Shea v. Ditech Financial LLC
Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDERFor the foregoing reasons, the motion of defendants Ditech Financial LLC and Wilmington Savings Fund, FSB to dismiss the first amended complaint (Docket No. 28) is ALLOWED.(Caruso, Stephanie)
United States District Court
District of Massachusetts
Ditech Financial LLC and
Wilmington Savings Fund Society, )
Civil Action No.
MEMORANDUM & ORDER
This case involves claims brought by plaintiff Karen Shea
(“Shea” or “plaintiff”) against defendants Ditech Financial LLC
and Wilmington Savings Fund Society, FSB (collectively,
“defendants”) for 1) breach of contract, 2) violation of M.G.L.
c. 244, § 35A, 3) negligent infliction of emotional distress, 4)
intentional infliction of emotional distress and 5) violation of
M.G.L. c. 93A.
Pending before this Court is defendants’ joint
motion to dismiss the complaint for failure to state claims upon
which relief can be granted.
For the reasons that follow, their
motion will be allowed.
Karen Shea and then-husband Patrick Shea bought the subject
property at 145 Jericho Road, Scituate, Massachusetts (“the
Property”) on October 6, 1996.
Nearly ten years later, in
March, 2006, the Sheas refinanced their mortgage with a $400,000
loan from Mt. Washington Cooperative Bank.
They signed a
promissory note (“the Note”) and granted a mortgage on the
Property (“the Mortgage”) to secure the loan.
The Mortgage was
assigned to the Mortgage Electronic Registry System (“MERS”) on
the same day.
In December, 2008, MERS assigned the Mortgage to
Countrywide Home Loans Servicing, LP (“Countrywide”), the
successor of which is Bank of America Home Loans Servicing, LP
On December 15, 2010, pursuant to a divorce decree,
the Property was conveyed from Patrick and Karen Shea to Karen
After falling behind on her payments, BAC offered Shea a
forbearance agreement under the Fannie Mae Homesaver program.
Shea agreed to the offer and the agreement became effective on
July 19, 2009 for a six-month period.
Shea timely made payments
for that entire period and claims that sometime thereafter, BAC
instructed her to continue making the reduced payments which she
did through July 20, 2010.
On May 14, 2010, BAC sent a Notice of Intention to
Foreclose (“the Notice”) to Shea.
The Notice stated that if the
default was not cured by June 13, 2010, payments would be
No such action was taken, however, until 2016.
BAC transferred the Mortgage to Green Tree Servicing, LLC
(“Green Tree”) by assignment recorded February 3, 2014.
corrective assignment was recorded on January 15, 2015 and Green
Tree changed its name to Ditech Financial, LLC (“Ditech”) on
August 31, 2015.
Shea made several requests for loan modification at
unspecified times between receiving the Notice and filing this
On December 28, 2014, Green Tree acknowledged receipt
of one such request but denied it three days later.
On January 8, 2015, Green Tree sent Shea a “Modification
Trial Period Plan Notice” that would have allowed her to make
payments for three months, which, if successfully made, would
have made Shea eligible for certain modifications of the
Shea asserts that she was unable to make those
payments because they exceeded her income as calculated by Green
Tree in their December 31, 2014 letter.
Shea sent a demand letter, pursuant to M.G.L. c. 93A, to
Ditech, f/k/a Green Tree, on September 24, 2015 alleging unfair
and deceptive trade practices in the servicing of her loan, as
well as failure to apply the payments made under the Forbearance
Agreement to the loan balance.
Ditech responded on October 20,
2015 asserting that her payments had been applied to the
outstanding balance on May 13, 2010 but it did not account for
the alleged July 20, 2010 payment of $1,661.31.
Shea initiated this suit against Ditech in April, 2016 in
Plymouth Superior Court, Massachusetts.
Ditech removed the
action to this Court in July, 2016 and shortly thereafter filed
a motion to dismiss Shea’s claims.
Ditech promptly sent Shea a Notice of Mortgage Foreclosure
Sale and, on July 29, 2016, assigned the Note and Mortgage to
Wilmington Savings Fund Society, FSB (“Wilmington”).
amended her complaint to include Wilmington as a defendant on
August 17, 2016.
Plaintiff filed a motion for preliminary injunction with
this Court on August 11, 2016.
That motion was held in abeyance
until September 21, 2016, at which point it was denied because
plaintiff failed to demonstrate a likelihood of success.
Shea’s amended complaint alleges five counts:
the forbearance agreement (Count I), failure to give adequate
notice prior to foreclosure in violation of M.G.L. c. 244, § 35A
(Count II), negligent and intentional infliction of emotional
distress (Counts III and IV, respectively) and unfair and
deceptive business practices in violation of M.G.L. c. 93A
On November 11, 2016, Wilmington filed an answer to
plaintiff’s first amended complaint.
Ditech and Wilmington
subsequently filed a joint motion to dismiss the first amended
That motion is the subject of this Memorandum.
Defendant’s Motions to Dismiss
To survive a motion to dismiss for failure to state a claim
under Fed. R. Civ. P. 12(b)(6), a complaint 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, 667 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
A claim is
facially plausible if, after accepting as true all nonconclusory factual allegations, the court can draw the
reasonable inference that the defendant is liable for the
misconduct alleged. Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d
1, 12 (1st Cir. 2011).
A court may not disregard properly pled
factual allegations even if actual proof of those facts is
Rather, the relevant inquiry focuses on the
reasonableness of the inference of liability that the plaintiff
is asking the court to draw. Id. at 13.
While it differs from a Rule 12(b)(6) motion to dismiss in
that it is filed after the close of pleadings and “implicates
the pleadings as a whole,” a Rule 12(c) motion for judgment on
the pleadings is governed by the same standard. Perez–Acevedo v.
Rivero–Cubano, 520 F.3d 26, 29 (1st Cir. 2008).
When rendering that determination, a court may not look
beyond the facts alleged in the complaint, documents
incorporated by reference therein and facts susceptible to
judicial notice. Haley v. City of Boston, 657 F.3d 39, 46 (1st
As a threshold matter, although defendant Wilmington
jointly filed a motion with Ditech to dismiss the amended
complaint pursuant to Fed. R. Civ. P. 12(b)(6), it has already
filed an answer and thus its motion is properly characterized as
a motion for judgment on the pleadings. See Fed. R. Civ. P.
Because the legal standard for Rule 12(c) motions are
the same as those for Rule 12(b)(6) motions, however, PerezAcevedo, 520 F.3d at 29, the Court will consider the motion as
Breach of the Forbearance Agreement
In Count I, plaintiff alleges that defendants breached the
Forbearance Agreement between BAC and Shea by commencing
foreclosure proceedings on the subject property.
respond that, because they were not parties to the Forbearance
Agreement and did not assume BAC’s obligations, they are not
liable for the alleged breach.
“As a general matter, contracts do not bind nonparties.”
City of Revere v. Boston/Logan Airport Assocs., LLC, 416 F.
Supp. 2d 200, 208 (D. Mass. 2005) (citing EEOC v. Waffle House,
Inc., 534 U.S. 279, 294 (2002)).
Successors in interest may,
however, expressly or impliedly assume the liabilities of a
contract to which they were not a party. Id.
Plaintiff appears to assume that the Forbearance Agreement
amended the Mortgage and, therefore, when defendants assumed the
Mortgage they became a party to the Forbearance Agreement.
The Forbearance Agreement specifically provides, however,
that it is not a modification of the Note or the Mortgage and,
thus, it is not incorporated, explicitly or implicitly, into
those legal documents.
Because defendants are not parties to
the Forbearance Agreement and there is no evidence that they
assumed its obligations, they are not bound by that agreement.
City of Revere, 416 F. Supp. 2d at 208.
Accordingly, Count I will be dismissed.
Failure to Provide Adequate Notice
Plaintiff contends that the Notice of Intention to
Foreclose (“the Notice”) provided only 30 days before
acceleration, in violation M.G.L. c. 244, § 35A, which requires
a 90-day notice.
Attempting to protect homeowners, § 35A “affords homeowners
who have fallen behind in their mortgage payments a ninety-day
right to cure a default.” U.S. Bank Nat’l Ass’n v. Schumacher,
5 N.E.3d 882, 889 (Mass. 2014).
The Notice was issued on May 14, 2010 and stated that
plaintiff had until June 13, 2010 to cure the default.
Nevertheless, defendants’ predecessor in interest, BAC, neither
foreclosed nor accelerated payment within 90 days of the Notice.
Because “foreclosure proceedings do not commence with the
issuance of the written notice,” id. at 890, plaintiff had
approximately six years from receipt of the Notice until she
filed her lawsuit to cure her default.
Therefore, plaintiff has
failed to allege a violation of § 35A. See id.
Counts III and IV:
Infliction of Emotional
Defendants move to dismiss Counts III and IV, negligent and
intentional infliction of emotional distress, respectively, as
Plaintiff responds that she is entitled to
equitable tolling pursuant to the “discovery rule”.
A tort action in Massachusetts must be commenced within
three years from the time that the alleged injury occurred.
Pagliuca v. City of Boston, 626 N.E.2d 625, 628 (Mass. App. Ct.
In claims of negligent infliction of emotional distress,
the injury follows “closely on the heels of the negligent act.”
Quinn v. Walsh, 732 N.E.2d 330, 332 (Mass. App. Ct. 2000)
(quoting Miles v. Edward O. Tabor, 789, 443 N.E.2d 1302 (Mass.
For claims of intentional infliction of emotional
distress, “the injury occurs on the date a plaintiff first
experiences anxiety or distress . . . .” Id.
Here, plaintiff’s alleged emotional distress arose on or
about May 14, 2010, when BAC sent her a notice of its intent to
foreclose but she did not initiate this lawsuit until nearly six
years later, on April 12, 2016, well beyond the three-year
limitations period. See Pagliuca, 626 N.E.2d at 629.
Under the so-called discovery rule, however, if plaintiff
has suffered an “inherently unknowable” injury, the statute of
limitations will be tolled until she knows, “or with reasonable
diligence should know,” that she suffered an injury and the
identity of the defendant who caused that injury. Harrington v.
Costello, 7 N.E.3d 449, 453-54 (Mass. 2014).
In relying upon
the discovery rule, plaintiff bears the burden of proving both
the actual lack of causal knowledge and the objective
reasonableness of that lack of knowledge. Koe v. Mercer, 876
N.E.2d 831, 836 (Mass. 2007) (citing Doe v. Creighton, 786
N.E.2d 1211, 1213 (Mass. 2003)).
Plaintiff proffers that she did not know nor could
reasonably have known that she may have been harmed by BAC’s
She does not offer any factual allegations, however,
to support that claim.
The Court will not credit such a
conclusory allegation. See Ocasio-Hernandez, 640 F.3d at 12
(citing Iqbal, 556 U.S. at 678).
Accordingly, plaintiff is not entitled to equitable tolling
of the limitations period and Counts III and IV will be
dismissed as time-barred.
Violation of M.G.L. c. 93A
In Count V, Shea alleges that defendants’ conduct
constitutes unfair and deceptive business practices, in
violation of M.G.L. c. 93A (“93A”).
Defendants maintain that
her 93A claim is barred by the statute of limitations.
The statute of limitations for a 93A claim is four years.
M.G.L. c. 260, § 5A.
Although plaintiff contends that she is
entitled to equitable tolling under the discovery rule, for the
reasons explained above, her 93A claim is time-barred.
Failure to Comply with Local Rule 7.1(a)(2)
Finally, plaintiff avers that defendants’ motion to dismiss
should be stricken because they did not confer with her before
filing it, in violation of Local Rule 7.1(a)(2).
Although the purported failure of the defendants to
meet and confer with plaintiff regarding the motion is
disconcerting, “summary denial” of their motion on that ground
is unwarranted. See Blanchard v. Swaine, No. 08-40073, 2010 WL
4922699, at *5 (D. Mass. Nov. 29, 2010).
For the foregoing reasons, the motion of defendants Ditech
Financial LLC and Wilmington Savings Fund, FSB to dismiss the
first amended complaint (Docket No. 28) is ALLOWED.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated June 15, 2017
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