948 F.3d 31
1st Cir.2020Background
- O'Brien obtained an $825,000 adjustable-rate mortgage in March 2005 after a broker completed an application that materially overstated her income; payments exceeded her real income and she defaulted in September 2008.
- WaMu failed in 2008; the mortgage was later assigned to JPMorgan Chase and, in February 2009, to Deutsche Bank; Select Portfolio Servicing (SPS) serviced the loan and repeatedly sent monthly collection statements.
- O'Brien sent a Chapter 93A demand letter on September 13, 2018, then sued in Essex Superior Court the same day, alleging (1) enforcement of a predatory loan violated Mass. Gen. Laws ch. 93A and (2) collection in an unfair/deceptive manner violated Mass. Gen. Laws ch. 93, § 49.
- Defendants removed to federal court; they moved to dismiss arguing, inter alia, FIRREA bars some relief, assignees/servicers are not liable for origination claims, and the four-year statute of limitations (Mass. Gen. Laws ch. 260, § 5A) bars the claims.
- The district court dismissed Count One as time-barred (accrual at loan closing) and dismissed Count Two for lack of a private right of action; O'Brien appealed.
- The First Circuit affirmed dismissal of both counts on statute-of-limitations grounds, holding the alleged wrongful conduct accrued at loan origination and subsequent collection statements did not create new, independently actionable claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether O'Brien's Chapter 93A claim is timely | O'Brien: enforcement/collection of the allegedly predatory loan (e.g., 2018 statements) constitutes ongoing "use" under § 9, so claims are within 4-year window after recent statements | Defs: claim accrued at loan origination/closing in 2005; 4-year limitations period expired | Timely challenge fails — claim accrued at signing; later routine collection under loan terms did not restart limitations period; Count One time-barred |
| Whether O'Brien's Chapter 93, § 49 claim is timely / provides private right | O'Brien: repeated collection statements are ongoing unfair collection acts that revive limitations and § 49 permits a private suit | Defs: enforcement traces to original loan terms (2005) so claim accrued then; § 49 may lack an independent private right but statute-of-limitations applies regardless | Court did not reach §49 private-right question; held §49-based claim time-barred because accrual occurred at origination and later statements did not create new actionable violations |
Key Cases Cited
- Latson v. Plaza Home Mortg., Inc., 708 F.3d 324 (1st Cir. 2013) (accrual of Chapter 93A claim at loan signing when terms are known)
- Frappier v. Countrywide Home Loans, Inc., 750 F.3d 91 (1st Cir. 2014) (acting pursuant to contract terms ordinarily not a bad-faith 93A violation)
- Shaulis v. Nordstrom, Inc., 865 F.3d 1 (1st Cir. 2017) (Chapter 93A requires an identifiable, causally connected harm separate from the statutory violation)
- Rhodes v. AIG Domestic Claims, Inc., 961 N.E.2d 1067 (Mass. 2012) (causation requirement for recovery under c.93A)
- Quality Cleaning Prods. R.C., Inc. v. SCA Tissue N. Am., LLC, 794 F.3d 200 (1st Cir. 2015) (accrual rule and when a plaintiff can file suit governs limitations)
- Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99 (2013) (a cause of action accrues when plaintiff can file suit and obtain relief)