United States District Court, D. Massachusetts
MEMORANDUM AND ORDER GRANTING MOTION FOR SUMMARY
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
Marie Claire Ayoub (“Ayoub”) filed this action
against her mortgage servicer, Defendant CitiMortgage, Inc.
(“Citi”), based on the denial of her applications
for a loan modification. The Court dismissed one of
Ayoub's claims prior to discovery pursuant to Federal
Rule of Civil Procedure 12(b)(6). Ayoub v. CitiMortgage,
Inc., No. 15-cv-13218-ADB, 2018 WL 1318919, at *8 (D.
Mass. Mar. 14, 2018). Currently pending before the Court is
Citi's motion for summary judgment on Ayoub's
remaining claims under Massachusetts General Laws Chapter 93A
(“Chapter 93A”). [ECF No. 79]. For the reasons
discussed herein, the motion is GRANTED.
factual summary is drawn from Citi's statement of
undisputed material facts and from Ayoub's statement of
disputed material facts. [ECF No. 81 (“SOF”); ECF
No. 99-1 at 7- 10].
9, 2007, Ayoub took out a $293, 600 loan from Prime Mortgage
Financial, Inc. (“Prime”) that was secured by a
mortgage on her home at 169 Jackson Street in Methuen,
Massachusetts (the “Property”). [Corrected First
Am. Compl., ECF No. 37 (“CFAC”) ¶ 1]. The
mortgage was originally held by Mortgage Electronic
Registration Systems, Inc. (“MERS”) as
Prime's nominee. [SOF ¶ 1]. On August 13, 2013, MERS
assigned the mortgage to Citi. [Id. ¶
2011, Ayoub's husband, Hussein Youssef
(“Youssef”), closed his full-time commercial auto
repair business in Lawrence, Massachusetts, which had been a
significant source of income for the couple. [ECF 99-1 at 8].
The closure created at least a temporary decline in their
income, which Youssef attempted to remedy through part-time
auto work that he performed from his home garage.
[Id. at 8-9]. In addition to his auto-related
self-employment, Youssef began working as a manager at Rabieh
& Hati, which ran a gas station. [Id. at 8, 10].
Nevertheless, the couple's financial circumstances were
such that Ayoub fell behind on her mortgage payments and, on
February 16, 2013, applied to Citi for assistance under the
Home Affordable Modification Program (“HAMP”).
[SOF ¶ 4]. Ayoub informed Citi that she was a homemaker
and therefore reliant on her husband's income. [ECF No.
81-8]. She further explained that she had become delinquent
on her mortgage due to a hardship that began when
Youssef's auto repair business suffered a 50 percent
downturn and that his income from the gas station was
insufficient to pay the mortgage. [Id.].
2013, after considering the financial details provided by
Ayoub, Citi denied her February 16, 2013 application. [SOF
¶¶ 12-13]. Citi explained that there was an
“irreconcilable discrepancy” in the application
and invited Ayoub to contact Citi to discuss the reason for
the non-approval. [Id. ¶ 13]. The
“irreconcilable discrepancy” was a reference to a
significant disparity between the $5, 000 per month that
Ayoub claimed Youssef was able to contribute to household
expenses and the significantly lower income implied by his
2012 tax return. [Id. ¶¶ 6-9].
November 12, 2013, Ayoub submitted a second application for a
HAMP modification to Citi. [Id. ¶ 14]. The new
application referenced Youssef's income from the Rabieh
& Hati gas station but did not include any income from
his repair business. [Id. ¶ 15]. On December
11, 2013, in response to a request from Citi, Youssef
submitted a letter saying that he was not self-employed.
[Id. ¶¶ 16-17]. Although Citi initially
denied the November 2013 application because it found that
Ayoub was barred from consideration for a loan modification
due to misrepresentation of income in her prior modification
request, Citi later considered the application on its merits
and concluded that Youssef's income was insufficient to
support a modification. [Id. ¶¶ 18-19].
Citi informed Ayoub that it was “unable to create an
affordable payment equal to 31% of [their] reported monthly
gross income without changing the terms of [the] loan beyond
the requirements of the program” and that the
“principal forbearance amount exceed[ed] the limit
available under HAMP.” [Id. ¶ 19].
3, 2014, Ayoub submitted a third application for a HAMP
modification. [Id. ¶ 20]. Although Youssef had
not reported any self-employment income on his 2013 tax
return, Ayoub claimed that that he was making $3, 000 a month
from his home auto-repair business. [Id.
¶¶ 21-22]. Citi requested additional documentation
to verify the self-employment income, including personal tax
returns and up-to-date profit and loss statements.
[Id. ¶ 23]. In response, Ayoub submitted
one-page profit and loss statements for the three-month
periods ending June and July 2014 that purported to show
exactly $3, 000 in profits per month. [Id. ¶
24]. On September 22, 2014, Citi requested a breakdown of
business expenses, a profit and loss statement updated
through August 2014, an explanation as to why the income was
not reported in Youssef's personal tax returns, business
tax returns for 2012 and 2013, and bank statements for the
business. [Id. ¶ 25]. Youssef acknowledged in a
September 30, 2014 letter that he operated the repair
business “somewhat informally through [his] home garage
and accept[ed] only cash, ” and that therefore
“the self-employment income [is] not reflect[ed] on
[his] tax returns.” [Id. ¶ 27]. In
January 2015, Citi informed Ayoub that her June 2014
application had been denied due to an “irreconcilable
discrepancy” and invited her to call if she had
questions. [Id. ¶ 29]. In response to a Chapter
93A demand letter, on April 16, 2015, Citi further explained
that Ayoub had not supplied the requisite financial documents
that Citi required in order to proceed, including profit and
loss statements, banking records, and tax returns.
[Id. ¶ 30].
8, 2015, Ayoub filed this case in Essex County Superior
Court, claiming that Citi had violated Chapter 93A through
its efforts to delay and obstruct approval of Ayoub's
applications for a HAMP loan modification (“Count
I”) and breach of the implied covenant of good faith
and fair dealing (“Count II”). [ECF No. 1-1
¶¶ 1, 13]. On August 24, 2015, Citi removed the
case to this Court. [ECF No. 1 at 12-14]. In an effort to
resolve this case, on September 12, 2015, Ayoub submitted a
fourth HAMP application to Citi through counsel, which was
denied on December 1, 2016. [SOF ¶¶ 31, 38]. On
April 24, 2017, Ayoub filed her Corrected First Amended
Complaint,  which added a claim asserting that Citi
also violated Chapter 93A by failing to explain its denial of
the fourth HAMP application (“Count III”). [CFAC
¶¶ 67-76; SOF ¶ 31]. As with her prior
applications, the September 2015 application was denied given
the incongruity between Youssef's purported
self-employment income and his tax returns and financial
records. [SOF ¶¶ 35-39].
9, 2017, Citi filed a motion to dismiss the Corrected First
Amended Complaint for failure to state a claim. [ECF No. 44].
The Court granted Citi's motion to dismiss Count II and
denied the motion with respect to Counts I and III. [ECF No.
January 24, 2019, Citi filed a motion for summary judgment.
[ECF Nos. 79, 80]. Ayoub obtained four extensions of time to
oppose the motion for summary judgment. [ECF Nos. 85, 90, 93,
95]. She did so by maintaining that there was a real prospect
of a successful mortgage modification, promising that she and
her husband would amend the tax returns that apparently
understated their income to help Citi verify relevant
financial information, asserting that she had unexpectedly
found a pre-approved buyer for the Property, and then stating
that she needed more time to oppose the motion for summary
judgment after the unexpected collapse of the planned sale
and due to counsel's illness. See [ECF Nos. 83,
90, 92, 94]. On January 30, 2019, while the summary judgment
motion was pending, Ayoub filed an “emergency
motion” to address an “emergency matter”
that required resolution on an “emergency basis.”
[ECF No. 88 (emphasis removed)]. Following receipt of this
emergency motion, on February 6, 2019, the Court held a
conference to address the issues raised by Plaintiff's
motion. [ECF No. 89]. During the conference, Ayoub's
counsel acknowledged that tax returns relevant to the
modification effort likely required amendment but was unable
to explain why the tax returns had not been updated before
the hearing. See [ECF No. 90].
judgment is appropriate where the moving party can show that
“there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). “[A]n issue is
‘genuine' if it ‘may reasonably be resolved
in favor of either party.'” Robinson v.
Cook, 863 F.Supp.2d 49, 60 (D. Mass. 2012) (quoting
Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir.
2008)). “A fact is material if its resolution might
affect the outcome of the case under the controlling
law.” Cochran v. Quest Software, Inc., 328
F.3d 1, 6 (1st Cir. 2003) (citation omitted). Thus,
“[a] genuine issue exists as to such a fact if there is
evidence from which a reasonable trier could decide the fact
either way.” Id. (citation omitted). By
invoking summary judgment, “the moving party in effect
declares that the evidence is insufficient to support the
nonmoving party's case.” United States v. One
Parcel of Real Prop. (Great Harbor Neck, New Shoreham,
R.I.), 960 F.2d 200, 204 (1st Cir. 1992) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).
“To succeed in showing that there is no genuine dispute
of material fact, ” the moving party must
“‘affirmatively produce evidence that negates an
essential element of the ...