United States District Court, D. Massachusetts
MEMORANDUM AND ORDER RE: DEFENDANTS FEDERAL NATIONAL
MORTGAGE ASSOCIATION AND GREEN TREE SERVICING LLC’S
MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY # 58)
MARIANNE B. BOWLER United States Magistrate Judge.
before this court is a motion for summary judgment filed by
defendants Federal National Mortgage Association
(“Fannie Mae”) and Ditech Financial LLC, formerly
known as Green Tree Servicing, LLC (“Green Tree”)
(collectively “defendants”) pursuant to
Fed.R.Civ.P. 56 (“Rule 56”). (Docket Entry # 58).
Plaintiff Heather Harrington (“plaintiff”)
opposes the motion. (Docket Entry # 62). After conducting a
hearing on March 3, 2016, this court took the motion under
advisement. (Docket Entry # 58).
parties’ dispute arises out of a settlement agreement
regarding a note and a mortgage on a property belonging to
plaintiff. When plaintiff first filed an eight count
complaint (“original complaint”) on May 12, 2014
(Docket Entry # 1-3), defendants and Orlans filed motions to
dismiss (Docket Entry ## 6 & 13). In response, plaintiff
filed a motion to amend the original complaint. (Docket Entry
# 12). Plaintiff subsequently filed a second motion to amend
(Docket Entry # 26) and this court deemed the aforementioned
motions moot. (Docket Entry # 31).
21, 2015, this court allowed in part and denied in part
plaintiff’s second motion to amend. (Docket Entry # 37,
p. 40). In light of that Order, on June 9, 2015, plaintiff
filed an amended complaint that set out two claims, one for
of breach of contract based on the settlement agreement
(Count I) and the other for breach of implied covenant of
good faith and fair dealing (Count II). (Docket Entry # 40).
The Order limited the breach of contract claim to a claim
that defendants allegedly breached the settlement agreement
based on the “failure to issue corrections to the
credit reporting agencies as required by the settlement
agreement.” (Docket Entry # 37, pp. 21-22). Defendants
move for summary judgment on both claims. (Docket Entry #
58). Plaintiff opposes the motion and contends that genuine
issues of material fact preclude summary judgment. (Docket
Entry # 62, p. 1).
judgment is designed “‘to pierce the boilerplate
of the pleadings and assay the parties’ proof in order
to determine whether trial is actually
required.’” Tobin v. Federal Express
Corp., 775 F.3d 448, 450 (1st Cir. 2014)
(quoting Wynne v. Tufts University School of
Medicine, 976 F.2d 791, 794 (1st Cir. 1992)).
It is appropriate “if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). It is inappropriate “if the record is
sufficiently open-ended to permit a rational factfinder to
resolve a material factual dispute in favor of either
side.” Pierce v. Cotuit Fire District, 741
F.3d 295, 301 (1st Cir. 2014).
issues of fact are those that a factfinder could resolve in
favor of the nonmovant, while material facts are those whose
‘existence or nonexistence has the potential to change
the outcome of the suit.’” Green Mountain
Realty Corp. v. Leonard, 750 F.3d 30, 38 (1st
Cir. 2014) (quoting Tropigas de Puerto Rico, Inc. v.
Certain Underwriters at Lloyd’s of London, 637
F.3d 53, 56 (1st Cir. 2011)). The evidence is
viewed “in the light most favorable to the non-moving
party" and "all reasonable inferences" are
drawn in his favor. Ahmed v. Johnson, 752 F.3d 490,
495 (1st Cir. 2014) . In reviewing a summary
judgment motion, a court may examine "all of the record
materials on file, " Geshke v. Crocs, Inc., 740
F.3d 74, 77 (1stCir. 2014), "including
depositions, documents, electronically stored information,
affidavits or declarations ... or other material."
Fed.R.Civ.P. 56(c)(1); see Ahmed v. Johnson, 7 52
F.3d at 495. "Unsupported allegations and speculation,
" however, "do not demonstrate either entitlement
to summary judgment or the existence of a genuine issue of
material fact sufficient to defeat summary judgment."
Rivera-Colon v. Mills, 635 F.3d 9, 12
(1st Cir. 2011); see Serra v. Quantum
Servicing, Corp., 747 F.3d 37, 40 (1st Cir.
2014) ("allegations of a merely speculative or
conclusory nature are rightly disregarded") .
filed a LR. 56.1 statement of undisputed facts.
Uncontroverted statements of fact in the LR. 56.1 statement
comprise part of the summary judgment record. See Cochran
v. Quest Software, Inc., 328 F.3d 1, 12 (1st
Cir. 2003) (the plaintiff's failure to contest date in
LR. 56.1 statement of material facts caused date to be
admitted on summary judgment); Stonkus v. City of
Brockton School Department, 322 F.3d 97, 102
(1st Cir. 2003) (citing LR. 56.1 and deeming
admitted undisputed material facts that the plaintiff failed
to controvert). Adhering to this framework, the record sets
out the following facts.
13, 2006, GMAC Mortgage Services, LLC (“GMAC”)
agreed to a Mortgage Selling and Servicing Contract (the
“Servicing Contract”) with the Federal National
Mortgage Association (“Fannie Mae”). (Docket
Entry # 60, ¶ 8) (Docket Entry # 60-3). The terms of the
Servicing Contract permitted GMAC as a lender to sell and
service mortgages on behalf of Fannie Mae. (Docket Entry #
60-3). The Servicing Contract also provided the terms of such
servicing. (Docket Entry # 60-3). Loan servicers such as GMAC
“are required to service the loans in accordance with a
set of guidelines for the management and servicing of Fannie
Mae loans, called the Fannie Mae Single Family Servicing
Guide.” (Docket Entry # 60, ¶ 4). The relevant
guide depicts servicers, such as GMAC, “as independent
contractors and not as agents, assignees, or representatives
of Fannie Mae.” (Docket Entry # 60-1, p.3). Fannie Mae
allowed GMAC to establish its own policies in connection with
servicing mortgages, including giving GMAC discretion to
enter into agreements in connection with mortgage servicing
on behalf of Fannie Mae. (Docket Entry # 60-1, p.7).
December 1, 2006, plaintiff signed a note in the principal
amount of $264, 000 ("the note" or "the
loan") payable to Infinity Mortgage Company, Inc.
("Infinity") and a mortgage ("the
mortgage") granting Infinity a security interest in the
property located at 40 Lyman Drive in Milton, Massachusetts
("the property"). (Docket Entry # 58-1, ¶ 1)
(Docket Entry # 62, p. 6, ¶ 1). Immediately after
origination, the note was assigned to GMAC Bank, which came
to be known as Ally Bank ("Ally"), and the mortgage
was assigned to Mortgage Electronic Registration Systems,
Inc. ("MERS"). (Docket Entry # 58-1, ¶ 2)
(Docket Entry # 62, p. 7, ¶ 2).
about January 1, 2007, Fannie Mae purchased the note from
Ally. (Docket Entry # 60, ¶ 2). Fannie Mae does
not service the loans that it owns. (Docket Entry # 58-1,
¶ 4) (Docket Entry # 62, p. 7, ¶ 4, In. 1) (Docket
Entry # 60, ¶ 3) . On January 1, 2007, GMAC Mortgage,
LLC ("GMAC") began servicing the loan on behalf of
Fannie Mae. (Docket Entry # 59, ¶
2).Fannie Mae's loan servicers establish
their own policies and written procedures for conducting
their loan servicing operations. (Docket Entry # 58-1, ¶
5) (Docket Entry # 62, p. 7, ¶ 5). Fannie Mae does not
provide the servicers with facilities, buildings, equipment,
printers, office furniture or fax machines. (Docket Entry #
60, ¶ 5). Fannie Mae does not pay the servicers'
employees or control how the servicers pay their employees.
(Docket Entry # 58-1, ¶ 7) (Docket Entry # 62, p. 7,
¶ 7) (Docket Entry # 60, ¶ 6) .
December 2008, plaintiff was laid off from her employment.
(Docket Entry # 58-1, ¶ 11) (Docket Entry # 62, p. 8,
¶ 11) . Subsequently, she failed to make the required
mortgage payments and defaulted under the terms of the note.
(Docket Entry # 58-1, ¶ 11) (Docket Entry # 62, p. 8,
¶ 11) . GMAC reported that the account was past due
between February 2009 and January 2013 to two credit
reporting agencies. (Docket Entry # 58-1, ¶¶ 13,
14) (Docket Entry # 62, p. 8, ¶¶ 13, 14) . On
November 12, 2009, MERS, which held the mortgage, assigned
the mortgage to GMAC. (Docket Entry # 61-9, p. 2) .
March 30, 2010, plaintiff filed a complaint in Massachusetts
Superior Court (Norfolk County) (“the Superior Court
Action”) against inter alia defendant Orlans Moran PLLC
(“Orlans”), Fannie Mae and GMAC for violations in
the origination and servicing of the loan. (Docket Entry #
58-1, ¶ 15) (Docket Entry # 62, p. 8,
¶ 15). On October 9, 2012, GMAC and plaintiff
signed the settlement agreement in which GMAC, which serviced
the mortgage, agreed to a trial period plan (“the
TPP”) attached to the settlement agreement. (Docket
Entry # 58- 1, ¶ 19) (Docket Entry # 61-13, p.
7) (Docket Entry # 62, p. 12, ¶ 47) (Docket
Entry # 65-1, ¶ 47). Plaintiff, in turn, agreed
under the settlement “that if she does not timely
comply with all terms of the Trial Plan, [GMAC] is under no
obligation to provide a permanent loan modification.”
(Docket Entry # 61-13, ¶ C(1)). The relevant portion of
the settlement agreement reads as follows:
1. Loan Modification. [GMAC] agrees to the Trial
Period Plan attached as Exhibit A to this Agreement (the
“Trial Plan”), the terms of which are expressly
incorporated herein. Borrower expressly acknowledges that the
final terms of a permanent loan modification cannot be
determined until after the conditions precedent set forth in
the Trial Plan are satisfied by Borrower. Borrower agrees
that if she does not timely comply with all terms of the
Trial Plan, [GMAC] is under no obligation to provide a
permanent loan modification.
(Docket Entry # 61-13, ¶ C(1)).
first paragraph of the settlement agreement identifies the
parties to the agreement, namely, “GMAC Mortgage, LLC
[(‘GMAC’)] and Heather Harrington
[(‘plaintiff)’].” (Docket Entry # 61-13, p.
1). The settlement agreement had a choice of law clause
dictating the application of Massachusetts law. (Docket Entry
# 61-13, p. 5).
the settlement agreement, GMAC also agreed to issue
corrections about payment status to credit reporting agencies
within 30 days of the filing of the stipulation. (Docket
Entry # 58-1, ¶ 20) (Docket Entry # 61-13, p. 3). The
relevant portion of the settlement agreement reads as
3. Credit Reporting. Within thirty (30) days of the
date of the filing of the Stipulation, [GMAC] will issue
corrections or amendments to the credit reporting agencies .
. . to correct or supplement information about payment status
provided to consumer reporting agencies, requesting that such
agency(ies) remove references on the Borrower’s
consumer reports to any arrearages and to any late payments
on the Loan for the period of December 1, 2006 through the
Effective Date [October 9, 2012], provided however that
Borrower acknowledges that all credit reporting agencies are
separate entities from [GMAC] and that once these steps have
been taken by [GMAC], [GMAC] cannot and will not be held
responsible for the actions or omissions of the credit
reporting agencies. Accordingly, Borrower acknowledges that
[GMAC] cannot guarantee, warrant, or take responsibility for
the performance of any credit reporting agency in changing,
deleting, or making entries in relation to any derogatory
credit information. Borrower warrants, declares, and
covenants that she understands the limitations on [GMAC] in
this regard and that any error on the part of any credit
reporting agency shall not constitute a breach of this
Agreement by [GMAC], nor ...