United States District Court, D. Massachusetts
THOMAS C. GALGANA, Plaintiff,
WELLS FARGO BANK, N.A., Defendant.
MEMORANDUM AND ORDER
case was filed on March 23, 2017, by plaintiff-mortgagor
Thomas C. Galgana against defendant-mortgagee Wells Fargo
Bank, N.A. ("Wells Fargo") relating to the
anticipated non-judicial foreclosure of plaintiff's home.
Galgana's original complaint contains three
Counts. First, Galgana alleges that Wells Fargo
violated M.G.L. c. 93A §2 ("Chapter 93A") by
engaging in predatory lending when he refinanced his mortgage
in 2004. More specifically, he alleges that the lender
fraudulently inflated his income to qualify him for an
adjustable-rate mortgage ("ARM") loan with
predatory terms that it knew or should have known he could
not afford (Count I) . In addition, Galgana asserts claims of
promissory estoppel and misrepresentation based on statements
that Wells Fargo allegedly made in connection with his 2009
ARM loan modification (Count III). Finally, Galgana requests
declaratory relief declaring his mortgage loan unenforceable
and/or reforming the terms (Count II).
Fargo has moved to dismiss the complaint (the "Motion to
Dismiss"). Galgana has filed a motion to amend the
complaint (the "Motion to Amend"). For the reasons
explained below, the Motion to Dismiss is being allowed
because Galgana's claims are time-barred. The Motion to
Amend is being denied because it is futile.
sued Wells Fargo in Massachusetts Superior Court on March 23,
2017. Wells Fargo removed the case on May 19, 2017, and
subsequently filed the Motion to Dismiss. Galgana sought and
received an extension of time to respond to the Motion to
Dismiss. Instead of opposing the Motion, Galgana moved to
amend the complaint. The court denied the motion to amend
without prejudice because it did not include a supporting
memorandum as required by Rule 7.1(b)(1) of the Local Rules
of the United States District Court for the District of
Massachusetts. The court then ordered Galgana to file either
an opposition to the Motion to Dismiss or a renewed motion to
amend the complaint accompanied by a memorandum of law.
Plaintiff filed a renewed Motion to Amend with a supporting
memorandum. The proposed amended complaint contains the same
three substantive counts as the original complaint. Wells
Fargo opposes the renewed Motion to Amend, arguing that the
amendment is futile because it does not cure the deficiencies
in the original complaint.
MOTION TO DISMISS COMPLAINT
Fargo moves to dismiss all counts in Galgana's original
complaint for failure to state a claim upon which relief can
be granted. See Fed.R.Civ.P. 12(b)(6). A complaint must
contain a "short and plain statement of the claim
showing that the pleader is entitled to relief."
Fed.R.Civ.P. 8(a). "To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to 'state a claim to relief that is plausible on
its face.'" Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (citing Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). Allegations of fraud, however,
must be pled with particularity. See id. at 687
(citing Fed.R.Civ.P. 9(b)).
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Id. at 678. This pleading standard
does not require "detailed factual allegations, "
but requires "more than labels and conclusions."
Twombly, 550 U.S. at 55. Therefore, in deciding a motion to
dismiss, the court may disregard "bald assertions,
unsupportable conclusions, and opprobrious epithets."
In re Citigroup, Inc., 535 F.3d 45, 52 (1st Cir.
2008). It must, however, accept well-pleaded allegations as
true and draw all reasonable inferences in plaintiff's
favor. See Penalbert-Roia v. Fortuno-Burset, 631
F.3d 592, 594-95 (1st Cir. 2011). Moreover, the court may
consider "documents that are part of or incorporated in
the complaint." Rivera v. Centro Medico de Turabo,
Inc., 575 F.3d 10, 15 (1st Cir. 2009).
the court takes the well-pleaded allegations in Galgana's
complaint as true and has considered the exhibits attached to
Chapter 93A and Recoupment Claims
of the complaint asserts a claim for Chapter 93A violations,
which he characterizes as a claim of recoupment in defense to
the anticipated non-judicial foreclosure on his home.
93A prohibits "unfair or deceptive acts and practices in
the conduct of any trade or practice, " including
predatory lending schemes. M.G.L. c. 93A §2. Under
Massachusetts law, "a lender may be liable under G.L. c.
93A for the origination of a home mortgage loan that the
lender should recognize at the outset that the borrower is
not likely to be able to repay." Drakopoulos v. U.S.
Bank Nat'l Ass'n, 991 N.E.2d 1086, 1094 (Mass.
2013) (quotations omitted). Such claims must be brought
within four years of when "the cause of action
accrues." M.G.L. c. 93A §5A. Galgana filed this
action until March 23, 2017. Therefore, any claim for which
the statute of limitations expired before March 23, 2013 is
alleges that Wells Fargo violated Chapter 93A by providing
him, in December 2004, with an ARM loan that he could not
afford, and that Wells Fargo knew or should have known, based
on his tax returns, that he could not afford
Galgana also alleges that the mortgage broker fraudulently
inflated Galgana's income and property value on the loan
application to qualify him for the loan, and that Galgana was
not aware of the fraud at the time. On December 6, 2004,
Galgana signed the ARM loan, which had interest rates and
monthly payments that increased over time and allowed for
negative amortization (the "2004 loan"). See Compl.
Ex. B (Docket No. 20 at 51) (Adjustable Rate Mortgage Note,
or "the Note"); ...