Aliberti v. Gmac Mortgage Llc

• Decision Date: 28 April 2011
• Docket Number: Civil Action No. 11–10174–NMG.
• Citation: Aliberti v. Gmac Mortgage Llc, 779 F.Supp.2d 242 (D. Mass. 2011)
• Parties: Bonnie ALIBERTI and William Aliberti, Plaintiffs,v.GMAC MORTGAGE, LLC, Defendant.
• Court: U.S. District Court — District of Massachusetts

779 F.Supp.2d 242

Bonnie ALIBERTI and William Aliberti, Plaintiffs,

v.GMAC MORTGAGE, LLC, Defendant.

Civil Action No. 11–10174–NMG.

United States District Court, D. Massachusetts.

April 28, 2011.

Richard E. Briansky, Joseph P. Calandrelli, Prince, Lobel, Glovsky & Tye LLP, Boston, MA, for Defendant.Paul W. Pappas, Methuen, MA, for Plaintiff.

MEMORANDUM & ORDER

GORTON, District Judge.

William Aliberti and his wife Bonnie Aliberti (“the Alibertis”) bring suit against defendant GMAC Mortgage, LLC (“GMAC”) for various counts related to the modification of two loans secured by a mortgage on plaintiffs' residence, located at 531–537 Lowell Street, Lawrence, Massachusetts (“the Property”).

I. BackgroundA. Factual Background

In June, 2006, plaintiffs refinanced with Mortgage Lenders Network USA, Inc. (“MLN”) two loans secured by a mortgage on the Property in the total principal amount of $450,000 ($360,000 at a fixed rate of 8.4% for two years and an adjustable rate for 28 years thereafter and $90,000 at a fixed rate of 11.6% for 20 years). MLN assigned its interest in the loans to two third-parties which then reassigned their interests to GMAC.

In 2008, the Alibertis began “having difficulty” making payments and defaulted under the terms of the notes. In January, 2010, the Alibertis and GMAC entered into an oral modification agreement for a two-month trial period while the parties continued working “to permanently modify” the loans. In June, 2010, GMAC notified the Alibertis that the modification agreement was denied because of “insufficient income” but that the account was being further reviewed for another “workout” option. Later that month, GMAC and the Alibertis entered into a Repayment Agreement which required the borrowers to make three monthly payments of $2,960 each in exchange for suspension of foreclosure activity.

The Alibertis returned the documentation and made three timely payments according to the Repayment Agreement. As a result, on October 6, 2010, GMAC approved the plaintiffs' request for a permanent modification subject to certain conditions, including that the Alibertis return the signed loan modification agreement no later than October 13, 2010.

The Alibertis apparently received the letter and loan documents on October 14, 2010, when they returned from a vacation. Four days later, they called GMAC and spoke with a representative who informed them “to get the document in as soon as possible”. The Alibertis signed and mailed the document which was received by GMAC on October 29, 2010. GMAC subsequently denied the Alibertis' loan modification request because the signed documents had not been received by the required date.

B. Procedural History

On January 6, 2011, the day before the scheduled foreclosure sale of the Property, plaintiffs filed suit in the Massachusetts Superior Court for Essex County. The Complaint alleges breach of contract (Counts I–III), fraud during the mortgage lending process in violation of Mass. Gen. Laws ch. 266, § 35A (Counts IV–VII), intentional misrepresentation (Counts VIII–XI) and negligent misrepresentation (Counts XII–XV). On that same day, plaintiffs also filed an ex parte motion for a temporary restraining order (“TRO”) which was denied “upon finding no reasonable likelihood of success upon the merits of plaintiffs' claims”.

The following day, the Massachusetts Supreme Judicial Court issued its decision in U.S. Bank Nat'l Assoc. v. Ibanez, 458 Mass. 637, 941 N.E.2d 40 (2011), and for unknown reasons, defendant postponed the foreclosure until January 21, 2011. In light of the Ibanez decision, plaintiffs again moved for a TRO, contending that GMAC had not proven the assignment was valid.

Despite notice, GMAC failed to appear at the hearing held January 18, 2011, at which the state court noted that it “would not undo or redo” the denial of the TRO but would address plaintiffs' motion to the extent it was based on the Ibanez decision. The state court issued a preliminary injunction to enjoin foreclosure “unless and until GMAC Mortgage, LLC is the holder of the mortgage on the property at the time of the foreclosure”.

Shortly thereafter, defendant removed the case to this Court on the basis of diversity jurisdiction and moved to dismiss the Complaint and dissolve the preliminary injunction issued by the state court. Plaintiffs moved to remand the case to state court on the ground that the amount in controversy is less than $75,000. The motions are pending before this Court.

II. Legal Analysis

Because the Court need not reach the motions to dismiss or to dissolve the injunction if it determines that the motion to remand to state court should be allowed, the Court first considers the motion to remand.

A. Motion to Remand

1. Legal Standard

Pursuant to 28 U.S.C. § 1446(b), a defendant may remove a case to federal court within thirty days after the receipt of the initial pleading or service of summons. If at any time before final judgment it appears that the Court lacks subject matter jurisdiction, the case shall be remanded to the state court. 28 U.S.C. § 1447(c). The Court has jurisdiction of all civil actions where the matter in controversy “exceeds the sum or value of $75,000, exclusive of interest and costs” and is between citizens of different states. 28 U.S.C. § 1332.

2. Application

The parties are citizens of different states because the plaintiffs are Massachusetts residents while defendant is a Delaware limited liability company with a principal place of business in Pennsylvania.

The parties disagree as to whether the amount-in-controversy requirement under 28 U.S.C. § 1332 has been met. Plaintiffs contend that they seek specific performance, rather than monetary damages, and thus the amount-in-controversy is less than $75,000 and remand is required. By contrast, defendant asserts that the amount-in-controversy in an action for specific performance is measured by the pecuniary value of the object sought in the litigation. In this case, defendant contends the object is a claimed entitlement to a permanent loan modification which would effectively reduce plaintiffs' debt by approximately $124,500.

Where the plaintiff seeks equitable relief, the amount-in-controversy is “measured by the value of the object of the litigation.” Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). The value is measured by “the judgment's pecuniary consequences to those involved in the litigation”. Richard C. Young & Co. v. Leventhal, 389 F.3d 1, 3 (1st Cir.2004) (citations omitted). Because the value of the object of the litigation here is entitlement to a permanent loan modification that would decrease plaintiffs' debt by approximately $124,500, the Court concludes that the amount-in-controversy requirement is satisfied for the purpose of diversity jurisdiction under 28 U.S.C. § 1332 and thus plaintiffs' motion to remand will be denied.

B. Motion to Dismiss

1. Legal Standard

In order to survive a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), a complaint must contain factual allegations sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In considering the merits of a motion to dismiss, the Court may look only to the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the complaint and matters of which judicial notice can be taken. Nollet v. Justices of the Trial Court of Mass., 83 F.Supp.2d 204, 208 (D.Mass.2000), aff'd, 248 F.3d 1127 (1st Cir.2000). Furthermore, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. Am. Airlines, Inc., 199 F.3d 68, 69 (1st Cir.2000). If the facts in the complaint are sufficient to state a cause of action, a motion to dismiss the complaint must be denied. See Nollet, 83 F.Supp.2d at 208.

Although a court must accept as true all of the factual allegations contained in a complaint, that doctrine is not applicable to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). Threadbare recitals of the legal elements, supported by mere conclusory statements, do not suffice to state a cause of action. Id. Accordingly, a complaint does not state a claim for relief where the well-pled facts fail to warrant an inference of any more than the mere possibility of misconduct. Id. at 1950.

2. Application

a. Breach of contract (Counts I–III)

If a contract is unambiguous, its interpretation is a question of law. See, e.g., Seaco Ins. Co. v. Barbosa, 435 Mass. 772, 761 N.E.2d 946, 951 (2002). If, however, the contract has terms that are ambiguous, uncertain or equivocal in meaning, the intent of the parties is a question of fact to be determined at trial. Id.

Plaintiffs first allege that GMAC breached the January, 2010 oral modification agreement by concluding that the plaintiffs had insufficient income and ultimately denying a permanent loan modification (Count I). The January 30, 2010 letter regarding the oral loan modification states:

During your trial payment period, I will continue to work with the Lender to permanently modify your loan.

The letter unambiguously indicates that no permanent modification agreement had been reached yet. GMAC, therefore, did not breach the January, 2010 agreement by subsequently determining that the plaintiffs were not eligible for a permanent modification. Count I will, therefore, be dismissed.

Plaintiffs further allege that GMAC breached a June, 2010 Repayment Agreement by “unilaterally and maliciously placing unreasonable time constraints” on the plaintiffs to return the executed documents and stating that GMAC had not received the documents (Count II). The Repayment Agreement states:

Once all scheduled payments have been received, your situation will be reviewed to...