McAllister v. Countrywide Home Loans, Inc.

• Decision Date: 29 March 2017
• Docket Number: CIVIL ACTION NO. 16-10911-GAO
• Parties: GREGG C. MCALLISTER and NATALIE M. MCALLISTER, Plaintiffs, v. COUNTRYWIDE HOME LOANS, INC., BANK OF AMERICA, N.A., DITECH FINANCIAL LLC F/K/A/ GREEN TREE SERVICING LLC, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants.
• Court: U.S. District Court — District of Massachusetts

GREGG C. MCALLISTER and NATALIE M. MCALLISTER, Plaintiffs, v. COUNTRYWIDE HOME LOANS, INC., BANK OF AMERICA, N.A.,DITECH FINANCIAL LLC F/K/A/ GREEN TREE SERVICING LLC,and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants.

CIVIL ACTION NO. 16-10911-GAO

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

March 29, 2017

OPINION AND ORDER

O'TOOLE, D.J.

The magistrate judge to whom this matter was referred has filed a Report and Recommendation (dkt. no. 58) ("R&R") recommending that the motion by defendants Countrywide Home Loans, Inc., Bank of America, N.A. ("BANA"), and Mortgage Electronic Registration Systems, Inc. ("MERS") to dismiss the Complaint (dkt. no. 42) be allowed as to Counts One through Four, but not Count Five.¹ The R&R also recommends allowing the motion by defendant Ditech Financial LLC to dismiss the Complaint (dkt. no. 37) as to Count Four but denying the motion as to Count Five. The defendants have filed objections to the R&R (dkt. nos. 60, 62). Ditech objects on the ground that the magistrate judge erroneously construed Counts Three and Five of the Complaint, and the other defendants echo Ditech's objection with respect to Count Five. The plaintiffs have not made any objection to the R&R.

The magistrate judge construed Count Three of the Complaint as having been brought against all "defendants," including Ditech, although no action or omission by it is mentioned in that count. Because Ditech did not move to dismiss that count as the other defendants did, the magistrate judge concluded that Count Three remains as against Ditech. The magistrate judge also construed Count Five of the Complaint as a claim pursuant to Massachusetts General Laws Chapter 93A. Because none of the defendants addressed the merits of that claim in their motions to dismiss, the magistrate judge concluded that Count Five should not be dismissed against any of the defendants.

I agree with the magistrate judge that the term "defendants" when used in a multi-defendant case can ordinarily be understood to refer to all defendants, but there can be exceptions. In Count Three, the only acts or omissions that are pled to support the legal theory of the claim are attributed to defendants Countrywide, BANA, and MERS by name. (See Compl. ¶¶ 35-41 (dkt. no. 1).) Unlike that specificity with respect to the other defendants, Count Three makes no specific allegation against (or specific mention of) Ditech to support a conclusion that it should be held liable for slander of title. The statements the plaintiffs rely on in support of their slander of title claim are the "recording[s] of the purported 'Assignments of Mortgage' into the Official Records of the Middlesex County Recorder's Office," (id. ¶ 41), and the Complaint alleges that it was MERS and BANA that recorded the assignments on June 8, 2011 and July 19, 2013 respectively, (id. ¶ 39). I therefore agree with Ditech's objection that the reference to "defendants" in Count Three is more reasonably understood to refer to the defendants whose acts are specifically alleged in that count, and not to Ditech. If it were read to include Ditech, it would fail the plausibility test established by Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

Finally, even if such a claim had been plausibly alleged against Ditech, the magistrate judge's well-developed reasoning with respect to Count Three's failure to state a claim as alleged against the other defendants would also apply to Ditech, and that claim would accordingly be without merit as well.

With respect to Count Five, I agree with the magistrate judge that the Complaint, read liberally, purports to allege a claim under Massachusetts General Laws Chapter 93A against all defendants. However, as the R&R makes clear, the alleged conduct recited in the other counts on which a Chapter 93A claim might conceivably be premised was, the magistrate judge rightly concluded, not wrongful. No other particular basis for Chapter 93A liability is alleged. The mention of Chapter 93A in Count Five may be adequate to identify a theory of liability the plaintiffs were attempting to invoke, but without supporting factual allegations, it is inadequate to state a plausible claim for Chapter 93A liability against any of the defendants.

Additionally, the defendants appear to be correct that the apparent absence of a pre-suit "Chapter 93A letter" also dooms the Complaint's attempted claim.

Accordingly, I approve and ADOPT the magistrate judge's recommendations except as described above. The defendants' Motions to Dismiss (dkt. nos. 37, 42) are GRANTED in full. Count One is dismissed without prejudice, and the remaining counts are dismissed with prejudice.

It is SO ORDERED.

/s/ George A. O'Toole, Jr.

United States District JudgeGREGG C. MCALLISTER and NATALIE M. MCALLISTER, Plaintiffs,

v.

COUNTRYWIDE HOME LOANS, INC., BANK OF AMERICA, N.A, DITECH FINANCIAL LLC F/K/A GREEN TREE SERVICING LLC, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants.

REPORT AND RECOMMENDATION RE: DEFENDANT DITECH FINANCIAL'S MOTION TO DISMISS (DOCKET ENTRY # 37); DEFENDANTS COUNTRYWIDE HOME LOANS, INC., BANK OF AMERICA, N.A. AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S MOTION TO DISMISS (DOCKET ENTRY # 42)

March 1, 2017

BOWLER, U.S.M.J.

Pending before this court is a motion to dismiss filed by defendant Ditech Financial LLC f/k/a Green Tree Servicing LLC ("Ditech") and a motion to dismiss filed by defendants Countrywide Home Loans, Inc. ("Countrywide"), Bank of America, N.A. ("BANA") and Mortgage Electronic Registration System, Inc. ("MERS").² (Docket Entry ## 37 & 42). Plaintiffs Gregg C. McAllister ("Gregg McAllister") and Natalie M. McAllister("plaintiffs") oppose both motions. (Docket Entry ## 40 & 47). After conducting a hearing on December 6, 2016, this court took the motions (Docket Entry ## 37 & 42) under advisement.

PROCEDURAL BACKGROUND

On May 19, 2016, plaintiffs filed a complaint seeking to prevent the foreclosure and sale of their residence at 31 Cutler Drive in Ashland, Massachusetts ("the property"). (Docket Entry # 1). The complaint sets out the following causes of action: (1) fraud in the concealment (Count One); (2) unconscionable contracts (Count Two); (3) slander of title (Count Three); (4) wrongful foreclosure (Count Four); and (5) a temporary restraining order and a preliminary injunction based on a violation of Massachusetts General Laws chapter 93A ("chapter 93A") (Count Five). The captions of the counts do not identify any particular defendant. The body of counts one and two depicts facts related to Countrywide and repeatedly refers to Countrywide. Counts one and two therefore raise claims only against Countrywide. The slander of title claim is based upon concealing a transfer made by Countrywide and thereafter recording assignments involving MERS, BAC and Green Tree Servicing LCC ("Green Tree"), a company that subsequently merged into Ditech. Count Three references all "defendants." (Docket Entry # 1, ¶¶ 39, 40). As such, it is brought against all defendants. Counts four and five are also brought against all"defendants." (Docket Entry # 1, ¶¶ 42-59). The complaint seeks both declaratory and monetary relief. (Docket Entry # 1).

On May 26, 2016, plaintiffs filed a motion for a temporary restraining order ("TRO") seeking to stop a pending foreclosure on the property. (Docket Entry # 14). The court allowed the motion in part and set a hearing on the motion for a preliminary injunction. On June 16, 2016, the court denied the motion for a preliminary injunction and dissolved the prior Order allowing the TRO. The court determined that plaintiffs failed to show a likelihood of success on the merits of their claims. (Docket Entry # 38). The substance of the Order denied the preliminary injunction relief that plaintiffs seek in Count Five but did not address the merits of the chapter 93A claim.

STANDARD OF REVIEW

To survive a Fed.R.Civ.P. 12(b)(6) ("Rule 12(b)(6)") motion to dismiss, the complaint "must contain 'enough facts to state a claim to relief that is plausible on its face'" even if actual proof of the facts is improbable. Bell Atlantic v. Twombly, 550 U.S. 544, 556, 570 (2007); Miller v. Town of Wenham Massachusetts, 833 F.3d 46, 51 (1^st Cir. 2016). The "standard is 'not akin to a "probability requirement," but it'" requires "'more than a sheer possibility that a defendant has acted unlawfully.'" Saldivar v. Racine, 818 F.3d 14, 18 (1^st Cir. 2016); Feliciano-Hernández v. Pereira-Castillo, 663 F.3d 527,533 (1^st Cir. 2011). "[A]ll reasonable inferences" are drawn "in the pleader's favor." Sanders v. Phoenix Ins. Co., 843 F.3d 37 (1^st Cir. 2016). Legal conclusions in the complaint are not part of the Rule 12(b)(6) record. See In re Ariad Pharmacy, Inc. Securities Litigation, 842 F.3d 744, 750 (1^st Cir. 2016).

Facts are confined to those in the complaint supplemented by matters of public record and facts susceptible to judicial notice, such as the bankruptcy filings (Docket Entry # 10-1). See Butler v. Balolia, 736 F.3d 609, 611 (1^st Cir. 2013) (supplementing facts in complaint "by examining 'documents incorporated by reference into the complaint, matters of public record, and facts susceptible to judicial notice'"). "Exhibits attached to the complaint are" also "properly considered part of the pleading 'for all purposes,' including Rule 12(b)(6)." Trans-Spec Truck Service, Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1^st Cir. 2008). In the case at bar, the exhibits attached to the complaint include a deed; mortgage; promissory note; two assignments of the mortgage; an affidavit by Joseph R. Esquivel, Jr. ("Esquivel"); an affidavit of compliance with Massachusetts General Laws chapter 244, sections 35B and 35C; and notices pertaining to a foreclosure sale. Accordingly,these exhibits, filed by plaintiffs as part of the complaint, are part of the Rule 12(b)(6) record.³

The court may consider the seven documents that Ditech relied upon in its...