United States District Court, D. Massachusetts
ORDER ON MOTION TO DISMISS (DOC. NO. 8)
Sorokin United States District Judge.
RI Property Wire, LLC (“RIPW”) filed a summary
process action in Barnstable County District Court against
defendants Scott A. Linnell and Theresa L. Linnell
(collectively, “the Linnells”) for possession of
the property located at 29 Chopteague Lane, Marstons Mills,
Massachusetts (“the Property”). Doc. No. 10-4 at
83. In response, the Linnells moved to dismiss the action,
alleging that the foreclosure of the Property was void.
Id. at 96-100.
the Linnells' motion to dismiss, RIPW moved to add Bank
of America, N.A. (“BANA”) as a third-party
defendant. Doc. No. 1-1 at 329. RIPW then filed crossclaims
against BANA alleging breach of contract, indemnification,
and unfair and deceptive practices in violation of Mass. Gen.
Laws ch. 93A. Id. at 364-65. BANA removed the case
to this Court under its diversity jurisdiction. Doc. No. 1 at
1. BANA now moves to dismiss the crossclaim for failure to
state a claim under Rule 12 (b)(6). Doc. No. 8. For the
following reasons, the motion to dismiss is ALLOWED.
a limited liability company with a principal office in
Providence, Rhode Island. Doc. No. 1-1 at 362 ¶ 1. The
Linnells bought the Property on March 16, 2006. Id.
¶ 3. BANA is successor by merger to BAC Home Loans
Servicing, LP f/k/a Countrywide Home Loans Servicing, LP, a
national bank with a principal office in Charlotte, North
Carolina. Id. ¶ 2.
March 16, 2006, the Linnells executed an adjustable rate note
(“the Note”) in favor of Patriot Funding, LLC
(“Patriot”) for a loan of $296, 400. Doc. No.
10-3 at 92. Patriot endorsed the Note to Countrywide Bank,
N.A., who endorsed it in blank. Id. at 97. To secure
the Note, the Linnells granted a mortgage (“the
Mortgage”) on the Property to Mortgage Electronic
Registration Systems, Inc. (“MERS”) and recorded
it in the Barnstable County Registry of Deeds. Id.
at 100-07. Around March 1, 2007, eleven months after the
Mortgage was recorded, the Linnells stopped making payments,
and defaulted on their loan. Doc. No. 10-5 at 3 ¶ 9. On
October 2, 2007, Countrywide filed a Servicemembers Complaint
with the Massachusetts Land Court, and proceeded to foreclose
nonjudicially, but then aborted the adverse action.
Id. ¶ 10. On July 7, 2008, Countrywide sent the
Linnells a “Notice of Intention to Foreclose”
which stated, “[i]f the default is not cured on or
before October 5, 2008, the mortgage payments will be
accelerated with the full amount remaining accelerated and
becoming due and payable in full, and foreclosure proceedings
will be initiated at that time, ” and that “the
failure to cure may result in the foreclosure and sale of
your property.” Id. ¶ 11.
September 8, 2011, and again on September 23, 2011, MERS
assigned the Note and Mortgage to BANA, recording the
assignments in the Barnstable Country Registry of Deeds on
September 20, 2011 and October 4, 2011, respectively.
Id. ¶ 12. On November 25, 2015, BANA sent the
Linnells a pre-foreclosure “Notice of Intent to
Accelerate, ” informing them that to cure the default,
they had to pay $217, 094.81 on or before January 4, 2016.
Id. ¶ 13. The notice also stated that the
Linnells had a “right to reinstate after acceleration
and the right to bring a court action to assert the
non-existence of a default or any other defense to
acceleration and sale” as required by Paragraph 22 of
the Mortgage. Id. On January 3, 2018, BANA conducted
a foreclosure by auction and was the highest bidder,
purchasing the Property for $254, 150. Doc. No. 1-1 at
132-33, 363 ¶ 8-9. On January 10, 2018, BANA received
the Property's title via a Foreclosure Deed and recorded
it along with an “Affidavit of Sale under Power of Sale
in Mortgage” (“Affidavit of Sale”) in the
Barnstable County Registry of Deeds. Id. at 134-36.
The Affidavit of Sale states “that the requirements of
the power of sale included in the mortgage and of the law
have been complied with in all respects.” Id.
April 13, 2018, RIPW agreed to purchase the Property from
BANA and executed an Auction and Retail Contract (the
“Contract”) that contained certain limitations on
BANA's liability and waiver of RIPW's rights. Doc.
No. 10-1 at 61. Section 1, “Limitation of Liability,
” states, “Buyer understands and acknowledges
that seller has or may have acquired the property through
foreclosure . . . Buyer agrees that Seller shall not be
liable to Buyer under any circumstances for an[y] special,
consequential, or punitive damages whatsoever, whether in
contract, tort . . . or any other legal or equitable
principle.” Id. at 61-62 ¶ 1(B), 1(E).
Finally, Section 14, “Title, ” states,
“Buyer acknowledges that Seller's title to the
Property may be subject to court approval of foreclosure or
to a mortgagor's right of redemption.” Id.
addition to the Contract, RIPW also executed a document
titled “Real Estate Purchase Addendum - Auction”
(“the Addendum”). Id. at 55. The
Addendum's Section 2, “Occupancy Status of
Property, ” states, “Buyer understand and
acknowledges that the property may be subject to leasehold
interests or other rights or claims of various Occupants or
Claimants . . . At Closing, Buyer will assume all
responsibility and liability for or with respect to any
Occupants or Claimants of the Property.” Id.
at 55 ¶ A. Section 3, “Eviction Proceedings;
Relocation Costs, ” of the Addendum further states,
“After Closing, Buyer may elect to bring, at
his/her/its sole cost and risk, such unlawful detainer,
eviction or similar proceedings as Buyer may desire. Buyer
acknowledges that Seller has made no representations or
warranties that Buyer may bring such proceeding or that any
such proceeding will be successful…”
Id. at 56-57. Section 7, “Indemnification,
” states, “The Buyer hereby indemnifies, defends
and holds harmless Seller . . . from and against any and all
claims, causes of action . . . arising from, in connections
with, or in any way relating to the existence or claims of
any occupant or Claimant, any violations of . . . federal,
state or local statutes or regulations.” Id.
at 57. On May 22, 2018, in accordance with the Contract and
the Addendum, BANA conveyed the Property to RIPW via a
quitclaim deed for $205, 801.05 and recorded it on May 31,
2018. Doc. No. 1-1 at 137.
4, 2018, RIPW sent the Linnells a letter stating,
“[p]lease vacate the property no later than Sunday,
June 10, 2018, or we may bring a court action to evict
you.” Doc. No. 10-4 at 49. After the Linnells failed to
vacate, RIPW filed a summary process complaint in the
Barnstable County District Court to remove the Linnells from
the Property. Id. at 83-84. On June 29, 2018, the
Linnells transferred the action to the Southeast County
Housing Court. Id. at 37.
Linnells' answer to RIPW's summary process complaint
denied RIPW's right to take possession of the Property,
asserted that the foreclosure of the Property was invalid,
and claimed that their initial Mortgage was unconscionable
and presumptively unfair. Id. at 91, 93-94. The
Linnells also filed a motion to dismiss RIPW's claim for
possession which asserted non-compliance with Paragraph 22 of
the Mortgage, expiration of the statute of limitations to
enforce the Note and exercise the Power of Sale, an
unconscionable underlying mortgage, and legally insufficient
notice to quit. Id. at 96-100.
September 26, 2018, RIPW filed a motion to join BANA as a
crossclaim defendant, which the Southeast Housing Court
granted. Doc. No. 10 at 155. RIPW then served BANA with a
crossclaim complaint alleging (1) breach of contract, (2)
indemnification, and (3) unfair and deceptive practices in
violation of Mass. Gen. Laws ch. 93A. Id. at 166-67.
BANA timely removed the case under this Court's diversity
jurisdiction. Doc. No. 1. The Court held a status conference
at which ...