into a loan modification agreement with Citibank, FSB. Under the terms of the agreement, the interest rate was reduced to 4.5% until March 1, 2008. The agreement provided that the rate was subject to change every year thereafter on a specified “change date.”

         In July of 2010, CitiMortgage adjusted the rate on the note, raising it from 3.125% to 3.75%, not on the change date, and without giving notice to Plaintiffs. Plaintiffs filed a complaint with CitiMortgage’s customer service department, to no avail. Then, the rate was adjusted again, from 3.75% to 6.125%. As a result, Plaintiffs were unable to keep up with the payments, and they fell behind. In April of 2011, Plaintiffs sent a Chapter 93A demand letter to CitiMortgage, alleging that CitiMortgage had improperly adjusted their interest rate in July of 2010 and had refused to correct the rate despite being notified of the error. In November of 2013, CitiMortgage assigned the mortgage to U.S. Bank National Association, as Trustee for Prof-2013-M4 Remic Trust I (U.S. Bank). In December of 2014, U.S. Bank assigned the mortgage to Wilmington.

         On February 27, 2015, Plaintiffs filed the instant complaint against CitiMortgage and U.S. Bank in Superior Court, alleging breach of contract and violation of Chapter 93A. Although the claims are asserted against both defendants, the factual allegations are that CitiMortgage improperly raised the interest rate in July of 2010 and failed to correct the error. Plaintiffs identified U.S. Bank as a “party in interest in this matter” as the current holder of the note and mortgage. The case was removed to this Court in June of 2015. In August of 2015, Wilmington was allowed to substitute itself for U.S. Bank. The case was referred to mediation in September of 2015. In January of 2016, Plaintiffs reached a settlement agreement with CitiMortgage.

         On February 18, 2016, Plaintiffs and CitiMortgage filed a joint motion to dismiss all claims against CitiMortgage, pursuant to their settlement agreement. On March 8, 2016, Wilmington filed a motion for judgment on the pleadings.

         Plaintiffs and CitiMortgage’s Motion to Dismiss

         In connection with their settlement, Plaintiffs and CitiMortgage were prepared to file a stipulation of dismissal with prejudice as to the claims against CitiMortgage, pursuant to Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure. This rule provides that all parties who have appeared in the case must sign the stipulation. CitiMortgage sent the stipulation to Wilmington, but Wilmington did not sign it. Thus, CitiMortgage and Plaintiffs jointly move to dismiss the claims against CitiMortgage. In its limited opposition, Wilmington asks the court only to stay its action on the motion to dismiss until there is a decision on Wilmington’s motion for judgment on the pleadings. The motion to dismiss is granted. The motion for judgment on the pleadings is also granted, as explained below.

         Wilmington’s Motion for Judgment on the Pleadings

         1. Standard of Review

         This Court reviews motions for judgment on the pleadings under a standard that is essentially the same as that for a motion to dismiss under Fed.R.Civ.P. 12(b)(6), except that “[a] Rule 12(c) motion, unlike a Rule 12(b)(6) motion, implicates the pleadings as a whole.” Aponte- Torres v. Univ. of P.R., 445 F.3d 50, 54-55 (1st Cir. 2006). Facts contained in the pleadings are viewed in the light most favorable to the nonmovant, and all reasonable inferences are drawn in his or her favor. Zipperer v. Raytheon Co., 493 F.3d 50, 53 (1st Cir. 2007). Judgment on the pleadings is appropriate “only if the uncontested and properly considered facts conclusively establish the movant’s entitlement to a favorable judgment.” Id. (quoting Aponte-Torres, 445 F.3d at 54). When reviewing a motion under Rule 12(c), the court “may consider ‘documents the authenticity of which are not disputed by the parties; . . . documents central to plaintiffs’ claim; [and] documents sufficiently referred to in the complaint.’” Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007) (quoting Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993)).

         2. Discussion

         Wilmington argues that Plaintiffs have failed to allege that it breached the mortgage contract. The complaint states an affirmative claim against CitiMortgage for breaching the contract by raising the interest rate in July of 2010. The complaint includes no allegations of wrongdoing against Wilmington, which did not acquire an interest in the mortgage until December of 2014. Wilmington argues that, as an assignee, it is not affirmatively liable ...


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