United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
J. Casper United States District Judge.
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. 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.
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.
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.
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.
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.
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.
Standard of Review
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).
Breach of Contract Claim (Count IV)