Rezende v. Ocwen Loan Servicing, LLC

United States Court of Appeals
For the First Circuit
No. 16-1931
PAULO REZENDE,
Plaintiff, Appellant,
v.
OCWEN LOAN SERVICING, LLC; US BANK, N.A., as Trustee,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]
Before
Howard, Chief Judge,
Lynch and Barron, Circuit Judges.
Carmenelisa Perez-Kudzma on brief for appellant.
Marissa I. Delinks, Maura K. McKelvey, and Hinshaw &
Culbertson LLP on brief for appellees.
August 25, 2017
LYNCH, Circuit Judge. In August 2005, Paulo Rezende
took out two loans from Aegis Funding Corporation ("Aegis") to
refinance his mortgage on property in Everett, Massachusetts.
Rezende executed mortgages identifying Mortgage Electronic
Registration Systems, Inc. ("MERS") as the mortgagee, "solely as
nominee" for Aegis and its successors and assigns. In June 2010,
MERS assigned one of the mortgages to US Bank, N.A. ("US Bank"),
as Trustee for Aegis Asset Backed Securities Trust, Mortgage Pass-
Through Certificates, Series 2005.
After a default and a first loan modification in 2009,
which was cancelled later that year, Rezende obtained a second
loan modification in March 2010. He did not receive any statements
for the modified loan until September 2010. He made payments from
September 2010 through June or July 2013, at which time Ocwen Loan
Servicing, LLC ("Ocwen") returned his latest payment and informed
him that the loan was in default.1 In June 2015, Rezende sued
Ocwen and US Bank (the "Defendants") in federal district court,
invoking diversity jurisdiction, seeking, inter alia, unclouded
title to the property, an injunction against foreclosure, and
damages. In June 2016, the district court granted Defendants'
motion for judgment on the pleadings under Fed. R. Civ. P. 12(c),
and dismissed all six counts of Rezende's complaint. On appeal,
1 The parties' briefs are inconsistent as to whether Ocwen
returned Rezende's June or rather July 2013 payment.
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Rezende argues that the district court's entry of judgment was
premature and challenges the court's findings that (1) he lacked
standing to raise a quiet title claim (count V) and (2) his claim
under Massachusetts's consumer-protection law ("Chapter 93A
claim") (count VI) was time-barred.2
We review the district court's judgment on the pleadings
de novo. Jardín De Las Catalinas Ltd. P'ship v. Joyner, 766 F.3d
127, 132 (1st Cir. 2014) (citation omitted). We accept all of the
non-moving party's well-pleaded facts as true and draw all
reasonable inferences in his favor. Feliciano v. Rhode Island,
160 F.3d 780, 788 (1st Cir. 1998). A judgment on the pleadings is
only appropriate when "it appears beyond a doubt that the nonmoving
party can prove no set of facts in support of [his] claim which
would entitle [him] to relief." Id.
Rezende's challenge that the court abused its discretion
by considering and granting Defendants' allegedly premature Rule
12(c) motion lacks merit. Not only was Defendants' filing of their
motion on January 25, 2016 itself timely,3 but the district court
2 Rezende does not challenge the district court's findings
as to counts I-IV. In addition, we will not address various
arguments Rezende attempts to raise on appeal but never presented
to the district court. See Dyer v. Wells Fargo Bank, N.A., 841
F.3d 550, 556 (1st Cir. 2016) (argument raised for the first time
on appeal is treated as waived).
3 Motions for judgment on the pleadings may be filed
"[a]fter the pleadings are closed." Fed. R. Civ. P. 12(c).
Rezende asserts without support that pleadings are closed only
once "the deadline for amendment of pleadings has run," then faults
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did not even hear the motion until four months later on May 25,
2016, and granted it on June 24, 2016. Rezende had ample time to
seek leave from the court to amend his complaint, but chose not to
do so. We also dismiss Rezende's unsubstantiated assertion that
"there were disputed issues of material fact . . . as to Counts V
and VII [sic] of the Complaint," for it is not relevant in the
context of a Rule 12(c) motion. Rather, we agree with the district
court's assessment that Defendants were entitled to judgment on
the pleadings because Rezende failed to plead any set of facts
that would entitle him to relief.
With respect to count V (quiet title), the district court
properly found that Rezende lacked standing. A mortgagor lacks
standing to bring a quiet title action as long as the mortgage
remains in effect. See, e.g., Oum v. Wells Fargo, N.A., 842 F.
Supp. 2d 407, 412 (D. Mass. 2012), abrogated on different grounds
by Culhane v. Aurora Loan Servs. of Nebraska, 708 F.3d 282 (1st
Cir. 2013); Flores v. OneWest Bank, F.S.B., 172 F. Supp. 3d 391,
Defendants for prematurely filing their motion an hour before
Rezende's deadline for amending his complaint. Rezende is
incorrect. A party may move under Rule 12(c) once the defendant
has filed his answer. See McGuigan v. Conte, 629 F. Supp. 2d 76,
80 (D. Mass. 2009) (pleadings closed for Rule 12(c) purposes once
complaint and answer have been filed) (citing Doe v. United States,
419 F.3d 1058, 1061 (9th Cir. 2005)); Georges River Tidewater Ass'n
v. Warren Sanitary Dist., No. 00-92-P-H, 2000 WL 891969, at *1-2
(D. Me. June 28, 2000) ("[C]losing of the pleadings within the
meaning of Rule 12(c) is not determined by each district court's
imposition of a deadline for amendment of the pleadings, or lack
thereof.").
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396 (D. Mass. 2016), appeal docketed, No. 16-1385 (1st Cir. Apr.
8, 2016). This is because under Massachusetts law, a quiet title
action "cannot be maintained unless both actual possession and the
legal title are united in the plaintiff," Daley v. Daley, 14 N.E.2d
113, 116 (Mass. 1938), yet "a 'mortgage splits the title in two
parts: the legal title, which becomes the mortgagee's, and the
equitable title, which the mortgagor retains.'" Bevilacqua v.
Rodriguez, 955 N.E.2d 884, 894 (Mass. 2011) (quoting Maglione v.
BancBoston Mortg. Corp., 557 N.E.2d 756, 757 (Mass. App. Ct.
1990)). Rezende's assertion that Defendants bear responsibility
for his default is irrelevant: what matters is the existence of a
mortgage, not whether the underlying loan is in default.
The district court also correctly rejected Rezende's
attempts to circumvent his lack of standing by challenging MERS's
assignment of the mortgage to US Bank. Rezende asserts that the
assignment was void because MERS failed to seek permission from
the bankruptcy court to assign the mortgage after Aegis had filed
for bankruptcy. Rezende waived this argument by failing to cite
any authority whatsoever in support of his conclusory assertion.
See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990)
("[I]ssues . . . unaccompanied by some effort at developed
argumentation[] are deemed waived."). As for Rezende's contention
that the assignment was void because it was made after the closing
date of the mortgage loan trust, Rezende lacked standing to bring
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this challenge. See Butler v. Deutsche Bank Trust Co. Ams., 748
F.3d 28, 37 (1st Cir. 2014) (borrowers lack standing to challenge
mortgage assignment for alleged violation of trust's pooling and
servicing agreement). On appeal, Rezende cites Culhane's holding
that "a mortgagor has standing to challenge a mortgage assignment
as . . . void," but Culhane specified that a mortgagor "does not
have standing to challenge shortcomings in an assignment that
render it merely voidable." 708 F.3d at 291 (emphasis added).
Here, the assignment, allegedly made in contravention of the trust
agreement, was "at most voidable at the option of the parties to
the trust agreement, not void as a matter of law." Dyer, 841 F.3d
at 554.
With respect to count VI, the district court correctly
found that the Chapter 93A claim was time-barred. Rezende alleges
that the delay caused by Defendants' failure to provide him monthly
statements between March and September 2010 was an "unfair and
deceptive practice." At the latest, this claim accrued by
September 2010 and expired by September 2014--well before Rezende
brought suit in June 2015. See Mass. Gen. Laws ch. 260, § 5A
(setting a four-year statute of limitations). On appeal, Rezende
asserts that the "trigger" for his claim was Defendants' notifying
him in June 2013 that he was in default, but it is apparent from
the face of the complaint that the predicate harm was Defendants'
failure to timely bill Rezende in 2010. See Compl. ¶¶ 79-85
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(alleging that Defendants "delayed five months" before billing
Rezende; that "[s]uch delay was unreasonable"; and that
"[u]nreasonable delay may be an unfair and deceptive act").
Rezende's attempt to invoke the discovery rule "to
salvage his untimely claims" is unavailing because, as the district
court already noted, the alleged harm was not "inherently
unknowable at the moment of [its] occurrence." Latson v. Plaza
Home Mortg., Inc., 708 F.3d 324, 327 (1st Cir. 2013) (internal
quotation marks omitted). Rezende argues that because Defendants
failed to send him statements between March and September 2010, he
could not have reasonably known of his default until Defendants
notified him in June 2013. Yet Rezende signed the 2010 loan
modification agreement, which expressly required him to make
monthly payments, in March 2010 at the latest. Therefore,
Defendants' delay in issuing statements and Rezende's default were
not "inherently unknowable" harms. See id. (holding that the
plaintiffs' alleged injury of payment of excess interest became
"apparent" when plaintiffs signed the loan documents); see also
St. Fleur v. WPI Cable Sys./Mutron, 879 N.E.2d 27, 35 (Mass. 2008)
("Typically, one who signs a written agreement is bound by its
terms whether he reads and understands them or not.").
For these reasons, we affirm.
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