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Sjostedt v. Ditech Financial, LLC

United States District Court, D. Massachusetts

February 21, 2018

JOHN SJOSTEDT, Plaintiff,
v.
DITECH FINANCIAL, LLC, CITIMORTGAGE, and JANICE SILVA, Defendants.

          MEMORANDUM AND ORDER

          Denise J. Casper United States District Judge.

         I. Introduction

         Plaintiff John Sjostedt brings claims against Defendants Ditech Financial, LLC (“Ditech”), Citimortgage, and Janice Silva, relating to his residence at 11 Chapel Hill Drive, Unit No. 5, Plymouth Massachusetts (the “Property”). D. 28.[1] Ditech Financial has filed a motion to dismiss the amended complaint. D. 29. For the reasons stated below, Ditech's motion is GRANTED in part and DENIED in part.

         II. Factual Allegations

         The Court accepts all non-conclusory facts alleged in the amended complaint, D. 28, as true, Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011), and “draw[s] all reasonable inferences in favor of the plaintiff[].” Gargano v. Liberty Int'l Underwriters, Inc., 572 F.3d 45, 48 (1st Cir. 2009). Plaintiff John Sjostedt purchased the Property in 2002. D. 28 ¶ 6. At that time, he executed a note and mortgage with ABN Amro Mortgage Group, Inc. to purchase the Property. D. 28-1. Defendant Citimortgage later “acquired an interest” in this note and mortgage in 2007. Id. ¶ 8. In 2014, Sjostedt fell behind on his payments on that note. Id. ¶ 9. Citimortgage granted a loan modification to Sjostedt, which lowered the monthly payment on the note from approximately $700 to $556, and extended the term of note to forty years. Id. ¶¶ 13-16. Because Sjostedt believed that he had obtained a permanent modification with Citimortgage, Sjostedt did not apply for another loan modification. Id. ¶ 17. Sjostedt made the modified payments from 2014 until 2016, when Citimortgage refused to accept his payments. Id. ¶ 18. A customer service representative at Citimortgage told Sjostedt that Citimortgage had been applying Sjostedt's monthly payments towards the outstanding principal on the loan, and not towards a regular payment of principal and interest. Id. ¶ 19. Sjostedt also learned that Citimortgage had been mailing some documents related to his mortgage to an address that was not Sjostedt's mailing address. Id. ¶ 20. In 2016, Sjostedt's note was “transferred” to Ditech, and Ditech informed Sjostedt that “all matters with the loan would carry over from Citimortgage.” Id. ¶ 22. Sjostedt attempted to apply for a loan modification with Ditech and sent materials related to that application by fax to Ditech, but Ditech informed Sjostedt that it never received those materials. Id. ¶¶ 23-24. Ditech ultimately denied Sjostedt a loan modification because Sjostedt had not provided information regarding a photo business - notwithstanding that Sjostedt had informed Ditech that he did not have a photo business. Id. ¶¶ 25-26.

         On November 7, 2016, Sjostedt received a letter informing him that a foreclosure sale on the Property had taken place on November 7, 2016 and that Janice Silva had purchased the Property. Id. ¶ 27. On February 2, 2017, Sjostedt received a letter informing him that another foreclosure sale on the Property was scheduled for March 20, 2017, without making any reference to the prior purported foreclosure sale of November 7, 2016. Id. ¶ 28.

         III. Procedural History

         On March 9, 2017, Sjostedt filed suit against Ditech, Citimortgage, and Janice Silva in Plymouth Superior Court. D. 1-1 at 1. Sjostedt sought a declaratory judgment resolving whether Ditech had standing to foreclose on the Property, in light of the prior purported sale of the Property to Janice Silva. Sjostedt also brought a quiet title action regarding the Property. In addition, Sjostedt brought two counts of a breach of the covenant of good faith and fair dealing (one against Ditech, and one against Citimortgage); a breach of contract claim; a promissory estoppel claim; and a claim under Chapter 93A. D. 1-1 at 8-12.

         On March 15, 2017, Ditech removed Sjostedt's suit to this Court. D. 1. That same day, Sjostedt moved for a temporary restraining order (“TRO”) to prevent the scheduled foreclosure sale. D. 4. On March 17, 2017, the Court granted Sjostedt's requested TRO and set a briefing and hearing schedule for his request for a preliminary injunction. D. 10. After a hearing, the Court denied Sjostedt's motion for a preliminary injunction. D. 22.[2] On April 28, 2017, Sjostedt filed an amended complaint. D. 28. Ditech has now moved to dismiss the amended complaint under Fed.R.Civ.P. 12(b)(6). D. 29. After a hearing on the motion, the Court took the matter under advisement. D. 36.[3]

         IV. Discussion

         A. Standard of Review

         On a motion to dismiss based upon Rule 12(b)(6), the Court will dismiss a complaint that fails to allege adequate facts “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In reviewing the complaint, the Court can consider documents attached to or fairly incorporated into the complaint and facts susceptible to judicial notice. Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012).

         B. Breach of Contract Claim (Count IV)

         1. ...


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