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Casse v. Aurora Loan Services, LLC

United States District Court, D. Massachusetts

August 30, 2016



          MARK G. MASTROIANNI United States District Judge

         I. Introduction

         Thomas J. La Casse and Joseph La Casse (“Plaintiffs”) originally brought this action in state court against: Aurora Loan Services, LLC (“Aurora”); U.S. Bank, National Association, as Trustee for the Lehman XS Trust, Series 2007-2N (“US Bank”); Mortgage Contracting Services (“MCS”); unknown MCS's employees listed as John Does 1 through 4[1]; and Mortgage Electronic Registration Systems, Inc. (“MERS”) (collectively, “Defendants”). On April 22, 2015, Defendants removed the action to this court pursuant to 28 U.S.C. §§ 1331, 1332, and 1441. The case arises out of Aurora's foreclosure in 2010 of Thomas's property, to which Joseph held a leasehold interest.

         Plaintiffs assert eleven counts pleading various state-law and federal claims. The counts are captioned as follows: Predatory Lending Practices - Breach of Contract (Count 1); Breach of Contract (Count 2); Fraudulent Misrepresentation (Count 3); Unconscionability (Count 4); Breach of the Implied Covenant of Good Faith and Fair Dealing (Count 5); Damages to Thomas's Reputation in the Community (Count 6); Forcible Entry (Count 7); Breach of Contract (Count 8); Violation of Consumer Protection Statute Mass. G. L. c. 93A § 11 (Count 9); Conversion (Count 10); and Loss of Use of Property (Count 11). Plaintiffs seek monetary damages, an injunction, and a declaratory judgment that would return them to their property.

         Presently before the court are motions to dismiss filed by all Defendants. (Dkt. Nos. 11 and 24.) For the reasons discussed below, the court will allow Defendants' motions to dismiss.

         II. Standard of Review

         When confronted with a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court must accept the well-pleaded allegations of the complaint as true, drawing all reasonable inferences in favor of the plaintiff. See S.E.C. v. Tambone, 597 F.3d 436, 441 (1st Cir. 2010). A complaint that states a plausible claim for relief, on its face, will survive a motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Supreme Court has explained that “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         III. Background

         The following facts come directly from Plaintiffs' complaint, exhibits attached thereto, and official public records. See Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008); Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).

         A. Plaintiffs' Mortgage and Foreclosure

         On November 15, 2006, “Thomas purchased a residential home at 270 Park Avenue, Longmeadow, Massachusetts, ” financing the purchase through a $600, 000 “loan transaction with Homecomings Financial, LLC.” (Dkt. No. 10, Compl. ¶¶ 25-26.) He secured the loan with a mortgage on the purchased property, with MERS designated as the mortgagee. (Id. ¶ 29.) According to the mortgage, “MERS is organized and existing under the laws of Delaware, and has an address . . . of P.O. Box 2026, Flint, MI 48501.” (Id., Ex. 3 at 1.)

         On July 31, 2009, MERS assigned the mortgage to Aurora, located at 2617 College Park, Scottsbluff, Nebraska. (Id. ¶ 32; Ex. 2.) The assignment lists MERS as located at “3300 S.W. 34th Avenue, Suite 101, Ocala, FL 34474, ” and it was signed by Vice President Theodore Schultz before Notary Public JoAnn Rein. (Id.) This assignment was recorded in the Hampden County Registry of Deeds (“Registry”), Book 17990, page 528.

         In October and November of 2010, Aurora published notice of the foreclosure sale in The Republican. (Compl. ¶ 77; Ex. 1 at 3, 5.) On November 17, 2010, the Massachusetts Land Court issued a judgment authorizing Aurora, in compliance with the Servicemembers Civil Relief Act, 50 U.S.C. §§ 501 et seq., to foreclose upon the property in accordance with the statutory power of sale in the mortgage. (Dkt. No. 12, Defs.' Mem., Ex. 10.)

         On November 22, 2010, Aurora sold itself the property at a foreclosure sale for $689, 000.00 and thereafter recorded the deed in the Registry, Book 18726, page 54. (Id. ¶¶ 38-39; Ex. 1) Aurora also recorded a certificate of entry on April 1, 2011 in the Registry, Book 18726, page 52, stating that Bonnie Baer-Green, “attorney-in-fact and agent of Aurora, ” “made an open, peaceable, and unopposed entry onto the premises” on November 22, 2010.[2] (Defs.' Mem., Ex. 14.) On May 2, 2011, Aurora filed a summary process action in Hampden County Housing Court against Thomas. (Dkt. No. 22, Pls.' Mem., Ex. A.)

         B. Thomas's Bankruptcy

         On January 19, 2010, Thomas filed a voluntary petition for Chapter 11 bankruptcy, which was converted into a Chapter 7 proceeding upon the trustee's motion on June 21, 2010. (In re Thomas James LaCasse (“In re LaCasse”), Case No. 10-30088-HJB, Dkt. Nos. 1, 54, 64.) In an Amended Schedule B, Thomas listed as an asset “[t]ruth in lending, mortgage, foreclosure, and related violations, and any other violations, concerning validity and extent of mortgage(s) on 270 Park Drive, Longmeadow, MA.” (Id., Dkt. Nos. 244, 247.) These assets thereafter were abandoned by the estate pursuant to 11 U.S.C. § 554(c). (Id., Dkt. No. 264.) The Bankruptcy Court discharged Thomas's Chapter 7 case on May 22, 2012. (Id., Dkt. No. 271.)

         C. Plaintiffs' Connecticut Action

         Plaintiffs filed a complaint with the Connecticut Superior Court of Stamford/Norwalk on December 8, 2010. (Defs.' Mem., Ex. 19 at 2.) In the Connecticut action, Plaintiffs sought recovery for five counts: predatory lending practices, breach of contract, fraud, unconscionability, and violation of the Fair Debt Collection Practices Act. (Id., Ex. 19 at 5-12.) On January 23, 2015, the Connecticut Action was “dismissed for failure to prosecute in accordance with [Connecticut] Practice Book § 14-3.” (Id., Ex. 22.)

         D. Present Action

         Plaintiffs filed the present action in the Massachusetts Superior Court on February 18, 2015. (Dkt. No. 10.) Plaintiffs admit the present action is “almost indistinguishable in both substance and syntax from the allegations” advanced in a proposed Amended Complaint to the Connecticut action. (Defs.' Mem. at 11; Pl.'s Mem. at 6; Ex. 21.) The Massachusetts Superior Court action was consolidated with the summary process action for “hearing purposes only.” (Dkt. No. 10 at 5.) Thereafter, Defendants removed the Massachusetts Superior Court action to this court and filed the motion to dismiss presently at issue.

         IV. Discussion

         Defendants raise four arguments in support of their motions to dismiss. First, Defendants argue Plaintiffs' action is barred by res judicata, because an identical action was dismissed in Connecticut Superior Court. (Defs.' Mem. at 13; Ex. 22.) Second, Defendants argue Plaintiffs lack standing to bring suit, because Plaintiffs' claims belong to the Chapter 7 trustee. (Id. at 16.) Third, they assert Plaintiffs' claims are untimely. (Id. at 17-19.) Finally, Defendants argue Plaintiffs' complaint fails to state a claim upon which relief can be granted. (Id. at 20.) Before analyzing these arguments, the court will briefly address two preliminary matters raised in Plaintiffs' brief.

         A. Subject-Matter Jurisdiction

         Plaintiffs suggest that removal to this court was improper and the court lacks subject-matter jurisdiction because the Massachusetts Superior Court action was consolidated with the summary process action, making Aurora the plaintiff and thus incapable of removing an action to federal court. The court does not agree. The actions were consolidated for “hearing purposes only, ” (Dkt. No. 10 at 5), which the court takes to mean that the summary process action remained a separate case and thus properly was not removed along with the Massachusetts Superior Court action. See, e.g., Boston Water & Sewer Com'n v. Automatic Switch Co., 2010 WL 759125, at *1 n. 2 (Mass. App. Ct. Mar. 8, 2010) (noting that the actions were consolidated “for hearing purposes” but retained separate trial court docket numbers). This conclusion is supported by Plaintiffs' own allegations that the summary process action has been stayed pending disposition of this controversy. (Pls.' Mem at 10, 14.) Accordingly, the court concludes that it has jurisdiction over this controversy.

         B. Violation of Local Rule 7.1(B)(4)

         Plaintiffs also notes that Aurora, U.S. Bank, and MERS submitted a thirty-one page memorandum in violation of Local Rule 7.1(B)(4), which provides that “[m]emoranda supporting or opposing allowance of motions shall not, without leave of court, exceed twenty (20) pages, double-spaced.” Although the court may be inclined to excuse an excess memorandum of a pro se party, see Tian v. Aspen Tech., Inc., 53 F.Supp.3d 345, 360 (D. Mass. 2014), represented parties are expected to adhere to the local rules. However, while “[f]ailure to comply with . . . Local Rules may result in dismissal, default, or the imposition of other sanctions, ” Local Rule 1.3, courts have “broad latitude in administering local rules, ” Air Line Pilots Ass'n v. Precision Valley Aviation, Inc., 26 F.3d 220, 224 (1st Cir. 1994), and may choose to forgive a ...

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