Akar v. Fed. Nat'l Mortg. Ass'n

• Citation: 845 F.Supp.2d 381
• Decision Date: 08 February 2012
• Docket Number: Civil Action No. 10–10539–NMG.
• Parties: Sabah AKAR, Sawusan I. Akar, T.F., a minor child by her mother and next friend Sawusan I. Akar, N.F., a minor child by her mother and next friend, Sawusan I. Akar, Plaintiffs, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION a/k/a Fannie Mae, Wells Fargo Bank, N.A., Harmon Law Offices, P.C., Northeast Abstract Services, Inc. and Hammond Residential Real Estate, LLC, Defendants.
• Court: U.S. District Court — District of Massachusetts

845 F.Supp.2d 381

Sabah AKAR, Sawusan I. Akar, T.F., a minor child by her mother and next friend Sawusan I. Akar, N.F., a minor child by her mother and next friend, Sawusan I. Akar, Plaintiffs,

v.FEDERAL NATIONAL MORTGAGE ASSOCIATION a/k/a Fannie Mae, Wells Fargo Bank, N.A., Harmon Law Offices, P.C., Northeast Abstract Services, Inc. and Hammond Residential Real Estate, LLC, Defendants.

Civil Action No. 10–10539–NMG.

United States District Court, D. Massachusetts.

Feb. 8, 2012.

Peter T. Clark, Law Offices of Peter T. Clark, P.C., Mansfield, MA, for Plaintiff.

Patrick T. Clendenen, Morgan T. Nickerson Nelson Mullins Riley & Scarborough, LLP, Christopher P. Maffucci, Casner & Edwards, LLP, Boston, MA, Christine A. Murphy, Marcus, Errico, Emmer & Brooks, P.C., Braintree, MA, Nathalie K. Salomon, Harmon Law Offices, P.C., Needham, MA, for Defendant.

MEMORANDUM & ORDER

GORTON, District Judge.

The Reports and Recommendations from Magistrate Judge Judith G. Dein are thorough and in almost every respect persuasive. The Court, however, declines to accept her conclusion that defendant Wells Fargo, N.A. (“Wells Fargo”) can be held liable for intentional infliction of emotional distress (“IIED”) for its foreclosure of the mortgage on plaintiffs' residence.¹

To maintain a cause of action for intentional infliction of emotional distress (“IIED”) under Massachusetts law, a plaintiff must offer proof of conduct that is “extreme and outrageous beyond all bounds of decency.” Agis v. Howard Johnson Co., 371 Mass. 140, 355 N.E.2d 315, 318–19 (1976). For conduct to rise to such a level requires more than tortious or criminal intent or even a degree of malice that may entitle a plaintiff to punitive damages for a different tort. Doyle v. Hasbro, Inc., 103 F.3d 186, 195 (1st Cir.1996).

Here, plaintiffs allege that Wells Fargo conducted a foreclosure sale after repeatedly assuring them that the sale would be postponed while their loan modification request was pending. Magistrate Judge Dein concluded that the alleged false promises potentially support a claim for IIED and that the plaintiffs should have an opportunity to take discovery in order to show that “making repeated promises that it failed to fulfill could be considered extreme and outrageous.”

This Court respectfully disagrees. Although such behavior supports plaintiffs' claims for bad faith, misrepresentation and/or violation of Chapter 93A, the facts alleged do not warrant a finding of extreme and outrageous conduct that is “beyond all bounds of decency” or “utterly intolerable in a civilized community.” See Foley v. Polaroid Corp., 400 Mass. 82, 99, 508 N.E.2d 72 (Mass.1987); see also Parker v. Bank of America, No. 11–1838, 2011 WL 6413615, at *3, *12 (Mass.Super. Dec. 16, 2011) (allegations of false or broken promises from bank could give rise to claim for fraud but did not constitute extreme or outrageous conduct).

ORDER

In accordance with the foregoing, and after consideration of the objections thereto, the Court ACCEPTS and ADOPTS, in part, and REJECTS, in part, the Magistrate Judge's Report and Recommendation (Docket No. 49) with respect to the motions for judgment on the pleadings filed by Wells Fargo and Fannie Mae. The Court accepts the recommendation that Fannie Mae's Motion for Judgment on the Pleadings (Docket No. 40) be allowed and that Wells Fargo's Motion for Judgment on the Pleadings (Docket No. 38) be allowed with respect to Counts I, III, IV and X but denied with respect to Counts V, VI, VII, VIII, IX and XII.

The Court declines to accept the Magistrate Judge's Recommendation that Wells Fargo's motion for judgment on the pleadings (Docket No. 38) be denied with respect to Count XI and will, instead, enter judgment in favor of Wells Fargo on that Count.

So ordered.

REPORT AND RECOMMENDATION ON DEFENDANTS' MOTIONS FOR JUDGMENT ON THE PLEADINGS

DEIN, United States Magistrate Judge.

I. INTRODUCTION

The plaintiffs, Sabah Akar (“Akar”), her daughter Sawusan I. Akar, and two of Sawusan Akar's minor children, through their mother and next friend, have brought this action to set aside the foreclosure sale of Akar's home on February 10, 2009, to enjoin the present owner from evicting them or charging them for use of the home, and to obtain damages for injuries suffered in connection with the foreclosure. The plaintiffs allege that the foreclosure was carried out by defendant Wells Fargo Bank, N.A. (“Wells Fargo”), with assistance from its counsel, defendant Harmon Law Offices, P.C. (“Harmon”), and Harmon's affiliate, defendant Northeast Abstract Services, Inc. (“Northeast Abstract”). The plaintiffs also allege that following the foreclosure, ownership of the property was transferred to defendant Federal National Mortgage Association a/k/a Fannie Mae or FNMA (“Fannie Mae”), which retained defendant Hammond Residential Real Estate, LLC (“Hammond”) to act as its property manager and marketing agent.

At the heart of the plaintiffs' claims are their allegations that the foreclosure sale was unlawful because Wells Fargo was not the holder of the mortgage at the time it initiated the foreclosure proceedings, and their allegations that Wells Fargo failed to honor its repeated promises not to foreclose while Akar's application for a loan modification remained pending. By their Second Amended Verified Complaint, the plaintiffs have asserted thirteen causes of action, which consist of claims for violation of the Truth in Lending Act, 15 U.S.C. § 1601et seq. (Count I), violation of the Fair Debt Collection Practices Act (Count II), wrongful foreclosure (Counts III, IV and VII), breach of contract (Count V), promissory estoppel (Count VI), intentional and negligent misrepresentation (Counts VIII and IX), assault and battery (Count IX),² trespass (Count X), intentional infliction of emotional distress (Count XI), and unfair and deceptive trade practices in violation of Mass. Gen. Laws ch. 93A (Count XII).

The matter is presently before the court on “Wells Fargo Bank, N.A.'s Motion for Judgment on the Pleadings” (Docket No. 38) and “Federal National Mortgage Association a/k/a Fannie Mae's Motion for Judgment on the Pleadings” (Docket No. 40), by which Wells Fargo and Fannie Mae are seeking judgment in their favor, pursuant to Fed.R.Civ.P. 12(c), with respect to each of the claims asserted against them.³ For all of the reasons described below, this court recommends to the District Judge to whom this case is assigned that Fannie Mae's motion be ALLOWED, and that all of the Counts against Fannie Mae be dismissed. This court also recommends that Wells Fargo's motion be ALLOWED IN PART and DENIED IN PART. Specifically, this court recommends that Counts I, III, IV and X against Wells Fargo be dismissed, but that Wells Fargo's motion be denied with respect to Counts V, VI, VII, VIII, IX, XI and XII.

II. STATEMENT OF FACTS

When ruling on a motion for judgment on the pleadings, the court must “view the facts contained in the pleadings in the light most favorable to the party opposing the motion—here, the plaintiff[s]—and draw all reasonable inferences in the plaintiff[s'] favor.” Curran v. Cousins, 509 F.3d 36, 43 (1st Cir.2007). In doing so, the court “may consider ‘documents the authenticity of which are not disputed by the parties; ... documents central to plaintiffs' claim; [and] documents sufficiently referred to in the complaint.’ ” Id. at 44 (quoting Watterson v. Page, 987 F.2d 1, 3 (1st Cir.1993)) (punctuation and alteration in original). Applying this standard to the instant case, the relevant facts are as follows.

Akar's Purchase of the Property

Akar is a single woman over the age of 60 who has limited knowledge of the English language. (Compl. ¶ 1).⁴ In August 2006, she purchased a home in Stoughton, Massachusetts (the “Property”), where she has continued to reside along with her daughter, son-in-law, and five minor grandchildren. ( Id. ¶¶ 1–2, 42). In connection with the purchase of the Property, Akar obtained a loan from Pride Mortgage, LLP (“Pride”). ( Id. ¶ 42). The principal amount of the loan was $300,000, and it had a fixed interest rate of 7.75%. ( Id.). The loan was evidenced by a note and secured by a mortgage, which was signed by Akar. ( See Compl., Ex. 2). According to the plaintiffs, Pride never verified Akar's employment or income, and failed to determine whether she could afford the Property. ( Id. ¶ 42). Allegedly, the monthly mortgage payment, including taxes and insurance, was over $3,400. ( Id.).

The mortgage identified Akar as the “Borrower,” Pride as the “Lender,” and Mortgage Electronic Registration Systems, Inc. (“MERS”),⁵ “a separate corporation ... acting solely as a nominee for Lender and Lender's successors and assigns” as the mortgagee. (Compl., Ex. 2 at p. 1). The mortgage also provided in relevant part that in the event of a default that is not cured within a specified time, the “Lender, at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the STATUTORY POWER OF SALE and any other remedies permitted by Applicable Law.” (Compl., Ex. 2 ¶ 22). The foreclosure giving rise to the plaintiffs' claims in this action occurred after Akar defaulted on her $300,000 loan and Wells Fargo invoked the statutory power of sale under the mortgage agreement.

The plaintiffs allege that Akar entered into a second mortgage loan with Pride, which consisted of an $80,000 equity line with a fixed interest rate of 12%, and a balloon payment of $69,000 that was never disclosed by the lender. ( Id. ¶¶ 43–44). Although the foreclosure at issue in this case does not concern the second mortgage, the plaintiffs claim that Pride never warned Akar about the true costs of the Property. ( Id. ¶ 43). According to the plaintiffs, the two mortgages together had a loan to value ratio of 95%, and they did not qualify for private mortgage insurance that would have protected the lender. ( Id....