United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON MOTION TO DISMISS FOR FAILURE
TO STATE A CLAIM (DOC. NO. 21)
Sorokin United States District Judge.
Jose Moreira (“Moreira”) filed a five-count
Complaint against Defendant CitiMortgage, Inc.
(“CitiMortgage”) in Middlesex Superior Court,
stemming from CitiMortgage's refusal to provide Moreira
with a mortgage loan modification. Doc. No. 1-2 at 5-13.
CitiMortgage removed the case to this Court, Doc. No. 1, and
subsequently moved to dismiss the Complaint, Doc. No. 9.
Instead of opposing the motion, Moreira filed the operative
three-count Amended Complaint. See Doc. No. 11.
CitiMortgage then filed a second Motion to Dismiss for
Failure to State a Claim. Doc. No. 21. Moreira opposed the
motion, Doc. No. 23, and CitiMortgage filed a reply brief,
Doc. No. 27. As explained below, CitiMortgage's motion is
ALLOWED IN PART and DENIED WITHOUT PREJUDICE IN PART.
FACTUAL BACKGROUND 
owns property at 62-64 Flint Street, Somerville,
Massachusetts (“The Property”). Doc. No. 11
¶ 1. He currently lives with his wife in a different
property. Id. ¶ 13. In 2005, he purchased the
Property by signing a promissory note which CitiMortgage now
holds, granting it a mortgage. Id. ¶ 6;
see Doc. No. 22-3. Moreira derived rental income
from the Property, but in 2008, after the Property suffered
structural damage, he defaulted on the loan. Doc. No. 11
¶ 7. Moreira has subsequently repaired this damage and
now has steady rental income from the property. Id.
In 2009, Moreira applied for a loan modification, which
CitiMortgage denied. Id. ¶ 8. He unsuccessfully
sued CitiMortgage over this denial in Middlesex Superior
Court. Id. ¶ 9. In 2012, Moreira, following his
attorney's advice, conveyed the property to A B C LLC
(“A B C”), a Massachusetts limited liability
corporation of which Moreira was the sole manager.
Id. ¶ 10. A B C dissolved in 2015. Id.
Also in 2012, CitiMortgage modified Moreira's loan.
Id. ¶ 11. He nevertheless defaulted on that
2013, Moreira again began applying for a loan modification
with CitiMortgage (“2013 Modification
Application”). Id. ¶ 12. He applied under
the Home Affordable Modification Program
(“HAMP”), a federal program designed to provide
foreclosure relief. Id. ¶¶ 14-15. His
income includes rental income from the Property, income from
his wife for childcare, and commissions for business
referrals from a local contractor. Id. ¶ 13.
CitiMortgage's participation in HAMP required it to
review Moreira's application and “offer him loss
mitigation assistance if he qualified.” Id.
¶ 17. Moreira included in his application, among other
things, the leases for the Property, bank accounts verifying
his income, and affidavits “explaining his income and
need for a loan modification.” Id. ¶ 18.
He promptly responded to CitiMortgage's requests for
additional materials. Id. ¶ 19. CitiMortgage,
claiming that Moreira failed to provide all the requested
documents, denied the 2013 Modification Application.
Id. ¶ 20.
February 2014, Moreira submitted another modification
application to CitiMortgage (“2014 Modification
Application”). Id. ¶ 21. Moreira included
a proposed modification proposal under HAMP. Id.
¶ 22. After receiving his application, CitiMortgage,
between February and November 2014, “continually
requested that [Moreira] resubmit the same documents over and
over again and provide repeated explanations on [sic] his
income.” Id. ¶ 24. While Moreira timely
complied with these requests, id. ¶ 25,
CitiMortgage denied the 2014 Modification Application on
November 7, 2014, claiming an “irreconcilable
discrepancy within [his] application request.”
Id. ¶ 26.
2015, Moreira applied for yet another modification
(“2015 Modification Application”). Id.
¶ 27. In January 2015, with the aid of counsel, he
“participated in an in-depth initial phone call
regarding his eligibility for a loan modification” with
CitiMortgage. Id. ¶ 28. This call included
Moreira explaining, “in depth, ” his need for a
modification and “specific explanations as to the
amount of income that he earned each month and where it came
from.” Id. CitiMortgage's loss mitigation
representative informed Moreira after this phone call
“that it appeared that he qualified for a loan
modification.” Id. ¶ 29.
then decided to pursue the 2015 Modification Application
further. Id. ¶ 30. He submitted an application
including: leases for the Property, showing consistent rental
income; bank accounts proving his income; affidavits
explaining his income and need for a modification; and an
affidavit from his wife, proving the income he received from
her. Id. ¶ 31. From January through May 2015,
CitiMortgage repeatedly requested Moreira to provide the same
documents and explanations of his income. Id. ¶
32. Specifically, CitiMortgage repeatedly asked for more
information about a painting business Moreira purportedly
had. Id. ¶ 34. During that time, Moreira
submitted seven supplements to his application with the
requested documents and information. Id. ¶ 33.
These included multiple records and explanations indicating
he did not have a painting business. Id. ¶ 35.
1, 2015, CitiMortgage, citing an “irreconcilable
discrepancy, ” denied the 2015 Modification
Application. Id. ¶ 36. CitiMortgage also denied
the 2015 Modification Application on the grounds that Moreira
rented out the property on a seasonal, non-year-round basis.
Id. Moreira appealed the denial. Id. ¶
37. As part of his appeal, he gave CitiMortgage year-round
leases to the Property and requested an explanation of the
“irreconcilable discrepancy” which prompted
CitiMortgage to deny his application. Id.
denied Moreira's appeal on June 2, 2015. Id.
¶ 39. It again noted an “irreconcilable
discrepancy” in Moreira's application, and did not
specify further. Id. In a subsequent phone call, a
CitiMortgage representative cited Moreira's alleged, yet
non-existent, painting business and $50, 000 in
unaccounted-for income as causes of the denial. Id.
¶ 40. As CitiMortgage had already denied his appeal,
Moreira had no avenue to address these issues. Id.
survive a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure, a Complaint must contain
sufficient factual matter, accepted as true, to “state
a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). The Court “must take the allegations in
the complaint as true and must make all reasonable inferences
in favor of the plaintiff.” Watterson v.
Page, 987 F.2d 1, 3 (1st Cir. 1993). “[F]actual
allegations” must be separated from “conclusory
statements in order to analyze whether the former, if taken
as true, set forth a plausible, not merely a conceivable,
case for relief.” Juarez v. Select Portfolio
Servicing, Inc., 708 F.3d 269, 276 (1st Cir. 2013)
(internal quotations omitted). This “highly
deferential” standard of review “does not mean,
however, that a court must (or should) accept every
allegation made by the complainant, no matter how conclusory
or generalized.” United States v. AVX Corp.,
962 F.2d 108, 115 (1st Cir. 1992). Dismissal for failure to
state a claim is appropriate when the pleadings fail to set
forth “factual allegations, either direct or
inferential, respecting each material element necessary to
sustain recovery under some actionable legal theory.”
Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir. 1997)
(quoting Gooley v. Mobil Oil Corp., 851 F.2d 513,
515 (1st Cir. 1988)).
the Court typically “may not consider any documents
that are outside of the complaint, or not expressly
incorporated therein, unless the motion is converted into one
for summary judgment, " Alt. Energy, Inc. v. St.
Paul Fire & Marine Ins. Co., 267 F.3d 30, 33 (1st
Cir. 2001), there is an exception “for documents the
authenticity of which are not disputed by the parties; for
official public records; for documents central to