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Rodrigues v. Ocwen Loan Servicing, LLC

United States District Court, D. Massachusetts

September 24, 2018




         The magistrate judge to whom this matter was referred has issued a Report and Recommendation (“R & R”) recommending that the defendants' Motion for Summary Judgment be granted in part and denied in part. In response, the defendants raise objections to the two rulings the magistrate judge relied on in denying the motion in part: (1) that the magistrate judge incorrectly found that the plaintiffs presented sufficient evidence about their history of monthly mortgage payments to demonstrate a genuine issue of material fact about how many payments had been made; and (2) that regarding the issue whether the plaintiffs were excused from the general requirement that a claim under Massachusetts General Laws chapter 93A must be preceded by a demand letter, the magistrate judge incorrectly found that on the summary judgment record a genuine issue of material fact existed whether Ocwen maintained a place of business in Massachusetts at the relevant time.[1] After review of the pleadings, the summary judgment record, the magistrate judge's R&R, and the defendants' timely objection, I conclude that the objections are valid.

         With respect to their first objection, the defendants assert that the plaintiff's sworn declaration that he made forty-one payments toward the modified loan is uncorroborated by additional evidence and therefore insufficient to create a factual dispute in light of the defendants' transactional records. I agree. The declaration's general assertion is insufficient to raise a genuine issue of material fact as to the accuracy of the payments history from the loan servicer. The defendants have proffered a full transcript of the loans in question. The transcript records twenty-eight payments during the relevant time span, with many missed payments. Mr. Rodrigues testified in his deposition that he commonly made payments by electronic transfer, using his computer. If so, it is very likely that records exist, either his or his bank's, which could support his count of forty-one payments and show the defendants' transcript to be in error. But the plaintiffs have not proffered any such factual support for Mr. Rodrigues's summary assertion. The mere recitation of a general allegation from the complaint is insufficient to warrant submission of the issue to the jury in light of the defendants' properly supported motion replete with documentary evidence of the transaction history. As a consequence, the fraud claim based on an alleged misrepresentation of the principal balance-the only theory available after the magistrate judge's R&R-lacks an essential factual basis and Ocwen is entitled to judgment as a matter of law.

         The defendants' second objection is also sustained. The defendants contend that the undisputed facts show Ocwen had a place of business in Massachusetts on or about November 28, 2015, and therefore the plaintiff should not be excused from the obligation to send a statutorily required pre-suit demand letter at least thirty days prior to the filing of a Chapter 93A claim, which happened here on December 28, 2015. See Mass. Gen. Laws ch. 93A, § 9(3). The defendants point to a sworn affidavit from its loan analyst as evidence that “[f]rom October 3, 2012 to May 31, 2017, Ocwen maintained a place of business . . . at 4 Technology Drive, Westborough, Massachusetts.” (Concise Statement of Material Facts in Supp. of Defs.' Mot. for Summ. J, Ex. 5 at ¶ 23 (dkt. no. 57-7).) Because the undisputed facts show that Ocwen did maintain a place of business in Massachusetts at the necessary time, the plaintiffs were required to first send a Chapter 93A demand letter as a precondition to suit. Ocwen is therefore entitled to judgment as a matter of law on the plaintiffs' Chapter 93A claim.

         The plaintiffs have made no objection to the magistrate judges' recommendation in any other respect.

         For the foregoing reasons, the defendants' Motion for Summary Judgment (dkt. no. 55) is GRANTED in full. Judgment shall enter in favor of the defendants.

         It is SO ORDERED.


         August 17, 2018


         Pending before this court is a motion for summary judgment filed by defendants Ocwen Loan Servicing, LCC (“Ocwen”) and Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2007-1 Asset Backed Certificates, Series 2007-1 (“DBNTC as Trustee”). (Docket Entry # 55). Plaintiffs Joe A. Rodrigues (“Rodrigues”) and Isabel Rodrigues (“plaintiffs”) oppose the motion in its entirety. (Docket Entry # 58). After conducting a hearing, this court took the motion (Docket Entry # 55) under advisement.


         Plaintiffs filed this action on December 28, 2015. The amended complaint seeks injunctive relief and monetary damages against Ocwen and DBNTC as Trustee to prevent continuing foreclosure activity on their property in Raynham, Massachusetts and to offer a permanent modification to an existing mortgage loan upon proper calculations of payment. (Docket Entry # 46). Plaintiffs seek actual and/or statutory damages, damages for emotional distress, exemplary and punitive damages, and compensation for the costs of this action, including the fees and costs of experts and reasonable attorney's fees. (Docket Entry # 46). The amended complaint sets out claims for fraud (Count I) and violation of the Massachusetts Consumer Protection Act, Massachusetts General Laws chapter 93A (“chapter 93A”) (Count II). (Docket Entry # 46).

         Ocwen and DBNTC as Trustee (“defendants”) seek summary judgment by asserting that plaintiffs fail to submit sufficient evidence to demonstrate common law fraud or liability under chapter 93A. (Docket Entry # 56). In addition to other arguments, defendants maintain that the claims arising from a 2011 HAMP[1] Agreement are time barred under the statute of limitations for fraud and chapter 93A. (Docket Entry # 56).


         Summary judgment is designed “‘to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.'” Dávila v. Corporación De Puerto Rico Para La Difusión Pública, 498 F.3d 9, 12 (1st Cir. 2007). It is appropriate when the summary judgment record shows “there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). It is inappropriate “if the summary judgment record is sufficiently open-ended to permit a rational factfinder to resolve a material factual dispute in favor of either side.” Pierce v. Cotuit Fire Dist., 741 F.3d 295, 301 (1st Cir. 2014).

         “An issue is ‘genuine' when a rational factfinder could resolve it [in] either direction” and a “fact is ‘material' when its (non)existence could change the case's outcome.” Mu v. Omni Hotels Mgmt. Corp., 882 F.3d 1, 5 (1st Cir. 2018); accord Green Mountain Realty Corp., 750 F.3d 30, 38 (1st Cir. 2014). Facts are viewed in favor of the non-movants, i.e., plaintiffs. See Garcia-Garcia v. Costco Wholesale Corp., 878 F.3d 411, 417 (1st Cir. 2017) (court examines “‘record in the light most favorable to the nonmovant' and must make ‘all reasonable inferences in that party's favor'”); Ahmed v. Johnson, 752 F.3d 490, 495 (1st Cir. 2014). In reviewing a summary judgment motion, a court may examine “all of the record materials on file” even if not cited by the parties. Fed.R.Civ.P. 56(c)(3); Geshke v. Crocs, Inc., 740 F.3d 74, 77 (1st Cir. 2014). “‘“[C]onclusory allegations, improbable inferences, and unsupported speculation”'” are ignored. Garcia-Garcia, 878 F.3d at 417.

         Under LR. 56.1, the moving party must “include a concise statement of material facts of record as to which it is contended that there exists a genuine issue to be tried” with citations to the record. LR. 56.1. As the opposing parties, plaintiffs must set out their own statement with citations to the record. See LR. 56.1. The rule deems admitted the facts in defendants' LR. 56.1 statement that plaintiffs' LR. 56.1 response does not controvert. See Cochran v. Quest Software, Inc., 328 F.3d 1, 12 (1st Cir. 2003) (plaintiff's failure to contest date in LR. 56.1 statement of material facts caused date to be admitted on summary judgment); Stonkus v. City of Brockton School Dep't, 322 F.3d 97, 102 (1st Cir. 2003) (citing LR. 56.1 and deeming admitted undisputed material facts that plaintiff failed to controvert). Adhering to this framework, the facts are as follows.


         On October 15, 2002, plaintiffs purchased land located at 538 Elm Street E in Raynham, Massachusetts (“the property”). (Docket Entry # 57, ¶ 1) (Docket Entry # 59, p. 18, ¶ 1). Plaintiffs secured their first mortgage for the property on September 5, 2003 with a $275, 000 loan from SLM Financial Corporation. (Docket Entry # 57, ¶ 2) (Docket Entry # 57-2) (Docket Entry # 59, p. 19, ¶ 2). On June 7, 2005, plaintiffs executed an additional mortgage on the property, a $100, 000 home equity line of credit from Citibank Federal Savings Bank. (Docket Entry # 57, ¶ 2) (Docket Entry # 57-3, p. 7) (Docket Entry # 59, p. 19, ¶ 2).

         On December 7, 2006, plaintiffs received the subject $475, 000 mortgage loan (“the loan”) from Mortgage Lenders Network, USA, Inc., designated as a nominee of Mortgage Electronic Registration Systems, Inc. (“MERS”). (Docket Entry # 57, ¶ 3) (Docket Entry # 57-7, ¶ 4) (Docket Entry # 59, p. 19, ¶ 3). This loan was intended to refinance the original $275, 000 loan and the subsequent $100, 000 line of credit. (Docket Entry # 57, ¶ 3) (Docket Entry # 59, p. 19, ¶ 3). The $475, 000 loan contained an adjustable rate balloon rider, a 30-year term and 50-year amortization, and a 5.8% initial interest rate through at least January 1, 2012. (Docket Entry # 57, ¶ 4) (Docket Entry # 59, p. 19, ¶ 4). The $475, 000 loan proceeds were distributed as follows: $355, 348.96 to GMAC Mortgage to settle and discharge the $275, 000 loan, $100, 640.93 to Citibank Mortgage to settle and discharge the $100, 000 line of credit, $9, 759.54 cash to plaintiffs, and $9, 250.57 for settlement charges. (Docket Entry # 57-7, ¶ 5). The loan also required an escrow account to pay property taxes and hazard insurance premiums. (Docket Entry # 57, ¶ 10) (Docket Entry # 59, p. 20, ¶ 10).

         On January 30, 2007, Ocwen began servicing the loan. (Docket Entry # 57-7, ¶ 7). DBNTC as Trustee currently owns the loan and is the holder of the promissory note evidencing it. (Docket Entry # 57-7, ¶ 9).

         Citing financial hardship, plaintiffs defaulted on their monthly repayment obligations in July 2009. (Docket Entry # 57, ¶ 11) (Docket Entry # 57-7, ¶ 10). A “true and accurate copy of the transaction history for the Loan” indicates consistent delays in payments beginning in 2009 and continuing through 2010.[2] (Docket Entry # 57-7, ¶ 10). For instance, Ocwen's transaction history reflects that plaintiffs' April 2010 payment was not processed until July 1, 2010. (Docket Entry # 57-7, ¶ 11) (Docket Entry # 57-7, p. 9). Moreover, the history reveals that Ocwen did not receive the May 2010 payment until July 26, 2010. (Docket Entry # 57-7, ¶ 11) (Docket Entry # 57-7, p. 10). In examining the transaction history for the period of January to September 2010, plaintiffs were consistently at least two months late on their scheduled payments. (Docket Entry # 57-7, pp. 9-10). An Ocwen account statement dated September 7, 2010 reflects a cumulative sum of $14, 110.47 due. (Docket Entry # 57-8, p. 1). This sum included $9, 798.72 in past due principal and escrow payments, $3, 264.59 in current principal, and $1, 047.16 in late fees. (Docket Entry # 57-8, p. 1).

         On September 27, 2010, Ocwen preliminarily approved plaintiffs for a loan modification under HAMP. (Docket Entry # 57-7, ¶ 12). In order to successfully complete the modification, plaintiffs were required to make three, consecutive monthly payments under a trial period plan from November 2010 to January 2011. (Docket Entry # 57-8). If all three trial payments were successfully completed, plaintiffs were to sign a Home Affordable Modification Agreement and Balloon Disclosure (“2011 HAMP Agreement”). (Docket Entry # 57-8).

         The 2011 HAMP Agreement specifically stated that, upon applying a $9, 900.00 deferred balance to the $482, 140.53 new principal balance, the total principal due would be $472, 240.53 at 2.00% interest. (Docket Entry # 57-8). The adjustable interest rate would be subject to alterations after five years. (Docket Entry # 57-8). The accompanying balloon disclosure did not specify an amount due at the mortgage term's conclusion. (Docket Entry # 57-8). In an account statement dated September 7, 2010, Ocwen informed plaintiffs that their total remaining principal balance due prior to the 2011 HAMP Agreement was $468, 909.34. (Docket Entry # 57-8).

         Ocwen transmitted the 2011 HAMP Agreement to plaintiffs on November 8, 2010. (Docket Entry # 57, ¶ 20) (Docket Entry # 59, p. 21, ¶ 20). The 2011 HAMP Agreement accounted for all outstanding amounts due, including the three trial payments to be submitted in the succeeding months. (Docket Entry # 57-7, ¶ 13). Plaintiffs successfully completed all three trial payments, and Ocwen received the signed 2011 HAMP Agreement on January 25, 2011. (Docket Entry # 57-7, ¶ 14). On January 27, 2011, Ocwen modified the loan. (Docket Entry # 57-7, ¶ 14).

         Beginning on February 1, 2011, $1, 430.07 of each payment was applied to both the principal and interest. (Docket Entry # 57-7, ¶ 15). For the payments dating from February 1, 2011 to May 1, 2013, Ocwen applied approximately $643.00 to $675.83 of each payment to the principal. (Docket Entry # 57-7, ¶ 15).

         An Ocwen Loan Analyst (“the loan analyst”) avers that from February 2011 to July 2013 Ocwen received only 28 regular monthly payments from plaintiffs, returning one to them. (Docket Entry # 57-7, ¶ 16). The transaction history reflects these payments. (Docket Entry # 57-7, pp. 11-12). Ocwen's records indicate that plaintiffs remained one to two months behind on their regular monthly modified loan payments from November 2012 to June 2013. (Docket Entry # 57-7, ¶ 16). Between July 26, 2013 and May 2, 2014, Ocwen did not record any new changes to the modified loan's outstanding balance that would have resulted from additional monthly payments. (Docket Entry # 57-7, pp. 12-13).

         By affidavit, Rodrigues avers that he “made 41 payments towards the modified loan between the [January] 2011 modification and the [July] 2014 modification.” (Docket Entry # 58, ¶ 3) (Docket Entry # 57-7, pp. 11-12). The transaction history does not reflect all of the 41 payments Rodrigues made between the January 2011 HAMP Agreement and “the [July] 2014 Modification.” (Docket Entry # 58, ¶ 3) (Docket Entry # 57-7, pp. 11-12). Drawing reasonable inferences in plaintiffs' favor, Ocwen received additional payments beyond the 28 it identifies in the transaction history. (Docket Entry # 57-7, ¶ 16) (Docket Entry # 57-7, pp. 11-12). A genuinely disputed material fact therefore exists regarding whether Ocwen received and correctly credited a number of payments that Rodrigues made during the January 2011 to July 2014 time period.

         In correspondence dated February 19, 2014, Ocwen proposed the second modification to the mortgage, which included a Loan Modification Agreement and Balloon Disclosure (“2014 Modification Agreement”). (Docket Entry # 57-9). In an account statement dated December 17, 2013 that Ocwen sent to plaintiffs, Ocwen listed a current principal balance of $451, 866.36 and a deferred principal amount of $9, 900.00. (Docket Entry # 57-7, ¶¶ 16, 18) (Docket Entry # 57-9, p. 3). After applying the deferred principal balance of $9, 900, the December 17, 2013 account statement discloses that the total principal owed leading up to the second modification was $461, 766.36. (Docket Entry # 57-9, p. 3) (Docket Entry # 57-7, ¶ 18). The same statement also shows that plaintiffs paid $5, 303.20 that Ocwen applied to interest and $4, 707.29 that Ocwen applied to principal during the “year-to-date.” (Docket Entry # 57-9, p. 3) (capitalization omitted). Ocwen also sent plaintiffs a February 17, 2014 account statement that disclosed the same principal ($451, 866.36) and deferred principal ($9, 900) figures. (Docket Entry # 57-9, p. 5).

         To qualify for the 2014 Modification Agreement, plaintiffs needed to sign the agreement, submit a single down payment of $2, 509.79 prior to April 1, 2014, and complete two subsequent trial period payments of $1, 626.22 for May and June 2014. (Docket Entry # 57-9, p. 7). The agreement stated that the new principal balance following the trial period would be $472, 823.93 with a 2.00% annual interest rate charged to the unpaid principal balance. (Docket Entry # 57-9, p. 9). The attached balloon disclosure estimated that a $185, 996.85 balloon payment would be due on the January 1, 2037 maturity date, subject to subsequent variation. (Docket Entry # 57-10).

         Plaintiffs successfully paid the three initial amounts and signed the 2014 Modification Agreement, which Ocwen received on June 30, 2014. (Docket Entry # 57-7, ¶ 19). On July 11, 2014, “the Loan was modified.” (Docket Entry # 57-7, ¶ 19). Following a recorded assignment on July 24, 2014, DBNTC as Trustee became the record holder of the mortgage. (Docket Entry # 57-7, p. 7).

         After the 2014 Modification Agreement, plaintiffs continued making adjusted monthly payments. (Docket Entry # 57-7, pp. 13-14). Their final, recorded, regular monthly payment was processed on April 17, 2015. (Docket Entry # 57-7, p. 15). On May 20, 2015, Ocwen transmitted an amortization schedule for the duration of the loan. (Docket Entry # 57-10, pp. 2-11) (Docket Entry # 57-7, ¶ 21). To date, the June 1, 2015 monthly payment is overdue, as are payments thereafter. (Docket Entry # 57-7, p. 15).

         From October 3, 2012 to May 31, 2017, Ocwen maintained a business operations office at 4 Technology Drive in Westborough, Massachusetts. (Docket Entry # 57-7, ¶ 23). From May 31 to October 31, 2017, Ocwen maintained another place of business also located in Westborough, Massachusetts. (Docket Entry # 57- 7, ¶ 23). Ocwen also maintains assets in Massachusetts through its Westborough offices and the recorded mortgages it maintains on real property located within the state. (Docket Entry # 57-7, ¶ 23).

         DBNTC as Trustee maintains places of business at One Beacon Street, One International Place, and 321 Summer Street, Suite 405 in Boston, Massachusetts. (Docket Entry # 57, ¶ 44). Moreover, as the record holder of recorded mortgages on real property located in Massachusetts, DBNTC ...

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