Keenan v. America's Servicing Company, division of Wells Fargo Bank, N.A. et al

Filing 38

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDER re 25 MOTION for Judgment on the Pleadings by U.S. Bank N.A. as Trustee, Wells Fargo Bank, N.A.."In accordance with the foregoing, defendants motion for judgment on the pleadings is, with respect to plaintiffs FDCPA claim, DENIED but is otherwise ALLOWED."(Caruso, Stephanie)

United States District Court
District of Massachusetts
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)
)
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Plaintiff,
)
)
v.
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WELLS FARGO BANK, N.A. and U.S. )
)
BANK N.A. AS TRUSTEE
)
)
Defendants.
)

EUGENE E. KEENAN, JR.,

Civil Action No.
16-10653-NMG

MEMORANDUM & ORDER
GORTON, J.
This case involves a dispute over the purported foreclosure
of property at 56 Bartlett Parkway, Unit 1, Winthrop,
Massachusetts (“the property”).

Eugene Keenan (“Keenan” or

“plaintiff”) alleges that defendants, Wells Fargo Bank, N.A.
d/b/a America’s Servicing Company (“Wells Fargo”) and U.S. Bank,
N.A as Trustee d/b/a America’s Servicing Company (“U.S. Bank”
and, collectively with Wells Fargo, “defendants”) sent demand
letters to him for money allegedly owed on the property after
they had already foreclosed on it.

Plaintiff claims that such

conduct 1) violated the Fair Debt Collections Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq., and the Massachusetts Fair
Debt Collections Practices Act (“MFDCPA”), M.G.L. c. 93, § 49,
2) negligently inflicted emotional distress upon the plaintiff

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and 3) violated the Massachusetts Consumer Protection Act,
M.G.L. c. 93A (“Chapter 93A”).
Defendants have filed a motion for judgment on the
pleadings and, for the following reasons, that motion will be,
with respect to the FDCPA claim, denied but otherwise allowed.
I.

Factual and Procedural Background
For purposes of a motion for judgment on the pleadings, the

Court assumes the truth of the facts in the complaint.
According to the complaint, in February, 2007, Keenan granted a
mortgage on the property to Mortgage Electronic Recording
Systems, Inc. (“MERS”).

MERS assigned the mortgage to U.S. Bank

in March, 2009 and Wells Fargo is the loan servicer.

In May,

2010, Wells Fargo informed Keenan by letter that his property
was being placed in foreclosure.

In June, 2012, U.S. Bank

allegedly held a foreclosure sale on the property and in July,
2013, a foreclosure deed, purportedly transferring title to U.S.
Bank, was recorded along with an affidavit confirming the
foreclosure.
In October, 2013, U.S. Bank began a summary process
eviction action against Keenan in East Boston Municipal Court.
That case was removed to Boston Municipal Court (“BMC”) and U.S.
Bank moved for summary judgment on its eviction claim.

Keenan

opposed summary judgment on the grounds that U.S. Bank’s
purported foreclosure was unlawful and thus the foreclosure sale
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was null and void.

The BMC denied U.S. Bank’s motion for

summary judgment.
In January, 2016, after a bench trial in the BMC, U.S. Bank
filed a motion to dismiss its eviction claim as a result of
changes in foreclosure law that may have invalidated the
foreclosure sale.

The BMC set a briefing schedule for the

remaining issues, including Keenan’s counterclaims.

It is

unclear whether the BMC case is now resolved or still pending.
Contemporaneously, Wells Fargo, apparently conceding that
the foreclosure was invalid, sent Keenan two letters attempting
to collect money that he owed on the mortgage.

Although he was

represented by counsel, Wells Fargo sent the letters directly to
Keenan.

One letter stated that “Wells Fargo has not made the

first notice or filing required . . . for the foreclosure
process”.

Keenan alleges that, because Wells Fargo and U.S.

Bank had already foreclosed upon his property, they knew that
statement was false.

The second letter requested proof of

insurance on the property.

Keenan asserts that defendants are

not entitled to any money owed on the mortgage because, as a
result of the attempted foreclosure, U.S. Bank is now the record
owner of the property.
According to Keenan, he was “utterly shocked” by the
letters and felt “nauseous, depressed and panicky”.

Keenan also

states that “his anxiety became extreme”, he had difficulty
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sleeping and he suffered depression.

Shortly thereafter, he

made a Chapter 93A demand for damages on defendants, claiming
that their unfair and deceptive practices had harmed him.
Defendants responded to the Chapter 93A demand letter by again
communicating directly with Keenan rather than with his counsel.
Keenan subsequently filed suit against defendants in this
Court in April, 2016, alleging 1) violations of the FDCPA and
MFDCPA, 2) negligent infliction of emotional distress and
3) Chapter 93A violations.

Defendants timely answered, denying

all substantive allegations.

In November, 2016, defendants

moved for judgment on the pleadings which plaintiff opposes and
that motion is the subject of this memorandum and order.
II.

Motion for Judgment on the Pleadings
A. Legal Standard
Although a Rule 12(c) motion for judgment on the pleadings

considers the factual allegations in both the complaint and the
answer, it is governed by the same standard as a Rule 12(b)(6)
motion to dismiss. See Perez-Acevedo v. Rivero-Cubano, 520 F.3d
26, 29 (1st Cir. 2008).

To survive such a motion, the subject

pleading must contain sufficient factual matter to state a claim
for relief that is actionable as a matter of law and “plausible
on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
For a claim to be facially plausible, the pleadings must show
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“more than a sheer possibility that a defendant has acted
unlawfully.” Id.

A plaintiff cannot merely restate the

defendant’s potential liability. Id.
In considering the merits of such a motion, the Court must
accept all factual allegations in the complaint as true and draw
all reasonable inferences in the plaintiff’s favor. R.G. Fin.
Corp. v. Vergara-Nunez, 446 F.3d 178, 182 (1st Cir. 2006).

The

Court may also consider documents if 1) the parties do not
dispute their authenticity, 2) they are “central to the
plaintiffs’ claim” or 3) they are “sufficiently referred to in
the complaint.” Curran v. Cousins, 509 F.3d 36, 44 (1st Cir.
2007) (quoting Watterson v. Page, 987 F.2d 1, 3 (1st Cir.
1993)).
B. Application
Defendants assert that judgment on the pleadings is
warranted because plaintiff successfully argued in the BMC
action that 1) the foreclosure was invalid and 2) he rightfully
possessed the property.

Therefore, according to defendants,

plaintiff is judicially estopped from now asserting that the
foreclosure was valid thus preventing U.S. Bank from collecting
mortgage payments.
Defendants further aver that judgment on the pleadings is
warranted because 1) the MFDCPA does not include a private cause
of action, 2) defendants owe no duty of care to plaintiff and
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thus the negligent infliction of emotion distress claim must
fail and 3) plaintiff has failed to plead sufficient facts to
state a claim under Chapter 93A.
1. Judicial Estoppel
a. Legal Standard
The purported judicial estoppel involves both state and
federal proceedings, creating the threshold question of whether
state or federal judicial estoppel law applies.

Because the

case is before this Court based on federal question jurisdiction
stemming from plaintiff’s FDCPA claim, the Court will apply
federal judicial estoppel law. Patriot Cinemas, Inc. v. Gen.
Cinemas Corp., 834 F.2d 208, 215 (1st Cir. 1987).
Judicial estoppel precludes a party who has taken a certain
position to succeed in one proceeding from then asserting a
contradictory position in a later proceeding. New Hampshire v.
Maine, 532 U.S. 742, 749 (2001).

It aims “to protect the

integrity of the judicial process” by ensuring that parties do
not simply adopt an argument based on the pressures of the
moment. Id. at 749-50 (quoting Edwards v. Aetna Life Ins. Co.,
690 F.2d 595, 598 (6th Cir. 1982)).

In other words, judicial

estoppel prevents parties from “playing fast and loose with the
courts.” Patriot, 834 F.2d at 212 (quoting Scarano v. Cent. R.
Co., 203 F.2d 510, 513 (3d Cir. 1953)).

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Although judicial estoppel is fact-specific and cannot be
“mechanical[ly]” applied, courts “widely agree that, at a
minimum, two conditions must be satisfied” before a party is
estopped. Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374
F.3d 23, 33 (1st Cir. 2004).

First, the positions at issue

“must be directly inconsistent, that is, mutually exclusive.”
Id.

Second, the party taking the contrary positions “must have

succeeded in persuading a court to accept its prior position.”
Id.

Courts also frequently examine a third condition by asking

whether “absent an estoppel, would the party asserting the
inconsistent position derive an unfair advantage?” Id.

In

examining possible unfair advantage, the crucial inquiry is
whether a court accepted the party’s first position. Id.
b. Application
In defendants’ view, plaintiff’s contention that the
foreclosure sale was void, which they assert the BMC relied upon
in its summary judgment decision, directly conflicts with his
current position that there was a valid foreclosure thereby
conveying title to U.S. Bank so that he is no longer required to
make mortgage payments.
Defendants’ contention that plaintiff is judicially
estopped from now arguing that the foreclosure was valid is well
taken.

The first requirement for judicial estoppel, that the

two positions are directly inconsistent, is met.
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In the BMC

action, Keenan’s memorandum opposing summary judgment stated
that
the foreclosure sale on June 6, 2012 is invalid and void
since it clearly violated the notice requirements of M.G.L.
c. 244, § 14 . . . .
Plaintiff also contended that “no foreclosure was ever[]
lawfully conducted on [Keenan’s] property.”
Plaintiff’s multiple statements in the earlier proceeding
that the foreclosure sale was void directly conflict with his
assertion in this case that U.S. Bank owns the property because
of a successful foreclosure.

In his complaint in this action,

plaintiff alleges
[Wells Fargo] purported to make demand on Keenan for moneys
purported[ly] due on this loan account for property which
had been foreclosed on some four (4) years earlier and
which property is no longer in Keenan’s name – but rather
is shown on the public land records as being in the name of
U.S. Bank.
Thus, plaintiff’s positions in the BMC action and this action
are contradictory and the first prerequisite for judicial
estoppel is satisfied. See Synopsys, Inc., 374 F.3d at 33.
With respect to the second step of the analysis, plaintiff
succeeded in convincing the BMC to accept his contention that
the mortgage was void at the summary judgment stage of that
proceeding.

In the judicial estoppel context, acceptance “is a

term of art” and a party need not have succeeded on the merits
to show acceptance. Perry v. Blum, 629 F.3d 1, 11 (1st Cir.

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2010).

Instead, a party is required to demonstrate “by

competent evidence or inescapable inference” that a court relied
on the argument “either in a preliminary matter or as part of a
final disposition.” Id.

Even if the court making the prior

ruling does not give the reasons for its ruling, if it is
“reasonable to believe” that a court ruled in a certain way in
reliance on an argument, it suffices to show that the court
accepted the argument. Patriot, 834 F.2d at 213.
In the BMC action, Keenan asserted in his opposition to the
motion for summary judgment that the foreclosure sale was
invalid
based on the fail [sic] of the Keegan affidavit [to comply,
inter alia, with personal knowledge requirements and M.G.L.
c. 244, §§ 14, 35A] . . . without which there is no
evidence whatsoever that a foreclosure was ever lawfully
conducted.
The BMC allowed Keenan’s motion to strike the Keegan affidavit
and denied U.S. Bank’s motion for summary judgment as well as
Keenan’s motion for summary judgment.

Although the BMC did not

explain why it denied U.S. Bank’s summary judgment motion, the
fact that it did so, after striking the affidavit and thereby
removing any evidence that a foreclosure had been lawfully
conducted, creates the “inescapable inference” that the Court
accepted Keenan’s argument that the foreclosure was void. Perry,
629 F.3d at 11.

Accordingly, the second requirement for

judicial estoppel is met.
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The third consideration for judicial estoppel, whether the
party with the contrary positions would derive an unfair
advantage, also weighs in favor of its application.

The BMC’s

acceptance of Keenan’s argument that the foreclosure sale was
void allowed him to avoid summary judgment and likely gave U.S.
Bank incentive to dismiss its claims.

Now Keenan avoids

mortgage payments by asserting that the foreclosure sale was
valid and U.S. Bank has title to the property.

The complete

reversal of positions is precisely “the sort of self-serving
self-contradiction, or playing fast and loose with the courts,”
that judicial estoppel is meant to prevent. Patriot, 834 F.2d at
213 (internal quotation marks omitted).

Consequently, the

unfair advantage that Keenan would derive from his contrary
positions is a “powerful factor in favor of applying the
doctrine.” Guay v. Burack, 677 F.3d 10, 17 (1st Cir. 2012)
Plaintiff raises four grounds that supposedly preclude
judicial estoppel: 1) the BMC case remains pending, 2) Wells
Fargo is not a party to the BMC litigation which 3) means the
claims in this case are not affected by the outcome of the BMC
case and 4) his claims involve actions that occurred after the
BMC trial.

None of those arguments prevents the application of

judicial estoppel.
First, the fact that the BMC case is ongoing does not
affect the analysis because judicial estoppel can occur based on
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a position taken at any stage of the prior proceeding. See
Patriot, 834 F.2d at 212-13.

Similarly, plaintiff’s second and

third contentions relying on the fact that Wells Fargo is not a
party to the BMC litigation are inapposite because “harm to an
opponent is not an invariable prerequisite to judicial
estoppel.” Id. at 214.

Finally, plaintiff’s assertion that his

claims relate to events that occurred after the trial in the BMC
case misses the mark: it is precisely because he first asserted
that the foreclosure was void and now that it is valid that
judicial estoppel applies.
In sum, the prerequisites for judicial estoppel are
satisfied and plaintiff has provided no convincing reason that
would prevent the Court from applying the doctrine.

To the

extent plaintiff’s claims rely on the position that the
foreclosure sale was valid, they are judicially estopped.
2. Plaintiff’s Remaining Allegations
Because plaintiff is judicially estopped from alleging that
the foreclosure was valid and that he therefore owes nothing on
his mortgage, the only remaining factual basis for his claims is
that defendants wrongly contacted him directly rather than his
counsel.

Evaluating plaintiff’s claims based on those contacts,

defendants are not entitled to judgment on the pleadings with
respect to the FDCPA claim.

Conversely, they are entitled to

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judgment on the pleadings for the claims based upon 1) the
MFDCPA, 2) emotional distress and 3) Chapter 93A.
a. The Fair Debt Collection Practices Act and the
Massachusetts Fair Debt Collection Practices Act
The only ground that defendants raised for dismissing the
FDCPA claim is that plaintiff is judicially estopped.

The only

remaining relevant factual allegation, i.e. that defendants
directly contacted plaintiff when they knew he was represented
by counsel, states a claim under the FDCPA.

Section 1692d of

that statue states that
[a] debt collector may not engage in any conduct the
natural consequence of which is to harass, oppress, or
abuse any person in . . . the collection of a debt.
15 U.S.C. § 1692d.

Based on the facts of the complaint,

defendants were well aware that plaintiff was represented by
counsel, yet they contacted him directly with respect to the
money allegedly owed on the mortgage.

Accordingly, plaintiff

has sufficiently alleged that defendants harassed him in
violation of 15 U.S.C. § 1962d and, with respect to that claim,
defendants’ motion will be denied.
Plaintiff also attempts to assert a claim under the MFDCPA,
M.G.L. c. 93, § 49, but that statute does not authorize a
private cause of action. See, e.g., O'Connor v. Nantucket Bank,
992 F. Supp. 2d 24, 33 (D. Mass. 2014).

Instead, as addressed

below, an individual must bring a claim concerning a violation

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of Section 49 under Chapter 93A. Id.

Therefore, to the extent

plaintiff attempts to allege an independent claim under the
MFDCPA, defendants’ motion will be allowed.
b. Negligent Infliction of Emotional Distress
Defendants correctly contend that the duty of care
necessary for a negligent infliction of emotional distress claim
is lacking.

As the First Circuit Court of Appeals has

determined, “[t]he relationship between a borrower and a lender
does not give rise to a duty of care under Massachusetts law.”
MacKenzie v. Flagstar Bank, FSB, 738 F.3d 486, 495 (1st Cir.
2013).

Because there is no duty, there can be no claim of

negligent infliction of emotional distress. See Rodriguez v.
Cambridge Hous. Auth., 823 N.E.2d 1249, 1253 (Mass. 2005).
Defendants are entitled to judgment on the pleadings with
respect to the negligent infliction of emotional distress claim.
c. Chapter 93A
The final question to be resolved is whether plaintiff
states a claim under Chapter 93A when he alleges that defendants
contacted him while he was represented by counsel.

To prevail

on a Chapter 93A claim, plaintiffs must show that 1) defendant
committed an unfair or deceptive trade practice while engaged in
trade or business, 2) plaintiffs suffered an injury and 3) a
causal connection between defendant’s alleged act and

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plaintiffs’ injury. See Morris v. BAC Home Loans Servicing,
L.P., 775 F. Supp. 2d 255, 259 (D. Mass. 2011).
Keenan passes the first hurtle because he has alleged that
defendants violated both the FDCPA, 15 U.S.C. 1692 et seq., and
the MFDCPA, M.G.L. c. 93, § 49, and a violation of either of
those statutes is a per se violation of Chapter 93A. McDermott
v. Marcus, Errico, Emmer & Brooks, P.C., 775 F.3d 109, 123 (1st
Cir. 2014).
Whether the pleadings meet the second requirement for a
Chapter 93A claim, that Keenan was injured, is a closer
question.

As another session of this Court has observed, “the

jurisprudence on cognizable injuries under chapter 93A leaves
much to be desired by way of clarity.” Ferreira v. Sterling
Jewelers, Inc., 130 F. Supp. 3d 471, 478 (D. Mass. 2015).

The

Supreme Judicial Court of Massachusetts (“the SJC”) has recently
clarified that
the violation of the legal right that has created the
unfair or deceptive act or practice must cause the consumer
some kind of separate, identifiable harm arising from the
violation itself.
Young v. Wells Fargo Bank, N.A., 828 F.3d 26, 35 (1st Cir. 2016)
(quoting Tyler v. Michaels Stores, Inc., 984 N.E.2d 737, 745
(Mass. 2013)).

In the past few years, the SJC “appear[s] to

have returned to the notion that injury under chapter 93A means
economic injury in the traditional sense.” Rule v. Fort Dodge

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Animal Health, Inc., 607 F.3d 250, 255 (1st Cir. 2010).

If a

plaintiff merely alleges emotional distress under Chapter 93A,
he must show that the requirements for intentional infliction of
emotional distress (“IIED”) are met.

Young v. Wells Fargo Bank,

N.A., 109 F. Supp. 3d 387, 396 (D. Mass. 2015), aff'd, 828 F.3d
26 (1st Cir. 2016); Haddad v. Gonzalez, 576 N.E.2d 658, 667
(Mass. 1991).
Here, plaintiff alleges that he suffered actual damages
from missing work, and copy, mailing and other charges.

Even

taking the complaint as true, those allegations fail to state a
plausible claim for economic harm.

Plaintiff’s vague assertions

of economic damages do not “raise a right to relief above the
speculative level”. Twombly, 550 U.S. at 555
Plaintiff also fails plausibly to allege emotional distress
that rises to the level of injury required for a Chapter 93A
claim.

To show IIED, a plaintiff must assert that “the

defendant’s conduct was extreme and outrageous, beyond all
possible bounds of decency, and utterly intolerable in a
civilized community.” Payton v. Abbott Labs, 437 N.E.2d 171, 180
(Mass. 1982).

It was ill-advised for defendants to send a

letter directly to plaintiff when he was represented by counsel
but such an action is not “utterly intolerable in a civilized
community.” Id.

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The failure to allege an actionable injury under Chapter
93A eliminates the need to examine causation.

Because

plaintiff’s purported economic injury is merely speculative and
his alleged emotional distress does not meet the prerequisites
for IIED, defendants are entitled to judgment on the pleadings
with respect to the Chapter 93A claim.
III.

Plaintiff’s Request to Amend the Complaint
Plaintiff suggests in passing that that he should be

permitted to amend the complaint.

If he seeks to do so, he must

file a motion to that effect.

ORDER
In accordance with the foregoing, defendants’ motion for
judgment on the pleadings is, with respect to plaintiff’s FDCPA
claim, DENIED but is otherwise ALLOWED.

So ordered.

/s/ Nathaniel M. Gorton______
Nathaniel M. Gorton
United States District Judge
Dated March 30, 2017

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