Speleos v. BAC Home Loans Servicing, L.P.
2010 U.S. Dist. LEXIS 132111
| D. Mass. | 2010Background
- Plaintiffs allege BAC foreclosed while they were pursuing HAMP modification.
- Property at issue is 750 Whittenton St., Taunton, MA 1022, financed by Stonebridge loan with Fannie Mae ownership and BAC servicing.
- HAMP guidelines require evaluation before foreclosure; Plaintiffs sought modification in March–July 2010; BAC scheduled foreclosure for Aug 5, 2010.
- Foreclosure sale occurred Aug 5, 2010; BAC, Fannie Mae, and Orlans Moran conducted sale; BAC later assigned bid to Fannie Mae.
- Plaintiffs seek rescission of sale, restoration of title, consideration of modification, damages, and fees; lis pendens sought to warn title holders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Third-party breach of contract standing | Borrowers may enforce HAMP Servicer Agreement | No intended third-party beneficiary under contract | Count II dismissed for lack of standing |
| Consistency with the contract terms | Borrowers intended beneficiaries under HAMP | Servicer Agreement lacks enforcement rights for borrowers | Count II dismissed for lack of enforceability under contract terms |
| Negligence based on HAMP guidelines | HAMP violation is evidence of duty and breach | No private action under HAMP; no duty to borrowers | Count I remains viable as negligence evidence; no private HAMP action but negligence per se theory allowed in MA |
| Breach of the covenant of good faith and fair dealing | HAMP violation implies bad faith in foreclosure | No contract provision supporting enforceable HAMP-based claim | Count III dismissed |
| Lis pendens relief | Foreclosure sale affects title; lis pendens appropriate | Not argued in same way; standard applies | Lis pendens allowed |
Key Cases Cited
- Miree v. DeKalb County, 433 U.S. 25 (U.S. 1977) (third-party beneficiary concept in government contracts for public safety)
- Ayala v. Boston Housing Authority, 404 Mass. 689 (1989) (third-party beneficiary implications in housing contracts)
- Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206 (9th Cir. 1999) (intent to benefit but not as enforceable third party)
- Jorgensen v. Mass. Port Auth., 905 F.2d 515 (1st Cir. 1990) (elements of negligence claims in public authority context)
- Berish v. Bornstein, 437 Mass. 252 (2002) (negligence per se available for statutory violations in MA)