611 B.R. 491 (Bkrtcy.D.Mass. 2020), 17-11769-FJB, In re Furrier

Docket Nº:17-11769-FJB
Citation:611 B.R. 491
Opinion Judge:Frank J. Bailey, United States Bankruptcy Judge
Party Name:IN RE Sandra FURRIER, Debtor Sandra Furrier, Plaintiff v. Liberty Home Equity Solutions, Inc., Defendant Adversary Proceeding 19-1034
Attorney:Christopher M. Brine, Brine Consumer Law, Worcester, MA, for Plaintiff. Jason Giguere, Tatyana P. Tabachnik, Orlans PC, Waltham, MA, Amy M. Kerlin, Reed Smith LLP, Pittsburg, PA, Hale Yazicioglu Lake, Maura K. McKelvey, Hinshaw & Culbertson, LLP, Boston, MA, for Defendant.
Case Date:January 16, 2020
Court:United States Bankruptcy Courts, First Circuit

Page 491

611 B.R. 491 (Bkrtcy.D.Mass. 2020)

IN RE Sandra FURRIER, Debtor Sandra Furrier, Plaintiff

v.

Liberty Home Equity Solutions, Inc., Defendant

No. 17-11769-FJB

Adversary Proceeding 19-1034

United States Bankruptcy Court, D. Massachusetts

January 16, 2020

Page 492

Christopher M. Brine, Brine Consumer Law, Worcester, MA, for Plaintiff.

Jason Giguere, Tatyana P. Tabachnik, Orlans PC, Waltham, MA, Amy M. Kerlin, Reed Smith LLP, Pittsburg, PA, Hale Yazicioglu Lake, Maura K. McKelvey, Hinshaw & Culbertson, LLP, Boston, MA, for Defendant.

MEMORANDUM OF DECISION and ORDER

Frank J. Bailey, United States Bankruptcy Judge

Page 493

This adversary proceeding is before the Court on the defendant’s motion to dismiss each of the complaint’s four counts for failure to state a claim on which relief can be granted.

Background

Sandra Furrier (the "Debtor"), owns and resides in certain real property (the "Property") that she inherited from her now-deceased parents. When her father was alive, he encumbered the Property with a reverse mortgage ("the Mortgage") in favor of Liberty Home Equity Solutions, Inc. ("Liberty"), which mortgage secured payment of a promissory note that the father gave to Liberty. The note became due and payable upon his death, on September 30, 2016. The Debtor owns the Property subject to Liberty’s mortgage.

On May 12, 2017, the Debtor filed a petition for relief under chapter 13 of the Bankruptcy Code, thereby commencing the case in which the present adversary proceeding arises. In the case, Liberty has filed a proof of claim, asserting a secured claim, based on the Mortgage, in the amount of $289,767.15. In her complaint in this adversary proceeding, the Debtor alleges that, wanting to pay off the promissory note by refinancing the Property (so that she could retain the Property as her residence), she several times asked Liberty for a payoff statement, but that Liberty’s responses were untimely, inaccurate, and of unreasonable duration. She further alleges that notwithstanding a pending sale of the property that would have fully paid off the promissory note, Liberty unreasonably refused to postpone its then-pending foreclosure sale. As a result of these actions, the Debtor alleges, Liberty caused her damages, including economic loss, loss of equity in her home, decreased credit score, lost opportunities, emotional damages, costs, and attorney’s fees. On the basis of these allegations, the Debtor asserts four counts for relief.

By the motion now before the Court, Liberty seeks dismissal of all four counts for failure to state a claim on which relief can be granted. Fed.R.Civ.P. 12(b)(6), made applicable to these proceedings by Fed. R. Bankr. P. 7012(b). To survive a motion to dismiss under Rule 12(b)(6) the complaint must state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The court should view the well-pleaded facts in the light most favorable to the non-moving party and assume the veracity of such facts. Id. at 679, 129 S.Ct. 1937. For the reasons below, the motion must be denied as to each count.

Analysis

A. Count I

In Count I, the Debtor seeks damages under MASS. GEN. LAWS ch. 183, § 54D(e) for alleged violations by Liberty of § 54D. Section 54D of chapter 183 obligates a mortgagee to respond to certain requests for a written payoff statement, establishes requirements for such responses, and subjects the mortgagee to liability for failing without reasonable cause to provide a timely payoff statement as required by that section. See generally MASS. GEN. LAWS ch. 183, § 54D. It specifies when the obligation to provide a timely payoff statement arises: "[u]pon request of 1 or more obligors on a mortgage note, or an authorized person on behalf thereof[.]" Liberty argues that Count I fails to state a claim on which relief can be granted because the

Page 494

Debtor is neither an "obligor on a mortgage note" nor an "authorized person on behalf thereof" as those terms are used in § 54D, and therefore her demands for a payoff letter cannot have triggered obligations under § 54D(a). The Debtor responds that, as the owner of the property that is subject to the mortgage that secures the promissory note in question, she is an obligor on the promissory note within the meaning of the statute. (She does not purport to be an "authorized person.") It is undisputed that the Debtor is not a party to the promissory note that Liberty’s mortgage secures.

The issue presented is whether an owner of property subject to a mortgage that secures a promissory note is, as such, "an obligor on a mortgage note" within the meaning of § 54D(a). The term obligor is not defined in the statute, so I must construe the term according...

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