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Freitas v. JPMorgan Chase Bank, N. A.

United States District Court, D. Massachusetts

September 15, 2017

MARK FREITAS, Plaintiff,



         Plaintiff Mark Freitas owned a property on Nantucket and fell behind on his mortgage payments for the property. He contends that he and Defendant JPMorgan Chase Bank (“Chase”) formed an oral contract whereby Chase would accept a deed in lieu of foreclosure, and in return, forgive any outstanding debt. Freitas asserts that Chase breached this agreement and, in response, has brought this action for breach of contract and associated claims. Now before the Court are the parties' cross-motions for summary judgment. [ECF Nos. 48, 54]. For the reasons set forth below, the Court grants Chase's motion for summary judgment and denies Freitas's motion.

         I. BACKGROUND[1]

         Plaintiff Mark Freitas is a businessman who lives in Florida. In 2005, he purchased a property located at 24 Pocomo Road, Nantucket, Massachusetts for $9 million, which he used as a vacation rental and not as a personal residence. In 2007, Freitas refinanced the property with a loan from Chase for $9.45 million at ¶ 6.125% interest rate. In 2010, he refinanced the loan with Chase again, in the same amount, at ¶ 5.375% interest rate. He refinanced with Chase for the same amount again in 2012 at ¶ 3.125% interest rate.

         Freitas lost his job in 2009 and began having difficulty making payments on the mortgage. In June 2010, he and Chase entered a forbearance agreement under which Chase agreed to refrain from foreclosing on the property in exchange for Freitas reaffirming the loan and making other payments. The forbearance agreement allowed Freitas to refinance in 2010 and 2012, as described above. Freitas defaulted on the loan in December 2013. Chase proposed allowing Freitas to conduct a short sale of the property, on the condition that Freitas pay Chase an additional $3 million cash contribution. Freitas submitted a bid to conduct a short sale of the property, but he ultimately declined to do so.

         On December 30, 2014, Julio Alejo, a mortgage banker working for Chase, called Freitas.[2] Alejo introduced himself and stated that he was from Chase's “deed in lieu department” and that the reason for his call was “to see if for a possible deed in lieu option for the property.” [ECF No. 51-2 at 2]. After a brief discussion of the prior short sale attempt, Alejo went on to explain the deed in lieu process:

Basically what I'd like to do is see if we can go ahead and eliminate your current mortgage debt as well as taking care of this within a 30 to 90 day process. Basically, that's what a deed in lieu is, we don't have to have the property listed any longer and we try to go ahead and eliminate this debt within 30 to 90 days.

Id. at 2-3. After Freitas asked how the process worked, Alejo responded:

[H]ow that works is that we'll just get a request from you stating that you want to go ahead and go through the deed in lieu and from there the file will be assigned to a negotiator and we're going to go out there and inspect the property, make sure everything good. Also make sure… We're going to order title, make sure there's no other liens on the property and when that comes out and everything's good to go then Chase's attorneys will draw up documents. Those documents are basically stating that you're relinquishing the debt over to Chase, you're basically… You're signing over a deed back to the bank.

Id. at 3. Freitas then asked what would happen to him after he signed over the deed and the house, and Alejo answered, “There's no… The deficiency will be waived from Chase. You won't owe nothing to Chase, of course, and it will be negatively impacting your credit . . . .” Id. Freitas then stated, “[o]kay that sounds great, that sounds good on my end. So just let me know, sir, what I need to do or do I just wait to hear back from you?” Id. To which Alejo responded, “[t]he only thing that we'll need right now is having a letter, signed from you, ” stating “that you want to go through the deed in lieu.” Id.

         Alejo provided Freitas with a number to which he could fax the letter, and then Freitas asked, “[j]ust say I want to proceed with the deed in lieu?” Id. at 4. Alejo responded, “[t]hat is correct.” Id. Alejo then mentioned that Chase also needed a copy of a listing agreement showing that the house was listed for at least 120 days, which Freitas confirmed he could provide. Id. Near the conclusion of the conversation, Alejo told Freitas that “[y]ou should be receiving a call from the negotiator at least five business days and then they'll be able to proceed forward.” Id. at 5. Freitas responded, “[g]reat, I appreciate it so much, thank you sir.” Id.

         Later the same day, Freitas faxed a letter to Chase which stated:

Please let this serve as confirmation that I am accepting the deed in lieu for my property at 24 Pocomo Road, Nantucket, MA 02554-4238.
Per our discussion, upon JPMorgan Chase's acceptance of the deed in lieu of foreclosure on this property, the referenced loan will be deemed to be fully satisfied, and I shall have no further obligations in respect of such loan ...

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