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Shea v. Ditech Financial LLC

United States District Court, D. Massachusetts

June 15, 2017

Karen Shea, Plaintiff,
v.
Ditech Financial LLC and Wilmington Savings Fund Society, FSB, Defendants.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge.

         This case involves claims brought by plaintiff Karen Shea (“Shea” or “plaintiff”) against defendants Ditech Financial LLC and Wilmington Savings Fund Society, FSB (collectively, “defendants”) for 1) breach of contract, 2) violation of M.G.L. c. 244, § 35A, 3) negligent infliction of emotional distress, 4) intentional infliction of emotional distress and 5) violation of M.G.L. c. 93A. Pending before this Court is defendants' joint motion to dismiss the complaint for failure to state claims upon which relief can be granted. For the reasons that follow, their motion will be allowed.

         I. Background

         Karen Shea and then-husband Patrick Shea bought the subject property at 145 Jericho Road, Scituate, Massachusetts (“the Property”) on October 6, 1996. Nearly ten years later, in March, 2006, the Sheas refinanced their mortgage with a $400, 000 loan from Mt. Washington Cooperative Bank. They signed a promissory note (“the Note”) and granted a mortgage on the Property (“the Mortgage”) to secure the loan. The Mortgage was assigned to the Mortgage Electronic Registry System (“MERS”) on the same day. In December, 2008, MERS assigned the Mortgage to Countrywide Home Loans Servicing, LP (“Countrywide”), the successor of which is Bank of America Home Loans Servicing, LP (“BAC”). On December 15, 2010, pursuant to a divorce decree, the Property was conveyed from Patrick and Karen Shea to Karen Shea alone.

         After falling behind on her payments, BAC offered Shea a forbearance agreement under the Fannie Mae Homesaver program. Shea agreed to the offer and the agreement became effective on July 19, 2009 for a six-month period. Shea timely made payments for that entire period and claims that sometime thereafter, BAC instructed her to continue making the reduced payments which she did through July 20, 2010.

         On May 14, 2010, BAC sent a Notice of Intention to Foreclose (“the Notice”) to Shea. The Notice stated that if the default was not cured by June 13, 2010, payments would be accelerated. No such action was taken, however, until 2016.

         BAC transferred the Mortgage to Green Tree Servicing, LLC (“Green Tree”) by assignment recorded February 3, 2014. A corrective assignment was recorded on January 15, 2015 and Green Tree changed its name to Ditech Financial, LLC (“Ditech”) on August 31, 2015.

         Shea made several requests for loan modification at unspecified times between receiving the Notice and filing this action. On December 28, 2014, Green Tree acknowledged receipt of one such request but denied it three days later.

         On January 8, 2015, Green Tree sent Shea a “Modification Trial Period Plan Notice” that would have allowed her to make payments for three months, which, if successfully made, would have made Shea eligible for certain modifications of the Mortgage. Shea asserts that she was unable to make those payments because they exceeded her income as calculated by Green Tree in their December 31, 2014 letter.

         Shea sent a demand letter, pursuant to M.G.L. c. 93A, to Ditech, f/k/a Green Tree, on September 24, 2015 alleging unfair and deceptive trade practices in the servicing of her loan, as well as failure to apply the payments made under the Forbearance Agreement to the loan balance. Ditech responded on October 20, 2015 asserting that her payments had been applied to the outstanding balance on May 13, 2010 but it did not account for the alleged July 20, 2010 payment of $1, 661.31.

         A. Procedural History

         Shea initiated this suit against Ditech in April, 2016 in Plymouth Superior Court, Massachusetts. Ditech removed the action to this Court in July, 2016 and shortly thereafter filed a motion to dismiss Shea's claims.

         Ditech promptly sent Shea a Notice of Mortgage Foreclosure Sale and, on July 29, 2016, assigned the Note and Mortgage to Wilmington Savings Fund Society, FSB (“Wilmington”). Plaintiff amended her complaint to include Wilmington as a defendant on August 17, 2016.

         Plaintiff filed a motion for preliminary injunction with this Court on August 11, 2016. That motion was held in abeyance until September 21, 2016, at which point it was denied because ...


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