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7/30/2019 Matt v HSBC_SJ_Memo_10_30_2012
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UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MASSACHUSETTS
JODI B. MATT,
Plaintiff,
v.
HSBC BANK USA, N.A., et al.,
Defendants.
Civil Action No. 1:10-cv-11621-PBS
CERTAIN DEFENDANTS MEMORANDUM OF LAW IN
SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT
Defendants Bank of America, N.A., successor by merger to BAC Home Loans Servicing,
LP, formerly known as Countrywide Home Loans Servicing, LP (Bank of America), HSBC
Bank USA, N.A. (HSBC), HSBC Bank USA, N.A., on Behalf of the Trust Fund and for the
Benefit of ACE Securities Corp. Home Equity Loan Trust Series 2005-HE4 Asset Backed Pass
Through Certificates (HSBC as Trustee), Countrywide Securities Corporation
(Countrywide), Wells Fargo Bank, N.A. (Wells Fargo) and ACE Securities Corp. (ACE)
(collectively, the Moving Defendants) respectfully submit the following Memorandum of Law
in Support of their Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure
56 and Local Rule 56.1. For the reasons set forth below, the Moving Defendants request that the
Motion be granted and that judgment be entered in their favor, against Plaintiff Jodi B. Matt
(Plaintiff).
INTRODUCTION
Plaintiffs Complaint, which names a total of nineteen (19) defendants, is her latest
attempt to delay a foreclosure sale on property located at 41 Downes Avenue in Canton,
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Massachusetts (the Property), and escape her obligations under her mortgage loan.1 Plaintiff
makes unsupported allegations against Bank of America, HSBC and HSBC as Trustee, while
failing to make any substantive allegations whatsoever against Countrywide, Wells Fargo and
ACE. Plaintiff, who does not deny that she defaulted on her mortgage loan, or that she has failed
to make a single payment pursuant to it since August 2008, asserts claims for (1) preliminary and
permanent injunctive relief barring the foreclosure sale of the Property, (2) civil RICO, (3) civil
conspiracy, (4) respondeat superiorliability, (5) breach of contract, (6) breach of the covenant of
good faith and fair dealing, (7) intentional misrepresentation, (8) violation of Massachusettss
Consumer Protection Act, M.G.L. c. 93A, (9) violation of Massachusetts Consumer Credit Cost
Disclosure Act, M.G.L. c. 140D and (10) unjust enrichment.
Specifically, Plaintiff complains that HSBC as Trustee, the foreclosing trust, is allegedly
not the mortgagee, that the Defendants somehow engaged in an illegal enterprise to coax her into
a mortgage loan that she could not afford, and that Bank of America, the loan servicer, allegedly
misrepresented that it would evaluate Plaintiffs mortgage loan for a modification. Judgment
should be entered in favor of all of the Moving Defendants for several reasons. First, the
undisputed facts establish that HSBC as Trustee is both the mortgagee and note-holder. Second,
the undisputed facts also show the Moving Defendants in no way conspired to induce her into a
mortgage loan that she could not afford. Lastly, Bank of America not only evaluated Plaintiffs
mortgage loan for a modification, but also offered Plaintiff a loan modification, which she
rejected.
In addition, none of Plaintiffs claims involve actions or conduct undertaken by
1 Plaintiff previously appealed a Land Court decision, which determined that HSBC as Trustee had standing to filethe Servicemembers Civil Relief Act complaint at issue in that matter. SeeHSBC as Trustee v. Matt, No. 10 MISC.421195. That case is currently on appeal with the Supreme Judicial Court. See HSBC as Trustee v. Matt, No. 2011-P-0214.
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Countrywide, Wells Fargo or ACE. Plaintiff merely names Countrywide, the co-manager of the
trust, Wells Fargo, the trusts master servicer and securities administrator, and ACE, the trusts
depositor, in the caption of the Complaint without a single factual or substantive allegation made
against them anywhere in the Complaint. See Compl., Dkt. No. 1, Compl. Exh. 21(A).
Plaintiff is unable to establish any liability on the part of any of the Moving Defendants.
Accordingly, judgment should be entered in their favor.
UNDISPUTED FACTS
In March 2005, Plaintiff applied for a mortgage loan with Northeast Mortgage
Corporation (Northeast). See Statement of Undisputed Material Facts (SMF) 1. Northeast
provided Plaintiff with an initial Truth-in-Lending Disclosure Statement (TILA Disclosure) on
or around March 18, 2005. See id. The statement indicated that the mortgage loan may contain
an initial monthly payment of $1,329.26 with an 8.158% annual percentage rate (APR). See
id.
Approximately one month later, on April 6, 2005, Plaintiff executed an adjustable rate
promissory note (the Note) for $200,000 in favor of Northeast. See id. at 2. The Note
provided for an initial monthly payment of $1,429.37 and a 7.725% initial interest rate. See id.
Plaintiff also executed and acknowledged an updated TILA Disclosure on April 6, 2005, which
similarly informed her of the loans $1,429.37 initial monthly payment, and informed her of the
loans 10.528% APR. See id. The Note is secured by a mortgage (the Mortgage, together with
the Note, the Mortgage Loan), which Plaintiff also executed on April 6, 2005. See id. The
Property secures the Mortgage. See id.
Also on April 6, 2005, Northeast assigned the Mortgage to New Century Mortgage
Corporation (New Century). See id. at 3. Northeast also endorsed the Note to New Century.
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See id. at 4. New Century later assigned the Mortgage to HSBC as Trustee on November 6,
2007. See id. at 5. It also endorsed the Note in blank. See id. at 6. Bank of America
serviced the Mortgage Loan until October 1, 2012, when the servicing rights transferred to Select
Portfolio Servicing, Inc. See id. at 7.
Shortly after entering into the loan agreement, Plaintiff defaulted by failing to timely
make her October 2005 monthly payment. See id. at 8. After bringing her loan current in
January 2007, Plaintiff again defaulted in April 2007. See id. Plaintiff sought to refinance the
Mortgage Loan with Countrywides Full Spectrum Lending Division and was provided with
terms of a proposed refinancing agreement in February 2007. See id. Plaintiff chose not to do
refinance, however. See id. Instead, Plaintiff reinstated the loan in April 2008 by making a lump
sum payment of $34,898.35. See id. Plaintiff defaulted yet again in May 2008. See id. Plaintiff
then ceased making payments, and has failed to make a single payment in over four (4) years,
since August 2008. See id. at 9. The loan is due for the July 2008 payment. See id. at 8.
Plaintiff subsequently applied for, and Bank of America offered her, a permanent loan
modification on or around June 5, 2009. See id. at 6. Plaintiff rejected Bank of Americas
offer on the gamble that Bank of America could not establish HSBC as Trustees right to seek
foreclosure. See id. However, both the assignments of the Mortgage and endorsements of the
Note establish that HSBC as Trustee is both the note-holder and mortgagee, for whom Bank of
America services the loan. See id. at 5-6.
Because Plaintiff did not cure her default, Bank of America sent her a Notice of Intention
to Foreclose on or around September 14, 2009. See id. at 11. The Notice gave Plaintiff the
opportunity to cure her default before foreclosure proceedings would begin. See id. Plaintiff did
not cure her default, and HSBC as Trustee filed a complaint under the Servicemembers Civil
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Relief Act (SCRA) in Land Court on or around January 27, 2010. SeeHSBC as Trustee v.
Matt, No. 10 MISC. 421195.
Plaintiff then filed her Complaint in this matter on September 23, 2010. See Compl., Dkt.
No. 1. On December 10, 2010, HSBC and HSBC as Trustee (collectively, the HSBC
Defendants) filed a motion to dismiss the Complaint, arguing that the Complaint failed to state a
civil RICO claim, that Plaintiff lacked standing to assert a civil RICO claim and that the claim
was barred by the statute of limitations. See Dkt. Nos. 28 and 29. The HSBC Defendants also
argued that because the civil RICO claim should be dismissed, the Court lacked subject matter
jurisdiction over the remaining state law claims. See Dkt. No. 29. This Court granted the motion
to dismiss with respect to the civil RICO claim, but denied it with respect to the Complaints
remaining counts. See Dkt. No. 89. 2 To the extent that the Court finds that the civil RICO claim
survives against the Moving Defendants, the Moving Defendants hereby argue that the reasoning
of the Courts Order dated September 23, 2011 is equally applicable to the Moving Defendants
here and that judgment should be entered in favor of the Moving Defendants. See id. Further,
Plaintiff concedes that the civil RICO claim is no longer part of the Complaint.3
Bank of America, Countrywide, Wells Fargo and ACE filed answers to the Complaint on
August 17, 2011. See Dkt. Nos. 85-88. HSBC and HSBC as Trustee filed their answers on
September 26, 2011. See Dkt. Nos. 90-91. Fact discovery closed on September 30, 2012.
However, due to Plaintiffs refusal to make herself available to be deposed by the Moving
Defendants prior to October 12, 2012 and her continual failure to comply with any of her
2 The Report and Recommendation issued on the Motion for Judgment on the Pleadings filed by Countrywide,Wells Fargo and ACE indicated that ACE also filed a motion to dismiss under Rule 12(b)(6), citing Dkt. No. 28.See Report and Recommendation, p. 2, Sept. 11, 2012. However, this is incorrect. ACE has never filed a motion todismiss under Rule 12(b)(6) in this action.3 Plaintiff has taken the position that her RICO claim has been dismissed and is no longer part of her complaint.Pl.s Opp. to Countrywide, Wells Fargo, ACEs Mot. J. Pleadings, p. 8, Aug. 9, 2012, Dkt. No. 105. Plaintiffbelieves that there is no need to further marinate in this claim and that it is a waste of this courts precious time
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discovery obligations, the Court extended the time by which the Moving Defendants had to
depose Plaintiff to October 12, 2012. Accordingly, Plaintiff was deposed on October 12, 2012.
STANDARD OF REVIEW
The Moving Defendants are entitled to summary judgment if there is an absence of
evidence to support Plaintiffs claims. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
Once the Moving Defendants meet this burden, Plaintiff is required to set forth specific facts
showing that there is a genuine issue for trial in order to evade judgment against her. Fed. R.
Civ. P. 56(e). Plaintiff is not entitled to rest upon her pleadings, but instead must provide
specific, provable facts demonstrating a triable issue of fact. See Pagano v. Frank, 983 F.2d 343,
347 (1st Cir. 1993); see also Mack v. Great Atl. and Pac. Tea Co., 871 F.2d 179, 181 (1st Cir.
1989). The evidence cannot be conjectural, but must have substance. See Mack, 871 F.2d at
181.
ARGUMENT
I. PLAINTIFF IS NOT ENTITLED TO PRELIMINARY AND
PERMANENT INJUNCTIVE RELIEF BECAUSE HSBC AS
TRUSTEE IS BOTH THE MORTGAGEE AND NOTE-HOLDER
Plaintiff argues that she is entitled to preliminary and permanent injunctive relief
preventing HSBC as Trustee from foreclosing on the Mortgage. See Compl. 73-74. Plaintiff
posits that the Mortgage was not properly assigned from New Century to HSBC as Trustee, and
that HSBC does not properly hold the Note. See id. at 72-110. However, HSBC as Trustee is
the proper Mortgage and Note holder.
To obtain a preliminary injunction, Plaintiff must demonstrate (1) the likelihood of
success on the merits, (2) the likelihood that [she] will suffer irreparable harm in the absence of
preliminary relief, (3) that the balance of equities tip in [her] favor, and (4) that an injunction is
resources. Id.
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in the public interest. Red Bend Ltd. v. Google Inc., No. 09-cv-11813-DPW, 2011 WL
1288503, at *13 (D. Mass. Mar. 31, 2011) (citations omitted). The standard for a preliminary
injunction is essentially the same as for a permanent injunction with the exception that the
plaintiff must show a likelihood of success on the merits rather than actual success. See id.
(citations omitted). The Court previously denied Plaintiffs separate Motion for Injunctive
Relief, Dkt. No. 2, on September 30, 2011. See Order Denying Pl.s Mot. Injunctive Relief,
Sept. 30, 2011. For the same reasons the Court denied this relief already, and because Plaintiff
cannot establish a likelihood of success on the merits, nor will she have actual success on the
merits as explained below, the Court should, again, deny Plaintiff preliminary and permanent
injunctive relief.
First, Plaintiff does not have standing to challenge the assignment of the Mortgage from
New Century to HSBC as Trustee because she is neither a party to the contract, nor an intended
third-party beneficiary thereof. See Oum v. Wells Fargo Bank, N.A., 842 F. Supp. 2d 407, 413
(D. Mass. 2012) (mortgagors lack standing to challenge the validity of the assignments of
mortgages). Plaintiff is also specifically prohibited from enforcing the ACE Securities Corp.
Home Equity Loan Trust Series 2005-HE4 Asset Backed Pass Through Certificates Trusts (the
Trust) Pooling and Servicing Agreement (PSA) and Prospectus Supplement because she is
neither a party to those agreements, nor a third party beneficiary of them. See In re Correria,
452 B.R. 319, 324 (BAP 1st Cir. 2011) (debtors could not enforce the PSA to challenge the
assignment of a mortgage because they are not parties to the PSA); see also In re Samuels, 415
B.R. 8, 22 (Bankr. D. Mass. 2009) (holding that mortgagors are not beneficiaries of a PSA and
further finding that a violation of the PSA would not invalidate a mortgage assignment); see also
In re Almeida, 417 B.R. 140, 147, 149 n.4 (Bankr. D. Mass. 2009) (mortgagors cannot enforce a
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PSA). Second, even if Plaintiff were entitled to challenge the Mortgage assignment, she is still
unable to establish that HSBC as Trustee is not the mortgagee because the Mortgage was
deposited into the Trust before its Pre-Funding Period cut-off date, September 27, 2005, and
because the Mortgage was assigned to HSBC as Trustee on November 6, 2007. See SMF 5,
12.4
HSBC as Trustee is entitled to enforce the Note because New Century endorsed the Note
in blank, which entitles the Note to be payable to the bearer, HSBC as Trustee. See id. at 6.
When indorsed in blank, an instrument becomes payable to the bearer and may be negotiated by
transfer of possession alone until specially indorsed. M.G.L. c. 106 3-205(b). Because HSBC
as Trustee is both the mortgagee and note-holder, Plaintiff cannot succeed on her claim for
preliminary and permanent injunctive relief.
II. THERE IS NO EVIDENCE TO SUPPORT THE CIVIL CONSPIRACY CLAIM
Plaintiff alleges the existence of a civil conspiracy by claiming that unspecified
defendants somehow worked in concert to induce her into the Mortgage Loan transaction, and
that HSBC as Trustee wrongfully attempted to collect payments and foreclose upon the
Mortgage without, allegedly, having been assigned the Mortgage. See Compl. 217-219, 223.
First, Northeast originated the loan, not any of the Moving Defendants. Plaintiff has set forth no
theory as to how the Moving Defendants could be held liable for Northeasts alleged actions.
Second, there is simply no evidence to support a civil conspiracy claim against the Moving
4 Contrary to Plaintiffs allegation, New Centurys bankruptcy proceedings in no way prohibited it from assigningthe Mortgage to HSBC as Trustee. See Juarez v. U.S.Bank Natl Assn, No. 11-10318-DJC, 2011 WL 5330465, at*7 (D. Mass. Nov. 4, 2011). As a part of New Centurys bankruptcy, the court approved a stipulation entered intobetween New Century and Countrywide Home Loans, Inc. See SMF 13. According to the stipulation, a LimitedPower of Attorney entered into between New Century and Countrywide Home Loans, Inc. appointed CountrywideHome Loans, Inc. to be New Centurys true and lawful attorney-in-fact. See id. Countrywide Home Loans, Inc.was authorized to assign mortgages on New Centurys behalf. See id. Kimberly Dawson, the Countrywide HomeLoans, Inc. employee who executed the assignment from New Century to HSBC was designated as an authorizedofficer to execute assignments. See id. at 14.
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Defendants. This is especially true as against Countrywide, Wells Fargo and ACE, about which
Plaintiff makes no allegations whatsoever. Seeid. at 211-225.
Massachusetts recognizes two types of civil conspiracy: true conspiracy and conspiracy
based on vicarious liability. Inman v. Siciliano, No. 10-10202-FDS, 2012 WL 1980408, at *16
(D. Mass. May 31, 2012) (citing Taylor v. Am. Chem. Council, 576 F.3d 34-35 (1st Cir. 2009)).
To establish true conspiracy, plaintiffs must demonstrate that the defendants, acting in unison,
had some power of coercion over [plaintiffs] that they would not have had if acting
independently. Id. (quotingAetna Cas. Sur. Co. v. P&B Autobody, 43 F.3d 1546, 1563 (1st
Cir. 1994)). To establish conspiracy based on vicarious liability, Plaintiff must demonstrate
first, a common design or an agreement, although not necessarily express, between two or more
persons to do a wrongful act and, second, proof of some tortious act in furtherance of the
agreement. Id. (quotingAetna Cas. Sur. Co., 43 F.3d at 1564). Plaintiff is unable to establish
the existence of either form of conspiracy because she cannot even identify the existence of any
agreement whatsoever between anyone and the Moving Defendants to commit a wrongful act.
See SMF 15-17.
Further, she cannot even establish any wrongful act. Plaintiff alleges in her Complaint
that the wrongful act consisted of inducing her into a Mortgage Loan, yet concedes that her only
basis for this belief is the fact that she started out owing Northeast Mortgage and has since had
defendants either claiming to service, own or have some involvement in the collection of the
loan. Seeid. at 24. This alleged conduct is not wrongful given that Bank of America serviced
the Mortgage Loan, see SMF 7, and that HSBC as Trustee is the mortgagee and note-holder, as
explained in I, supra. Accordingly, judgment must be entered in favor of all the Moving
Defendants on Plaintiffs civil conspiracy claim.
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III. PLAINTIFF IS UNABLE TO ESTABLISH
RESPONDEAT SUPERIOR LIABILITY BECAUSE
NO EMPLOYEE-EMPLOYER RELATIONSHIP EXISTS
Plaintiff purportedly alleges a respondeat superiorliability claim against the Moving
Defendants, which is a doctrine, not a cause of action. Plaintiff alleges that HSBC as Trustee
directed various defendants unspecified wrongful conduct. She complains that Defendant
HSBC as Trustee hired, directed, or controlled the actions of Bank of America Home Loans
as successor in interest to Countrywide Home Loans, and that Bank of America Home Loans
hired both Stanton and Davis and Harmon Law Offices, P.C. to carry out the instructions of
HSBC. Compl. 146; see also SMF 18.
5
Under the doctrine ofrespondeat superior, an
employer is subject to liability for the torts of its employees committed within the scope of their
employment. Roggio v. City of Gardner, No. 10-40076-FDS, 2011 WL 1303141, at *5 (D.
Mass. Mar. 30, 2011) (citations omitted). Respondeat superioris a theory of liability, not a
claim. See id. The Moving Defendants do not employ one another, but instead are separate
entities. See id. (explaining that the doctrine can hold employers liable for the actions of its
employees). Plaintiffs theory of liability fails because there is no evidence to establish any
employee-employer relationship. Accordingly, judgment should be entered in favor of the
Moving Defendants.
IV. PLAINTIFF CANNOT ESTABLISH THAT THE
MOVING DEFENDANTS BREACHED ANY CONTRACT
Plaintiff states in the title to her claim that she is asserting it against HSBC and ACE,
however she only makes allegations against New Century and Northeast. See Compl. 189-
196. Specifically, she complains that New Century, through Northeast, breached a contract with
Ms. Consumer by providing her with an interest rate and monthly payment higher than that
5 Because Plaintiff makes no allegations whatsoever involving Countrywide, Wells Fargo or ACE, judgment should
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which she expected. See id. at 192-193. First, the Moving Defendants are in no way liable
for the actions of Northeast, nor does Plaintiff advance any such viable theory. Second, even if
the Moving Defendants could be held liable for Northeasts alleged conduct, Plaintiff still cannot
establish that any contract was breached or that there was any breach of the covenant of good
faith and fair dealing.6
A. Northeast Breached No Contract
To establish a claim for breach of contract, Plaintiff must show that there was a valid
contract, that the defendant breached its duties under its contractual agreement, and that the
breach caused the plaintiff damage. Gardner v. Simpson Financing Ltd. Partnership, No. 09-
11806-FDS, 2012 WL 1109104, at *5 (D. Mass. Mar. 30, 2012) (quoting Guckenberger v.
Boston Univ., 957 F. Supp. 306, 316 (D. Mass. 1997)). The elements of a valid contract are an
offer, acceptance, and an exchange of consideration or a meeting of the minds. Id. (citing
Vadnais v. NSK Steering Sys. Am., Inc., 675 F. Supp. 2d 205, 207 (D. Mass. 2009)). Here,
Plaintiff cannot establish a breach of any contract because there was no offer, no acceptance and
no consideration when Northeast provided Plaintiff with an initial, estimated TILA Disclosure on
or around March 18, 2005. See SMF 1. The March 18, 2005 TILA Disclosure estimated an
initial monthly payment in the amount of $1,329.26, and an 8.158% APR. See id. It was neither
a Note, nor a Mortgage, and in no way bound the mortgagee to its estimates. Plaintiff cites no
authority to the contrary. See generally, Compl. Instead, Plaintiff later executed the binding
agreement, which was the adjustable rate Note and Mortgage, on April 6, 2005. See id. at 2.
The Note clearly provided for an initial monthly payment of $1,429.37 and an initial interest rate
of 7.725%. See id. The second TILA Disclosure that Plaintiff executed on April 6, 2005 also
unequivocally be entered in their favor.6 Again, because there are no allegations involving Bank of America, Countrywide, Wells Fargo or ACE, judgment
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provided for a $1,429.37 monthly payment, and indicated that the APR was 10.528%. See id. In
sum, the initial estimates provided to the Plaintiff were just that, estimates. No contract was ever
formed to give Plaintiff a mortgage loan bearing the terms of the March 18, 2005 TILA
Disclosure estimate. Accordingly, the Moving Defendants could not have breached any contract.
The only party to this lawsuit who breached a contract was Plaintiff, by defaulting on her
payment obligations under the Note. See id. at 8-9.
B. Because No Contract Was Breached, Plaintiff Cannot
Establish a Breach of the Covenant of Good Faith and Fair Dealing
Plaintiff claims that Northeast, not any of the Moving Defendants, breached the covenant
of good faith and fair dealing by allegedly offering Plaintiff loan terms prior to closing that differ
from those of the Mortgage Loan. See Compl. 229. Even if the Moving Defendants could
somehow be liable for the actions of Northeast, which they in no way concede, Plaintiff is still
unable to establish a breach of the covenant of good faith and fair dealing because she cannot
establish the existence of a contract that was breached. See Famm Steel, Inc. v. Sovereign Bank,
571 F.3d 93, 100 (1st Cir. 2009) (the scope of the covenant is only as broad as the contract that
governs the particular relationship the covenant does not supply terms that the parties were
free to negotiate, but did not, nor does it create rights and duties not otherwise provided for in the
contract). Because Plaintiff cannot establish a breach of contract claim, as explained in
IV(A), supra, she cannot establish a breach of the covenant of good faith and fair dealing.
V. PLAINTIFF CANNOT ESTABLISH A CLAIM
FOR INTENTIONAL MISREPRESENTATION
BECAUSE THE MOVING DEFENDANTS MADE NO FALSE
REPRESENTATION UPON WHICH PLAINTIFF DETRIMENTALLY RELIED
Plaintiff sets forth two theories of intentional misrepresentation. First she claims that
HSBC and ACE provided her with loan terms that differed from what she expected, even though
should be entered in their favor.
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Northeast, not the Moving Defendants, originated the loan. See Compl. 197-202. Second,
Plaintiff claims that Bank of America misrepresented that it would help her to modify the
Mortgage Loan. Seeid. at 203-210. For the reasons explained below, Plaintiff cannot
establish liability on either theory.7
A. Plaintiff Cannot Establish That the Moving
Defendants Misrepresented the Terms of the Mortgage Loan
Plaintiff asserts a claim for intentional misrepresentation against HSBC and ACE for
Northeast allegedly providing Plaintiff with terms at the loan closing that differed from the
estimates she was provided one month prior to closing. Seeid. at 197-202. To establish a
claim for intentional misrepresentation, a plaintiff must establish that the defendant made a
false representation of a material fact with knowledge of its falsity for the purpose of inducing
the plaintiff to act thereon, and that the plaintiff reasonably relied upon the representation as true
and acted upon it to his damage. Gardner, 2012 WL 1109104, at *4 (quotingRussell v. Cooley
Dickinson Hosp, Inc., 437 Mass. 443, 458, 772 N.E.2d 1054, 1066 (2002)) (additional citations
omitted).
First, neither HSBC, ACE, nor the remaining Moving Defendants can bear liability for
Northeasts actions. See Cazales v. HSBC Bank, N.A., No. 12-10263-RGS, 2012 WL 1969320,
at *2 (D. Mass. June 1, 2012) (refusing to hold HSBC as Trustee liable for the torts of a
predecessor mortgagee because it was a bona fide purchaser for value, acquiring the mortgage
by way of an assignment free and clear of the undisclosed intentions of the original contracting
parties) (citations omitted). Second, Plaintiff is unable to establish the existence of any false
representation or detrimental reliance. As explained in IV(A), supra, the March 18, 2005
TILA Disclosure estimate was not a contract and in no way bound Plaintiff or Northeast to exact
7 Because Plaintiff does not so much as claim that HSBC as Trustee, Countrywide or Wells Fargo represented, let
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loan terms. The actual contract, which did bind both Northeast and the Plaintiff was the Note
agreement, executed on April 6, 2005. See SMF 2. Further, the only detrimental reliance
Plaintiff claims that she suffered entailed defending the foreclosure action and filing the instant
lawsuit [d]ue to the defendants assertion of the ownership of note and mortgage. See id. at
21. This alleged reliance is in no way related to Plaintiffs intentional misrepresentation claim.
See Gardner, 2012 WL 1109104, at *4 (requiring the plaintiff to reasonably rely on the
representation as true and act[] upon it to his damage) (citations omitted).
B. Plaintiff Cannot Establish that Bank of America
Misrepresented That it Would Review the Mortgage Loan for a Modification
Plaintiff also alleges that Bank of America indicated that it would help with her
mortgage or modify her Mortgage Loan, but that it instead foreclosed upon the Property. See
Compl. 203-210. Again, Plaintiff cannot establish any false representation or detrimental
reliance. Rather, Plaintiff concedes that the alleged false representation is pure speculation.
See SMF 22. Contrary to Plaintiffs unsupported allegation, Bank of America has helped
Plaintiff continuously since her initial October 2005 default. Seeid. at 8, 10. When Plaintiff
sought to refinance with Countrywides Full Spectrum Lending Division, Countrywide provided
her with terms of a proposed refinancing agreement in February 2007. See id. at 8. Plaintiff
chose not to pursue this, however. See id. Instead, Plaintiff reinstated her loan in April 2008 by
making a lump sum payment of $34,898.35. See id. Plaintiff now complains that she liquidated
her life savings in her desperation to save her familys home, but fails to acknowledge that her
default caused this problem, not Bank of Americas assistance, or purported lack thereof.
Compl. 206. In June 2009, Bank of America offered her a loan modification. See SMF 10.
Plaintiff chose to reject the modification offer. See id. Plaintiff explained that the reason why
alone misrepresented, anything to her, the Court should enter judgment in their favor.
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she did not accept the June 5, 2009 loan modification was because BOA could not provide any
evidentiary foundation to support its claim of ownership of the Note and Mortgage and because
BOA would not agree to indemnify the Plaintiff against any future claims to the said note and
mortgage. Id. at 23.8 Bank of America was under no duty to do so, however. Further, Bank
of America sent her a Notice of Intention to Foreclose on September 14, 2009, which provided
her the opportunity to cure her default. See id. at 11. Plaintiff did not do so, and, accordingly,
HSBC as Trustee filed its SCRA complaint on January 27, 2010. SeeHSBC as Trustee v. Matt,
No. 10 MISC. 421195. Plaintiffs complaint that Bank of America falsely misrepresented that it
would help her with her mortgage is wholly unsubstantiated. Accordingly, judgment should
be entered in favor of the Moving Defendants.
VI. PLAINTIFF CANNOT ESTABLISH A VIOLATION OF 93A
BECAUSE SHE FAILED TO SERVE A DEMAND LETTER AND THE
MOVING DEFENDANTS COMMITTED NO UNFAIR OR DECEPTIVE ACTS
Plaintiff cannot establish any violation of 93A as against the Moving Defendants because
she failed to serve the Moving Defendants with a required 30-day demand letter prior to filing
suit and because she cannot establish any unfair or deceptive acts committed by the Moving
Defendants.
A. Plaintiffs Failure to Serve a Demand Letter Bars the Claim
Judgment must be entered in favor of the Moving Defendants on Plaintiffs 93A claim
because she failed to serve the required 30-day demand letter on any of the Moving Defendants.
M.G.L. c. 93A 9(3) requires that [a]t least thirty days prior to the filing of any such action, a
written demand for relief, identifying the claimant and reasonably describing the unfair or
8 To the extent that Plaintiff claims that the June 2009 loan modification offer should have contained an interest rateno higher than 6.99%, with no escrow, and with arrears calculated from the date of her default, this argument isentirely unsubstantiated. See SMF 10. Plaintiff cannot identify any documents or communications whatsoeverthat informed her that the modification would bear these terms. See id. Instead, she vaguely identifies unspecified
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deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any
prospective respondent. M.G.L. c. 93A 9(3). Plaintiff did not send any of the Moving
Defendants a demand letter, and, in fact, concedes as much. See Compl. 154-56. She
erroneously contends that she is excused from this requirement.9 Seeid.
Sending a 30-day demand letter is an absolute prerequisite to an action asserted under
G.L. c. 93A, 9, and failing to satisfy the prerequisite entitles a defendant to judgment as a
matter of law. Ball v. Wal-Mart, Inc., 102 F. Supp. 2d 44, 54 (D. Mass. 2000) (granting
summary judgment for a defendant where the plaintiff failed to send a demand letter); see also
Brown v. Bank of Am. Corp., No. 10-11085-GAO, 2011 WL 1311278, at *3 (D. Mass. Mar. 31,
2011) (holding that the demand letter requirement is not a mere formality and that [t]he
failure to comply with this prerequisite is fatal to the plaintiffs Chapter 93A claim); see also
Entrialgo v. Twin City Dodge, Inc., 368 Mass. 812, 813 (1975) (failure to send and allege the
demand letter according to the statute results in dismissal of the claim). Because Plaintiff did not
serve the Moving Defendants with the required demand letter, judgment should be entered in
their favor. See id.
B. Plaintiff Cannot Establish Any Unfair or Deceptive Acts
Under 93A 2, unfair methods of competition and unfair or deceptive acts or practices
in the conduct of any trade or commerce are hereby declared unlawful. M.G.L. c. 93A 2.
Even if Plaintiff had served the required demand letter, she still cannot establish any unfair or
deceptive acts committed by the Moving Defendants. Plaintiff claims only that the Moving
Defendants violated 93A by Northeast allegedly using terms and practices that were unfair,
communications from time to time with BOA. See id.9 To the extent Plaintiff argues that she is exempt from serving a demand letter upon the Moving Defendantsbecause she is asserting her claims defensively against the foreclosure action, her argument fails. Compl. 154.There is no authority for this proposition.
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(the obligor shall have the right to rescind the transaction until midnight of the third business
day following the consummation of the transaction or the delivery of the information and
rescission forms required under this section whichever is later, by notifying the creditor).
Plaintiff does not claim that she did not receive the notices. See generally, Compl. Instead, she
complains that she did not receive the required copies of the Notice of the Right to Cancel or
TILA Disclosure on April 6, 2005, but rather that she received them a few days later. Seeid. at
182 (Reviewing Ms. Matts closing documents reveals that she did not receive the required
copies of the Notice of the Right to Cancel at closing that clearly and conspicuously discloses
[sic] her right to rescind the mortgage contract. Nor did Ms. Matt receive the required copies
of the Truth in Lending Disclosure statement at closing.); see also SMF 19. Plaintiff states
that she received the documents a few days after the closing of the Mortgage Loan because the
closing attorney, Tomasello was sick and pregnant and needed to use [Plaintiffs] bathroom.
See SMF 20. Plaintiffs right to rescind expired on April 9, 2005, three days after the closing
of the loan, or, at the latest, three days after she received a copy of the Notice of the Right to
Cancel shortly after the closing. See M.G.L. c. 140D 10(a). Accordingly, because the Notice
of the Right to Cancel and the TILA Disclosure were delivered to the Plaintiff within days of
April 6, 2005, the claim is time-barred. See id.12 Accordingly, judgment should be entered in
right to rescind to each consumer entitled to rescind. 209 MASS.CODE REGS. 32.23(2)(a).12 To the extent Plaintiff argues that her claim is not time-barred because she is asserting an action for recoupment,
this argument is flawed. The common-law doctrine of recoupment allows a defendant to defend against a claimby asserting up to the amount of the claim the defendants own claim against the plaintiff growing out of thesame transaction. Kelly v. Deutsche Bank Natl Trust Co., 789 F. Supp. 2d 262, 266 (D. Mass. 2011) (quotingBolduc v. Beal Bank, SSB, 167 F.3d 667, 672 (1st Cir. 1999)). [A] recoupment action can only be brought asaffirmative defenses to limit the plaintiffs possible recovery. Damas v. Mortgage Elec. Registration Sys., Inc., No.082207, 2009 WL 2232778, at *1 (Mass. Super. Ct. June 3, 2009). It serve[s] to reduce or extinguish theplaintiffs claim, but it c[an] not result in an affirmative recovery for the defendant. Kelly, 789 F. Supp. 2d at 266(quotingBose Corp. v. Consumers Union of U.S., Inc., 367 Mass. 424, 427-28, 326 N.E.2d 8, 10 (1975)). It is acounterclaim not a claim. Damas, 2009 WL 2232778, at *1. Because Plaintiff is asserting her claim forrecoupment affirmatively in this lawsuit, rather than defensively, Plaintiff cannot recover thereunder.
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favor of the Moving Defendants.13
VIII. PLAINTIFF CANNOT ESTABLISH THAT THE
MOVING DEFENDANTS WERE UNJUSTLY ENRICHED
Unjust enrichment is an equitable remedy, not a separate cause of action, which gives an
aggrieved party the right to seek restitution against another party who has been unjustly enriched
at the aggrieved partys expense. Salaman v. Terra, 394 Mass. 857, 859 (1985); see also Keller
v. OBrien, 425 Mass. 774, 778 (1997) (Restitution is an equitable remedy by which a person
who has been unjustly enriched at the expense of another is required to repay the injured party)
(citations omitted). The fact that a person has benefitted from another is not of itself sufficient
to require the other to make restitution therefor. Id. (quoting Restatement of Restitution 1
(1937)). Instead, the remedy is appropriate only if it would be unjust for the recipient to retain
the benefit. See id. (citingNatl Shawmut Bank v. Fidelity Mut. Life Ins. Co., 318 Mass. 142,
146, 61 N.E.2d 18, 20 (1945)). Plaintiff alleges that [a]ll Defendants have been unjustly
enriched at the expense of Ms. Matt. Compl. 232. She complains that the Moving
Defendants conduct in originating, servicing and litigating the foreclosure of Plaintiffs
defaulted loan constitutes unjust enrichment. However, as explained above, Northeast in no way
misrepresented the terms of the Mortgage Loan, Bank of America continuously offered to assist
Plaintiff to modify the terms of her Mortgage Loan, offers which Plaintiff rejected, and HSBC as
Trustee was entitled to foreclose, as the note-holder and mortgagee, because Plaintiff has not
cured her default. See V(A), V(B), I, supra.14 Despite claiming that the Moving Defendants
have been unjustly enriched, Plaintiff has been living the Property without having made a single
13 Without conceding that liability could be imputed to HSBC as Trustee, Bank of America, HSBC, Countrywide,Wells Fargo and ACE can bear no liability given that they were never assignees of the Mortgage, nor holders of theNote.14 As with Plaintiffs other claims, she makes no substantive allegations against Countrywide, Wells Fargo or ACE,and on that basis, summary judgment should be entered in their favor. See generally, Compl.
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payment in over four (4) years, since August 2008. See SMF 9. There is absolutely no benefit
that has been conferred upon the Moving Defendants to which they are unentitled. Accordingly,
judgment should be entered in favor of the Moving Defendants.
CONCLUSION
For the reasons stated above, the Moving Defendants respectfully request that this Court
grant their Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56 and
enter judgment in their favor.
Dated: October 30, 2012
Respectfully submitted,
BANK OF AMERICA, N.A., HSBC BANKUSA, N.A., HSBC AS TRUSTEE,COUNTRYWIDE SECURITIESCORPORATION, WELLS FARGO BANK,N.A. AND ACE SECURITIES CORP.,
By their attorneys,
/s/ Courtney BensonCourtney L. Benson (BBO# 675679)Chad W. Higgins (BBO# 668924)GOODWIN PROCTER LLPExchange Place, 53 State StreetBoston, MA 02109Tel. 617-570-1000Fax. [email protected]@goodwinprocter.com
CERTIFICATE OF SERVICE
I hereby certify that this document filed through the ECF system will be sentelectronically to the registered participants as identified on the Notice of Electronic Filing (NEF)and paper copies will be sent to those indicated as non-registered participants on October 30,2012.
/s/ Courtney Benson
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