United States District Court, D. Massachusetts
ORDER ON MOTIONS TO DISMISS (DOC. NOS. 25, 49) AND
MOTION FOR JUDGMENT ON THE PLEADINGS (DOC. NO. 59)
SOROKIN UNITED STATES DISTRICT JUDGE.
Gregory Gozzo has filed a First Amended Complaint. Doc. No.
22. Subsequently, he has voluntarily dismissed two defendants
named therein, Altisource and H&R Block. Doc. Nos. 53,
73. Defendants Option One Mortgage Co. and Sand Canyon Corp.
have moved for judgment on the pleadings. In response, Gozzo
has voluntarily dismissed against Option One. Doc. No. 74. In
both the First Amended Complaint, Doc. No. 22-3 at 3, and the
Motion for Judgment on the Pleadings, Doc. No. 60 at 1 n.1,
the parties represent that Option One and Sand Canyon are the
same company. Therefore, the Court interprets Plaintiff's
Motion for Voluntary Dismissal as to Option One as a
voluntary dismissal of Sand Canyon as well. Sand Canyon is
voluntarily DISMISSED. Accordingly, the Motion for Judgment
on the Pleadings, Doc. No. 59, is DENIED AS MOOT. Defendant
Wells Fargo has moved to dismiss, Doc. No. 25, Gozzo opposed,
Doc. No. 38, and Wells Fargo replied, Doc. No. 45. Defendant
Ocwen Loan Servicing has moved to dismiss, Doc. No. 49,
advancing similar grounds to Wells Fargo and Plaintiff
opposes, Doc. No. 75, relying upon its opposition to Wells
15, 2005, Option One issued a loan to Gozzo for $389, 500.00.
Doc. No. 22-3 at 4. Gozzo signed a Note payable to Option
One. Id. As security for the Note, Gozzo granted a
mortgage encumbering the property located at 46 Arcadia
Street in Revere, MA. Id. The mortgage was an
adjustable rate mortgage with an initial annual interest rate
of 7.29%. Id. Every six months, the Note holder
would calculate the new rate as 6.39% over the
then-prevailing London Interbank Offer Rate (LIBOR).
Id. The contract provided a minimum rate of 7.29%
and a maximum rate of 13.29%. Id.
Fargo is the current holder of the Note and Mortgage.
Id. at 5. On November 9, 2015, Gozzo was sent a
notice of delinquency by Korde & Associates stating
“our intention on November 30, 2015 at 2:00pm to
foreclose by sale under power of sale for breach of
conditions, and by entry.” Id. Gozzo was sent
another delinquency notice from Ocwen Loan Servicing on
November 17, 2015, which stated that Gozzo was “2999
days delinquent on [his] mortgage loan, ” that he
“first became delinquent on 09/02/07” and that he
“must pay” $324, 727.88 to be current on his
payments. Id. at 5-6.
sent a “Pre-Foreclosure Referral Letter” dated
November 27, 2015, which stated that “Your mortgage
payments are past due, which puts you in default of your loan
agreement and the property may be referred to foreclosure
after 14 days from the date of this letter.”
Id. at 6 (emphasis omitted). The letter stated that
the total due was $321, 636.12: $286, 005.18 in principal and
interest, $18, 363.00 in escrow, $1, 693.03 in late charges,
and $15, 574.91 in fees and expenses. Id.
foreclosure sale was held on November 30, 2015, and Wells
Fargo bought the property. Id. On January 7, 2016,
Gozzo received a letter from Korde & Associates addressed
to “Occupant or Tenant” and “advised that a
foreclosure sale was held 11/30/2015 regarding a mortgage
given by Gregory Gozzo to Option One Mortgage Corporation.
The purchaser at the foreclosure sale was Wells Fargo Bank,
N.A. as Trustee for Option One Mortgage Loan Trust 2005-4,
Asset-Backed Certificates, Series 2005-4.” Id.
early April 2016, Gozzo received a notice to quit from
Orlans/Moran stating that Wells Fargo was the current owner
of the property “pursuant to a foreclosure deed
recorded . . . on January 26, 2016 . . . as the result of a
foreclosure sale that was held at the Property on November
30, 2015 pursuant to Mass. Gen. Laws c-244 §14.”
Id. at 7. The notice stated that Wells Fargo
“hereby terminates your occupancy of the
Property” and instructed Gozzo “to vacate, remove
all personal belongings from and surrender possession of the
Property . . . within seventy two (72) hours after service on
you of this notice” or Wells Fargo “will proceed
with a court action to evict you.” Id.
considering a motion to dismiss, the Court “must take
the allegations in the complaint as true and must make all
reasonable inferences in favor of the plaintiffs.”
Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).
Dismissal for failure to state a claim is appropriate when
the pleadings set forth “factual allegations, either
direct or inferential, respecting each material element
necessary to sustain recovery under some actionable legal
theory.” Berner v. Delhanty, 129 F.3d 20, 25
(1st Cir. 1997) (quoting Gooley v. Mobil Oil Corp.,
851 F.2d 513, 515 (1st Cir. 1988)).
extent that Gozzo asserts claims arising out of the initial
contract and the conduct surrounding it, those claims are
time barred. Gozzo's first cause of action for an
unconscionable contract is subject to a six-year statute of
limitations. Mass. Gen. Laws ch. 260, § 2. The contract
was signed in 2005 and the statute of limitations expired in
2011 and the Court does not find Gozzo's argument that
the claim did not accrue until later persuasive considering
that the terms of the contract were clearly set out when it
was signed. See DaSilva v. U.S. Bank, N.A., 885
F.Supp.2d 500, 504 (D. Mass. 2012) (“A violation
involving an issuance of a loan begins to accrue from the
moment the parties entered into the loan.” (citing
Maldonado v. AMS Servicing LLC, Civ. A. Nos.
11-40044-FDS, 11-40219-FDS, 2012 WL 220249, at *5 (D. Mass.
Jan. 24, 2012))) Thus, the Motions to Dismiss are ALLOWED as
to Gozzo's claim for unconscionable contract (claim one).
As to Gozzo's other claims, to the extent they are based
on the original contract the claims are time barred.
See Mass. Gen. Laws ch. 260, § 2A (three-year
statute of limitations for tort claims); Mass. Gen. Laws ch.
260, § 5A (four-year statute of limitations for section
93A claims). Below, the Court considers the claims only as to
the more recent conduct related to the 2015 foreclosure.
Gozzo's negligence claims (claims three and eight), both
Wells Fargo and Ocwen assert that they owed Gozzo no duty of
care. “[I]t is axiomatic that duty is a necessary
ingredient of an action for negligence.” Young v.
Wells Fargo Bank, N.A., 717 F.3d 224, 239 (1st Cir.
2013). Under Massachusetts law, “a lender owes no
general duty of care to a borrower.” Corcoran v.
Saxon Mortg. Servs., Inc., Civ. A. No. 09-11468-NMG,
2010 WL 2106179, at *4 (D. Mass. May 24, 2010). Additionally,
“[i]t is well established that a lender owes no duty of
care to a borrower when the institution's involvement in
the transaction does not exceed the scope of its conventional
role as a mere lender of money.” Huerta v. Ocwen
Loan Servicing, Inc., No. C 09-05822(HRL), 2010
WL 728223, at *4 (N.D. Cal. Mar. 1, 2010) (quotation marks
omitted). Gozzo points the Court to no authority suggesting
that either Wells Fargo or Ocwen owed him a duty of care and
the Court is unaware of any such authority. Gozzo responds to
the argument by merely quoting from the complaint that
“the Defendants owed Plaintiff a duty not to proceed
with a mortgage arrangement that was highly likely to result
in default in the event of any significant hike in the
adjustable rate and monthly payment.” Doc. No. 22-3 at
12. That is insufficient and devoid of any legal
justification suggesting the duty of care
existed. Thus, the Motions to Dismiss are ALLOWED
as to claims three (negligence) and eight (negligent
infliction of emotional distress).
asserts a claim for negligent misrepresentation based on the
November 27, 2015 letter. To show negligent
misrepresentation, Gozzo must show that Defendants “(1)
in the course of [its] business, (2) supplied false
information for the guidance of others (3) in their business
transactions, (4) causing and resulting in pecuniary loss to
those others (5) by their justifiable reliance on the
information, and that he (6) failed to exercise reasonable
care or competence in obtaining or communicating the
information.” Gossels v. Fleet Nat. Bank, 902
N.E.2d 370, 377 (Mass. 2009). At no point in his complaint
does Gozzo assert that he justifiably relied on the
fourteen-day window that the letter provided. Thus, the
Motions to Dismiss claim four are ALLOWED.
claims unjust enrichment against both Ocwen and Wells Fargo.
Gozzo alleges that the transfer “constitutes unjust
enrichment by virtue of the acquisition of title to real
property of significant monetary value to the detriment of
plaintiff's own financial circumstance.” Doc. No.
22-3 at 13. Under Massachusetts law, “[o]rdinarily, a
claim of unjust enrichment will not lie ‘where there is
a valid contract that defines the obligations of the
parties.'” Metro. Life Ins. Co. v. Cotter,
984 N.E.2d 835, 849 (Mass. 2013) (quoting Bos. Med. Ctr.
Corp. v. Sec'y of the Exec. Office of Health & Human
Servs., 974 N.E.2d 1114, 1132 (Mass. 2012)). As the
relationship between Gozzo and Wells Fargo is defined by the
contract, Wells Fargo's Motion to Dismiss the claim for
unjust enrichment is ALLOWED. As to Ocwen, Gozzo has failed
to present facts allowing the inference that Ocwen was
unjustly enriched to Gozzo's detriment. Wells Fargo held
the Note and Mortgage and was the buyer at the ...