NAPOLITANO et al v. GREEN TREE SERVICING LLC et al

Filing 15

ORDER denying 8 Motion to Dismiss for Failure to State a Claim. By JUDGE JOHN A. WOODCOCK, JR. (MFS)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
THOMAS T. NAPOLITANO, et al.,
Plaintiffs,
v.
GREEN TREE SERVICING, LLC,
et al.,
Defendants.

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2:15-cv-00160-JAW

ORDER ON MOTION TO DISMISS
Thomas and Lisa Napolitano claim that Green Tree Servicing, LLC committed
a number of violations of law when, although they were current on their modified
loan, it treated them as delinquent, broke into their South Portland, Maine home,
changed the door locks, winterized the home, dismantled a basement sump pump and
allowed a previously dry basement to flood, and caused a persistent mold problem.
Green Tree Servicing, LLC has moved to dismiss the Napolitanos’ Complaint,
claiming that they have failed to state claims upon which relief can be granted. The
Court disagrees and denies Green Tree’s motion.
I.

BACKGROUND
A.

Procedural History

On April 9, 2015, Thomas T. and Lisa M. Napolitano (Napolitanos or Plaintiffs)
filed suit in Cumberland County Superior Court for the state of Maine against Green
Tree Servicing, LLC (Green Tree) and Safeguard Properties, LLC (Safeguard),

asserting a series of alleged violations of law arising out of the servicing of their
residential mortgage. Notice of Removal Attach. 1 Compl. (ECF No. 1) (Compl.); State
Ct. Record Attach. 1 State Ct. Docket Record (ECF No. 7). On May 1, 2015, Green
Tree filed a Notice of Removal in this Court based on subject matter jurisdiction.
Notice of Removal (ECF No. 1). On May 5, 2015, before the state court records were
submitted to this Court, Safeguard answered the Complaint. State Ct. Record Attach.
9 Answer and Additional Defenses (ECF No. 7). On May 11, 2015, Green Tree moved
to dismiss the Complaint on the ground that it failed to state a claim upon which
relief could be granted. Def. Green Tree Servicing LLC’s Mot. to Dismiss (ECF No. 8)
(Def.’s Mot.). On June 8, 2015, the Napolitanos filed their opposition to the motion.
Pls.’ Opp’n to Green Tree Servicing, LLC’s Mot. to Dismiss (ECF No. 11) (Pls.’ Opp’n).
Green Tree did not file a reply.
B.

The Complaint1

The Napolitanos state that this case arises out of a “mortgage transaction
secured by the Plaintiffs’ former residence, located at 195 School Street, South
Portland, Cumberland County, Maine.” Compl. ¶ 4. They allege that Green Tree is
a mortgage servicer and Safeguard was Green Tree’s contract agent and that the case
involves “deceptive and unfair property management and asset preservation
practices.” Id. ¶ 5. The Plaintiffs acknowledge that they were delinquent on a
mortgage loan obligation secured by the 195 School Street residence. Id. ¶ 6. They

In considering a motion to dismiss, a court “must take the allegations in the complaint as true
and must make all reasonable inferences in favor of the plaintiffs.” Waterson v. Page, 987 F.2d 1, 3
(1st Cir. 1993). See also Town of Barnstable v. O’Connor, 786 F.3d 130, 141 n.12 (1st Cir. 2015)
(discussing Waterson).
1

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say that Bank of America, N.A. (BOA) was their mortgage lender, but upon their
default BOA assigned its right to foreclose the mortgage and otherwise collect on the
debt to Green Tree, BOA’s servicing agent. Id. ¶ 7. The Plaintiffs allege that no
foreclosure proceeding was instituted in a Maine court. Id. The Plaintiffs say that
they were “able to rescue their home from foreclosure by modifying the terms of their
mortgage loan.” Id. ¶ 8.
The Plaintiffs claim that they “ultimately entered into a ‘Fannie Mae Loan
Modification’ that they signed on September 29, 2013 with [BOA], although the rights
to service the Plaintiffs’ mortgage remained with Green Tree as of the date of this
Complaint, as evidence [sic] by an Assignment of Mortgage dated August 19, 2013
and recorded in the Cumberland County Registry [o]f Deeds at Book 31370, Page
990.” Id. ¶ 9. They allege that “[i]n accordance with the Modification Agreement and
in accordance with negotiations concluded prior to that Agreement, the Plaintiffs
were required to comply with a trial period modification, which they successfully
completed in August, 2013.”

Id. ¶ 10.

The Plaintiffs say they were “granted

permanent loan modification status in October 2013 although [BOA], through its
nominee, the Mortgage Electronic Registration Systems, Inc., signed the Modification
Agreement on March 18, 2014.” Id. ¶ 11. They maintain that “[s]ince the time . . .
they were offered and agreed to a permanent loan modification to the present, the
Plaintiffs complied with all material[] terms and conditions of their loan obligations,”
specifically including paying “all mortgage loan installments when due, . . . taxes
when due and kept their home adequately insured.” Id. ¶¶ 12-13.

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Regardless of their compliance with the modification terms, the Plaintiffs
allege that Green Tree “continued to treat the Plaintiffs as they were delinquent on
their loan obligations by sending notices of default, contacting the Plaintiffs to
determine their intentions in connection with the claimed ‘delinquency’ and offering
the prospects of accepting a deed in lieu of foreclosure for their South Portland home”
and that Green Tree’s “efforts have continued through June and July, 2014.” Id. ¶
14. The Plaintiffs believe that Green Tree and Safeguard “consider the Plaintiffs to
be delinquent in their mortgage loan obligations as of the date of this Complaint,
although no foreclosure action has yet to be instituted.” Id. ¶ 15.
The Plaintiffs assert that Safeguard entered into various contracts with Green
Tree to provide property inspection and preservation services for properties whose
owners were delinquent or had defaulted on their mortgages. Id. ¶ 16. However,
they claim that “Safeguard’s involvement with residential property begins only if a
homeowner become[s] delinquent or defaults on a mortgage” and Safeguard then
becomes “responsible for performing property management and preservation services
on the home.” Id. ¶¶ 17-18. When Safeguard becomes involved, it “instructs [one] of
its subcontractors to inspect the property to determine its occupancy status” and once
Safeguard deems the property vacant, it then “instructs its subcontractors to secure
the property by boarding up the doorway, turning off the water and winterizing the
home, and placing lockboxes or padlocks on the doors.” Id. ¶¶ 19-20. The Plaintiffs
say that “[e]ven though [they] complied with their modified loan obligations, Green

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Tree deployed Safeguard’s services acting as though it were a legally-appointed
receiver of the Plaintiffs’ home.” Id. ¶ 23.
In October, 2013, Plaintiffs say they relocated to Massachusetts for better job
prospects but continued to own their South Portland home. Id. ¶ 21. They say they
listed their home for sale with a local realtor and employed a caretaker to look after
their home. Id. They also say that the realtor routinely inspected the home. Id.
From October, 2013 onward, the Plaintiffs say that they snowplowed their driveway,
continued to pay property taxes, and performed home improvements to enhance its
marketability. Id. They maintain “in no uncertain terms” that they “did not abandon
their South Portland home.” Id. ¶ 22.
In December 2013, the pipes in the South Portland home froze, causing major
damage. Id. ¶ 24. While the Plaintiffs were repairing the damage to their home,
Green Tree, they say, “broke into the Plaintiffs’ home, changed the door locks,
‘winterized’ the home, dismantled a basement sump pump and allowed a previously
dry basement to flood.” Id. They allege that neither “Green Tree nor Safeguard relied
on any legal process such as a receivership or injunction as a precursor to taking such
drastic measures.” Id. ¶ 27. Instead, the Plaintiffs say, Green Tree and Safeguard
“resorted to unauthorized self-help.” Id. ¶ 28.
The Plaintiffs say that the “water damaged caused by Green Tree and
Safeguard’s conduct has resulted in a mold problem in the home.” Id. ¶ 24. The
Plaintiffs state that they were “forced to discard their dishwasher and washing
machine as a result of Green Tree’s and Safeguard’s unauthorized break-in.” Id. ¶

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25. They say their home is now “basically a mess, preventing Plaintiffs’ broker from
selling the home and jeopardizing the Plaintiffs’ financial equity position in their
home.” Id. ¶ 26.
In March, 2014, the Plaintiffs through counsel “corresponded with the
President of Green Tree and the General Counsel of Safeguard, demanding an end to
this conduct and threatening a claim for punitive damages if the conduct continued,”
stating that the conduct was “a violation of the Maine Unfair Trade Practices Act.”
Id. ¶ 29. They say the correspondence “was ignored.” Id. ¶ 30.
In sum, the Plaintiffs maintain that Safeguard and Green Tree have jointly
and severally, “violated the Plaintiffs’ privacy interests, [have] trespassed on their
property, [have] converted their assets, have prevented the sale and marketing of
their South Portland home, have violated their statutory rights as consumers, and
have intentionally caused the Plaintiffs emotional distress.” Id. ¶ 35.
C.

The Theories of Action Against Green Tree

The Napolitanos’ Complaint consists of seven counts against Green Tree: (1)
Illegal, Fraudulent and Unconscionable Conduct/Maine Unfair Trade Practices Act
(MUTPA), (2) Trespass, (3) Conversion, (4) Breach of Contract, (5) Intentional
Infliction of Emotional Distress (IIED), (6) Negligent Infliction of Emotional Distress
(NIED), and (7) Fair Debt Collection Practices Act (FDCPA). Id. 1-10.
II.

POSITIONS OF THE PARTIES
A.

Green Tree’s Motion

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Green Tree contends that none of the Plaintiffs’ counts states a claim upon
which relief can be granted and that their Complaint against Green Tree must be
dismissed in its entirety. Def.’s Mot. at 2.
1.

Count Two: Trespass

Turning first to the trespass claim, Green Tree argues that the Plaintiffs may
not as a matter of law maintain a trespass claim against it because they “consented
to and authorized Green Tree to enter and secure the Property.” Id. at 4. It points
to section 9 of the Mortgage which it maintains “authorizes Green Tree to enter,
secure and repair the Property without notice to the Napolitanos upon either a
default of the Mortgage or an abandonment of the Property.” Id. at 5. They say that
the Plaintiffs “concede that they both vacated the Property and defaulted under the
terms of their Mortgage,” and that “[t]hese concessions are sufficient as a matter of
law to bar . . . the trespass claim.” Id.
2.

Counts Five and Six: Intentional and Negligent Infliction
of Emotional Distress

Regarding the intentional and negligent infliction of emotional distress claims,
Green Tree says that the claims fail because (1) the Plaintiffs failed to allege any facts
showing that Green Tree acted with specific intent to cause emotional distress, (2)
that Green Tree was exercising a contractual right in entering the home, (3) that a
mortgagor has no legal right to claim emotional distress from the initiation of a
foreclosure, and (4) that the Plaintiffs have failed to identify any objective symptoms
as a consequence of Green Tree’s actions. Id. at 5-8.
3.

Count Three: Conversion
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Noting that the tort of conversion applies only to personal, not real property,
Green Tree maintains that the Complaint fails to allege that Green Tree converted
any personal property and Green Tree also notes that it was authorized to enter into
the property under the terms of the Mortgage. Id. at 8-9.
4.

Count Seven: Fair Debt Collection Practices Act

Green Tree states that as the current holder of the Mortgage in this case, it
does not fit within the definition of “debt collector” in the FDCPA. Id. at 9. Green
Tree argues that “[c]reditors collecting their own debt are excluded from the statute’s
reach.” Id. at 10. Furthermore, even if the FDCPA did apply, Green Tree says that
the Plaintiffs have failed to identify any Green Tree conduct that violated the FDCPA.
Id.
5.

Counts One and Four: Maine Unfair Trade Practices Act
and Breach of Contract

Green Tree says that “its exercise of the right to enter was not a breach of
contract as a matter of law” and that to the extent the MUTPA claim is based on the
alleged wrongful entry, the claim must fail because Green Tree had the right to enter.
Id. at 11. Furthermore, Green Tree asserts that “the Plaintiffs have failed to identify
any loss of money or Property as a result of the alleged wrongful attempt to collect a
debt.” Id. at 11.
B.

The Napolitanos’ Response

Preliminarily, the Napolitanos observe that Green Tree attached only the first
Mortgage and not the subsequent modification to its motion to dismiss. Pls.’ Opp’n
at 4. They say that “[i]f only for this reason, Green Tree’s first basis for dismissal
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must fail.” Id. However, the Napolitanos attached the modification and agree that
the motion “should still be decided under Rule 12(b)(6) and not Rule 56.” Id. at 4-5.
1.

Count Two: Trespass

Regarding the trespass claim, the Napolitanos say that under Maine caselaw,
a mortgagee’s “right of entry cannot apply . . . when the mortgagor is in possession
pursuant to an agreement and the mortgagor complies with the mortgage
instrument.”

Id. at 5 (citing Cook v. Curtis, 125 Me. 114, 131 A. 204 (1925) and

Gilman v. Wills, 66 Me. 273 (1877)). The Napolitanos point out that their Complaint
alleged that they were not in default of the mortgage loan obligations as of October,
2013 and that the mortgage upon which Green Tree relies permits lender remedies
only upon default. Id.
2.

Counts Five and Six: Intentional and Negligent Infliction
of Emotional Distress

Citing Gammon v. Osteopathic Hospital of Maine, Inc., 534 A.2d (Me. 1987),
the Napolitanos say that their recovery of damages “turns on foreseeability of the
harm caused by the tortfeasor.” Pls.’ Opp’n at 6. They say that the cases relied upon
by Green Tree are summary judgment, not motion to dismiss cases, and that Green
Tree’s conduct, as alleged in the Complaint, is sufficient to survive dismissal. Id. at
5-6.
3.

Count Three: Conversion

Regarding Green Tree’s point about personal property, the Napolitanos
observe that they claimed that Green Tree destroyed a sump pump, a washing
machine, and a dishwasher, all of which qualify as personal property. Id. at 8. The
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Napolitanos dispute Green Tree’s claim that because it had the right to enter the real
property, it also had the right to seize personal property without resorting to proper
legal process. Id.
4.

Count Seven: Fair Debt Collection Practices Act

The Napolitanos agree that the FDCPA does not apply in general to creditors
who are collecting a debt in their own names. Id. at 9. However, the Napolitanos
argue that if a creditor receives an assignment or transfer of debt when the debtor is
in default and if the creditor is in the business of debt collection, the creditor is
deemed a “debt collector” within the meaning of the FDCPA.

Id.

Here, the

Napolitanos state that the Complaint alleges that they were in default at the time
BOA transferred their mortgage to Green Tree.

Id. (citing Compl. ¶ 7).

The

Napolitanos disagree with Green Tree’s further contention that the Complaint does
not contain enough specificity. Id. at 10-11.
5.

Counts One and Four: Maine Unfair Trade Practices Act
and Breach of Contract

Regarding Green Tree’s arguments on Count One, the MUTPA count, and
Count Four, the breach of contract count, the Napolitanos maintain that they must
fail because Green Tree’s right of entry was conditioned upon a default and there was
no default when Green Tree entered. Id. at 11.
Regarding Green Tree’s contention that the Napolitanos have failed to allege
a cognizable loss, the Napolitanos note that they alleged the loss of their personal
property, the diminution in value of their residence due to a mold problem, the

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reduction in the equity in their home, and that these damages are sufficient to state
a claim under the MUTPA. Id. at 12.
III.

DISCUSSION
A.

Legal Standard

When evaluating a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim upon which relief can be granted, a court must
determine “whether, construing the well-pleaded facts of the complaint in the light
most favorable to the plaintiffs, the complaint states a claim for which relief can be
granted.” Ocasio–Hernández v. Fortuño–Burset, 640 F.3d 1, 7 (1st Cir. 2011) (citing
FED. R. CIV. P. 12(b)(6)). A court need not assume the truth of conclusory allegations,
and the complaint must state at least a “plausible claim for relief.” Ashcroft v. Iqbal,
556 U.S. 662, 678-79 (2009). However, “[n]on-conclusory factual allegations in the
complaint must . . . be treated as true, even if seemingly incredible.”
Hernández, 640 F.3d at 12.

Ocasio–

A court may not “attempt to forecast a plaintiff's

likelihood of success on the merits.” Id. at 12-13.
In 2007, the United States Supreme Court issued Twombly, which emphasized
the need for a plaintiff’s complaint to marshal sufficient facts to demonstrate a
“plausible entitlement to relief.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 559
(2007). It is noteworthy that Twombly is an antitrust case in which the plaintiff
claimed a violation of § 1 of the Sherman Act. Id. at 548. In stressing the need for
plausibility, the Twombly Court observed that an antitrust action “can be expensive,”
id. at 558, and the Supreme Court worried that “the threat of discovery expense will

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push cost-conscious defendants to settle even anemic cases before reaching” the
summary judgment or trial stages. Id. at 559.
Two years later, in Iqbal, the United States Supreme Court refined the
dismissal standard:
To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is
plausible on its face. A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.
556 U.S. at 678 (internal quotation marks and citations omitted). The Iqbal Court
suggested that courts when considering motions to dismiss could “choose to begin by
identifying pleadings that, because they are no more than conclusions, are not
entitled to the assumption of truth.” Id. at 679. Having isolated “the well-pleaded
factual allegations, a court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief.” Id.
In 2013, the First Circuit described the Twombly and Iqbal decisions as
“watershed cases.” García-Catalán v. United States, 734 F.3d 100, 101 (1st Cir. 2013).
The “plausibility standard,” the First Circuit wrote, has become “the ‘new normal’ in
federal civil practice.” Id. (quoting A.G. v. Elsevier, Inc., 732 F.3d 77, 78-79 (1st Cir.
2013)). The First Circuit explained that “[t]he plausibility inquiry necessitates a twostep pavane.” Id. at 103 (citing Rodríguez-Reyes v. Molina-Rodríguez, 711 F.3d 49,
53 (1st Cir. 2013)).

“First, the court must distinguish ‘the complaint’s factual

allegations (which must be accepted as true) from its conclusory legal allegations
(which need not be credited).’” Id. (quoting Morales-Cruz v. Univ. of P.R., 676 F.3d

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220, 224 (1st Cir. 2012)). “Second, the court must determine whether the factual
allegations are sufficient to support ‘the reasonable inference that the defendant is
liable for the misconduct alleged.’” Id. (quoting Haley v. City of Boston, 657 F.3d 39,
46 (1st Cir. 2011) (quoting Iqbal, 556 U.S. at 678)).
B.

The Mortgage and the Modification

In considering a motion to dismiss, a court “must take the allegations in the
complaint as true and must make all reasonable inferences in favor of the plaintiffs.”
Waterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993). See also Town of Barnstable v.
O’Connor, 786 F.3d 130, 141 n.12 (1st Cir. 2015) (discussing Waterson). In Green
Tree’s motion and in the Napolitanos’ opposition, the parties attached copies of the
original mortgage and the later modification. See Def.’s Mot. Attach. 1 Mortgage (ECF
No. 8) (Mortgage); Pls.’ Opp’n Attach. 1 Fannie Mae Loan Modification Agreement
(ECF No. 11) (Modification). The Court is unclear from the Napolitanos’ response
whether they are pressing the objection to the Court’s consideration of the attached
documents.
“Ordinarily, of course, any consideration of documents not attached to the
complaint, or not expressly incorporated therein, is forbidden, unless the proceeding
is properly converted into one for summary judgment under Federal Rule of Civil
Procedure 56.” Waterson, 987 F.2d at 3 (citing FED. R. CIV. P. 12(b)(6)). At the same
time, there are “narrow exceptions” for “documents the authenticity of which are not
disputed by the parties; for official records; for documents central to plaintiffs’ claim;
or for documents sufficiently referred to in the complaint.” Id. (citations omitted).

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Here, as both parties attached documents to their filings, neither objected to
authenticity, and the documents are central to the parties’ claims and defenses, the
Court concludes that both the mortgage and the modification fall within the Waterson
exception and to the extent the Napolitanos demand that the Green Tree motion be
dismissed for failure to attach a complete set of relevant documents, the Court rejects
their contention as they have cured any defect in completeness. Lemos v. Bank of
Am., No. 15-12884-LTS, 2015 U.S. Dist. LEXIS 126732, at *2 n.1 (D. Mass. Sept. 22,
2015) (“The Court may consider the Note, Mortgage and Assignments at the Motion
to Dismiss stage since it is ‘integral to or explicitly relied upon in the complaint’”)
(citation omitted).
C.

Count Two: Trespass

The Court rejects Green Tree’s claim that section 9 of the original mortgage
granted it the unrestricted right to enter onto the Napolitanos’ residence. Maine
“follows the title theory of mortgage.” Johnson v. McNeil, 2002 ME 99, ¶ 10, 800 A.2d
702. Under Maine law, a mortgage is “a conditional conveyance vesting the legal title
in the mortgagee.” Id. (quoting Martel v. Bearce, 311 A.2d 540, 543 (Me. 1973)). But
the Maine Supreme Judicial Court has clarified that “the mortgagee is not in a
general sense the owner of the mortgaged estate before foreclosure.” Pettingill v.
Turo, 159 Me. 350, 359, 193 A.2d 367, 373 (1963). “Until the mortgagee chooses to
take possession, the mortgage gives him no right to do any act whereby the mortgagor
may be disturbed in his enjoyment of the estate, or its value and earnings may be
diminished.” Id. Thus, under Maine law, Green Tree did not have the unrestricted

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right by virtue of its mortgage to enter onto the Napolitanos’ property absent a breach
of the mortgage.
Nor did the mortgage and the modification grant Green Tree such a right. The
mortgage provides in part:
Lender or its agents may enter and inspect the Property at reasonable
times. If it has reasonable cause, Lender may inspect the interior of the
improvements on the Property. Lender will give me notice prior to an
interior inspection specifying such reasonable cause.
Mortgage ¶ 7. This lawsuit generates a question as to whether Green Tree entered
the Napolitanos’ home at “reasonable times,” whether Green Tree had “reasonable
cause” to inspect the interior of the home, and whether Green Tree gave prior notice
of the interior inspections specifying “such reasonable cause.” Green Tree’s citation
to paragraph 9 of the mortgage does not change this analysis. Green Tree’s right to
“do and pay for whatever is necessary to protect the value of the Property and
Lender’s rights in the Property” is triggered only (1) if the Napolitanos fail to keep
their promises, (2) if someone, including Green Tree, began a legal proceeding that
may significantly affect Green Tree’s interest in the Napolitano residence, or (3) if the
Napolitanos abandoned the property.

Mortgage ¶ 9.

In their Complaint, the

Napolitanos have raised a factual question as to whether any of these preconditions
had taken place when Green Tree entered onto the South Portland property. In its
review of the modification, the Court found no provisions that acted in derogation of
these preconditions and, if Green Tree failed to comply with its own contractual
provisions and simply entered the home, the Napolitanos are able to maintain a claim
of trespass.
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D.

Counts Five and Six: Intentional and Negligent Infliction of
Emotional Distress

The Court rejects Green Tree’s contention that the Napolitanos failed to allege
any facts to support a claim that it acted with the specific intent to cause emotional
distress. The Maine Supreme Judicial Court in Vicnire v. Ford Motor Co., 401 A.2d
148 (Me. 1979) set forth the applicable standard:
We expressly recognize that a defendant may be liable for engaging in
extreme and outrageous conduct and intentionally or recklessly
inflicting severe mental distress on a plaintiff. Specifically, in order to
recover for the intentional infliction of emotional distress, a plaintiff
must establish that (1) the defendant intentionally or recklessly inflicted
severe emotional distress or was certain or substantially certain that
such distress would result from his conduct, (2) the conduct was so
extreme and outrageous as to exceed all possible bounds of decency and
must be regarded as atrocious and utterly intolerable in a civilized
community, (3) the actions of the defendant caused the plaintiff’s
emotional distress, and (4) the emotional distress suffered by the
plaintiff was so severe that no reasonable man could be expected to
endure it. Although severe emotional distress is usually manifested by
shock, illness or other bodily harm, such objective symptomatology is not
an absolute prerequisite for recovery of damages for intentional, as
opposed to negligent, infliction of emotional distress. In appropriate
cases, severe emotional distress may be inferred from the extreme and
outrageous nature of the defendant’s conduct alone.
Id. at 154 (internal citations and punctuation omitted). The Maine Law Court has
periodically reiterated this standard since Vicnire. See Bratton v. McDonough, 2014
ME 64, ¶ 22, 91 A.3d 1050; Lyman v. Huber, 2010 ME 139, ¶ 16, 10 A.3d 707.
Here, the Napolitanos have alleged that they entered into a mortgage with
BOA, that they fell behind on their BOA mortgage, that BOA assigned the mortgage
to Green Tree, that they entered into a mortgage modification with BOA, and that
they were able to maintain compliance with the payment schedule under the modified

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mortgage. Nevertheless, Green Tree continued to treat them as if they were in
default, sent them harassing notices, contacted them about their supposed
delinquency, offered to accept a deed in lieu of foreclosure, and finally Green Tree’s
agent Safeguard broke into the Napolitanos’ home, changed the door locks, winterized
the home, dismantled a basement sump pump and allowed a previously dry basement
to flood, causing the destruction of personal property and the development of mold.
This accumulated conduct is sufficient in the Court’s view to withstand dismissal.
Green Tree cites Beaulieu v. Bank of America, N.A., 1:14-cv-00023-GZS, 2014
U.S. Dist. LEXIS 136876 (D. Me. Sept. 29, 2014) for the proposition that the District
Court “rejected a claim of emotional distress based on a foreclosure, which was in fact
unlawful.” Def.’s Mot. at 7. In Beaulieu, the bank engaged in a “failed attempt at
foreclosure” which the District Court could not “reasonably characterize[] as atrocious
and utterly intolerable conduct sufficient to state an IIED claim.” Beaulieu, 2014
U.S. Dist. LEXIS 136876, at *19. The difference here is that Green Tree never
foreclosed on the Napolitanos and never engaged in any other legally sanctioned
process.

Instead, Green Tree entered their house and caused damage, when,

according to the Napolitanos, it had no right to do so.
Green Tree also cites Lougee Conservancy v. CitiMortgage, Inc., 2012 ME 103,
48 A.3d 774, Lyman, and Vicnire, none of which was decided on a motion to dismiss.
Lougee Conservancy, 2012 ME 103, ¶ 1, 48 A.3d 774 (appeal after summary
judgment); Lyman, 2010 ME 139, ¶ 1, 10 A.3d 707 (appeal after bench trial); Vicnire,
401 A.2d at 150 (appeal after jury verdict). Typically, the Maine Supreme Judicial

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Court has decided these issues after trial or on motion for summary judgment, not on
motions to dismiss. See Steadman v. Pagels, 2015 ME 122, ¶ 1, 125 A.3d 713 (appeal
after bench trial); Bratton, 2014 ME 64, ¶ 1, 91 A.3d 1050 (appeal after summary
judgment); Curtis v. Porter, 2001 ME 158, ¶1, 784 A.2d 18 (appeal after summary
judgment). Although the Court agrees with Green Tree that the allegations about
the type of emotional damage the Plaintiffs sustained are scant, the Court views a
motion for summary judgment as a better vehicle to test whether the Plaintiffs are
able to meet the Maine standard for purely emotional injury.
E.

Count Three: Conversion

The Court already addressed Green Tree’s point about being authorized to
enter the Napolitano home and rejects it here as well. Regarding Green Tree’s
contention that a person does not commit conversion by affecting real as opposed to
personal property, the Complaint alleges that Green Tree damaged the Napolitanos’
personal as well as real property. In Allen v. Bicknell, 36 Me. 436 (1853), the Maine
Law Court concluded that a mortgagee’s right to take possession includes the
obligation to carefully remove the mortgagor’s personal property. Id. at 439; see also
JACK H. SIMMONS, DONALD N. ZILLMAN & DAVID D. GREGORY, MAINE TORT LAW § 6.05
(2004 Ed.). This Count survives dismissal.
F.

Count Seven: Fair Debt Collection Practices Act

To maintain a claim under the FDCPA, the plaintiff must demonstrate among
other things that the defendant is a “debt collector” within the meaning of the statute.
Som v. Daniels Law Offices, P.C., 573 F. Supp. 2d 349, 356 (D. Mass. 2008). Green

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Tree maintains that the FDCPA does not apply to it because it is not a “debt collector.”
Def.’s Mot. at 9-10. Green Tree argues that once the BOA assignment was made,
Green Tree was collecting its own debt. Id. at 10. “Creditors collecting on their own
accounts are generally excluded from the statute’s reach.” Chiang v. Verizon New
Eng., Inc., 595 F.3d 26, 41 (1st Cir. 2010) (citing 15 U.S.C. § 1692a(6)(F)(ii)).
Quoting 15 U.S.C. § 1692a(6)(F)(iii), the Napolitanos respond that the statute
creates an exception from the definition of debt collector for an entity like a mortgage
servicer that collects a debt “not in default at the time it was obtained by such person.”
Pl.’s Opp’n at 9. The Napolitanos are correct. In Schlosser v. Fairbanks Capital
Corporation the Seventh Circuit explained:
If the one who acquired the debt continues to service it, it is acting much
like the original creditor that created the debt. On the other hand, if it
simply acquires the debts for collection, it is acting more like a debt
collector.
Schlosser v. Fairbanks Capital Corporation, 323 F.3d 534, 536 (7th Cir. 2003). Thus,
the FDCPA “treats assignees as debt collectors if the debt sought to be collected was
in default when acquired by the assignee, and as creditors if it was not.” Id.
In their Complaint, the Napolitanos alleged:
Upon their default, the Plaintiffs’ mortgage lender, Bank of America,
N.A., assigned its right to foreclose on its mortgage and otherwise collect
on any debt owed to the Bank’s servicing agent, Green Tree, although
no foreclosure proceeding was instituted in a Maine Court.
Compl. ¶ 7. The Plaintiffs have alleged sufficient facts to place Green Tree within
the definition of “debt collector” under the FDCPA. McCusker v. Ocwen Loan Servs.,
LLC, No. 14-13663-MGM, 2015 U.S. Dist. LEXIS 97593, at *5-6 (D. Mass. July 27,

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2015) (“Mortgage servicing companies qualify as debt collectors under the statute if
the mortgage at issue was in default, but not being foreclosed upon, at the time they
began servicing the loan”).
Green Tree also contends that the higher pleading standards of Rule 9 apply
to the Napolitanos’ FDCPA claim and that the Napolitanos have failed to meet those
higher pleading standards by making conclusory allegations which merely track the
terms of the statute.2 Def.’s Mot. at 10. The Court was unable to locate any authority
for the proposition that the heightened pleading standards of Rule 9(b) apply to
claims under the FDCPA. To the contrary, in assessing motions to dismiss lawsuits
brought under the FDCPA, courts have proceeded under the analysis set forth by the
United States Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007) and Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). See Cunha v. LVNV Funding,
LLC, No. 13-11418-MLW, 2015 U.S. Dist. LEXIS 132911, at *4-5 (D. Mass. Sept. 30,
2015). Finally, as is evidenced by the Court’s description of the allegations in the
Complaint, the Court disagrees with Green Tree that the Napolitanos have merely
recited the language of the statute in their Complaint.
G.

Counts One and Four: Maine Unfair Trade Practices Act and
Breach of Contract

In support of its contentions, Green Tree cited two opinions in the case of Wright v. Specialized
Loan Servicing LLC from the Eastern District of California. Green Tree cites a February 25, 2010
opinion under Wright v. Specialized Load Servicing, LLC, 2010 WL 71255, at *7 (E.D. Cal. Feb. 25,
2010). Using Green Tree’s citation, the Court was unable to locate this case. The Court was able to
locate other opinions in the Wright case, all of which used the Rule 8(a) pleading standard, not a Rule
9(b) standard, in assessing a motion to dismiss a FDCPA claim. Wright, No. 1:13-cv-00899, 2013 U.S.
Dist. LEXIS, at *1-4 (E.D. Cal. Jun. 19, 2013); Wright, No. 14-cv-01587-JLT, 2014 WL 5308633, at *12 (E.D. Cal. Oct. 16, 2014); Wright, 1:15-cv-0287-JLT, 2015 U.S. Dist. LEXIS 24269, at *1-4 (E.D. Cal.
Feb. 27, 2015).
2

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In urging the dismissal of the breach of contract count, Green Tree states that
it had the right to enter the premises and therefore cannot be held responsible for
exercising a contractual right. But as the Court has noted, Green Tree’s right to enter
the Napolitano home was much more circumscribed than Green Tree acknowledges,
and the Napolitanos have set forth sufficient facts to maintain a claim that Green
Tree breached the terms of the contract.
Green Tree also maintains that the Napolitanos failed to allege any damage
and therefore the MUTPA claim should be dismissed. Def.’s Mot. at 11. The MUTPA
requires that the plaintiff sustain a “loss of money or property, real or personal” as a
result of a prohibited act. 5 M.R.S. § 213(1). Green Tree cites Fogg v. Ocwen Loan
Servicing, LLC, No. 2:14-cv-454-GZS, 2015 U.S. Dist. LEXIS 45642, at *11-13 (D. Me.
Apr. 8, 2015) for the proposition that the failure to allege any loss of money or
property is fatal to a MUTPA claim. Def.’s Mot. at 11. But the Fogg Court addressed
a case where the only loss of money or property was attorney’s fees and, not
surprisingly, the Court concluded that the plaintiffs could not bootstrap themselves
into the MUTPA statute by expending attorney’s fees to bring a MUTPA claim. Fogg,
2015 U.S. Dist. LEXIS 45642, at *11-13. Here, the Napolitanos have claimed specific
damage to their real and personal property sufficient to come within the protection
of the MUTPA.
IV.

CONCLUSION
The Court DENIES Defendant Green Tree Servicing, LLC’s Motion to Dismiss

(ECF No. 8).

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SO ORDERED.

/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
UNITED STATES DISTRICT JUDGE
Dated this 4th day of February, 2016

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