764 F. Supp. 2d 249
D. Mass.2011Background
- Wilder purchased a used 2004 Grand Cherokee from Toyota of Watertown financed by TMCC and TMCC/ TFS; a Retail Installment Contract was signed assigning rights to TMCC.
- Wilder defaulted in January 2009; TMCC issued a Notice of Default requiring cure within 21 days.
- Wilder allegedly attempted to cure electronically after 21 days but could not due to the defendants closing her account to payment.
- Repossession occurred on February 10, 2009.
- Wilder alleged that defendants violated Mass. Gen. Laws ch. 255B, § 20A(e), breached the contract, breached the implied covenant of good faith and fair dealing, committed fraud, and violated ch. 93A.
- The Magistrate Judge recommended denying the defendants’ motion to dismiss; the District Judge adopted and set discovery deadlines.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wilder state a breach of contract under 20A(e) | Wilder had continued cure right after 21 days until acceleration or collateral action | Cure rights ended at the 21-day period or on proceeding against collateral | Denied in part; court finds potential continuing cure rights exist before proceeding against collateral |
| Whether the implied covenant of good faith and fair dealing was violated | Closing account to payment hindered Wilder’s ability to cure | No implied covenant violation beyond statutory rights | Denied; court finds sufficient facts to state a claim for breach of implied covenant |
| Whether Wilder states a claim for fraud | Defendants knew policy closed accounts to payment while claiming compliance with law | Pleading fails Rule 9(b) and essential fraud elements | Sustained; court finds sufficient facts to state a fraud claim under Massachusetts law |
| Whether Wilder states a claim under Ch. 255B, § 20A(e) | Defendants prevented cure by foreclosing payment methods after 21 days | Statute does not require post-21-day cure rights | Sustained; court allows § 20A(e) claim to proceed based on alleged prevention of cure |
| Whether Wilder states a claim under Massachusetts Chapter 93A | Policy of closing accounts to prevent cure constitutes unfair and deceptive practices | Breaches alone do not equal 93A violation; need unfair acts | Sustained; court finds pleadings support 93A claim at this stage |
Key Cases Cited
- Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376 (Mass. 2004) (implied covenant and performance standards; context of good faith in Massachusetts law)
- Rodi v. Southern New England School of Law, 389 F.3d 5 (1st Cir. 2004) (fraud pleading specificity; who/what/where/when rule)
- Acushnet Federal Credit Union v. Roderick, 26 Mass. App.Ct. 604 (Mass. App. Ct. 1988) (misrepresentation knowledge requirement; diligence may suffice)
- FAMM Steel, Inc. v. Sovereign Bank, 571 F.3d 93 (1st Cir. 2009) (3P/93A framework for unfair or deceptive practices)