Kassner v. Chase Home Finance, LLC et al

Filing 35

Judge Rya W. Zobel: ORDER entered granting 9 Motion to Dismiss; granting 13 Motion to Dismiss; granting 15 Motion to Dismiss. Judgment may be entered dismissing the complaint. (Urso, Lisa)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 11-10643-RWZ
PATRICIA A. KASSNER
v.
CHASE HOME FINANCE, LLC, et al.
ORDER
January 27, 2012
ZOBEL, D.J.
Plaintiff, Patricia Kassner, brings this nine-count complaint against Chase Home
Finance LLC (“CHF”), JP Morgan Chase Bank, N.A. (“JPMC”), and the Federal Deposit
Insurance Corporation (“FDIC”), as receiver for Washington Mutual (“WAMU”), alleging
various violations of state and federal real estate and consumer protection laws in
connection with a $1.9 million residential home loan issued to plaintiff by WAMU in
2007. Docket # 1 Ex. B. The action originated in state court but was removed by the
FDIC pursuant to 12 U.S.C. § 1819(b)(2)(B) of the Financial Institution Reform,
Recovery, and Enforcement Act of 1989 ("FIRRA"), as amended, 12 U.S.C. § 1819 et
seq. Docket # 1. Each defendant has moved to dismiss the complaint. Docket ## 13, 9,
15.
I. The Complaint
These are the facts alleged in the complaint. Plaintiff entered into a loan
agreement with and gave to WAMU a mortgage and promissory note in the principal
sum of $1,900,000 in connection with the purchase of a residential property in

December 2007.
The complaint alleges a number of improprieties in connection with the
execution of the loan in 2007, principally that:
(1) WAMU's (and plaintiff's) attorney failed to bring to plaintiff’s attention the fact
that her loan application was inaccurate because it stated that she earned
$60,000 per month when her annual income was actually $6,000 per month;
(2) WAMU’s Truth in Leading Act (“TILA”) disclosure stated only the initial
interest rate on the loan, 2.25 %, but not the fully indexed rate of 8.512 %;
(3) the TILA disclosure and Notice of Right to Cancel (“NRC”) form contained
handwritten notations made after the loan closing;
(4) plaintiff received only one NRC form instead of the statutorily required two;
and
(5) WAMU failed to clearly and conspicuously disclose which one of four loan
options stated on the “Adjustable Rate Mortgage Disclosure Form” plaintiff was
actually receiving.
On September 25, 2008, WAMU was seized by the U.S. Office of Thrift
Supervision and placed into receivership with the FDIC. Simultaneous with the seizure,
WAMU’s deposits and loan portfolio were purchased by JPMC. Under the Purchase
Assumption Agreement (“PAA”), JPMC purchased from the FDIC whatever assets and
liabilities WAMU owned as of September 25, 2008. Plaintiff states, upon information
and belief, that sometime after the loan agreement was executed and before
September 2008, WAMU sold plaintiff’s loan and assigned her mortgage to a third party
retaining only the loan servicing rights to the mortgage. Accordingly, plaintiff alleges
that JPMC bought only the servicing rights to plaintiff’s loan from the FDIC, because
she says, that is all WAMU owned (and therefore could have transferred) at the time
WAMU went into receivership.
Sometime after September 25, 2008, CHF began collecting loan payments from

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plaintiff on behalf of JPMC and represented to plaintiff that her note and mortgage are
lawfully owned and/or held by JPMC and that CHF will service plaintiff’s loan in
accordance with the original terms of the note and mortgage. Plaintiff alleges that CHF
is a “debt collector” as the term is defined under federal and state law and that other
than conclusory declarations from JPMC neither JPMC or CHF has provided any
evidence that JPMC lawfully owns plaintiff’s loan and that CHF is lawfully entitled to
collect it.
On April 7, 2010, plaintiff‘s counsel sent a Qualified Written Request (“QWR”)
pursuant to the Real Estate Settlement Procedures Act (“RESPA”) (12 U.S.C. §
2605(e)) noting errors in the original loan transaction and requested copies of certain
documents related to plaintiff’s loan as well as the name and address of the holder of
the promissory note. On the same day, plaintiff made a demand for rescission and
validation. CHF responded on May 7, 2010, with documentation of the loan and denied
plaintiff's request to rescind. Plaintiff asserts that CHF’s response was deficient and not
in compliance with applicable law. On May 27, 2010, plaintiff sent to CHF a so-called
“30 day demand letter” pursuant to the Massachusetts Consumer Protection Act (Mass.
Gen. L. c. 93A) which, she alleges, was never answered.
Plaintiff claims under an impressive collection of state and federal statutes, and
in equity, amounting to all but the proverbial “kitchen sink.” The nine counts of the
complaint, each brought in various permutations against the three defendants, allege

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wrongs of three kinds.1 First, defendants (as successors-in-interest) are liable for the
improprieties surrounding the execution of the original 2007 home loan. Second,
defendants failed to properly respond to plaintiff’s inquiries and validate the underlying
debt after WAMU went into receivership. And third, defendants engaged in improper
debt collection techniques while attempting to collect the underlying mortgage debt.
Plaintiff seeks an injunction, rescission of her mortgage loan and cancellation of any
security interest in the property, monetary damages and attorney fees.
As noted, each defendant has moved to dismiss the complaint in its entirety.
Docket ## 13, 9, 15.
II. Standard
To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a complaint must
allege “plausible entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559
1

Count I: requests a declaratory judgment that plaintiff is entitled to the rescission of her loan
under the Truth in Lending Act (“TILA”) (15 U.S.C. §§1635, 1640) including 12 C.R.F. § 226.23
(“Reg. Z”), and the Massachusetts Consumer Credit Cost Disclosure Act (“MCCCDA”) (Mass.
Gen. L. c. 140D);
Count II: requests equitable relief on the ground that the plaintiff has validly rescinded her loan
and is entitled to immediate termination of any security interest in the property;
Count III: alleges violations of Real Estate Settlement Procedures Act (“RESPA”) (12 U.S.C. § 2605(e)) by
CHF for failing to provide required information regarding the legal ownership of plaintiff’s loan upon
request;
Count IV: alleges violations of TILA including Reg. Z and MCCCDA, by JPMC and the FDIC for alleged
improprieties surrounding the execution of the 2007 WAMU home loan;
Count V: alleges violations of the Fair Debt Collection Practices Act (“FDCPA”) (15 U.S.C. § 1601, et.
seq.) and/or the Mass. Gen. L. c. 93, § 49 (Massachusetts’s unfair, deceptive or unreasonable debt
collection act) against CHF for failing to validate the 2007 loan debt, attempting to collect on a debt that
had not been validated, failing to register as a debt collector and to do business in Massachusetts;
Count VI: alleges violations of 209 C.M.R. 18.00 et seq. (Massachusetts’ debt collection regulation
statutes), by CHF for essentially the same conduct alleged in Count V;
Count VII: alleges violations of Mass. Gen. L.. c. 93A (Massachusetts’s Unfair Practices Act) against all
defendants for engaging in “unfair and deceptive acts” comprising the same behavior complained of in
Counts V and VII;
Count VIII: although unclear, Count VIII apparently seeks a declaratory judgment that the plaintiff has
standing to bring this suit because a judiciable controversy exists; and
Count IX: seeks a preliminary injunction enjoining defendants from collecting on the loan in question, and
from reporting any nonpayment to any credit reporting bureau during the pendency of this suit.

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(2007). It does not need “detailed factual allegations,” but “a plaintiff’s obligation to
provide the grounds of [her] entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Id. at 555 (internal citations omitted). Pleadings must make “a ‘showing,’ rather than a
blanket assertion, of entitlement to relief.” Id. (internal citations omitted). “[W]here the
well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is
entitled to relief.’” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950 (2009)
(internal citations omitted). Dismissal is appropriate if the complaint does not “possess
enough heft to show that plaintiff is entitled to relief.” Ruiz Rivera v. Pfizer Pharms.,
LLC, 521 F.3d 76, 84 (1st Cir. 2008) (internal citations and alterations omitted).
III. Analysis
A. Rescission Claims (Count I and Count II )
The federal Truth in Lending Act (“TILA”), implemented by the Federal Reserve
Board of Governors through “Regulation Z” (12 C.F.R. § 226.23) (“Reg. Z”), allows
consumers to rescind a credit transaction when a security interest is or will be acquired
in a consumer's principal dwelling. The right to rescind must be exercised by midnight
of the third business day following:
“consummation, delivery of the notice required by paragraph (b) of this section,
or delivery of all material disclosures, whichever occurs last. If the required
notice or material disclosures are not delivered, the right to rescind shall expire
3 years after consummation upon transfer of all of the consumer’s interest in the
property, or upon sale of the property, whichever occurs first.” 12 C.F.R. §
226.23 (3)
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The MCCCDA is the Massachusetts equivalent to TILA. For present purposes the
MCCCDA mirrors TILA in nearly all material respects, except that, MCCCDA extends
the right to rescind for an additional year in the case of failed or faulty disclosures;
Mass. Gen. L. c. 140D, § 10(f)). However, it is construed by Massachusetts courts in
parallel with TILA. McKenna v. First Horizon Home Loan Corp., 475 F.3d 418, 422 (1st
Cir. 2007).2
Having carefully examined her loan documents, plaintiff argues that because all
required “notice(s)” and “material disclosures” were not provided to her, she is entitled
to an extension of the three-day rescission period up to a maximum of three or four
years under TILA or the MCCCDA. She executed the mortgage in December 2007 and
presented her notice of rescission to CHF on April 7, 2010. She bases her request to
rescind on the defects and errors she identified to CHF in letter(s) dated April 7, 2010
and May 27, 2010. The letters and complaint allege the defects previously listed as
items 1 through 5 in Section I above which I address ad seriatim.
(1) Plaintiff’s attorney failed to bring to her attention the fact that her loan
application overstated her monthly income
First, plaintiff alleges that the “attorney who closed the loan, and who upon
information and belief, represented both Plaintiff and WAMU, never called this
Although JPMC argues that TILA preempts MCCCDA (Docket # 14 at 12), preemption is not
applicable here. The Federal Reserve board has ruled that “Credit transactions subject to the
Massachusetts Truth in Lending Act are exempt from chapters 2 and 4 of the Federal act. [However,]
[t]he exemption does not apply to transactions in which a federally chartered institution is a creditor.)” 48
Fed.Reg. 14882, 14890 (April 6, 1983). Here, JPMC is not exempt because it does not fit the definition of
a “creditor.” “The term ‘creditor’ refers only to a person who both (1) regularly extends ... consumer credit
... and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable
on the face of the evidence of indebtedness....” 15 U.S.C. § 1602(f). WAMU is the “person” to whom the
debt is payable on the face of the mortgage documents therefore MCCCDA is not preempted and will
apply coextensively with TILA, including its broader four-year statute of limitations. In Re Myers, 175
B.R. 122, 126 (Bkrtcy. D. Mass. 1994) (reversed on other grounds).
3

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discrepancy to Plaintiff’s attention during the closing process.”
TILA defines as “material” those disclosures involving the annual percentage
rate, the finance charge, the amount to be financed, the total number of payments, and
the payment schedule. See 15 U.S.C. § 1602(u); 12 C.F.R. § 226.23; Fogle v.
Wilmington Finance, No. 08-cv-388-JD, 2011 WL 320572, at *4 (D. N. H. Jan. 31,
2011). Failure of plaintiff’s counsel to advise her of a misstatement contained on the
loan application, regarding her own reported income, is not a failure of the bank to
provide plaintiff with a “material disclosure” under TILA. See Beach v. Ocwen Fed.
Bank, 523 U.S. 410, 412 (1998) (The Act only requires that creditors make “clear and
accurate disclosures of terms dealing with things like finance charges, annual
percentage rates of interest, and the borrower's rights.”).
(2) Plaintiff received only one copy of the NRC form at the closing
As this court has held, receiving one copy of the NRC form instead of two does
not extend a consumer’s right of rescission for failure to provide adequate notice. King
v. Long Beach Mortg. Co., 672 F. Supp. 2d 238, 250–51 (D. Mass. 2009)(“By
deliberately choosing to use the singular form “notice” instead of the plural form
‘notices’ or ‘two copies of the notice,’ the Federal Reserve Board intended that delivery
of a single copy of the Notice would not trigger an extension of the rescission right.”);
McKenna v. Wells Fargo Bank, N.A., No. 10–10417–JLT, 2011 WL 1100160 (D. Mass.
March 21, 2011) (“as long as a borrower receives one such notice, the rescission
period is not extended”).
(3) Handwritten markings were placed on the loan documents after the
closing and without plaintiff’s knowledge
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Plaintiff points to two handwritten marks, one on the TILA form provided to her at
or before the loan closing which states “Also secured by: 64 Perishing Lane, Brewster,
MA” and another on the NRC form in the “Your Right to Cancel” section which states
“300 Foster Rd. Brewster MA,” and is located underneath a line, which was left blank,
labeled “identification of transaction.” Docket # 1 Ex. B, Sub - ex. I.
The statement on the TILA form that the mortgage is secured by an interest in
“64 Perishing Lane” is correct, as 64 Perishing Lane is the property described and
secured by the 2007 mortgage. The application for the 2007 mortgage, the 2007
mortgage, and the adjustable rate note all refer to 64 Perishing Lane as the subject
property. Docket # 1 Ex. B, Sub - exs. A-C. That such notation may have been added
“after the closing, without the plaintiff’s knowledge” is irrelevant as the plaintiff alleges
no harm therefrom. Rescission rights under these statutes “do not provide a basis for
undoing bargains where no harm whatever occurred or could have occurred.” In re
Fuller, 642 F.3d 240, 243 (1st Cir. 2011) (also stating “it is hard to imagine any court
thinking that every small slip-say, a date printed upside down or a name with a letter
missing – could automatically allow rescission …”).
Plaintiff’s related argument that the NRC form may be invalid because
handwriting on it listed plaintiff’s then current address, 300 Foster Road, Brewster, MA,
and therefore described the wrong property secured by the loan similarly lacks merit.
First, plaintiff has again failed to allege any harm. Second, the NRC form was
admittedly provided to plaintiff at or before the closing for the 2007 mortgage. On its
face, the NRC clearly apprised plaintiff of her right to cancel together with the time and
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manner for exercising the right. It is therefore sufficient notice as a matter of law. See
Melfi v. WMC Mortgage Corp., 568 F 3d 309, 312 (1st Cir. 2009) (under TILA “technical
deficiencies do not matter if the borrower receives a notice that effectively gives [her]
notice as to the final date for rescission and has the three full days to act.”); see also
Palmer v. Champion Mortg., 465 F.3d 24, 29 (1st Cir. 2006).
(4) TILA form did not “clearly and conspicuously” disclose that the initial
interest rate of 2.25% would be fully indexed at 8.512%
Plaintiff points to no requirement that lenders disclose to borrowers a “fully
indexed rate;” what TILA does require is that lenders disclose an accurate Annual
Percentage Rate (“APR”). 15 U.S.C. § 1602(u); 12 C.F.R. § 226.23. That requirement
was met. The TILA form, attached to the complaint, and signed by plaintiff on
December 17, 2007, states that the APR on the mortgage will be “8.57062%.” Docket #
1 Ex. B, Sub-ex. I. Because 8.512%, the rate alleged in the complaint, differs a mere
.04038 % from the APR disclosed on the TILA form, the interest rate disclosed is within
the statutory range for acceptable variance under Reg. Z and Massachusetts state law,
and plaintiff therefore fails to allege a material disclosure claim under the relevant
statutes. 12 C.F.R. 226.22(a)(2)(“the annual percentage rate shall be considered
accurate if it is not more than 1/8 of 1 percentage point [or .125%] above or below the
annual percentage rate determined in accordance with paragraph(a)(1) of this
section.”); 209 CMR 32.22 (providing same under Massachusetts state law).
(5) The Adjustable Rate Mortgage Loan Disclosure Statement (“ARM
statement”) failed to state which one of four possible stated adjustable
rate “options” plaintiff was to receive

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The TILA ARM statement provided plaintiff with initial disclosures applicable to
“all loan programs” and also “describes the features of the 1, 3, 36 [ ] and 60[ ] month
MTA Option ARM.” Docket # 1 Ex. B, Sub-ex. I. Plaintiff’s loan was for an adjustable
rate mortgage that included an interest rate “change date” on February 1, 2008, and
“on that day every month thereafter.” Docket # 1 Ex. B, Sub-ex. I. The ARM statement
shows plaintiff’s particular loan formulation, and plaintiff does not contest the accuracy
of the disclosures provided. She does complain that the ARM statement, on its face,
fails to advise her which loan option she was to receive. However, the precise number
of months of an initial ARM is not an enumerated “material disclosure” required by
TILA. See Section III(A)(1) above.
Although the definition of “material disclosures” under Reg. Z incorporates 12
C.F.R. § 226.32(c)(4) 3, it only requires that borrowers be apprised: (1) of the amount of
the maximum single monthly payments for which they could be held responsible for
(based on the maximum interest rate, which also must be disclosed);4 and (2) that the
interest rate and monthly payments may increase during the life of the loan. Therefore
plaintiff’s claim that the precise loan option was not singled out on that ARM statement
fails to establish a TILA violation.

3

12 C.F.R. § 226.32(c)(4) (“For variable-rate transactions, a statement that the interest rate and
monthly payment may increase, and the amount of the single maximum monthly payment, based on the
maximum interest rate required to be disclosed under § 226.30”)
.

12 C.F.R. § 226.30 (“A creditor shall include in any consumer credit contract secured by a
dwelling and subject to the act and this regulation the maximum interest rate that may be imposed during
the term of the obligation when: (a) In the case of closed-end credit, the annual percentage rate may
increase after consummation, or (b) In the case of open-end credit, the annual percentage rate may
increase during the plan.”).
4

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For all the foregoing reasons, plaintiff fails to establish any deficiency in the
disclosures provided with the 2007 mortgage, and the motion to dismiss Count I is
allowed. Similarly, because plaintiff fails to allege facts sufficient to establish
entitlement to rescission, the motion to dismiss Count II is allowed.
B. RESPA Claim (Count III)
Count III asserts a claim against CHF under RESPA for failure to adequately
respond to plaintiff’s inquiries and provide relevant information regarding plaintiff’s
loan.
Under RESPA a QWR is a written correspondence (not written on a payment
coupon or other payment medium supplied by the servicer) that (I) identifies the name
and account of the borrower, and (ii) includes a statement of the reasons that the
account is in error or provides sufficient detail regarding the information sought. 12
U.S.C. § 2605 (e)(1)(B).
When faced with a QWR, the servicer must acknowledge receipt of the
correspondence in writing within 20 days (12 U.S.C. § 2605 (e)(1)(A)) and, if
applicable, not later than 60 days (1) make appropriate corrections to the borrower’s
account; (2) provide the borrower with a written explanation or clarification of the
reasons the servicer believes the account is correct; (3) provide the borrower with the
information requested or an explanation of why such information is unavailable; and (4)
provide the contact information of an individual employed by the servicer who can
provide further assistance to the borrower. 12 U.S.C. § 2605(e)(2).

11

Plaintiff’s alleged QWR is a four-page single spaced letter with 37 separate
requests for, inter alia, all copies of all documents pertaining to the origination of the
mortgage, all loan modification agreements, itemized statements of the loan history, a
statement of all charges and advances against the loan, an itemized statement of the
escrow account, all property inspection reports, an itemized statement of late charges,
a statement of the current amount needed to pay off the loan, the procedural manual
used with respect to servicing the loan and many other documents. Docket # 1 Ex. B,
Sub-ex. F. The bank’s response attached a copy of the executed note, ARM Mortgage
Loan Disclosure Statement, Notice of the Right to Cancel statement, Truth in Lending
Disclosure Statement and HUD 1–Settlement Statement. Docket # 1 Ex. B, Sub-ex. F.
Plaintiff’s allege that CHF’s response was deficient and not in compliance with
applicable law.
CHF argues that plaintiff’s letter is not a QWR because the requests made by
plaintiff were not “servicer related,” and that correspondence about a loan’s validity
does not constitute a QWR, citing Kee v. Fifth Third Bank, No. 2:06-CV-00602-CW,
2009 WL 735048, at *6 (D. Utah March 18, 2009) (“Challenging the validity of a loan is
different from challenging how the loan has been serviced. Consequently,
correspondence about the validity of a loan does not constitute a qualified written
request”).
Although most of the 37 requests are ostensibly not “servicer related,” plaintiff’s
request for a copy of the loan’s payment history clearly does relate to the servicing of
the loan. CHF did not include that history in its May 7, 2010, response to the QWR. It
12

also failed to provide the contact information of an individual employed by the servicer
who can provide further assistance to plaintiff as required by RESPA. This is sufficient
to allege a technical RESPA violation.
However, even though CHF’s response may have violated RESPA, in order for
plaintiff to recover she must also plead either actual damages (demonstrable damages
that occur “as a result of” the specific violation complained of) or statutory damages
(requiring the showing of a “pattern or practice of noncompliance” by the servicer). 12
U.S.C. §§ 2605(f)(1)(A) – (B); Mantz v. Wells Fargo Bank, N.A., No. 09-12010-JLT,
2011 WL 196915, at *5 (D. Mass. 2011)(dismissing RESPA claim for failure to plead
actual damages); In re Holland, No. 04–18099–JNF, 2008 WL 4809493, *9 (Bkrtcy. D.
Mass. 2008) (granting summary judgment against debtor, in part, for failure to establish
actual or statutory damages arising from lack of a response to QWR).
Because plaintiff does not allege a pattern or practice of noncompliance,
statutory damages are inapplicable. As for actual damages, plaintiff alleges: (1) that
she “has no actual knowledge of who owns her loans and thus may have been making
payments to the wrong party since at least October 2008;” and (2) that she has
“incurred monetary damages in having to hire counsel to bring suit to determine the
proper ownership of her loan” as a result of CHF’s failure to adequately respond to
plaintiff’s QWR. Neither is sufficient.
Plaintiff’s first allegation of damages is not only speculative but she pleads the
exact opposite in the complaint; where she identifies the servicers of the loan together

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with the documentation granting such servicing rights. The facts alleged in the
complaint belie any assertion that plaintiff could have been paying the wrong party.
Plaintiff’s second claim of damages is similarly deficient because attorney’s fees
for bringing a RESPA suit are not actual damages under the statute. Long v. Deutsche
Bank Nat. Trust Co., No. 10–00359 JMS/KSC, 2011 WL 5079586, at *4 (D. Haw.
October 24, 2011); Kevelighan v. Trott & Trott, P.C., No. 09–12543, 2011 WL 2076336,
at *4 (E. D. Mich. 2011 May 26, 2011); Lal v. Am. Home Servicing, Inc., 680 F. Supp.
2d 1218, 1223 (E. D. Cal. 2010); Luciw v. Bank of Am., N.A., No. 5:10-cv-02779JF/HRL, 2010 WL 3958715, at *5 (N. D. Cal. Oct. 7, 2010); Allen v. United Fin. Mortg.
Corp., 660 F. Supp. 2d 1089, 1097 (N. D. Cal.2009); Cootey v. Countrywide Home
Loans, Inc., No. 11–00152 JMS/KSC, 2011 WL 4853333, at *6.
The motion to dismiss Count III is allowed.
C. Borrower Claims (Count IV)
Count IV against JPMC and the FDIC seeks damages under TILA and Reg. Z for
the same alleged improprieties surrounding plaintiff’s original loan execution in 2007
discussed in Sections I and III(a) above. 5 It is true that “rescission is not the only
remedy for violations of the duties imposed by TILA. Congress envisaged other
remedies or ‘[a]dditional relief ... for violations of [TILA] not related to the right to
rescind.’ 15 U.S.C. § 1635(g).” King, 672 F. Supp. 2d at 251.

Plaintiff also brings this count under the MCCCDA, but note that TILA and the MCCCDA are to
be viewed “co-extensively and in parallel” as discussed in Section III(A) above.
5

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However, such claims are properly considered “borrower claims” as defined by
the PAA because they arise out of the original mortgage transaction and therefore are
“related [ ] to any loan or commitment to lend made by the failed bank [here, WAMU]
prior to failure.” (PAA §2.5.) Under the PAA, the FDIC, as receiver of WAMU, explicitly
and solely retained liability for such claims; thus, JPMC did not assume them when it
purchased the WAMU assets in 2008. Therefore, the FDIC is the only proper
defendant as to the pre-receivership borrower claims and Count IV fails to state a claim
against JPMC. Yeomalakis v. FDIC, 562 F.3d 56, 60 (1st Cir. 2009) (“When
Washington Mutual failed, Chase Bank acquired many assets but its agreement with
the FDIC retains for the FDIC [pre-receivership borrower claims for monetary relief]
thus the FDIC was and remains the appropriate party in interest.”)
As to the FDIC, FIRREA establishes a set of mandatory administrative claim
procedures for filing and resolving all claims against a failed depository institution in
receivership. See generally 12 U.S.C. §1821(d)(3) - (13). To be considered, claims
must be brought before the bar date established for creditors under 12 U.S.C.
§1821(d)(3)(B)(I). The bar date operates as a mandatory barrier to all claims brought
after that date. 12 U.S.C. §1821(d)(5)(C)(I). Only if the claimant establishes that he or
she did not “receive notice of the appointment of the receiver in time to file such claim”
and the “claim is filed in time to permit payment” does FIRREA permit the receivership
to consider such late claims; however it is not obligated to do so. 12 U.S.C.
§1821(d)(5)(C)(ii); Palumbo v. Roberti, 839 F. Supp. 80, 84 (D. Mass. 1993) (the
language of section 1821(d)(5)(C)(ii) is discretionary”). Limited judicial review is
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provided under FIRREA for disallowed or ignored claims pursuant to 12 U.S.C.
§1821(d)(5)(A)(I), however, no judicial review is available for borrower claims either
disallowed solely by operation of the bar-date or not raised at all through the mandatory
administrative review process set up under FIRREA. 12 U.S.C. §§1821(d)(5)(C)(I),
(d)(13)(D)(i)-(ii)); Heno v. F.D.I.C., 20 F.3d 1204, 1207 (1st Cir. 2004) (“Failure to
participate in the administrative claims review process [ ] is a “jurisdictional bar” to
judicial review.”)
Here, although plaintiff made a last ditch effort to have her claims considered
two and a half years after the bar date set by the FDIC, its disallowance of plaintiff’s
application (Docket # 31 at 1-2) was correct both as a matter of law and discretion.
Moreover, the statute, 12 U.S.C. § 1821(d)(6)(A)(ii), specifies that any judicial
review must be initiated in the district within which the depository institution’s principal
place of business is located or in the District Court for the District of Columbia. The
complaint does not set forth these requisites. This failure is fatal. Lloyd v. FDIC, 22 F.
3d 335, 337-338 (1st Cir. 1994).
Count IV is dismissed as to JPMC because it is not a proper party and it is
dismissed as against the FDIC, for lack of subject matter jurisdiction for failure to timely
exhaust administrative remedies and for failure to file in the correct jurisdiction.6
D. FDCPA Claim (Count V)

6

Plaintiff’s cross-motion to stay this action for 180 days so that plaintiff could exhaust her
administrative remedies under FIRREA is denied as moot.

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Count V claims against CHF for violations of the federal Fair Debt Collection
Practices Act (FDCPA) (15 U.S.C. § 1692 et seq.), under 15 U.S.C. § 1692k which
allows recovery of actual and statutory damages. Plaintiff alleges that defendant (1)
failed to provide proper and complete responses to her QWR letter; (2) collected on the
loan debt when it has not been “shown to be owed;” (3) failed to respond to her “30 day
demand letter;” (4) failed to register as a debt collector; and (5) failed to register to do
business in Massachusetts with the Secretary of State.
Both provisions of the FDCPA that plaintiff invokes (15 U.S.C. §§ 1692 (e)-(f))
only apply to “debt collectors.” 15 U.S.C. § 1692(a)(6)(f)(iii) of the FDCPA provides that
the term “debt collector” excludes any person collecting or attempting to collect any
debt owed or due or asserted to be owed or due to another to the extent such activity…
“concerns a debt which was not in default at the time it was obtained ...”
Plaintiff fails to allege that the subject loan was in default at any time, including
the time when JPMC or CHF obtained or would have obtained the loan and/or servicing
rights therein. She has therefore failed to plead a claim under the FDCPA. See
Costigan v. CitiMortgage, Inc, No. 10 Civ. 8776 (SAS), 2011 WL 3370397, at *9 (S. D.
N. Y. Aug. 2, 2011); Siwulec v. Chase Home Finance, LLC, No. 10-1875 (FLW), 2010
WL 5071353 at *3 - 5 (D. N. J. Dec. 7, 2010); see also Pomykala v. PCFS Mortg.
Resources Div. of Provident Bank, No. Civ.A. 04-11956-RWZ, 2005 WL 2149411, at *2
(D. Mass. Sept. 1, 2005).
Plaintiff brings related “debt collection” claims under Mass. Gen. L. c. 93, § 49
(the Massachusetts state counterpart to the FDCPA) and 209 CMR 18.00 (the
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Massachusetts statute regulating the “Conduct of the Business of Debt Collectors and
Loan Services”), which do not provide private rights of action. To the extent plaintiff
pleads them only as a basis for derivative liability under Mass. Gen. L. c. 93A7, I
address them below.
E. Mass. Gen. L. c. 93A Deceptive Practices Claim (Count VII)
Mass. Gen. L. c. 93A, § 2 declares unlawful “unfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade or commerce.” Mass.
Gen. L. c. 93A, § 9 enables a person who has been “injured by another person’s use or
employment of any method, act or practice declared to be unlawful by [Mass. Gen. L. c.
93A, § 2]” to bring a civil action for money damages. The statute “requires a showing
of conduct that (1) falls within the penumbra of some common-law, statutory, or other
established concept of unfairness; (2) is immoral, unethical, oppressive, or
unscrupulous,” and causes “substantial injury to consumers or other businesspersons.”
Jasty v. Wright Med. Tech., Inc., 528 F.3d 28, 37 (1st Cir.2008) (internal brackets
omitted); Hershenow v. Enterprise Rent-A-Car Company Of Boston, Inc., 445 Mass.
790 (2006).
Plaintiff asserts that a violation of any of the statutes complained of herein
constitute per se violations of Mass. Gen. L. c. 93A, § 2. However, even if “an act that
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See Mass. Gen. L. c. 93, § 49 provides “Failure to comply with the provisions of this section
shall constitute an unfair or deceptive act or practice under the provisions of chapter ninety-three A.”;
Ishaq v. Wachovia Mortg., FSB, No. 09-11422-RGS, 2010 WL 1380386, at * 6 (D. Mass. Apr. 2, 2010)
(“without an enabling statute to support it, a private cause of action cannot be inferred from an agency
regulation.... [209 CMR 18.00 et. seq.] was promulgated by the Commissioner of Banks pursuant to the
authority granted her by Mass. Gen. Laws ch. 93, § 24A. The statute contains no hint that a private cause
of action was created or intended.”)(internal citations and quotations omitted).

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violates a consumer statute is per se deceptive under G.L. c. 93A, § 2 ... that does not
make it per se an injury under G.L. c. 93A, § 9.” Hershenow, 445 Mass. at 799, n. 17.
A plaintiff seeking a remedy under Mass. Gen. L. c. 93A, § 9, must still demonstrate
that even a per se deception caused an actual loss. Gather v. Credit Control Services,
623 F. Supp. 2d 113 (D. Mass. 2009). Injury under chapter 93A, § 9 means economic
injury in the traditional sense. Rule v. Fort Dodge Animal Health, Inc., 607 F. 3d 250,
*255 (1st Cir. 2010) (plaintiff suffering no economic loss cannot maintain an action
under Mass. Gen. L. c. 93A).
IV. Conclusion
Defendants’ motions to dismiss (Docket ## 13, 9, 15) are ALLOWED, and
plaintiff’s first amended complaint (Docket # 1 Ex. B) is DISMISSED. Count IX seeking
an injunction against defendants during the pendency of this action and Count VIII
seeking a declaratory judgment on standing are DISMISSED AS MOOT.
Judgment may be entered dismissing the complaint.

January 27, 2012
DATE

/s/Rya W. Zobel
RYA W. ZOBEL
UNITED STATES DISTRICT JUDGE

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