Taglieri Everton v. HSBC Bank USA, N.A.

Filing 35

Judge F. Dennis Saylor, IV: MEMORANDUM AND ORDER entered granting 16 Motion to Dismiss for Failure to State a Claim (Halley, Taylor)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_______________________________________
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PAMELA TAGLIERI EVERTON,
)
)
Plaintiff,
)
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v.
)
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HSBC BANK USA, N.A., and
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OCWEN LOAN SERVICING LLC,
)
)
Defendants.
)
_______________________________________)

Civil Action No.
18-10264-FDS

MEMORANDUM AND ORDER ON DEFENDANTS’ MOTION TO DISMISS
SAYLOR, J.
This is an action arising out of an attempted mortgage foreclosure. Plaintiff Pamela
Taglieri Everton filed this suit against her mortgage lender, defendant HSBC Bank USA, N.A.,
and its mortgage servicer, defendant Ocwen Loan Servicing LLC. Everton defaulted on her
mortgage in 2009. Ocwen allegedly offered her a private loan modification, which she accepted.
The amended complaint alleges that Ocwen reneged on its initial offer and coerced her into
accepting a second loan modification. Everton was unable to keep up with the increased
mortgage payments and Ocwen, on behalf of HSBC, initiated foreclosure. The amended
complaint asserts three claims: (1) violation of Mass. Gen. Laws ch. 93, §§ 49, 12 by HSBC; (2)
violation of Mass. Gen. Laws ch. 93A by HSBC and Ocwen; and (3) failure to satisfy the
provisions of Mass. Gen. Laws ch. 244, § 35B by HSBC.
HSBC and Ocwen have moved to dismiss all three counts of the amended complaint.
Specifically, HSBC and Ocwen contend that Counts One and Two should be dismissed because
they are barred by the relevant statutes of limitations and the statute of frauds. They further

contend that Count Three should be dismissed for failure to state a claim upon which relief can
be granted.
For the following reasons, the motion will be granted.
I.

Background
Unless otherwise noted, the following facts are drawn from the amended complaint,

documents referred to in the amended complaint, and accompanying exhibits.
A.

Factual Background

Pamela Taglieri Everton resides at 13 Bruno Street, Revere, Massachusetts. (Amend.
Compl.¶ 5). The deed to the property covers two parcels of land. (Id. ¶ 7). One parcel is
registered with the Massachusetts Land Court, and the other is recorded in the Suffolk County
Registry of Deeds. (Id. ¶7).
On April 5, 2006, Everton and three of her family members executed a note and granted a
mortgage on the property to the original lender, Delta Funding Corporation, in the amount of
$280,011.94. (Id. ¶¶ 5-6). Delta subsequently assigned the mortgage to HSBC. (Id. ¶ 8). At all
relevant times, Ocwen has serviced the mortgage for HSBC. (Id. ¶ 9). The mortgage and the
subsequent assignment were both recorded in the Registry of Deeds and registered with the Land
Court. (Id. ¶¶ 7-8).
In 2009, Everton defaulted on the mortgage. (Id. ¶ 10). On August 11, 2009, Everton
received a loan modification offer from Ocwen that would reduce her principal balance to
$77,494.26, and the interest rate to 3.95%, for the next five years, after which the rate would be
calculated according to the terms of the original loan. (Id. ¶ 12; Ex. 1). It appears that the
amount of the principal balance set forth in the offer was a mistake, in light of the huge
discrepancy between that amount and the then-existing actual balance.
In order to “take advantage of” Ocwen’s loan-modification offer, Everton was required to
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make an initial payment of $662.31 and return the signed loan-modification agreement to Ocwen
by August 31, 2009. (Id. ¶ 13; Ex. 1). Everton timely made the required payment and returned
the signed agreement to accept the offer. (Id. ¶ 14; Ex. 2).
On September 14, 2009, Ocwen called Everton and told her that it had sent her a new
loan-modification agreement that increased her principal balance to $279,759.59 and her
monthly payment from $662.31 to $1,417.88. (Id. ¶ 15; Ex. 3). After Everton stated that she did
not want to accept the modification, Ocwen “warned her that if she did not accept the new offer,
her mortgage would be declared in default” and “Ocwen would then initiate foreclosure of the
home.” (Id. ¶¶ 16-17). Feeling “intimidated and threatened,” Everton “capitulated” and signed
the new loan-modification agreement. (Id. ¶¶ 17-18; Ex. 3).
Everton continues to receive monthly mortgage statements from Ocwen reflecting the
increased balance under the September 2009 modification agreement. (Id. ¶ 19). At some point,
Ocwen initiated foreclosure proceedings on behalf of HSBC. (Id. ¶ 22).
The foreclosure was scheduled for January 31, 2018. (Id. ¶ 25; Ex. 5). However,
Everton obtained a preliminary injunction in Suffolk Superior Court restraining the foreclosure
prior to the removal of this case to federal court. (Id. ¶¶ 26-27).
B.

Procedural Background

Everton filed suit in state court on January 19, 2018. HSBC and Ocwen removed the
proceeding to federal court on February 9, 2018.
HSBC and Ocwen have moved to dismiss the complaint for failure to state a claim upon
which relief can be granted.
II.

Legal Standard
On a motion to dismiss, the court “must assume the truth of all well-plead[ed] facts and

give . . . plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness
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Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.
1999)). To survive a motion to dismiss, the complaint must state a claim that is plausible on its
face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In other words, the “[f]actual
allegations must be enough to raise a right to relief above the speculative level, . . . on the
assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555
(citations omitted). “The plausibility standard is not akin to a ‘probability requirement,’ but it
asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 556). Dismissal is appropriate if the
complaint fails to set forth “factual allegations, either direct or inferential, respecting each
material element necessary to sustain recovery under some actionable legal theory.” Gagliardi v.
Sullivan, 513 F.3d 301, 305 (1st Cir. 2008) (quoting Centro Medico del Turabo, Inc. v. Feliciano
de Melecio, 406 F.3d 1, 6 (1st Cir. 2005)).
III.

Analysis
Defendants have moved to dismiss all three counts of the amended complaint. They

contend that Counts One and Two should be dismissed because they are barred by the relevant
statutes of limitations and statute of frauds. They further contend that Count Three should be
dismissed for failure to state a claim because HSBC complied with the provisions of Mass. Gen.
Laws ch. 244, § 35B.
Plaintiff contends that the limitations periods for Counts One and Two have not expired
because defendants continue to send mortgage statements with an allegedly incorrect amount
due, rendering each new statement a new violation of the Massachusetts Debt Collection
Practices Act. She further contends the statute of frauds is inapplicable because Ocwen’s August
2009 loan-modification offer was capable of being accepted by her performance. Finally, with
respect to Count Three, she disputes that defendants satisfied the requirements of ch. 244, § 35B.
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A.

Counts One and Two
1.

Statute of Limitations

Counts One and Two allege claims under the Massachusetts Fair Debt Collection
Practices Act, Mass. Gen. Laws ch. 93, §§ 49 and 12, and Mass. Gen. Laws ch. 93A,
respectively. The limitations period for claims arising under Massachusetts consumer protection
laws is four years. Mass. Gen. Laws ch. 260, § 5A. Such claims accrue “when plaintiff knows
or reasonably should have known of the harm attributable to defendant’s conduct.” PatersonLeich Co., Inc. v. Massachusetts Mun. Wholesale Elec. Co., 840 F.2d 985, 994 (1st Cir. 1988).
Plaintiff here should have been on notice that she was harmed by defendants’ allegedly
unfair and deceptive practices no later than September 2009. By that point, even accepting her
version of events as true, Ocwen had repudiated the August 2009 loan modification offer and she
had been allegedly coerced into signing a new loan-modification agreement with less-favorable
terms. The amended complaint does not allege that she learned any new facts after September
2009 that would toll the limitations period.
Plaintiff’s reliance on a “continuing violation” theory to trigger a new accrual date for the
statute of limitations is misplaced. Some courts have applied the doctrine to toll the limitations
period for consumer-protection claims where there is a pattern of wrongful conduct or when each
separate collection letter may be considered a discrete act constituting a separate violation of the
FDCPA. McDermott v. Marcus, Errico, Emmer & Brooks, P.C., 911 F. Supp. 2d 1, 46 (D. Mass.
2012), amended in part, 969 F. Supp. 2d 74 (D. Mass. 2013), aff'd in part, rev'd in part and
remanded, 775 F.3d 109 (1st Cir. 2014) (internal citation omitted); see, e.g., Devlin v. Law
Offices Howard Lee Schiff, P.C., 2012 WL 4469139, at *7 (D. Mass. Sept. 25, 2012); Simard v.
LVNV Funding, LLC, 2011 U.S. Dist. LEXIS 111330, at *5 (D. Mass. Sep. 27, 2011)
(“Typically, a continuing violation theory applies where a debt collection suit was not initiated
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but the debt collector engaged in a series of harassing communications.”). In applying the
doctrine, however, it is said that “courts must be careful to differentiate between [unlawful] acts
and the ongoing injuries which are the natural, if bitter, fruit of such acts.” Gilbert v. City of
Cambridge, 932 F.2d 51, 58 (1st Cir. 1991). “A defendant's subsequent act only renews the
statute of limitations as to time-barred claims if that act is itself unlawful.” Monteferrante v.
Williams-Sonoma, Inc., 241 F. Supp. 3d 264, 272 (D. Mass. 2017) (citing Centro Medico del
Turabo, Inc. v. Feliciano de Melecio, 406 F.3d 1, 7 (1st Cir. 2005)).
While “each new communication from a debt collector is viewed as a separate violation
and a new statute of limitations period accrues[,] . . . if the new communication concerns an old
claim, the new communication is subject to the statute of limitations period for the old claim.”
Simard v. LVNV Funding, LLC, 2011 WL 4543956, at *5 (D. Mass. Sept. 28, 2011). Plaintiff
characterizes the continued mortgage statements she received from defendants as “new claims
related to misrepresentation of the amounts due.” (Pl.’s Sur-Reply to Mot. to Dismiss at 5-6).
Under plaintiff’s theory, each mortgage statement containing the disputed principal balance
“constituted a new violation” because it was “incorrect correspondence” that “provide[d]
misleading information.” (Id. at 5). That theory, however, is misplaced. The mortgage
statements containing the disputed principal balance were new communications concerning an
old claim—that is, the September 2009 loan modification—not new claims or separate
violations. See Simard, 2011 WL 4543956, at *5. The mortgage statements were “ongoing
injuries which [were] the natural, if bitter, fruit” of an allegedly unlawful act, the September
2009 repudiation, not discrete acts that are themselves unlawful. See Monteferrante, 241 F.
Supp. 3d at 272; Gilbert, 932 F.2d at 58.
Because plaintiff’s claim accrued in September 2009, when she was notified of Ocwen’s

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repudiation of the August 2009 modification offer, the four-year limitations period expired well
before she filed her complaint in 2018. Accordingly, Counts One and Two will be dismissed as
barred by the statute of limitations.
2.

Statute of Frauds

Because the Court finds Counts One and Two to be barred by the statute of limitations, it
is not necessary to reach the issue of whether the August 2009 loan modification agreement falls
within the statute of frauds.
B.

Count Three

Count Three alleges that the foreclosure is prohibited because of HSBC’s failure to
comply with the provisions of Mass. Gen. Laws ch. 244, § 35B. Defendants contend HSBC did
comply with the required formalities and have accordingly moved to dismiss Count Three for
failure to state a claim.
Mass. Gen. Laws ch. 244, § 35B(f) provides: “Prior to publishing a notice of a
foreclosure sale, as required by section 14, the creditor, or if the creditor is not a natural person,
an officer or duly authorized agent of the creditor, shall certify compliance with this section in an
affidavit based upon a review of the creditor's business records. The creditor, or an officer or
duly authorized agent of the creditor, shall record this affidavit with the registry of deeds for the
county or district where the land lies.” This provision has been read together with Mass. Gen.
Laws ch. 188, §4 (recording requirements for deeds) and Mass. Gen. Laws ch. 188, § 32 (“The
law relative to the acknowledgment and recording of deeds shall apply to letters of attorney for
the conveyance of real estate.”) to require that the § 35B affiant, if acting under a power of
attorney, also record that power of attorney in the county Registry of Deeds. See, e.g., Weiner v.
Rushmore Loan Mgmt. Servs., LLC, 2018 WL 3912361, at *3–4 (D. Mass. Aug. 15, 2018); Afridi
v. Residential Credit Sols., Inc., 189 F. Supp. 3d 193, 200–01 (D. Mass. 2016).
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The amended complaint identifies two infirmities with the affidavit filed in this case, the
alleged effect of which is to strip Ocwen of standing to foreclose on the property. First, plaintiff
points to Ocwen’s failure to register the requisite power of attorney in the Land Court, in
addition to recording it in the Registry of Deeds. Second, with respect to the power of attorney
that was recorded in the Registry of Deeds, plaintiff objects to its “generic” nature, because the
document gives a power of attorney to Ocwen, as an entity, instead of the specific employee of
Ocwen, Shandra Liddell, who served as the company’s § 35B affiant. The Court is not
persuaded that either of these alleged defects, if they are in fact defects, prevents defendants
from foreclosing on plaintiff’s property.
Plaintiff’s first claim arises out of the unique characteristics of the property in this case,
which is both recorded and registered because the deed covers two parcels. The question is
whether HSBC’s failure to register a power of attorney in the Land Court, in addition to the
power of attorney it recorded in the Registry of Deeds, renders any foreclosure on plaintiff’s
property a violation of the requirements of § 35B. Defendants contend that the statute is
intended to protect innocent third-party purchasers, not a mortgagor such as plaintiff. They
further contend that the power of attorney recorded in the Registry of Deeds for the county where
the land lies accomplishes that goal, and therefore satisfies the statute, by providing sufficient
notice to third parties. Plaintiff insists that the purpose of the statute is consumer protection, not
the protection of third parties, and therefore the failure to register a power of attorney in the Land
Court is fatal.
The issue, however, is not the purpose of the statute, but its actual language. In
Massachusetts, “[i]t is a canon of statutory construction that statutory language should be given
effect consistent with its plain meaning and in light of the aim of the Legislature unless to do so

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would achieve an illogical result.” Commonwealth v. Parent, 465 Mass. 395, 409 (2013)
(quoting Welch v. Sudbury Youth Soccer Ass’n, Inc., 453 Mass. 352, 354-55 (2009)). Here, the
statute itself, passed by a legislature fully aware of the existence of registered land in
Massachusetts, requires only a recording in the Registry of Deeds, not a filing with the Land
Court. And to the extent the purpose of the statutory scheme is taken into account, there is no
obvious reason why the Court should add a new formality by imposing a dual requirement of
recording and registration, where declining to do so would not achieve an illogical result.
The purpose of the land registration system is to “provide a means by which title to land
may be made certain and indefeasible.” Deacy v. Berberian, 182 Mass. 514, 519 (1962). The
Land Court is a court of record with exclusive jurisdiction over complaints affecting title to
registered land. Mass. Gen. Laws ch. 185, § 1. The governor appoints the Land Court recorder.
Mass. Gen. Laws ch. 185, § 6. Registers of Deeds in each county act as assistant recorders who,
under the supervision of the Land Court recorder, “have the same authority as the recorder to
make memoranda affecting the title of such land, and to enter and issue new certificates of title,
and to affix the seal of the court to such certificates and duplicate certificates of title.” Mass.
Gen. Laws ch. 185, § 10; see also MENDLER, MASSACHUSETTS CONVEYANCERS' HANDBOOK
WITH FORMS §

8:3 (4th ed.) (“[E]ach registry of deeds has a ‘registered land department,’ more

accurately called a registry district, and under M.G.L.A. c. 185, § 10, each register of deeds is an
assistant recorder of the land court, charged with maintenance of a separate set of record books
in which certificates of title are entered . . . .”).
As the supervisory authority for the county registries, the Land Court issues guidelines
“to offer a consistent, reliable set of requirements across the Commonwealth’s registered
districts.” COMMONWEALTH OF MASSACHUSETTS, LAND COURT GUIDELINES ON REGISTERED

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LAND, “Introduction” (Feb. 27, 2009). The Land Court revised those guidelines in 2009 in light
of the wave of the “recent increase in foreclosures,” in order to “eliminate the need for filing
cases with the court unless such filings were absolutely necessary.” Id. “[U]nder the revised
Guidelines,” the Land Court anticipated that “more decisions [would] be made at the registry
district level, with the revised guidelines themselves affording sufficient guidance to the decision
makers.” Id.
In light of those statements and the statutory relationship between the Land Court and the
Registry of Deeds, the Court is not inclined to read a dual registration and recording requirement
into § 35B. Again, the statute explicitly requires recording with the Registry of Deeds in the
county where the land lies, and is silent on the issue of Land Court registration. Defendants’
power of attorney was recorded by an assistant recorder of the Land Court who has been given
sufficient guidance by the Land Court and has much the same authority as the Land Court
recorder. See Mass. Gen. Laws ch. 185, § 10; LAND COURT GUIDELINES ON REGISTERED LAND,
“Introduction.” The power of attorney that was recorded with the Registry of Deeds complied
with the plain language of the statute and “provide[d] a means by which title to [plaintiff’s] land
may be made certain and indefeasible,” consistent with the purpose of the statutory scheme. See
Deacy, 182 Mass. at 519. The Court therefore cannot say that giving effect to the plain language
of the statute has “achieve[d] an illogical result,” or that it was “absolutely necessary” for
defendants to also register the power of attorney with the Land Court. See Commonwealth, 465
Mass. at 409; LAND COURT GUIDELINES ON REGISTERED LAND, “Introduction.” In short, the
Court finds defendants complied with the requirements of § 35B.
Even if the Court were to find that the statute required defendants to register a power of
attorney with the Land Court, it is not persuaded that the remedy plaintiff seeks—“[a]

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declaratory judgment that the § 35B Affidavit is defective and that HSBC is not entitled to
foreclose”—is appropriate. In analogous cases where courts in this district have been asked to
hold that an error in a mortgage assignment stripped the servicer of standing to foreclose, they
have declined to do so where the defect in question was merely a “scrivener’s error,” and there
was evidence the assignment was otherwise valid—that is, the servicer was operating under an
effective power of attorney. See Weiner v. Rushmore Loan Mgmt. Servs., LLC, 2018 WL
3912361, at 3-4 (D. Mass. Aug. 15, 2018) (upholding foreclosure sale despite mortgage
assignment that referred to a power of attorney recorded in a different county registry of deeds
because of evidence that there was a valid power of attorney recorded in the correct registry of
deeds at the time the § 35B affidavits were signed and recorded); Clockedile v. U.S. Bank Tr.,
N.A., 189 F. Supp. 3d 312, 315 (D. Mass. 2016) (upholding foreclosure sale despite mortgage
assignment that referred to an expired power of attorney because of evidence the servicer was
operating under a valid power of attorney, “albeit not the one that was referenced in the
assignment document”) (citing Culhane v. Aurora Loan Servs. of Nebraska, 708 F.3d 282, 291
(1st Cir. 2013)). Here, where there is evidence that Ocwen was operating under an effective
power of attorney at the time Liddell certified compliance with § 35B, the failure to register an
additional power of attorney in the Land Court should not strip defendants of standing to
foreclose.
With respect to the second alleged defect, the Court does not find any infirmity, much
less one that would void the foreclosure. Plaintiff objects to the fact that the recorded power of
attorney defendants have produced is “generic” to Ocwen, and not specific to the Ocwen
employee, Shandra Liddell, who served as the company’s § 35B affiant. Defendants counter that
“a corporation can only act through its employees,” and proffer that “[a]s Ocwen’s Contract

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Mortgage Coordinator, Ms. Liddell was the individual identified by the company to certify that
Defendants ha[d] complied with [§ 35B].” (Defs.’ Mot. to Dismiss at 11-12).
It is true, of course, that a corporation can only act through its employees and agents.
Peterborough Oil Co. v. Great Am. Ins. Co., 397 F. Supp. 2d 230, 238 (D. Mass. 2005); In re
Lernout & Hauspie Sec. Litig., 230 F. Supp. 2d 152, 172 (D. Mass. 2002) (quoting Suez Equity
Investors, L.P. v. Toronto–Dominion Bank, 250 F.3d 87, 101 (2d Cir. 2001)). The text of the
power of attorney itself contemplates that obvious fact, appointing Ocwen as HSBC’s “true and
lawful attorney-in-fact,” in the singular, and then switching to the plural to provide that “said
attorneys-in-fact, and each of them, are hereby authorized, and empowered, as follows . . ..”
(Ex. A to Defs.’ Mot. to Dismiss) (emphasis added). Indeed, the document itself is signed by
Susie May, Vice President of HSBC, as an officer acting on behalf of a corporation. (Id.). The
language of the statute also contemplates such practicalities of doing business, providing that the
affidavit shall be completed by “the creditor, or if the creditor is not a natural person, an officer
or duly authorized agent of the creditor.” Mass. Gen. Laws ch. 244, § 35B (emphasis added).
In Conrad v. Caliber Home Loans, Inc., 2017 WL 1496922, at *4 (D. Mass. Apr. 25,
2017), reconsideration denied, 2017 WL 2312686 (D. Mass. May 26, 2017), the court approved
of a similar “Limited Powers of Attorney” document authorizing the mortgage servicer to
complete the required § 35B affidavit. In Conrad and in this case, the servicers, as entities, were
granted power of attorney, but both affidavits were subsequently completed by employees of that
entity, without separately executed powers of attorney in the employee’s name. See 2017 WL
1496922, at *4.
Accordingly, the Court finds the power of attorney appointing Ocwen as HSBC’s
attorney-in-fact was sufficient to authorize Liddell to complete the required § 35B affidavit, and

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therefore that the second infirmity identified by plaintiff also fails to void the foreclosure sale.
IV.

Conclusion
For the foregoing reasons, defendants’ motion to dismiss is GRANTED.

So Ordered.
/s/ F. Dennis Saylor
F. Dennis Saylor, IV
United States District Judge

Dated: October 17, 2018

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