United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO
DISMISS SAYLOR, J.
DENNIS SAYLOR, UNITED STATES DISTRICT JUDGE
an action arising out of a lapsed insurance policy on
plaintiff's home, which was destroyed by fire.
Charles Reedy entered into a reverse mortgage under which he
was responsible for maintaining hazard insurance on the
property. He failed to pay the premium and the policy lapsed.
A few months later, an arsonist burned down his house. The
insurance company denied his claim. He now asserts claims for
negligence, breach of contract, negligent and reckless
infliction of emotional distress, and violation of Mass. Gen.
Laws ch. 93A against his current loan servicer, defendant
NOVAD Management Consulting, LLC, for allegedly failing to
inform him that the premium had not been paid.
has filed a motion to dismiss all counts for failure to state
a claim upon which relief can be granted. For the following
reasons, that motion will be granted.
following facts are set forth as alleged in the complaint.
2011, Charles Reedy executed a reverse mortgage on his
property at 91-93 Adams Street, New Bedford, Massachusetts.
(Compl.¶¶ 3-4). Under the terms of that mortgage,
Reedy was required to maintain hazard insurance covering the
property. (Id. ¶ 8). According to the
complaint, he “was informed” at the time he
entered into the reverse mortgage that if he failed to pay
his insurance premium, the mortgagee would pay the premium
and charge his account. (Id. ¶ 9).
2016, the original mortgagee assigned Reedy's mortgage to
the U.S. Department of Housing and Urban Development
(“HUD”). (Compl. ¶ 6). NOVAD Management
Consulting, LLC became the servicer of the Reedy loan at that
time. (Id. ¶ 7). The complaint alleges that
NOVAD was “authorized to pay the insurance premium on
the Plaintiff's behalf and charge the premium to the
Plaintiff's account.” (Id. ¶ 21).
the time of the assignment to HUD, the hazard insurance
policy on the property was active. (Id. ¶ 10).
It did not automatically renew and was set to expire on May
3, 2017. (Id. ¶¶ 11-12). The complaint
alleges that NOVAD sent Reedy a letter on May 3, 2017, to
inquire as to the status of the insurance policy, but that
Reedy is elderly and forgetful and does not remember
receiving the letter. (Id. ¶¶ 14, 16, Ex.
A). The letter informed him that his policy was set to expire
and requested “a copy of the declarations page for
[his] new insurance policy.” (Id. Ex. A). It
also explains: “If you prefer us to contact your
insurance agent directly for this information, please
complete the information below and sign where indicated
authorizing release of this information directly to us. A
self-addressed envelope has been provided for your
Reedy nor anyone else paid the premium for the insurance
policy, and it lapsed on May 3, 2017. (Compl. ¶¶
21-22). On July 22, 2017, an arsonist set fire to the house,
causing extensive damage and rendering the property unsafe
for human habitation. (Id. ¶ 23). Reedy alleges
that he discovered for the first time that the policy had
lapsed when he went to his insurance agent to file a claim.
(Id. ¶ 25).
mailed NOVAD a demand letter pursuant to Mass. Gen. Laws ch.
93A, § 9 on November 17, 2017. (Compl. ¶ 79, Ex.
B). NOVAD did not respond. (Id. ¶ 81). Reedy
mailed the letter again on January 24, 2018, and NOVAD again
failed to respond. (Id. ¶¶ 82-83, Ex. C).
On March 12, 2018, Reedy mailed another demand letter,
including additional claims and citations. (Id.
¶ 84, Ex. D). NOVAD did not respond to that letter
either and has not made any offer of settlement.
(Id. ¶¶ 85-86).
filed this claim in Bristol Superior Court on April 17, 2018.
NOVAD removed this action to federal court pursuant to 28
U.S.C. §§ 1332(a) and 1441(a), on the ground that
Reedy is a citizen of Massachusetts, NOVAD is a citizen of
Maryland, and the amount in controversy is about $600,
complaint contains 5 counts: (1) negligence; (2) breach of
contract; (3) negligent infliction of emotional distress; (4)
reckless infliction of emotional ...