Surprenant v. PNC Mortgage

Filing 78

Ch. Magistrate Judge Leo T. Sorokin: ORDER entered re 76 MOTION to Strike. The Motion is DENIED. REPORT AND RECOMMENDATIONS re 45 MOTION for Summary Judgment. Recommendation: The motion for summary judgment should be ALLOWED in part and DENIED in part. See attached Order and Report and Recommendation. (Objections to R&R due by 12/4/2013) (Robinson, Amy)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

DOUGLAS SURPRENANT,
Plaintiff,
v.
PNC MORTGAGE,
Defendant.

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Civil No. 12-10019-PBS

REPORT AND RECOMMENDATION ON
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
November 20, 2013
SOROKIN, C.M.J.
This case arises from a familiar scenario: a homeowner’s efforts to obtain a loan
modification after defaulting on his mortgage payments. Although he ultimately was granted a
modification and remains in his home today, plaintiff Douglas Surprenant challenges the
defendant’s handling of his various applications for loan modifications over the course of several
years. Pending is a motion filed by the defendant, PNC Mortgage (“PNC”), seeking entry of
summary judgment with respect to each of the four claims asserted in Surprenant’s complaint.
Doc. No. 45. Surprenant has opposed the motion, Doc. No. 65, which has been referred to the
undersigned for a report and recommendation, Doc. No. 9. For the reasons that follow, I
recommend the motion be ALLOWED in part and DENIED in part.
I.

BACKGROUND
A.

Motion to Strike

When he originally opposed PNC’s motion, Surprenant, an attorney proceeding here pro

se, failed to comply with relevant Local Rules governing summary judgment proceedings. See
Doc. No. 62. At PNC’s request, the Court struck Surprenant’s original responsive submissions
and directed him to amend his papers in accordance with the Local Rules. Id. As instructed,
Surprenant revised his brief, his exhibits, and his response to PNC’s statement of undisputed
facts. See Doc. Nos. 65, 66, 73. PNC, however, suggests Surprenant’s amended submissions
violate both the Local Rules and the Court’s prior order, and once again has moved to strike
portions of Surprenant’s response to PNC’s Local Rule 56.1 statement. Doc. No. 76.
This time, PNC’s motion (Doc. No. 76) is DENIED. Surprenant’s revised submission
provides paragraph-by-paragraph responses to each of PNC’s factual statements, consistent with
the Court’s instructions. See Doc. No. 66. In some instances, Surprenant offers explanatory
facts along with a statement that a particular fact is either admitted or disputed, but he does so
reasonably and with citations to record evidence. E.g., id. at ¶ 26. And, as permitted by the
Court’s prior order (as well as by the Local Rules), Surprenant has supplemented his response
with a list of additional disputed facts which he suggests are material to his claims and warrant a
trial.1 Accordingly, his revised submission is compliant with both the Local Rules and the
Court’s directives and, as such, there is no basis for striking it.2

1

PNC argues Surprenant improperly has offered his own list of undisputed facts,
presumably overlooking the heading that precedes Surprenant’s additional factual statements:
“Plaintiff’s Other Disputed Material Facts.” Doc. No. 66 at 16 (emphasis added).
2

This is not to say that the Court will embrace any or all of Surprenant’s explanatory facts
or his statement of disputed facts without considering them against the record evidence and
independently determining whether they are supported therein.
2

B.

Material Facts3

Surprenant purchased his home at 63 Cedarhill Road in Holbrook, Massachusetts on July
3, 2007 for $394,000. Doc. No. 66 at ¶¶ 1-2, 58. In connection with the purchase, he obtained a
loan for $315,200 secured by a mortgage on the home. Id. The terms of the mortgage provided
for a fixed 7.5% interest rate over a term of thirty years, with monthly payments of $2,203.92.
Id. at ¶¶ 5-6. Both the note and the mortgage eventually were assigned to PNC. Id. at ¶ 4; Doc.
No. 48-29.
Around March 2008, Surprenant fell behind on his mortgage payments.4 Doc. No. 66 at
¶ 11. He filed for bankruptcy on May 5, 2009 and subsequently requested information from
PNC regarding options for modifying his loan. Id. at ¶¶ 12-13. From May 2009 through
October 2009, Surprenant made regular payments toward his mortgage and his arrears through
his Chapter 13 bankruptcy plan. Id. at ¶ 62. In September 2009, PNC sent Surprenant
information about how to apply for the Making Home Affordable Modification Program
(“HAMP”).5 Id. at ¶ 13; see Doc. No. 48-5. One of the letters from PNC outlining the
information needed to process a HAMP application explained that any Trial Period Plan (“TPP”)
or permanent modification under HAMP would require bankruptcy court approval before

3

The following facts include: those which are not in dispute; those which are contained in
documentary evidence, such as letters from PNC to Surprenant and PNC’s internal logs related
to Surprenant’s loan; and those which are disputed, considered in the light most favorable to
Surprenant.
4

This apparently occurred after Surprenant split with his girlfriend, she moved out of the
home, and she ceased contributing to the monthly payments. See Doc. No. 48-3 at 3.
5

For background information on HAMP, see Young v. Wells Fargo Bank, N.A., 717 F.3d
224, 228-29 (1st Cir. 2013).
3

becoming effective. See Doc. No. 73-6 at 2.6
In November 2009, a PNC representative informed Surprenant during a telephone call
that he did “not qualify for HAMP at [that] time due to [pending] bankruptcy.” Doc. No. 73-5 at
3. In response, Surprenant ceased making mortgage payments and did not oppose PNC’s request
for relief from the bankruptcy court’s automatic stay. Id. at ¶ 67. He also wrote to PNC
requesting reconsideration, Doc. No. 73-8, but on February 15, 2010, PNC responded with a
letter stating: “We are unable to offer you a Home Affordable Modification because [your
mortgage] is [in] Active Bankruptcy,” Doc. No. 48-6. Along with that letter, PNC sent
information on other modification options and a “Workout Package.” Id.
A few days later, the bankruptcy court granted PNC relief from the automatic stay,
removing Surprenant’s mortgage from the active bankruptcy proceedings. Doc. No. 66 at ¶¶ 15,
75-76. At the same time, PNC acknowledged receipt of “a partial workout package” from
Surprenant and wrote to him requesting additional documents. Id. at ¶ 16. Later in February
2010, Surprenant spoke with a PNC representative named “Tabatha” about his pending request
that his loan be modified. Id. at ¶ 53. Although she did not promise him a modification, she
asked him whether he would consider a new thirty-year term at an interest rate between 4.5 and
4.875%, with monthly payments between $1,621 and $1,693 if, in fact, he qualified and was
approved for such a modification. See id. at ¶¶ 54-57, 78. Surprenant told her he would accept
such terms. See id. at ¶ 78.
In March 2010, Surprenant sent PNC a payment of $2,723.91 “to show good faith.” Id.

6

Page cites are to the numbers included in the ECF stamp at the top of documents
appearing on the docket.
4

at ¶ 80. Upon receiving the payment, a PNC representative instructed Surprenant not to make
further payments “unless [he] ha[d] a payment arrangement.” Id. at ¶ 81. Later that month, PNC
wrote to Surprenant requesting updated financial information in connection with his
modification application. Id. at ¶ 17. One of the financial documents Surprenant submitted was
a “profit and loss” statement (“P&L”) he created reflecting his law practice’s total income and
expenses for the first quarter of 2010. Doc. No. 75-25. In early April 2010, Surprenant
explained to a PNC representative during a telephone call that he paid himself a salary out of his
law practice twice each month, and that those payments were reflected on the P&L next to the
entry for expenses designated as “Salary.” Doc. No. 73-17 at 25; see Doc. No. 75-25 (showing
$16,200 paid in salary between January 1 and March 30, 2010, or $5,400 each month).
Surprenant also informed the representative that he accounted for his income taxes on the P&L
next to the entry for “Payroll Taxes.” Doc. No. 73-17 at 25; see Doc. No. 75-25 (noting $2,700
paid in taxes for the first quarter of 2010). The bottom of the P&L reflected “Net Income” for
Surprenant’s law practice of $2,879.72 for the first quarter of 2010.7 Doc. No. 75-25.
A title search conducted in April 2010 at PNC’s request revealed tax liens on
Surprenant’s home. Doc. No. 66 at ¶ 85; Doc. No. 73-22 at 4; see Doc. No. 73-17 at 23
(showing title ordered on April 8, 2010 and report returned by April 21, 2010); see also id. at 25
(reflecting Surprenant informed a PNC representative on March 26, 2010 that he owed back
taxes). There is no indication in the record that PNC informed Surprenant in April 2010 that

7

Considering Surprenant’s explanation of his salary, it appears as though a
straightforward calculation of his total monthly income from his law practice would require
adding the amount listed next to “Salary” on the P&L to the “Net Income” reflected at the
bottom, then dividing that total by the number of months encompassed by the P&L.
5

such liens would present obstacles to his modification application. Later that month, Tabatha
contacted Surprenant to ask whether the modification terms they previously had discussed were
still acceptable; he agreed that they were. Doc. No. 66 at ¶¶ 55, 86-88. He understood this
conversation to mean that final review and approval of a modification under those terms was
imminent. See id. at ¶ 89. Soon thereafter, when Surprenant’s file and the proposed
modification terms were submitted to a Freddie Mac representative for approval,8 that
representative advised PNC (and then PNC advised Surprenant) that Surprenant should apply for
relief pursuant to HAMP.9 Doc. No. 66 at ¶ 95; Doc. No. 73-17 at 23.
Surprenant promptly submitted a HAMP application. See Doc. No. 66 at ¶ 112; Doc. No.
73-17 at 23; Doc. No. 73-24. On May 26, 2010, PNC wrote to request additional documents,
including Surprenant’s tax returns. Doc. No. 66 at ¶ 18. About a month later, PNC sent
Surprenant a letter explaining he did not qualify for HAMP based on “excessive forbearance,”
i.e., inability “to create an affordable payment equal to 31% of [his] monthly gross income
without changing the terms of [his] loan beyond the requirements of the program.” Doc. No. 4810; see Doc. No. 66 at ¶ 19. This determination apparently was based, at least in part, on PNC’s
calculation of Surprenant’s monthly income using the “net income” reflected on the P&L, and
without including the bimonthly “salary” Surprenant previously explained he paid himself. See
73-17 at 22. The HAMP denial letter informed Surprenant that “other options” might be
possible and instructed him to submit further information. Doc. No. 48-10.

8

Freddie Mac was the investor associated with Surprenant’s loan.

9

This apparently was recommended because, by that time, Surprenant’s mortgage no
longer was part of his bankruptcy proceedings. See Doc. No. 73-17 at 23.
6

Once again, Surprenant provided the requested documentation. See Doc. No. 73-17 at 22
(listing information received on July 3, 2010); Doc. No. 73-18 (suggesting Surprenant faxed
copies and/or additional information to PNC on July 7, 2010). PNC wrote requesting additional
information on September 16, 2010, Doc. No. 66 at ¶ 21, which Surprenant submitted, Doc. No.
73-17 at 21. On October 15, 2010, PNC sent Surprenant a letter stating he did not qualify for a
loan modification due to “a deficit of income,” Doc. No. 48-13; see Doc. No. 66 at ¶ 22, based
on calculations which again omitted Surprenant’s bimonthly salary, Doc. No. 73-17 at 20 (using
the “net profit” of Surprenant’s law practice to arrive at a monthly income of $1,339.93).
Surprenant reapplied for a modification, Doc. No. 73-17 at 20, this time faxing an
expanded P&L which incorporated an explicit description of his bimonthly salary payments to
himself, along with a list of dates, amounts, and check numbers for each such payment through
the first three quarters of 2010, Doc. No. 73-28. After Surprenant provided additional
information requested by PNC, the bank again concluded that he did not qualify for a
modification due to insufficient income. See Doc. No. 66 at ¶¶ 23-24; Doc. No. 73-17 at 19.
The bank notified Surprenant of its determination via telephone call and letter dated November
22, 2010. Doc. No. 66 at ¶ 24; Doc. No. 73-17 at 18. For a third time, PNC’s calculation of
Surprenant’s monthly income did not account for his bimonthly salary, despite the addendum to
his P&L detailing those payments. See Doc. No. 73-17 at 18-19 (calculating monthly income
from his law office as $2,265.97).
Once more, Surprenant promptly reapplied for a modification. Doc. No. 73-17 at 18.
This time, Surprenant followed his application with a November 29, 2010 telephone call, during
which he reminded PNC of his twice-monthly salary. Id. at 17. Surprenant provided additional

7

financial information in December 2010, and explained (for at least the fourth time) in January
2011 the manner in which he paid himself a salary from his law practice. Id. In February 2011,
PNC requested updated financial information, which Surprenant supplied. Doc. No. 66 at ¶ 25;
Doc. No. 73-17 at 16. Surprenant’s application was denied on March 11, 2011 after PNC
calculated Surprenant’s gross monthly income as $7,743.86, but then deducted estimated taxes
and concluded his net income was insufficient in light of his monthly expenses. Doc. No. 66 at
¶ 26; Doc. No. 73-17 at 15-16. According to Surprenant, he attempted to call PNC upon
learning of the denial to remind them that, as reflected on his P&L and as he had told them by
telephone once before, he had accounted for his taxes by deducting them throughout the year,
but PNC informed him his file already was closed.10 Doc. No. 66 at ¶ 26(e); see Doc. No. 73-17
at 25 (noting Surprenant’s April 2010 explanation of his tax withholdings); Doc. No. 73-28
(listing “payroll taxes” as an expense).
Within a week, Surprenant submitted what appears to have been at least his sixth
application for a loan modification. Doc. No. 73-17 at 15. A familiar chain of events ensued,
with PNC requesting and Surprenant supplying additional information. Doc. No. 66 at ¶ 27;
Doc. No. 73-17 at 14. This time, although it appears PNC appropriately calculated Surprenant’s
income and acknowledged his tax withholdings, it nonetheless denied Surprenant’s application
on April 27, 2011. Doc. No. 66 at ¶ 28. The denial came after a title search, which reflected

10

Additionally, PNC’s corporate representative suggested during her deposition that loan
modification assessments were properly made based on an applicant’s gross income, not net
income. See Doc. No. 73-4 at 29, 36.
8

Surprenant’s state tax liens.11 Doc. No. 73-17 at 12-13. PNC informed Surprenant he would
“need to clear title first and submit proof of satisfaction of [the] lien[s] and may be able to
reapply then.” Id. at 12.
Two days after the denial, Surprenant reapplied. Id. PNC requested a copy of
Surprenant’s 2010 tax return, which he promptly produced. Doc. No. 66 at ¶ 30; Doc. No. 4820; Doc. No. 73-17 at 12. In May 2011, Surprenant informed PNC that he was in the process of
resolving his tax liens in the context of his pending bankruptcy, and he asked whether he could
use funds he had saved as a contribution toward the arrears on his mortgage; PNC instructed him
to use the money to dispose of his tax liens. Doc. No. 73-17 at 12. Surprenant complied. He
voluntarily dismissed his bankruptcy petition, paid his back taxes, and faxed PNC notice that his
liens had been satisfied in June 2011. Doc. No. 48-4 at 13; Doc. No. 66 at ¶ 29; see Doc. No.
73-17 at 11. From the time of that fax through August 18, 2011, Surprenant called PNC
approximately fifteen times seeking status updates regarding his application and asking to speak
with the person responsible for reviewing it. Doc. No. 73-17 at 10-11.
On August 22, 2011, when PNC still had not made a decision regarding his application
and he had not succeeded in speaking with the individual assigned to review it, Surprenant sent
PNC a demand letter pursuant to Chapter 93A of the Massachusetts General Laws. Doc. No. 7310. Four days later, PNC wrote to Surprenant thanking him “for [his] recent inquiry concerning
[his] mortgage loan,” noting “it may take some time to gather the information needed to

11

The tax liens were part of Surprenant’s Chapter 13 proceedings and, as noted above,
had been revealed to PNC a year earlier by Surprenant as well as during a previous title search.
Doc. No. 66 at ¶¶ 29(a), 85; Doc. No. 73-17 at 25; Doc. No. 73-22 at 4.
9

accurately respond,” and promising further written contact in thirty days.12 Doc. No. 48-21.
PNC requested updated information from Surprenant related to his modification application on
September 16, 2011, Doc. No. 48-22, which he provided, see Doc. No. 48-24. On September 20,
2011, PNC wrote again to “follow up [on Surprenant’s] recent inquiry concerning [his] loan,”
stating its research into the inquiry was ongoing and promising “results by October 5, 2011.”
Doc. No. 48-23. PNC sought, and Surprenant supplied, further information related to the
pending modification application at the end of September 2011. Doc. No. 66 at ¶ 36.
On October 3, 2011, PNC sent another “follow up” letter regarding Surprenant’s “recent
inquiry,” noting its ongoing research and promising a response by October 18, 2011. Doc. No.
48-26. PNC sent a response to Surprenant’s Chapter 93A letter on October 5, 2011, in which it
outlined its view of the history of Surprenant’s modification requests, found “no indication of
unfair or deceptive practices involving [his] mortgage,” and noted its review of Surprenant’s file
for modification eligibility was ongoing. Doc. No. 73-11. The letter also indicated that loan
modifications for individuals in active bankruptcy can occur if the debtor has his mortgage
reaffirmed. Id. at 4. Around the same time, PNC determined Surprenant was ineligible for
HAMP because his monthly income was sufficient to permit him to make payments in the
amount required under the existing terms of his mortgage. Doc. No. 66 at ¶ 38; see Doc. No. 7317 at 9 (including an October 4, 2011 note calculating monthly income of more than $9,000 and
concluding “loan is . . . already a fail,” and an October 6, 2011 note rejecting modification

12

Although the parties characterize this letter as one regarding Surprenant’s application
for a loan modification, see Doc. No. 66 at ¶ 32, the timing seems to suggest it more likely was
sent in response to Surprenant’s Chapter 93A letter. This question does not impact the resolution
of the pending motion for summary judgment.
10

because “current payment [is] less than 31% of gross monthly income”).13
Surprenant immediately pursued further review for “other [modification] options” by
submitting information requested as part of a workout package, Doc. No. 48-26, and PNC
acknowledged it had received his “request for hardship assistance” by October 10, 2011, Doc.
No. 48-30; see Doc. No. 66 at ¶ 40. On November 17, 2011, PNC informed Surprenant his
request had been assigned to a new “contact representative,” and shortly thereafter PNC
requested updated financial information from Surprenant. Doc. No. 66 at ¶¶ 41-43; see Docs.
No. 48-31, 48-32, 48-33. Two months later, on January 17, 2012, PNC approved Surprenant for
a Trial Period Plan (“TPP”), pursuant to which Surprenant would be required to make three
monthly payments of $2,667.60, beginning in March 2012.14 Doc. No. 48-35; Doc. No. 66 at
¶¶ 45-46.
The TPP provided that successful completion of its terms would result in a permanent
loan modification being offered, although it did not contain information about what the terms of
such a modification might be. Doc. No. 48-35; see Doc. No. 66 at ¶ 47. Surprenant was first
notified of the TPP approval by phone, but did not receive a written copy of the TPP until
January 30, 2012 – one day before he was required to sign and return it – and, according to
Surprenant, that copy was at least partly illegible. Doc. No. 66 at ¶ 45(a), (c). While awaiting

13

This time, PNC’s calculations were based on the sum of Surprenant’s reported income
on his most recent P&L and the “officer wages” reported on his 2010 tax returns, a formula not
applied when considering his prior applications. Doc. No. 73-17 at 9; see Doc. No. 66 at ¶
38(d); see generally Doc. No. 73-17.
14

It appears Surprenant sent a “Qualified Written Request” to PNC in December 2011,
although no copy of that request or any response thereto appears in the record. See Doc. No. 732 at 34; see also Doc. No. 48-34.
11

written confirmation of the TPP, Surprenant received notice that a foreclosure sale of his home
had been scheduled for February 2012. Id. at ¶ 45(b). The sale never occurred, but was
postponed by a month (and then stayed indefinitely) only after Surprenant resorted to litigation.
Doc. No. 66 at ¶ 51.
After Surprenant made the payments required under the TPP, PNC offered him a
permanent loan modification reducing his interest rate to 5% and extending the term of the loan
by fifteen years. Id. at ¶¶ 48-50. Surprenant received the permanent modification paperwork on
May 25, 2012 and was required to sign and return it by June 1, 2012. Id. at ¶ 48(b). Surprenant
accepted the permanent modification. Doc. No. 66 at ¶ 48. The new principal due under the
terms of the modification is $399,537.88; Surprenant’s modified monthly payments are
$1,926.56. Doc. No. 48-36 at 2. In September 2012, PNC received a $400 “investor incentive”
payment for having modified Surprenant’s loan; the same day, it received a third-party check in
the amount of $58,700, which is logged in Surprenant’s loan file, but which PNC’s corporate
representative was unable to explain. Doc. No. 66 at ¶¶ 97-100; Doc. No. 73-20 at 2.
A few additional facts bear mention. First, the parties dispute whether Surprenant always
submitted the necessary paperwork to PNC on a timely basis. This dispute is not capable of
resolution on the record as it now stands, but it is clear from the notes related to Surprenant’s
loan and summarized above that, at least in many instances, he did provide requested
information promptly. Second, throughout the pendency of his repeated applications, Surprenant
called PNC dozens of times to provide information or to check on the status of his loan. It
appears as though certain PNC representatives did not always return his calls or contact him with
information as promised. See, e.g., Doc. No. 73-17 at 10-11. Third, Surprenant is an attorney.

12

He has submitted evidence showing that one of his clients also had arrears on a mortgage held by
PNC, also had an active bankruptcy action in 2010, and was offered a permanent loan
modification by PNC (which the bankruptcy court approved) while her arrears were part of her
bankruptcy proceedings.15 See Doc. Nos. 73-12, 73-13, 73-14. Finally, Surprenant has
submitted an expert report estimating that he has suffered more than $75,000 in damages as a
result of the alleged delay in PNC’s offer to modify his loan. See Doc. No. 73-39.
II.

LEGAL STANDARD
Summary judgment is appropriate when “the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). Once a party has properly supported its motion for summary judgment, the
burden shifts to the nonmoving party, who “may not rest on mere allegations or denials of his
pleading, but must set forth specific facts showing there is a genuine issue for trial.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); accord Barbour v. Dynamics Research Corp.,
63 F.3d 32, 37 (1st Cir. 1995). The Court is “obliged to view the record in the light most
favorable to the nonmoving party, and to draw all reasonable inferences in the nonmoving
party’s favor.” LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993). Even so, the
Court must ignore “conclusory allegations, improbable inferences, and unsupported

15

Surprenant’s client has authorized him to disclose the circumstances of her loan
modification. See Doc. No. 73-13. The parties dispute whether this client’s circumstances were
comparable to Surprenant’s – and, thus, whether facts regarding her modification are material
here. This is a fact question that the Court cannot resolve at this time. For present purposes, it is
sufficient to note that certain similarities are apparent from the record: both mortgages were
originated in 2007; the loans were for similar amounts ($302,400 and $315,200); both debtors
sought modifications in 2009 and 2010 while in bankruptcy; and Freddie Mac appears to be the
investor associated with both loans. Compare Doc. No. 48-36 at 1-2, with Doc. No. 73-14 at 3.
13

speculation.” Sullivan v. City of Springfield, 561 F.3d 7, 14 (1st Cir. 2009).
“There must be sufficient evidence favoring the nonmoving party for a [factfinder] to
return a verdict for that party. If the evidence is merely colorable or is not significantly
probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50.
“Trialworthiness requires not only a ‘genuine’ issue but also an issue that involves a ‘material’
fact.” Nat’l Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 735 (1st Cir. 1995). A material
fact is one which has the “potential to affect the outcome of the suit under applicable law.”
Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir. 1993). For a factual dispute to
be “genuine,” the “evidence relevant to the issue, viewed in the light most flattering to the party
opposing the motion, must be sufficiently open-ended to permit a rational factfinder to resolve
the issue in favor of either side.” Nat’l Amusements, Inc., 43 F.3d at 735 (internal citation
omitted).
III.

DISCUSSION
A.

Predatory Lending and Implied Covenant Claims

PNC seeks summary judgment with respect to each of Surprenant’s four claims,
including those alleging predatory lending in violation of Massachusetts law and breach of an
implied covenant of good faith and fair dealing. See Doc. No. 46 at 4-8. In his response,
Surprenant concedes that these two causes of action should be dismissed. See Doc. No. 65 at 1.
As such, no further discussion of these claims is necessary. Summary judgment should enter in
PNC’s favor as to Counts I and II of the complaint.
B.

Promissory Estoppel

PNC challenges the promissory estoppel claim alleged in Count III of the complaint,

14

arguing Surprenant cannot satisfy the elements of such a claim under Massachusetts law. See
Doc. No. 46 at 8-11. Surprenant counters by asserting PNC “dangled the loan modification on a
string so that [he] would remove his arrears from his bankruptcy thus subjecting his home to
foreclosure,” but later “revoked its offer” of a modification and caused Surprenant to “live under
the cloud of foreclosure and the fear of losing his family home.” Doc. No. 65 at 7. Setting aside
the question of whether PNC’s conduct was unfair or deceptive – a question central to the final
claim in Surprenant’s complaint, discussed below – Surprenant has not established that the
circumstances presented here amount to “a sufficiently definite promise . . . made, relied upon,
and then broken,” as is necessary to support a promissory estoppel claim. In re JPMorgan Chase
Mortg. Modification Litig., 880 F. Supp. 2d 220, 240 (D. Mass. 2012).
In Massachusetts, a plaintiff must establish three elements to prevail on a claim of
promissory estoppel: that “a promisor makes a promise which he should reasonably expect to
induce action or forbearance of a definite and substantial character on the part of the promisee”;
that “the promise does induce such action or forbearance”; and that “injustice can be avoided
only by enforcement of the promise.” Neuhoff v. Marvin Lumber & Cedar Co., 370 F.3d 197,
203 (1st Cir. 2004) (citations and internal quotations omitted).16 The first element requires a
promise that is “interchangeable with an offer in the sense of commitment,” such that the
promisee is justified “in understanding that a commitment has been made” because “the
promisor’s expectation to be legally bound is clear.” Dixon, 798 F. Supp. 2d at 340 (citations

16

Although Massachusetts courts do not embrace the term “promissory estoppel,” they
apply the doctrine using traditional contract principles, with detrimental reliance serving as a
substitute for consideration. See Dixon v. Wells Fargo Bank, N.A., 798 F. Supp. 2d 336, 340 (D.
Mass. 2011) (discussing Loranger Constr. Corp. v. E.F. Hauserman Co., 384 N.E.2d 176 (Mass.
1978)).
15

and internal quotations omitted); accord Braunstein v. McCabe, 571 F.3d 108, 127 (1st Cir.
2009). Moreover, the promise “must be sufficiently definite and certain in its [essential] terms to
be enforceable.” Dixon, 798 F. Supp. 2d at 341 (internal quotations omitted). Massachusetts
courts “are justifiably unwilling to endorse one party’s aspirational view of the terms of an
unrealized agreement.” Id. However, “where the facts suggest that the promisor’s words or
conduct were designed to take advantage of the promisee,” courts may “enforce even an
indefinite promise made during preliminary negotiations.” Id. at 344.
Surprenant relies on two “promises” by PNC in an effort to support his promissory
estoppel claim: 1) representations that he was not eligible for a loan modification while his
mortgage was part of his active bankruptcy; and 2) statements made by PNC’s representative
Tabatha that, if he qualified, Surprenant might receive a loan modification involving a new
thirty-year term, an interest rate between 4.5 and 4.875%, and monthly payments between
$1,621 and $1,693. See Doc. No. 65 at 6, 8. No reasonable factfinder could conclude that either
set of statements provides a basis for relief pursuant to the promissory estoppel doctrine.
The former representations fail to support a triable promissory estoppel claim for several
reasons. First, explanations by PNC during a November 2009 telephone call and in a February
2010 letter that Surprenant was ineligible for HAMP due to his pending bankruptcy, see Doc.
Nos. 48-6, 73-5 at 3, are neither offers nor promises in any usual sense of those terms. Such
statements conveyed policies or guidelines applicable to HAMP applications, whether accurately
or inaccurately, and cannot be construed as expressing commitments or intentions by PNC to be
legally bound. Second, Surprenant has adduced no evidence (besides, perhaps, his own
speculation) suggesting that these comments were designed by PNC to “take advantage of” him.

16

Third, Surprenant has not alleged that any PNC representative assured him he would be
considered for (or would qualify for) HAMP if he voluntarily removed his arrears from his
bankruptcy proceedings, as he chose to do, or that anyone from PNC ever suggested that he do
so. Indeed, when informing Surprenant that he could not receive HAMP relief while his
bankruptcy was pending, PNC went on to offer him an opportunity to pursue other “workout” or
modification options available through PNC. See Doc. No. 48-6.
Even if the statements about Surprenant’s pending bankruptcy did, somehow, constitute a
“promise” to consider him for HAMP after his mortgage was removed from his bankruptcy
proceedings, and assuming that Surprenant’s decision to remove his arrears from his bankruptcy
proceedings was undertaken in reasonable reliance on that “promise,” the facts demonstrate PNC
kept its promise. Upon learning the bankruptcy court had relieved PNC from the automatic stay,
PNC considered Surprenant’s various applications for relief pursuant to HAMP and PNC’s other
available workout programs. To the extent that such consideration was plagued by allegedly
unfair or deceptive conduct which delayed the offer of a permanent modification, Surprenant’s
recourse is through Chapter 93A, see Discussion § III(C), infra, not promissory estoppel. See
JPMorgan Chase, 880 F. Supp. 2d at 239-40.
Finally, notwithstanding the series of applications that were denied for reasons
Surprenant challenges here, the fact remains that PNC did not foreclose because Surprenant
ultimately qualified for, was offered, and accepted a permanent loan modification. Under these
circumstances, he has not shown detrimental reliance, or that injustice can be avoided only by
sustaining his promissory estoppel claim. See id. (concluding that plaintiffs who “eventually”
received modifications, but who incurred increased principal balances and late fees as a result of

17

delay and “conduct [by the lender which] may have been deceptive and unfair,” had “not shown
that a sufficiently definite promise was made, relied upon, and then broken”).17
Surprenant’s promissory estoppel theory fares no better insofar as it is grounded in
allegations related to his conversations with Tabatha. Although Surprenant claims he “believed
the modification negotiation was over and he had been approved for a modification” after
Tabatha’s April 2010 call to discuss proposed terms, Doc. No. 66 at ¶ 89, no reasonable person
in Surprenant’s position could have construed the comments he attributes to Tabatha as an offer
or commitment by which PNC expected to be legally bound. Even accepting Surprenant’s
description of Tabatha’s statements, certain key terms of the modification he claims was offered
were left indefinite. For example, both the interest rate and the monthly payment amount were
posited as ranges, not finite terms, and the total principal was not cited. See Doc. No. 66 at
¶¶ 78, 88. Moreover, Surprenant acknowledged that he understood Tabatha was not authorized
to make a binding offer on behalf of PNC, and that the terms she proposed were dependent on
him being qualified and approved for such a modification. See Doc. No. 48-3 at 21-22.

17

Surprenant’s circumstances are not analogous to those presented by the plaintiffs in
Dixon, upon which he relies. There, the only facts before the Court, which was ruling on a
motion to dismiss, were those alleged in the complaint. 798 F. Supp. 2d at 338. According to
the complaint, the following series of events were at issue: the plaintiffs requested a loan
modification, the bank instructed them to stop making payments on their loan and to submit
financial information to be considered in connection with a modification, the plaintiffs complied
and stopped making payments, and the bank initiated foreclosure proceedings without ever
having considered the modification application. Id. at 339. The Court in Dixon concluded that
the plaintiffs had stated a promissory estoppel claim by alleging that the bank had induced their
default through its broken promise to consider them for a loan modification if they took certain
steps; in other words, the bank promised to negotiate in good faith, then did not negotiate at all.
Id. at 348. Here, the record as developed at this stage in the litigation establishes that Surprenant
already was in arrears on his mortgage (and in active bankruptcy) when he first approached PNC
about a modification, and that PNC did consider (and, ultimately, approve) his applications for a
modification after he removed his arrears from his bankruptcy proceedings.
18

Surprenant has not adduced evidence suggesting he did qualify, or should have qualified, for a
loan modification on terms such as those described by Tabatha (as opposed to those he
ultimately accepted).
Additionally, even if Tabatha’s statements were construed as a promise or offer by PNC,
it is unclear precisely how Surprenant claims he relied on those statements. His decisions to
remove his arrears from his bankruptcy proceedings and cease making payments occurred after
he was told the bankruptcy action rendered him ineligible for HAMP, but before either of his
conversations with Tabatha. Surprenant has identified no actions he took after, and in reliance
on, Tabatha’s discussions with him about possible modification terms. See Doc. No. 65 at 9-10.
Indeed, the record before the Court reflects that Surprenant merely continued requesting a
modification, providing financial information, and awaiting resolution of his applications. Such
conduct does not constitute the sort of “action or forbearance” that can support a promissory
estoppel claim. Furthermore, as stated above, there is no basis for finding that any emotional
distress or economic damages claimed by Surprenant constitute detriments resulting from
reliance on a promise allegedly conveyed by Tabatha in February or April 2010 (as opposed to
harm flowing from PNC’s allegedly unfair or deceptive conduct throughout the modification
process, discussed further below).
Because Surprenant has not adduced evidence from which a reasonable factfinder could
conclude he has established each of the elements of a promissory estoppel claim, PNC is entitled
to summary judgment with respect to Count III of the complaint.
C.

Chapter 93A

Finally, PNC seeks summary judgment on Count IV of Surprenant’s complaint, claiming

19

he “cannot prove that [PNC] engaged in any unfair or deceptive act” prohibited by Chapter 93A.
Doc. No. 46 at 11. Surprenant counters by characterizing PNC’s actions here as “extraordinary,”
arguing he has raised genuine factual disputes as to whether PNC wrongly refused to modify his
loan while his bankruptcy action was pending, improperly revoked an initial modification offer
in order to pursue government incentives available through HAMP, repeatedly failed to follow
its own procedures in determining Surprenant’s eligibility for a loan modification, and
unnecessarily delayed the modification process resulting in an increased principal balance owed
on his mortgage.18 Doc. No. 65 at 12. Careful consideration of the record and the parties’
arguments reveals that PNC has not established entitlement to judgment as a matter of law on
Surprenant’s Chapter 93A claim.
Chapter 93A “provides a cause of action for a plaintiff who ‘has been injured,’ by ‘unfair
or deceptive acts or practices.’” Rule v. Fort Dodge Animal Health, Inc., 607 F.3d 250, 253 (1st
Cir. 2010) (quoting Mass. Gen. Laws ch. 93A, §§ 2(a), 9(1)). “A practice is unfair if it is within
the penumbra of some common-law, statutory, or other established concept of unfairness; is
immoral, unethical, oppressive, or unscrupulous; and causes substantial injury.” Linkage Corp.
v. Trs. of Bos. Univ., 679 N.E.2d 191, 209 (Mass. 1997) (citation, internal quotations, and
modifications omitted). “Conduct is ‘deceptive’ when it has ‘the capacity to mislead consumers,

18

Surprenant does not rest his Chapter 93A claim on conduct by PNC during the loan
origination process, instead limiting it to events occurring after his default, during the loan
modification process. Furthermore, this is not a case in which Surprenant simply advances a
Chapter 93A claim based on an alleged violation of HAMP guidelines (like many other plaintiffs
pursuing such claims in federal court arising from efforts to modify their mortgages). Cf.
Okoye, 2011 WL 3269686, at *7-*9 (discussing such claims and the three-pronged analysis
courts in this District have applied thereto). Rather, Surprenant’s claim turns on a lengthy course
of conduct by PNC, which Surprenant argues constitutes one overarching unfair or deceptive
practice.
20

acting reasonably under the circumstances, to act differently from the way they otherwise would
have acted.’” Okoye v. Bank of N.Y. Mellon, No. 10-11563, 2011 WL 3269686, at *6 (D. Mass.
July 28, 2011) (quoting Aspinall v. Philip Morris Cos., 813 N.E.2d 476, 488 (Mass. 2004)).
Because Chapter 93A “‘creates new substantive rights and, in particular cases, makes conduct
unlawful which was not unlawful under the common law or any prior statute,’” a plaintiff need
not establish a statutory violation as an element of proving a Chapter 93A claim. Young, 717
F.3d at 240 (quoting Commonwealth v. Fremont Inv. & Loan, 897 N.E.2d 548, 556 (Mass.
2008)).
Whether conduct amounts to a violation of Chapter 93A depends on the nature, purpose,
and effect of the conduct and is a fact-intensive and case-specific inquiry. See Okoye, 2011 WL
3269686, at *6. On several occasions over the past few years, courts in this jurisdiction have
concluded that unfair conduct by a loan servicer in the context of loan modification negotiations
may, under the appropriate circumstances, rise to the level of a Chapter 93A violation. See, e.g.,
Young, 717 F.3d at 241-42; Okoye, 2011 WL 3269686, at *9, *11; Morris v. BAC Home Loans
Servicing, L.P., 775 F. Supp. 2d 255, 259 (D. Mass. 2011).19
Surprenant’s Chapter 93A claim encompasses conduct by PNC spanning a period of
more than two years when his series of modification applications were pending; it “includes
[PNC’s] handling of h[is] entire case,” beginning with his initial HAMP application in 2009 and
continuing through his attempts to secure a permanent loan modification in 2012. Young, 717
F.3d at 240. Surprenant has provided evidence from which a reasonable factfinder could

19

Although these cases arise in the context of motions to dismiss, the same reasoning
regarding the sorts of conduct that could, if proven, establish a Chapter 93A violation applies
here.
21

conclude that PNC engaged in “a pattern of misrepresentations, failure to correct detrimental
errors, and/or dilatory conduct . . . that . . . could amount to unfair or deceptive practices.”
Okoye, 2011 WL 3269686, at *9. This course of conduct included:
•

Taking apparently inconsistent positions about the impact of an active bankruptcy
proceeding on a defaulting borrower’s eligibility for a loan modification. See Doc. No.
73-6 at 2 (stating in a letter that HAMP modifications required bankruptcy court
approval, implying such modifications were possible); Doc. No. 48-6 (stating that
Surprenant was ineligible for a HAMP modification because of his pending bankruptcy);
Doc. No. 73-5 at 3 (same); Doc. No. 73-11 at 4 (stating individuals in bankruptcy could
obtain modifications after having their mortgages reaffirmed); Doc. Nos. 73-12, 73-13,
73-14 (reflecting an instance in which another individual with an active bankruptcy
proceeding obtained a modification from PNC with court permission, but without having
her mortgage reaffirmed).

•

Twice securing Surprenant’s agreement to proposed payment and modification terms (or
ranges of terms), leading him to believe approval of a permanent loan modification was
imminent in April 2010, and then changing course to require a new HAMP application
instead. Doc. No. 66 at ¶¶ 53-57, 78, 86-89, 95; Doc. No. 73-17 at 23-24.

•

Embarking on a serial application process lasting more than a year and a half, throughout
which Surprenant repeatedly was required to submit financial information which was
often identical to information he already had provided, see generally Doc. No. 73-17
(reflecting numerous submissions of HAMP applications and workout packages, and
repeated requests for P&Ls, tax returns, rental income documentation, and hardship

22

letters), and which resulted in eight separate denials for different reasons.20
•

Issuing three consecutive denials for insufficient income based on calculations of
Surprenant’s monthly income that disregarded information about his salary and income
taxes that he previously had provided and specifically had explained on more than one
occasion, as reflected in PNC’s own notes related to Surprenant’s loan. See Doc. No. 7317 at 25; Doc. No. 73-28.

•

Denying one of Surprenant’s modification requests due to tax liens that had existed – and
about which PNC had been aware – for more than a year at the time of the relevant
denial, without previously informing Surprenant that such liens would impede his
modification request. See Doc. No. 73-17 at 12-13, 25.

•

Failing to provide a written copy of the TPP documents until one day before Surprenant
was required to sign and return them, and even then failing to provide a legible copy
thereof. Doc. No. 66 at ¶ 45.

•

Failing to provide any notice about the terms of the permanent loan modification offer
until the Friday before Memorial Day weekend in 2012, only one week before Surprenant
was required to sign and return the document, despite requests by Surprenant for

20

The ever-changing reasons were: ineligibility due to bankruptcy in 2009; the need to
apply through HAMP instead of through other workout programs in May 2010; excessive
forbearance in June 2010; insufficient income in October and November 2010 and March 2011;
the need to resolve a tax lien in April 2011; and a determination in October 2011 that
Surprenant’s monthly payments already were low enough (i.e., that Surprenant made too much
money). See Doc. Nos. 48-6, 48-10, 48-13; Doc. No. 66 at ¶¶ 24, 26, 28, 38, 95. The differing
reasons – and the inconsistent methods used to calculate Surprenant’s income, as reflected in
PNC’s own loan file – are particularly troubling in light of the fact that Surprenant’s P&L
statements throughout the entire modification process reflected relatively consistent monthly
incomes, at least insofar as Surprenant’s $5,400-per-month salary is concerned. See, e.g., Doc.
No. 73-25; Doc. No. 73-26 at 3; Doc. No. 73-28; Doc. No. 73-32; Doc. No. 73-40.
23

information about the modification terms at an earlier date. Id. at ¶ 48.
•

Sending foreclosure sale notices to Surprenant after he had accepted the TPP, and
requiring him to pursue court action in order to secure a stay of the sale. Id. at ¶¶ 45, 51.
Such actions also might be viewed as “withholding and changing information, providing

pretextual reasons for denying modification, and making misleading statements regarding the
process and the state of the loan,” which could support a Chapter 93A claim stemming from bad
faith negotiation of a loan modification. See Okoye, 2011 WL 3269686, at *11 (noting there is
no general duty to negotiate a loan modification, but finding that where a lender undertakes such
negotiations it must do so in good faith). This pattern of behavior by PNC, if accepted by a
factfinder at trial, falls “within the penumbra of . . . [an] established concept of unfairness” for
purposes of Chapter 93A. See Linkage Corp., 679 N.E.2d at 209.
To be sure, PNC might ultimately have reasonable, legitimate explanations of each of its
numerous representations and actions cited by Surprenant in support of his Chapter 93A claim.
The evaluation of such explanations, however, presents a question of fact for trial, especially
where, as here, no such explanations appear in the summary judgment record or are based upon
undisputed facts. For example, PNC seeks to explain its shifting statements regarding the
significance of Surprenant’s pending bankruptcy proceedings by asserting a change in governing
regulations. See Doc. No. 75 at 4 n.5. But PNC fails to identify the relevant regulations, submit
copies thereof, or advance undisputed factual evidence sufficient to warrant a legal conclusion
that its differing statements on the subject arose from differing controlling law at the relevant
times.
Surprenant also has adduced evidence which, if credited, shows “substantial harm” that

24

has accrued as a result of PNC’s allegedly unfair and dilatory conduct. For example, his expert’s
report notes that the principal balance on his mortgage was $336,021 in early 2010, near the
beginning of his modification application process, but had risen to $399,538 by the time his loan
was permanently modified in 2012. Doc. No. 73-39 at 2. This increase came after PNC
instructed Surprenant not to make further payments without a formal payment arrangement, and
his arrears continued to accrue during the pendency of his various modification applications.
See Doc. No. 66 at ¶ 81; see also Doc. No. 73-17 at 12 (instructing Surprenant to use a large
lump sum to pay off tax liens rather than to reduce his arrears on his mortgage). Surprenant’s
expert also noted Surprenant suffered “miscellaneous monetary harm caused by dismissing [his]
bankruptcy, . . . increased interest on student loans and the future cost of credit due to the two
year continued negative mortgage delinquency reporting,” and a reduced credit score. Doc. No.
73-39 at 4.
Given the saga of the loan modification here – and especially where Surprenant
repeatedly submitted information reflecting that his financial position remained substantially
unchanged during the relevant time period, see note 20, supra – a jury reasonably could conclude
that PNC strung Surprenant along in an unfair, unethical, or unscrupulous way, resulting in a
significant increase in his mortgage balance. Under these circumstances, Surprenant has
adduced sufficient evidence to raise a genuine issue of material fact as to whether PNC’s
conduct rose to the level of a Chapter 93A violation, warranting a trial with respect to Count IV
in his complaint.
IV.

CONCLUSION
For the foregoing reasons, I respectfully recommend the Court ALLOW PNC’s motion

25

(Doc. No. 45) in part and DENY it in part.21 Specifically, I recommend that the Court enter
judgment in PNC’s favor with respect to the first three claims in Surprenant’s complaint, deny
summary judgment with respect to Surprenant’s Chapter 93A claim, and schedule a pretrial
conference.

/s/ Leo T. Sorokin
Leo T. Sorokin
Chief U.S. Magistrate Judge

21

The Parties are hereby advised that any party who objects to these proposed findings
and recommendations must file a written objection thereto within fourteen days of receipt of this
Report and Recommendation. The written objections must identify with specificity the portion
of the proposed findings, recommendations, or report to which objection is made, and the basis
for such objections. See Fed. R. Civ. P. 72; 28 U.S.C. § 636(b). The parties are further advised
that the United States Court of Appeals for this Circuit has repeatedly indicated that failure to
comply with Rule 72(b) will preclude further appellate review of the District Court’s order based
on this Report and Recommendation. See Keating v. Sec’y of Health & Human Servs., 848 F.2d
271 (1st Cir. 1988); United States v. Valencia-Copete, 792 F.2d 4 (1st Cir. 1986); Scott v.
Schweiker, 702 F.2d 13, 14 (1st Cir. 1983); United States v. Vega, 678 F.2d 376, 378-79 (1st
Cir. 1982); Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603 (1st Cir. 1980); see also
Thomas v. Arn, 474 U.S. 140 (1985).
26