# Muller v. Selene Finance LP

> District Court, D. Massachusetts · January 31, 2023

URL: https://www.frixlaw.com/law-library/cases/10200834

## Case

- **Court:** District Court, D. Massachusetts
- **Decided:** January 31, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10200834

## How later opinions describe it (automated extraction)

- finding that loan modification denial does not constitute a Chapter 93A violation “[w]ithout further factual detail demonstrating unfairness, as opposed to clerical error or mere negligence”
- explaining that “[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims”
- explaining that “[i]f the non-moving party rests merely upon conclusory allegations, improbable inferences, and unsupported speculation,” then “summary judgment may be appropriate”

## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

)
CLAUDIA MULLER, )
)
Plaintiff, )
Case No. 21-CV-10797-AK
)

v. )

)

SELENE FINANCE LP, )
)
Defendant. )
)

MEMORANDUM AND ORDER ON DEFENDANT SELENE FINANCE LP’S
MOTION FOR SUMMARY JUDGMENT

A. KELLEY, D.J.

Plaintiff Claudia Muller (“Muller”) brings this suit against Defendant Selene Finance LP
(“Selene”), in connection with Muller’s attempt to obtain a loan modification for her mortgage.
Muller alleges Selene engaged in unfair and deceptive business practices in violation of
Massachusetts General Law ch. 93A, § 9, and breached the implied covenant of good faith and
fair dealing. [Dkt. 22 at ¶¶ 59-84]. The case was removed to this Court based on diversity
jurisdiction, and the Court granted Muller’s request for a preliminary injunction preventing
Selene from proceeding with the foreclosure of Muller’s home for the pendency of this litigation.
[See Dkt. 1 at 3; Dkt. 50]. Pending before the Court is Selene’s motion for summary judgment.
[Dkt. 69]. Muller filed an opposition to that motion approximately two months after the
response deadline. [Dkt. 80]. For the reasons set forth below, Selene’s motion for summary
judgment [Dkt. 69] is GRANTED.
I. BACKGROUND
The factual background is typically drawn from the parties’ statements of material facts.
However, Muller submitted neither a statement of material facts nor a response to Selene’s
statement of material facts when filing her opposition to Selene’s motion for summary judgment.

See Fed. R. Civ. P. 56; Local Rule 56.1 (stating that a party opposing a motion for summary
judgment “shall include a concise statement of the material facts of record as to which it is
contended that there exists a genuine issue to be tried, with page references to affidavits,
depositions and other documentation,” and that “all referenced documentation shall be filed as
exhibits to the motion or opposition”). The Local Rules of the District of Massachusetts provide
that “[m]aterial facts of record set forth in the statement required to be served by the moving
party will be deemed for the purposes of the motion to be admitted by opposing parties unless
controverted by the statement required to be served by opposing parties.” Local Rule 56.1. This
generally requires the Court to consider Selene’s material facts undisputed. However, in the
interest of fairness, the Court will consider, as appropriate, Muller’s allegations and the exhibits

referenced in Muller’s opposition to Selene’s motion for summary judgment, which were
attached to her amended complaint. See Fed. R. Civ. P. 56(c), (e) (explaining what the courts
may do when “a party fails to properly support an assertion of fact or fails to properly address
another party’s assertion of fact”). As such, the following facts are drawn from Selene’s
statement of material facts in support of its motion for summary judgment [see Dkt. 70 at 2-7]
and Muller’s opposition to Selene’s motion for summary judgment [see Dkt. 80], including
exhibits included with those filings or referenced therein.
A. Muller’s Mortgage and Financial Hardship
Muller owns a residential property in Malden, Massachusetts. [Dkt. 70-2 at 1, 4]. On
June 15, 2007, Muller and Henry Victor (“Victor”)1 signed a promissory note for that residence
with Chase Bank USA (“Chase’) in the original principal amount of $344,800.00, granting Chase

a mortgage on the property for the loan’s original principal amount. [See generally Dkt. 70-2].
This mortgage was recorded with the Middlesex County South Registry of Deeds. [Dkt. 70-3 at
15]. In 2018, Muller, then the sole owner of the property, experienced financial hardship when
one of her tenants failed to pay rent, and she lost her job as a massage therapist in 2019. [Dkt.
22-2 at 7; Dkt. 70-11 at 2]. Despite opening her own massage therapist business and obtaining
reliable tenants in 2019, Muller fell behind on paying her expenses and mortgage. [Id.]
B. Muller’s First Loan Modification Application
In June 2019, Muller’s mortgage was assigned to Wilmington Savings Fund Society
(“Wilmington Savings”). [Dkt. 70-4]. Also in June, servicing of the loan transferred to Selene.
[Dkt. 70-1 (“Selene Affidavit”) at ¶ 7]. On October 8, 2019, Selene, on behalf of Wilmington

Savings, sent Muller a “Right to Request Modified Mortgage Loan” notice. [Dkt. 70-5]. This
form stated that under Massachusetts law, Muller was qualified to request a modification on her
mortgage and had until November 7, 2019, to fill out the corresponding paperwork. [Id. at 1].
Muller failed to return the mortgage modification form and supporting documentation by that
deadline. [Selene Affidavit at ¶ 10].
On February 26, 2020, Muller, through an attorney, submitted to Selene a hardship
assistance application package for a loan modification. [Dkt. 22-2]. The following month,
Selene requested a completed uniform borrower application, an updated profit and loss statement

1 Muller and Victor are now divorced. Victor filed a quitclaim deed to the shared property, giving Muller
sole ownership of the property. [Dkt. 70-6 at 73].
for the period of January 1, 2020, to March 31, 2020, and respective bank statements for that
same time period, providing a due date of April 8, 2020, for Muller to submit the
supplementation. [Dkt. 22 at 2; Dkt. 22-3 at 2; Dkt. 70-6 at 50]. On April 8, 2020, Selene
acknowledged a facially complete loan modification application. [Dkt. 70-6 at 47]. On May 6,

2020, Selene determined it still needed bank statements with dates of transactions for the entirety
of the period from January 1, 2020, through March 31, 2020, to validate Muller’s self-
employment income. [Id. at 44]. Additionally, Selene noted a discrepancy between the $1,500
income listed on Muller’s rental agreement with her tenant and the deposits into her bank
account. [Id. at 44]. On July 24, 2020, Selene advised Muller’s attorney of this missing
information and requested additional documentation. [Id. at 42]. Muller’s attorney responded
that he would provide this information as soon as possible and that Muller was not depositing
income in her bank account. [Id.]. Selene requested that the attorney submit that explanation in
writing to not delay the decision on the loan modification request. [Id.]. By September 2, 2020,
the requested documentation had yet to be submitted. [Id. at 41]. Consequently, on September

3, 2020, Selene notified Muller that it did not approve her loan modification request, because she
failed to return the completed final workout package and supporting documentation. [Dkt. 22-4].
The missing documents included bank statements, a signed borrower application, a divorce
decree, profit-and-loss statements, and proof of rental income. [Dkt. 70-8].
C. Muller’s Second Loan Modification Application
On October 6, 2020, Muller sent Selene a second application for loan modification [see
Dkt. 22-5], but omitted the required 4506-T IRS Form, a signed borrower application, a signed
hardship letter, and proof of rental income [see Dkt. 70-8 at 3]. On October 15, 2020, Selene
notified Muller of the missing documentation, providing a due date of November 14, 2020, for
the requested materials. [Dkt. 70-9]. Despite this deadline, on November 16, 2020, Selene noted
that Muller had failed to return a completed modification application. [Dkt. 70-6 at 32]. The
following day, Selene denied Muller’s request for a loan modification. [Dkt. 70-10].
D. Muller’s Third Loan Modification Application

Two months later, on January 19, 2021, Muller sent Selene a third application for loan
modification. [Dkt. 70-11]. Selene had set a mortgage foreclosure auction for January 20, 2021,
but postponed that auction until March 5, 2021, because of this new application. [Selene
Affidavit at ¶ 25]. On February 4, 2021, Selene noted that the application was missing several
documents or had provided incomplete information, including lease agreements that failed to
include lease terms, an undated hardship letter, undated tax documents, undated profit-and-loss
statements, and a uniform borrower assistance form that was largely blank. [Dkt. 70-6 at 21-22].
Muller responded to Selene’s request for supplemental documents by letter on February 11, 2021
[see Dkt. 70-12] and provided the final remaining documents on March 24, 2021 [see Dkt. 70-
13]. In the meantime, the foreclosure auction was postponed until April 21, 2021, and then to

May 5, 2021, to accommodate Muller’s third application. [Selene Affidavit at ¶ 29; Dkt. 70-15
at 15]. On March 30, 2022, after reviewing Muller’s documents, Selene determined that Muller
could not afford a modified monthly mortgage payment. [Dkt. 70-14]. Specifically, Selene
found that Muller had a 44% front-end debt-to-income ratio, and Pretium, the investor for the
loan, provides a target of a 35% or lower front-end debt-to-income ratio. [Selene Affidavit at
¶ 32; Exhibit 22-8 at 37-38].
E. Muller’s Legal Action Against Selene
In October 2021, after some proceedings in state court and removal to this Court, Muller
filed the operative first amended complaint, which alleges that Selene engaged in unfair and
deceptive business practices, pursuant to Mass. Gen. Laws c. 93A, § 9, by twice determining her
application contained incomplete documentation (“Count I”); Selene breached the implied
covenant of good faith and fair dealing by obstructing her loan modification application process
(“Count II”); and Selene again engaged in unfair and deceptive business practices, pursuant to

Mass. Gen. Laws. ch. 93A, § 9, by determining she had insufficient income for loan modification
(“Count III”). [Dkt. 22 at ¶¶ 59-84]. Muller requests declaratory judgment pursuant to Mass
Gen. Laws ch. 231A, § 1, and damages for each count in the amount of $83,3952 plus attorney
fees of $5,000. [Id. at 18]. Furthermore, Muller requests $361,294 in consequential damages on
Count I, if she should lose her home to foreclosure. [Id.].
II. LEGAL STANDARD
The purpose of summary judgment is to “pierce the pleadings and to assess the proof in
order to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816,
822 (1st Cir. 1991) (citing Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990)).
Summary judgment may be granted when the record, viewed in the light most favorable to the

non-moving party, presents “no genuine issue of material fact,” and the moving party is entitled
to judgment as a matter of law. Paul v. Murphy, 948 F.3d 42, 49 (1st Cir. 2020) (citation
omitted). The Court must consider (1) whether a factual dispute exists; (2) whether the factual
dispute is “genuine,” such that a “reasonable fact-finder could return a verdict for the nonmoving
party based on the evidence”; and (3) whether a fact genuinely in dispute is material, such that it
“might affect the outcome of the suit under the applicable substantive law.” Scott v. Sulzer
Carbomedics, Inc., 141 F. Supp. 2d 154, 170 (D. Mass. 2001); see also Napier v. F/V DEESIE,
Inc., 454 F.3d 61, 66 (1st Cir. 2006). Courts must evaluate “the record and [draw] all reasonable

2 This amount includes Muller’s accumulated mortgage arrears, late charges, bank attorney fees, and
corporate advance balance fees. [Dkt. 22 at 10].
inferences therefrom in the light most favorable to the non-moving parties.” Est. of Hevia v.
Portrio Corp., 602 F.3d 34, 40 (1st Cir. 2010) (citing Houlton Citizens’ Coal. v. Town of
Houlton, 175 F.3d 178, 183–84 (1st Cir. 1999)). A non-moving party may “defeat a summary
judgment motion by demonstrating, through submissions of evidentiary quality, that a

trialworthy issue persists.” Paul, 948 F.3d at 49 (citation omitted).
III. DISCUSSION
All of Muller’s claims require the Court to evaluate whether Selene delayed or obstructed
Muller’s attempt to obtain a loan modification on her mortgage. Counts I and III do so within
the context of the Massachusetts Consumer Protection Act (“Chapter 93A”), and Count II does
so within the context of a contract claim.
A. Counts I and III: Chapter 93A
Muller brings two claims against Selene under Chapter 93A: Count I alleges that Selene’s
denial of Muller’s loan modification for “incomplete documentation” was an unfair and
deceptive business practice, and Count III claims that Selene’s determination that Muller had

“insufficient income” to qualify for the requested loan modification was also an unfair and
deceptive business practice. As to Count I, Muller states that the three separate loan
modification applications she submitted on February 26, 2020, October 6, 2020, and January 19,
2021, were complete and all contained the same documentation and financial information. [Dkt.
80 at 2-3]. She argues that she was unfairly and deceptively denied a loan modification by
Selene “under the false pretense of ‘incomplete documentation’” on the first two applications.
[Id. at 2]. As to Count III, Muller claims that Selene unfairly and deceptively denied her third
loan modification application on the basis of insufficient income by using a “wildly and
intentionally” false figure for her monthly gross income. [Dkt. 80 at 13].
To succeed on a claim under Chapter 93A, a plaintiff must show that: (1) the defendant
engaged in trade or business and committed an unfair or deceptive practice defined by
Massachusetts General Law 93A, § 2; (2) this act resulted in economic injury to the plaintiff; and
(3) there is a casual connection between the unfair practice and the plaintiff’s economic injury.

Mass. Gen. Laws. ch. 93A, § 9. The crucial issue here is the latter half of the first element—
whether Selene committed an unfair or deceptive act while reviewing Muller’s applications for
loan modification. To determine whether conduct is “unfair” under Chapter 93A, courts
consider several factors, including “(1) whether the practice is within at least the penumbra of
some common-law, statutory, or other established concept of unfairness; (2) whether it is
immoral, unethical, oppressive, or unscrupulous; and (3) whether it causes substantial injury to
consumers (or competitors or other businessmen).” Hanrahran v. Specialized Loan Servicing,
LLC, 54 F. Supp. 3d 149, 153 (D. Mass. 2014). Conduct is “deceptive” when it has the
“capacity to mislead consumers, acting reasonably under the circumstances, to act differently
than they would otherwise would have acted.” Id. Simple errors, negligent acts, and even

negligent misrepresentations are not ordinarily actionable under Chapter 93A, unless they are
egregious. Aquino v. Pacesetter Adjustment Co., 416 F. Supp. 2d 181, 192 (D. Mass. 2005); see
also Brown v. Bank of America, Nat., Ass’n, 67 F. Supp. 3d 508, 516 (D. Mass. 2014) (“To be
independently actionable . . . a loan servicer’s conduct must be more than mere technical
violations and clerical errors”). Indeed, the “few Chapter 93A claims that have survived . . .
have alleged a pattern of misrepresentations, failure to correct detrimental errors, and/or dilatory
conduct on the part of the servicer and/or bank.” Okoye v. Bank of N.Y. Mellon, No. 10-cv-
11563-DPW, 2011 WL 3269686, at *9 (D. Mass. July 28, 2011). As explained below, the
undisputed material facts show that Selene did not act unfairly or deceptively when reviewing
and ultimately denying Muller’s applications for loan modification.
1. Selene’s Requests for Supplemental Documentation (Count I)
Muller claims that Selene engaged in unfair and deceptive acts in violation of Chapter

93A by denying Muller’s first two loan modification applications on the basis that documents
were missing or incomplete when, in fact, Selene knew it had received the required documents,
which obstructed and delayed Muller’s loan modification. [Dkt. 22 at ¶ 60]. Selene argues that
the first and second loan applications were incomplete and, even if they were not, Selene’s
conclusion that documents were missing or incomplete was, at most, error or mistake, which
does not rise to the level of an unfair or deceptive act. [Dkt. 70 at 11]. Courts have found that a
servicer’s dilatory conduct can sometimes constitute an unfair or deceptive business practice.
Examples of dilatory conduct include a servicer telling a mortgagor that certain documents were
missing from her application when they were not and a defendant telling a plaintiff to repeatedly
resubmit the same papers over the course of several years. See Hannigan v. Bank of America,

N.A., 48 F. Supp. 3d 135, 142 (D. Mass. 2014); Moreira v. CitiMortgage, Inc., No. 15-CV-
13720-LTS, 2016 WL 4707981, at *3 (D. Mass. Sep. 8, 2016) (finding that requests to
supplement an application seven times over a five-month period, in addition to other alleged
conduct, suggested intentional dilatory conduct by the loan servicer).
These circumstances do not apply to Muller’s case because the evidence shows that she
omitted necessary documentation when submitting her first two loan modification applications.
Muller’s first loan modification application was missing relevant bank statements, a signed
borrower application, a divorce decree, a relevant profit-and-loss statement, and adequate proof
of rental income. [Dkt. 70-8 at 1-2]. Muller submitted some of the requested supplemental
documents [see Dkt. 22-3], implicitly conceding that the initial application was incomplete, and
then failed to submit follow-up materials, including a written explanation as to why the rental
income listed in the lease agreement did not match the deposits in Muller’s bank account and
copies of bank statements through March 31, 2020, as bank statements previously submitted

were dated only through March 9, 2020 [see Selene Affidavit at ¶¶ 14-15; Dkt. 22-3 at 8].
Muller’s second loan modification application did not include a 4506-T IRS Form, a signed
borrower application, a signed hardship letter, or adequate proof of rental income. [Dkt. 70-9].
Muller does not dispute that these specifically requested documents were not initially included in
the first and second loan modification application packets, nor does Muller argue that the
requested documentation was not necessary to the loan modification application. Instead, Muller
makes the cursory argument that her loan modification applications were complete—without
specifying the requirements of a loan modification application—citing to one exhibit included
with the first amended complaint and claiming that the allegations in the complaint establish that
the issues remain “hotly in dispute.”3 [See Dkt. 80 at 1, 5; Dkt. 22-2]. Muller’s reference to her

complaint is insufficient to create a genuine dispute of material facts at the summary judgment
stage, as Federal Rule of Civil Procedure 56(e) “permits a proper summary judgment motion to
be opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere
pleadings themselves.” Celotext Corp. v. Catrett, 477 U.S. 317, 324 (1986) (explaining that
“[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of
factually unsupported claims”). Moreover, aside from the fact that such a citation violates the

3 The cases Muller cites in support of her argument also fall short. See Charest v. Federal Nat. Mortg.
Ass’n, 9 F. Supp. 3d 114, 126 (D. Mass 2014); Bosque v. Wells Fargo Bank, N.A., 762 F. Supp. 2d 342,
354 (D. Mass. 2011); Ayoub v. Citimortgage, Inc., No. 15-CV-13218, 2018 WL 1318919, at *5 (D. Mass.
Mar. 14, 2018). Not only do all of these cases address a different procedural posture—motions to
dismiss, which evaluate only the pleadings—but they also may be differentiated on the facts.
Local Rules of the District of Massachusetts, as a party opposing a motion for summary
judgment must include “a concise statement of the material facts of record as to which it is
contended that there exists a genuine issue to be tried, with page references to affidavits,
depositions and other documentation,” and such referenced documentation “shall be filed as

exhibits to the motion or opposition,” a review of the cited exhibit shows that the documents
requested by Selene were not, in fact, included therein or were missing relevant information.4
Local Rule 56.1; [see Dkt. 22-2].
Muller has even admitted that she omitted at least one required document in each of her
applications. For example, Muller’s attorney agreed to send documents missing from the first
loan modification application, including rent deposits, when he spoke with one of Selene’s
representatives. [Dkt. 70-6 at 50; see Dkt. 22-3; Dkt. 80 at 8]. Moreover, Muller does not
dispute that the attorney later failed to submit follow-up documentation, including a written
explanation as to why the rental income listed in the lease agreement did not match the deposits
in Muller’s bank account and copies of bank statements through March 31, 2020. [See Selene

Affidavit at ¶¶ 14-15; Dkt. 22-3 at 8]. Muller also confirmed during a deposition that the second
loan modification application did not include required documents.5 [Dkt. 70-17 at 3]. This is not
a case where the loan servicer intentionally delayed a loan modification. Rather, Selene

4 Muller provides only the first loan modification application, not the second, and the Court therefore
cannot independently evaluate the content of the second loan modification application. [See Dkt. 22-2].
Muller’s cursory assertion that the second loan modification was complete is insufficient to establish a
genuine issue of material fact.
5 Muller’s opposition to Selene’s motion for summary judgment makes a frivolous argument about the
document used by Selene during the plaintiff’s deposition. [See Dkt. 80 at 9-10]. Muller claims that the
document used in the deposition, Exhibit E, was an exhibit from the original verified complaint, not the
operative amended complaint, and that Selene’s questioning was therefore inappropriate. The transcript
clearly shows otherwise. [See Dkt. 70-17 at 1-2 (counsel showed the plaintiff Exhibit E, the “financial
workout package,” attached to the amended complaint)]. Moreover, the opposition acknowledges that
Exhibit E of the original verified complaint and Exhibit E of the amended complaint were “identical.”
[Dkt. 80 at 10].
reasonably requested missing documents essential for its loan modification eligibility
determination. It is also clear that throughout this entire process, Selene consistently conferred
with Muller’s counsel about what documents were missing and had to keep circling back to
ensure completion.6 [See Dkt. 70-6 at 14, 42, 50, 52]. Selene did not act in a deceptive way so

as to mislead Muller or her attorney “to act differently than they would otherwise would have
acted.” See Hanarahan, 54 F. Supp. 3d at 153. Ultimately, therefore, Selene did not engage in
any unfair or deceptive business practices by requesting further documentation from Muller
when evaluating her first and second loan modification applications. See Aquino, 416 F. Supp.
2d at 192. Selene’s motion for summary judgment is granted as to Count I.
2. Selene’s Determination of “Insufficient Income” (Count III)
In her amended complaint, Muller alleges that Selene’s denial of Muller’s third loan
modification application based on insufficient income “was clearly an intentionally deceptive
and unfair act because [Selene] had in fact received verifiable proof of sufficient income for
[Muller] to receive a loan modification”7 [Dkt. 22 at ¶ 80], and she argues that the gross monthly

income Selene used to calculate her debt-to-income ratio was “wildly and intentionally
inaccurate” [Dkt. 80 at 13]. Selene counters that Muller, at most, alleges that Selene’s

6 Muller’s complaints that Selene did not provide a list of the exact documents deemed missing in its
second denial letter and that Selene scheduled a foreclosure during the time provided to Muller to gather
the missing documents do not, even when taken together, qualify as unfair or deceptive business
practices. [See Dkt. 22 at ¶ 63; Dkt. 80 at 5]. Selene provided Muller details about the missing
documentation prior to issuing the denial letters for the first and second loan modification applications.
Moreover, Selene’s notice informing Muller of the incomplete application and requesting further
documentation expressly provides that “the foreclosure process may continue in accordance with
applicable law while an application remains incomplete.” [Dkt. 70-9 at 1].
7 Muller also briefly alleges that Selene violated Chapter 93A by not providing a reasonable offer of
settlement upon receipt of Muller’s demand letter on May 10, 2022 [Dkt. 22 at ¶ 81], but this does not
create Chapter 93A liability, see Dawe v. Capital One Bank, No. 04-40192-FDA, 2007 WL 3332810, at
*1 n.2 (D. Mass. Oct. 24, 2007) (“[A] failure to respond or an inadequate response to a demand letter is
not itself a violation of Chapter 93A.”).
calculation was an error, which is not a deceptive or unfair action as required under Chapter 93A.
[Dkt. 70 at ¶ 40]. Selene’s argument prevails.
As an initial matter, Muller provides no facts to support this claim and therefore fails to
establish a genuine issue of material fact that would survive summary judgment. Like the

previous Chapter 93A claim, Muller relies on the bare bones “factual allegations” in her
complaint to dispute Selene’s income calculations. [See Dkt. 80 at 13]. But allegations are just
that, see Allegation, Black’s Law Dictionary (11th ed. 2019) (defining “allegation” as a
“declaration that something is true,” especially, “a statement, not yet proven, that someone has
done something wrong or illegal” (emphasis added)), and more than a plaintiff’s pleading is
required to survive summary judgment, see DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir.
1997) (explaining that “[i]f the non-moving party rests merely upon conclusory allegations,
improbable inferences, and unsupported speculation,” then “summary judgment may be
appropriate”). Muller has not explained how Selene’s calculations were inaccurate, beyond mere
speculation, nor has Muller pointed to any facts supporting the inference that Selene’s

calculations were not only inaccurate but also unfair or deceptive. In contrast, Selene provides
the basis for its income calculation, the default interest rate, and the total debt, and explains the
debt-to-income ratio used. [See Dkt. 70 at ¶ 32; Dkt. 70-16 at 2]. Muller’s unsupported claim
that such calculations are not correct is simply insufficient to create a genuine issue of material
fact worthy of trial. See Mesnick, 950 F. 2d at 822.
Even assuming Selene made a mistake in calculating Muller’s income, courts have
consistently rejected Chapter 93A claims based solely on allegedly wrongful loan modification
denials. See, e.g., Kozaryn v. Ocwen Loan Servicing, LLC, 784 F. Supp. 2d 100, 103 (D. Mass.
2011) (finding that loan modification denial does not constitute a Chapter 93A violation
“[w]ithout further factual detail demonstrating unfairness, as opposed to clerical error or mere
negligence”). Courts have not found conduct to be unfair or deceptive even where the loan
servicing company’s calculations for loan modification were egregiously wrong. See Saade v.
Pennymac Loan Servs., LLC, No. 15-cv-12275-IT, 2016 WL 4582083, at *2 (D. Mass. Aug. 31,

2016) (finding that the plaintiff failed to state a Chapter 93A claim even though he alleged that
the loan servicer denied the mortgagor’s modification based on incorrect monthly payments
under the mortgage, misstated monthly payments, and an incorrect interest rate, because he failed
to allege that the defendant’s conduct “was unfair as opposed to the result of mistakes or
technical errors”), adopted 2016 WL 6089684 (D. Mass. Oct. 17, 2016); see also Squizzero v.
U.S. Bank Nat’l Ass’n, No. 17-cv-10368-ADB, 2018 WL 3651351 (D. Mass. Aug. 1, 2018)
(finding that a loan servicer’s failure to accept the mortgagor’s partial payments on her default
was not an unfair or deceptive practice in their denial for modification). Regardless of whether
Selene wrongfully calculated the denial based on Muller’s financial documents, such error does
not amount to deception and is insufficient to create liability under Chapter 93A. Selene’s

motion for summary judgment is granted as to Count III.
B. Count II: The Implied Covenant of Good Faith and Fair Dealing
Muller also claims Selene breached the implied covenant of good faith and fair dealing
by unreasonably and intentionally delaying her loan modification, continuously requesting
documents which had already been received, and failing to respond to her Chapter 93A demand
letter with a reasonable offer of settlement required by the statute. [Dkt. 22 at ¶ 70]. Because the
relationship between loan servicers and mortgagors is not contractual, this claim cannot survive
summary judgment.
The implied covenant of good faith and fair dealing provides that “neither party shall do
anything that will have the effect of destroying or injuring the rights of the other party to receive
the fruits of the contract.” Anthony’s Pier Four, Inc. v. HBC Assocs., 583 N.E.2d 806, 820
(Mass. 1991). In Massachusetts, this covenant applies to all valid contracts. Id. Thus, a plaintiff

first “must show that there existed an enforceable contract between the two parties” to establish a
breach of the implied convent of good faith and fair dealing. Christensen v. Kingston Sch.
Comm., 360 F. Supp. 2d 212, 226 (D. Mass. 2005) (citation omitted); see Dill v. Am. Home
Mortg. Servicing, Inc., 935 F. Supp. 2d 299, 303 (D. Mass. 2013) (“[W]ithout a contract, there is
no covenant to be breached.”). Muller does not dispute that Selene is merely the loan servicer,
and not the assignee of the mortgage, which is Wilmington Savings. [Dkt. 70-4]. As such, there
is no valid contract between Muller and Selene. See In re Jackson, 622 BR 321, 331 (Bankr.
E.D. Mass. 2020) (“Courts have consistently held that there is no contractual privity between a
borrower and a loan servicer with respect to a note and mortgage, and, therefore, the borrower
cannot prevail against the servicer on a breach of contract claim.”) (collecting cases).

Even assuming there is a contractual obligation between Muller and Selene, Selene’s
denials of Muller’s loan modification applications do not amount to a breach of the implied
covenant of good faith and fair dealing. Absent an explicit provision in the mortgage contract,
“there is no duty to negotiate for loan modification once a mortgagor defaults,” and the implied
covenant of good faith and fair dealing “cannot ‘create rights and duties not otherwise provided
for in the existing contractual relationship.’” Mackenzie v. Flagstar Bank, FSB, 738 F.3d 486
(1st Cir. 2013) (citation omitted). Nothing in Muller’s mortgage imposes a duty on Wilmington
Savings or Selene to consider a loan modification prior to foreclosure in the event of a default.
See id. In fact, the mortgage explicitly states that the lender is required only to give notice to the
borrower of its acceleration, including foreclosure, for any borrower breach and to allow thirty
days prior to foreclosure to cure the default. [Dkt. 70-3 at 13]. Muller does not bring a claim on
that basis, and it would “be an error to extend the implied covenant to encompass a duty to
modify (or consider modifying) the loan prior to foreclosure, where no such obligation exists in

the mortgage.” Mackenzie, 738 F.3d at 493. Additionally, as already explained, Muller has not
shown a genuine issue of material fact as to whether Selene acted in good faith. See Young v.
Wells Fargo Bank, N.A., 717 F.3d 224, 238 (1st Cir. 2013) (explaining that the plaintiff must
present “evidence of bad faith or an absence of good faith,” which “carries an implication of a
dishonest purpose, conscious doing of wrong, or breach of duty through motive of self-interest or
ill will,” to prevail on a claim for breach of the implied covenant of good faith and fair dealing).
The Court therefore grants Selene’s motion for summary judgment as to Count II.
IV. CONCLUSION
For the foregoing reasons, Selene’s motion for summary judgment [Dkt. 69] is
GRANTED. Accordingly, the preliminary injunction previously entered by the Court [Dkt. 50]

is VACATED.
SO ORDERED.
Dated: January 31, 2023 /s/ Angel Kelley
Hon. Angel Kelley
United States District Judge

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10200834. Public record. Not legal advice.