United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO
DISMISS
F.
Dennis Saylor IV United States District Judge.
This is
an action seeking to forestall a mortgage foreclosure.
Plaintiff Matthew Vanderhoop, who has been in default on his
mortgage for more than ten years, seeks to enjoin defendant
Wilmington Savings Funds Society FSB from foreclosing on his
property. Wilmington Savings has filed a motion to dismiss
the complaint. For the reasons set forth below, the motion to
dismiss will be granted in part and denied in part.
I.
Background
A.
Factual Background
Unless
otherwise noted, the facts are stated as alleged in the
amended complaint.[1]Matthew Vanderhoop has owned property in
Aquinnah, Massachusetts, since approximately 1989. (Am.
Compl. ¶ 8). On April 24, 2007, he entered into a $850,
000 mortgage loan agreement with Sovereign Bank to finance
the building of a house at 17 Old South Road in Aquinnah.
(Am. Compl. ¶ 12). The agreement required him to make
monthly payments of $5, 090.72. (Am. Compl. ¶ 17).
According
to the complaint, in 2008, Vanderhoop's seasonal business
began to suffer from reduced levels of tourism caused by the
economic recession. He was unable to make his monthly
mortgage payments. (Am. Compl. ¶ 19). He contends that
he contacted the bank in an attempt to reduce the interest
rate on his mortgage, but that the bank never responded. (Am.
Compl. ¶ 21). According to the bank, he has not made a
payment in more than ten years.
On
September 9, 2014, Sovereign Bank, which had by then changed
its name to Santander Bank, assigned and transferred the
mortgage to MTGLQ Investors. (Am. Compl. ¶
26).[2]
On February 2, 2015, MTGLQ assigned the mortgage to
Wilmington Savings. (Am. Compl. ¶ 32).[3] Vanderhoop
contends that he was not notified of either of those
assignments. (Am. Compl. ¶ 27, 33).
Vanderhoop
also contends that both assignments were defective. The
acknowledgment of the 2014 assignment, he contends, was
defective because (1) it “was not dated by Kathryn
Marvel, ” the notary public whose signature appears on
the document, and (2) it did “not indicate that Carlie
F. Speece was authorized to act in a representative capacity
on behalf of Santander Bank.” (Am. Compl. ¶ 38,
40). The acknowledgment of the 2015 assignment, he contends,
failed to “identify the company, MTGLQ.” (Am.
Compl. ¶ 41).
On
February 4, 2016, Wilmington Savings filed an affidavit with
the Dukes County Registry of Deeds executed by Angela Farmer,
Vice President, Rushmore Loan Management Services, LLC, as
the agent of Wilmington Savings. (Am. Compl. ¶ 44, Pl.
Ex. 9). Among other things, the affidavit stated that
Vanderhoop's mortgage “may” have been a
“certain mortgage loan” as defined by Mass. Gen.
Laws ch. 244, § 35B, and that Wilmington Savings had
“satisfied . . . [t]he requirements of” §
35B by sending Vanderhoop “a notice of his [] rights to
pursue a modified mortgage loan.” Vanderhoop contends,
however, that he in fact was never “notif[ied] of his
right to pursue a modified mortgage loan.” (Am. Compl.
¶ 34).
Vanderhoop
further contends that “[o]n February 14, 2018, at
8:59:14 AM, ” his “mortgage was assigned from
[Wilmington Savings] to MTGLQ.” (Am. Compl. ¶ 48).
He has submitted a copy of a document titled
“Assignment of Mortgage” that appears to have
assigned the mortgage from Wilmington Savings to MTGLQ. (Pl.
Ex. 5). The document, however, is dated January 10, not
February 14, 2018. (Pl. Ex. 5). “February 14, 2018, at
8:59:14 AM” appears instead to be the date and time
when the assignment was filed with the Dukes County Registry
of Deeds. (Pl. Ex. 5).
Vanderhoop
similarly contends that “[o]n February 14, 2018, at
8:59:14 AM, ” his “mortgage was assigned from
MTGLQ to [Wilmington Savings].” (Am. Compl. ¶ 47).
He has submitted a copy of a document titled
“Assignment of Mortgage” that appears to have
assigned the mortgage from MTGLQ to Wilmington Savings. (Pl.
Ex. 6A). That document, however, is dated February 6, not
February 14, 2018, and “February 14, 2018, at 8:59:14
AM” again appears to be the date and time when the
assignment was filed with the Dukes County Registry of Deeds.
Vanderhoop
contends that the acknowledgments of both 2018 assignments,
like the earlier acknowledgments, suffered from various
defects. The acknowledgement of the first 2018 assignment, he
alleges, did not state that Donna Bramer, the
attorney-in-fact for Wilmington Savings, “signed the
document in a representative capacity.” (Am. Compl.
¶ 49). The acknowledgment of the second 2018 assignment,
he contends, was defective in three ways. First, it lacked a
date of the notary's signature. (Am. Compl. ¶ 50).
Second, it did “not indicate” how the notary
public “identified the signatory.” (Am. Compl.
¶ 51). Third, it did not state that Dave Slear,
MTGLQ's Vice President, signed the assignment “in a
representative capacity [] as an act of [Wilmington
Savings].” (Am. Compl. ¶ 52).
Ultimately,
Vanderhoop seeks to “prevent [Wilmington Savings] from
foreclosing on [his] home.” The amended complaint,
however, provides almost no information concerning a
scheduled or threatened foreclosure. (Am. Compl. ¶ 1).
Indeed, the complaint states only that “[o]n March 20,
2018, [Wilmington Savings] filed a [Servicemembers Civil
Relief Act] Notice with the Massachusetts Land Court.”
(Am. Compl. ¶ 53).[4] None of the documents filed by
Vanderhoop appear to provide any additional information
concerning a threatened foreclosure.
B.
Procedural History
On
August 22, 2018, Vanderhoop filed a complaint in Dukes County
Superior Court against Wilmington Savings. (Am. Compl. ¶
2). The bank removed the action to this Court on September
11, 2018.
On
October 15, 2018, the bank filed a motion to dismiss the
complaint. On October 17, 2018, the Court issued a
preliminary injunction enjoining the bank from foreclosing on
the property before November 13, 2018.
On
November 13, 2018, the Court denied the bank's motion to
dismiss without prejudice. The Court also directed Vanderhoop
to file an amended complaint by November 29, 2018, and
extended the preliminary injunction through December 19,
2018.
Vanderhoop
filed an amended complaint on November 29. On December 11,
the bank filed a motion to dismiss the amended complaint. The
Court heard argument on December 19, 2018. Due to the
impending holidays, the Court permitted supplemental briefing
to be filed by January 3, 2019, and extended the preliminary
injunction through January 4, 2019.[5]
II.
Analysis
The
amended complaint asserts 15 counts. Each count lists
multiple claims, many of which are repeated over the
different counts.[6] Defendant has moved to dismiss each count.
For the following reasons, the motion to dismiss will be
granted in part and denied in part.
A.
Count One
Count
One is entitled “Material Breach of Contract; Unlawful
Methods and Practices; Unfair and Deceptive Practices;
Violation of G.L. c. 244, §35A, §35B, and
§35C, and Failure to Perform.” It alleges as
follows:
Mr. Vanderhoop repeats and realleges the allegations in
paragraphs 1 through 53 above. Mr. Vanderhoop's mortgage
was a “certain mortgage [loan]” as defined by
G.L.c. 244, §35B, and defendant did not conduct the
required analysis to determine if Mr. Vanderhoop was capable
of paying a modified mortgage loan and, defendant did not
offer Mr. Vanderhoop any such identified loan.
Am. Compl. ¶ 54. Thus, despite its title, Count One
alleges only a violation of Mass. Gen. Laws ch. 244, §
35B.
1.
The Requirements of Ch. 244, § 35B
Mass.
Gen. Laws ch. 244, § 35B provides, among other things,
that a “creditor shall not cause publication of notice
of a foreclosure sale” upon “certain mortgage
loans” unless “it has first taken reasonable
steps and made a good faith effort to avoid
foreclosure.” Mass. Gen. Laws ch. 244, § 35B(b).
The definition of “certain mortgage loans” has
many parts; it is sufficient to note for present purposes
that the parties appear to agree that the Vanderhoop loan is
a “certain mortgage loan” within the meaning of
the statute.
The
statute further provides that “[a] creditor shall have
taken reasonable steps and made a good faith effort to avoid
foreclosure if the creditor has considered: (i) an assessment
of the borrower's ability to make an affordable monthly
payment; (ii) the net present value of receiving payments
under a modified mortgage loan as compared to the anticipated
net recovery following foreclosure; and (iii) the interests
of the creditor, including, but not limited to,
investors.” Id. It goes on to state that
“[a] creditor shall be presumed to have acted in good
faith and to have complied with this subsection, if, prior to
causing publication of notice of a foreclosure sale, . . .
the creditor” determines “a borrower's
ability to make an affordable monthly payment, ”
conducts an analysis, and either agrees to a modified
mortgage or notifies the borrower that “no modified
mortgage loan will be offered.” Id. §
(b)(2). It further provides that “the creditor shall
send notice . . . of the borrower's rights to pursue a
modified mortgage loan” and that the borrower must
respond to the notice within 30 days. Id. §
(c).
2.
Whether Defendant Complied with the Statutory
Requirements
Wilmington
Savings contends that it complied with Mass. Gen. Laws ch.
244, § 35B, because it provided Vanderhoop with the
required notice, thus giving him an opportunity to request a
modified mortgage loan, and he never responded to that offer.
The bank further contends that it recorded an affidavit in
the registry of deeds that states it complied with the
statute, and that ...