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Abbatematteo v. Federal Housing Finance Agency

United States District Court, D. Rhode Island

July 17, 2018




         This case is before the Court on a Motion from Defendant JP Morgan Chase Bank (“Chase”) to Dismiss (ECF No. 10) the Complaint (ECF No. 1) filed by Plaintiff Lilia Maria Abbatematteo. After reviewing the alleged facts, the Court DENIES all but part of Chase's Motion.

         I. Background

         On November 15, 2002, Maria E. Amaral, Plaintiff's mother, borrowed $90, 000, which was recorded on a promissory note, and secured by a mortgage on Plaintiff's primary residence. (See Compl. ¶¶ 47-48.) The mortgage was signed by Amaral, Domingos P. Arruda, and Plaintiff. (Id.) In June 2003, these three signed a corrective quitclaim deed, which granted them title as joint tenants. (See id. at ¶ 49.) On August 31, 2009, Amaral passed away. (Id. at ¶ 51.) A few months later, Arruda moved out and stopped contributing to payments due on the note. (Id.) Later, when Plaintiff's wages dropped, she fell behind on the mortgage payments. (Id.) On September 6, 2013, Fannie Mae foreclosed on the property, and on May 12, 2014, Plaintiff filed an action in federal court (“Abbatematteo I”), before applying for a loan modification and assumption on July 9. (Id. at ¶¶ 55-57.)

         On September 18, 2014, during a court-ordered mediation in Abbatematteo I, the parties signed a Settlement Terms Agreement in Principal (“Agreement”). (Id. at ¶ 60.) There, the parties agreed that if Plaintiff provided an application by November 15, Chase would review it, and Arruda's participation in the application process would not be required. (Id.) Plaintiff submitted an application before November 15, and the Court entered a Consent Judgment, setting aside the foreclosure, returning the property to Plaintiff, and stating the mortgage was valid, “subject only to a modification and assumption agreement entered between the parties which shall also be recorded in the official records of the City of Providence.” (Id. at ¶¶ 61, 63.) Before providing Plaintiff with a modification, Chase requested additional documentation on December 9 and 23, 2014, and then again on June 14, 2015, after Plaintiff had submitted another application for loan modification and assumption. (Id. at ¶¶ 65-68.)

         On February 10, 2016, Fannie Mae, through Chase, scheduled a foreclosure proceeding for April 4, and on April 1, Plaintiff filed a petition for protection in United States Bankruptcy Court, where she filed a request to participate in the Court's Loss Mitigation Program, and submitted yet another application for modification to Chase around May 20, 2016. (Id. at ¶¶ 69-71.) Chase refused to review Plaintiff's application unless Arruda conveyed his interest to Plaintiff. (Id. at ¶ 72.) So on August 26, 2016, Plaintiff negotiated a quitclaim deed with Arruda, paying him $16, 000 for his interest, making Plaintiff the sole owner of the property. (Id. at ¶ 73.) Plaintiff provided a copy of the quitclaim deed to Chase, along with her fifth (and final) application for a loan modification. (Id. at ¶ 74.)

         On January 18, 2017, Chase denied Plaintiff's fifth application because they claimed they could not create an “affordable payment without changing the terms of the mortgage beyond the modification program's requirements.” (Id. at ¶¶ 77-78.) Plaintiff requested an appeal of this denial on February 2, 2017. (Id. at ¶ 84.) Chase stated it would not respond to her appeal until she proved she was the sole owner of the property. (Id. at ¶85.) On May 19, 2017, Plaintiff emailed the Rhode Island Housing Resource Commission (“RIHRC”), who forwarded the email to Chase and Fannie Mae, questioning why Plaintiff was denied a loan modification and assumption. (Id. at ¶ 88.) Chase again told Plaintiff it would not respond until she proved she was “the sole name on the title.” (Id. at ¶ 90.)

         Plaintiff brought this action on July 14, 2017.

         II. Discussion

         The Complaint contains six counts: one each for violation of due process, breach of contract, breach of the covenant of good faith and fair dealing, misrepresentation, breach of the covenant of “extreme” good faith, and violation of 12 C.F.R. 1024.41. Chase has moved to dismiss each of these counts insofar as they concern it.

         “To survive a motion to dismiss for failure to state a claim, the complaint must contain sufficient factual matter . . . to state a claim to relief that is plausible on its face.” Katz v. Pershing, LLC, 672 F.3d 64, 72-73 (1st Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)) (quotation marks omitted). When deciding a motion to dismiss, the Court takes “the complaint's well-pled (i.e., non-conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor.” Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). Further, “[t]he Court may include in its analysis (a) implications from documents attached to or fairly incorporated into the complaint, (b) facts susceptible to judicial notice, and (c) concessions in plaintiff's response to the motion to dismiss.” Lisnoff v. Stein, 925 F.Supp.2d 233, 236 (D.R.I. 2013) (quotation marks omitted).

         A. Count One: Due Process

         Count One alleges Plaintiff's property was deprived without due process. (See Compl. ¶ 96.) Chase moves to dismiss this claim, but as Plaintiff clarified in her response, Count One is not directed at Chase. (Mem. Supp. Pl.'s Obj. to Def.'s Mot. to Dismiss (“Objection”) 6, ECF No. 12.) Accepting ...

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