Woods v. Wells Fargo Bank, N.A., 1st Cir. (2013)

7/26/2019 Woods v. Wells Fargo Bank, N.A., 1st Cir. (2013)

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United States Court of AppealsFor the First Circuit

No. 12- 1942

R. SUSAN WOODS,

Pl ai nt i f f , Appel l ant ,

v.

WELLS FARGO BANK, N. A. AS TRUSTEE FOR FREMONTI NVESTMENT & LOAN SABR 2005- FR2, MORTGAGE PASS- THROUGH

CERTI FI CATES, SERI ES 2005- FR2,

Def endant , Appel l ee.

APPEAL FROM THE UNI TED STATES DI STRI CT COURTFOR THE DI STRI CT OF MASSACHUSETTS

[ Hon. Mi chael A. Ponsor , U. S. Di st r i ct J udge]

Bef or e

Tor r uel l a, Dyk* and Kayat t a,Ci r cui t J udges.

Gl enn F. Russel l , J r . , wi t h whom Law Of f i ce of Gl enn F.Russel l , J r . , was on br i ef f or appel l ant .

Chr i st opher A. Cor net t a, wi t h whomHouser & Al l i son, APC, wason br i ef f or appel l ee.

Oct ober 9, 2013

* Of t he Feder al Ci r cui t , si t t i ng by desi gnat i on.


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TORRUELLA, Circuit Judge.Ther e i s, by now, a si gni f i cant

body of comment ary on t he housi ng market ' s most r ecent boom and

bust . Li t t l e coul d we add about t he devel opment , pr ol i f er at i on,

and ul t i mat e col l apse of t he mor t gage- backed secur i t i es mar ket t hat

has not al r eady been sai d. Wr i t i ng agai nst t hat backgr ound, we

r eci t e her e onl y t he most r el evant aspect s of t he mar ket ' s r ecent

i nst abi l i t y. At i t s hei ght , t he boom was f aci l i t at ed by a novel

syst em of bundl i ng r esi dent i al mor t gages and t r adi ng t hese pool ed

mor t gages i n t he f or mof debt - backed secur i t y i nst r ument s. Cr uci al

t o t he success of t hi s mar ket was Mor t gage El ect r oni c Recor di ng

Syst em ( "MERS") , a cor por at e ent i t y t hat f aci l i t at ed t he pool i ng

and assi gnment of mor t gages among i t s member i nst i t ut i ons. 1

Wi t h t he mar ket ' s bust , as mor e and mor e homeowner s f aced

f or ecl osur es i ni t i at ed not by t hei r or i gi nal l ender s but by

f i nanci al i nst i t ut i ons wi t h whi ch t hey had never di r ect l y deal t ,

MERS' s pr act i ces came under i ncr easi ng l egal scr ut i ny. Thi s case

i s a paradi gmat i c exampl e of t hat common f act pat t ern. I n 2012, R.

1 We have pr evi ousl y descr i bed t he MERS busi ness model i n detai l .See Cul hane v. Aur ora Loan Servs. of Neb. , 708 F. 3d 282, 286- 88( 1st Ci r . 2013) . I n shor t , MERS f unct i ons t o st r eaml i ne t he pr ocessof secur i t i zat i on and t r adi ng of mort gages. A MERS member, uponbecomi ng a l ender , names MERS as i t s nomi nee and t he mor t gagee ofr ecor d and i nputs t he mort gage i nt o t he MERS database. The

mor t gage not e can t hen be ass i gned f r eel y among MERS member s, wi t hMERS - - as mor t gagee of r ecor d - - aut hor i zi ng and memor i al i zi ngt hese t r ades whi l e ci r cumvent i ng much of t he t i me and paperworkassoci at ed wi t h t r adi t i onal assi gnment s. Onl y when a not e i st r ansf err ed t o a non- MERS member i nst i t ut i on does MERS t r ansf eraway i t s i nt er est as mor t gagee, t hus endi ng i t s i nvol vement i n t heassi gnment pr ocess .

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Susan Woods ( "Woods" ) , havi ng f al l en behi nd on her payment s, f aced

f or ecl osure on her home mor t gage. The not i ce of f or ecl osure di d

not come f r om Woods' s l endi ng i nst i t ut i on, however , but f r om an

unknown bank t hat had purchased her mor t gage t hrough a ser i es of

MERS- f aci l i t at ed assi gnment s.

Woods chal l enged t he f or ecl osure on mul t i pl e gr ounds, al l

l ar gel y pr edi cat ed on her t heor y t hat MERS coul d not val i dl y assi gn

her mor t gage, and t her ef or e t he r ecei vi ng i nst i t ut i on had no l egal

i nt er est upon whi ch t o f or ecl ose. Woods al so br ought r el at ed st at e

l aw cl ai ms f or f r aud and unf ai r busi ness pr act i ces. The di st r i ct

cour t f ound t hese cl ai ms unavai l i ng and di smi ssed Woods' s

compl ai nt . Agr eei ng t hat t he compl ai nt st at es no pl ausi bl e cl ai m

f or r el i ef , we af f i r m.

I. Background

On J anuar y 26, 2005, Woods execut ed a pr omi ssor y not e f or

$228, 000 to Fremont I nvest ment & Loan ( "Fr emont " ) , secured by a

mort gage on her Hadl ey, Massachuset t s home. The mort gage l i st ed

Fr emont as t he " l ender" and MERS as Fr emont ' s "nomi nee" as wel l as

t he "mor t gagee" of r ecor d. As mor t gagee, MERS hel d l egal t i t l e

over t he mort gaged pr opert y and, "sol el y as nomi nee f or [ Fr emont

and i t s] successor s and assi gns, " i t possessed t he power of sal e.

The mor t gage was r ecor ded i n t he Hampshi r e Count y Regi st r y of

Deeds.

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The f i r st of several assi gnment s of Woods' s mor t gage

occur r ed on Oct ober 29, 2007 when, act i ng i n i t s own name, MERS

t r ansf err ed t he mort gage and note to Wel l s Far go Bank, Nat i onal

Associ at i on as Trust ee f or Fr emont I nvest ment & Loan SABR 2005- FR2.

On J anuary 22, 2009, act i ng thi s t i me as nomi nee f or Fr emont , MERS

agai n assi gned t he mort gage and note to Wel l s Far go Bank, Nat i onal

Associ at i on as Trust ee f or Fr emont I nvest ment & Loan SABR 2005- FR2.

Both ass i gnment s were t i mel y r ecor ded i n t he Hampshi r e Count y

Regi st r y of Deeds.

On Apr i l 17, 2009, counsel f or Wel l s Far go Bank, Nat i onal

Associ at i on as Tr ust ee f or Fr emont I nvest ment and Loan SABR 2005-

FR2 f i l ed not i ce of i t s i nt ended f or ecl osur e i n Massachuset t s Land

Cour t , seeki ng a decl ar at i on t hat t he sal e was not bar r ed by t he

Ser vi cemember s Ci vi l Rel i ef Act , 50 U. S. C. app. 533. Shor t l y

t her eaf t er , on J ul y 23, 2009, t he mor t gage was agai n assi gned.

Thi s t i me, Wel l s Far go Bank, Nat i onal Associ at i on as Tr ust ee f or

Fr emont I nvest ment and Loan SABR 2005- FR2 t r ansf er r ed al l " r i ght ,

t i t l e, and i nt er est . . . as cur r ent hol der of t he [ ] Mor t gage" t o

Wel l s Far go Bank, Nat i onal Associ at i on as Tr ust ee f or Secur i t i zed

Asset Backed Recei vabl es LLC 2005- FR2 Mor t gage Pass - Thr ough

Cer t i f i cat es, Ser i es 2005- FR2 ( "Wel l s Far go") . 2

2 At oral ar gument , Wel l s Far go' s counsel expl ai ned t hat t hi st hi r d t r ansf er ser ved onl y to "adj ust [ ] t he name of t he t r ust , "wi t h the mor t gage remai ni ng i n Wel l s Fargo' s possessi on thr oughout .

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The Massachuset t s Land Cour t grant ed Wel l s Far go

per mi ssi on t o sel l on J une 16, 2010. Subsequent l y, on J ul y 5, 2011,

Wel l s Far go not i f i ed Woods of i t s i nt ent t o f or ecl ose. At f i r st

pr oceedi ng pr o se, Woods f i l ed a compl ai nt i n Hampshi r e Count y

Super i or Cour t on J ul y 29, 2011, seeki ng - - and ul t i mat el y

r ecei vi ng - - a pr el i mi nar y i nj unct i on t o ar r est t he f or ecl osur e.

Af t er r etai ni ng counsel , an amended compl ai nt f ol l owed on August 4,

2011.

Thi s amended compl ai nt al l eged t hat Wel l s Far go l acked

val i d possessi on of her mort gage and had pr ovi ded no evi dence t hat

i t hel d t he accompanyi ng note, maki ng any at t empt ed f orecl osur e

i l l egal . Fur t her , Woods cl ai med t hat t he f or ecl osur e vi ol at ed a

consent agr eement bet ween the Stat e of Massachuset t s and Fremont ,

whi ch r equi r ed Fr emont t o not i f y the st at e of any pendi ng

f or ecl osur es and abi de by a t hi r t y- day wai t i ng per i od dur i ng whi ch

t he At t or ney Gener al coul d ar r est f or ecl osures deemed pr esumpt i vel y

unf ai r . The compl ai nt al so i ncl uded cl ai ms f or common l aw f r aud

and vi ol at i ons of Massachuset t s' s consumer pr ot ect i on st at ut e.

Af t er r emovi ng t he case t o f eder al cour t , Wel l s Far go

f i l ed a mot i on t o di smi ss f or f ai l ur e t o st at e a cl ai m. Fed. R.

Ci v. P. 12( b) ( 6) . The mot i on ar gued t hat Woods pl ed no f acts

pl ausi bl y showi ng t hat Wel l s Far go l acked l egal st andi ng t o

f or ecl ose, f ai l ed t o compl y wi t h t he Fr emont consent agr eement , or

made f al se r epr esent at i ons act i onabl e as f r aud. I t al so ar gued

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t hat Woods l acked st andi ng t o chal l enge the ass i gnment s of her

mor t gage, t o whi ch she was not a par t y, and t hat her cl ai m f or

decept i ve busi ness pr act i ces was voi d f or f ai l ur e t o abi de by a

pr e- sui t not i ce r equi r ement . 3 The di st r i ct cour t gr ant ed t hat

mot i on on J ul y 3, 2012, concl udi ng t hat Wel l s Far go val i dl y

possessed bot h t he not e and mor t gage, t hat Woods di d not have

st andi ng t o chal l enge the mor t gage' s assi gnment , and t hat al l

r equi r ement s of t he Fremont consent decr ee were pr oper l y met .

Woods f i l ed a t i mel y appeal f r omt hat deci si on. Al t hough

her argument s are not al ways cl ear , we r ead her br i ef as cont endi ng

t hat t he f ol l owi ng cl ai ms wer e pl ausi bl y pl ed: ( 1) Woods had

st andi ng t o chal l enge the assi gnment s of her mor t gage; ( 2) t he

pur port ed assi gnment s were voi d, maki ng Wel l s Far go' s at t empt ed

f or ecl osur e i l l egal under Mass. Gen. Laws ch. 244, 14; ( 3) Wel l s

Fargo di d not possess both t he note and mort gage at t he t i me of

at t empt ed f or ecl osur e; ( 4) t he at t empt ed f or ecl osur e vi ol at ed t he

t erms of Fr emont ' s consent agr eement ; and ( 5) Wel l s Far go commi t t ed

3 Wel l s Far go al so poi nt ed t o t he st r uct ur e of Woods' s compl ai nt ,whi ch pl ed "i nj unct i ve r el i ef " as a "cause of act i on. " Pr oper l ynot i ng t hat i nj unct i ve r el i ef i s not a st and- al one cause of act i oni n Massachuset t s, see Payton v. Wel l s Far go Bank, N. A. , Ci v. No.

12- 11540- DJ C, 2013 WL 782601, at *6 ( D. Mass. Feb. 28, 2013)( col l ect i ng cases) , Wel l s Far go asser t ed t hat t hi s er r or was f at alt o al l cl ai ms appear i ng t her eunder . Whi l e acknowl edgi ng Woods' smi st ake, we di sagr ee as t o i t s ef f ect. I t i s suf f i ci ent l y cl earf r om t he compl ai nt t hat Woods' s cl ai ms wer e i nt ended t o pr oceedunder Mass. Gen. Laws ch. 183, 21 and i d. ch. 244, 14. We wi l lr evi ew t hem as such.

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f r aud and decept i ve busi ness pract i ces under Mass. Gen. Laws ch.

93A.

II. Discussion

We r evi ew a di smi ssal f or f ai l ur e t o st at e a cl ai munder

Rul e 12( b) ( 6) de novo. Fel i ci ano- Her nndez v. Per ei r a- Cast i l l o, 663

F. 3d 527, 532 ( 1st Ci r . 2011) . Set t i ng asi de any st at ement s t hat

ar e mer el y concl usor y, we const r ue al l f act ual al l egat i ons i n t he

l i ght most f avor abl e t o t he non- movi ng par t y t o det er mi ne i f t her e

exi st s a pl ausi bl e cl ai mupon whi ch r el i ef may be gr ant ed. Ocasi o-

Her nndez v. For t uo- Bur set , 640 F. 3d 1, 12 ( 1st Ci r . 2011) .

1. Woods's standing to challenge assignments

Bef or e t ur ni ng t o t he mer i t s of Woods' s chal l enge t o t he

assi gnment of her mor t gage, we must t ake up t he pr edi cat e quest i on

of whet her she has st andi ng t o br i ng t hat cl ai m. The di st r i ct

cour t f ound t hat she di d not , r easoni ng t hat Woods was " not a par t y

t o t he t r ust agr eement , nor . . . i n pr i vi t y wi t h Fremont . " Woods

v. Wel l s Fargo Bank, N. A. , 875 F. Supp. 2d 85, 88 ( D. Mass. 2012) .

I n a case deci ded subsequent t o t he di st r i ct cour t ' s or der ,

however , t hi s cour t r ej ect ed t hat appr oach, hol di ng t hat st andi ng

may be appropr i ate even where a mort gagor i s not par t y t o, nor

benef i ci ar y of , t he chal l enged assi gnment s. Cul hane v. Aur or a Loan

Ser vs. of Neb. , 708 F. 3d 282, 290 ( 1st Ci r . 2013) ( assessi ng

mor t gagor ' s st andi ng based sol el y on pr i vi t y "pai nt [ s] wi t h t oo

br oad a br ush") . Because Massachuset t s l aw al l ows f or non- j udi ci al

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f orecl osur es by mort gagees wi t h t he power of sal e, Cul hane r easoned

t hat bar r i ng st andi ng i n al l cases woul d undul y i nsul at e

assi gnment s; mor t gagor s coul d not chal l enge t he val i di t y of

assi gnment s ei t her as t he def endant i n a sui t f or j udi ci al

aut hor i zat i on or as t he pet i t i oner i n a sui t l i ke t he pr esent one.

I d. ( hol di ng t hat mor t gagor s must have st andi ng t o br i ng cer t ai n

chal l enges t o assi gnment s i n or der t o pr ot ect t hei r "l egal l y

cogni zabl e r i ght " t o be secur e f r om unl awf ul f or ecl osur es) . On

t hi s basi s, Cul hane f ound st andi ng appr opr i at e i n i nst ances wher e

a mort gagor " chal l enge[s] a mort gage assi gnment as i nval i d,

i nef f ect i ve, or voi d, " al t hough not wher e t he chal l enge woul d

"r ender [ t he assi gnment ] mer el y voi dabl e . . . but ot her wi se

ef f ect i ve t o pass l egal t i t l e. " I d. at 291.

Thus, cl ai ms t hat mer el y asser t procedur al i nf i r mi t i es i n

t he assi gnment of a mor t gage, such as a f ai l ur e t o abi de by t he

t er ms of a gover ni ng t r ust agr eement , ar e bar r ed f or l ack of

st andi ng. I d. I n cont r ast , st andi ng exi st s f or chal l enges t hat

cont end t hat t he assi gni ng par t y never possessed l egal t i t l e and,

as a resul t , no val i d t r ansf er abl e i nt er est ever exchanged hands.

See U. S. Bank Nat ' l Ass' n v. I banez, 458 Mass. 637, 651, 941

N. E. 2d 40, 53 ( 2011) ( " [ T] here must be pr oof t hat t he ass i gnment

was made by a par t y t hat i t sel f hel d t he mor t gage. " ) . I n t hi s

l at t er case, t he chal l enge i s t o t he "f or ecl osi ng ent i t y' s st at us

qua mort gagee. " Cul hane, 708 F. 3d at 291; see al so I banez, 941

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N. E. 2d at 50 ( "Any ef f or t t o f or ecl ose by a par t y l acki ng

j ur i sdi ct i on and aut hor i t y t o car r y out a f or ecl osur e . . . i s

voi d. ") ( i nt er nal quot at i on mar ks omi t t ed) .

Whi l e f ar f r om a par adi gm of cl ar i t y, Woods' s compl ai nt

appear s t o set f or t h j ust such a chal l enge. The compl ai nt al l eges

t hat MERS, as a mere "nomi nee" f or Fr emont , never possessed a

l egal l y t r ansf er abl e i nt er est i n Woods' s mor t gage, r ender i ng any

at t empt ed assi gnment s voi d. See Cul hane, 708 F. 3d at 291 ( " [ The

chal l enge] i s premi sed on t he not i on t hat MERS never pr oper l y hel d

t he mor t gage and, t hus, had no i nt er est t o assi gn. I f t hi s wer e so,

t he assi gnment woul d be voi d . . . . " ) . 4 Ther ef or e, under t he

f r amework of Cul hane, Woods has st andi ng t o chal l enge whether t he

assi gnment s of her mor t gage wer e l egal l y val i d.

Havi ng determi ned t hat Woods may br i ng a chal l enge as t o

t he assi gnment s' val i di t y, we now t ur n t o t he mer i t s of t hat cl ai m.

2. The assignments' validity

Woods cont ends t hat t he ver y pr emi se upon whi ch MERS i s

pr edi cated - - t hat i t may r emai n a mort gagee of r ecor d t hr oughout

mul t i pl e t r ansf er s of an under l yi ng pr omi ssor y not e - - r uns

"count er t o t he t i t l e t heor y [ ] nat ur e" of Massachuset t s l aw. I n

4 I nsof ar as Woods' s amended compl ai nt al so suggest s t hat t heassi gnment s wer e i n vi ol at i on of t he t r ust ' s Pool i ng and Ser vi ci ngAgr eement , we f i nd t hat no st andi ng exi st s as t o these al t er nat ecl ai ms, whi ch woul d r ender t he assi gnment onl y voi dabl e. See,e. g. , Kouf os v. U. S. Bank, N. A. , 415 B. R. 8, 22 ( Bankr. D. Mass.2009) . Gi ven t hat Woods seems t o have f orgone t hi s ar gument i n herappel l at e br i ef , we pr esume t hat such a def i ci ency i s cl ear .

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suppor t of t hi s pr oposi t i on, her compl ai nt r eci t es Massachuset t s

l aw hol di ng t hat when a mor t gage i s spl i t f r om i t s pr omi ssory not e

a const r uct i ve t r ust i s i mpl i ed t o t he benef i t of t he not ehol der .

As such, she asser t s t hat Fremont , as t he or i gi nal l ender and

not ehol der , was t he sol e ent i t y possessi ng a benef i ci al ,

t r ansf er abl e i nt er est i n her mor t gage. MERS, i n cont r ast , hel d

onl y a bar e l egal i nt er est as a "pl acehol der nomi nee, " r ender i ng i t

unabl e t o pr oper l y i ni t i at e an assi gnment .

Thi s ar gument st umbl es whi l e bar el y out of t he gat e. As

an i ni t i al mat t er , Woods' s cont ent i on that t he MERS busi ness model

r uns count er t o t he natur e of Massachuset t s mor t gage l aw has been

r esoundi ngl y r ej ect ed by thi s cour t . Cul hane, 708 F. 3d at 291- 93

( f i ndi ng t hat t he MERS model " f i t [ s] comf or t abl y wi t hi n t he

st r uct ur e of Massachuset t s mor t gage l aw") ; see al so Rosa v. Mor t g.

El ec. Sys. , I nc. , 821 F. Supp. 2d 423, 429 ( D. Mass. 2011) ; I n r e

Mar r on, 462 B. R. 364, 374 ( Bankr . D. Mass. 2012) . Fur t her , i t

i gnores t he expr ess l anguage of Woods' s mort gage, whi ch gr ant s

MERS, as nomi nee, t he "power of sal e. " "Under Massachuset t s l aw, a

nomi nee i n such a si t uat i on hol ds t i t l e f or t he owner of t he

benef i ci al i nt er est . " Cul hane, 708 F. 3d at 293 ( ci t i ng Mor r i son v.

Lennet t , 415 Mass. 857, 860- 61, 616 N. E. 2d 92, 94- 95 ( 1993) ) . As

such, when Fremont - - t he hol der of t he benef i ci al i nt er est - -

undert ook t o t r ansf er t he pr omi ssory note t o Wel l s Far go, MERS was

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"aut hor i zed by the t er ms of t he cont r act " t o t r ansf er t he

under l yi ng mor t gage as wel l . I d.

Woods' s r eci t at i on of t r adi t i onal mor t gage l aw pr ecept s

r egar di ng t he ef f ect of spl i t t i ng a not e f r om i t s under l yi ng

mor t gage ar e no mor e hel pf ul t o her cause. I t i s undoubt edl y t r ue,

as Woods assert s, t hat i n Massachuset t s an ent i t y t hat hol ds a

mort gage but not t he associ ated pr omi ssory note hol ds t hat mort gage

i n an equi t abl e t r ust f or t he benef i t of t he not ehol der . I banez,

941 N. E. 2d at 53- 54 ( ci t i ng Barnes v. Boar dman, 149 Mass. 106, 114,

21 N. E. 308, 309 ( 1889) ) . Yet Cul hane made cl ear t hat MERS' s

st at us as an equi t abl e t r ust ee does not ci r cumscr i be t he

t r ansf er abi l i t y of i t s l egal i nt er est . Cul hane, 708 F. 3d at 292

( expl ai ni ng t hat wher e the not e and mor t gage ar e spl i t , t he

mor t gagee ret ai ns and may t r ansf er i t s bar e l egal i nt er est i n t he

under l yi ng mor t gage) . As such, i t i s cl ear , and Woods present s no

pl ausi bl e cl ai m t o t he cont r ar y, t hat MERS, as t he mor t gagee of

r ecor d, possessed t he abi l i t y t o assi gn Woods' s mor t gage. I d. ( " [ A]

mort gagee may assi gn i t s mor t gage to another par t y. " ) ; McKenna v.

Wel l s Fargo Bank, N. A. , 693 F. 3d 207, 215 ( 1st Ci r . 2012) .

Woods at t empt s t o set f or t h an al t ernat i ve argument t hat

Wel l s Far go' s i nt er est i s l egal l y i nval i d because t he r ecor ded

assi gnment s t hr ough whi ch i t pur por t edl y gai ned possessi on f ai l ed

t o account f or addi t i onal par t i es wi t h an i nt er est i n t he mor t gage.

The ent i r et y of t hi s ar gument r est s on a si ngl e al l egat i on i n

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Woods' s compl ai nt : "Bar cl ays Bank, PLC i s t he ' i nvest or ' of

[ Woods' s] l oan, not [ Wel l s Far go] . "5 Even dr awi ng al l r easonabl e

i nf er ences f r omt hi s f actual al l egat i on, however , i t f al l s shor t of

est abl i shi ng any pl ausi bl e cl ai m upon whi ch r el i ef mi ght be

gr ant ed.

Woods f ai l s t o recogni ze t hat t he MERS r egi st r y

el ect r oni cal l y t r acks t r ansf er s of a mor t gagor s' pr omi ssor y not e,

a pr ocess whi ch i s l egal l y di st i nct f r om t he assi gnment and

r ecor dat i on of mor t gage i nt er est s i n a count y regi st r y of deeds.

See Rosa, 821 F. Supp. 2d at 429 ( "MERS i s named as t he mor t gagee

of r ecor d . . . so t hat benef i ci al owner shi p and ser vi ci ng r i ght s

of t he not e may be t r ansf er r ed among MERS member s wi t hout t he need

t o publ i cl y recor d such assi gnment s; i nst ead assi gnment s of t he

not e ar e t r acked by MERS' el ect r oni c syst em. " ) . That Bar cl ays

possessed some i nt erest i n t he pr omi ssory note at some t i me - t he

r egi st r y sear ch i s undat ed - does not pl ausi bl y est abl i sh a l egal

def i ci ency i n t he t r ansf er of t hat not e' s under l yi ng mor t gage.

Ther e i s a chai n of r ecor ded ass i gnment s whi ch show t he mor t gage

t r avel i ng f r om Fr emont t o Wel l s Fargo, and Woods has of f er ed no

5 I n suppor t of t hi s al l egat i on, Woods appends a pr i nt out of a

MERS r egi st r y sear ch l i st i ng Bar cl ays Bank, PLC as an " i nvest or . "Thi s pr i ntout i s undat ed and i dent i f i es t he under l yi ng mor t gageonl y by i t s MERS MI N number . MERS never cl ear l y def i nes t hemeani ng of "i nvest or " i n i t s gover ni ng r ul es. The t er m i s used i nt hose rul es, however , i n a manner apparent l y synonymous wi t h"benef i ci al owner . " See I n r e Mar r on, 455 B. R. 1, 8 n. 8 ( Bankr . D.Mass. 2011) .

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gr ounds on whi ch t o cal l t he val i di t y or compl et eness of t hose

assi gnment s i nt o quest i on. I banez, 941 N. E. 2d at 53 ( "A

f or ecl osi ng ent i t y may pr ovi de a compl ete chai n of assi gnment s

l i nki ng i t t o t he r ecor d hol der [ t o pr ove i t val i dl y hol ds t he

mor t gage] . " ) .

3. Wells Fargo's ability to foreclose

Havi ng f ound t he t r ansf er of Woods' s mort gage val i d, we

need pause onl y br i ef l y t o make cl ear t hat t her e exi st s no r eal

di sput e t hat Wel l s Far go i s t he cur r ent possessor of Woods' s

pr omi ssory note. Woods does not al l ege t hat Wel l s Far go does not

own t he not e. She i nst ead al l eges onl y t hat " [ a] t no t i me has

[ Wel l s Fargo] ever adduced any di r ect evi dence t hat i t r ecei ved a

val i d assi gnment of [ her ] Not e. " I n suppor t of i t s mot i on t o

di smi ss , Wel l s Far go pr esent ed what appear s t o be the note,

endor sed i n bl ank, at or al ar gument bef or e t he di st r i ct cour t and

as an appendi x to i t s mot i on t o di smi ss.

I n r esponse, Woods provi des no ser i ous chal l enge t o

ei t her t he not e' s aut hent i ci t y or Wel l s Far go' s owner shi p of i t .

At or al ar gument Woods of f er ed onl y a hypot het i cal al l egat i on,

absent any f act ual suppor t , t hat t he not e mi ght be f or ger y. Even

t hat weak ar gument was l ar gel y f or egone i n her appel l at e br i ef .

Li ke t he di st r i ct cour t bef or e us, we see no need t o t r avel down

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t hi s r abbi t hol e of basel ess suspi ci on; i t i s cl ear no pl ausi bl e

cl ai m r est s at i t s bot t om. 6

Where the note and mort gage ar e uni f i ed at t he t i me of

f or ecl osure, our i nqui r y may come t o an end. Eat on v. Fed. Nat ' l

Mort g. Ass ' n, 462 Mass. 569, 582- 84, 969 N. E. 2d 1118, 1129- 30

( 2012) ( r equi r i ng possessi on of bot h t he not e and mor t gage to

pr oper l y f or ecl ose) . 7 Havi ng f ound no pl ausi bl e gr ounds f or r el i ef

based on MERS' s i nvol vement i n t he assi gnment of Woods' s mor t gage,

we af f i r mt he di st r i ct cour t ' s di smi ssal of her Mass. Gen. Laws ch.

244, 14 cl ai m and t ur n now t o the ot her cl ai ms assert ed i n her

amended compl ai nt .

4. Fremont's consent agreement

Woods next asser t s t hat t he f or ecl osur e vi ol at ed t he

t er ms of a consent agreement between Fr emont and the Commonweal t h

of Massachuset t s, r equi r i ng Fr emont t o not i f y t he At t or ney Gener al

pr i or t o i ni t i at i ng any f or ecl osur es i n t he st at e. Thi s agr eement

was t he r esul t of l i t i gat i on f i l ed by the Massachuset t s At t or ney

General agai nst Fr emont based on unf ai r and decept i ve busi ness

6 We not e al so t hat Woods has st opped payi ng her mor t gage and t hatno f i nanci al i nst i t ut i on ot her t han Wel l s Far go has sought t o t akeact i on on account of t hat br each.

7 Because Wel l s Far go r euni f i ed t he not e and mor t gage pr i or t oi ni t i at i ng f or ecl osur e, t her e i s no r eason t o del ve i nt o t heongoi ng f r ay of l i t i gat i on at t empt i ng t o demar cat e t he pr eci sebor der s of Eat on' s pr ospect i ve appl i cat i on. Eat on, 969 N. E. 2d at1133; see al so HSBC Bank USA, N. A. v. Norr i s, 83 Mass. App. Ct .1115, 983 N. E. 2d 749 ( 2013) ( unpubl i shed opi ni on) .

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pr act i ces, Mass. Gen. Laws ch. 93A, st emmi ng f r om i t s mor t gage

f orecl osur es i n t he Commonweal t h. Fi nal J udgment by Consent ,

Commonweal t h v. Fr emont I nv. & Loan, No. 07- 4373- BLS1 ( Mass. Supp.

Ct . J une 9, 2009) ( i ncor por at i ng, ver bat i m, t he t er ms of an ear l i er

pr el i mi nar y i nj unct i on ar r est i ng Fremont ' s f or ecl osur es absent

At t or ney Gener al r evi ew) . 8 As rel evant t o t hi s appeal , t he consent

agr eement cont ai ns l anguage mandat i ng t hat Fr emont r ecei ve appr oval

by the At t or ney Gener al pr i or t o pr oceedi ng wi t h any f or ecl osur e i n

t he Commonweal t h:

Bef or e i ni t i at i ng or advanci ng a f or ecl osur eon any mor t gage l oan or i gi nat ed by Fr emont. . . Fr emont shal l f i r st gi ve t he At t or neyGeneral 30 days advance wr i t t en not i ce so t hatt he At t or ney Gener al can ver i f y t hat t hepr oposed f or ecl osur e f al l s out si de t he scopeof t hi s [ agr eement ] . I f t he At t or ney Gener alhas not gi ven wr i t t en not i ce of an obj ect i ont o Fremont by t he 30t h day . . . Fr emont maypr oceed wi t h t he f or ecl osur e.

I d. sl i p op. at 10 ( emphasi s added) .

Wel l s Far go pr esent ed t o t he di st r i ct cour t a l et t er ,

dat ed Mar ch 10, 2009, i nf or mi ng t he At t or ney Gener al of i t s

i nt ent i on t o f or ecl ose. Woods cont ends, however , t hat absent pr oof

of r et ur n cor r espondence f r om t he At t or ney Gener al expr essl y

showi ng t hat i t consent ed t o t he f or ecl osur e, her cl ai mt hat Wel l s

8 The r equi r ement t hat Fr emont - or i gi nated mort gages be r evi ewedpr i or t o f or ecl osur e or i gi nat ed i n a Febr uar y 28, 2008 or der by theMassachuset t s Super i or Cour t . I t i s t hi s or der t hat was i n ef f ectat t he t i me Wel l s Fargo sought cl ear ance to f or ecl ose on Woods' smor t gage. The or der was i ncor por at ed, i n f ul l , i nt o t he cour t ' ssubsequent consent j udgment .

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Far go vi ol ated t he agr eement must be al l owed t o pr oceed. Thi s

argument st r ays f ar wi de of i t s mark. The l anguage of t he consent

decr ee unambi guousl y r equi r es r et ur n cor r espondence onl y i f t he

At t or ney Gener al wi shes t o pr ecl ude f or ecl osur e. I n cont r ast ,

wher e the At t or ney Gener al does not wi sh to f or est al l t he

pr oceedi ngs, t he agr eement ' s t er ms make cl ear t hat si l ence

suf f i ces. As such, we agr ee wi t h t he di st r i ct cour t t hat a

r esponse was not r equi r ed, and Woods cannot cr af t a col or abl e cl ai m

f r om i t s absence.

Moreover , nothi ng i n t he consent agr eement appear s t o

cr eat e a pr i vat e ri ght of act i on on whi ch Woods or si mi l ar l y

si t uat ed pl ai nt i f f s coul d chal l enge compl i ance wi t h i t s t er ms. I n

f act, i n i t s f i nal f or m t he agr eement expl i ci t l y di scl ai ms the

creat i on of any pr i vat e r i ght of acti on. I d. sl i p op. at 16.

Al t hough we need not r est on t hi s i ssue, havi ng f ound no f act s

pl ausi bl y suggest i ng a vi ol at i on occur r ed, we not e t hat i t i s f ar

f r om cl ear how any such vi ol at i on coul d be enf or ced by pr i vat e

l i t i gant s, r egar dl ess.

5. Woods's fraud and Chapter 93(a) claims

Woods pr edi cat es her cl ai m of f r aud on t he al l egat i on

t hat Wel l s Far go " i nt ent i onal l y made st at ement s . . . t hat [ i t ] was

t he ' hol der ' of her mor t gage wi t h ent i t l ement t o t he r i ght s t o her

mont hl y mor t gage payment s, and t he r el at ed r i ght t o f or ecl ose. "

Fur t her , she al l eges t hat t hese st at ement s caused her "di r ect " and

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"pecuni ar y" i nj ur y as a r esul t of t he encumbr ance pl aced on her

pr opert y by Wel l s Fargo' s at t empt s t o enf orce t he mort gage debt .

Under Massachuset t s l aw, f r aud r equi r es t hat t he

def endant made a knowi ngl y f al se st atement concer ni ng a mater i al

mat t er t hat was i nt ended t o, and di d i n f act , i nduce t he

pl ai nt i f f ' s r el i ance and, t hr ough t hat r el i ance, creat ed an i nj ur y.

Russel l v. Cool ey Di cki nson Hosp. , I nc. , 437 Mass. 443, 458, 772

N. E. 2d 1054, 1066 ( 2002) . A cl ai m of f r aud must al so sat i sf y t he

par t i cul ar i t y r equi r ement s set f or t h i n Fed. R. Ci v. P. 9( b) ,

mandat i ng "speci f i cs about t he t i me, pl ace, and cont ent of t he

al l eged f al se r epr esent at i ons. " J ur ez v. Sel ect Por t f ol i o

Ser vi ci ng, I nc. , 708 F. 3d 269, 279- 80 ( 1st Ci r . 2013) ( quot i ng

Uni t ed St at es ex r el . Rost v. Pf i zer , I nc. , 507 F. 3d 720, 731 ( 1st

Ci r . 2007) ( i nt er nal quot at i on mar ks omi t t ed) .

Al t hough Woods' s compl ai nt i ncl udes a basi c r eci t at i on of

t he el ement s of f r aud, she does not i ndi cate when, where, and how

of t en t he al l egedl y f al se st atement s were made or what ,

speci f i cal l y, was stated. She al so f ai l s t o st at e t he speci f i c

nat ur e of t he r esul t i ng har m, i ndi cat i ng onl y that i t was of a

monet ar y nat ur e. Fi nal l y, t he compl ai nt i s whol l y si l ent on t he

i ssue of her act ual r el i ance. Thi s vague pl eadi ng f al l s shor t of

Rul e 9( b) ' s par t i cul ar i t y r equi r ement . Hayduk v. Lanna, 775 F. 2d

441, 444 ( 1st Ci r . 1985) ( "[ M] er e al l egat i ons of f r aud, . . .

aver ment s t o condi t i ons of mi nd, or r ef er r al s t o pl ans and schemes

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ar e t oo concl usi onal t o sat i sf y t he par t i cul ar i t y r equi r ement .

. . . ") ; see al so J ur ez, 708 F. 3d at 280 ( di smi ssi ng a cl ai m of

f r aud based on an al l egedl y wr ongf ul f or ecl osur e f or f ai l ur e t o

speci f i cal l y pl ead f act s showi ng det r i ment al r el i ance) .

Woods' s cl ai mf ur t her f ai l s f or l ack of sci ent er . N. Am.

Cat hol i c Educ. Pr ogr ammi ng Found. , I nc. v. Car di nal e, 567 F. 3d 8,

13 ( 1st Ci r . 2009) ( "The Cour t s have uni f or ml y hel d i nadequat e a

compl ai nt ' s gener al aver ment of t he def endant ' s ' knowl edge' of

mat er i al f al si t y, unl ess t he compl ai nt al so set s f or t h speci f i c

f act s t hat make i t r easonabl e to bel i eve t hat def endant knew t hat

a st at ement was mat er i al l y f al se or mi sl eadi ng. " ( quot i ng

Gr eenst one v. Cambex Corp. , 975 F. 2d 22, 25 ( 1st Ci r . 1992)

( i nt er nal quot at i on mar ks omi t t ed) ) . Our concl usi on t hat Woods

f ai l ed t o pl ausi bl y pl ead t hat Wel l s Far go di d not l egal l y possess

her mor t gage i s t hus f at al t o her f r aud cl ai m as wel l . Wi t hout

f actual al l egat i ons suf f i ci ent t o suggest i l l egal i t y occur r ed, we

ar e necessar i l y l ef t wi t hout al l egat i ons suf f i ci ent t o suggest

Wel l s Far go knew of such i l l egal i t y. We t her ef or e af f i r m t he

di smi ssal of Woods' s cl ai m of f r aud.

Woods' s cl ai m under Chapt er 93A was al so pr oper l y

di smi ssed. Massachuset t s l aw pr ot ect s consumer s f r om "unf ai r or

decept i ve act s or pr act i ces i n t he conduct of any t r ade or

commerce. " Mass. Gen. Laws. ch. 93A, 2. What const i t ut es an

unf ai r or decept i ve pr act i ce r equi r es an i ndi vi dual i zed, "f act -

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speci f i c" i nqui r y. Ar t hur D. Li t t l e, I nc. , v. Dooyang Cor p. , 147

F. 3d 47, 55 ( 1st Ci r . 1998) ( i nt er nal quot at i on mar ks and ci t at i on

omi t t ed) . Gener al l y, however , t he f act s must i l l ust r at e somet hi ng

beyond a mer e good f ai t h di sput e, f ai l ur e t o pay, or si mpl e br each

of cont r act. I d. at 55- 56 ( ci t at i ons omi t t ed) . I n r el at i on t o a

f or ecl osur e pr oceedi ng, t her ef or e, "[ i ] t i s not enough i n t he

cont ext of Chapt er 93A [ ] t o al l ege t hat def endant s f or ecl osed

. . . i n vi ol at i on of Massachuset t s f or ecl osur e l aw. Somet hi ng

mor e i s requi r ed. " J ur ez, 708 F. 3d at 281.

Here, Woods' s compl ai nt of f ers no more. Af t er maki ng a

gener al al l egat i on r egar di ng t he pur por t ed i l l egal i t y of Wel l s

Far go' s f or ecl osur e, she st at es onl y that she seeks a r emedy under

93A. Thi s f ai l ur e t o set f or t h any par t i cul ar act s or pr act i ces

mar ked by "an ext or t i onat e qual i t y . . . of unf ai r ness [ and

decept i veness] , " Ar t hur D. Li t t l e, I nc. , 147 F. 3d at 55 ( quot i ng

At ki nson v. Rosent hal , 33 Mass. App. Ct . 219, 226, 598 N. E. 2d 666,

670 ( 1993) ) , necessi t at es a f i ndi ng t hat t he f act s as pl ed ar e

i nsuf f i ci ent t o st at e a cl ai m.

Woods' s cl ai m necessar i l y f ai l s f or anot her r eason as

wel l . Namel y, 93A i ncl udes a pr e- sui t not i ce pr ovi si on mandat i ng

t hat "[ a] t l east t hi r t y days pr i or t o t he f i l i ng of any such

act i on, a wr i t t en demand f or r el i ef , i dent i f yi ng t he cl ai mant and

r easonabl y descr i bi ng t he unf ai r or decept i ve act or pr act i ce

r el i ed upon and t he i nj ur y suf f er ed" be sent t o t he r espondent .

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Mass. Gen. Laws ch. 93A, 9( 3) ; Ent r i al go v. Twi n Ci t y Dodge,

I nc. , 368 Mass. 812, 812, 333 N. E. 2d 202, 204 ( 1975) ( "A demand

l et t er l i st i ng t he speci f i c decept i ve pr acti ces i s a pr er equi si t e

t o sui t . . . . ") . Pl ai nt i f f s ar e exempt f r omt hi s r equi r ement onl y

i f " t he pr ospect i ve r espondent does not mai nt ai n a pl ace of

busi ness or does not keep asset s wi t hi n [ Massachuset t s] . " Mass.

Gen. Laws ch. 93A, 9( 3) . Woods does not di sput e t hat she never

sent t i mel y pr e- sui t not i ce. Rat her , she ar gues f or an exempt i on

f r om t he r equi r ement , based on her asser t i on t hat Wel l s Far go

mai nt ai ns no asset s i n Massachuset t s. Wel l s Far go aver s, t o t he

cont r ar y, t hat i t undoubt edl y possesses at l east one asset : a real

pr oper t y i nt er est i n t he f or m of Woods' s mor t gage and not e.

Woods poi nt s t o a r ecent di st r i ct cour t deci si on hol di ng

t hat possessi on of a mort gage, absent i t s accompanyi ng note, cannot

al one sust ai n 93A' s not i ce r equi r ement because i t " i s of no val ue

as pr oper t y, as i t coul d at most be onl y resor t ed t o as a t r ust f or

t he benef i t of t he hol der of t he not e. " But l er v. Deut sche Bank

Tr ust Co. Ams. , Ci v. No. 12- 10337- DPW, 2012 WL 3518560, at *12- 13

( D. Mass. Aug. 14, 2012) ( quot i ng Eaton, 969 N. E. 2d at 1125)

( i nt er nal quot at i on mar ks omi t t ed) . Even i f t hat case i s cor r ect ,

however , cont r a McKenna, 693 F. 3d at 218 ( f i ndi ng a real pr oper t y

i nt er est suf f i ci ent t o r equi r e not i ce even absent a det er mi nat i on

t hat t he mor t gagee hel d t he not e) , i t i s i napposi t e t o the cur r ent

pr oceedi ngs.

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Her e, t he compl ai nt does not suppor t an al l egat i on t hat

Wel l s Fargo hol ds a mor t gage "separ at ed f r omt he under l yi ng debt . "

But l er , 2012 WL 3518560 at *12 (quot i ng Eat on, 969 N. E. 2d at 1124)

( i nt er nal quot at i on mar ks omi t t ed) . Rat her , Wel l s Far go hol ds bot h

t he mort gage and t he under l yi ng pr omi ssory note. I n Massachuset t s,

a t i t l e t heor y st at e, possessi on of t he mor t gage and not e

undi sput edl y vest s i n t he hol der a r eal pr oper t y i nt er est . See

I banez, 941 N. E. 2d at 51- 52; Magl i one v. BancBost on Mor t g. Cor p. ,

29 Mass. App. Ct . 88, 91, 557 N. E. 2d 756, 758 ( 1990) ( expl ai ni ng

t hat i n a t i t l e t heor y st at e " t he mor t gagee may ent er i nt o

possessi on of t he mort gaged pr emi ses upon def aul t and bef ore

f or ecl osur e") . As such, t hat Wel l s Far go mai nt ai ned at l east one

asset i n Massachuset t s i s cl ear . Thi s i s enough t o est abl i sh t he

need f or pre- sui t not i ce. Because Woods' s pl eadi ngs admi t she

f i l ed no not i ce, her 93A cl ai m was pr oper l y di smi ssed.

III. Conclusion

Ul t i mat el y, t hi s case st ands as anot her exampl e of t he

personal cost s exact ed on homeowners as a r esul t of t he housi ng

mar ket ' s I car us- st yl e r i se and f al l . I t s unf or t unat e event s,

however , do not pr esent l egal l y cogni zabl e cl ai ms f or r el i ef i n

t hi s case. For t he r easons set f or t h above, we af f i r mt he di st r i ct

cour t ' s di smi ssal of Woods' s compl ai nt .

Affirmed.

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Woods v. Wells Fargo Bank, N.A., 1st Cir. (2013)

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