United States District Court, D. Massachusetts
CONRAD S. TRAUT and CELINA M. TRAUT, Plaintiffs
QUANTUM SERVICING CORPORATION, RESIDENTIAL CREDIT SOLUTIONS, INC., RUSHMORE LOAN MANAGEMENT SERVICES LLC, ELIZON MASTER PARTICIPATION TRUST I and U.S. BANK TRUST N.A., Defendants.
MEMORANDUM & ORDER
Nathaniel M. Gorton United States District Judge
and Celina Traut (collectively, “plaintiffs”)
bring this action against Quantum Servicing Corporation
(“Quantum”), Residential Credit Solutions, Inc.
(“RCS”), Rushmore Loan Management Services LLC
(“Rushmore”), Elizon Master Participation Trust I
(“Elizon”) and U.S. Bank Trust N.A. (“US
Bank”)(collectively, “defendants”) seeking
injunctive relief and civil damages for defendants’
alleged conduct with respect to plaintiffs’ residential
mortgage. Pending before the Court are RCS’s motion for
judgment on the pleadings and Rushmore’s motion for
partial dismissal. For the reasons that follow,
Rushmore’s motion will be denied and RCS’s motion
will be allowed, in part, and denied, in part.
own a residence in Sharon, Massachusetts. RCS is a Delaware
corporation with a principal place of business in Texas.
Rushmore is a limited liability company registered as a
foreign entity in Massachusetts whose members apparently
reside in California. Both defendants provide loan servicing
services on behalf of mortgage creditors.
2007, plaintiffs executed a note and 30-year mortgage with
American Home Mortgage (“AHM”) to secure a loan
in the amount of $415, 200. The terms of the mortgage
included a low introductory interest rate, an initial monthly
payment of less than full interest and a subsequent rate
increase set only to repay accrued interest.
July, 2010, plaintiffs made a late payment due to financial
hardship. Quantum, as the loan servicer, marked the loan
delinquent and threatened foreclosure. Plaintiffs allege that
they attempted to make subsequent payments but such efforts
were rejected by Quantum. They also allege that they applied
for multiple loan modifications throughout 2011. In December,
2011 those efforts resulted in receipt of a forbearance
agreement and letter indicating that plaintiffs’ loan
would be modified “upon completion of the 6 month trial
plan agreement.” Despite confusion over the forbearance
agreement and the modification approval, plaintiffs executed
the document to prevent an imminent foreclosure sale. Quantum
nevertheless auctioned plaintiffs’ residence but
rescinded the sale after plaintiffs’ counsel threatened
August, 2012, RCS succeeded Quantum as the loan servicer.
Plaintiffs allege that RCS did not credit some of their
previous payments to Quantum on the loan. As a result,
plaintiffs stopped making payments in September, 2012. They
attempted to apply for a loan modification for nearly two
years and resubmitted multiple applications and documents at
RCS’s request. Plaintiffs did not, however, receive a
December, 2014, Elizon became the loan creditor and Rushmore
assumed loan servicing. Rushmore notified plaintiffs in
February, 2015 that the loan was in foreclosure. Throughout
the spring of 2015, Rushmore was in contact with plaintiffs.
In May, 2015, plaintiffs’ counsel sent Rushmore a cease
and desist letter advising Rushmore that all further
communications should be made through plaintiffs’
counsel. They also sent a demand letter to Quantum, RCS and
Rushmore in May, 2015 pursuant to Mass. Gen. Laws ch. 93A.
Plaintiffs continued to receive communications from Rushmore
through October, 2015.
September, 2015, plaintiffs initiated this action by filing a
complaint against defendants alleging 1) breach of contract
by Quantum, RCS, Rushmore and Elizon, 2) promissory estoppel
against Quantum, RCS, Rushmore and Elizon, 3) negligent
misrepresentation by Quantum, 4) violations of the Fair Debt
Collection Practices Act (“FDCPA”) by Quantum,
RCS and Rushmore and 5) violations of Mass. Gen. Laws ch. 93A
(“Chapter 93A”) by Quantum, RCS, Rushmore and
Rushmore’s Motion to Dismiss and RCS’s Motion for
Judgment on the Pleadings
filed a motion to dismiss, in part, pursuant to Fed.R.Civ.P.
12(b)(6) with respect to the breach of contract claim in
Count I and the promissory estoppel claim in Count II.
Rushmore filed that motion with its answer to the complaint
so the Court will treat it as a motion for judgment on the
pleadings. See Lu v. Menino, 98 F.Supp.3d 85, 93 (D.
Mass. 2015)(reviewing a 12(b)(6) motion filed after the
submission of an answer under the 12(c) standard).
RCS filed a motion for judgment on the pleadings pursuant to
Rule 12(c) with respect to the breach of contract claim in
Count I, the promissory estoppel claim in Count II, the Fair
Debt Collection Practices Act (“FDCPA”) claim in
Count IV and the Chapter 93A claim in Count V.
motion for judgment on the pleadings under Rule 12(c)
“is treated much like a Rule 12(b)(6) motion to
dismiss.” Perez- Acevedo v. Rivero-Cubano, 520
F.3d 26, 29 (1st Cir. 2008). While it differs from a Rule
12(b)(6) motion insofar as it is filed after the close of the
pleadings and considers the factual allegations in both the
complaint and answer, a Rule 12(c) motion for judgment on the
pleadings is governed by the same standard. See
Perez-Acevedo, 520 F.3d at 19; Santiago v. Bloise,
741 F.Supp.2d 357, 360 (D. Mass. 2010).
survive a motion to dismiss, the subject pleadings must
contain sufficient factual matter to state a claim for relief
that is actionable as a matter of law and is “plausible
on its face.” Ashcroft v. Iqbal, 129 S.Ct.
1937, 1949 (2009). For a claim to be facially plausible, the
pleadings must show “more than a sheer possibility that
a defendant has acted unlawfully.” Id.
Plaintiffs cannot merely restate defendants’ potential
considering the merits of these motions, the Court must
accept all factual allegations in the complaint as true and
draw all reasonable inferences in plaintiffs’ favor.
See Lu, 98 F.Supp.3d at 93. Moreover, the Court should
“treat any allegations in the answer that contradict
the complaint as false.” Id. at 94. The Court
may also consider certain documents when 1) the
documents’ authenticity is not disputed by the parties,
2) the documents are “central to the plaintiffs’
claim” or 3) the documents are “sufficiently
referred to in the complaint.” Curran v.
Cousins, 509 F.3d 36, 44 (1st Cir. 2007).
Breach of Contract Claim (Count I) Against Rushmore &
Count I, plaintiffs allege that RCS and Rushmore breached the
terms of a 2011 trial plan or forbearance agreement entered
between plaintiffs and Quantum (“the Agreement”).
In accordance with Massachusetts law, plaintiffs must make
the following four showings of fact to allege a breach of
contract: 1) a valid contract existed between the parties, 2)
plaintiffs were ready, willing, and able to perform under the
contract, 3) defendants breached the contract and 4)