Saade v. Wilmington Saving Fund Society et al

Filing 81

Judge Indira Talwani: ORDER entered. MEMORANDUM AND ORDER DENYING Plaintiff's 66 MOTION to Strike Defendants' 42 Motion to Dismiss Plaintiff's Amended Complaint; GRANTING Defendant CitiMortgage's 57 MOTI ON To Dismiss for Failure to State a Claim; GRANTING the PennyMac Defendants' 42 Motion to Dismiss Plaintiff's Amended Complaint with respect to Counts 1-6, 8, 10-14, 16-21, and 24-25. See Attached Order. (DaSilva, Carolina)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
JACQUES SAADE,
Plaintiff,
v.
WILMINGTON SAVINGS FUND SOCIETY,
CHRISTIANA TRUST, PNMAC
MORTGAGE CO. LLC, PENNY MAC
SERVICING LLC, PENNYMAC MORTGAGE
INVESTMENT TRUST HOLDINGS I, LLC,
CITI MORTGAGE, MORTGAGE LENDERS
NETWORK USA, INC., SLS LLC, DEUTSCHE
BANK TRUST COMPANY DELAWARE,
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC., BENDETT AND MCHUGH,
EVA MASSIMINO, NELSON MULLINS LLP,
and KEVIN POLANSKY,
Defendants.

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Civil Action No. 16-cv-11982-IT

MEMORANDUM & ORDER
September 26, 2017
TALWANI, D.J.
I.

Introduction
Currently pending before this court are the Motion to Dismiss [#42] by Wilmington

Savings Fund Society, FSB (“Wilmington”), Christiana Trust, PNMAC Mortgage Co. LLC
(“PNMAC”), PennyMac Loan Services, LLC (“PennyMac”), PennyMac Mortgage Investment
Trust Holdings I, LLC (“PennyMac Holdings”), Deutsche Bank as Trustee of PennyMac Loan
Trust 2011-NPL1 (“Deutsche Bank Trustee”), Mortgage Electronic Registration Systems, Inc.
(“MERS”), and Specialized Loan Servicing LLC (“SLS”) (collectively, the “PennyMac
Defendants”) and Defendant CitiMortgage’s Motion to Dismiss [#57]. Both motions seek

dismissal of Plaintiff Jacques Saade’s Verified First Amended Complaint & Request for
Injunctive Relief Demand for Jury Trial [“Amended Complaint”] [#14] based on res judicata
and other grounds. Also pending is Plaintiff’s Motion to Strike Defendants’ Motion to Dismiss
[“Motion to Strike”] [#66]. For the reasons set forth below, Plaintiff’s Motion to Strike [#66] is
DENIED, and Defendant CitiMortgage’s Motion to Dismiss [#57] is GRANTED. The
PennyMac Defendants’ Motion to Dismiss [#42] is GRANTED with respect to Counts 1-6, 8,
10-14, 16-21, and 24-25. The court reserves ruling on whether Count 9 should be dismissed, and
will set a hearing with respect to the issue identified below.
II.

Plaintiff’s Motion to Strike
Plaintiff asked this court to strike the PennyMac Defendants’ motion to dismiss as

untimely, and to enter default judgment against them pursuant to Federal Rule of Civil Procedure
55. Mot. to Strike 6 [#66]. Plaintiff notes that he filed this action on October 3, 2016, and that the
PennyMac Defendants did not file their motion to dismiss until December 20, 2016. Id. at 1, 3-4.
The record shows no attempt to serve any of the PennyMac Defendants, other than
Defendant Christiana Trust, and thus no facts to suggest that the unserved PennyMac Defendants
failed to timely defend this action.
Plaintiff does claim to have served Christiana Trust, while the PennyMac Defendants
assert that the purported service was improper. The court need not resolve this dispute. Even if
Plaintiff had properly served Christiana Trust on October 12, 2016, he did not file an Affidavit of
Service until December 13, 2016. Once the claim of service was filed, the PennyMac Defendants
promptly filed their motion to dismiss on December 20, 2016.
Federal Rule of Civil Procedure 55(a) states that where “a party against whom a
judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure

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is shown by affidavit or otherwise, the clerk must enter the party’s default.” After such entry of
default by the clerk, the plaintiff may seek a default judgment. Fed. R. Civ. P. 55(b). Here, the
PennyMac Defendants have defended this action prior to service or attempted service on all but
one of them, and as to that one, moved prior to any clerk’s entry of default, and prior to Plaintiff
seeking entry of default judgment. The court finds no basis for a default judgment and
accordingly, Plaintiff’s Motion to Strike [#66] is DENIED.
III.

Defendants’ Motions to Dismiss
A.

Legal Standard

To survive a motion to dismiss, a complaint must include factual allegations that, taken as
true, demonstrate a plausible claim for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-58
(2007). A plausible claim is one containing “factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). To assess a complaint, the court first “must separate the complaint’s
factual allegations (which must be accepted as true) from its conclusory legal allegations (which
need not be credited).” Jane Doe No. 1 v. Backpage.com, LLC, 817 F.3d 12, 24 (1st Cir. 2016)
(citation omitted). The court must then “determine whether the remaining facts allow it to ‘draw
the reasonable inference that the defendant is liable for the misconduct alleged.’” Id.
This court can, in an appropriate case, consider the affirmative defense of res judicata on
a Rule 12(b)(6) motion to dismiss. See In re Colonial Mortg. Bankers Corp., 324 F.3d 12, 16 (1st
Cir. 2003). An appropriate case is one in which (1) “the facts that establish the defense [are]
definitively ascertainable from the allegations of the complaint, the documents (if any)
incorporated therein, matters of public record, and other matters of which the court may take
judicial notice,” and (2) “the facts so gleaned [] conclusively establish the affirmative defense.”

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Id. In deciding a Rule 12(b)(6) motion to dismiss, a court is ordinarily limited to considering
“only the complaint, documents attached to it, and documents expressly incorporated into it.”
Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71-72 (1st Cir. 2014). The court can also consider
matters of public record, Freeman v. Town of Hudson, 714 F.3d 29, 36 (1st Cir. 2013), including
the record of the purportedly preclusive action where a “motion to dismiss is premised on a
defense of res judicata.” Andrew Robinson Int’l, Inc. v. Hartford Fire Ins. Co., 547 F.3d 48, 51
(1st Cir. 2008).
B.

Plaintiff’s Factual Allegations

A review of the facts alleged in the Amended Complaint is set forth in the Memorandum
& Order [#78].
C.

The PennyMac Defendants’ Motion to Dismiss1

The Amended Complaint asserts the following claims against the PennyMac Defendants:
Counts 1-6, 8-14, 16-21, and 24-25. The PennyMac Defendants have moved to dismiss each of
the counts against them in the Amended Complaint pursuant to Federal Rule of Civil Procedure
12(b)(6).
1.

Res Judicata

The PennyMac Defendants argue first that the doctrine of res judicata precludes Plaintiff
from asserting his claims here.
Plaintiff has filed two prior actions regarding his mortgage (the “Mortgage”). First, in
April 2015, Plaintiff filed a complaint in Massachusetts state court against the PennyMac

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On January 3, 2017, Plaintiff filed an Opposition to Defendants’ December 20th Motion to Dismiss [#48]. In that
opposition, Plaintiff requested leave to file further opposition to the PennyMac Defendants’ motion to dismiss by
January 11, 2017. Id. at 1. The court granted that request, and ordered Plaintiff to file his further opposition on or
before January 11, 2017. Elec. Order [#49]. Plaintiff did not file a further opposition by the date allowed by the
court, but included further argument with his Motion to Strike [#66], filed a month later. The court has considered
Plaintiff’s arguments in both his original opposition and the motion to strike.

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Defendants, CitiMortgage, and other defendants. That action was removed to this court,
Plaintiff’s motion to remand was denied, and on October 14, 2015, Plaintiff filed his Second
Amended Complaint. The Second Amended Complaint was eventually dismissed, and the case
was closed. See Saade v. PennyMac Loan Services, LLC, 15-cv-12275-IT (D. Mass.) (the “First
Action”), Notice of Removal [#1]; Order Denying Remand [#14]; Second Amended Complaint
[#56]; Mem. & Order [#116]; Order Dismissing Case [#127].
After Plaintiff’s motion to remand the First Action was denied, Plaintiff filed a second
action in Massachusetts state court against the PennyMac Defendants, CitiMortgage, and MLN.
On October 13, 2015, Plaintiff filed an amended complaint. The second action was then removed
to this court and eventually dismissed, and the case was closed. Saade v. PennyMac Loan
Services, LLC, 15-cv-13611-IT (D. Mass.) (the “Second Action”), Notice of Removal [#1];
Mem. & Order [#38]; Order [#40]; Order Dismissing Case [#42]. Plaintiff’s appeals of both
dismissals are currently pending before the First Circuit. Notice of Appeal [15-cv-12275, #130];
Notice of Appeal [15-cv-13611, #44].
Where “both the potentially precluding suit and the potentially precluded suit were
litigated in federal courts, federal law governs the res judicata effect of the prior judgment.”
Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass’n, 142 F.3d 26, 37 (1st Cir. 1998). Under the
doctrine of res judicata, “a final judgment on the merits of an action precludes the parties or their
privies from relitigating claims that were raised or could have been raised in that action.”
Apparel Art Int’l, Inc. v. Amertex Enterprises Ltd., 48 F.3d 576, 583 (1st Cir. 1995) (citing Allen
v. McCurry, 449 U.S. 90, 94 (1980)); see also In re Sonus Networks, Inc., S’holder Derivative
Litig., 499 F.3d 47, 56 (1st Cir. 2007) (“Claim preclusion is based on the idea that the precluded
litigant had the opportunity and incentive to fully litigate the claim in an earlier action, so that all

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matters that were or could have been adjudicated in the earlier action on the claim are considered
to have been finally settled by the first judgment.”). A res judicata defense precludes litigation of
a party’s claims when the following elements have been established: (1) a final judgment on the
merits in an earlier proceeding, (2) sufficient identity between the causes of action asserted in the
earlier and later suits, and (3) sufficient identity between the parties in the two actions. Mass.
Sch. of Law at Andover, 142 F.3d at 37. As set forth below, except as to the claims based on
events occurring after October 2015, all three elements of res judicata are satisfied with respect
to the claims against the PennyMac Defendants.
First, the court in the First and Second Actions entered a final judgment on the merits by
allowing Defendants’ motion to dismiss. See Airframe Sys., Inc. v. Raytheon Co., 601 F.3d 9, 14
(1st Cir. 2010) (citing AVX Corp. v. Cabot Corp., 424 F.3d 28, 30 (1st Cir. 2005)) (holding that
dismissal for failure to state a claim is “plainly a final judgment on the merits”). The parties are
also sufficiently identical, given that the PennyMac Defendants were all named as defendants in
the First and Second Actions.
In addition, except for the claims based on events occurring after the operative
complaints in the first two actions were filed in October 2015, the causes of action articulated in
the instant action and the First and Second Actions are sufficiently identical. Causes of action are
sufficiently identical when they “derive . . . from the same transaction or series of connected
transactions.” McDonough v. City of Quincy, 452 F.3d 8, 16 (1st Cir. 2006) (internal quotation
marks omitted); see also Mass. Sch. of Law at Andover, 142 F.3d at 38 (“[The transactional
approach] boils down to whether the causes of action arise out of a common nucleus of operative
facts.”). “Although a set of facts may give rise to multiple counts based on different legal
theories, if the facts form a common nucleus that is identifiable as a transaction . . ., then those

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facts represent one cause of action.” Herman v. Meiselman, 541 F.3d 59, 62 (1st Cir. 2008)
(quoting Apparel Art Int’l, 48 F.3d at 583-84). To determine whether a common nucleus of
operative facts exists, courts “routinely ask whether the facts are related in time, space, origin, or
motivation, whether they form a convenient trial unit, and whether their treatment as a unit
conforms to the parties’ expectations.” Mass. Sch. of Law at Andover, Inc., 142 F.3d at 38
(citation and internal quotation marks omitted).
As an initial matter, several of the claims in the instant action are identical to those
presented in both the First and Second Actions. For example, Plaintiff asserts three claims for
breach of contract and fraudulent assignment with respect to the various assignments of his
mortgage, see Am. Compl. ¶¶ 229-255 (Counts 18-20) [#14], having previously done so in both
prior actions, see First Action, Second Am. Compl. ¶¶ 214-238 (Counts 6-8) [15-cv-12275, #56];
Second Action, Am. Compl. ¶¶ 167-198 (Counts 1-3), ¶¶ 215-219 (Count 8) [15-cv-13611, #11]. He also brings claims under the Real Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. § 2601 et seq., the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., some of which he
asserts give rise to claims under Massachusetts General Laws ch. 93A (“Chapter 93A”),
regarding the PennyMac Defendants’ assignments and servicing of his mortgage, each of which
he raised in the First Action.2 Compare Am. Compl. ¶¶ 74-100 (Count 1), ¶¶ 116-141 (Counts 46) [#14]; with First Action, Second Am. Compl. ¶¶ 199-213 (Counts 4-5), ¶¶ 239-250 (Count 9)
[15-cv-12275, #56]. Plaintiff also raises a laches claim in all three actions. See Am. Compl. ¶¶
109-115 (Count 3) [#14]; First Action, Second Am. Compl. ¶¶ 271-275 (Count 13) [15-cv-

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In Counts 1 and 4, Plaintiff also argues that the PennyMac Defendants have violated the Massachusetts debt
collection regulations, 209 C.M.R. § 18.16 and 940 C.M.R. § 7.04. See Am. Compl. ¶¶ 74-100 (Count 1), ¶¶ 116128 (Count 4) [#14]. To the extent Plaintiff did not reference such regulations in the First Action, those claims could
have been raised, and are thus barred by res judicata. See Allen, 449 U.S. at 94.

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12275, #56]; Second Action, Am. Compl. ¶¶ 243-248 (Count 10) [15-cv-13611, #1-1]. As a
result, Counts 1, 3-6, and 18-20 are barred by res judicata.
Moreover, although the remaining counts against the PennyMac Defendants are being
brought for the first time, several of those claims “could have been raised in [the prior]
action[s].” Allen, 449 U.S. at 94. Plaintiff now seeks to argue that the PennyMac Defendants
breached their duty of good faith and reasonable diligence with respect to the various mortgage
assignments, Am. Compl. ¶¶101-108 (Count 2) [#14], and the interest rate applied to the
mortgage, id. ¶¶ 222-228 (Count 17). He also seeks declaratory judgment regarding the total
amount of his existing debt on his mortgage. Id. ¶¶ 292-298 (Count 24). But Plaintiff had a “full
and fair” opportunity to raise such claims when he twice complained about the same set of facts.
See Airframe Sys., Inc., 601 F.3d at 15 (stating that inquiry regarding whether “causes of action
are sufficiently identical or related for claim preclusion purposes . . . does not turn on the labels
the plaintiff attaches to [his] various claims”). As a result, Counts 2, 17, and 24 are also barred
by res judicata.
2.

Other Grounds

Plaintiff also asserts a number of claims against the PennyMac Defendants based on
events that occurred after the October 2015 filing of the operative complaints in the First and
Second Actions. For example, Plaintiff now brings claims based on a February 16, 2016, letter
regarding a loan modification proposal, see Am. Compl. ¶¶ 162-170 (Count 9) [#14], an April 2,
2016, letter directing Plaintiff to seek flood insurance, see id. ¶¶ 154-161 (Count 8), and the
filing of a servicemember action in Massachusetts Land Court on August 1, 2016, see id. ¶¶ 74100 (Count 1), ¶¶ 171-208 (Counts 10-14), ¶¶ 214-221 (Count 16), ¶¶ ¶¶ 256-265 (Count 21), ¶¶
299-308 (Count 25). Insofar as these claims are based on new transactions, the court finds

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Plaintiff’s claims not barred by res judicata. The court now considers whether Plaintiff has
alleged facts sufficient to state claims based on those new events.
a. February 16, 2016, Letter Regarding a Trial Plan Period
In Count 9, Plaintiff alleges that PennyMac violated the FDCPA by sending him a letter
on February 16, 2016, regarding an offered Trial Plan Period for the Mortgage. To show a
violation of the FDCPA, a plaintiff must establish “(1) that []he was the object o-f collection
activity arising from consumer debt, (2) defendants are debt collectors as defined by the FDCPA,
and (3) defendants engaged in an act or omission prohibited by the FDCPA.” O’Connor v.
Nantucket Bank, 992 F. Supp. 2d 24, 30 (D. Mass. 2014) (internal citation and quotation marks
omitted). Plaintiff points to two statutory provisions that PennyMac allegedly violated: (1) 15
U.S.C. § 1692c(c), which states that “[i]f a consumer notifies a debt collector in writing that the
consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further
communication with the consumer, the debt collector shall not communicate further with the
consumer with respect to such debt.”3 A communication may give rise to liability if it is sent in
connection with the collection of any debt; it need not expressly state a demand for payment. See
LeDoux v. JP Morgan Chase, N.A., No. 12-cv-260-JL, 2012 WL 5874314, at *8 (D.N.H. Nov.
20, 2012).
Plaintiff has alleged that in 2011, he was notified that his Mortgage was in default. He
has also alleged that PennyMac, who obtained the Mortgage after Plaintiff was notified that the

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Plaintiff also alleges that PennyMac violated 15 U.S.C. § 1692e(10), which states that “a debt collector may not
use any false, deceptive, or misleading representation or means in connection with the collection of any debt. . . .
[including] [t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to
obtain information concerning a consumer.” To support his claim, Plaintiff states that PennyMac sent the February
16, 2016, letter “so it can submit an affidavit of compliance of G.L.c 244 §§ 35A and 35B,” and “to facilitate their
unlawful foreclosure proceedings specifically filing the Land Court Action detailed below.” Am. Compl. ¶¶ 166,
168 [#14]. Such vague, speculative allegations do not allow for a “reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S. at 678. Thus, Count 9 cannot survive on the basis of 15 U.S.C.
§ 1692e(10).

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Mortgage was in default, is a debt collector. See McCusker v. Ocwen Loan Servs., LLC, No. 14cv-13663-MGM, 2015 WL 4529986, at *2 (D. Mass. July 27, 2015) (concluding that mortgage
servicer defendant qualified as debt collector under FDCPA where “loan was in default when
[defendant] received it”). Finally, he has alleged that prior to receiving the February 16, 2016,
letter from PennyMac, he notified PennyMac in writing that he wished PennyMac to cease
further communication regarding the Mortgage. See, e.g., Am. Compl. ¶¶ 52-54 [#14]. The
PennyMac Defendants primarily assert that Count 9 should be dismissed as barred by res
judicata, and make only passing reference to the underlying merits of the claim. Accordingly, the
court finds that oral argument on the underlying merits of Count 9, specifically with respect to
whether Plaintiff has stated facts sufficient to support a claim that PennyMac violated 15 U.S.C.
§ 1692c(c), would be instructive, and will reserve ruling on whether Count 9 survives until after
such oral argument.
b. April 2, 2016, Letter Regarding Flood Insurance
In Count 8, Plaintiff asserts that the PennyMac Defendants violated RESPA by obtaining
force-placed flood insurance on his property. To prove a RESPA claim, a plaintiff must show
“(1) that the servicer failed to comply with the statute’s [] rules; and (2) that the plaintiff incurred
‘actual damages’ as a consequence of the servicer’s failure.” O’Connor v. Nantucket Bank, 992
F. Supp. 2d 24, 35 (D. Mass. 2014) (citation omitted). To allege actual damages, “a plaintiff
must allege specific damages and identify how the purported RESPA violations caused those
damages.” Foregger v. Residential Credit Solutions, Inc., No. 12-cv-11914-FDS, 2013 WL
6388665, at *4 (D. Mass. Dec. 5, 2013). Plaintiff may also recover statutory damages by alleging
that defendants were engaged in a “pattern or practice of noncompliance.” 12 U.S.C. § 2605(f).
Here, Plaintiff points to two statutory provisions with which the PennyMac Defendants allegedly

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failed to comply: (1) that a mortgage servicer shall not “obtain force-placed hazard insurance
unless there is a reasonable basis to believe the borrower has failed to comply with the loan
contract’s requirements to maintain property insurance,” 12 U.S.C. § 2605(k)(1)(A); and (2) that
“[a]ll charges, apart from charges subject to State regulation as the business of insurance, related
to force-placed insurance imposed on the borrower by or through the servicer shall be bona fide
and reasonable.” Id. § 2605(m).
Plaintiff’s claim is defective for several reasons. First, the April 2, 2016, letter upon
which he bases his claim does not show that the PennyMac Defendants ever force-placed flood
insurance on his property. Rather, the April 2, 2016, letter states only that the PennyMac
Defendants learned of “a change in the Federal Emergency Management Agency (FEMA) maps
which affect your property,” that “[w]e are required by law to notify you at any time during the
life of your loan if we become aware of a change in the flood requirements,” and that Plaintiff
should “contact an insurance agent or carrier as soon as possible to obtain flood coverage.” Am.
Compl. Ex. 5 [#14-2]. Second, even assuming the PennyMac Defendants force-placed flood
insurance on his property, Plaintiff has not alleged that they did not possess a “reasonable basis
to believe” that he had failed to maintain property insurance, or that the insurance obtained was
not bona fide and reasonable. Finally, Plaintiff has not made any allegations entitling him to
damages. Plaintiff alleged that he was “damaged by the defendants’ conducts,” see Am. Compl.
¶ 159 [#14], but does not explain how. Nor does he allege a pattern or practice of
noncompliance. Accordingly, Count 8 fails to state a claim upon which relief may be granted,
and must be dismissed.

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c. August 1, 2016, Filing of a Servicemember Action
The remainder of Plaintiff’s claims relate to the PennyMac Defendants’ filing of a
servicemember action on August 1, 2016.4 First, Plaintiff complains in Counts 1, 10, and 21 that
the filing of a servicemember action violates the FDCPA (and corresponding Massachusetts
regulations). Specifically, he alleges that such action violates 15 U.S.C. § 1692e(10), because it
is a “false, deceptive, or misleading representation or means in connection with the collection of
any debt,” and 15 U.S.C. § 1692(f)(6), because such action constitutes a “nonjudicial action to
effect dispossession or disablement of property.” But a servicemember action is not part of the
debt collection process. See HSBC Bank USA, N.A. v. Matt, 981 N.E.2d 710, 713-15 (Mass.
2013) (“[A] servicemember proceeding is neither a part of nor necessary to the foreclosure
process; it simply ensures that a foreclosure will not be rendered invalid for failure to provide the
protections of the SCRA to anyone so entitled”). Therefore, the filing of such an action cannot
give rise to a claim under the FDCPA, and on that ground, Counts 1, 10, and 21 must fail.
As alternative grounds for relief in Counts 10 and 11, Plaintiff alleges that the filing of a
servicemember action violates Mass. Gen. Laws ch. 244 §§ 35A (“Section 35A”) and 35B
(“Section 35B”), and Chapter 93A.5 Section 35A provides that a mortgagor “shall have a 90-day
right to cure a default”6 of a mortgage, during which time the mortgagee is prohibited from
accelerating the “maturity of the unpaid balance of such mortgage obligation or otherwise
enforce the mortgage because of a default.” Id. § 35A(a), (b). Plaintiff challenges the sufficiency
of the right to cure notice he received from Bendett & McHugh (on PennyMac and Christiana
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A general explanation of a servicemember action is set forth in the Memorandum & Order [#78].
With respect to Count 10, Plaintiff also lists Massachusetts General Laws ch. 244 § 35C (“Section 35C”) as a
ground for relief. However, he does not include any factual allegations tying Defendants’ conduct to Section 35C in
the body of the Amended Complaint, and therefore, he fails to state a claim for relief under Section 35C. See Iqbal,
556 U.S. at 678.
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At the time Plaintiff received a Section 35A right to cure notice, Section 35A provided 150 days to cure the
default.
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Trust’s behalf) in March 2015, stating that it “failed to provide the required information.” Am.
Compl. ¶ 270 [#14]. But Plaintiff does not explain what information was excluded from the
notice. Further, nothing in Section 35A prohibited Christiana Trust from filing a servicemember
proceeding during the pendency of the right to cure period, or at any time thereafter. Thus,
Section 35A does not provide a ground for relief.
Section 35B provides that “a creditor shall not cause publication of notice of a
foreclosure sale, as required by section 14, upon certain mortgage loans unless it has first taken
reasonable steps and made a good faith effort to avoid foreclosure.” Plaintiff alleges that the
servicemember action filed by Bendett & McHugh on Christiana Trust’s behalf constituted a
foreclosure publication, in violation of Section 35B. See, e.g., Am. Compl. ¶¶ 67 [#14]. But as
explained above, a servicemember action is separate from the foreclosure process, and thus filing
such action cannot constitute publication of notice of a foreclosure sale. On this ground too,
Plaintiff has failed to state a claim upon which relief may be granted.
Chapter 93A declares unlawful any “unfair or deceptive acts or practices in the conduct
of any trade or commerce.” Mass. Gen. L. ch. 93A § 2(a). Individuals have a private right of
action via Chapter 93A, Section 9. To prove a claim under Chapter 93A, a plaintiff must show
“that a person who is engaged in trade or business committed an unfair or deceptive trade
practice and that the [plaintiff] suffered a loss of money or property as a result.” Morris v. BAC
Home Loans Servicing, L.P., 775 F. Supp. 2d 255, 259 (D. Mass. 2011). Conduct may be
considered deceptive when it has “[t]he capacity to mislead consumers, acting reasonably under
the circumstances, to act differently from the way they otherwise would have acted.” Foley v.
Wells Fargo, N.A., No. 13-cv-12107-LTS, 2017 WL 1591835, at *8 (D. Mass. May 1, 2017)
(quotation omitted). To determine whether conduct is unfair, courts look to “(1) whether the

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practice . . . is within at least the penumbra of some common-law, statutory or other established
concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; [and] (3)
whether it causes substantial injury to consumers (or competitors or other businessmen).” Id.
(quotation omitted).
Plaintiff alleges that the filing of the servicemember action constituted an unfair or
deceptive act or practice. Beyond failing to show how such filing resulted in any loss of money
or property, Plaintiff also fails to articulate in other than conclusory fashion how such filing—
intended to ensure the preservation of the rights of any servicemembers—rose to the level of
“immoral, unethical, oppressive, or unscrupulous.” As a result, Plaintiff cannot recover on any of
the three alternative theories articulated in Counts 10 and 11.
Next, Plaintiff asserts in Counts 11, 13, and 16 that the filing of a servicemember action
is a violation of paragraph 22 of the Mortgage, and thus constitutes a breach of contract and the
implied covenant of good faith and fair dealing. Paragraph 22 states that the “[l]ender shall give
notice to Borrower prior to acceleration following Borrower’s breach of any covenant or
agreement in this Security Instrument . . . The notice shall further inform Borrower of the right to
reinstate after acceleration and the right to bring a court action to assert the non-existence of a
default or any other defense of Borrower to acceleration or sale.” Defs.’ Mot. Dismiss, Ex. A
¶ 22 [#43-1]. Nothing in Paragraph 22 prohibits the PennyMac Defendants from filing a
servicemember action during the pendency of pre-foreclosure legal proceedings brought by the
Plaintiff. Nor does Plaintiff’s citation to Pinti v. Emigrant Mortgage Co. save him. In Pinti, the
court held that failure to provide a borrower with a notice of the right to file a pre-foreclosure
action in accordance with paragraph 22 renders any subsequent foreclosure void. 472 Mass. 226,
240-43. Plaintiff has not alleged that the notice he received in March of 2015 failed to inform

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him of the right to file a pre-foreclosure action. Indeed, Plaintiff has exercised that right three
times. Thus, the filing of a servicemember action could not have breached the Mortgage contract
or the implied covenant of good faith and fair dealing. Counts 11, 13, and 16 fail on those
grounds.
Plaintiff also argues that the allegedly improperly filed servicemember action gives rise
to several tort claims, including defamation, Am. Compl. ¶¶ 188-193 (Count 12) [#14], and
intentional infliction of emotional distress, id. ¶¶ 205-208 (Count 14). To state a claim for
defamation, a plaintiff must allege “(1) that “[t]he defendant made a statement, concerning the
plaintiff, to a third party”; (2) that the statement was defamatory such that it “could damage the
plaintiff’s reputation in the community”; (3) that “[t]he defendant was at fault in making the
statement”; and (4) that “[t]he statement either caused the plaintiff economic loss ... or is
actionable without proof of economic loss.” Shay v. Walters, 702 F.3d 76, 81 (1st Cir. 2012)
(quoting Ravnikar v. Bogojavlensky, 782 N.E.2d 508, 510-11 (Mass. 2003)). Plaintiff states that
various foreclosure publications caused him “humiliations.” But the filing of a servicemember
action is not a foreclosure proceeding, and therefore is not tied to any alleged foreclosure
publications. Nor does Plaintiff set forth with any specificity the “humiliations” he has suffered,
or any economic loss to him. Thus, Count 12 claim must fail.
To prove intentional infliction of emotional distress, a plaintiff must show “(1) that
[defendant] intended to inflict emotional distress or that he knew or should have known that
emotional distress was the likely result of his conduct; (2) that the conduct was extreme and
outrageous, was beyond all possible bounds of decency and was utterly intolerable in a civilized
community; (3) that [defendant’s] actions were the cause of [plaintiff’s] distress; and (4) that the
emotional distress sustained by [plaintiff] was severe.” Yohe v. Nugent, 321 F.3d 35, 42 (1st Cir.

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2003). Plaintiff has not—and cannot—show that the filing of a servicemember action falls into
the realm of conduct so “extreme and outrageous” as to be “beyond all possible bounds of
decency” or “utterly intolerable in a civilized community.” As a result, Count 14 fails.
Finally, in Count 25, Plaintiff seeks injunctive relief ordering the PennyMac Defendants
to dismiss the Servicemembers Action. Am. Compl. ¶ 308 [#14]. But “injunctive relief is not a
stand-alone cause of action under Massachusetts or federal law.” Payton v. Wells Fargo Bank,
N.A., No. 12-cv-11540-DJC, 2013 WL 782601, at *6 (D. Mass. Feb. 28, 2013). And, as noted
above, there is no underlying stand-alone cause of action regarding the servicemember action
that could support such relief. Thus, Count 25 fails.
Accordingly, the PennyMac Defendants’ Motion to Dismiss [#42] is GRANTED with
respect to Counts 1-6, 8, 10-14, 16-21, and 24-25. The court reserves ruling with respect to
Count 9, and will hold oral argument regarding that claim.
D.

Defendant CitiMortgage

The Amended Complaint asserts the following claims against CitiMortgage: Counts 1, 35, 7, 15, 17, and 24.7 CitiMortgage, like the PennyMac Defendants, has moved to dismiss each of
the counts against it pursuant to Federal Rule of Civil Procedure 12(b)(6), on the basis of res
judicata or, in the alternative, failure to state a claim. As set forth below, all three elements of res
judicata are satisfied with respect to CitiMortgage.
As noted above, the court in the First Action entered a final judgment on the merits by
allowing CitiMortgage’s motion to dismiss. The parties are also sufficiently identical, given that

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Although Plaintiff does not specify in Count 25 the defendants against which he asserts his claim for injunctive
relief, the relief sought (termination of the servicemembers action filed in 2016) could not apply to CitiMortgage,
who has not serviced Plaintiff’s mortgage since 2011.

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CitiMortgage was named as a defendant in the First Action.8 Moreover, as with the PennyMac
Defendants, several of the claims Plaintiff asserts against CitiMortgage in the instant action are
identical to those presented in the First Action. For example, Plaintiff brings a claim under
RESPA regarding CitiMortgage’s servicing of his mortgage, a claim he raised in the First
Action. Compare Am. Compl. ¶¶ 129-135 (Count 5) [#14]; with First Action, Second Am.
Compl. ¶¶ 199-208 (Count 4), ¶¶ 239-250 (Count 9) [15-cv-12275, #56]. He also re-asserts a
fraud claim regarding CitiMortgage’s May 2, 2011, denial of his loan modification request, Am.
Compl. ¶¶ 209-213 (Count 15) [#14], and a laches claim, id. ¶¶ 109-115 (Count 3) [#14].
Compare First Action, Second Am. Compl. ¶¶ 186-198 (Counts 2-3), ¶¶ 271-275 (Count 13) [15cv-12275, #56]. As a result, Counts 3, 5, and 15 are barred by res judicata.
Although the remaining counts against CitiMortgage are being brought for the first time,
those claims “could have been raised in [the prior] action[s].” Allen, 449 U.S. at 94. Plaintiff
now seeks to argue that CitiMortgage’s loan modification negotiations and the interest rate it
applied violated the FDCPA (and corresponding Massachusetts regulations) and constituted a
breach of contract. Am. Compl. ¶¶ 74-100 (Count 1), ¶¶ 116-128 (Count 4), ¶¶ 222-228 (Count
17) [#14]. He also seeks declaratory judgment regarding the total amount of his existing debt on
his mortgage. Id. ¶¶ 292-298 (Count 24). Here again, Plaintiff had a “full and fair” opportunity to
raise such claims when he complained about the same set of facts in the First Action. As a result,
Counts 4, 17, and 24 are barred by res judicata.
Finally, Plaintiff asserts an FDCPA claim against CitiMortgage that is based in part on
facts highlighted in prior actions—the applicable interest rate—and in part on a claim already
considered on the merits, CitiMortgage’s failure to confer with Plaintiff pursuant to Local Rule

8

CitiMortgage was also named as a Defendant in the Second Action, but was dismissed without prejudice due to
Plaintiff’s failure to serve. See Order [15-cv-13611, #40].

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7.1 prior to filing the instant motion to dismiss. Am. Compl. ¶¶ 142-153 (Count 7) [#14]. To the
extent Count 7 is premised on CitiMortgage’s application of a particular interest rate, Plaintiff
had a full and fair opportunity to raise such claim in the First Action, and it is therefore barred by
res judicata. To the extent Count 7 is premised on CitiMortgage’s failure to confer with Plaintiff
prior to filing the instant motion, the Magistrate Judge in the First Action already considered on
the merits, and dismissed, such claim. Elec. Order [15-cv-12275, #97].
Accordingly, because Plaintiff’s claims against CitiMortgage are barred by res judicata
or fail to state a claim upon which relief may be granted, CitiMortgage’s Motion to Dismiss
[#57] is GRANTED.
IV.

Conclusion
For the foregoing reasons, Plaintiff’s Motion to Strike [#66] is DENIED, and Defendant
CitiMortgage’s Motion to Dismiss [#57] is GRANTED. The PennyMac Defendants’ Motion to
Dismiss [#42] is GRANTED with respect to Counts 1-6, 8, 10-14, 16-21, and 24-25. Because the
court finds that oral argument on the underlying merits of Count 9, specifically with respect to
whether Plaintiff’s allegations state facts sufficient to support a claim that PennyMac violated 15
U.S.C. § 1692c(c), would be instructive, the court reserves ruling on whether Count 9 survives
until after such oral argument.
IT IS SO ORDERED.
September 26, 2017

/s/ Indira Talwani
United States District Judge

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