United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON MOTION TO DISMISS
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
Leonard Lyons brings this action against Ditech Financial LLC
(“Ditech”), the servicer of his mortgage, and
Federal National Mortgage Association (“Fannie
Mae”), the holder of his mortgage (collectively,
“Defendants”), for a declaratory judgment and
monetary damages arising out of Ditech's servicing of
Plaintiff's mortgage loan. [ECF No. 26]. The Amended
Complaint alleges five counts: a claim under “Consumer
Protection Law” against Defendants (Count I); a claim
under the Real Estate Settlement Procedures Act, 12 U.S.C.
§ 2605 (“RESPA”) against Ditech (Count II);
a declaratory judgment that Defendants have not strictly
complied with Plaintiff's mortgage terms (Count III); a
claim for breach of contract against Defendants (Count IV);
and, a claim for breach of the covenant of good faith and
fair dealing against Defendants (Count V). [ECF No. 26
¶¶ 21-51 (“Amended Complaint” or
“Am. Compl.”)]. Pending before the Court is
Defendants' motion to dismiss Counts I and II pursuant to
Federal Rule of Civil Procedure 12(b)(6). [ECF No. 29]. For
the following reasons, the Defendants' partial motion to
dismiss, [ECF No. 29], is GRANTED in part, and
Counts I and II are dismissed as against Fannie
following facts are drawn from the Amended Complaint, the
well-pleaded allegations of which are taken as true for
purposes of evaluating the 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
sufficiently referred to in the Amended Complaint or attached
thereto. Trans-Spec Truck Serv., Inc. v. Caterpillar
Inc., 542 F.3d 315, 321 (1st Cir. 2008); Watterson
v. Page, 987 F.2d 1, 3 (1st Cir. 1993).
purchased his current house at 61 Court Road, Braintree, MA
in 2004. [Am. Compl. ¶ 7]. On October 22, 2007, he
executed a promissory note for $344, 000, secured by a
mortgage on his residence. [ECF No. 26-1]. Plaintiff alleges that
Fannie Mae is the current holder of his mortgage loan and
that Ditech is its current servicer. [Am. Compl. ¶¶
2012, Plaintiff filed for bankruptcy. [Id. ¶
10]. After the bankruptcy case concluded, Plaintiff attempted
to make mortgage payments. [Id.]. He received loan
documents from Ditech that informed him that no amount was
due on the mortgage loan, but his credit report indicated
that Ditech had reported the mortgage loan as 90-days
delinquent. [Id. ¶¶ 11-12].
October 12, 2016, Plaintiff sent a letter to Ditech with a
payment for four months of the outstanding balance of his
mortgage loan. [Id. ¶ 13; ECF No. 26-2]. The
letter was addressed to Ditech, P.O. Box 94710, Palatine, IL
60094-4710, with copies to Ditech, P.O. Box 6172, Rapid City,
S.D. 57709-6172, and Ditech Financial LLC, 1100 Virginia
Drive, Suite 100A, Fort Washington, PA, 19034. [ECF No.
26-2]. The letter contained Plaintiff's name and loan
number and indicated the discrepancy between Plaintiff's
credit report, which reported a 90-day delinquency on the
mortgage loan, and the documents Ditech sent Plaintiff, which
stated that there was no balance due on the same mortgage
loan. [ECF No. 26-2]. Plaintiff's letter enclosed an
“Information Billing Statement” that provided a
“Designated Address for Qualified Written Requests,
Notices of Error and Requests for Information” under
the heading “Other Important Information Regarding Your
Account.” [ECF No. 29 at 84-85]. The
“Designated Address” was Ditech Financial LLC,
P.O. Box 6176, Rapid City, S.D. 57709-6176. [Id. at
85]. Plaintiff requested that Ditech “clarify for [him]
the status of [his] account, and what steps must be taken to
see this resolved.” [Id. at 82]. Ditech
responded to Plaintiff's October 12, 2016 letter on
October 20, 2016, stating that it was looking into the matter
and indicating that Plaintiff could expect to receive a
written response within 30 days. [Am. Compl. ¶ 14; ECF
No. 26-3]. Ditech did not provide any further response. [Am.
Compl. ¶ 14].
sent four follow up letters to Ditech between November 2016
and July 2017, each addressed to the same three Ditech
locations as the October 12, 2016 letter. [Id.
¶ 16; ECF No. 26-4]. Ditech did not respond. [Am. Compl.
¶ 16]. Instead, on or around August 10, 2017, Plaintiff
received a notice informing him of his right to cure his
mortgage default within 90 days. [Id. ¶ 17; ECF
No. 26-5]. According to the notice, the past due amount on
the mortgage loan was $37, 617.05, [ECF No. 26-5], but this
letter did not account for Plaintiff's October 12, 2016
payment on the mortgage, [Am. Compl. ¶ 17].
failure to address Plaintiff's concern about his mortgage
or to verify Plaintiff's mortgage debt allegedly caused
increased service charges and accrued interest on
Plaintiff's mortgage loan, damaged his credit score, and
required him to spend time and expense addressing the issue.
[Id. ¶ 25]. In October 2017, Plaintiff sent
Ditech a demand letter under “Consumer Protection
Law.” [Id. ¶ 19]. Ditech responded in
November 2017. [Id. ¶ 20].
February 2, 2018, Plaintiff filed this action in the Superior
Court of Norfolk County. [ECF No. 1-1]. Defendants removed
the action to this Court on February 26, 2018. [ECF No. 1].
Defendants later moved to dismiss the complaint, [ECF No.
14], and Plaintiff responded by filing an Amended Complaint
on June 22, 2018, [ECF No. 26].
12, 2018, Defendants moved to partially dismiss the Amended
Complaint. [ECF No. 29]. Plaintiff opposed the motion on July
26, 2018. [ECF No. 33]. On February 11, 2019, Ditech filed
for Chapter 11 bankruptcy, which triggered an automatic stay
that prohibits further litigation of Counts I and II as
against Ditech at this time. See supra n.1; [ECF No.
38 at 1-2].
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6), the Court must accept as true all well-pleaded
facts, analyze those facts in the light most favorable to the
plaintiff's theory, and draw all reasonable inferences
from those facts in favor of the plaintiff. United States
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 must be sufficient to “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).
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).” Id.
(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
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