Gideon v. Wells Fargo Bank, N.A.

DEBORAH GIDEON, f/k/a DEBORAH SHANINGA Plaintiff, v. WELLS FARGO BANK, N.A., et al. Defendants.

Civil No. 19-12094-LTS

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

March 23, 2020

ORDER ON MOTIONS TO DISMISS (DOC. NOS. 14, 37, 40)

SOROKIN, J.

Plaintiff Deborah Gideon's brings this counselled Complaint, Doc. No. 1-1 at 10-20, alleging that she purchased a home located at 19 Milstone Road Boston, MA 02136 on March 25, 2005, id. ¶ 9, obtaining a sub-prime mortgage from Fremont Investment & Loan ("Fremont"), id. ¶ 13, which Gideon alleges later went into bankruptcy, id. ¶ 12. Gideon further alleges that: her loan balance is higher than at commencement of the loan, id. ¶ 22; the interest rate is higher than warranted, id. ¶ 24; there are unaccounted payments, id.; and, there are unavailable files, id. ¶ 18, despite demands from lenders or services (unidentified) who are seeking foreclosure or pre-foreclosure despite payment, id. ¶ 24.

The Complaint then proceeds to advance five claims. Count I seeks an accounting of all monies received by any defendant, id. ¶ 27, and references "suspect" billings by Carrington, Fremont, and Wells Fargo, id. ¶¶ 28-33. Count II seeks a declaration that the defendants defrauded and victimized her, committed various billing irregularities, and induced Gideon to sign a loan with inflated terms. Id. ¶ 36. Count III seeks a reformation of the notes and mortgage and alleges that Fremont failed to disclose terms of the mortgage and note. Id. ¶¶ 37, 41. Count IV seeks specific performance of a settlement agreement entered into by the Massachusetts Attorney General and Fremont on behalf of many borrowers, including Gideon. Id. ¶¶ 44-46. Count V, seeking rescission and reformation, is alleged only against a defendant named Herman Owoussou. Id. ¶¶ 49-50. Count VI seeks a preliminary injunction. Id. ¶¶ 51-53.¹

The Complaint additionally names Wells Fargo, Wilshire Credit Corporation, Carrington, and Trustee for Carrington Mortgage Loan Trust as defendants, as well as XYZ Unknown 1-100. Id. at 1. The defendants have moved to dismiss the Complaint. Doc. Nos. 14, 37, 40. Gideon, represented by counsel throughout these proceedings, opposes. Doc. Nos. 35, 42. The Court ALLOWS defendants' motions (Doc. Nos. 14, 37, 40) and DISMISSES the Complaint for each of the following reasons.

First, the Complaint fails to comply Federal Rule of Civil Procedure 8's requirement of "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Complaint is so devoid of factual detail that the Court cannot discern the contours or factual basis for Gideon's various claims. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (holding that "the pleading standard Rule 8 announces does not require 'detailed factual allegations' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). For example, the only factual allegation about Wilshire Credit Corporation is that, in 2005, "Gideon commenced mortgage payments to Wilshire Credit Corporation." Doc. No. 1-1 ¶ 11. This is not the first time Gideon has encountered this problem. See Deborah Gideon v. Carrington Mortgage Services, No. 1:18-10062-RGS, Doc. No. 21 (D. Mass. Jan. 31, 2018) (holding that Gideon's Amended Complaint failed to comply with Rule 8's strictures because "the court [was] unable to discern from plaintiff's Amended Complaint—a listing of documents and cryptic and fragmentary conclusions—the factual or legal basis for any cognizable claim.").

Second, insofar as Count II, or any other part of the Complaint, advances a claim of fraud, the pleading must satisfy the particularity requirement of Federal Rule of Civil Procedure 9(b). See Fed. R. Civ. P. 9(b) ("In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake."); U.S. ex rel. Ge v. Takeda Pharm. Co., 737 F.3d 116, 123 (1st Cir. 2013) (holding that allegations of fraud must "set forth with particularity the 'who, what, when, where, and how' of the alleged fraud" in order to comply with Rule 9(b) (quoting United States ex. rel Walsh v. Eastman Kodak Co., 98 F.Supp.2d 141, 147 (D. Mass. 2000)). None of the prerequisites necessary to satisfy Rule 9(b) are alleged in Gideon's Complaint.

Third, insofar as the Complaint alleges that a predatory loan was extended in 2005, or that various forms of wrongful billing or related misconduct occurred, all of those allegations concern actions well outside of any applicable period of limitations under Massachusetts law. See, e.g., Passatempo v. McMenimen, 293, 960 N.E.2d 275, 288 (Mass. 2012) (holding that claims that "sound in tort [] are governed by the three-year limitation period provided by Mass. Gen. L. c. 260, § 2A"); Power Control Devices, Inc. v. Orchid Techs. Eng'g & Consulting, Inc., 968 F. Supp. 2d 435, 441 n.3 (D. Mass. 2013) ("Actions of contract . . . shall, except as otherwise provided, be commenced only within six years next after the cause of action accrues." (quoting Mass. Gen. L. c. 260 § 2)); Micromuse, Inc. v. Micromuse, PLC, 304 F. Supp. 2d 202, 209 (D. Mass. 2004) ("Massachusetts imposes a six-year statute of limitations on claims of breach of contract and breach of the implied duty of good faith and fair dealing. A six-year statute of limitations also applies to unjust enrichment claims based on the same underlying facts." (internal citations omitted)). And, nothing in the Complaint, including the assertions regarding the alleged predatory terms of the 2005 loan, support invocation of "the discovery rule" delaying the commencement of the limitations period. See McGillen v. JP Morgan Chase Bank, N.A., No. CV 19-11917-LTS, 2020 WL 519997, at *4 (D. Mass. Jan. 31, 2020) (explaining that under Massachusetts law, "the statute of limitations starts when the plaintiff discovers, or reasonably should have discovered, that he has been harmed or may have been harmed by the defendant's conduct." (quoting Passatempo, 960 N.E.2d at 288-89)).

Fourth, Gideon previously sued both Carrington and Wilshire in another session of this Court. Judge Stearns dismissed that action for failure to state a claim. Gideon, No. 1:18-10062-RGS, Doc. No. 22 (D. Mass. March 16, 2018) (Order of Dismissal). "The doctrine of res judicata bars a suit on a cause of action which has been judicially determined on the merits in aprior suit involving the same parties or persons in privity with them." Papadopoulos v. US Gov't, No. 19-11331-PBS, 2019 WL 3253229, at *2 (D. Mass. 2019). Res judicata, or claim preclusion, applies when three preconditions are present: "(1) a final judgment on the merits in an earlier action; (2) an identity of the cause of action in both the earlier and later suits; and (3) an identity of parties or privies in the two suits." Kale v. Combined Ins. Co. of Am., 924 F.2d 1161, 1165 (1st Cir. 1991). "Under federal law, dismissals under Rule 12(b)(6) that dispose of an entire complaint are considered final judgments on the merits for the purposes of claim preclusion." Desmond Demontegnac v. Selene Fin. LP, No. CV 18-12560-NMG, 2019 WL 3546885, at *11 (D. Mass. Apr. 16, 2019) (internal quotation marks and alterations omitted). Gideon's previous action before Judge Stearns was dismissed for failure to state a claim, see Gideon, No. 1:18-10062-RGS, Doc. No. 21 (D. Mass. March 16, 2018), and all of the defendants were either parties to the previous action or in privity with those parties, see Doc. No. 15 at 14-15.² Moreover, all of Gideon's claims were or could have been brought in her prior suit. Maher v. GSI Lumonics, Inc., 433 F.3d 123, 126 (1st Cir. 2005) ("Under the federal law of res judicata, a final judgment on the merits of an action precludes the parties from relitigating claims that were raised or could have been raised in that action." (internal quotation marks and citations omitted)). Accordingly, claim preclusion bars the entire Complaint.³

Fifth, Gideon's Complaint, even liberally construed, fails to state claims for relief. For example, Count I, which seeks "an accounting of all monies received by any defendant," Doc. No. 1-1 ¶ 27, provides no factual basis for its allegation of "suspect billings," id. ¶ 28. See Pearson v. Bank of New York Mellon, No. CIV.A. 14-12359-TSH, 2014 WL 3849969, at *3 (D. Mass. Aug. 4, 2014) (dismissing claim where plaintiff "simply demand[ed] an accounting of the loan without alleging any elements of such a claim, including that a fiduciary relationship exists between the parties"). Similarly, the generalized and conclusory allegations in Count III do not sufficiently plead fraud or any other proper basis for reforming Gideon's mortgage loan. Cf. Beaton v. Land Court, 326 N.E.2d 302, 307 (Mass. 1975) (holding that "a court acting under general principles of equity jurisprudence has broad power to reform, rescind, or cancel written instruments, including mortgages, on grounds such as fraud, mistake, accident, or illegality."). Similarly, Count IV fails to state a claim because Gideon has failed to plead or describe, "with substantial certainty, the specific contractual promise the defendant failed to keep." Brooks v. AIG SunAmerica Life Assur. Co., 480 F.3d 579, 586 (1st Cir. 2007) (applying Massachusetts contract law). And, as previously noted, see supra note 1, Counts II and VI are entirely derivative and do not state freestanding claims for relief.

Finally, Gideon claims that defendants have breached a consent decree entered into between Fremont and the Massachusetts Attorney General on behalf of certain borrowers. Doc. No. 1-1 ¶¶ 44-46. Gideon alleges that she is one of those borrowers. Id. Insofar as Gideon is aggrieved by the Massachusetts Attorney General, that is a matter outside the scope of this Complaint. Insofar as she seeks specific performance of the consent decree, "nothing in theconsent agreement ...