Thomas Harry, Jr. v. Countrywide Home Loans, Inc., et al.

In November 2005, Thomas and Gretchen Harry borrowed $245,350 from

Countrywide Home Loans, Inc.,1 to refinance their property in Mashpee,

Massachusetts. The Harrys defaulted on their loan in 2009, and in 2016

they initiated this action to void their transaction and enjoin their

property's foreclosure sale. The district court granted the defendants'

motion to dismiss the Harrys' complaint under Federal Rule of Civil

Procedure 12(b)(6), Harry v. Countrywide Home Loans Inc., 219

F.Supp. 3d 228 (D. Mass. 2016), and denied the Harrys' request for

injunctive relief, Harry v. Countrywide Home Loans Inc., 215

F.Supp. 3d 183 (D. Mass. 2016). We affirm.

I.

A.

Our review of the dismissal is de novo. Maloy v.

Ballori-Lage, 744 F.3d 250, 252 (1st Cir. 2014). The Harrys'

eleven-count amended complaint alleged that Countrywide falsified

the Harrys' loan application, failed to comply with federal law in

the preparation of the loan, and lacked a Massachusetts home

1 The Harrys' complaint named Countrywide as a defendant, but

Bank of America, N.A. acquired Countrywide in 2008. Moreover,

defendant BAC Home Loans Servicing "was a wholly owned subsidiary

of Bank of America, N.A.," and has since "merged into Bank of

America, N.A." Kolbe v. BAC Home Loans Servicing, LP, 738 F.3d

432, 438 n.3 (1st Cir. 2013) (en banc). For simplicity's sake, we

group these defendants together with Mortgage Electronic Recording

Systems, Inc., as well as Ditech Financial LLC (formerly Green

Tree Servicing, LLC), unless otherwise noted.

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lender's license when their 2005 mortgage was executed. On appeal,

they reassert that a laundry list of errors infected their

application to refinance their home mortgage, and they further

argue that the district court erred in dismissing the bulk of their

claims as time-barred.

We agree with the district court that the Harrys cannot

escape time bars for their RICO claim (four years to file, see

Lares Grp., II v. Tobin, 221 F.3d 41, 44 (1st Cir. 2000) (citing

Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143,

156 (1987))); their Fair Debt Collection Practices Act claim (one

year to file, see 15 U.S.C. § 1692k(d)); their Real Estate

Settlement Procedures Act claim (maximum of three years to file,

see 12 U.S.C. § 2614); their Truth in Lending Act claims (three

years to file, see 15 U.S.C. § 1635(f); In re Sheedy, 801 F.3d 12,

19-20 (1st Cir. 2015); or their state-law claims under the

Massachusetts consumer protection statute, Chapter 93A (four years

to file, see Mass. Gen. Laws ch. 260, § 5A) or for slander of title

(three years to file, see Mass. Gen. Laws ch. 260, § 4; Harrington

v. Costello, 7 N.E.3d 449, 453 (Mass. 2014)).

The Harrys' only argument against finding these claims

time barred is that "the statute of limitations never runs on void

documents, period." But their basis for claiming that the mortgage

and note were void from the beginning is simply their allegation

that Countrywide "was never licensed to lend money in

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Massachusetts." This, they state in conclusory fashion, makes the

note and mortgage deed that they executed akin to forgeries and

thus "void ab initio . . . because Countrywide lacked the legal

authority to write these documents." The Harrys, however, cite no

authority for this unusual proposition, and we have found none.

The Harrys do make a somewhat more relevant pitch, urging

us to toll the applicable limitations periods under the doctrine

of fraudulent concealment. Tolling for fraudulent concealment,

however, like the Harrys' argument for equitable tolling, requires

them to make a threshold showing of due diligence. See Protective

Life Ins. Co. v. Sullivan, 682 N.E.2d 624, 635 (Mass. 1997)

(equitable tolling); Ortiz-Rivera v. United States, 891 F.3d 20,

25 (1st Cir. 2018) (equitable tolling); Gonzalez v. United States,

284 F.3d 281, 292 (1st Cir. 2002) (fraudulent concealment). That

showing is absent here. As the district court noted, the Harrys

were represented by counsel at least as of 2011, yet they failed

to file any claim until March 2016, "more than five years after

they retained counsel and ten years after they granted the mortgage

at issue." 219 F. Supp. 3d at 236. In light of the Harrys' lack

of diligence, we agree with the district court that they have

"failed plausibly to allege that the applicable statutes of

limitation should be tolled." Id. at 237.

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B.

We can easily dispose of the remainder of the Harrys'

arguments. To start, the district court properly rejected the

Harrys' contention that their mortgage is obsolete under the

Massachusetts obsolete mortgage statute, Massachusetts General

Laws chapter 260, section 33 (extinguishing the right to foreclose

on a mortgage five years after the mortgage matures).2 The Harrys

argue that Ditech -- then acting as the servicer of the Harrys'

mortgage -- acted illegally when it instituted its October 2016

foreclosure action because the foreclosure occurred more than five

years after Ditech accelerated the maturity date of their note.

But there is no suggestion in either that statute, or, as the

Harrys suggest, in the Massachusetts Supreme Judicial Court's

decision in Deutsche Bank Nat. Tr. Co. v. Fitchburg Capital, LLC,

28 N.E.3d 416 (Mass. 2015), that the acceleration of a note has

any impact on the limitations period for a mortgagee's right to

foreclose.3

2 We previously rejected this precise argument in an opinion

that has since been withdrawn for unrelated reasons. See Hayden

v. HSBC Bank USA, 867 F.3d 222, 224 (1st Cir. 2017), withdrawn,

Hayden v. HSBC Bank USA, No. 16-2274, 2018 WL 3017468 (1st Cir.

June 14, 2018).

3 To the extent that the Harrys repeat this argument in their

appeal of the district court's denial of their motion to enjoin

the sale of their property in foreclosure, we find the district

court's exercise of its discretion to deny injunctive relief to

have been more than adequately supported by the record.

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As noted earlier in our discussion of the applicable

statutes of limitation, the Harrys also claim that their mortgage

is void because Countrywide "was licensed as a mere third party

loan servicer and not a lender," thereby running afoul of

Massachusetts General Laws chapters 255E (licensing of mortgage

lenders) and 255F (licensing of mortgage loan originators. But

neither of those statutes explicitly creates a private cause of

action, and the Harrys present us with no arguments to infer one.

Accordingly, we find their implicit invitation to do so -- an

invitation we would only reluctantly consider in any case, see

Loffredo v. Ctr. For Addictive Behaviors, 689 N.E.2d 799, 802

(Mass. 1998) -- waived. See United States v. Zannino, 895 F.2d 1,

17 (1st Cir. 1990).

We also find meritless the Harrys' argument that the

district court abused its discretion in refusing to grant their

last-ditch motions for entry of default against all defendants.

There is nothing in the record to suggest that any defendant

"failed to plead or otherwise defend" against the Harrys'

complaint, see Fed. R. Civ. P. 55, and the district court acted

well within its discretion by refusing to entertain the Harrys'

arguments to the contrary.

For the foregoing reasons, we AFFIRM the district

court's rulings.