Harry, Jr., et al v. Countrywide Home Loans, Inc., et al

Filing

OPINION issued by Jeffrey R. Howard, Chief Appellate Judge; Sandra L. Lynch, Appellate Judge and Rogeriee Thompson, Appellate Judge. Published. [16-2380, 17-1101]

Case: 16-2380

Document: 00117330242

Page: 1

Date Filed: 08/23/2018

Entry ID: 6193057

United States Court of Appeals
For the First Circuit
Nos. 16-2380
17-1101
THOMAS HARRY, JR., GRETCHEN HARRY
Plaintiffs, Appellants,
v.
COUNTRYWIDE HOME LOANS, INC.; BAC HOME LOANS SERVICING, LP; BANK
OF AMERICA, N.A.; THE BANK OF NEW YORK MELLON f/k/a The Bank of
New York as Trustee for the Certificate Holders of CWABS, Inc.,
Asset-Backed Certificates, Series 2005-17; GREEN TREE SERVICING,
LLC, n/k/a Ditech Financial LLC; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before
Howard, Chief Judge,
Lynch and Thompson, Circuit Judges.

Tina L. Sherwood on brief for appellants.
Phoebe Norton Coddington, Connie Flores Jones, and Winston &
Strawn LLP on brief for appellees Countrywide Home Loans, Inc.,
Bank of America, N.A., and Bank of America Corporation.
Richard E. Briansky, Amy B. Hackett, and McCarter English,
LLP on brief for appellees Ditech Financial LLC, Mortgage
Electronic Registration Systems, Inc., and The Bank of New York
Mellon f/k/a The Bank of New York as Trustee for the Certificate
Holders of the CWABS, Inc., Asset-Backed Certificate Series
2005-17.

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HOWARD, Chief Judge.

Date Filed: 08/23/2018

Entry ID: 6193057

In November 2005, Thomas and

Gretchen Harry borrowed $245,350 from Countrywide Home Loans,
Inc.,1 to refinance their property in Mashpee, Massachusetts.

The

Harrys defaulted on their loan in 2009, and in 2016 they initiated
this action to void their transaction and enjoin their property's
foreclosure sale.

The district court granted the defendants'

motion to dismiss the Harrys' complaint under Federal Rule of Civil
Procedure 12(b)(6), Harry v. Countrywide Home Loans Inc., 219
F.Supp. 3d 228 (D. Mass. 2016), and denied the Harrys' request for
injunctive relief, Harry v. Countrywide Home Loans Inc., 215
F.Supp. 3d 183 (D. Mass. 2016).

We affirm.
I.
A.

Our review of the dismissal is de novo.
Ballori-Lage, 744 F.3d 250, 252 (1st Cir. 2014).

Maloy v.
The Harrys'

eleven-count amended complaint alleged that Countrywide falsified
the Harrys' loan application, failed to comply with federal law in
the preparation of the loan, and lacked a Massachusetts home

1

The Harrys' complaint named Countrywide as a defendant, but
Bank of America, N.A. acquired Countrywide in 2008.
Moreover,
defendant BAC Home Loans Servicing "was a wholly owned subsidiary
of Bank of America, N.A.," and has since "merged into Bank of
America, N.A." Kolbe v. BAC Home Loans Servicing, LP, 738 F.3d
432, 438 n.3 (1st Cir. 2013) (en banc). For simplicity's sake, we
group these defendants together with Mortgage Electronic Recording
Systems, Inc., as well as Ditech Financial LLC (formerly Green
Tree Servicing, LLC), unless otherwise noted.

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lender's license when their 2005 mortgage was executed. On appeal,
they

reassert

that

a

laundry

list

of

errors

infected

their

application to refinance their home mortgage, and they further
argue that the district court erred in dismissing the bulk of their
claims as time-barred.
We agree with the district court that the Harrys cannot
escape time bars for their RICO claim (four years to file, see
Lares Grp., II v. Tobin, 221 F.3d 41, 44 (1st Cir. 2000) (citing
Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143,
156 (1987))); their Fair Debt Collection Practices Act claim (one
year

to

file,

see

15

U.S.C.

§ 1692k(d));

their

Real

Estate

Settlement Procedures Act claim (maximum of three years to file,
see 12 U.S.C. § 2614); their Truth in Lending Act claims (three
years to file, see 15 U.S.C. § 1635(f); In re Sheedy, 801 F.3d 12,
19-20

(1st

Cir.

2015);

or

their

state-law

claims

under

the

Massachusetts consumer protection statute, Chapter 93A (four years
to file, see Mass. Gen. Laws ch. 260, § 5A) or for slander of title
(three years to file, see Mass. Gen. Laws ch. 260, § 4; Harrington
v. Costello, 7 N.E.3d 449, 453 (Mass. 2014)).
The Harrys' only argument against finding these claims
time barred is that "the statute of limitations never runs on void
documents, period." But their basis for claiming that the mortgage
and note were void from the beginning is simply their allegation
that

Countrywide

"was

never

licensed

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to

lend

money

in

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Massachusetts."

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Entry ID: 6193057

This, they state in conclusory fashion, makes the

note and mortgage deed that they executed akin to forgeries and
thus "void ab initio . . . because Countrywide lacked the legal
authority to write these documents."

The Harrys, however, cite no

authority for this unusual proposition, and we have found none.
The Harrys do make a somewhat more relevant pitch, urging
us to toll the applicable limitations periods under the doctrine
of fraudulent concealment.

Tolling for fraudulent concealment,

however, like the Harrys' argument for equitable tolling, requires
them to make a threshold showing of due diligence.

See Protective

Life Ins. Co. v. Sullivan, 682 N.E.2d 624, 635 (Mass. 1997)
(equitable tolling); Ortiz-Rivera v. United States, 891 F.3d 20,
25 (1st Cir. 2018) (equitable tolling); Gonzalez v. United States,
284 F.3d 281, 292 (1st Cir. 2002) (fraudulent concealment).
showing is absent here.

That

As the district court noted, the Harrys

were represented by counsel at least as of 2011, yet they failed
to file any claim until March 2016, "more than five years after
they retained counsel and ten years after they granted the mortgage
at issue."

219 F. Supp. 3d at 236.

In light of the Harrys' lack

of diligence, we agree with the district court that they have
"failed

plausibly

to

allege

limitation should be tolled."

that

the

applicable

Id. at 237.

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statutes

of

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B.
We can easily dispose of the remainder of the Harrys'
arguments.

To start, the district court properly rejected the

Harrys' contention that their mortgage is obsolete under the
Massachusetts obsolete mortgage statute, Massachusetts General
Laws chapter 260, section 33 (extinguishing the right to foreclose
on a mortgage five years after the mortgage matures).2

The Harrys

argue that Ditech -- then acting as the servicer of the Harrys'
mortgage -- acted illegally when it instituted its October 2016
foreclosure action because the foreclosure occurred more than five
years after Ditech accelerated the maturity date of their note.
But there is no suggestion in either that statute, or, as the
Harrys suggest, in the Massachusetts Supreme Judicial Court's
decision in Deutsche Bank Nat. Tr. Co. v. Fitchburg Capital, LLC,
28 N.E.3d 416 (Mass. 2015), that the acceleration of a note has
any impact on the limitations period for a mortgagee's right to
foreclose.3

2

We previously rejected this precise argument in an opinion
that has since been withdrawn for unrelated reasons. See Hayden
v. HSBC Bank USA, 867 F.3d 222, 224 (1st Cir. 2017), withdrawn,
Hayden v. HSBC Bank USA, No. 16-2274, 2018 WL 3017468 (1st Cir.
June 14, 2018).
3

To the extent that the Harrys repeat this argument in their
appeal of the district court's denial of their motion to enjoin
the sale of their property in foreclosure, we find the district
court's exercise of its discretion to deny injunctive relief to
have been more than adequately supported by the record.

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As noted earlier in our discussion of the applicable
statutes of limitation, the Harrys also claim that their mortgage
is void because Countrywide "was licensed as a mere third party
loan

servicer

and

not

a

lender,"

thereby

running

afoul

of

Massachusetts General Laws chapters 255E (licensing of mortgage
lenders) and 255F (licensing of mortgage loan originators.

But

neither of those statutes explicitly creates a private cause of
action, and the Harrys present us with no arguments to infer one.
Accordingly, we find their implicit invitation to do so -- an
invitation we would only reluctantly consider in any case, see
Loffredo v. Ctr. For Addictive Behaviors, 689 N.E.2d 799, 802
(Mass. 1998) -- waived.

See United States v. Zannino, 895 F.2d 1,

17 (1st Cir. 1990).
We also find meritless the Harrys' argument that the
district court abused its discretion in refusing to grant their
last-ditch motions for entry of default against all defendants.
There is nothing in the record to suggest that any defendant
"failed

to

plead

or

otherwise

defend"

against

the

Harrys'

complaint, see Fed. R. Civ. P. 55, and the district court acted
well within its discretion by refusing to entertain the Harrys'
arguments to the contrary.
II.
For

the

foregoing

reasons,

court's rulings.

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we

AFFIRM

the

district