Harry v. Countrywide Home Loans Inc.
219 F. Supp. 3d 228
D. Mass.2016Background
- Thomas and Gretchen Harry refinanced their Mashpee, MA home in November 2005 with a Countrywide loan (~$245,000) secured by a mortgage recorded in MERS’s name. Payments were made only from Jan 2006–Nov 2009.
- MERS assigned the mortgage to Bank of New York Mellon (BNY Mellon) in October 2011; Ditech later serviced the loan. Harmon Law Offices repeatedly threatened foreclosure beginning in 2011.
- Plaintiffs allege predatory lending, clerical errors on the HUD-1 (wrong lender name), an unsigned second loan application for $257,000, and “robo-signed” assignment signatures; they sought rescission under TILA and filed suit in 2016 in Massachusetts Superior Court (removed to federal court).
- Complaint asserted 11 counts including RICO, Chapter 93A, FDCPA, RESPA, TILA rescission/enforceability, slander of title, fraud, and lack of standing; plaintiffs argued equitable tolling/estoppel of limitations periods.
- Defendants Ditech, MERS, and BNY Mellon moved to dismiss under Fed. R. Civ. P. 12(b)(6); the court applied the plausibility standard and dismissed all claims against those defendants as time‑barred or legally insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of mortgage based on HUD‑1 name error | HUD statement misnames lender, so mortgage is void | Clerical HUD errors do not void mortgage; defendants enforce mortgage, not the HUD form | Court: clerical error irrelevant; mortgage valid; related claims time‑barred |
| Relevance of unsigned $257,000 loan application | Unsigned app shows fraud and supports claims | App is irrelevant to the operative $245k mortgage and, in any event, is old and time‑barred | Court: application immaterial; claims based on it are untimely and not plausibly pleaded |
| Alleged robo‑signing of assignment | Assignment void due to illegal robo‑signers | Bare robo‑signing allegations insufficient to invalidate assignment | Court: conclusory robo‑signing claims fail to state a claim |
| Timeliness and tolling of federal/state claims (RICO, TILA, RESPA, Chapter 93A, FDCPA, slander, fraud, standing) | Equitable tolling/estoppel should suspend statutes of limitations; rescission attempt preserved rights | Most claims are time‑barred; plaintiffs had counsel since 2011 and failed to show concealment or due diligence; some statutes (e.g., foreclosure under M.G.L. c.260 §33) not expired | Court: equitable tolling/estoppel not plausibly alleged; nearly all counts dismissed as time‑barred or legally deficient; foreclosure right not expired |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleading)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state plausible claim)
- Ocasio‑Hernández v. Fortuño‑Burset, 640 F.3d 1 (First Circuit on inference and plausibility)
- Haley v. City of Boston, 657 F.3d 39 (documents incorporated by reference/judicial notice at pleading stage)
- Wilson v. HSBC Mortg. Servs., Inc., 744 F.3d 1 (bare robo‑signing allegations insufficient)
- In re Sheedy, 801 F.3d 12 (TILA rescission three‑year limit for consumer dwellings)
- Large v. Conseco Fin. Servicing Corp., 292 F.3d 49 (rescission does not automatically void contract)
- Abdallah v. Bain Capital LLC, 752 F.3d 114 (fraudulent concealment tolling principles)
- Mercado v. Ritz‑Carlton San Juan Hotel, Spa & Casino, 410 F.3d 41 (factors for equitable tolling in First Circuit)
- Protective Life Ins. Co. v. Sullivan, 425 Mass. 615 (Massachusetts standard for equitable tolling)