Sunningdale Ventures, Inc. v. Martin

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

SUNNINGDALE VENTURES, INC., )

)

Plaintiff, )

)

v. )

) CIVIL ACTION NO.

JAMES W. MARTIN JR., MARCIA ) 13-12512-DPW

MARTIN, MAUREEN MARTIN, )

KELLY SOPER, and ANY AND ALL )

OCCUPANTS, )

)

Defendants, )

)

v. )

)

EASTERN SAVINGS BANK, FSB, )

)

Third-Party Defendant. )

MEMORANDUM AND ORDER

March 31, 2018

This case involves a homeowner, defendant James Martin,

who, like many during the recent recession, defaulted on his

mortgage.1 After a period of forbearance by his lender,

defendant-in-counterclaim Eastern Savings Bank, F.S.B.

(“Eastern”), the parties were unable to agree regarding

modification and the property was foreclosed upon. Plaintiff

Sunningdale Ventures, Inc. (“Sunningdale”), a subsidiary of

1 The action is also brought against Marcia Martin, Maureen

Martin, Kelly Soper, and any and all occupants. Following the

protocol of the parties, I will refer to Defendants in the

singular as “Martin,” and the references will generally be to

actions or arguments by James Martin.

Eastern, now seeks possession of the foreclosed property under

Massachusetts state law.2 In response, Martin asserts a number

2 Sunningdale based its possession claim when filed on the right

to foreclose pursuant to the statutory power of sale set forth

in the mortgage. See Mass. Gen. Laws ch. 244, § 14 and ch. 183,

§ 21. In a supplemental memorandum, filed after the argument on

the summary judgment motions, Sunningdale and Easton Bank added

reliance upon Mass. Gen. Laws ch. 294, § 1 for the proposition

that its foreclosure sale recorded by Certificate of Entry dated

May 1, 2013 had independently ripened into full title to the

property on May 1, 2016. See generally Singh v. 207-211 Main

St., LLC, 937 N.E.2d 977, 979 (Mass. App. Ct. 2010).

Massachusetts law recognizes that foreclosure under a

statutory power of sale and foreclosure by peaceable entry,

recording a certificate of entry and maintenance of peaceable

possession for three years after recordation, are independent

grounds standing alone that support possession. See U.S. Bank

Nat’l Ass’n v. Ibanez, 941 N.E.2d 40, 49 n.15 (Mass. 2011);

Grabiel v. Michelson, 8 N.E.2d 764, 765 (Mass. 1937) (concluding

that because good title under the foreclosure of the mortgage by

entry existed, it was not necessary to consider whether there

was any irregularity in the foreclosure of the mortgage under

the power of sale).

While bankruptcy court decisions in this District have

suggested that litigation proceedings interrupt “peaceable

possession,” see, e.g., In re Goulet, No. 13-41812, 2015 WL

269269, at *7 (Bankr. D. Mass. Jan. 21, 2015) (commencing an

adversary proceeding prior to the expiration of the three year

period was sufficient to terminate the peaceable possession); In

re Loucheschi LLC, 496 B.R. 41, 46 (Bankr. D. Mass. 2013) (“the

commencement of an adversary proceeding challenging a mortgage

lender's right to be in possession of the mortgaged premises

interrupts the lender's peaceable possession); In re Ledgemere

Land Corp., 116 B.R. 338, 341 (Bankr. D. Mass. 1990),

(mortgagee’s “entry upon the premises, even though ‘open and

peaceable,’ is not enough” . . . “[t]he statute requires that

the entry be followed by ‘possession . . . continued peaceably .

. .[,]’ [but] [w]hat followed its entry [in Ledgemere] could

hardly be called peaceable, with threats of eviction, disputes

over who should receive rents, and, finally, litigation”), I am

of the view that the relevant challenge must be initiated by the

mortgagee within the three year period. See U.S. Nat’l Ass’n v.

McDermott, 24 N.E.3d 1061 (Mass. App. Ct. 2015) (unpublished

opinion) (reaffirming that if a mortgagor wants to challenge a

of counterclaims based on the negotiation of his forbearance

agreements. He claims that Eastern caused him to believe that

his mortgage obligations would be permanently modified, that

this misrepresentation lured him deeper into debt, and as a

consequence, foreclosure improperly ensued. Sunningdale has

moved for summary judgment. I summarize the facts in the light

most favorable to Martin, as the party opposing summary

judgment.

I. FACTS

On December 19, 2003, Mr. Martin executed a note to Eastern

in the amount of $260,000, secured by a mortgage on his home at

38 Hesper Street in Saugus, Massachusetts. By 2005, Martin was

in default. In early 2009, Martin’s financial situation

worsened and he began discussing with Eastern options for easing

payments on his mortgage. In February, Martin spoke with

Eastern employee Gerald Feinstein by telephone, and told him

that he could only afford monthly payments of $2,000, not the

$3,124.19 his payment schedule then required.

In a letter dated February 10, 2009 to Martin, Feinstein

foreclosure by entry, “it is incumbent on him to do so before

the three-year period has elapsed.”). Martin did so here by

asserting counterclaims in his answer. The alternative grounds

of continued peaceable possession for three years following

recordation of the Certificate of Entry, asserted by Sunningdale

and Eastern in the Supplemental Memorandum, is not sufficient

independently to support grant of summary judgment to them here.

referenced this telephone conversation, recounting that in the

conversation “we advised you that we would look at a possible

workout option to see if you will qualify for the program.” In

that letter, Feinstein also requested that Martin submit

financial information to Eastern. A handwritten notation, the

authorship of which is unclear on the record before me, but

which for purposes of the motion before me I will ascribe to

Eastern, reads: “$2000 per month/6 months - possible mod after

fulfilled.” Martin now states that he understood Eastern in

this call to have offered an outright modification of his

mortgage obligations, or at least to have had intimated that a

modification would be forthcoming.

On March 6, 2009, after receiving Martin’s financial

information, an Eastern representative again spoke with Martin

on the phone and again sent a confirmatory letter. This letter

made clear that what was being offered was only a forbearance

program in which Martin’s monthly payments would be reduced, but

that he would continue to accumulate debt. The letter was

styled as a “Forbearance Agreement” and stated that Eastern

would accept a regular monthly payment of $2,000 for a period of

six months, with “[a]ll funds received under this Agreement [to]

be applied to past due payments, late charges and advances at

Eastern Savings Bank’s sole discretion.” It reiterated that it

“does not change the terms and conditions of the original loan

documents.”

The letter also made certain open-ended representations

about Eastern’s future actions and the possibility of a

modification. Specifically, Eastern committed to review the

loan in September and to consider modifying the terms of the

loan, if Martin complied with the agreement. Eastern stated

that the purpose of the agreement was “to determine your

desirability to make timely payments” and that “[i]f payments

are received as outlined, the loan may be reviewed for further

workout options.” Eastern expressly reserved the right to

extend the forbearance agreement rather than modify the terms.

Martin then proceeded to make the agreed-upon $2,000

monthly payments, although there is some dispute as to whether

all were timely made. After the six month forbearance period,

Eastern extended its forbearance agreement two additional times

on substantially identical terms after receiving updated

financial information from Martin.

Then, in December 2010, Eastern extended the Forbearance

Agreement for a fourth time, this time increasing the minimum

monthly payment to the original monthly payment of $3,124.19.

By this point, Martin’s arrearage had increased from $11,771.93

as of the March 6, 2009 letter to $45,696.49. After review of

Martin’s financial information, which had led to the increase of

his monthly payment, Eastern also determined that his loan was

not eligible for a modification.

Martin made one payment under the new arrangement and then

again defaulted on his obligation. Martin and Eastern engaged

in additional negotiations over his mortgage payments, but were

unable to reach an agreement. In response, Eastern began the

foreclosure process. On February 9, 2011, Eastern sent Martin a

150-Day Notice of Right to Cure pursuant to Mass. Gen. Laws ch.

244, § 35A. When Martin failed to cure within 150 days, Eastern

took the additional steps necessary to foreclose, including

complying with the Servicemembers Civil Relief Act., 50 U.S.C.

App. § 501, et seq., and publishing and mailing notice of the

foreclosure sale as required by Mass. Gen. Laws ch. 244, § 14.

The property was sold at auction on April 16, 2013, and Eastern

was the successful bidder. Eastern assigned its bid to

Sunningdale, an operating subsidiary, and the requisite deeds

and affidavits were recorded with the Essex County Registry of

Deeds on May 1, 2013. Martin refused to vacate the home, and

this suit followed.

Martin’s ultimate contention is that, but for his

misapprehension that a mortgage modification was coming, he

would have been able to avoid foreclosure. He says a family

member would have helped him refinance or stay current on his

payments in order to avoid the significant costs of default and

foreclosure. Only because he was misled, he asserts, did he

fall so far behind and lose his home.

II. PROCEDURAL HISTORY

Eastern initially filed a summary process action for

possession, pursuant to Mass. Gen. Laws ch. 239, in

Massachusetts Housing Court. In response, Martin asserted,

among other things, that Eastern could not demonstrate that the

foreclosure complied with the requirements of Mass. Gen. Laws

ch. 183, § 21 and Mass. Gen. Laws ch. 244, §§ 35A and 35B.

Because Martin’s allegations of non-compliance with § 35A raised

potential issues concerning pursuit of a summary process action

in the Housing Court, cf. U.S. Bank Nat’l Ass’n. v. Schumacher,

5 N.E.3d 882 (Mass. 2014), Eastern elected voluntarily to

dismiss that action and litigate this diversity matter in this

court as a court of general jurisdiction competent to dispose of

all claims.

On January 6, 2014, Judge Tauro denied Martin’s motion to

dismiss for lack of subject matter jurisdiction. The case was

then reassigned to Judge Young, who granted a motion to dismiss

counts three and five of Martin’s counterclaim which alleged

fraudulent conveyance and civil RICO violations.

After the case was then assigned to my session, I granted

Sunningdale’s motion for use and occupancy payments, set at

$1,600 monthly, pending resolution of the case. Before me is

Sunningdale’s motion for summary judgment as to all remaining

claims and counterclaims. As one dimension of his opposition to

summary judgment, Martin sought a continuance to conduct

additional discovery. I turn to the discovery question first.

III. CONTINUANCE FOR ADDITIONAL DISCOVERY

To obtain a continuance of summary judgment disposition

under Rule 56(d), a party must show “(i) good cause for his

inability to have discovered or marshalled the necessary facts

earlier in the proceedings; (ii) a plausible basis for believing

that additional facts probably exist and can be retrieved within

a reasonable time; and (iii) an explanation of how those facts,

if collected, will suffice to defeat the pending summary

judgment motion.” Rivera-Torres v. Rey-Hernandez, 502 F.3d 7,

10 (1st Cir. 2007). The party opposing summary judgment must

also show due diligence in conducting discovery and pursuing an

extension of time for additional discovery. Id. at 11.

Martin has failed to satisfy this standard. Despite a

substantial passage of time since the filing of Sunningdale’s

motion for summary judgment, he has provided no sufficiently

concrete basis for believing that additional facts exist or how

those facts could defeat summary judgment. He has only provided

conclusory statements that the case is in an early posture,

“that there are plausible bases for his belief that there are

facts, discoverable within a reasonable time, which, if

obtained, will suffice to engender an issue both genuine and

material,” and requests that “if any discovery is needed to

establish the existence of a genuine dispute of material facts,

that decision on the summary judgment motion should be deferred

. . . .” But “[s]peculative conclusions, unanchored in facts,

are not sufficient” to secure a continuance under Rule 56.

Rivera-Torres, 502 F.3d at 12. Without any meaningful

description of what discoverable facts are necessary to oppose

summary judgment, a continuance is unwarranted. I now turn to

consideration of Sunningdale’s motion for summary judgment.

IV. STANDARD OF REVIEW

A movant is entitled to summary judgment “if the movant

shows that there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.”

Fed. Rule Civ. P. 56(a). If the movant meets this burden, “the

opposing party can then defeat the motion by showing that there

is a genuine issue of material fact.” Rivera-Colon v. Mills,

635 F.3d 9, 12 (1st Cir. 2011). An issue is genuine “if a

reasonable jury could resolve the point in favor of the

nonmoving party.” Tropigas de P.R., Inc. v. Certain Underwriters

at Lloyd's of London, 637 F.3d 53, 56 (1st Cir. 2011). A fact

is material if “its existence or nonexistence has the potential

to change the outcome of the suit.” Borges ex rel. S.M.B.W. v.

Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010).

“In evaluating whether there is a genuine issue of material

fact, the court examines the record — pleadings, affidavits,

depositions, admissions, and answers to interrogatories —

viewing the evidence in the light most favorable to the party

opposing summary judgment.” Rivera-Colon, 635 F.3d at 12

(citations omitted). However, I may “afford no evidentiary

weight to ‘conclusory allegations, empty rhetoric, unsupported

speculation, or evidence which, in the aggregate, is less than

significantly probative.’” Tropigas de P.R., Inc., 637 F.3d at

56 (quoting Rogan v. City of Boston, 267 F.3d 24, 27 (1st Cir.

2001)). Thus, in order to meet its burden, the nonmoving party

“must point to competent evidence and specific facts.” Id. at

56.

V. THE POSSESSION CLAIM

Sunningdale seeks possession of the real property located

at 38 Hesper Street in Saugus, Massachusetts. To make out its

prima facie case, it must show that “it obtained a deed to the

property at issue and that the deed and affidavit of sale,

showing compliance with statutory foreclosure requirements, were

recorded.” Bank of New York v. Bailey, 951 N.E.2d 331, 336-7

(Mass. 2011). It is uncontested that Sunningdale obtained a

Foreclosure Deed for the property on May 1, 2013, which it

recorded with the Essex County Registry of Deeds, and that a

Confirmatory Foreclosure Deed, including an affidavit of sale,

was recorded on September 27, 2013.3 Sunningdale has established

its prima facie case for possession.4

However, to foreclose upon a property, a mortgagee must

also “act in good faith and . . . use reasonable diligence to

protect the interests of the mortgagor.” U.S. Bank Nat’l Ass'n

v. Ibanez, 941 N.E.2d 40, 50 n.16 (Mass. 2011). This duty is

heightened when the mortgagee itself buys the property. Id.

“When a party who is intrusted with a power to sell attempts

also to become the purchaser, he will be held to the strictest

good faith and the utmost diligence for the protection of the

rights of his principal.” Williams v. Resolution GGF OY, 630

N.E.2d 581, 584 (Mass. 1994) (quoting Union Market Nat’l Bank of

3 Under Local Rule 56.1, a fact asserted in a statement of

uncontested material facts which is not controverted by the

opposing parties is deemed admitted for the purposes of summary

judgment. These facts were included in Sunningdale’s statement

of undisputed material facts and neither denied nor contradicted

by Defendant’s filing.

4 Possession does not require showing compliance with Mass. Gen.

Laws ch. 244 § 35A. A homeowner can generally challenge a

foreclosing mortgagee’s non-compliance with § 35A only in a

separate suit or counterclaim, not as a defense to possession.

U.S. Bank Nat’l Ass'n v. Schumacher, 5 N.E.3d 882, 884 (Mass.

2014). While a § 35A violation that renders the foreclosure “so

fundamentally unfair that the former homeowner is entitled to

affirmative equitable relief” can void a sale, no such violation

is alleged here. Wells Fargo Bank, N.A. v. Davies, 6 N.E.3d

570, at *1 (Mass. App. Ct. 2014) (per curiam) (quoting

Schumacher, 5 N.E.3d at 891). Moreover, for loans originated

prior to the enactment of the Dodd-Frank Act, § 35A is preempted

by regulations promulgated under the Home Owners’ Loan Act.

Sovereign Bank v. Sturgis, 863 F. Supp. 2d 75, 102-03 (D. Mass.

2012). See generally infra note 6 and accompanying text at 17.

Watertown v. Derderian, 62 N.E.2d 661, 663 (Mass. 1945)

(internal citations omitted); Montague v. Dawes, 14 Allen 369,

373 (Mass. 1867)). Failure to act in good faith can invalidate

the foreclosure sale. Sandler v. Silk, 198 N.E. 749, 751 (Mass.

1935).

Martin contends that Sunningdale and Eastern failed to act

in good faith and with reasonable diligence in protecting him

and that they should therefore be denied possession. Such

contentions are generally viewed as raising questions of fact.

Oyegbola v. DeSimone, 1996 Mass. App. Div. 67, at *3 (Dist. Ct.

1996).

Massachusetts courts have developed guidance for

identifying behaviors that constitute less than good faith by a

mortgagee in this context.5 In this connection, that a property

is sold at auction for less than its full market price does not

necessarily indicate bad faith or lack of diligence, even where

there is an extreme disparity between the sale price and the

market price, although the disparity can be evidence to support

a finding of bad faith. Seppala & Aho Constr. Co. v. Petersen,

367 N.E.2d 613, 620 (Mass. 1977). Similarly, lack of bidders at

5 The First Circuit has explained that the duty of a mortgagee to

act in good faith and use reasonable diligence is distinct from

the implied covenant of good faith and fair dealing. MacKenzie

v. Flagstar Bank, FSB, 738 F.3d 486, 493 n.4 (1st Cir. 2013). I

discuss only the former duty here.

the auction proof is not in and of itself bad faith, although

that too can be relevant proof. Cambridge Sav. Bank v. Cronin,

194 N.E. 289, 290 (Mass. 1935). Sales have generally been

invalidated only where “the bad faith or failure of diligence

has been of an active and conspicuous character.” Pemstein v.

Stimpson, 630 N.E.2d 608, 611-12 (Mass. App. Ct. 1994).

Generally, “the mortgagee is given much leeway.” Id. at 61

(quoting In re Gen. Indus., Inc., 79 B.R. 124, 132 (Bankr. D.

Mass. 1987)). That said, separate acts which taken alone would

not show a lack of good faith may constitute such a showing when

taken together. DesLauries v. Shea, 13 N.E.2d 932, 937 (Mass.

1938).

In this case, Martin identifies two separate acts he says

show a lack of good faith. First, he points to Eastern’s

alleged failure to provide notice of the foreclosure to his

parents, who were junior mortgagees, as evidence of bad faith.

There is some support for this contention in the case law.

In Sandler v. Silk, 198 N.E. 749 (Mass. 1935), the Supreme

Judicial Court upheld a finding of bad faith where a junior

mortgagee was not notified of the foreclosure. While the

mortgagee was not obligated to give her notice, she had

specifically requested to be notified of a foreclosure in order

to be able to purchase the property. Id. at 751. The failure

to notify was found to be part of an effort to purchase the

property at a below-market price. The evidence of bad faith was

materially more extensive in Sandler, however, than exists on

the record here.

But there is no evidence here that Martin’s parents had

specially requested notice of foreclosure, nor had they stated

an intent to purchase the property. There is also no evidence

of a “concerted plan” by Eastern and Sunningdale to deny them

notice. Id. On the contrary, in an affidavit, Eastern attests

that notice of the foreclosure sale was sent to Martin’s parents

on April 3, 2013. Attached to the affidavit is a copy of the

certified mail receipts as well as the USPS tracking

information. The notice was sent to 5 Ekstrand Road in Saugus,

the same address Martin admitted in his answer that he was

temporarily staying at with his father. The evidence of record

before me cannot provide grounds for a finding of bad faith on

the basis of an unsupported claim that Martin’s parents did not

receive requested notice.

Second, Martin contends a lack of good faith and diligence

might also be found in Eastern’s unwillingness at least to defer

its foreclosure auction in the face of an offer to purchase the

house. Through the broker, Martin received a written offer on

the property for $307,000 on the day before the foreclosure sale

was scheduled to take place. He forwarded the offer to Eastern,

but Eastern chose not to accept it or to delay the foreclosure.

The price at which Eastern purchased the property was $270,000.

Courts have refused to find a lack of good faith in a

failure to postpone a foreclosure sale where there was no

prospective purchaser or other reason to think that more

favorable terms could be obtained. DesLauries, 13 N.E.2d at 936

(“there was no evidence that the circumstances at an adjourned

sale were likely to be more favorable”); Oyegbola v. DeSimone,

1996 Mass. App. Div. 67, at *4 (Dist. Ct. 1996)(“[t]he record in

this case is devoid of any indication beyond the plaintiff's

sheer speculation that there was any prospective purchaser who

would have bid more than the price paid by the defendants.”).

An implication of these cases may be that when there is

such a prospective purchaser shown, a mortgagee’s failure to

take the higher offer or at least put off the sale might

constitute bad faith. Indeed, in the most favorable conditions

— where a buyer had legally bound himself to purchase the

property, not contingent on securing financing, and would pay a

price sufficient to give the mortgagee full recovery — a

Massachusetts Superior Court Judge sua sponte found bad faith

and directed summary judgment for the non-moving plaintiffs in

the case. Snowden v. Chase Manhattan Mortg. Corp., No. CIV.A.

03-0001B, 2003 WL 22519518, at *4 (Mass. Super. Ct. Nov. 5,

2003).

Here, Eastern references evidence that Martin

unsuccessfully attempted to sell the property through a short-

sale on three separate occasions. Martin had actually been

involved in a Chapter 13 Bankruptcy; Eastern and a bankruptcy

court judge approved one of the three attempted short-sales.

However, Martin failed to consummate the approved short-sale.

Other proposals came to Eastern on the day prior to the

scheduled foreclosure sale. The specific potential put in issue

here involved a buyer who approached Martin but was still

offering only a short-sale, and one contingent on financing at

that. Even under the broadest reading of Snowden, a mortgagee

who ignored a contingent purchase offer given such a history of

aborted sales initiatives by the mortgagor, cannot be said to

have been a pattern of acting in bad faith. These attempts

suggest pretextual purported sale “opportunities” designed to

forestall foreclosure rather than actually to raise funds to

satisfy a mortgage.

Even drawing all reasonable inferences in favor of Martin,

Eastern and Sunningdale have satisfactorily demonstrated as a

matter of law that they acted in good faith in the sale. This

conclusion also bars Martin’s §93A counterclaim insofar as it

specifically arises out of the foreclosure sale.

VI. MARTIN’S COUNTERCLAIMS

A. Preemption

For his part, Martin has raised a number of state law

counterclaims against Eastern and Sunningdale, arising out of

what he contends to be misleading negotiations over mortgage

forbearance and modification plans. As a threshold matter, I

must first address whether these state law causes of action are

preempted by the Home Owners’ Loan Act (“HOLA”), 12 U.S.C. §§

1461 et seq. I addressed the preemptive effects of HOLA at

length in Sovereign Bank v. Sturgis, 863 F. Supp. 2d 75 (D.

Mass. 2012), applying the three-step analysis outlined by the

Office of Thrift Supervision regulations, and need not restate

that analysis here.6 The first count, alleging fraud and

misrepresentation, and the fourth count, alleging breach of the

covenant of good faith and fair dealing and promissory estoppel,

arise under generally applicable commercial and tort law that

affect lending only incidentally and are not preempted. 12

6 That analysis is unaffected by the Dodd-Frank Act, Pub. L. 111-

203 (2010), which substantially reduced the preemptive effect of

HOLA. Where loans originated prior to the enactment of the Act,

as here, the older HOLA preemption regime remains applicable.

Sturgis, 863 F. Supp. 2d at 91 n.9; Henning v. Wachovia Mortg.,

FSB, 969 F. Supp. 2d 135, 146 (D. Mass. 2013) (“Courts have

uniformly held, however, that the provisions of Dodd–Frank are

not retroactive, and HOLA preemption applies to mortgages

originated before either July 21, 2010 or July 21, 2011.”).

Martin’s mortgage is unaffected by Dodd-Frank because it

originated in 2003.

C.F.R. 560.2(c). The counterclaim under § 93A does not attempt

to “shoehorn” a preempted state law claim into a consumer

protection law, a circumstance which would preempt the

counterclaim; rather, it takes the form of a more general

assertion of unfair commercial negotiations, as to which HOLA

and OTS allow scope under state law. Sturgis, 863 F. Supp. 2d

at 98. I conclude preemption provides no grounds for summary

judgment here.

B. Misrepresentation and Fraud

Passing preemption and moving on to the merits, Martin

claims that Eastern’s communications with him concerning a

workout for his loan constituted fraud, intentional

misrepresentation, and/or negligent misrepresentation. To show

fraud or intentional misrepresentation, a plaintiff “must allege

and prove 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

relied upon the representation as true and acted upon it to his

[or her] damage.” Damon v. Sun Co., 87 F.3d 1467, 1471-72 (1st

Cir. 1996) (quoting Barrett Assocs., Inc. v. Aronson, 190 N.E.2d

867, 868 (Mass. 1963)). This standard has been interpreted to

require reasonable reliance. Kennedy v. Josephthal & Co., 814

F.2d 798, 805 (1st Cir. 1987).

Negligent misrepresentation requires a plaintiff to prove

that the defendant “(1) in the course of his business, (2)

supplied false information for the guidance of others (3) in

their business transactions, (4) causing and resulting in

pecuniary loss to those others (5) by their justifiable reliance

on the information, and that he (6) failed to exercise

reasonable care or competence in obtaining or communicating the

information.” Gossels v. Fleet Nat’l Bank, 902 N.E.2d 370, 377

(Mass. 2009).

Both causes of action require that the plaintiff reasonably

or, alternatively stated, justifiably relied on the alleged

false statements. Ordinarily, the reasonableness of reliance is

a question of fact. Rodi v. S. New England Sch. of Law, 389

F.3d 5, 16 (1st Cir. 2004). Here, however, I conclude as a

matter of law that Martin cannot show reasonable reliance. To

be sure, Martin avers that he was not looking for temporary

forbearance, that he never discussed a temporary solution with

Eastern, and that he believed that he was in a probationary

period that would lead to a modification. The evidence of

record, however, does not support him.

The documentary evidence makes clear that Martin was only

offered the possibility of a modification, not the promise of a

modification. See generally, In re Brandao, 567 B.R. 396, 406

(Bankr. D. Mass. 2017) (emails from mortgagee showed that it

presented postponement of foreclosure sale merely as a

possibility). The handwritten note of uncertain provenance at

the bottom of the February 10, 2009 letter from Eastern to

Martin stating “$2000 per month/6 months - possible mod after

fulfilled” does not suggest more than what is says: a

possibility. The March 6, 2009 letter from Eastern, which

purports to confirm the terms arranged in a telephone call,

states that “ESB will consider modifying your loan terms” based

on compliance with a forbearance agreement, but that “we reserve

the right to extend the agreement.” In the next bullet point,

that letter again says that “the loan may be reviewed for

further workout options.” These terms raise the possibility of

a mortgage modification but provide no firm and enforceable

promise of modification in the future. The same language is

repeated in successive communications from Eastern.

Martin’s own post hoc statements about his subjective

beliefs, standing alone against these documents, are not enough

to raise a genuine issue of fact as to whether any false

statement was made concerning Martin receiving a mortgage

modification.7 Martin’s post hoc assertion that an oral promise

7 There is in fact evidence to support the proposition that

Martin himself understood the temporary nature of the relief he

had received from Eastern. A fax Martin sent Eastern on April

20, 2010, informing the bank of his new employment and hoping to

“talk about straightening out this mess” in light of the new

circumstances certainly demonstrates a recognition by Martin

of modification was made initially, is contrary to the

subsequent written evidence. Even if such a promise were made

in Martin’s original telephone conversations with Eastern,

expressly or through more subtle misrepresentations, his

reliance on those conversations was unreasonable in the face of

successive, unambiguous written communications plainly denying

any promise of a permanent modification. Those letters should

have, at a minimum, prompted Martin to investigate further.

Trifiro v. N.Y. Life Ins. Co., 845 F.2d 30, 33 (1st Cir. 1988)

(“Confronted by such conflict a reasonable person investigates

matters further; he receives assurances or clarification before

relying.”) Without any possibility of showing reasonable

reliance, Martin’s misrepresentation claims cannot survive

summary judgment.

C. Chapter 93A

Based upon the same allegations of misrepresentation in the

negotiations over a mortgage workout, Martin also makes claims

under Mass. Gen. Laws ch. § 93A, the state’s consumer protection

law. Chapter 93A provides a cause of action where a person has

been injured by an unfair or deceptive act or practice.

Hershenow v. Enter. Rent-A-Car Co. of Bos., Inc., 840 N.E.2d

526, 528 (Mass. 2006). Reliance is not a necessary element of a

that no final agreement for permanent modified mortgage had been

reached.

ch. 93A claim; ch. 93A is consequently broader than common-law

fraud. Id. at 534 n.20. Thus, the above misrepresentation

analysis, resting on a lack of reasonable reliance, does not

dispose of Martin’s counterclaim under ch. 93A.

Moreover, it is clear that if Martin’s allegations were

true, he would be able to establish a ch. 93A violation. In

Bosque v. Wells Fargo Bank, N.A., 762 F. Supp. 2d 342 (D. Mass.

2011), the plaintiff homeowners alleged that they were led to

believe that if they complied with certain obligations, they

would be entitled to a permanent mortgage modification from

their lender under the federal HAMP program or an outright

denial on that request, when in fact, compliance would not

trigger any such outcomes. Id. at 353-54. “These allegations

are plainly sufficient to state a claim under ch. 93A for unfair

or deceptive practices.” Id.; see also Okoye v. Bank of N.Y.

Mellon, No. CIV.A. 10-11563-DPW, 2011 WL 3269686, at *9 (D.

Mass. July 28, 2011) (collecting cases stating same

proposition). If Eastern similarly led Martin to believe that

his participation in the forbearance program would lead to a

permanent mortgage modification, that would be an unfair

practice, one prompting borrowers to sink further into arrearage

in pursuit of an unforthcoming writedown.

It is equally clear that in the absence of such assurances

of a modification, there would be no unfair or deceptive act.

There is no obligation to restructure or even extend the terms

of a loan agreement under ch. 93A. Carney v. Shawmut Bank,

N.A., 893 N.E.2d 802 (Mass. App. Ct. 2008)(per curiam). Nor do

“[h]ighly generalized expressions of good will such as, ‘We’ll

work with you,’” create ch. 93A liability when a workout is not

reached. Hogan v. Riemer, 619 N.E.2d 984, 989 (Mass. App. Ct.

1993). This is all the more so where the written communications

between Martin and Eastern explicitly disavow any promise of a

permanent modification. It would take meaningful and concrete

statements by a lender to “cause a borrower of ordinary

perspicacity, who signs highly specific loan documents,

reasonably to believe that the documents are without meaning.”

Id. But for Martin’s affidavit statements that he believed he

was on the path to a permanent modification, there would be no

evidence intimating a ch. 93A violation.

Martin’s affidavit is not enough to forestall summary

judgment. He does not identify meaningful and concrete

statements from which a reasonable juror could conclude the

highly specific subsequent documentation should be disregarded.

To be sure, the March 6, 2009 letter memorializing the

conversation between Martin and Eastern shows that some

discussion occurred about the possibility of a modification.

Likewise, although the handwritten note at the bottom of the

initial February 10 letter, which states “possible mod after

fulfilled,” might be read to suggest that the first six month

period was discussed as preceding a possible permanent

modification, such a possibility is inadequate grounds on which

to base a ch. 93A claim of this sort. Such preliminary

discussions and — at best — ambiguous contingencies concerning

whether Eastern merely raised the possibility of a modification

or intimated that a modification would be likely are, in any

event, definitively superseded. Subsequent writings

emphasizing Martin was not entitled to a modification also state

that the forbearance was agreed to in order “to determine your

desirability to make timely payments.”

Martin’s counterclaim also alleges ch. 93A violations based

on violations of specific statutes and regulations. He claims

that Eastern and Sunningdale violated 12 U.S.C. § 5536, a

provision of the Dodd-Frank Act concerning unfair business

practices. However, Dodd-Frank, which was enacted in 2010, is

not retroactive. Molosky v. Wash. Mut., Inc., 664 F.3d 109, 113

n.1 (6th Cir. 2011). The Dodd-Frank Act does not cover this

loan agreement or the 2009 conversation in which Eastern

allegedly misled Martin about the forbearance agreements.

Martin’s counterclaims also cite a series of Massachusetts

regulations defining unfair and deceptive practices for purposes

of ch. 93A. Nothing alleged, much less nothing in the record

evidence in support, matches these regulations. See generally

940 MASS. CODE REGS. § 7.04 (1)(m) concerns unfulfilled threats by

creditors seeking additional payments; 940 MASS. CODE REGS. §

7.07(1) concerns false representations that the creditor has

information or other things of value for the debtor; 940 MASS.

CODE REGS. § 7.07(2) concerns false statements about the amount or

status of the debt; 940 MASS. CODE REGS. § 7.07(3) concerns false

representations that a creditor is affiliated with a government

entity; 940 MASS. CODE REGS. § 7.07(8) concerns false

representations in connection with the collection of any debt or

to obtain information concerning a debt, and 940 MASS. CODE REGS. §

7.08 concerns the validation of debts. Furthermore, 940 MASS.

CODE REGS. § 3.16(4) concerns violations of the Federal Trade

Commission Act, the Federal Consumer Credit Protection Act, or

other Federal consumer protection statutes and 940 MASS. CODE REGS.

§ 3.16(2) concerns failure to disclose to a buyer or prospective

buyer any fact which may have influenced the buyer not to enter

into the transaction. These sections are plainly irrelevant to

the case at hand and, to the extent that Martin seeks to build a

ch. 93A claim on them, summary judgment is appropriate in favor

of Eastern and Sunningdale.8 Martin’s 93A claim proceeds only on

8 In briefing, Martin also raises the contention that Eastern

“pyramiding” of late charges was in violation of federal

regulation. While Eastern disagrees about both the applicable

regulations and the characterization of its practices as

pyramiding, this dispute appears immaterial. The “pyramiding”

accusation seems to be an effort to contest allegations by

the general allegation of unfair or deceptive acts or practices.

D. Contract Claims

Martin raises two contractual claims based on these same

negotiations: breach of the covenant of good faith and fair

dealing, and a promissory estoppel claim concerning his right to

modification. Neither is supported in the record.

1. Covenant of Good Faith and Fair Dealing

Application of Massachusetts law clearly yields the result

that there was no breach of the covenant of good faith and fair

dealing. “Good faith and fair dealing simply obligate each

party to a contract not to act in such a way as to impair the

other party's right to reap the fruits of the contract.” Fed.

Nat’l Mortg. Assocs. v. Tong, 799 N.E.2d 605, at *1 (Mass. App.

Ct. 2003) (per curiam). Where the original loan agreement

contains no contractual obligation to provide a mortgage

modification, there is no impairment of that right; the borrower

reaps the fruit of the loan when he receives the funds to

purchase their property. Id.; see also Adamson v. Mortg. Elec.

Registration Sys., Inc., No. CIV.A. 11-0693-H, 2011 WL 4985490,

Eastern concerning Martin’s payment history, not an independent

claim of an unfair practice. Because it is immaterial to

decision of the matter before me how often Martin timely made

his payments, I do not address whether Eastern’s late charge

practices were pyramiding or were unlawful. The final

resolution of any balance due must be resolved in other

litigation if that becomes necessary.

at *4 (Mass. Super. Ct. Oct. 19, 2011). Sunningdale’s motion

for summary judgment will be granted on this claim.

2. Promissory Estoppel

Martin’s promissory estoppel counterclaim fails to overcome

a number of obstacles. First, establishing promissory estoppel,

or, under Massachusetts terminology, detrimental reliance,

Loranger Constr. Corp. v. E. F. Hauserman Co., 384 N.E.2d 176,

179 (Mass. 1978), requires showing reasonable reliance. See,

e.g., Hinchey v. NYNEX Corp., 144 F.3d 134, 143 (1st Cir. 1998);

Kiely v. Raytheon Co., 105 F.3d 734, 736 (1st Cir. 1997) (per

curiam). As discussed above, Martin’s purported reliance on a

telephone conversation with an Eastern representative was not

reasonable, as a matter of law, given that he also received

multiple written communications unambiguously denying that he

had any expectation of a permanent mortgage modification.

Although Martin persistently claims that he “was definitely not

looking for a temporary solution which would have resulted in

the accumulation in arrears,” it is rather difficult to find

merit in his argument when the letters from Eastern clearly set

forth in the first sentence, his accumulated amount due, which

only increased with each letter sent. This is sufficient to

defeat a claim of detrimental reliance.

Moreover, even accepting Martin’s full account of what

occurred, there was not a sufficiently definite promise to

create a binding obligation through detrimental reliance. Under

Massachusetts law, reliance replaces only consideration in

contract formation; the other elements of a contract must still

be proven. R.I. Hosp. Trust Nat’l Bank v. Varadian, 647 N.E.2d

1174, 1179 (Mass. 1995). One requirement for contract formation

is a promise that is “definite and certain.” Lucey v. Hero

Int'l Corp., 281 N.E.2d 266, 269 (Mass. 1972). Without well-

defined terms, the courts would be forced to “make for the

parties a contract which they did not make for themselves.” Id.

(quoting Read v. McKeague, 147 N.E. 585, 586 (Mass. 1925)). For

the same reason, an agreement-to-agree later is unenforceable,

id. at 270, as are for the most part, agreements to negotiate,

Bell v. B. F. Goodrich Co., 270 N.E.2d 926 (Mass. 1971) (per

curiam). Courts have consistently required that promises be

definite and certain to give rise to contractual liability under

a theory of promissory estoppel, as well as under ordinary

contract principles. See, e.g., Kiely v. Raytheon Co., 914 F.

Supp. 708, 712 (D. Mass. 1996), aff'd, 105 F.3d 734 (1st Cir.

1997) (“In the case of a contract formed by reliance, the

putative promise must . . . be definite and certain in its

terms”); Moore v. La-Z-Boy, Inc., 639 F. Supp. 2d 136, 142 (D.

Mass. 2009). Martin does not allege that Eastern promised him

any particular modification terms. At most, Eastern promised

him that it would agree to negotiate over a later modification.

Under Massachusetts law, this is too vague to be enforced, even

under a theory of detrimental reliance. A court would have to

write all the essential terms of the modified loan agreement

into the purported contract in order to reach the result Martin

seeks.

Martin argues that this case should follow Dixon v. Wells

Fargo Bank, N.A., 798 F. Supp. 2d 336, 341 (D. Mass. 2011) in

finding promissory estoppel and granting reliance damages where

a mortgage lender allegedly strung along borrowers with promises

to consider the borrowers’ eligibility for a loan modification

if they defaulted on their payments. But here there was no

guarantee of a modification, much less a modification on

specific terms, only an alleged promise to consider the

borrower’s eligibility for a modification. Id. at 343.

Moreover, there are important differences between Dixon and this

case.

First, in Dixon, the bank “never considered the plaintiff

for such modification before beginning foreclosure proceedings.”

Henning v. Wachovia Mortg., FSB, 969 F.Supp.2d 135, 150 (D.

Mass. 2013). Thus, even the open ended promise to consider the

borrower for a modification was not kept. In this case, there

is clear and unrebutted evidence that Eastern repeatedly sought

financial documents from Martin and that it responded to changes

in his economic situation, such as getting a new job, with

changes to his loan terms. It is evident Eastern did consider

Martin for a mortgage modification in December 2010, although it

ultimately denied him that outcome. To the extent Eastern’s

“promise” was to consider Martin for a modification, under the

theory of Dixon, it is apparent on this record it did so.

Second, Dixon involved allegations of behavior that was

quite exploitative, and the need to protect principles of good

conscience played a significant role in that decision. Dixon,

798 F. Supp. 2d at 344, 346-52. There, the bank told homeowners

who were not previously in default to stop payments, then

immediately foreclosed upon them. In contrast, Martin was

already in default when he spoke with Eastern. Eastern then

entered into a series of forbearance agreements, which it

complied with, only foreclosing years later. Without endorsing

or condemning Eastern’s business practices, I find the record

clear that they were not in the manipulatively opportunistic

realm evident in Dixon.

Third, Martin has requested not only reliance damages,

which were granted in Dixon, but rather specific performance of

the purported contract in the form of a court-ordered

modification of the loan. The Dixon court recognized that this

form of relief could not be granted. Id. at 342.

Finally, Judge Young in Dixon also recognized that he was

stretching the law of Massachusetts, noting that its decision

was an “anomaly” and “in tension” with some Massachusetts

doctrine. Id. at 344, 352. Stretching the law of promissory

estoppel still further would be a fundamental departure from

state law, which I am bound to apply. Dixon is not enough to

show detrimental reliance under state law – even if that

reliance could be shown to be reasonable, which it cannot – and

summary judgment for Sunningdale is appropriate on both of

Martin’s contractual counterclaims.

VII. CONCLUSION

For the reasons stated above, Sunningdale’s motion for

summary judgment is GRANTED. The Clerk is directed to enter

judgment for plaintiff Sunningdale and third-party defendant

Eastern Savings Bank, on all claims asserted against or by the

defendants with respect to them.

Douglas P. Woodlock

DOUGLAS P. WOODLOCK

UNITED STATES DISTRICT JUDGE