Consolo v. Bank of Am.

• Decision Date: 02 May 2017
• Docket Number: Civil Action No. 15-11840
• Parties: JOHN CONSOLO, Plaintiff, v. BANK OF AMERICA et al., Defendant.
• Court: U.S. District Court — District of Massachusetts

JOHN CONSOLO, Plaintiff, v. BANK OF AMERICA et al., Defendant.

Civil Action No. 15-11840

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

May 2, 2017

MEMORANDUM AND ORDER

CASPER, J.

I. Introduction

Plaintiff John Consolo ("Consolo") filed this lawsuit against Defendants Bank of America and NationStar Mortgage LLC ("Defendants") bringing claims for breach of contract (Count I), promissory estoppel (Count II), negligent misrepresentation (Count III), breach of implied covenant of good faith and fair dealing (Count IV) and violation of Mass. Gen. L. c. 93A (Count V). D. 1-2. Defendants have moved for summary judgment. D. 50. For the reasons stated below, the Court ALLOWS Defendants' motion.

II. Standard of Review

The Court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). "A fact is material if it carries with it the potential to affect the outcome of the suit under the applicable law." Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000) (quoting Sanchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)). The movant bears the burden of demonstrating the absence of a genuine issue of material fact. Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000); see Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets its burden, the non-moving party may not rest on the allegations or denials in her pleadings, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986), but "must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor." Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010). "As a general rule, that requires the production of evidence that is 'significant[ly] probative.'" Id. (quoting Anderson, 477 U.S. at 249) (alteration in original). The Court "view[s] the record in the light most favorable to the nonmovant, drawing reasonable inferences in his favor." Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009).

III. Factual Background

For purposes of this summary judgment motion, the Court will consider undisputed facts taken from the parties' Rule 56.1 statements.¹ Consolo is the son of Mary Consolo, who became owner of the property located at 262 East Eagle Street, East Boston, Massachusetts (the "Property") in 1984. D. 52-1 at 5 (Consolo's Deposition). In 1996, Mary Consolo transferred ownership of the Property to Consolo and his brother, Gaetano Consolo, by quitclaim deed. Id. at13-14; D. 52-2 at 72. In doing so, Mary reserved a life estate for herself in the Property. D. 1-2 at 6. In 2000, when Mary was 85 years old, she signed a power of attorney appointing Consolo to manage her affairs. Id. At that time, Consolo resided at an apartment on the Property (and he continues to live there). Id.; D. 52-1 at 5.

In 2009, the Consolos decided to seek a home equity conversion loan (also known as a reverse mortgage) (the "Loan") secured by the Property. D. 1-2 at 7. At or about this time, Gaetano Consolo, gave Consolo a power of attorney to allow him to apply for the Loan on Gaetano's behalf. Id. at 7-8. Consolo called Bank of America and spoke with Tim Keough ("Keough"), to discuss whether his family would be eligible to obtain the Loan. Id. The two communicated about the Loan solely through telephone and e-mail. Id. Initially, Consolo applied for the Loan on the Property in Gaetano's name. Id. at 8; D. 52-1 at 33. Consolo's objective from the beginning of this process was to secure a Loan that would also allow Mary, Gaetano and himself to live in the Property until they died. D. 52-1 at 32. Understanding that his family could maximize the cash from the Loan by basing it on Mary's age as opposed to Gaetano's age, D. 1-2 at 8,² Consolo decided to apply for the Loan on the Property in Mary's name and again completed the Loan counseling over the phone. Id.

To effectuate the Loan, Keough sent Consolo a packet of documents to sign. Id. at 9. The adjustable rate home equity conversion mortgage (the "Mortgage") stated the following:

THIS MORTGAGE ("Security Instrument") is given on April 24, 2009 ("Date"). The mortgagor is John G. Consolo and Gaetano F. Consolo, as tenants in common and Mary Consolo, reserving a Life estate whose address is 262 East Eagle Street East Boston, MA 02128 ("Borrower").

D. 52-2 at 23. On the signature page of the Mortgage, the document read:

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any rider(s) executed by Borrower and recorded with it.

D. 52-2 at 32. Underneath this statement, Bank of America included signature lines for each of the three Consolos with their preprinted names underneath each line: "Mary Consolo, by John G. Consolo, her attorney in fact;" "John G. Consolo, as remainderman;" and Gaetano F. Consolo, remainderman, by John G. Consolo, his attorney in fact." Id. Consolo signed the Mortgage on behalf of all three. Id. The Mortgage also contained the following acceleration clause:

9. Grounds for Acceleration of Debt

(a) Due and Payable. Lender may require immediate payment-in-full of all sums secured by this Security instrument if:

(i) A Borrower dies and the Property is not the principal residence of at least one surviving Borrower; or

(ii) All of a Borrower's title in the Property (or his or her beneficial interest in a trust owning all or part of the Property) is sold or otherwise transferred and no other Borrower retains title to the Property in fee simple or retains a leasehold under a lease for less than 99 years which is renewable or a lease having a remaining period of not less than 50 years beyond the date of the 100th birthday of the youngest Borrower or retains a life estate, (or retaining a beneficial interest in a trust with such an interest in the Property).

Id. at 26 (bold in the original). The Adjustable-Rate Note Home Equity Conversion (the "Note"), however, only listed Mary Consolo as the borrower and only required Mary's signature, which Consolo signed on her behalf with the power of attorney. Id. at 102-04. Additionally, the Note contained a clause that mirrored the acceleration clause found in the Mortgage. Id. at 118. In addition to the Note (which was incorporated by express reference in the Mortgage, id. at 23), there were numerous other closing documents that also only listed Mary as the borrower (although signed by Consolo on her behalf with her power of attorney) to close the Loan. These documentsincluded the Residential Loan Application for Reverse Mortgages, HUD/VA Addendum to Uniform Residential Loan Application; Good Faith Estimate of Settlement Charges; Settlement Statement; Third Party Contact Form; Errors and Omissions/Compliance Agreement; Personal Liability Notice; Flood Hazard Determination; and Notice of Right to Cancel. D. 52-2 at 87, 90, 91, 93-101, 119.

After receiving the Loan documents and prior to signing them, Consolo called Keough to confirm that his understanding of the identification of him on the Mortgage as "remainderman" and that the terms of the Mortgage would allow him to stay in the Property following the death of his mother. D. 52-1 at 33-34. Keogh confirmed Consolo's understanding and Consolo then signed the documents. Id. In February 2012, Mary Consolo passed away. Id. at 25. Bank of America sent Consolo a letter informing him that the acceleration clause of the Mortgage and Note had been triggered by Mary's death and that the Loan was due in full, which Consolo acknowledged receiving. Id. After the instant action was filed, Bank of America and Nationstar attempted to foreclose on the Property. Id. at 37, 39.

IV. Procedural History

Consolo instituted this action on April 23, 2015 in Suffolk Superior Court, D. 1-2 at 4, and Defendants removed the case to this Court. D. 1. Defendants have now moved for summary judgment. D. 50. The Court heard the parties on the pending motion and took the matter under advisement. D. 60.

V. Discussion

A. Breach of Contract

Consolo brings a breach of contract claim against Defendants, arguing that he was a borrower on the Loan and that Defendants breached the agreement by accelerating the Loan andattempting to foreclose on the Property while he remained alive and resided as a resident at the Property. D. 53 at 4. Defendants counter that the terms of the Loan are clear that Mary Consolo was the sole borrower and, therefore, the Loan became due and payable upon her death. D. 51 at 8.

When evaluating a breach of contract claim under Massachusetts law, courts must first assess whether the contract provision at issue is ambiguous, which is a question of law. Barclays Bank PLC v. Poynter, 710 F.3d 16, 21 (1st Cir. 2013). "To answer the ambiguity question, the court must first examine the language of the contract by itself, independent of extrinsic evidence concerning the drafting history or the intention of the parties." Bank v. Thermo Elemental Inc., 451 Mass. 638, 648 (2008). Language is ambiguous "only if it is susceptible of more than one meaning and reasonably intelligent persons would differ as to which meaning is the proper one." Gemini Inv'rs Inc. v. AmeriPark, Inc., 643 F.3d 43, 52 (1st Cir. 2011) (quoting Citation Ins. Co. v. Gomez, 426 Mass. 379, 381 (1998)). In considering whether a contract is ambiguous, the Court notes that it must read the contract "in a reasonable and practical way, consistent with its language, background, and purpose." Bukuras v. Mueller Grp., LLC, 592 F.3d 225, 262 (1st Cir. 2010).

The crux of Consolo's breach of contract claim is that the wording of the Mortgage signed by Consolo, his mother and his brother is unclear. The Mortgage states that "[t]he mortgagor is John G. Consolo and Gaetano F. Consolo, as tenants in common and Mary Consolo, reserving a Life Estate,...