Fernandes v. U.S. Bank, N.A. (In Re Fernandes)
446 B.R. 6
| Bankr. D. Mass. | 2011Background
- Debtor Flavia A. Vieira Fernandes filed an adversary proceeding in the Eastern District of Massachusetts challenging a prepetition foreclosure and alleging defects in the mortgage origination and its holder.
- U.S. Bank, N.A. moved to dismiss the Amended Complaint’s twelve counts, arguing lack of standing, failure to state claims, and procedural defects.
- The dispute centers on whether U.S. Bank held the note and mortgage, and whether it complied with alternatives to foreclosure under various statutes and programs.
- Counts address: good-faith obligation in sale, HAMP contract, deceit by loan originator, unjust enrichment, Massachusetts consumer protection acts, RESPA, predatory lending statutes, and foreclosure validity.
- Judge Bailey’s memorandum granted the motion to dismiss in part and denied in part, with limited permission to reassert certain claims after a demanded-letter process.
- Certain counts were deemed unsupported or time-barred, while others were allowed to proceed only after compliance with threshold procedural prerequisites.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does SPA/HAMP create a viable duty of good faith to consider loan modification? | Vieira Fernandes argues U.S. Bank’s SPA/HAMP promises give rise to a duty and breach when modification was not considered. | U.S. Bank contends no private right of action or enforceable duty under HAMP/SPA exists. | Count I survives dismissal for now; the theory may proceed to summary judgment. |
| Is there a private right of action for breach of HAMP/SPA against a mortgagee? | Vieira Fernandes contends Breach under HAMP/SPA supports relief. | Bank argues there is no private right of action under HAMP/SPA. | Count II dismissed. |
| Can deceit claims be asserted against the loan originator or assignee for origination misrepresentations? | Deceit against originator supports tort relief. | Assignee cannot be liable for deceit of the originator; limitations period issues apply. | Count III dismissed on both statute of limitations and lack of misrepresentation by U.S. Bank. |
| Do the RESPA claims survive where the debtor concedes no RESPA right of action exists? | RESPA claims should tolerate discovery and not be dismissed at pleading stage. | Debtor concedes no RESPA right of action; claims must be dismissed. | Count IIX (RESPA) dismissed. |
| Was the foreclosure sale invalid for lack of power or defective chain of title? | Foreclosure power may be defective due to ownership issues; sale could be void. | Power to foreclose and chain of title defenses require evidence; pleadings may raise too many factual questions. | Count X denied (claims may proceed; dismissal not warranted at this stage). |
Key Cases Cited
- Williams v. Resolution GGF OY, 417 Mass. 377 (Mass. 1994) (mortgagee duty to act with good faith and reasonable diligence in sale)
- Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456 (Mass. 1997) (extreme and outrageous conduct required for IIED)
- Graves Equipment, Inc. v. M. DeMatteo Const. Co., 397 Mass. 110 (Mass. 1986) (assignee has no greater rights than assignor; defenses burdened against contract claims)
- Rodi v. Southern New England School of Law, 389 F.3d 5 (1st Cir. 2004) (demand letters and 93A pleading requirements)