United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON MOTION TO DISMISS
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
Angemarie Saint Vil filed suit against Wells Fargo Home
Mortgage (“Wells Fargo”) and U.S. Bank National
Association, individually and as Trustee of the Citigroup
Mortgage Loan Trust, Inc. 2006 NC2, Asset Backed Pass Through
Certificates Series 2006-NC2 (“U.S. Bank, ” and
together, “Defendants”). This suit arises out of
the threatened foreclosure of Plaintiff's residence in
Malden, MA (the “Property”). Now pending before
the Court is Defendants' Motion to Dismiss for failure to
state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6). [ECF No. 13]. For the reasons discussed below, the
Court GRANTS IN PART and DENIES IN PART the
Defendants' motion to dismiss.
following facts are drawn from Plaintiff's Complaint [ECF
No. 1-1 (hereinafter, the “Complaint”)], the
well-pleaded allegations of which are taken as true for
purposes of evaluating Defendants' motion to dismiss.
See Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87, 90
(1st Cir. 2014). Certain details are also culled from
documents whose authenticity are not disputed by the parties,
official public records, and documents sufficiently referred
to in the complaint or attached thereto. Watterson v.
Page, 987 F.2d 1, 3 (1st Cir. 1993); Trans-Spec
Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321
(1st Cir. 2008).
is a Massachusetts resident who lives at the Property with
her three children. Complaint ¶ 1. On July 7, 2006,
Nazon St. Vil Maurilus, Plaintiff's former husband,
executed a promissory note in the amount of $410, 000 (the
“Note”) in exchange for a refinanced mortgage
(the “Mortgage”) on the Property from New Century
Mortgage Corporation (“New Century”).
Id. ¶¶ 7-9, 11; [ECF No. 13-2]. Both Mr.
St. Vil Maurilus and Plaintiff executed the Mortgage.
Complaint ¶ 11.
April 2, 2007, New Century and certain related entities filed
for chapter 11 bankruptcy in the U.S. Bankruptcy Court for
the District of Delaware. Id. ¶ 13. On June 20,
2007, New Century granted Wells Fargo Bank, N.A. a limited
power of attorney that authorized it, inter alia, to
“execute, acknowledge, seal, and deliver . . .
assignments of . . . mortgage” on New Century's
behalf. [ECF No. 13-4]. On January 3, 2012, Wells Fargo Bank,
N.A., recorded an assignment of the Mortgage executed on
December 30, 2011 on behalf of New Century to U.S. Bank (the
“Assignment”). Complaint ¶ 22; [ECF No.
2014, Mr. St. Vil Maurilus stopped living at the Property and
divorce proceedings commenced. Complaint ¶ 24. Plaintiff
obtained a restraining order against Mr. St. Vil Maurilus
after he threatened her with physical violence. Id.
January 5, 2016, Wells Fargo and America's Servicing
Company sent Plaintiff a Right to Cure notice and a Right to
Request a Modified Loan notice. Id. ¶ 28.
Plaintiff authorized her attorney to ask Wells Fargo about
loan modification options that would enable her to retain the
Property, but Wells Fargo refused to discuss loss mitigation
with her attorney because Plaintiff did not execute the Note.
Id. ¶ 31. On December 22, 2016, an attorney for
U.S. Bank notified Plaintiff by letter that the Property
would be sold at auction. Id. ¶ 41-42. After
January 23, 2017, Plaintiff was erroneously told that the
Property had been sold at auction. Id. ¶ 43.
February 6, 2017, Plaintiff sent a letter to Wells Fargo
requesting information about the loan and the foreclosure.
Id. ¶¶ 45-47. Plaintiff and Mr. St. Vil
Maurilus settled their divorce action on February 8, 2017; in
the settlement, Plaintiff was granted Mr. St. Vil
Maurilus's interest in the Property. Id. ¶
27. On February 13, 2017, Wells Fargo sent a letter to
Plaintiff that notified her that it serviced the Mortgage on
behalf of U.S. Bank and falsely stated that the Property had
been sold at a foreclosure sale on January 23, 2017.
Id. ¶¶ 48-52. Along with the February 13,
2017 letter, Wells Fargo sent Plaintiff copies of the
Mortgage, the Assignment, and a Customer Account Activity
Statement dated January 8, 2016. Id. ¶¶
50, 53. The Customer Account Activity Statement contained an
entry for $765.00 in attorney's fees that had been added
to the Mortgage account on January 8, 2016. Id.
12, 2017, an attorney for U.S. Bank sent a letter to
Plaintiff notifying her that the Property would be sold at
auction on June 9, 2017. Id. ¶ 58. Plaintiff
also received a letter from Wells Fargo dated May 15, 2017
and addressed to Mr. St. Vil. Maurilus that described options
for avoiding foreclosure. Id. ¶ 60. On May 31,
2017, Plaintiff's attorney sent Defendants a demand
letter pursuant to M.G.L. c. 93A, § 9 notifying
Defendants that Plaintiff would bring a lawsuit to enjoin the
foreclosure and for damages. Id. ¶ 62. On June
9, 2017, Defendants' attorney represented that Defendants
would postpone the June 9, 2017 auction to allow Plaintiff
time to apply for a loan modification. Id. ¶
64. Notwithstanding that representation, Plaintiff later
received a letter from Wells Fargo stating that it would go
forward with the June 9, 2017 auction. Id. ¶
65. Plaintiff stayed home on June 9, 2017 and observed that
there was no auction or public proclamation of postponement
that day. Id. ¶ 66. Defendants later notified
Plaintiff that the auction had been rescheduled. Id.
about July 27, 2017, Plaintiff applied to assume and modify
the loan. Id. ¶ 69. On September 22, 2017,
Wells Fargo notified Plaintiff that it had denied her
application for a loan modification and that she had a right
to appeal. Id. ¶ 76. On October 5, 2017,
Plaintiff appealed the denial of her loan modification
application. Id. ¶ 84. On October 10, 2017,
Wells Fargo denied Plaintiff's appeal. Id.
¶ 88. On October 17, 2017, during a telephone
conversation with Plaintiff's attorney, Wells Fargo
stated that an auction of the Property was scheduled for
October 26, 2017. Id. ¶ 90.
sent Defendants a second demand letter pursuant to M.G.L. c.
93A, and on October 25, 2017, Plaintiff filed a Complaint and
an emergency motion for a temporary restraining order and a
preliminary injunction in the Massachusetts Superior Court
for Middlesex County. [ECF No. 1 at 2]. The court issued a
temporary restraining order and scheduled a hearing on the
preliminary injunction motion for October 30, 2017.
[Id.]. On October 30, 2017, Defendants removed the
action to this Court based on diversity jurisdiction, and
rescheduled the foreclosure auction for December 11, 2017.
[Id. at 1, 2 n.2]. On December 14, 2017, Defendants
filed a motion to dismiss the Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6). [ECF No. 13]. Defendants
have postponed the scheduled foreclosure auction of the
Property at least two additional times. [See ECF No.
10 ¶ 5 (postponing the foreclosure sale until at least
February 12, 2018); ECF No. 25 (postponing the foreclosure
sale during stay to pursue potential settlement)].
STANDARD OF REVIEW
motion to dismiss for failure to state a claim, the Court
accepts as true all well-pleaded facts in the complaint and
draws all reasonable inferences in the light most favorable
to the plaintiff. U.S. ex rel. Hutcheson v. Blackstone
Med., Inc., 647 F.3d 377, 383 (1st Cir. 2011). While
detailed factual allegations are not required, the complaint
must set forth “more than labels and conclusions,
” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007), and it must contain “factual allegations,
either direct or inferential, respecting each material
element necessary to sustain recovery under some actionable
legal theory.” Gagliardi v. Sullivan, 513 F.3d
301, 305 (1st Cir. 2008) (internal quotations and citations
omitted). The facts alleged, taken together, must
“state a claim to relief that is plausible on its
face.” A.G. ex rel. Maddox v. Elsevier, Inc.,
732 F.3d 77, 80 (1st Cir. 2013) (quoting Twombly,
550 U.S. at 570). “A claim is facially plausible if
supported by ‘factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.'” Eldredge v. Town
of Falmouth, 662 F.3d 100, 104 (1st Cir. 2011) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
assessing the sufficiency of a complaint, the Court first
“separate[s] the complaint's factual allegations
(which must be accepted as true) from its conclusory legal
allegations (which need not be credited).”
Maddox, 732 F.3d at 80 (quoting Morales-Cruz v.
Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012)). Next,
the Court “determine[s] 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). “[T]he court may not disregard properly pled
factual allegations, ‘even if it strikes a savvy judge
that actual proof of those facts is improbable.'”
Ocasio-Hernandez v. Fortuño-Burset, 640 F.3d
1, 12 (1st Cir. 2011) (quoting Twombly, 550 U.S. at
556). “[W]here the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct,
” however, a claim may be dismissed. Iqbal,
556 U.S. at 679.
Massachusetts, a mortgage that includes a power of sale, as
Plaintiff's Mortgage does, incorporates by reference the
statutory power of sale established under M.G.L. c. 183,
§ 21 and M.G.L. c. 244, §§ 11-17C. See
U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40,
49-50 (Mass. 2011). Under M.G.L. c. 183, § 21, after a
mortgagor defaults in the performance of the underlying note,
“[a] mortgage holder may foreclose on a mortgage that
includes a power of sale without prior judicial
authorization.” Ross v. Deutsche Bank Nat. Tr.
Co., 933 F.Supp.2d 225, 230 (D. Mass. 2013). “Even
where there is a dispute as to whether the mortgagor was in
default or whether the party claiming to be the mortgage
holder is the true mortgage holder, the foreclosure goes
forward unless the mortgagor files an action and obtains a
court order enjoining the foreclosure.”
Ibanez, 941 N.E.2d at 49 (citing Beaton v. Land
Court, 326 N.E.2d 302, 307 (Mass. 1975)).
“Recognizing the substantial power that the statutory
scheme affords to a mortgage holder to foreclose without
immediate judicial oversight, [Massachusetts courts] adhere
to the familiar rule that ‘one who sells under a power
[of sale] must follow strictly its terms.'”
Id. at 49-50.
of the terms of the power of sale that must be strictly
adhered to is the restriction on who is entitled to
foreclose.” Id. at 50. The statutory power of
sale can be exercised by “the mortgagee or his
executors, administrators, successors or assigns.”
M.G.L. c. 183, § 21. An assignee exercising the power of
sale “must hold the mortgage at the time of the notice
and sale in order accurately to identify itself as the
present holder in the notice and in order to have the
authority to foreclose under the power of sale.”
Ibanez, 941 N.E.2d at 53. “To establish itself
as the mortgage holder, ‘a foreclosing entity may
provide a complete chain of assignments linking it to the
record holder of the mortgage, or a single assignment from
the record holder of the mortgage.'” Simmons v.
Deutsche Bank Nat'l Tr. Co., No. 18-cv-10136-ADB,
2018 WL 1924453, at *3 (D. Mass. Apr. 24, 2018) (quoting
Orellana v. Deutsche Bank Nat'l Trust Co., No.
12-cv-11982-NMG, 2013 WL 5348596, at *7 (D. Mass. Aug. 30,
2013)). “A mortgage assignment executed by an assignor
who has no interest to assign or ‘no authority to make
an assignment to a particular assignee' is thus void and
does not confer upon the assignee the legal status required
to exercise the power of sale.” Ross, 933
F.Supp.2d at 230 (quoting Culhane v. Aurora Loan Servs.
of Nebraska, 708 F.3d 282, 290 (1st Cir. 2013)).
addition, a mortgage holder seeking to foreclose pursuant to
M.G.L. c. 183, § 21 must strictly follow the statutory
notice provisions. M.G.L. c. 244, § 14 governs the
procedure for providing proper notice of foreclosure under
the power of sale. Section 14 requires “[a]dvance
notice of the foreclosure sale . . . by publication in a
newspaper published or generally circulating in the town
where the mortgaged property lies, ” Culhane v.
Aurora Loan Servs. of Nebraska, 826 F.Supp.2d 352, 362
(D. Mass. 2011), aff'd, 708 F.3d 282 (1st Cir.
2013), and also “that a mortgagee send notice of the
foreclosure to the mortgagor at least fourteen days prior to
the date of the sale.” Sovereign Bank v.
Sturgis, 863 F.Supp.2d 75, 80 (D. Mass. 2012).
“[T]he failure to identify the holder of the mortgage
in the notice of sale may render the notice defective.”
Ibanez, 941 N.E.2d at 50. Further, “while
details of the initial auction must be provided by written
notice to the appropriate parties and published in a
newspaper . . ., a postponement of the sale may be announced
by public proclamation to those present at the auction
site.” Fitzgerald v. First Nat. Bank of Bos.,
703 N.E.2d 1192, 1194 (Mass. App. Ct. 1999).
M.G.L. c. 244, § 35A, mortgagors are entitled to a
90-day right to cure a mortgage default before a mortgagee
can commence the foreclosure process by invoking the
statutory power of sale. See M.G.L. c. 244, §
35A(a)-(b). Pursuant to the statutory scheme, a mortgagee
that seeks to foreclose on a mortgage must notify the
mortgagor of his right to cure, and “shall not
accelerate maturity of the unpaid balance of such
mortgage” or “otherwise enforce the
mortgage” until at least 90 days after the service of
such notice. Id. at § 35A(b). The Right to Cure
notice must be “given by the mortgagee to the
mortgagor, ” and must provide the mortgagor with
certain categories of information, including the nature of
the default, the date by which the mortgagor must cure the
default to avoid acceleration, and the telephone number for a
representative of the mortgagee whom the mortgagor may
contact if the mortgagee disagrees with the mortgagee's
assertion that a default has occurred or the mortgagee's
calculation of the amount required to cure the default.
Id. at § 35A(c). Section 35A further provides
that “[t]he mortgagor shall not be liable for any
attorneys' fees relating to the mortgagor's default
that are incurred by the mortgagee or anyone holding
thereunder prior to or during the period set forth in the
notice required by this section.” Id. at
§ 35A(d). A mortgagor alleging a violation of Section
35A in a pre-foreclosure suit can enjoin a foreclosure by
establishing that the mortgagee's Right to Cure notice
was inadequate. See U.S. Bank Nat'l Ass'n v.
Schumacher, 5 N.E.3d 882, 890-91 (Mass. 2014) (Gants,
M.G.L. c. 244, § 35B, a creditor must “first
take reasonable steps and ma[ke] a good faith effort to
avoid foreclosure” before publishing notice of a
foreclosure sale under M.G.L. c. 244, § 14. M.G.L. c.
244, § 35B(b). “A creditor is deemed to have taken