United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON MOTION TO DISMISS
ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE.
Stephen Wolsh asserts claims for negligent misrepresentation
and breach of the covenant of good faith and fair dealing
against his current mortgage loan servicer, Defendant Ditech
Financial LLC f/k/a/ Green Tree Servicing. [ECF No. 16]
(“Amended Complaint”). Currently pending before
the Court is Defendant's motion to dismiss for failure to
state a claim. [ECF No. 20]. For the following reasons, the
motion is GRANTED and the Amended Complaint is
DISMISSED without prejudice. Plaintiff may file a
second amended complaint within 21 days if he can cure the
deficiencies discussed herein.
evaluating Defendant's motion to dismiss, the Court
accepts the well-pleaded allegations as true. See Ruivo
v. Wells Fargo Bank, 766 F.3d 87, 90 (1st Cir. 2014).
Plaintiff has attached several documents to the Complaint,
which the Court may consider as part of the pleadings.
See Giragosian v. Ryan, 547 F.3d 59, 65 (1st Cir.
2008); Trans-Spec Truck Serv., Inc. v. Caterpillar
Inc., 524 F.3d 315, 321 (1st Cir. 2008). The Court may
also look to documents that are central to Plaintiffs claim
or documents that are sufficiently referred to in the Amended
Complaint. See Watterson v. Page, 987 F.2d 1, 3-4
(1st Cir. 1993).
April 2008, Plaintiff obtained a loan of $417, 000 from GMAC
Mortgage, LLC (“GMAC”), with Mortgage Electronic
Registration Systems, Inc. (“MERS”) serving as
GMAC's nominee. The loan was secured by a mortgage on
Plaintiffs property in West Dennis,
Massachusetts. Am. Compl. ¶¶ 4, 10-11; [ECF No.
20-1 at 2-3]. Plaintiff remained current on his mortgage
payments until 2012 when, due to the impact of the nationwide
financial crisis and Plaintiffs health issues, Plaintiff
contacted GMAC regarding his need for a loan
modification.Am. Compl. ¶¶ 13-16. A GMAC
representative told Plaintiff that his loan would need to be
in default for three months to be eligible for a loan
modification; Plaintiff then purposefully defaulted on his
mortgage payments. Id ¶¶ 16-18. After
falling at least three months behind, Plaintiff contacted
GMAC again but was informed that GMAC was unable to accept
his payments due to his default, and he never received a loan
modification from GMAC. Id ¶¶ 19-23.
2016, after Defendant succeeded GMAC as Plaintiffs mortgage
loan servicer, Defendant offered Plaintiff a trial period
plan (“TPP”) as an initial step toward obtaining
a permanent loan modification. Id ¶¶
23-25. The TPP included an estimation of the terms of a
permanent loan modification offer, including a new loan
balance of $541, 774.63 (unpaid principal balance of $401,
103.16 plus principal forbearance of $140, 671.47, and
monthly principal and interest payments of $1, 214.64). [ECF
No. 20-1 at 38]. To qualify for a permanent loan
modification, and in accordance with the TPP, Plaintiff made
three trial payments of $1, 839.45 in August, September, and
October 2016. Id ¶ 26; [ECF No. 20-1 at 33].
Plaintiff allegedly made these payments in reliance on
Defendant's statements to him that if he did not agree to
a permanent loan modification for any reason, the trial
payments would be returned to him. Id ¶ 27.
Defendant never returned the TPP payments. Id ¶
October 2017, Defendant received an offer for a permanent
loan modification but found the terms to be unacceptable; the
principal amount due under the permanent loan modification
was $555, 000 and exceeded the appraisal value of the
property of $359, 000. Id ¶¶ 29-30.
Plaintiff declined to accept the offer after Defendant
refused to reduce the principal amount owed. Id
¶¶ 31-35. On November 10, 2016, before declining
the modification offer, Plaintiff confirmed with an employee
of Defendant that his three TPP payments would be returned
and that he could immediately apply for a deed in lieu of
foreclosure. Id ¶ 36. To do so, Defendant
informed Plaintiff that he had to reapply for a loan
modification and indicate in his application that he was
requesting a deed in lieu of foreclosure. Id ¶
38. Plaintiff applied for a deed in lieu of foreclosure and
supplied the necessary documentation but his application was
denied due to property title issues relating to a
“senior mortgage with an improper discharge.”
Id. ¶¶ 39-44. Defendant at this point had
resumed foreclosure proceedings and attempted to foreclose by
public auction on April 25, 2017. Id ¶ 46. The
police were called, however, and the auction was cancelled.
evaluate a motion to dismiss for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6), the Court
must “accept as true all well-pleaded facts alleged in
the complaint and draw all reasonable inferences therefrom in
the pleader's favor.” A.G. ex rel. Maddox v.
Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013) (quoting
Santiago v. P.R., 655 F.3d 61, 72 (1st Cir. 2011)).
The complaint must set forth “a short and plain
statement of the claim showing that the pleader is entitled
to relief, ” and should “contain ‘enough
facts to state a claim to relief that is plausible on its
face.'” Maddox, 732 F.3d at 80 (quoting
Fed.R.Civ.P. 8(a)(2) and Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “To cross the plausibility
threshold a claim does not need to be probable, but it must
give rise to more than a mere possibility of
liability.” Grajales v. P.R. Ports Auth., 682
F.3d 40, 44-45 (1st Cir. 2012) (citing Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). “A determination
of plausibility is ‘a context-specific task that
requires the reviewing court to draw on its judicial
experience and common sense.'” Id. at 44
(quoting Iqbal, 556 U.S. at 679) (internal quotation
marks omitted). “[T]he complaint should be read as a
whole, not parsed piece by piece to determine whether each
allegation, in isolation, is plausible.”
Hernandez-Cuevas v. Taylor, 723 F.3d 91, 103 (1st
Cir. 2013) (quoting Ocasio-Hernandez v.
Fortuno-Burset, 640 F.3d 1, 14 (1st Cir. 2011))
(internal quotation marks omitted). “The plausibility
standard invites a two-step pavane.” Maddox,
732 F.3d at 80. First, the Court “must separate the
complaint's factual allegations (which must be accepted
as true) from its conclusory legal allegations (which need
not be credited).” Id. (quoting
Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 224
(1st Cir. 2012)). Secondly, the Court “must determine
whether the remaining factual content allows a
‘reasonable inference that the defendant is liable for
the misconduct alleged.'” Id. (quoting
Morales-Cruz, 676 F.3d at 224).
prevail on a claim for negligent misrepresentation, Plaintiff
must establish that:
the defendant (1) in the course of his business, (2) supplied
false information for the guidance of others (3) in their
business transactions, (4) causing and resulting in pecuniary
loss to those others (5) by their justifiable reliance on the
information, and that he (6) failed to exercise reasonable
care or competence in obtaining or communicating the
Brown v. Bank of Am., Nat'l, Ass'n, CIV.A.
No. 13-13256-PBS, 2015 WL 13685917, at *12 (D. Mass. Sept. 3,
2015) (quoting Braunstein v. McCabe, 571 F.3d ...