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Lyons v. Federal National Mortgage Association

United States District Court, D. Massachusetts

May 1, 2019




         Leonard Lyons (“Plaintiff”) brought suit against Ditech Financial LLC (“Ditech”), the servicer of his mortgage, and Federal National Mortgage Association (“Fannie Mae”), the holder of his mortgage, (collectively, “Defendants”) seeking a declaratory judgment and monetary damages from Ditech's servicing of his mortgage loan. [ECF No. 26 (“Amended Complaint” or “Am. Compl.”)]. 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). [Id. ¶¶ 21-51]. Defendants moved to dismiss Counts I and II, [ECF No. 29], and this Court dismissed both Counts as against Fannie Mae on March 5, 2019, [1] [ECF No. 39]. Presently before the Court is Plaintiff's Motion for Reconsideration of the March 15, 2019 Memorandum and Order on Motion to Dismiss or Alternatively Leave to Amend Complaint (“Motion for Reconsideration”). [ECF No. 41]. For the reasons set forth below, Plaintiff's Motion for Reconsideration [ECF No. 41] is DENIED.

         I. BACKGROUND

         A. Factual Background

         The following facts are drawn from the Amended Complaint and documents appended thereto.[2] Plaintiff owns a home in Braintree, MA, and in 2007, he executed a promissory note, secured by a mortgage on his residence.[3] [Am. Compl. ¶ 7; 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. ¶¶ 8-9].

         Five years later, in 2012, Plaintiff filed for bankruptcy. [Id. ¶ 10]. After the bankruptcy case concluded, Plaintiff attempted to make payments on his mortgage. [Id.]. Loan documents from Ditech stated 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].

         On 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]. On October 20, 2016, Ditech responded to Plaintiff's October 12, 2016 letter, 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]. Plaintiff 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].

         In October 2017, Plaintiff sent Ditech a demand letter under “Consumer Protection Law.” [Id. ¶ 19]. Ditech responded in November 2017. [Id. ¶ 20].

         B. Procedural Background

         On 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]. On July 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 against Ditech at this time. See supra note 1; [ECF No. 38 at 1-2].

         On March 15, 2019, the Court issued its order on the motion to dismiss (“March 15, 2019 Order”). [ECF No. 39]. On March 21, 2019, Plaintiff filed the Motion for Reconsideration. [ECF No. 41]. On April 8, 2019, Plaintiff filed a supplement to the Motion for Reconsideration, in which he confirmed that Fannie Mae does have a place of business in Massachusetts and agreed that he was required to send Fannie Mae a demand letter as a prerequisite to his consumer protection claim under Massachusetts General Laws Chapter 93A (“Chapter 93A”). [ECF No. 46 at 2]. Plaintiff also requested that the Court amend its March 15, 2019 Order to dismiss the Chapter 93A claim without prejudice, in order to permit him to serve Fannie Mae with a demand letter and later seek leave to amend the operative complaint once again. [Id.]. Fannie Mae filed an opposition to the Motion for Reconsideration on April 10, 2019, [ECF No. 47], to which Plaintiff replied on April 15, 2019, [ECF No. 50].


         A. Legal Standard

         Although Plaintiff does not clearly identify the basis for his Motion for Reconsideration and “[t]he Federal Rules of Civil Procedure do not specifically provide for the filing of motions for reconsideration, ” such motions are usually decided pursuant to either Federal Rule of Civil Procedure 59(e) or Federal Rule of Civil Procedure 60(b). See Cent. Produce El Jibarito v. Luna Commercial Corp., 880 F.Supp.2d 282, 284 (D.P.R. 2012) (citation omitted). Both Rules 59(e) and 60(b) are inapplicable here, however, because they apply only to final judgments. See Barrows v. Resolution Trust Corp., 39 F.3d 1166, at *3 (1st Cir. 1994) (table) (noting that Rule 59(e) “applies only to final judgments”); Farr Man & Co. v. M/V Rozita, 903 F.2d 871, 874 (1st Cir. 1990) (“It is, by this time, well settled that Rule 60 applies ...

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