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Thomas v. U.S. Bank National Association

United States District Court, D. Massachusetts

June 18, 2018

LOUISE THOMAS and KEVIN THOMAS, Plaintiffs,
v.
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR RESIDENTIAL ACCREDIT LOANS, INC., MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-QS2, Defendant.

          MEMORANDUM AND ORDER

          DENISE J. CASPER UNITED STATES DISTRICT JUDGE

         I. Introduction

         Plaintiffs Louise and Kevin Thomas have filed this lawsuit against U.S. Bank National Association, as Trustee, for Residential Accredit Loans, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2006-QS2 (“U.S. Bank”) alleging breach of contract (Count I) and a claim under Mass. Gen. L. c. 93A (“Chapter 93A”) (Count II). D. 1. U.S. Bank now moves to dismiss the claims under Fed.R.Civ.P. 12(b)(6). D. 12. For the reasons discussed, the Court ALLOWS the motion to dismiss as to both Count I and Count II.

         II. Standard of Review

         Pursuant to Rule 12(b)(6), a complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); García-Catalán v. United States, 734 F.3d 100, 103 (1st Cir. 2013). This requirement “simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence” of the illegal conduct alleged. Twombly, 550 U.S. at 556. The Court “must assume the truth of all well-plead[ed] facts and give the plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007). To do so, the Court may consider “implications from documents attached to or fairly incorporated into the complaint, ” “facts susceptible to judicial notice, ” and “concessions in plaintiff's response to the motion to dismss.” Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55-56 (1st Cir. 2012) (quoting Arturet-Velez v. R.J. Reynolds Tobacco Co., 429 F.3d 10, 13 n. 2 (1st Cir. 2005)); see Pare v. Northborough Capital Partners, LLC, 133 F.Supp.3d 334, 336 (D. Mass. 2015) (quoting Trans-Spec Truck Serv., Inc. v. Caterpillar, Inc., 524 F.3d 315, 321 (1st Cir. 2008)).

         III. Factual Background

         The following facts are based upon the allegations in the complaint (and the documents attached to and fairly incorporated therein) and are accepted as true for the consideration of the motion to dismiss. In 1973, Mrs. Thomas purchased the real estate property located at 17 Fresh Pond Circle, in Plymouth, Massachusetts (the “Property”). D. 1 ¶ 6. In 2005, Mrs. Thomas executed the Note and both Plaintiffs executed the Mortgage for $224, 250, Id. ¶¶ 7-8; D. 13-1; D. 13-2. The Note and Mortgage identify Family Choice Mortgage Corporation (“FCMC”) as the original lender. Id. ¶¶ 7-8. The Note, signed solely by Mrs. Thomas had a maturity date of January 1, 2021. D. 13-1 ¶ 3(A). The Mortgage, executed by both Plaintiffs, also had the same maturity date and granted Mortgage Electronic Registration System (“MERS”), as nominee for FCMC, a security interest in the Property. D. 13-2 at 1-2, 12. Pursuant to a pooling and servicing agreement, on or about February 1, 2006, the Note and Mortgage were assigned to U.S. Bank as trustee and the assignment of the Mortgage was subsequently recorded on June 18, 2012. D. 1 ¶ 9. The Mortgage has been previously serviced by GMAC Mortgage, LLC (“GMAC”) and is now serviced by Ocwen Loan Servicing, LLC (“Ocwen”), as agents of U.S. Bank. D. 1 ¶¶ 11-13.

         Subsequent to the execution of the Note and Mortgage, on September 18, 2006, the Plaintiffs executed a quitclaim deed from the Plaintiffs to themselves as co-trustees of the Seventeen Fresh Pond Circle Realty Trust (the “Realty Trust”). D. 13-3; 21-1.

         The Plaintiffs defaulted sometime in 2012. D. 1 ¶ 10. Under the Home Affordable Modification Program (“HAMP”) and on behalf of U.S. Bank, GMAC offered Mrs. Thomas a three-month Trial Period Plan (“TPP”) loan modification agreement in November 2012. D. 1 ¶ 17; D. 1-1 at 1. As part of the TPP, Mrs. Thomas certified that there had been “no change in the ownership of the Property since [she] signed the Loan Documents, ” D. 1-1 at 4 (¶ 1C), and the TPP indicated that “if the Lender determined that [Mrs. Thomas's] representations . . . are no longer true and correct, [the] loan will not be modified and this [TPP] will terminate.” D. 1-1 at 5-6 (¶ 2F). Under the TPP, Ms. Thomas further agreed that the lender was not “obligated or bound to modify [the loan] if [she] fail[ed] to meet any one of the requirements” under the TPP. D. 1-1 at 6 (¶ 2G).

         During the three months following the TPP - January, February and March - the Plaintiffs were obligated to make three payments each in the amount of $2, 132.49, D. 15 at 3, and did so. D. 1 ¶¶ 23-24. After such payments were made, Ocwen informed Ms. Thomas that a loan modification would not be made given the issue of the title of the Property since the guidelines were not met for “loans held in an Estate or a Trust.” D. 1-2 at 1. As a result, the Plaintiffs did not receive a permanent loan modification. Ocwen subsequently made two loan modification offers in 2015, but the Plaintiffs rejected both, as alleged by the Plaintiffs, these offers were unsustainable, unaffordable, and doomed to foreclosure. D. 1 ¶¶ 39-40, 43-44. Thereafter, in 2016, U.S. Bank initiated foreclosure proceedings on the Property in 2016, D. 1 ¶ 14, and the Plaintiffs filed this complaint in September 2017. D. 1.

         U.S. Bank has now moved to dismiss the complaint. D. 12. The Court heard the parties on the pending motion and took the matter under advisement. D. 20.

         IV. Discussion

         A. Count I - Breach of Contract

         The Plaintiffs allege a breach of contract claim against U.S. Bank arguing that, despite their compliance with the three trial payments under the TPP agreement, U.S. Bank failed to provide them with a permanent loan modification agreement. D. 1 ¶ 33. To state a breach of contract claim, Plaintiffs must plausibly allege that there was a valid contract; the defendant breached the contract; and that the Plaintiffs sustained injury as a result of the defendant's breach. Linton v. N.Y. Life Ins. Corp., 392 F.Supp.2d 39, 41 (D. Mass. 2005). Even accepting the allegations in the complaint (and those exhibits attached and ...


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