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Ross v. Deutsche Bank National Co.

United States District Court, D. Massachusetts

September 24, 2019

ALAN J. ROSS and RUTH ROSS, Plaintiffs,
DEUTSCHE BANK NATIONAL COMPANY d/b/a DEUTSCHE BANK and DEUTSCHE BANK NATIONAL COMPANY in its capacity as Indenture Trustee for New Century Home Equity Loan Trust 2005-4, Defendants.


          Leo T. Sorokin, United States District Judge.

         Alan J. Ross and Ruth Ross brought suit against Deutsche Bank National Company, and Deutsche Bank National Company in its capacity as Indenture Trustee (collectively, “Deutsche Bank”), to enjoin the foreclosure of their home. They assert a breach of contract claim in connection to a settlement agreement between the parties, a product of a previous foreclosure proceeding involving the Rosses’ property. Deutsche Bank has moved to dismiss the suit for failure to state a claim. For the reasons expressed herein, the motion to dismiss is ALLOWED.

         I. FACTS[1]

         Since September 1986, the Rosses have been the owners of the property at 974 Dedham Street in Newton, Massachusetts. Doc. No. 6 ¶ 3. In June 2005, the Rosses applied for and accepted a loan in the amount of $500, 000 (“the Loan”) from New Century Mortgage Corporation (“New Century”). Doc. No. 6-1 at 1.[2] A promissory note (“the Note”) evidenced the Loan, and the Note was secured by a mortgage encumbering the property (“the Mortgage”). Id. In August 2005, the Note and the Mortgage were transferred from New Century to Deutsche Bank. Id. at 2. In May 2007, New Century sold the loan servicing rights to Carrington Mortgage Services (“Carrington”). Id. The Rosses defaulted on the Loan in December 2006, and after further defaults in 2008 and 2010, they entered into loan modification agreements with Carrington. Id.

         On or about December 1, 2010, Carrington commenced foreclosure proceedings. Id. The Rosses brought suit in Middlesex County Superior Court on March 7, 2012, to request a preliminary injunction, which was granted on March 12, 2012. Id. Deutsche Bank filed a notice of removal to another session of this Court on April 4, 2012. Id. Following a hearing and subsequent mediation, on September 11, 2013, the parties executed a Settlement Agreement and Unconditional General Release (“the Settlement Agreement”). Doc. No. 6 ¶ 7. The Settlement Agreement permitted the Rosses to remain at the residence for an 18-month period from the time of the execution of the Settlement Agreement (“the Occupancy Period”) but required them to surrender their home on February 1, 2015. Doc. No. 6-1 at 4.

         In relevant part, the Settlement Agreement states: “Upon the execution of this Settlement Agreement, [Deutsche Bank and Carrington] shall continue with the Foreclosure Proceeding. . . . Without limiting the generality of the foregoing, during the Occupancy Period, Borrowers acknowledge and agree that the Lender will restart the Foreclosure Proceeding in accordance with M.G.L. ch. 244[.]” Id. at 3. After the expiration of the Occupancy Period and the surrender of the property, any of the Rosses’ loan debt not recovered via the foreclosure sale would be forgiven, and the Rosses further waived any future claims against Deutsche Bank or its agents involving their property. Id. at 6, 8. Additionally, the Settlement Agreement provides that “[n]o delay or omission by the Lender in exercising or enforcing any of [Deutsche Bank’s] powers, rights, privileges, remedies, or discretions hereunder shall operate as a waiver thereof on the occasion nor on any other occasion.” Id. at 7. Finally, the Settlement Agreement notes that “[t]ime is of the essence with respect to the performance of any and all provisions of this Agreement.” Id. at 11.

         After the Occupancy Period expired on February 1, 2015, the Rosses relocated to their new residence in Watertown, Massachusetts. Doc. No. 6 ¶¶ 8, 19; Doc. No. 14 at 5–6. The Rosses twice notified Deutsche Bank and Carrington of their updated address. Doc. No. 6 ¶ 8. But the Rosses were unaware of any action taken to proceed with the foreclosure until sometime after January 23, 2019-over five years after the execution of the Settlement Agreement-when Deutsche Bank filed affidavits in Massachusetts Land Court under the federal Servicemembers Civil Relief Act (SRCA). Id. ¶ 9. It was not until “various real estate brokers solicit[ed] potential business” from the Rosses that they were made aware of the fact that Deutsche Bank had reinitiated foreclosure proceedings. Id. ¶ 10. Thus, the Rosses come before this Court contesting the proceedings, alleging a breach of the Settlement Agreement and seeking both a permanent injunction against Deutsche Bank foreclosing their home and a declaratory judgment ruling the Note and the Mortgage tied to their property are null and void. Id. ¶¶ 21, 24, 27.


         To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint “must provide fair notice to the defendants and state a facially plausible legal claim.” Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011). The pleader must “‘show’ an entitlement to relief” by including in the complaint “enough factual material ‘to raise a right to relief above the speculative level’” if the facts alleged are accepted as true. Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); accord Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Fed.R.Civ.P. 8(a). In assessing whether a complaint withstands a Rule 12(b)(6) challenge, courts “employ a two-pronged approach.” Ocasio-Hernandez, 640 F.3d at 12.

         First, statements in the complaint that amount to “threadbare recitals of the elements of a cause of action” are identified and disregarded. Id. (quotation marks and brackets omitted). So, too, are “bald assertions, subjective characterizations and legal conclusions.” DM Research, Inc. v. Coll. Of Am. Pathologists, 170 F.3d 53, 55 (1st Cir. 1999) (quotation marks omitted). As the First Circuit has warned, such statements “are a danger sign that the plaintiff is engaged in a fishing expedition.” Id. “[T]he price of entry, even to discovery, is for the plaintiff to allege a factual predicate concrete enough to warrant further proceedings, which may be costly and burdensome.” Id. (emphasis in original).

         Second, “[n]on-conclusory factual allegations” are “treated as true, even if seemingly incredible.” Id. If such allegations “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, ” and thereby “state a plausible, not a merely conceivable, case for relief, ” then the motion to dismiss must be denied. Id. (quotation marks omitted); accord Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a ‘probability requirement, ’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citation omitted). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679 (citation omitted).


         A. Breach of Contract

         The Rosses’ primary claim alleges a breach of the Settlement Agreement[3] arising from the manner in which Deutsche Bank reinitiated the foreclosure proceedings. Doc. No. 6 ¶¶ 11, 13. Under Massachusetts law, the elements of a breach of contract claim are as follows: “plaintiffs must prove that a valid, binding contract existed, the defendant breached the terms of the contract, and the plaintiffs sustained damages as a result of the breach.” Brooks v. AIG SunAmerica Life Assurance Co., 480 F.3d 579, 586 (1st ...

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