COMMONWEALTH OF MASSACHUSETS
PLYMOUTH, SS. SUPERIOR COURT
CIVIL ACTION NO.:
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)
)
Plaintiffs, )
) VERIFIED
v. ) COMPLAINT TO VACATE FINAL
) JUDGMENT OF FORECLOSURE, EASTERN SAVINGS BANK, a Maryland ) FOR FRAUD, DAMAGES,
corporation, and PERIDOT INVESTMENTS, ) INJUNCTIVE RELIEF, AND
INC., ) OTHER RELIEF
Defendants. )
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Plaintiffs sue Defendants to vacate a Final Judgment of Foreclosure, for fraud, damages, injunctive relief, and other relief, and state:
- Parties and Jurisdiction
1. This is an action for damages, injunctive relief, and other relief which is properly brought within this Court as the real property the subject of this action is situated within Rockland County, Massachusets.
2. Plaintiffs are and were at all times material hereto sui juris citizens and residents of the Commonwealth of Massachusets and over the age of eighteen (18).
3. Defendant EASTERN SAVINGS BANK (“ESB”) is a Maryland banking corporation with its principal place of business being located in Hunt Valley, Maryland, but is subject to the jurisdiction of this Court pursuant to the Massachusets long-arm statute, M.G.L. c. 223A sec. 3 as it transacted business in the Commonwealth of Massachusets deliberately by lending money for a refinance of real property located in Massachusets and instituting a foreclosure proceeding in Massachusets as to the Massachusets real property.
4. Defendant PERIDOT INVESTMENTS, INC. (“PII”) is, on information and belief, a foreign corporation which is subject to the jurisdiction of this Court pursuant to M.G.L. c. 223A sec. 3 by virtue of deliberately transacting business in the Commonwealth through the acquisition of real property located in Massachusets and initiating eviction proceedings incident to such property in the Commonwealth as well.
5. All transactions and occurrences material hereto took place in Plymouth County, Massachusets.
- Material Facts Common to All Counts
6. Plaintiffs, who are not and have never been engaged in the business of extending consumer loans, originally closed on a fixed-rated mortgage loan with Defendant ESB in 2003 in connection with the refinance of residential real property located at 326 North Avenue, Rockland, Plymouth County, Massachusets.
7. Defendant ESB’s pre-closing Truth-In-Lending Statement presented to Plaintiffs affirmatively represented that the interest rate on the loan was 12.881%. At all times material, Defendant ESB knew that the loan was not an “interest only” loan.
8. Defendant ESB’s pre-closing Truth-In-Lending Statement disclosed to Plaintiffs also affirmatively represented that the monthly payments on the loan were to be reduced from $1,716.92 to $1,605.97 as of October 30, 2006; further reduced to $1,499.17 as of June 30, 2008; further reduced to $1,397.45 as of February 28, 2010; and reduced again to $1,301.71 as of October 28, 2011, with a final payment of $1,272.71 due on September 28, 2033.
9. Plaintiffs relied upon the affirmative disclosures and representations of Defendant ESB in agreeing to close on the mortgage loan.
10. However, and despite repeated demand by Plaintiffs, Defendant ESB failed to provide Plaintiffs with a copy of the fully executed closing documents for in excess of three (3) years following the closing. Defendant ESB also failed to provide the Mortgage Servicing Disclosure Statement to Plaintiffs either at closing or within the legally prescribed three business days of receiving the loan, having only provided the subject MSDS some 4 and ½ years after closing.
11. Despite Plaintiffs having made their mortgage payments, Defendant ESB failed to apply any portion of the payments toward principal and failed to reduce principal in contradiction to the affirmative representations of Defendant ESB in its pre-closing Truth-In-Lending Statement.
12. In June of 2005, Defendant ESB charged Plaintiffs $983.50 for “legal fees” for an alleged foreclosure even though Plaintiffs were not in arrears or default of the mortgage.
13. Plaintiffs contacted Paul Buckingham, an authorized representative of Defendant ESB, as to the wrongful attorneys’ fee charge and the failure of Defendant ESB to apply any portion of Plaintiffs’ mortgage payments to principal. Plaintiffs also forwarded written correspondence to Defendant ESB’s counsel detailing the errors then known to Plaintiffs.
14. Defendant ESB and its counsel failed to respond to the Plaintiffs as to the wrongful charge for attorneys’ fees, failure of Defendant ESB to apply any portion of Plaintiffs’ payments to principal, and other errors.
15. Defendant ESB further wrongfully and unilaterally changed Plaintiffs’ interest rate to $13.99% on the loan without any authorization from or consent of Plaintiffs.
16. Plaintiffs experienced financial difficulties in the latter part of 2006, and were one month late on the mortgage payment.
17. Pursuant to the closing documents, Plaintiffs’ mortgage payments were due at the end of each month.
18. When Plaintiffs sent their September 30, 2006 payment to Defendant ESB (which was more than what was owed), Defendant ESB returned same claiming that an additional $247.00 was owed, thus intentionally setting up Plaintiffs for being two months behind in their mortgage instead of accepting the payment and billing Plaintiffs for the additional $247.00.
19. The following day, Plaintiffs received papers from Defendant ESB indicating its intention to foreclose.
20. Defendant ESB thereafter agreed to a forbearance of the foreclosure.
21. The forbearance agreement called for, among other things, a payment of $2,300.00 for the February, 2007 mortgage payment, which the Plaintiffs did make.
22. Plaintiffs continued to make payments pursuant to the forbearance agreement including an additional $247.00 which Defendant ESB claimed was owed from an alleged prior balance.
23. At all times material, Defendant ESB was aware, and agreed, to accept payment of the mortgage payments which accrued during the forbearance period when Plaintiffs were able to access certain funds from an annuity, which was anticipated to be in or about mid-April, 2007.
24. Plaintiffs made Defendant ESB aware of the fact that the monies were coming from the subject annuity and that the checks were only cut on certain days of the month but which exact dates were unknown in advance to the Plaintiffs.
25. Plaintiffs made the March, 2007 payment on April 2, 2007. Despite making such payment, Defendant ESB, through its attorney Potter, claimed not to have received the subject payment and threatened to foreclose on April 18, 2007.
26. Despite the fact that the forbearance amount to be paid was $11,529.61, Defendant ESB’s agent attorney Erik Potter, Esq. demanded a payment from Plaintiffs of $23,500.00.
27. When Plaintiffs questioned attorney Potter as to the source of this increased amount (which was demanded by attorney Potter without explanation), attorney Potter reduced the figure to $21,177,60, but without explanation or breakdown as to how this sum was computed.
28. Despite Plaintiffs tendering to attorney Potter a cashier’s check for $21,177.60 payable to Defendant ESB (which attorney Potter accepted) and Plaintiffs making numerous attempts to contact attorney Potter for a breakdown of the demanded amount, attorney Potter never provided any such breakdown.
29. Plaintiffs continued to experience difficulties with Defendant ESB, and sought the services of a credit counselor.
30. Although Plaintiffs continued to make payments to Defendant ESB throughout 2008, Defendant ESB continued to threaten foreclosure claiming that Plaintiffs were “late” as to payments which were allegedly due by the 15th of the month when in fact Plaintiffs never consented to, approved, or executed any agreement which changed their payment date from the end of the month to the 15th of the month.
31. Defendant ESB also continued to wrongfully return checks sent by Plaintiffs to Defendant ESB, with Defendant ESB returning the checks not to the address of Plaintiffs, but to the address of Plaintiffs’ neighbor. Defendant ESB intentionally engaged in such conduct for the purpose of attempting to manufacture a fraudulent default and a create an alleged posture to institute foreclosure.
32. Defendant ESB continued to demand the payment of additional sums from the Plaintiffs without backup or documentation as a condition of canceling any foreclosure, which Plaintiffs did pay, including a lump sum payment of $12,000.00 to Defendant ESB on August 18, 2008 on the express understanding that such payment cancelled all foreclosure intentions of Defendant ESB.
33. Despite having complied with the demands of Defendant ESB, counsel for Defendant ESB continued to threaten foreclosure, and by letter of September 19, 2008 notified Plaintiffs that the foreclosure was simply “postponed” from September 18, 2008 until October 20, 2008.
34. On October 7, 2008, a representative of Defendant ESB telephoned Plaintiffs and affirmatively represented to Plaintiffs that Defendant ESB had agreed to put any claimed arrearage on the “back end” of the loan, but wanted Plaintiffs to accelerate their payment date by 15 days before it was otherwise and normally due per the closing documents.
35. Although Plaintiffs did not accede to the accelerated payment date requested by Defendant ESB, Defendant ESB nonetheless agreed, on October 9, 2008 through and with the same representative of Defendant ESB who spoke to Plaintiffs on October 7, 2008, to permit Plaintiffs to keep their current payment due date (which was, as set forth above, the end of the month; the grace period being to the 15th of the following month). This representative of Defendant ESB also affirmatively represented to Plaintiffs “not to worry about” the September 19, 2008 letter from Defendant ESB’s counsel which purported to reschedule the date of the foreclosure sale.
36. The representative of Defendant ESB advised the Plaintiffs that the current amount due was $2,008.86.
37. Although Plaintiffs tendered a check to Defendant ESB for $2,009.00 by express mail on October 29, 2008, Defendant ESB wrongfully returned the subject payment, sending it not the to Plaintiffs, but to the Plaintiffs’ neighbor, and having returned the payment without explanation.
38. Plaintiffs attempted to make the subject payment again with a cashier’s check. However and despite such efforts which were made by the Plaintiffs in reasonable reliance on the prior express affirmative representations of the representative of Defendant ESB, Defendant ESB conducted a foreclosure sale of the Property on October 20, 2008, selling the Property to Defendant PII.
39. Notwithstanding that Plaintiffs complied with the forbearance agreement, made payments pursuant thereto, and even overpaid Defendant ESB pursuant to the demands of its agent/attorney Potter for all sums demanded by him, Defendant ESB wrongfully, illegally, and unlawfully foreclosed on Plaintiffs’ property through a pattern of manufacturing alleged “defaults” on payment schedules never agreed to by Plaintiffs; unilaterally altering the alleged sums due at the last minute; wrongfully refusing tender of payments; and failing to properly credit payments toward the mortgage loan.
40. Defendant PII subsequently acquired title to the property following the wrongful foreclosure by Defendant ESB, and is currently attempting to obtain possession of the property and force the Plaintiffs to undertake measures to remediate the property in the Housing Court.
41. The property is the Plaintiffs’ residence which the Plaintiffs intend to seek to repossess. Further action of the Housing Court needs to be stayed or abated in order to maintain the status quo of the property pending the resolution of the legality of the underlying foreclosure.
- Claims for Relief
FIRST CLAIM FOR RELIEF
42. Plaintiffs reallege and reincorporate paragraphs 1 through 41 hereinabove as if set forth more fully hereinbelow.
43. As set forth above, Defendant ESB made numerous material representations to Plaintiffs which Defendant ESB knew to be false when made and which were made deliberately and intentionally.
44. Defendant ESB made the subject material misrepresentations to Plaintiffs with the specific intent that Plaintiffs rely thereon.
45. Plaintiffs did reasonably rely upon the affirmative representations of Defendant ESB to their detriment.
46. As a direct and proximate result of the material misrepresentations which were made by Defendant ESB, Plaintiffs have suffered damages.
SECOND CLAIM FOR RELIEF
47. Plaintiffs reallege and reincorporate paragraphs 1 through 35 hereinabove as if set forth more fully hereinbelow.
48. As set forth above, Defendant ESB wrongfully acquired title to the property the subject of this action through a pattern of intentional fraudulent conduct; the fraudulent manufacturing of defaults; and the intentional demand for monies to which it was not legally entitled.
49. Pursuant to Mass.R.Civ.P. 60(b)(3), Plaintiffs are entitled to bring this action to request that the Court vacate and set aside the Final Judgment of Foreclosure which was procured by fraud.
50. Plaintiffs also request that the Final Judgment of Foreclosure be set aside pursuant to Mass.R.Civ.P. 60(b)(6), as to do so is appropriate to accomplish the ends of justice under the circumstances.
51. This claim is brought within one year of the entry of the Final Judgment of Foreclosure, and is thus timely.
THIRD CLAIM FOR RELIEF
52. Plaintiffs reallege and reincorporate paragraphs 1 through 35 hereinabove as if set forth more fully hereinbelow.
53. This is an action and claim for relief which is brought pursuant to G.L. 93A for damages and injunctive relief.
54. Plaintiffs are “persons” within the meaning of G.L. 93(A)(1)(a).
55. The actions of Defendant ESB constitute unfair and deceptive practices engaged in by a business within the course of trade or commerce within the meaning of G.L. 93(A)(1)(b).
56. The presuit notice provisions of G.L. 93(A)(9)(3) are not applicable as to Defendant ESB as said Defendant does not maintain a place of business or keep assets within the Commonwealth of Massachusets.
57. Pursuant to G.L. 93(A)(9)(1), Plaintiffs are entitled to seek remedies of damages and injunctive relief.
58. As a direct and proximate result of the unfair and deceptive practices of Defendant ESB as set forth above, Plaintiffs have suffered and continue to suffer damages.
FOURTH CLAIM FOR RELIEF
59. Plaintiffs reallege and reincorporate paragraphs 1 through 35 hereinabove as if set forth more fully hereinbelow.
60. As the Plaintiffs have lost their home through the fraudulent acts and practices of Defendant ESB which have permitted Defendant PII to commence eviction and other proceedings, Plaintiffs have a clear legal right to seek injunctive relief.
61. Plaintiffs have a likelihood of success on the merits of their claims against Defendant ESB that the foreclosure instituted thereby was fraudulent and subject to being vacated and set aside.
62. If the injunctive relief requested herein is not granted, Plaintiffs will suffer irreparable harm in the form of loss of their home and further actions of the Housing Court, for which damages is an inadequate remedy as the home is unique.
63. The granting of the injunctive relief requested herein is in the public interest.
64. Under the circumstances where Defendant PII has only acquired title to the property through the fraudulent and unfair and deceptive conduct of Defendant ESB, Plaintiffs should not be required to post any bond as a condition of being granted injunctive relief.
WHEREFORE, Plaintiffs pray as follows:
As to their FIRST CLAIM FOR RELIEF, an award of money damages;
As to their SECOND CLAIM FOR RELIEF, the entry of an Order or Judgment vacating and setting aside the Final Judgment of Foreclosure previously entered in favor of Defendant ESB;
As to their THIRD CLAIM FOR RELIEF, the entry of an injunction prohibiting any further post-foreclosure proceedings by any party and for an award of money damages including any multiple of damages as provided by G.L. 93A, costs, and attorneys’ fees; and
As to their FOURTH CLAIM FOR RELIEF, the entry of a temporary and permanent injunction prohibiting any further post-foreclosure proceedings including any eviction or other proceedings related to the property by the Housing Court or any other Court which command any action on the part of the Plaintiffs.
Dated this 21st day of January, 2009.
VERIFICATION
COUNTY OF PLYMOUTH
BEFORE ME, THE UNDERSIGNED AUTHORITY, personally appeared who, after being either (personally known to me) or (who have produced _____________________[type of identification]) executed the foregoing document and swear, under the penalties and pains of perjury, that the factual allegations of this Verified Complaint are true and correct.
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Notary Public
Commonwealth of Massachusets
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