Sheedy v. Deutsche Bank National Trust Co. (In re Sheedy)
480 B.R. 204
Bankr. D. Mass.2012Background
- Debtor Laura Sheedy filed a Chapter 13 petition on June 8, 2010 concerning real property in Lexington, MA encumbered by a mortgage.
- Defendants Deutsche Bank and Chase (servicer) move for summary judgment and to strike a forensic audit report relied on by Sheedy.
- Sheedy's complaint asserts claims for TILA rescission, Massachusetts Chapter 93A, fraud, objection to claim, and standing; she incorporates a forensic audit by Dilbert.
- Refinance loan occurred April 2004 with an adjustable-rate note; initial payments were interest-only, and the loan was later transferred to Deutsche Bank via FDIC-related transactions.
- FDIC, as Receiver, acquired Washington Mutual Bank’s assets in 2008; Chase became custodian; Deutsche Bank holds the note with Chase servicing.
- Court later grants motion to strike the forensic audit and grants summary judgment on all counts, including standing and fraud, based on statute-of-limitations and insufficiency of evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TILA rescission claim is time-barred | Sheedy contends rescission rights remain under TILA/93A preservation. | Rescission expired under §1635(f) and Beach v. Ocwen; no timely action. | TILA rescission barred; limitations run; no timely action. |
| Whether Count II (Chapter 93A) is time-barred and properly pled | Chapter 93A preservation and rescission rights exist via plan. | No proper written demand; statute of limitations; plan is inadequate. | Count II barred; no valid written demand; four-year window not satisfied. |
| Whether fraud claim (Count III) survives summary judgment | Dilbert's forensic audit supports fraud allegations. | Audit lacks admissible foundation; lacks particularity and evidence. | Count III dismissed; no credible evidence of fraud. |
| Whether Count IV (Objection to Claim) or standing issues survive | Disputed fees and standing to challenge assignments. | Amended claim supported; FDIC/PAA allocations show standing and reasonableness. | Count IV granted; standing issues resolved against Debtor. |
| Whether Debtor has standing to challenge assignments/foreclosure | Debtor may challenge chain of assignments to affect foreclosure validity. | Mortgagors generally lack standing to contest assignments; PSA/FDIC context controls. | Debtor lacks standing to challenge assignment; court upholds Chase/Deutsche DB chain. |
Key Cases Cited
- Beach v. Ocwen Fed. Bank, 523 U.S. 410, 523 U.S. 410 (1998) (TILA rescission timing for non-purchase money loans)
- Belini v. Wash. Mut. Bank, 412 F.3d 17 (1st Cir. 2005) (20-day response and rescission enforcement under §1635)
- Palmer v. Champion Morte g., 465 F.3d 24, 465 F.3d 24 (1st Cir. 2006) (TILA disclosures and liability framework)
- In re Fidler, 210 B.R. 411, 210 B.R. 411 (D. Mass. 1997) (admissibility and reliability of affidavits in summary judgment)
- Wenzel v. Sand Canyon Corp., 841 F. Supp. 2d 468, 841 F. Supp. 2d 468 (D. Mass. 2012) (standing to challenge assignments; Ibanez discussion context)
- U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 458 Mass. 637 (Mass. 2011) (standing to foreclose; mortgage ownership at time of notice)
- Lacey v. BAC Home Loans Serv., LP (In re Lacey), 480 B.R. 13, 480 B.R. 13 (Bankr. D. Mass. 2012) (standing to challenge foreclosure when not party to assignment)
- McKenna v. First Horizon Home Loan Corp., 475 F.3d 418, 475 F.3d 418 (1st Cir. 2007) (recoupment and TILA interplay concepts)