Saade v. Security Connection Inc. et al

Filing 98

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDERFor the foregoing reasons,- defendant Ocwens motion to dismiss (Docket No. 25) is, with respect to Counts III and V, DENIED but is otherwise ALLOWED;- defe ndant Security Connection Inc.s motion to dismiss (Docket No. 46) is,with respect to Count III, DENIED but is otherwise ALLOWED;- defendant Orlans Moran PLLCs motion to dismiss (Docket No. 20) is ALLOWED;- defendant Ocwens motion to continue and defer (Docket No. 69) is DENIED as moot;- plaintiffs motions to vacate the Courts order allowing the motion to dismiss (Docket No. 60), for partial summary judgment (Docket No. 64), and for partial summary judgment as to Counts II, III, and IV (Docket No. 66) are all DENIED; and- plaintiffs request for notice of default as to HSBC (Docket No. 55) is DENIED. Plaintiff has until Monday, November 6, 2017, to complete service of process upon HSBC Bank, USA, National Association.As a result of the Courts rulings, the plaintiffs amended complaint survives as follows:1) Count I is DISMISSED as time barred;2) Count II is DISMISSED with respect to the FDCPA claim as time bar red and, with respect to the Code of Massachusetts Regulations claims, for failure to state a claim upon which relief can be granted;3) Count III is DISMISSED as to defendant Orlans Moran for failure to state a claim upon which relief can b e granted but may proceed with respect to defendant Ocwen;4) Count IV is DISMISSED as time barred;5) Count V may proceed as alleged;Plaintiff has until Monday, November 6, 2017, a) to complete service of process upon defendant HSBC Bank, USA, National Association with respect to Count VI, and b) to file a second amended complaint so long as it is in compliance with Federal Rule of Civil Procedure 8(a)(2). So ordered.(Caruso, Stephanie)

United States District Court
District of Massachusetts
)
)
)
Plaintiff,
)
)
v.
)
)
Security Connection Inc.; Ocwen )
Loan Servicing LLC; American
)
Home Mortgage Servicing, Inc.;
)
HSBC Bank, USA, National
)
Association; Orlans Moran, PLLC; )
)
Defendants.
)
)
Jack Saade,

Civil Action No.
17-10168-NMG

MEMORANDUM & ORDER
GORTON, J.
This case arises from allegations of misconduct with
respect to the refinancing of a mortgage, its assignment and
conduct by the servicer of the mortgage.

Plaintiff Jack Saade

(“plaintiff” or “Saade”), who appears pro se, alleges that
Option One Mortgage Company (“Option One”), the original
mortgagee of property he owns, misrepresented the status of his
mortgage refinancing.

He contends that 1) Security Connection

Inc. (“SCI”), a facilitator of mortgage assignments, committed
fraud and 2) Ocwen Loan Servicing LLC (“Ocwen”), the mortgage
servicer, engaged in various unfair trade practices, 3) Orlans
Moran PLLC (“Orlans Moran”), legal counsel for the mortgagee,
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engaged in unfair debt collection practices, and 4) HSBC Bank,
USA, National Association (“HSBC”), the purported assignee of
the mortgagee, was not a legitimate assignee.
Before the Court are 1) motions to dismiss of defendants
Orlans Moran, Ocwen and SCI, defendant 2) Ocwen’s motion to
continue and defer plaintiff’s motion for partial summary
judgment, 3) plaintiff’s motions for summary judgment generally
and, in particular, as to Counts II, III and IV and to vacate
the Court’s order granting defendant Homeward’s motion to
dismiss, and 4) plaintiff’s request for notice of default as to
HSBC.
A. Background
Plaintiff alleges a number of illicit incidents by several
entities on a number of occasions.
The first nucleus of allegations concerns the refinancing
of plaintiff’s mortgage.
Option One in 2003.
mortgage.

Mr. Saade obtained a mortgage from

In 2009, he sought to refinance that

Saade alleges that Option One was evasive and

misinformed him that the request was under review when, in fact,
it was not.
A second alleged wrong-doing involves a series of
assignments of the 2003 mortgage.

According to plaintiff,

Option One assigned the mortgage to American Home Mortgage
Servicing, Inc., (“AHMSI”), the original mortgage servicer,
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which, in turn, assigned the mortgage to Homeward Residential,
Inc.

Homeward was eventually acquired by Ocwen.
Plaintiff’s third claim focuses on an affidavit that Ocwen

filed with the registry of deeds averring the authenticity of
what plaintiff alleges were fabricated mortgage records produced
by SCI.
The final alleged misconduct involves Ocwen’s servicing of
the loan.

Saade alleges that Ocwen placed “forced insurance” on

the property, knowing that it was already adequately insured and
causing Saade additional expense.

In addition, Saade claims

that his loan servicer was replaced without proper statutory
notice.
Plaintiff originally brought this suit in the Massachusetts
Land Court (Suffolk County) in January, 2017.
removed to this Court later that month.

The case was

Plaintiff filed an

amended complaint in February, 2017, and the multiple motions to
dismiss and for partial summary judgment followed seriatim.
The Court will address each count of the amended complaint
in turn.
B. Analysis
To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to “state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007).
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In considering the merits of

a motion to dismiss, the Court may look only to the facts
alleged in the pleadings, documents attached as exhibits or
incorporated by reference in the complaint and matters of which
judicial notice can be taken. Nollet v. Justices of Trial Court
of Mass., 83 F. Supp. 2d 204, 208 (D. Mass. 2000), aff’d, 248
F.3d 1127 (1st Cir. 2000).

Furthermore, the Court must accept

all factual allegations in the complaint as true and draw all
reasonable inferences in the plaintiff's favor. Langadinos v.
Am. Airlines, Inc., 199 F.3d 68, 69 (1st Cir. 2000).

If the

facts in the complaint are sufficient to state a cause of
action, a motion to dismiss the complaint must be denied. See
Nollet, 83 F. Supp. 2d at 208.
Although a court must accept as true all of the factual
allegations contained in a complaint, that doctrine is not
applicable to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662
(2009).

Threadbare recitals of the legal elements which are

supported by mere conclusory statements do not suffice to state
a cause of action. Id. Accordingly, a complaint does not state a
claim for relief where the well-pled facts fail to warrant an
inference of any more than the mere possibility of misconduct.
Id. at 1950.

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Count I – Intentional Misrepresentation and fraudulent assignment
of mortgage
Count I in the amended complaint alleges two different
claims.

First, plaintiff avers that Option One misrepresented

to plaintiff the status of his refinancing application.

Second,

plaintiff contends that Option One, AHMSI, Homeward and Ocwen
fraudulently assigned the mortgage in a scheme facilitated by
SCI.

Saade alleges that SCI employees fraudulently represented

themselves to be employees of the assignor (Sand Canyon) to
fabricate the assignment.
Although intentional misrepresentation and fraud claims
often arise in the context of a contract, Massachusetts state
courts consistently construe such claims as torts.

Salois v.

Dime Sav. Bank of New York, FSB, 128 F.3d 20, 24 (1st Cir.
1997).

The issue presents a threshold determination for this

Court.

Actions of contract, under Massachusetts law, must be

commenced within six years after the cause of action accrues,
M.G.L. ch. 260, § 2, while tort actions must be commenced within
three years. M.G.L. c. 260, § 2A.

For “[a]ctions arising on

account of violations of any law intended for the protection of
consumers,” a plaintiff has four years to commence an action.
M.G.L. ch. 260, § 5A (“including but not limited to . . .
chapter ninety-three A”).

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Here, plaintiff’s intentional misrepresentation claim
arises from his frustrated attempts to refinance his mortgage in
2009.

Plaintiff filed his complaint in this action in January,

2017, more than seven years after the complained-of conduct.
This action is time barred.
The second claim within Count I arises from the allegedly
fraudulent assignment of a mortgage executed on January 3, 2013
and recorded on January 31, 2013.

Plaintiff filed his complaint

in this action on January 31, 2017, exactly four years after the
alleged wrongful conduct.

Because the Massachusetts statute of

limitations for tort claims is three years, the plaintiff’s
common law fraud claim is time barred.
Plaintiff’s claims for fraud and intentional
misrepresentation are barred by the statute of limitations and
therefore Count I will be dismissed.
Count II - Violations of 15 U.S.C. § 1692(e)(6), 940 CMR 7.04
(1)(A) and 209 CMR 18.16(2) (Unfair debt collection)
Plaintiff alleges that Ocwen and Homeward, Ocwen’s
subsidiary, transferred plaintiff’s account between the two loan
servicing companies to “preclude a favorable refinancing term”
that would have lowered plaintiff’s monthly payments.

Such

conduct, plaintiff contends, is a violation of federal and
Massachusetts law.

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Section 1692 of Title 15 of the United States Code is
better known as the Fair Debt Collection Practices Act
(“FDCPA”).

The text of the FDCPA provides that a violation

thereof “is an unfair or deceptive act or practice in violation
of” the Federal Trade Commission Act (“FTCA”). See 15 U.S.C. §
1692l(a).

Chapter 93A of the Massachusetts General Laws

incorporates the FTCA. See McDermott v. Marcus, Errico, Emmer &
Brooks, P.C., 775 F.3d 109, 122 (1st Cir. 2014).

Furthermore,

Massachusetts has enacted its own equivalent of the FDCPA in
M.G.L. c. 93, § 49.

Accordingly, conduct that violates the

FDCPA also violates the FTCA, Chapter 93A and Chapter 93, § 49.
See McDermott, 775 F.3d at 122-23.
The plaintiff frames Count II as an FDCPA claim.
claim is time barred.

That

The FDCPA requires a plaintiff to file

suit within one year from the date on which the violation
occurs. 15 U.S.C. § 1692k(d).

Here, plaintiff alleges that

defendants violated the FDCPA by virtue of a notice on February
13, 2013 of a service transfer to Ocwen to occur on March 1,
2013.

Plaintiff filed his complaint in this action in January,

31, 2017, more than three years after the alleged violation.
Plaintiff’s FDCPA claim is barred by the statute of
limitations.
Plaintiff also relies in Count II on the Massachusetts Code
of Regulations but the provisions upon which he relies do not
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provide for a private cause of action. See Ishaq v. Wachovia
Mortg., FSB, 2010 WL 1380386, at *4 (D. Mass. Apr. 2, 2010).
Absent a private right of action, plaintiff’s claim must be
dismissed.
Accordingly, Count II will be dismissed.
Count III - Violation of 15 U.S.C. § 1692 and M.G.L.c. 93 § 49
(Unfair debt collection)
Plaintiff alleges that Ocwen and its law firm, Orlans
Moran, filed a fraudulent affidavit with the registry of deeds
on December 27, 2016.

Because plaintiff filed this action in

January 2017, this claim is not time barred.
A viable claim for violation of the FDCPA requires that a
plaintiff establish three elements: (1) that she was the object
of collection activity arising from consumer debt, (2) that
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).
To the extent that Ocwen’s conduct in this matter can be
found to be an unfair, unreasonable or deceptive collection of
debt under M.G.L.c. 93 § 49, it can also constitute an unfair or
deceptive act under Chapter 93A.
The alleged misconduct by Ocwen does not concern the
fraudulent assignment that occurred in 2013 but rather an

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affidavit filed with the registry of deeds averring the
authenticity of the allegedly fraudulent assignment.

Thus Count

III will not be dismissed and Ocwen’s motion in that regard will
be denied.
Plaintiff does not, however, allege that Orlans Moran is a
debt collector or that it acted with knowledge of the fraudulent
assignment.

Plaintiff has not stated a claim for violation of

the FDCPA or § 49 against Orlans Moran.

Orlans Moran’s motion

to dismiss will therefore be allowed.
Count IV – Violations of the Real Estate Settlement Procedures
Act (RESPA)
As a general rule, RESPA requires that a borrower be given
15 days’ notice before his loan is transferred to a new
servicer. See 12 U.S.C.A. § 2605(b)(2)(A).
that no such notice occurred.

Plaintiff claims

To the extent such practices

violated RESPA, they also violated Chapter 93A of the
Massachusetts General Laws, the Consumer Protection Act.

A

claim under RESPA § 2605 must be filed within three years of a
violation. 12 U.S.C. § 2614.
Plaintiff’s RESPA claims arise out of a notice of transfer
dated February 13, 2013.

Plaintiff filed his complaint in this

action in January, 31, 2017, more than three years after the
subject transaction occurred.

Plaintiff’s RESPA claim is,

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accordingly, barred by the statute of limitations and Count IV
will be dismissed.
Count V – Violations of the Real Estate Settlement Procedures
Act (RESPA)
Plaintiff alleges that Ocwen acquired a series of forced
insurance policies on the property, “adding considerable charges
for such insurance.”

Such conduct, according to plaintiff,

violates RESPA sections 2605(k)(1)(A) and 2605(m).
To prove a RESPA violation, 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.

Foregger v. Residential Credit Solutions, Inc., 2013 WL 6388665,
at *4 (D. Mass. Dec. 5, 2013).
Defendant contends that this claim should be dismissed
because plaintiff has not alleged that he was damaged by the
action or that the damage was proximately caused by defendant’s
violation.
The plaintiff has, however, alleged that the property was
insured, that the defendant forced the placement of additional
insurance in spite of knowledge of that fact and that the
policies “added considerable charges.”

He has stated a claim

for violation of RESPA § 2605 and defendant’s motion to dismiss
that count will be denied.

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Count VI - HSBC failed to acquire the mortgage note
Plaintiff alleges that HSBC has no valid interest in the
note.

The parties currently dispute whether process has been

properly served upon HSBC.

Accordingly, the Court will allow

plaintiff until Monday, November 6, 2017 to complete service of
process upon HSBC and if he does so, HSBC will file responsive
pleadings pursuant to the federal rules of civil procedure.
C. Leave to Amend Plaintiff’s Amended Complaint
Many of plaintiff’s claims under federal law are time
barred by various statutes of limitations.

Mr. Saade, a pro se

plaintiff, has noted both in written pleadings and at the
hearing on October 6, 2017, that Chapter 93A of the
Massachusetts General Laws provides for a four-year statute of
limitations and that many violations of federal consumer law and
common law implicate Chapter 93A.

His amended complaint, does

not, however, assert any claims under that chapter.
The First Circuit Court of Appeals has explained that the
fact a plaintiff files a complaint pro se “militates in favor of
a liberal reading.” See Boivin v. Black, 225 F.3d 36, 43 (1st
Cir. 2000).

In particular, courts are instructed to “endeavor,

within reasonable limits, to guard against the loss of pro se
claims due to technical defects.”

Rodi v. S. New England Sch.

Of Law, 389 F.3d 5, 20 (1st Cir. 2004).

At the same time, the

Court will not become a drafter of pleadings, especially in a
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realm of consumer law where attorneys’ fees are made available
by statute to ensure the protection of plaintiffs such as Mr.
Saade. See, e.g., 15 U.S.C. § 1692k(a)(3) (providing for
reasonable attorneys’ fees as determined by the court); M.G.L.
ch. 93A § 11 (providing for attorneys’ fees and costs).
To the extent that plaintiff’s federal claims are time
barred, Mr. Saade has no remedy but insofar as he can assert
state law claims that are not barred by the relevant
Massachusetts statutes of limitations, he will be granted one
final opportunity to amend his complaint for a second time.

Any

such second amended complaint shall be filed with the Court and
copies provided to the remaining defendants on or before Monday,
November 6, 2017, and must be in compliance with Federal Rule of
Civil Procedure 8(a)(2) which requires that such a pleading
contain “a short and plain statement of the claim[s]” (emphasis
added).
ORDER
For the foregoing reasons,
- defendant Ocwen’s motion to dismiss (Docket No. 25)
is, with respect to Counts III and V, DENIED but is
otherwise ALLOWED;

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- defendant Security Connection Inc.’s motion to dismiss
(Docket No. 46) is, with respect to Count III, DENIED
but is otherwise ALLOWED;
- defendant Orlans Moran PLLC’s motion to dismiss
(Docket No. 20) is ALLOWED;
- defendant Ocwen’s motion to continue and defer (Docket
No. 69) is DENIED as moot;
- plaintiff’s motions to vacate the Court’s order
allowing the motion to dismiss (Docket No. 60), for
partial summary judgment (Docket No. 64), and for
partial summary judgment as to Counts II, III, and IV
(Docket No. 66) are all DENIED; and
- plaintiff’s request for notice of default as to HSBC
(Docket No. 55) is DENIED.

Plaintiff has until

Monday, November 6, 2017, to complete service of
process upon HSBC Bank, USA, National Association.
As a result of the Court’s rulings, the plaintiff’s amended
complaint survives as follows:
1) Count I is DISMISSED as time barred;
2) Count II is DISMISSED with respect to the FDCPA
claim as time barred and, with respect to the Code of
Massachusetts Regulations claims, for failure to state
a claim upon which relief can be granted;

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3) Count III is DISMISSED as to defendant Orlans Moran
for failure to state a claim upon which relief can be
granted but may proceed with respect to defendant
Ocwen;
4) Count IV is DISMISSED as time barred;
5) Count V may proceed as alleged;
Plaintiff has until Monday, November 6, 2017, a) to
complete service of process upon defendant HSBC Bank, USA,
National Association with respect to Count VI, and b) to file a
second amended complaint so long as it is in compliance with
Federal Rule of Civil Procedure 8(a)(2).

So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated October 12, 2017

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