Medeiros v. Countrywide Home Loans, Inc., of Van Nuys, California, a Division of Bank of America, N.A.
1:17-cv-11675
D. Mass.Jul 3, 2018Background
- Plaintiff Luis R. Medeiros executed four Countrywide-promulgated adjustable-rate notes and mortgages in June 2006 securing four condominium units he converted; mortgages named MERS as nominee and allowed assignment and sale of the notes.
- Plaintiff alleges broker and lenders engaged in predatory, nondisclosed last-minute changes to loan terms, misrepresented the property as an existing condominium complex, and later refused promised refinancing and loan modifications.
- Over time servicing/ownership of the loans changed (Bank of America, Green Tree/Ditech, MTGLQ among others); plaintiff eventually defaulted and foreclosure proceedings followed.
- Plaintiff filed a pro se complaint in 2017 asserting fraud, breach of contract, and violations of Mass. Gen. Laws ch. 93A; defendants moved to dismiss under Rule 12(b)(6) (and Rule 9(b) for fraud).
- The magistrate judge found the challenged claims either untimely, barred by the statute of frauds, insufficiently pleaded (Rule 9(b)), or not actionable against assignees/successors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Chapter 93A claim based on origination/predatory lending | Medeiros contends broker/lender hid effective rate and closing costs and refused promised refinancing, constituting unfair/deceptive practices | Time-barred (4-year limitations); assignees not liable for originator's conduct | Dismissed: claim accrued at origination (2006); discovery rule inapplicable; also cannot hold assignees liable for predecessor's origination acts |
| Fraud (fraudulent misrepresentation) | Allegations: (1) broker changed terms at closing; (2) lenders falsified condo status to sell to Fannie Mae; (3) dishonest loan modification practices | Fails Rule 9(b): lacks particularity (who, when, where, how); also time-barred (3-year limitations) | Dismissed: pleadings do not meet Rule 9(b) specificity; origination-related fraud untimely |
| Breach of contract (promise to refinance & keep loans together) | Broker and CHLI promised refinancing after 1 year and to keep loans in same portfolio; they breached those promises | Claims are time-barred (6-year limit for contract); statute of frauds bars oral promises regarding interests in land; Notes/Mortgages contain no such terms | Dismissed: refinance claim accrued in 2007 and is time-barred; oral promises unenforceable under statute of frauds; no contractual basis pleaded |
| Standing/assignee liability for origination misconduct | Plaintiff seeks relief from current servicers/holders for origination conduct | Assignees/successors who did not participate in origination are not liable for assignor's deceptive acts | Dismissed: plaintiff cannot impute originator liability to assignees absent facts showing their participation in misconduct |
Key Cases Cited
- Bell Atlantic v. Twombly, 550 U.S. 554 (plausibility standard for pleadings)
- Gargano v. Liberty Int'l Underwriters, Inc., 572 F.3d 45 (First Circuit standards on accepting well-pleaded facts)
- Juarez v. Select Portfolio Servicing, Inc., 708 F.3d 269 (fraud pleading requirements and foreclosure-context fraud law)
- Drakopoulos v. U.S. Bank Nat’l Ass’n, 991 N.E.2d 1086 (Mass.) (limits on assignee liability for assignor's unfair acts)
- Hull v. Attleboro Sav. Bank, 596 N.E.2d 358 (Mass. App. Ct. 1992) (presumption that signatory knows contents of documents signed)