Dasilva v. Jenkins
| Decision Date | 18 June 2010 |
| Docket Number | Civil Action No. 07-12067-RGS. |
| Citation | 718 F.Supp.2d 155 |
| Court | U.S. District Court — District of Massachusetts |
| Parties | Robert SMITH and Maria DaSilva v. Dwight JENKINS, Cherry Jenkins, Dorea Smith, Robert E. Kelley, Rkelley-Law, P.C., Louis G. Bertucci, EB Real Estate Group, Inc., Dorchester Real Estate, Inc., New England Merchants Corp., Union Capital Mortgage Business Trust, Mid City Mortgage, LLC, Fremont Investment & Loan, and Meritage Mortgage Corporation. |
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Jonathan D. Plaut, Chardon Law Offices, Jeffrey S. Baker, Baker & Associates, Boston, MA, for Robert Smith and Maria DaSilva.
Geoffrey A. Domenico, Piscitelli, Domenico & Murphy, LLP, North Easton, MA, James F. McLaughlin, McLaughlin, McLaughlin & McLaughlin, Brockton, MA, Christopher J. Fein, Fein Law Office, Braintree, MA, Joseph A. King, Mary Alys Azzarito, Murphy & Riley PC, Jay S. Gregory, Thomas K. McCraw, Jr., Leclair Ryan, PC, Anthony R. Brighton, Douglas A. Robertson, Martin, Magnuson, McCarthy and Kenney, John R. Bauer, Claire E. Newton, Alexandria E. Baez, Katherine S. Kayatta, Peter J. Moser, Robinson & Cole LLP, Donn A. Randall, J. Patrick Kennedy, Bulkley Richardson & Gelinas LLP, Boston, MA, Michael J. Markoff, Falmouth, MA, for Dwight Jenkins, Cherry Jenkins, Dorea Smith, Robert E. Kelley, Rkelley-Law, P.C., Louis G. Bertucci, EB Real Estate Group, Inc., Dorchester Real Estate, Inc., New England Merchants Corp., Union Capital Mortgage Business Trust, Mid City Mortgage, LLC, Fremont Investment & Loan, and Meritage Mortgage Corporation.
MEMORANDUM AND ORDER ON DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT
This action, which sounds primarily in fraud, arises out of an alleged multi-party real estate mortgage scheme in which plaintiffs Robert Smith and Maria DaSilva claim to have been victimized. On June 16, 2009, 626 F.Supp.2d 155 (D.Mass.2009), the court issued a Memorandum and Order granting in part and denying in part certain defendants' motions to dismiss. Six of the remaining defendants have now moved for summary judgment. 1 The court heard oral argument on April 8, 2010.
Smith suffers from schizophrenia, depression, post traumatic stress disorder, and mild mental retardation. Smith has heard voices in his head since suffering traumatic injuries while serving in the United States Marine Corps from 1978 to 1980. Smith is homeless and functionally illiterate. In January of 2005, Smith was working as a trash collector for Waste Management Corporation (WMC) in the Fields Corner neighborhood of Dorchester. Smith was approached while at work by a woman who introduced herself as Laurice Taylor. Taylor told Smith that she worked at a nearby RE/MAX office on Dorchester Avenue. 2 , 3
Taylor invited Smith to participate in a “special investment program” through RE/MAX. Taylor told Smith that he would receive $10,000 and would not have to invest any money. Smith testified that Taylor told him that she and Dwight Jenkins, a codefendant in the case and the alleged mastermind of the scheme, would “take care of everything.” Smith Dep. at 64. Smith testified that he visited Taylor at the RE/MAX office in Dorchester where he met several other RE/MAX employees. Taylor showed Smith a form from NEMCO, which purported to list the documentation that he would require to become an “investor.”
Rachel Noyes, an independent contractor associated with NEMCO, completed a loan application on Smith's behalf (and without his knowledge). 4 The application contained numerous false statements, among them: (1) that the application had been completed in a face-to-face interview; (2) that Smith's monthly income was $7,500 (or $90,000 annually); (3) that Smith had two separate bank accounts totaling $18,500; (4) that Smith had completed fourteen years of school; (5) that Smith had rented his current residence for five years; (6) that he had been employed by WMC for four and one-half years; (7) that he had a net worth of $397,037; and finally, (8) that he intended to occupy the listed property as his primary residence.
In February of 2005, upon Taylor's instruction, Smith went to the office of Attorney Robert Kelley in Braintree, Massachusetts. 5 Unbeknownst to Smith, he was attending a closing on a home in Dighton, Massachusetts. Taylor was present, along with James Adamos (a purported representative of Century 21). 6 Smith unwittingly “borrowed” $411,964.24, secured by two mortgages issued by Fremont, the lender to whom NEMCO had submitted Smith's loan application. 7 The Purchase and Sale Agreement (P & S) signed by Smith read, in part,[t]he BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing, except for the following additional warranties and representations, if any, made by either the SELLER or the Broker(s): NONE, AND NONE IMPLIED.
Smith did not read any of the closing documents, including those that he signed. He alleges that defendants lulled him into believing that they had his best interests in mind. Smith states that he was told that RE/MAX Smith Dep. at 65-66. Smith testified that although he did not understand the documents, he signed them because he was “just thinking about [his] money.” Id. at 129. With regard to the assurances given him by Century 21, Smith testified that he was told that Id. at 402.
Several days after the Dighton closing, Smith went to RE/MAX's office and received a check in the amount of $10,000. Unbeknownst to him, Smith had signed a document giving Jenkins a power of attorney over the Dighton property. Smith testified that he also received $500 in cash from Laurice Taylor. Jenkins received a “contract release” fee of $42,000 as a result of the Dighton closing. NEMCO received a broker's commission of $8,800, of which ninety percent was remitted to Noyes.
Several days later, Smith was contacted by Attorney Kelley and instructed to attend a second closing on February 28, 2005. On this occasion, Philip Goodwin of Union Capital filled out a loan application for a residential property on West Cottage Street in Boston. 8 The application falsely stated that Smith's monthly income was $9,754, including employment income of $7,129 per month. An Ivana Foley from Century 21 was present. Foley gave Smith her business card and introduced herself, but according to Century 21, she had no further conversation with Smith, nor did she have any contact with Smith afterwards. 9 Smith testified that Foley told him Smith Dep. at 214.
The P & S for the Boston property included the following language.
The BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing, except for the following additional warranties and representations, if any, made by either the SELLER or the Broker(s): NONE, AND NONE IMPLIED.
On signing the closing documents, Smith had unwittingly borrowed $437,198.13 for the purchase of the Boston property, secured by two mortgages from Meritage. Jenkins received a contract release fee of $41,500, while Century 21 received a broker's commission of $18,950.
Smith testified that he had no understanding of either the Dighton or the Boston transaction. He was unaware that the documents he had signed involved real estate, or that he was borrowing money to make the purchases. Smith did not tell anyone at the closings that he could not read, that he was uncomfortable signing documents, or that he did not understand what the documents said. Nor did he ask anyone to explain any of the documents to him.
The Dighton and Boston properties were eventually foreclosed after Jenkins failed to make payments on the mortgages. Smith testified that the severity of the voices in his head increased after September of 2005, and that his previous “symptoms [are] worse because I'm going through this stuff.” 10 Smith Dep. at 240.
DaSilva met Jenkins in 2004, after her boyfriend told her that Jenkins could offer her an opportunity to make money. At the time, DaSilva was 22 years-old and working as a security guard. Jenkins told DaSilva that if she purchased designated properties (with no money down), he would find tenants, collect the rents, and pay the mortgages. DaSilva would simply be a straw-woman and receive $10,000 at each closing and another $10,000 when a property was sold. DaSilva did not investigate Jenkins or his proposal. DaSilva admits that she understood that the transactions involved real estate, that she would own the properties, and that she would be obligated on the mortgage loans. However, she trusted Jenkins to take care of the payments, and anticipated that having the loans paid in her name would improve her credit rating.
On December 3, 2004, DaSilva met with Jenkins and signed a number of documents without reading them. Jenkins told DaSilva that the documents were necessary to qualify...
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