Case 1:10-cv-11621-PBS Document 116 Filed 10/30/12 Page 1 of 20

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS JODI B. MATT, Plaintiff, v. HSBC BANK USA, N.A., et al., Defendants. CERTAIN DEFENDANTS MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT Defendants Bank of America, N.A., successor by merger to BAC Home Loans Servicing, LP, formerly known as Countrywide Home Loans Servicing, LP (Bank of America), HSBC Bank USA, N.A. (HSBC), HSBC Bank USA, N.A., on Behalf of the Trust Fund and for the Benefit of ACE Securities Corp. Home Equity Loan Trust Series 2005-HE4 Asset Backed Pass Through Certificates (HSBC as Trustee), Countrywide Securities Corporation (Countrywide), Wells Fargo Bank, N.A. (Wells Fargo) and ACE Securities Corp. (ACE) (collectively, the Moving Defendants) respectfully submit the following Memorandum of Law in Support of their Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56 and Local Rule 56.1. For the reasons set forth below, the Moving Defendants request that the Motion be granted and that judgment be entered in their favor, against Plaintiff Jodi B. Matt (Plaintiff). INTRODUCTION Plaintiffs Complaint, which names a total of nineteen (19) defendants, is her latest attempt to delay a foreclosure sale on property located at 41 Downes Avenue in Canton, Civil Action No. 1:10-cv-11621-PBS

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Massachusetts (the Property), and escape her obligations under her mortgage loan.1 Plaintiff makes unsupported allegations against Bank of America, HSBC and HSBC as Trustee, while failing to make any substantive allegations whatsoever against Countrywide, Wells Fargo and ACE. Plaintiff, who does not deny that she defaulted on her mortgage loan, or that she has failed to make a single payment pursuant to it since August 2008, asserts claims for (1) preliminary and permanent injunctive relief barring the foreclosure sale of the Property, (2) civil RICO, (3) civil conspiracy, (4) respondeat superior liability, (5) breach of contract, (6) breach of the covenant of good faith and fair dealing, (7) intentional misrepresentation, (8) violation of Massachusettss Consumer Protection Act, M.G.L. c. 93A, (9) violation of Massachusetts Consumer Credit Cost Disclosure Act, M.G.L. c. 140D and (10) unjust enrichment. Specifically, Plaintiff complains that HSBC as Trustee, the foreclosing trust, is allegedly not the mortgagee, that the Defendants somehow engaged in an illegal enterprise to coax her into a mortgage loan that she could not afford, and that Bank of America, the loan servicer, allegedly misrepresented that it would evaluate Plaintiffs mortgage loan for a modification. Judgment should be entered in favor of all of the Moving Defendants for several reasons. First, the undisputed facts establish that HSBC as Trustee is both the mortgagee and note-holder. Second, the undisputed facts also show the Moving Defendants in no way conspired to induce her into a mortgage loan that she could not afford. Lastly, Bank of America not only evaluated Plaintiffs mortgage loan for a modification, but also offered Plaintiff a loan modification, which she rejected. In addition, none of Plaintiffs claims involve actions or conduct undertaken by

Plaintiff previously appealed a Land Court decision, which determined that HSBC as Trustee had standing to file the Servicemembers Civil Relief Act complaint at issue in that matter. See HSBC as Trustee v. Matt, No. 10 MISC. 421195. That case is currently on appeal with the Supreme Judicial Court. See HSBC as Trustee v. Matt, No. 2011P-0214.

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Countrywide, Wells Fargo or ACE. Plaintiff merely names Countrywide, the co-manager of the trust, Wells Fargo, the trusts master servicer and securities administrator, and ACE, the trusts depositor, in the caption of the Complaint without a single factual or substantive allegation made against them anywhere in the Complaint. See Compl., Dkt. No. 1, Compl. Exh. 21(A). Plaintiff is unable to establish any liability on the part of any of the Moving Defendants. Accordingly, judgment should be entered in their favor. UNDISPUTED FACTS In March 2005, Plaintiff applied for a mortgage loan with Northeast Mortgage Corporation (Northeast). See Statement of Undisputed Material Facts (SMF) 1. Northeast provided Plaintiff with an initial Truth-in-Lending Disclosure Statement (TILA Disclosure) on or around March 18, 2005. See id. The statement indicated that the mortgage loan may contain an initial monthly payment of $1,329.26 with an 8.158% annual percentage rate (APR). See id. Approximately one month later, on April 6, 2005, Plaintiff executed an adjustable rate promissory note (the Note) for $200,000 in favor of Northeast. See id. at 2. The Note provided for an initial monthly payment of $1,429.37 and a 7.725% initial interest rate. See id. Plaintiff also executed and acknowledged an updated TILA Disclosure on April 6, 2005, which similarly informed her of the loans $1,429.37 initial monthly payment, and informed her of the loans 10.528% APR. See id. The Note is secured by a mortgage (the Mortgage, together with the Note, the Mortgage Loan), which Plaintiff also executed on April 6, 2005. See id. The Property secures the Mortgage. See id. Also on April 6, 2005, Northeast assigned the Mortgage to New Century Mortgage Corporation (New Century). See id. at 3. Northeast also endorsed the Note to New Century.

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See id. at 4. New Century later assigned the Mortgage to HSBC as Trustee on November 6, 2007. See id. at 5. It also endorsed the Note in blank. See id. at 6. Bank of America serviced the Mortgage Loan until October 1, 2012, when the servicing rights transferred to Select Portfolio Servicing, Inc. See id. at 7. Shortly after entering into the loan agreement, Plaintiff defaulted by failing to timely make her October 2005 monthly payment. See id. at 8. After bringing her loan current in January 2007, Plaintiff again defaulted in April 2007. See id. Plaintiff sought to refinance the Mortgage Loan with Countrywides Full Spectrum Lending Division and was provided with terms of a proposed refinancing agreement in February 2007. See id. Plaintiff chose not to do refinance, however. See id. Instead, Plaintiff reinstated the loan in April 2008 by making a lump sum payment of $34,898.35. See id. Plaintiff defaulted yet again in May 2008. See id. Plaintiff then ceased making payments, and has failed to make a single payment in over four (4) years, since August 2008. See id. at 9. The loan is due for the July 2008 payment. See id. at 8. Plaintiff subsequently applied for, and Bank of America offered her, a permanent loan modification on or around June 5, 2009. See id. at 6. Plaintiff rejected Bank of Americas offer on the gamble that Bank of America could not establish HSBC as Trustees right to seek foreclosure. See id. However, both the assignments of the Mortgage and endorsements of the Note establish that HSBC as Trustee is both the note-holder and mortgagee, for whom Bank of America services the loan. See id. at 5-6. Because Plaintiff did not cure her default, Bank of America sent her a Notice of Intention to Foreclose on or around September 14, 2009. See id. at 11. The Notice gave Plaintiff the opportunity to cure her default before foreclosure proceedings would begin. See id. Plaintiff did not cure her default, and HSBC as Trustee filed a complaint under the Servicemembers Civil

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Relief Act (SCRA) in Land Court on or around January 27, 2010. See HSBC as Trustee v. Matt, No. 10 MISC. 421195. Plaintiff then filed her Complaint in this matter on September 23, 2010. See Compl., Dkt. No. 1. On December 10, 2010, HSBC and HSBC as Trustee (collectively, the HSBC Defendants) filed a motion to dismiss the Complaint, arguing that the Complaint failed to state a civil RICO claim, that Plaintiff lacked standing to assert a civil RICO claim and that the claim was barred by the statute of limitations. See Dkt. Nos. 28 and 29. The HSBC Defendants also argued that because the civil RICO claim should be dismissed, the Court lacked subject matter jurisdiction over the remaining state law claims. See Dkt. No. 29. This Court granted the motion to dismiss with respect to the civil RICO claim, but denied it with respect to the Complaints remaining counts. See Dkt. No. 89. 2 To the extent that the Court finds that the civil RICO claim survives against the Moving Defendants, the Moving Defendants hereby argue that the reasoning of the Courts Order dated September 23, 2011 is equally applicable to the Moving Defendants here and that judgment should be entered in favor of the Moving Defendants. See id. Further, Plaintiff concedes that the civil RICO claim is no longer part of the Complaint.3 Bank of America, Countrywide, Wells Fargo and ACE filed answers to the Complaint on August 17, 2011. See Dkt. Nos. 85-88. HSBC and HSBC as Trustee filed their answers on September 26, 2011. See Dkt. Nos. 90-91. Fact discovery closed on September 30, 2012. However, due to Plaintiffs refusal to make herself available to be deposed by the Moving Defendants prior to October 12, 2012 and her continual failure to comply with any of her
2

The Report and Recommendation issued on the Motion for Judgment on the Pleadings filed by Countrywide, Wells Fargo and ACE indicated that ACE also filed a motion to dismiss under Rule 12(b)(6), citing Dkt. No. 28. See Report and Recommendation, p. 2, Sept. 11, 2012. However, this is incorrect. ACE has never filed a motion to dismiss under Rule 12(b)(6) in this action. 3 Plaintiff has taken the position that her RICO claim has been dismissed and is no longer part of her complaint. Pl.s Opp. to Countrywide, Wells Fargo, ACEs Mot. J. Pleadings, p. 8, Aug. 9, 2012, Dkt. No. 105. Plaintiff believes that there is no need to further marinate in this claim and that it is a waste of this courts precious time

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discovery obligations, the Court extended the time by which the Moving Defendants had to depose Plaintiff to October 12, 2012. Accordingly, Plaintiff was deposed on October 12, 2012. STANDARD OF REVIEW The Moving Defendants are entitled to summary judgment if there is an absence of evidence to support Plaintiffs claims. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the Moving Defendants meet this burden, Plaintiff is required to set forth specific facts showing that there is a genuine issue for trial in order to evade judgment against her. Fed. R. Civ. P. 56(e). Plaintiff is not entitled to rest upon her pleadings, but instead must provide specific, provable facts demonstrating a triable issue of fact. See Pagano v. Frank, 983 F.2d 343, 347 (1st Cir. 1993); see also Mack v. Great Atl. and Pac. Tea Co., 871 F.2d 179, 181 (1st Cir. 1989). The evidence cannot be conjectural, but must have substance. See Mack, 871 F.2d at 181. ARGUMENT I. PLAINTIFF IS NOT ENTITLED TO PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF BECAUSE HSBC AS TRUSTEE IS BOTH THE MORTGAGEE AND NOTE-HOLDER Plaintiff argues that she is entitled to preliminary and permanent injunctive relief preventing HSBC as Trustee from foreclosing on the Mortgage. See Compl. 73-74. Plaintiff posits that the Mortgage was not properly assigned from New Century to HSBC as Trustee, and that HSBC does not properly hold the Note. See id. at 72-110. However, HSBC as Trustee is the proper Mortgage and Note holder. To obtain a preliminary injunction, Plaintiff must demonstrate (1) the likelihood of success on the merits, (2) the likelihood that [she] will suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tip in [her] favor, and (4) that an injunction is

resources. Id.

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in the public interest. Red Bend Ltd. v. Google Inc., No. 09-cv-11813-DPW, 2011 WL 1288503, at *13 (D. Mass. Mar. 31, 2011) (citations omitted). The standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that the plaintiff must show a likelihood of success on the merits rather than actual success. See id. (citations omitted). The Court previously denied Plaintiffs separate Motion for Injunctive Relief, Dkt. No. 2, on September 30, 2011. See Order Denying Pl.s Mot. Injunctive Relief, Sept. 30, 2011. For the same reasons the Court denied this relief already, and because Plaintiff cannot establish a likelihood of success on the merits, nor will she have actual success on the merits as explained below, the Court should, again, deny Plaintiff preliminary and permanent injunctive relief. First, Plaintiff does not have standing to challenge the assignment of the Mortgage from New Century to HSBC as Trustee because she is neither a party to the contract, nor an intended third-party beneficiary thereof. See Oum v. Wells Fargo Bank, N.A., 842 F. Supp. 2d 407, 413 (D. Mass. 2012) (mortgagors lack standing to challenge the validity of the assignments of mortgages). Plaintiff is also specifically prohibited from enforcing the ACE Securities Corp. Home Equity Loan Trust Series 2005-HE4 Asset Backed Pass Through Certificates Trusts (the Trust) Pooling and Servicing Agreement (PSA) and Prospectus Supplement because she is neither a party to those agreements, nor a third party beneficiary of them. See In re Correria, 452 B.R. 319, 324 (BAP 1st Cir. 2011) (debtors could not enforce the PSA to challenge the assignment of a mortgage because they are not parties to the PSA); see also In re Samuels, 415 B.R. 8, 22 (Bankr. D. Mass. 2009) (holding that mortgagors are not beneficiaries of a PSA and further finding that a violation of the PSA would not invalidate a mortgage assignment); see also In re Almeida, 417 B.R. 140, 147, 149 n.4 (Bankr. D. Mass. 2009) (mortgagors cannot enforce a

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PSA). Second, even if Plaintiff were entitled to challenge the Mortgage assignment, she is still unable to establish that HSBC as Trustee is not the mortgagee because the Mortgage was deposited into the Trust before its Pre-Funding Period cut-off date, September 27, 2005, and because the Mortgage was assigned to HSBC as Trustee on November 6, 2007. See SMF 5, 12.4 HSBC as Trustee is entitled to enforce the Note because New Century endorsed the Note in blank, which entitles the Note to be payable to the bearer, HSBC as Trustee. See id. at 6. When indorsed in blank, an instrument becomes payable to the bearer and may be negotiated by transfer of possession alone until specially indorsed. M.G.L. c. 106 3-205(b). Because HSBC as Trustee is both the mortgagee and note-holder, Plaintiff cannot succeed on her claim for preliminary and permanent injunctive relief. II. THERE IS NO EVIDENCE TO SUPPORT THE CIVIL CONSPIRACY CLAIM Plaintiff alleges the existence of a civil conspiracy by claiming that unspecified defendants somehow worked in concert to induce her into the Mortgage Loan transaction, and that HSBC as Trustee wrongfully attempted to collect payments and foreclose upon the Mortgage without, allegedly, having been assigned the Mortgage. See Compl. 217-219, 223. First, Northeast originated the loan, not any of the Moving Defendants. Plaintiff has set forth no theory as to how the Moving Defendants could be held liable for Northeasts alleged actions. Second, there is simply no evidence to support a civil conspiracy claim against the Moving

Contrary to Plaintiffs allegation, New Centurys bankruptcy proceedings in no way prohibited it from assigning the Mortgage to HSBC as Trustee. See Juarez v. U.S.Bank Natl Assn, No. 11-10318-DJC, 2011 WL 5330465, at *7 (D. Mass. Nov. 4, 2011). As a part of New Centurys bankruptcy, the court approved a stipulation entered into between New Century and Countrywide Home Loans, Inc. See SMF 13. According to the stipulation, a Limited Power of Attorney entered into between New Century and Countrywide Home Loans, Inc. appointed Countrywide Home Loans, Inc. to be New Centurys true and lawful attorney-in-fact. See id. Countrywide Home Loans, Inc. was authorized to assign mortgages on New Centurys behalf. See id. Kimberly Dawson, the Countrywide Home Loans, Inc. employee who executed the assignment from New Century to HSBC was designated as an authorized officer to execute assignments. See id. at 14.

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Defendants. This is especially true as against Countrywide, Wells Fargo and ACE, about which Plaintiff makes no allegations whatsoever. See id. at 211-225. Massachusetts recognizes two types of civil conspiracy: true conspiracy and conspiracy based on vicarious liability. Inman v. Siciliano, No. 10-10202-FDS, 2012 WL 1980408, at *16 (D. Mass. May 31, 2012) (citing Taylor v. Am. Chem. Council, 576 F.3d 34-35 (1st Cir. 2009)). To establish true conspiracy, plaintiffs must demonstrate that the defendants, acting in unison, had some power of coercion over [plaintiffs] that they would not have had if acting independently. Id. (quoting Aetna Cas. Sur. Co. v. P&B Autobody, 43 F.3d 1546, 1563 (1st Cir. 1994)). To establish conspiracy based on vicarious liability, Plaintiff must demonstrate first, a common design or an agreement, although not necessarily express, between two or more persons to do a wrongful act and, second, proof of some tortious act in furtherance of the agreement. Id. (quoting Aetna Cas. Sur. Co., 43 F.3d at 1564). Plaintiff is unable to establish the existence of either form of conspiracy because she cannot even identify the existence of any agreement whatsoever between anyone and the Moving Defendants to commit a wrongful act. See SMF 15-17. Further, she cannot even establish any wrongful act. Plaintiff alleges in her Complaint that the wrongful act consisted of inducing her into a Mortgage Loan, yet concedes that her only basis for this belief is the fact that she started out owing Northeast Mortgage and has since had defendants either claiming to service, own or have some involvement in the collection of the loan. See id. at 24. This alleged conduct is not wrongful given that Bank of America serviced the Mortgage Loan, see SMF 7, and that HSBC as Trustee is the mortgagee and note-holder, as explained in I, supra. Accordingly, judgment must be entered in favor of all the Moving Defendants on Plaintiffs civil conspiracy claim.

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III.

PLAINTIFF IS UNABLE TO ESTABLISH RESPONDEAT SUPERIOR LIABILITY BECAUSE NO EMPLOYEE-EMPLOYER RELATIONSHIP EXISTS Plaintiff purportedly alleges a respondeat superior liability claim against the Moving

Defendants, which is a doctrine, not a cause of action. Plaintiff alleges that HSBC as Trustee directed various defendants unspecified wrongful conduct. She complains that Defendant HSBC as Trustee hired, directed, or controlled the actions of Bank of America Home Loans as successor in interest to Countrywide Home Loans, and that Bank of America Home Loans hired both Stanton and Davis and Harmon Law Offices, P.C. to carry out the instructions of HSBC. Compl. 146; see also SMF 18.5 Under the doctrine of respondeat superior, an employer is subject to liability for the torts of its employees committed within the scope of their employment. Roggio v. City of Gardner, No. 10-40076-FDS, 2011 WL 1303141, at *5 (D. Mass. Mar. 30, 2011) (citations omitted). Respondeat superior is a theory of liability, not a claim. See id. The Moving Defendants do not employ one another, but instead are separate entities. See id. (explaining that the doctrine can hold employers liable for the actions of its employees). Plaintiffs theory of liability fails because there is no evidence to establish any employee-employer relationship. Accordingly, judgment should be entered in favor of the Moving Defendants. IV. PLAINTIFF CANNOT ESTABLISH THAT THE MOVING DEFENDANTS BREACHED ANY CONTRACT Plaintiff states in the title to her claim that she is asserting it against HSBC and ACE, however she only makes allegations against New Century and Northeast. See Compl. 189196. Specifically, she complains that New Century, through Northeast, breached a contract with Ms. Consumer by providing her with an interest rate and monthly payment higher than that
5

Because Plaintiff makes no allegations whatsoever involving Countrywide, Wells Fargo or ACE, judgment should

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which she expected. See id. at 192-193. First, the Moving Defendants are in no way liable for the actions of Northeast, nor does Plaintiff advance any such viable theory. Second, even if the Moving Defendants could be held liable for Northeasts alleged conduct, Plaintiff still cannot establish that any contract was breached or that there was any breach of the covenant of good faith and fair dealing.6 A. Northeast Breached No Contract

To establish a claim for breach of contract, Plaintiff must show that there was a valid contract, that the defendant breached its duties under its contractual agreement, and that the breach caused the plaintiff damage. Gardner v. Simpson Financing Ltd. Partnership, No. 0911806-FDS, 2012 WL 1109104, at *5 (D. Mass. Mar. 30, 2012) (quoting Guckenberger v. Boston Univ., 957 F. Supp. 306, 316 (D. Mass. 1997)). The elements of a valid contract are an offer, acceptance, and an exchange of consideration or a meeting of the minds. Id. (citing Vadnais v. NSK Steering Sys. Am., Inc., 675 F. Supp. 2d 205, 207 (D. Mass. 2009)). Here, Plaintiff cannot establish a breach of any contract because there was no offer, no acceptance and no consideration when Northeast provided Plaintiff with an initial, estimated TILA Disclosure on or around March 18, 2005. See SMF 1. The March 18, 2005 TILA Disclosure estimated an initial monthly payment in the amount of $1,329.26, and an 8.158% APR. See id. It was neither a Note, nor a Mortgage, and in no way bound the mortgagee to its estimates. Plaintiff cites no authority to the contrary. See generally, Compl. Instead, Plaintiff later executed the binding agreement, which was the adjustable rate Note and Mortgage, on April 6, 2005. See id. at 2. The Note clearly provided for an initial monthly payment of $1,429.37 and an initial interest rate of 7.725%. See id. The second TILA Disclosure that Plaintiff executed on April 6, 2005 also

unequivocally be entered in their favor. 6 Again, because there are no allegations involving Bank of America, Countrywide, Wells Fargo or ACE, judgment

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provided for a $1,429.37 monthly payment, and indicated that the APR was 10.528%. See id. In sum, the initial estimates provided to the Plaintiff were just that, estimates. No contract was ever formed to give Plaintiff a mortgage loan bearing the terms of the March 18, 2005 TILA Disclosure estimate. Accordingly, the Moving Defendants could not have breached any contract. The only party to this lawsuit who breached a contract was Plaintiff, by defaulting on her payment obligations under the Note. See id. at 8-9. B. Because No Contract Was Breached, Plaintiff Cannot Establish a Breach of the Covenant of Good Faith and Fair Dealing

Plaintiff claims that Northeast, not any of the Moving Defendants, breached the covenant of good faith and fair dealing by allegedly offering Plaintiff loan terms prior to closing that differ from those of the Mortgage Loan. See Compl. 229. Even if the Moving Defendants could somehow be liable for the actions of Northeast, which they in no way concede, Plaintiff is still unable to establish a breach of the covenant of good faith and fair dealing because she cannot establish the existence of a contract that was breached. See Famm Steel, Inc. v. Sovereign Bank, 571 F.3d 93, 100 (1st Cir. 2009) (the scope of the covenant is only as broad as the contract that governs the particular relationship the covenant does not supply terms that the parties were free to negotiate, but did not, nor does it create rights and duties not otherwise provided for in the contract). Because Plaintiff cannot establish a breach of contract claim, as explained in IV(A), supra, she cannot establish a breach of the covenant of good faith and fair dealing. V. PLAINTIFF CANNOT ESTABLISH A CLAIM FOR INTENTIONAL MISREPRESENTATION BECAUSE THE MOVING DEFENDANTS MADE NO FALSE REPRESENTATION UPON WHICH PLAINTIFF DETRIMENTALLY RELIED Plaintiff sets forth two theories of intentional misrepresentation. First she claims that HSBC and ACE provided her with loan terms that differed from what she expected, even though

should be entered in their favor.

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Northeast, not the Moving Defendants, originated the loan. See Compl. 197-202. Second, Plaintiff claims that Bank of America misrepresented that it would help her to modify the Mortgage Loan. See id. at 203-210. For the reasons explained below, Plaintiff cannot establish liability on either theory.7 A. Plaintiff Cannot Establish That the Moving Defendants Misrepresented the Terms of the Mortgage Loan

Plaintiff asserts a claim for intentional misrepresentation against HSBC and ACE for Northeast allegedly providing Plaintiff with terms at the loan closing that differed from the estimates she was provided one month prior to closing. See id. at 197-202. To establish a claim for intentional misrepresentation, a plaintiff must establish that the defendant made a false representation of a material fact with knowledge of its falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff reasonably relied upon the representation as true and acted upon it to his damage. Gardner, 2012 WL 1109104, at *4 (quoting Russell v. Cooley Dickinson Hosp, Inc., 437 Mass. 443, 458, 772 N.E.2d 1054, 1066 (2002)) (additional citations omitted). First, neither HSBC, ACE, nor the remaining Moving Defendants can bear liability for Northeasts actions. See Cazales v. HSBC Bank, N.A., No. 12-10263-RGS, 2012 WL 1969320, at *2 (D. Mass. June 1, 2012) (refusing to hold HSBC as Trustee liable for the torts of a predecessor mortgagee because it was a bona fide purchaser for value, acquiring the mortgage by way of an assignment free and clear of the undisclosed intentions of the original contracting parties) (citations omitted). Second, Plaintiff is unable to establish the existence of any false representation or detrimental reliance. As explained in IV(A), supra, the March 18, 2005 TILA Disclosure estimate was not a contract and in no way bound Plaintiff or Northeast to exact
7

Because Plaintiff does not so much as claim that HSBC as Trustee, Countrywide or Wells Fargo represented, let

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loan terms. The actual contract, which did bind both Northeast and the Plaintiff was the Note agreement, executed on April 6, 2005. See SMF 2. Further, the only detrimental reliance Plaintiff claims that she suffered entailed defending the foreclosure action and filing the instant lawsuit [d]ue to the defendants assertion of the ownership of note and mortgage. See id. at 21. This alleged reliance is in no way related to Plaintiffs intentional misrepresentation claim. See Gardner, 2012 WL 1109104, at *4 (requiring the plaintiff to reasonably rely on the representation as true and act[] upon it to his damage) (citations omitted). B. Plaintiff Cannot Establish that Bank of America Misrepresented That it Would Review the Mortgage Loan for a Modification

Plaintiff also alleges that Bank of America indicated that it would help with her mortgage or modify her Mortgage Loan, but that it instead foreclosed upon the Property. See Compl. 203-210. Again, Plaintiff cannot establish any false representation or detrimental reliance. Rather, Plaintiff concedes that the alleged false representation is pure speculation. See SMF 22. Contrary to Plaintiffs unsupported allegation, Bank of America has helped Plaintiff continuously since her initial October 2005 default. See id. at 8, 10. When Plaintiff sought to refinance with Countrywides Full Spectrum Lending Division, Countrywide provided her with terms of a proposed refinancing agreement in February 2007. See id. at 8. Plaintiff chose not to pursue this, however. See id. Instead, Plaintiff reinstated her loan in April 2008 by making a lump sum payment of $34,898.35. See id. Plaintiff now complains that she liquidated her life savings in her desperation to save her familys home, but fails to acknowledge that her default caused this problem, not Bank of Americas assistance, or purported lack thereof. Compl. 206. In June 2009, Bank of America offered her a loan modification. See SMF 10. Plaintiff chose to reject the modification offer. See id. Plaintiff explained that the reason why

alone misrepresented, anything to her, the Court should enter judgment in their favor.

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she did not accept the June 5, 2009 loan modification was because BOA could not provide any evidentiary foundation to support its claim of ownership of the Note and Mortgage and because BOA would not agree to indemnify the Plaintiff against any future claims to the said note and mortgage. Id. at 23.8 Bank of America was under no duty to do so, however. Further, Bank of America sent her a Notice of Intention to Foreclose on September 14, 2009, which provided her the opportunity to cure her default. See id. at 11. Plaintiff did not do so, and, accordingly, HSBC as Trustee filed its SCRA complaint on January 27, 2010. See HSBC as Trustee v. Matt, No. 10 MISC. 421195. Plaintiffs complaint that Bank of America falsely misrepresented that it would help her with her mortgage is wholly unsubstantiated. Accordingly, judgment should be entered in favor of the Moving Defendants. VI. PLAINTIFF CANNOT ESTABLISH A VIOLATION OF 93A BECAUSE SHE FAILED TO SERVE A DEMAND LETTER AND THE MOVING DEFENDANTS COMMITTED NO UNFAIR OR DECEPTIVE ACTS Plaintiff cannot establish any violation of 93A as against the Moving Defendants because she failed to serve the Moving Defendants with a required 30-day demand letter prior to filing suit and because she cannot establish any unfair or deceptive acts committed by the Moving Defendants. A. Plaintiffs Failure to Serve a Demand Letter Bars the Claim

Judgment must be entered in favor of the Moving Defendants on Plaintiffs 93A claim because she failed to serve the required 30-day demand letter on any of the Moving Defendants. M.G.L. c. 93A 9(3) requires that [a]t least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or

To the extent that Plaintiff claims that the June 2009 loan modification offer should have contained an interest rate no higher than 6.99%, with no escrow, and with arrears calculated from the date of her default, this argument is entirely unsubstantiated. See SMF 10. Plaintiff cannot identify any documents or communications whatsoever that informed her that the modification would bear these terms. See id. Instead, she vaguely identifies unspecified

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deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent. M.G.L. c. 93A 9(3). Plaintiff did not send any of the Moving Defendants a demand letter, and, in fact, concedes as much. See Compl. 154-56. She erroneously contends that she is excused from this requirement.9 See id. Sending a 30-day demand letter is an absolute prerequisite to an action asserted under G.L. c. 93A, 9, and failing to satisfy the prerequisite entitles a defendant to judgment as a matter of law. Ball v. Wal-Mart, Inc., 102 F. Supp. 2d 44, 54 (D. Mass. 2000) (granting summary judgment for a defendant where the plaintiff failed to send a demand letter); see also Brown v. Bank of Am. Corp., No. 10-11085-GAO, 2011 WL 1311278, at *3 (D. Mass. Mar. 31, 2011) (holding that the demand letter requirement is not a mere formality and that [t]he failure to comply with this prerequisite is fatal to the plaintiffs Chapter 93A claim); see also Entrialgo v. Twin City Dodge, Inc., 368 Mass. 812, 813 (1975) (failure to send and allege the demand letter according to the statute results in dismissal of the claim). Because Plaintiff did not serve the Moving Defendants with the required demand letter, judgment should be entered in their favor. See id. B. Plaintiff Cannot Establish Any Unfair or Deceptive Acts

Under 93A 2, unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful. M.G.L. c. 93A 2. Even if Plaintiff had served the required demand letter, she still cannot establish any unfair or deceptive acts committed by the Moving Defendants. Plaintiff claims only that the Moving Defendants violated 93A by Northeast allegedly using terms and practices that were unfair,

communications from time to time with BOA. See id. 9 To the extent Plaintiff argues that she is exempt from serving a demand letter upon the Moving Defendants because she is asserting her claims defensively against the foreclosure action, her argument fails. Compl. 154. There is no authority for this proposition.

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deceptive, and/or unconscionable. Compl. 151. First, assignees are not liable under 93A for the alleged actions of loan originators. See McKensi v. Bank of America, N.A., No. 09-11940JGD, 2010 WL 3781841, at *3 (D. Mass. Sept. 22, 2010); see also In re Mae, 460 B.R. 1, 4 (Bkrtcy. D. Mass. 2011) (same). Second, Northeast did not act unfairly or deceptively by originating a loan on the terms Plaintiff agreed to by executing the Note and Mortgage, as explained in IV(A), supra.10 Accordingly, judgment should be entered in favor of the Moving Defendants. VII. PLAINTIFFS MCCCDA CLAIM IS TIME-BARRED Plaintiff seeks to rescind her Mortgage Loan pursuant to the Massachusetts Consumer Credit Cost Disclosure Act (MCCCDA), M.G.L. c. 140D, five years after the loan was consummated. See Compl. 188; see also SMF 2. Under the MCCCDA, a creditor must clearly and conspicuously disclose to any obligor in a transaction subject to this section the rights of the obligor under this section. M.G.L. c. 140D 10(a). The creditor is required to provide, in accordance with the regulations of the commissioner, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section. Id.11 Plaintiff alleges that Northeast and Tomasello failed to provide her with the required copies of a Notice of the Right to Cancel and the required copies of the TILA Disclosure at the closing of the Mortgage Loan on April 6, 2005. See Compl. 182. Plaintiffs claim is time-barred. M.G.L. c. 140D 10(a) permits an obligor of credit to rescind a transaction during a three day window commencing on the date of the loans consummation. See M.G.L. c. 140D 10(a)
10

To the extent Plaintiff argues that HSBC as Trustee acted deceptively by initiating foreclosure proceedings when it was allegedly not the mortgagee, this argument is baseless as explained in I, supra. Similarly, to the extent Plaintiff claims that Bank of America acted unfairly by allegedly not helping her with her mortgage, not only was Bank of America under no obligation to do so, but Bank of America did attempt to assist Plaintiff, as explained in V(B), supra. Because there are simply no substantive allegations against these defendants or HSBC, Countrywide, Wells Fargo or ACE, judgment should be entered in their favor. 11 209 MASS. CODE REGS. 32.23(2)(a) requires a creditor to provide the obligor with: two copies of the notice of the

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(the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section whichever is later, by notifying the creditor). Plaintiff does not claim that she did not receive the notices. See generally, Compl. Instead, she complains that she did not receive the required copies of the Notice of the Right to Cancel or TILA Disclosure on April 6, 2005, but rather that she received them a few days later. See id. at 182 (Reviewing Ms. Matts closing documents reveals that she did not receive the required copies of the Notice of the Right to Cancel at closing that clearly and conspicuously discloses [sic] her right to rescind the mortgage contract. Nor did Ms. Matt receive the required copies of the Truth in Lending Disclosure statement at closing.); see also SMF 19. Plaintiff states that she received the documents a few days after the closing of the Mortgage Loan because the closing attorney, Tomasello was sick and pregnant and needed to use [Plaintiffs] bathroom. See SMF 20. Plaintiffs right to rescind expired on April 9, 2005, three days after the closing of the loan, or, at the latest, three days after she received a copy of the Notice of the Right to Cancel shortly after the closing. See M.G.L. c. 140D 10(a). Accordingly, because the Notice of the Right to Cancel and the TILA Disclosure were delivered to the Plaintiff within days of April 6, 2005, the claim is time-barred. See id.12 Accordingly, judgment should be entered in

right to rescind to each consumer entitled to rescind. 209 MASS. CODE REGS. 32.23(2)(a). 12 To the extent Plaintiff argues that her claim is not time-barred because she is asserting an action for recoupment, this argument is flawed. The common-law doctrine of recoupment allows a defendant to defend against a claim by asserting up to the amount of the claim the defendants own claim against the plaintiff growing out of the same transaction. Kelly v. Deutsche Bank Natl Trust Co., 789 F. Supp. 2d 262, 266 (D. Mass. 2011) (quoting Bolduc v. Beal Bank, SSB, 167 F.3d 667, 672 (1st Cir. 1999)). [A] recoupment action can only be brought as affirmative defenses to limit the plaintiffs possible recovery. Damas v. Mortgage Elec. Registration Sys., Inc., No. 082207, 2009 WL 2232778, at *1 (Mass. Super. Ct. June 3, 2009). It serve[s] to reduce or extinguish the plaintiffs claim, but it c[an] not result in an affirmative recovery for the defendant. Kelly, 789 F. Supp. 2d at 266 (quoting Bose Corp. v. Consumers Union of U.S., Inc., 367 Mass. 424, 427-28, 326 N.E.2d 8, 10 (1975)). It is a counterclaim not a claim. Damas, 2009 WL 2232778, at *1. Because Plaintiff is asserting her claim for recoupment affirmatively in this lawsuit, rather than defensively, Plaintiff cannot recover thereunder.

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favor of the Moving Defendants.13 VIII. PLAINTIFF CANNOT ESTABLISH THAT THE MOVING DEFENDANTS WERE UNJUSTLY ENRICHED Unjust enrichment is an equitable remedy, not a separate cause of action, which gives an aggrieved party the right to seek restitution against another party who has been unjustly enriched at the aggrieved partys expense. Salaman v. Terra, 394 Mass. 857, 859 (1985); see also Keller v. OBrien, 425 Mass. 774, 778 (1997) (Restitution is an equitable remedy by which a person who has been unjustly enriched at the expense of another is required to repay the injured party) (citations omitted). The fact that a person has benefitted from another is not of itself sufficient to require the other to make restitution therefor. Id. (quoting Restatement of Restitution 1 (1937)). Instead, the remedy is appropriate only if it would be unjust for the recipient to retain the benefit. See id. (citing Natl Shawmut Bank v. Fidelity Mut. Life Ins. Co., 318 Mass. 142, 146, 61 N.E.2d 18, 20 (1945)). Plaintiff alleges that [a]ll Defendants have been unjustly enriched at the expense of Ms. Matt. Compl. 232. She complains that the Moving Defendants conduct in originating, servicing and litigating the foreclosure of Plaintiffs defaulted loan constitutes unjust enrichment. However, as explained above, Northeast in no way misrepresented the terms of the Mortgage Loan, Bank of America continuously offered to assist Plaintiff to modify the terms of her Mortgage Loan, offers which Plaintiff rejected, and HSBC as Trustee was entitled to foreclose, as the note-holder and mortgagee, because Plaintiff has not cured her default. See V(A), V(B), I, supra.14 Despite claiming that the Moving Defendants have been unjustly enriched, Plaintiff has been living the Property without having made a single

13

Without conceding that liability could be imputed to HSBC as Trustee, Bank of America, HSBC, Countrywide, Wells Fargo and ACE can bear no liability given that they were never assignees of the Mortgage, nor holders of the Note. 14 As with Plaintiffs other claims, she makes no substantive allegations against Countrywide, Wells Fargo or ACE, and on that basis, summary judgment should be entered in their favor. See generally, Compl.

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payment in over four (4) years, since August 2008. See SMF 9. There is absolutely no benefit that has been conferred upon the Moving Defendants to which they are unentitled. Accordingly, judgment should be entered in favor of the Moving Defendants. CONCLUSION For the reasons stated above, the Moving Defendants respectfully request that this Court grant their Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56 and enter judgment in their favor. Respectfully submitted, BANK OF AMERICA, N.A., HSBC BANK USA, N.A., HSBC AS TRUSTEE, COUNTRYWIDE SECURITIES CORPORATION, WELLS FARGO BANK, N.A. AND ACE SECURITIES CORP., By their attorneys, /s/ Courtney Benson Courtney L. Benson (BBO# 675679) Chad W. Higgins (BBO# 668924) GOODWIN PROCTER LLP Exchange Place, 53 State Street Boston, MA 02109 Tel. 617-570-1000 Fax. 617-523-1231 courtneybenson@goodwinprocter.com chiggins@goodwinprocter.com

Dated: October 30, 2012

CERTIFICATE OF SERVICE I hereby certify that this document filed through the ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF) and paper copies will be sent to those indicated as non-registered participants on October 30, 2012. /s/ Courtney Benson

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