Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

The First Circuit reversed the judgment of the district court granting Bank’s motion to dismiss this case alleging that Bank failed to comply with the notice requirements in Plaintiffs’ mortgage before foreclosing on their property, holding that Bank’s failure to strictly comply with paragraph 22 of the mortgage invalidated the foreclosure.Paragraph 22 required that prior to accelerating payment by Plaintiffs, the mortgagee had to provide Plaintiffs with notice specifying certain elements. After Bank sent default and acceleration notices to Plaintiffs Plaintiff failed to cure the default, and Bank conducted a foreclosure sale. Plaintiffs then filed a complaint alleging that Bank failed to comply with the paragraph 22 notice requirements prior to foreclosing on their property. The district court granted Bank’s motion to dismiss for failure to state a claim, concluding that Bank’s default and acceleration notice strictly complied with paragraph 22. The First Circuit disagreed, holding (1) the mortgage terms for which Massachusetts courts demand strict compliance include the provisions in paragraph 22 requiring and prescribing the preforeclosure default notice; and (2) because the default letter omitted certain information that rendered the notice potentially deceptive the Bank violated the strict compliance requirement, thus invalidating the foreclosure. View "Thompson v. JPMorgan Chase Bank, N.A." on Justia Law

The First Circuit affirmed in substantial part the district court’s judgment dismissing US Bank’s complaint against HLC Escrow, Inc. and First American Title Insurance Company, vacating only its dismissal of US Bank’s claim against First American alleging violation of Maine’s Unfair Claims Settlement Practices Act (USCPA), which the First Circuit concluded was timely filed.US Bank, the current holder of a 2007 mortgage that incorrectly identified a parcel of unimproved land rather than the correct parcel of improved land that encompassed the mortgagors’ residence, sued the closing agent and the title insurer in 2016. The complaint included causes of action for negligence and “duty of care” against HLC Escrow, and negligence, unilateral mistake, and violation of USCPA against First American. The district court dismissed the complaint in its entirety, concluding that Maine’s six-year statute of limitations for civil actions barred US Bank’s claims. The First Circuit vacated the dismissal with respect to US Bank’s USCPA claim against First American and otherwise affirmed, holding that the USCPA claim was timely for statute of limitations purposes but that the remainder of US Bank’s claims were untimely filed. View "US Bank, N.A. v. HLC Escrow, Inc." on Justia Law

The First Circuit affirmed the district court’s order dismissing a suit that challenged the lawfulness of a 2012 foreclosure sale of a Massachusetts home.In their complaint, Plaintiffs, who formerly owned the property at issue, alleged that Defendants - OneWest Bank, Indymac Mortgage Services, Ocwen Servicing, and the Federal National Mortgage Association - had engaged in unfair and predatory mortgage lending and loan servicing practices. The complaint set forth nine claims. The district court granted Defendants’ motion to dismiss all of the claims. The First Circuit affirmed, holding that the district court did not err in (1) dismissing three claims for which Plaintiffs sought a judgment declaring that the foreclosure sale was void; (2) dismissing for lack of standing the claim in which Plaintiffs sought to quiet title; (3) dismissing the claim for breach of the duty of good faith and reasonable diligence on the basis that there was no such duty; and (4) dismissing Plaintiffs’ remaining claims. View "Flores v. OneWest Bank, F.S.B." on Justia Law

Plaintiffs took out a loan to buy a property in Massachusetts. Plaintiffs executed a mortgage naming the Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee and executed a promissory note to Chevy Chase Bank, FSB. Plaintiffs later fell behind on their mortgage. U.S. Bank, which was assigned the mortgage and came into physical possession of the note, conducted a foreclosure sale of the property and purchased the property. Plaintiffs filed suit against U.S. Bank, MERS and other defendants, alleging, inter alia, a claim for a declaratory judgment that the foreclosure was invalid. The district court disposed of the complaint by (1) granting Defendants’ partial motion to dismiss several counts for failure to state a claim; (2) granting summary judgment to U.S. Bank on its counterclaim for possession; and (3) granting summary judgment to Defendants on Plaintiffs’ remaining claims and to U.S. Bank on its counterclaim for deficiency. The First Circuit reversed in part and affirmed in part, holding (1) the entry of judgment in favor of U.S. Bank on its deficiency claim was in error because U.S. Bank did not comply with Mass. Gen. Laws ch. 244, 17B; and (2) the judgment of the district court was otherwise without prejudicial error. View "Galvin v. U.S. Bank, N.A." on Justia Law

After Appellants went bankrupt, Appellees foreclosed on their home. Appellants each received an IRS Form 1099-A in the mail at the end of the tax year stating that the foreclosure might have tax consequences. The mortgage debt, however, was discharged during Appellants’ Chapter 7 bankruptcy proceedings. Appellants sued Appellees, claiming that the Forms were a coercive attempt to collect on the mortgage debt, which Appellees had no right to collect. The bankruptcy court found the Forms gave Appellants “no objective basis” to believe Appellees were trying to collect the discharged mortgage debt. The district court affirmed. The First Circuit affirmed, holding that the evidence in the record showed that the Forms were not objectively coercive. View "Bates v. CitiMortgage, Inc." on Justia Law

The underlying dispute in this case concerned a mortgage purported granted by Andrew and Maureen DeMore to the predecessor in interest to HSBC Bank, USA, N.A. on a parcel of property owned by the DeMores. This appeal came by way of bankruptcy court after each of the DeMores filed separate voluntary petitions for bankruptcy under Chapter 7 of the Bankruptcy Code. Donald Lassman, as trustee for the DeMores’ bankruptcy cases, filed adversary actions against HSBC to avoid the mortgage, arguing that the mortgage on the DeMores’ property was voidable under Massachusetts state law because the certificate of acknowledgment was “materially defective.” Specifically, Lassman asserted that the certificate failed to make clear that the DeMores executed the mortgage as their free act and deed. The Bankruptcy Court granted summary judgment to Lassman. The district court reversed. The First Circuit affirmed, holding that the certificate of acknowledgment was not materially defective because it made clear that the DeMores had executed the mortgage as their free act and deed. View "HSBC Bank USA, N.A. v. Lassman" on Justia Law

Edythe Dyer executed a promissory note to Dreamhouse Mortgage Corporation and granted a mortgage on her property in Boston, Massachusetts to Mortgage Electronic Registration Systems, Inc. (MERS). MERS assigned the mortgage to U.S. Bank. Wells Fargo was U.S. Bank’s servicer of the loan. U.S. Bank later notified Dyer that it intended to foreclose on the property by utilizing the statutory power of sale provided for in Mass. Gen. Laws ch. 183, 21. Dyer filed suit naming U.S. Bank and Wells Fargo as defendants, arguing, inter alia, that U.S. Bank was not a proper party to utilize the statutory power of sale. The case was removed to federal court, where the parties consented to a proceeding before a magistrate judge. The magistrate judge granted Defendants’ motion for judgment of the pleadings and dismissed all of Dyer’s claims. The First Circuit affirmed, holding (1) U.S. Bank was authorized to exercise the statutory power of sale; and (2) the magistrate judge correctly dismissed Dyer’s Massachusetts General Laws Chapter 93A claim against Wells Fargo. View "Dyer v. Wells Fargo Bank, N.A." on Justia Law

After seeking a mortgage modification under the Home Affordable Modification Program Plaintiff filed a complaint against Wells Fargo Bank, N.A. and Homeward Residential Inc., claiming breach of contract, unfair debt collection under Mass. Gen. Laws ch. 93A, and derivative equitable relief. A federal district court dismissed Plaintiff’s action in its entirety. The First Circuit vacated and remanded, holding that Plaintiff’s complaint sufficiently alleged that Defendants failed to offer her a mortgage modification in a timely manner and that Plaintiff had sufficiently pled damages for her Chapter 93A claim. On remand, the district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that Plaintiff’s breach of contract and Chapter 93A claims failed, and therefore, her derivative claim for equitable relief failed as well. View "Young v. Wells Fargo Bank, N.A." on Justia Law

Thomas and Frances Frangos (Plaintiffs) secured a loan and pledged their home as collateral to secure a promissory note issued to the lender. Plaintiffs defaulted on the mortgage twice. A foreclosure sale was scheduled, but on the eve of the sale, Plaintiffs filed suit. Plaintiffs sought an injunction permanently barring Bank of America, N.A. and New Penn Financial, LLC (Defendants) from foreclosing, as well as damages premised on an alleged breached of a provision in the mortgage agreement. The district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that the district court did not err in its judgment. View "Frangos v. Bank of America, N.A." on Justia Law

In 2011, Federal Home Loan Bank of Boston (Bank), a federally-chartered entity pursuant to 12 U.S.C. 1432(a), filed suit against multiple defendants, including Moody’s Corporation and Moody’s Investors Service, Inc. (collectively, Moody’s), in Massachusetts state court alleging that various rating agencies falsely gave out triple-A ratings to mortgage-backed securities that were riskier than indicated by their ratings. Some of the defendants, but not Moody’s, removed the case to the Massachusetts federal district court on the grounds that the Bank was federally chartered. Moody’s then moved to dismiss on the ground that the Massachusetts district court lacked personal jurisdiction over it. The district judge ultimately granted the motion, concluding that personal jurisdiction was lacking after Daimler AG v. Bauman, and entered separate and final judgment in favor of Moody’s. The district judge also denied the Bank’s motion to sever its claims against Moody’s from those against the other defendants and transfer them to the Southern District of New York. The First Circuit vacated the district court’s dismissal order, holding that the district court erred in concluding that it lacked statutory power to transfer the claims against Moody’s to the Southern District of New York. Remanded. View "Fed. Home Loan Bank of Bost v. Moody's Corp." on Justia Law