McKenna v. Wells Fargo Bank, N.A.
2012 U.S. App. LEXIS 17694
| 1st Cir. | 2012Background
- Mortgage on Suzette and Charles McKenna's South Orleans, MA home tied to a 2006 refinance with Wells Fargo; Wells Fargo foreclosed after a Massachusetts limited judicial procedure showed the borrower was not in military service; Wells Fargo issued a notice of sale in January 2010; McKenna challenged foreclosure and pursued rescission rights under TILA and MCCCDA; Eaton v. Fannie Mae (Mass. superseding) was decided by MA SJC during the appeal; the district court dismissed the federal and state-law claims but diversity jurisdiction was later determined to support the state-law claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal subject-matter jurisdiction exists to support the claims. | McKenna asserts federal TILA claim; MCCCDA mirrors TILA but claims framed as state-law. | Wells Fargo argues federal question jurisdiction or diversity jurisdiction. | Diversity jurisdiction supports the state-law claims; no federal question jurisdiction. |
| Whether a foreclosing mortgagee must hold the note to foreclose under MA law. | Foreclosing holder must possess the note or act as note-holder’s agent. | Massachusetts statute allows foreclosure by mortgagee without proof of note ownership. | Eaton v. FNM A requires note possession for foreclosures; prospectively applied, but not to this case due to timing. |
| Whether McKenna's MCCCDA rescission claim extends beyond three days. | Lack of proper notice could extend rescission period. | Only lack of proper written notice extends the rescission window. | Rescission period extends only if proper written notice is lacking; here, extension not established. |
| Whether the 93A demand-letter requirement bars 93A claims here. | McKenna did not send a demand letter; claims may proceed defensively. | Demand letter prerequisite applies to private 93A actions. | Demand letter prerequisite applies; 93A claim dismissed. |
| Whether the fraud claim meets Rule 9(b) particularity requirements. | Allegations of misrepresentations by Wells Fargo. | Allegations are vague and fail to specify time/place/content. | Fraud allegations are too vague; Rule 9(b) not satisfied. |
Key Cases Cited
- Belini v. Wash. Mut. Bank, F.A., 412 F.3d 17 (1st Cir. 2005) (federal jurisdiction over MCCCDA claims is limited; reliance on supplemental jurisdiction)
- Eaton v. Federal National Mortgage Ass’n, 969 N.E.2d 1118 (Mass. 2012) (Mass. foreclosure statute interpreted to require note possession; prospective application)
- McKenna v. First Horizon Home Loan Corp., 475 F.3d 418 (1st Cir. 2007) (discusses TILA/MCCCDA interplay)
- Ives v. W. T. Grant Co., 522 F.2d 749 (2d Cir. 1975) (federal question jurisdiction considerations in extrinsic circumstances)
- Town of Norwood v. New Eng. Power Co., 202 F.3d 408 (1st Cir. 2000) (jurisdictional timing and review standards context)