Kozusko v. Aegis Funding

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM With Supporting Memo

D.R.I.March 15, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND EDWARD M. KOZUSKO, III, C.A. No. 1:17-cv-00034-S-PAS Plaintiff, v. AEGIS FUNDING D/B/A AEGIS HOME EQUITY BY AND THROUGH ITS NOMINEE, MERS, Defendant. MOTION OF DEFENDANT, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., TO DISMISS PLAINTIFF’S AMENDED COMPLAINT Defendant, Mortgage Electronic Registration Systems, Inc. (“MERS”) (improperly named as “Aegis Funding d/b/a Aegis Home Equity by and Through its Nominee, MERS”), hereby moves pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss with prejudice the Amended Complaint of Plaintiff, Edward M. Kozusko, III. This Motion is supported by the accompanying Memorandum of Law. Respectfully submitted, Date: March 15, 2017 /s/ David J. Pellegrino David J. Pellegrino (#7326) Partridge Snow & Hahn, LLP 40 Westminster Street, Suite 1100 Providence, RI 02903 (401) 861-8200/(401)861-8210 (fax) djp@psh.com Attorneys for Defendant, Mortgage Electronic Registration Systems, Inc., improperly named as Aegis Funding d/b/a Aegis Home Equity by and Through its Nominee, MERS Case 1:17-cv-00034-S-PAS Document 6 Filed 03/15/17 Page 1 of 2 PageID #: 133 - 2 - CERTIFICATE OF SERVICE I, David J. Pellegrino, hereby certify that the foregoing Motion to Dismiss Plaintiff’s Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6) was filed electronically through the Court’s ECF system. /s/ David J. Pellegrino David J. Pellegrino Date: March 15, 2017 Case 1:17-cv-00034-S-PAS Document 6 Filed 03/15/17 Page 2 of 2 PageID #: 134 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND EDWARD M. KOZUSKO, III, C.A. No. 1:17-cv-00034-S-PAS Plaintiff, v. AEGIS FUNDING D/B/A AEGIS HOME EQUITY BY AND THROUGH ITS NOMINEE, MERS, Defendant. MEMORANDUM OF LAW IN SUPPORT OF MOTION OF DEFENDANT MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. TO DISMISS PLAINTIFF’S AMENDED COMPLAINT Defendant, Mortgage Electronic Registration Systems, Inc. (“MERS”) (improperly named as “Aegis Funding d/b/a Aegis Home Equity by and Through its Nominee, MERS”), hereby submits this Memorandum of Law in support of its Motion pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss with prejudice the Amended Complaint of Plaintiff, Edward M. Kozusko, III. I. INTRODUCTION In his Amended Complaint, Plaintiff purports to assert five separate causes of action against “Aegis Funding d/b/a Aegis Home Equity by and through its Nominee, MERS” related to a 2006 mortgage on certain real property located at 12 Edwards Drive, Hopkinton, Rhode Island (the “Property”). Aegis Funding d/b/a Aegis Home Equity is a defunct entity, Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 1 of 15 PageID #: 135 - 2 - however.1 To the extent Plaintiff is seeking to assert his claims against MERS, Plaintiff has failed to assert sufficient facts to support any request for relief. First, Plaintiff improperly seeks to quiet title in the Property, by alleging in Count I of the Amended Complaint that his mortgage was subject to Aegis’s bankruptcy, became an asset of Aegis’s bankruptcy estate, and was “settled” by the bankruptcy, thus allegedly causing “Defendant’s right, title and interest” in the mortgage to become invalid. This claim fails for the simple reason that in a title theory state such as Rhode Island, a mortgagor is not adverse to a mortgagee and thus cannot quiet title with respect to a mortgagee. Second, in Counts II, IV, and V of the Amended Complaint, Plaintiff appears to raise issues with respect to the original loan transaction in 2006, including that he did not execute a Promissory Note in favor of the “Defendant” at the time of the original loan transaction, that the “Defendant” failed to provide certain information about the loan terms and failed to provide copies of the closing documents, and that the “Defendant” misrepresented material facts concerning the mortgage. In Count III, Plaintiff purports to assert a claim under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq., in connection with certain correspondence allegedly submitted to the “Defendant,” which Plaintiff contends qualified as a Qualified Written Request (“QWR”). Plaintiff, however, fails to support any of these allegations with any facts, particularly as to MERS’s alleged involvement in these events, given that MERS is merely alleged to be the nominee for the original mortgagee, Aegis. Accordingly, such allegations fail to support any cognizable claim against MERS. 1 Aegis Mortgage Corporation, the parent company of Aegis Funding Corporation d/b/a Aegis Home Equity, filed a Chapter 11 petition, and its liquidation plan was approved by the U.S. Bankruptcy Court for the District of Delaware in October 2010. See https://www.law360.com/articles/202954/aegis-mortgage-ch-11-liquidation-plan-ok-d. It should be noted that undersigned counsel only represents MERS and does not represent any Aegis entity in this action. Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 2 of 15 PageID #: 136 - 3 - Finally, it appears from the face of the Amended Complaint that the common law and state statutory claims in Counts IV and V (for Breach of Contract, Good Faith and Fair Dealing (Count IV); and Deceptive Trade Practices Act (Count V), are time-barred under the applicable ten-year limitations periods. For the reasons discussed more fully below, Plaintiff’s claims as to MERS must be dismissed with prejudice. II. FACTUAL AND PROCEDURAL BACKGROUND Plaintiff alleges that he executed a mortgage “granted by Plaintiff to the Defendant” on the subject property on or about January 5, 2006. (Am. Compl. ¶ 7.) Plaintiff further contends that Aegis “appointed” MERS as its nominee for the mortgage instrument that is the subject of this lawsuit. (Id. ¶ 8.) Plaintiff alleges that at the time of the original loan closing in January, 2006, he did not execute a promissory note; was not informed of the loan’s terms; and was not provided a copy of his closing documents, including various “required” disclosures. (Id. ¶¶ 9-11, 20, 23, 32-34, 41-43.) Plaintiff alleges that “Defendant wrongfully induced [him] into the transaction which is the basis of its mortgage instrument,” and improperly tried to collect on that mortgage. (Id. ¶¶ 26-28.) Furthermore, Plaintiff contends that “Defendant” misrepresented the material terms and conditions of Plaintiff’s loan, and that such misrepresentations were “likely to … affect [Plaintiff’s] decision making with respect to the transaction and Plaintiff’s relationship with Defendant following the transaction.” (Id. ¶¶ 44-46.) Plaintiff contends Aegis’s “asset[s]”, including the mortgage, were later “liquidated” in a bankruptcy action. (Am. Compl. ¶¶ 14-15). He also alleges that “Defendant’s mortgage instrument and that all of Defendant’s right, title and interest in and to said mortgage Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 3 of 15 PageID #: 137 - 4 - … were settled through the Chapter 11 [b]ankruptcy.” (Id. ¶ 16.) Because “no party” acquired ownership rights to the mortgage through Aegis’s bankruptcy, Plaintiff contends that “Defendant’s” interest in the instrument “is invalid and … Defendant lacks the authority to enforce the terms, conditions and covenants of said mortgage…” (Id. ¶¶ 17-18.) Finally, during some unspecified period in 2016, Plaintiff alleges that he submitted correspondence to “Defendant” “disputing account information which were qualified written requests” under the RESPA. (Id. ¶ 25.) Plaintiff fails to identify the nature of his alleged “dispute,” fails to identify as to which “Defendant” the correspondence allegedly was sent, and fails to attach a copy of such correspondence to the Amended Complaint. Plaintiff nonetheless contends that “Defendant” had a “duty to respond” to his requests and take corrective action, which it failed to do, and that this failure was a “pattern or practice” of non-compliance with the RESPA. (Id. ¶¶ 26-28.) Plaintiff commenced this action by filing a Complaint in Rhode Island Superior Court for Washington County on or about November 22, 2016. On or about December 20, 2016, Plaintiff filed an Amended Complaint against the named Defendant, in which Plaintiff purported to assert five separate causes of action: Quite[sic] Title (Count I); Failure of Indebtedness (Count II); Real Estate Settlement Procedures Act (Count III); Breach of Contract, Good Faith and Fair Dealing (Count IV); and Deceptive Trade Practices Act (Count V). On or about January 26, 2017, MERS filed a notice of removal to this Court. III. STANDARD OF REVIEW To survive a motion to dismiss under Federal Rule 12(b)(6), a complaint must allege “a plausible entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007); see also ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 58 (1st Cir. 2006). Under this standard, Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 4 of 15 PageID #: 138 - 5 - “[f]actual allegations must be enough to raise a right to relief above the speculative level,” and a plaintiff must “nudge[ ] their claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 555, 570. Although a court must accept all allegations as true, this tenet is not applicable to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555); see also Meas v. Greenpoint Mortg. Funding, Inc., Civ. No. 12-438-M, 2013 WL 5652054, * 2 (D.R.I. Oct. 16, 2013). In short, “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. IV. LEGAL ARGUMENT A. Plaintiff’s Claim in Count I For Quiet Title Fails as a Matter of Law. Count I of Plaintiff’s Amended Complaint purports to assert a claim for quiet title as to the Property. Rhode Island law permits any person claiming title to real estate to file suit to determine the validity of title or estate therein, to remove any cloud on title, and to affirm or quiet title to real estate. R.I. Gen. Laws § 34-16-4. An action to quiet title is permitted against all persons “appearing to have of record any adverse interest.” Id. A mortgagee does not have such an “adverse interest” to its mortgagor, however. In Rhode Island, when a borrower secures a loan by giving a lender a mortgage on his property, legal title to that property is granted to his lender/mortgagee but equitable title and the right of redemption are retained by the mortgagor. Houle v. Guilbeault, 40 A.2d 438, 440 (R.I. 1944); see also Block Island Land v. Washington Trust Co., 713 A.2d 199, 201 (R.I. 1998); Lister v. Bank of America, N.A., 790 F.3d 20, 25 (1st Cir. 2015) (holding that in title theory state such as Rhode Island “a mortgagee not only obtains a lien upon the real estate by virtue of the grant of the mortgage deed but also obtains legal title to the property subject to defeasance upon Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 5 of 15 PageID #: 139 - 6 - payment of the debt”) (internal citations omitted). Therefore, a mortgagor lacks standing to assert a quiet title claim against a mortgagee. Lister, 790 F.3d at 26. The First Circuit Court of Appeals’s decision in Lister is particularly instructive. There, the plaintiff mortgagor originally purchased her property in 2000, and subsequently refinanced the loan with a lender that soon went bankrupt. Id. at 22. Her note and mortgage thereafter assigned to at least two other entities. Id. In 2008, the mortgagor “grew suspicious” with how her loan was being handled and “slowed” her mortgage payments, which led the current holder of the note and mortgage to contact her and threaten to foreclose. Lister, 790 F.3d at 26. Shortly thereafter, a foreclosure action was commenced against the mortgagors. Id. The mortgagor, claiming uncertainty regarding which entity held an enforceable mortgage on her home, brought suit in the district court against several “potential” mortgagees and asserted a cause of action for quiet title, among other claims. Id. at 23. The district court dismissed the mortgagor’s complaint in its entirety for failure to state a claim, and she appealed dismissal of the quiet title count to the First Circuit. Id. In affirming the dismissal of the mortgagor’s quiet title claim, the First Circuit held a mortgagor’s equitable interest in title, and a mortgagee’s legal interest in that same title, were separate and complementary to one another and “not adverse.” Lister, 790 F.3d at 25. Further, in a title theory state, mortgage law “splits the title [to the property] in two parts: the legal title, which becomes the mortgagee’s and secures the underlying debt, and the equitable title, which the mortgagor retains,” and a “mortgagor can reacquire this defeasible legal title by paying the debt which the mortgage secures.” Id. In this case, Plaintiff brought suit against his original lender, Aegis, and its nominee, MERS. Accordingly, Plaintiff has failed to demonstrate any “adverse” relationship Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 6 of 15 PageID #: 140 - 7 - between himself and the named “Defendant.” Thus, pursuant to the First Circuit’s decision in Lister, Plaintiff cannot maintain a quiet title action as to MERS as a matter of law. B. Plaintiff’s Claims in Counts II, III, IV, and V Are Deficient Under The Twombly and Iqbal Pleading Standards. Plaintiff’s conclusory allegations in Counts II, III, IV and V of his Amended Complaint are not supported by any well-pleaded facts and, as such, fall well short of the pleading standards set forth in Twombly and Iqbal. 1. Plaintiff fails to allege any facts demonstrating MERS’s involvement in the January, 2006, origination of the mortgage loan or any misrepresentations made by MERS regarding the mortgage loan. In Counts II, IV, and V (purporting to assert claims for Failure of Indebtedness, Breach of Contract, Good Faith and Fair Dealing, and Deceptive Trade Practices Act), Plaintiff essentially attempts to challenge the original loan transaction with Aegis, for which MERS was the nominee. Plaintiff also conclusorily alleges that since the origination of the loan, “Defendant” made certain misrepresentations about the loan. Plaintiff contends that: • “[O]n or about January 5, 2006, the Plaintiff did not execute a promissory note in favor of the Defendant.” (Am. Compl. ¶ 20); • “Defendant failed to inform Plaintiff of the mortgage terms, conditions of the loan, the effective annual percentage rate, and the costs and expenses related with the transaction.” (Am. Compl. ¶ 32); • “Defendant failed to provide a copy of the closing documents…” (Am. Compl. ¶ 33); • “Defendant wrongfully induced Plaintiff into the transaction…. [and] wrongfully attempted collection upon said mortgage instrument” (Am. Compl. ¶¶ 35-36); • “[O]n or about January 5, 2006, Defendant misrepresented material facts concerning the validity of the Defendant’s mortgage instrument, and, concerning the terms, conditions and covenants of the settlement of a transaction which occurred at said time.” (Am. Compl. ¶ 44); and Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 7 of 15 PageID #: 141 - 8 - • “[S]ince January 5, 2006, the Defendant has continued to misrepresent material facts to Plaintiff concerning the validity of the Defendant’s mortgage instrument, and, concerning the terms, conditions and covenants of the settlement of a transaction which occurred at said time.” (Am. Compl. ¶ 45). Each of these allegations is insufficiently specific, and particularly as to MERS. Notably, nowhere in any of these Counts of the Amended Complaint does Plaintiff specifically identify a single alleged act or omission by MERS itself, nor any conduct by MERS directed to Plaintiff. Rather, these allegations improperly lump together both Aegis and MERS as the “Defendant” and appear, in fact, to be directed at the originating lender, Aegis, a defunct entity. Plaintiff’s claims are thus deficient, because, among other things, they fail to state clearly which defendant committed each of the alleged wrongful acts. See Bagheri v. Galligan, 16 Fed. Appx. 4, 5, 2005 WL 3536555, *1 (1st Cir. Dec. 28, 2005) (unpublished decision) (affirming dismissal of complaint under Rule 12(b)(6) where district court had found complaint deficient because plaintiff failed to state clearly which defendant or defendants committed each of the alleged wrongful acts, and plaintiff failed to file amended complaint); see also Diaz v. Perez, NO. 16- 11860-RGS, 2016 WL 6871233 (D. Mass. Nov. 21, 2016) (finding that where plaintiff made conclusory allegations concerning defendants’ actions and combined all causes of action against all defendants, it is unclear what legal claims plaintiff asserts against which defendants) (citing Bagheri and Atuahene v. City of Hartford, 10 Fed. Appx. 33, *34, 2001 WL 604902, at *1 (2d Cir. 2001) (unpublished decision) (stating “[b]y lumping all the defendants together in each claim and providing no factual basis to distinguish their conduct, [plaintiff’s] complaint failed to satisfy [ ] minimum standard…”)). In Clark v. Mortgage Electronic Registration Sys., Inc., 7 F. Supp. 3d 169, 181 (D.R.I. 2014), a mortgagor asserted a number of allegations against MERS and an assignee of Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 8 of 15 PageID #: 142 - 9 - the mortgage, Bayview Loan Servicing, LLC, (“Bayview”), including that the “Defendants” did not comply with the mortgage’s provisions regarding the statutory power of sale. The District Court determined that such allegations, which did not specifically allege how the named Defendants had failed to comply with the terms of the mortgage, failed under an Iqbal-Twombly analysis. Id., 7 F. Supp. 3d at 181. The Court pointed out that such allegations, even if plausible, were made only as to the original lender (Equity One), and not to MERS and/or the assignee, Bayview, as the plaintiff did not make any allegations specific to those entities regarding the alleged failure to invoke the statutory power of sale and other notice requirements. See id. Likewise, in this case, Plaintiff has not made any factual allegations specific to MERS regarding the origination of the loan, including any alleged obligation or involvement by MERS in the closing. Plaintiff also wholly fails to identify any facts concerning alleged misrepresentations or statements made by a MERS representative to Plaintiff, such as when such statements allegedly were made, by whom, and the exact content of such alleged statements. As such, Plaintiff’s generic and conclusory allegations as to “Defendant” in Counts II, IV, and V fail under Iqbal-Twombly. See Iqbal, 556 U.S. at 678 (“threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice”); Twombly, 550 U.S. at 555. Additionally, even if Plaintiff sought leave to amend to attempt to more specifically plead his claim as to MERS, Plaintiff likely could not state any plausible claim for relief against MERS, which is merely the nominee for the mortgagee and would have had no involvement in the origination or servicing of the loan. See, e.g., Magdaleno v. Indymac Bancorp, Inc., 853 F. Supp. 2d 983, 994 (E.D. Cal. 2011) (holding that dismissal of mortgagor’s Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 9 of 15 PageID #: 143 - 10 - fraud claims against successor mortgagee and MERS, as nominee, would be without leave to amend, where mortgagor conceded she was unable to show how the defendants had any involvement in originating the loans). 2. Plaintiff fails to identify any QWR directed to MERS, or that MERS had an obligation to respond to any QWR under RESPA. Plaintiff’s claim in Count III grounded in alleged violations of the RESPA also fails as against MERS. Here, Plaintiff makes the following accusations, again aimed at the “Defendant,” and not MERS specifically, regarding the “Defendant’s” alleged failure to respond to a qualified written request (“QWR”) at some point in 2016: • “In 2016, the Plaintiff submitted correspondence to the Defendant requesting account information and further disputing account information which were qualified written requests pursuant to the Real Estate Settlement Procedures Act.” (Am. Compl. ¶ 25); • “On each occasion the Defendant had a duty to respond to the request and to act to correct the account or explain why the account was correct” (Id. ¶ 26); • “On each occasion the Defendant did not respond to the request nor act to correct the account or explain why the account was correct” (Id. ¶ 27); and • “That the Defendant’s conduct was a pattern or practice of non- compliance with the Real Estate Settlement Procedures Act” (Id. ¶ 28). Plaintiff fails to attach any of the referenced correspondence to the Amended Complaint. Furthermore, no specificity is provided as to (1) any specific date on which Plaintiff allegedly requested and/or disputed his account information; (2) what specific information was requested and/or disputed; and, perhaps most importantly, (3) to whom did Plaintiff makes these purported requests and/or disputes (i.e., Aegis and/or MERS), and (4) to what address Plaintiff allegedly directed the QWR. Plaintiff utterly fails to identify a single communication sent to MERS that would qualify as a QWR under RESPA. Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 10 of 15 PageID #: 144 - 11 - In addition to failing to identify any QWR as to MERS, Plaintiff also has failed to allege that MERS had any obligation to respond to an alleged QWR at all. Section 2605 of RESPA relates to the disclosures and communications required regarding the servicing of mortgage loans, and provides that loan servicers have a duty to respond to QWRs from borrowers asking for information relating to the servicing of their loan. See 12 U.S.C. § 2605(e). Here, Plaintiff has not alleged that MERS is a servicer at all, much less that it ever serviced Plaintiff’s mortgage loan. Without alleging that MERS is a “loan servicer” under RESPA, Plaintiff cannot show that MERS had any duty to respond to an alleged QWR, even if Plaintiff can demonstrate that a QWR was even sent to MERS. See, e.g., Moceri v. Plaza Home Mortg., Inc., No. 11cv1060-CAB (RBB), 2013 WL 7869339, *7 (S.D. Cal. Mar. 7, 2013) (granting with prejudice motion to dismiss filed by MERS, because alleged QWR letters were not addressed to MERS and plaintiff failed to allege that MERS was a loan servicer under RESPA); Castaneda v. Saxon Mortg. Servs., Inc., 687 F. Supp. 2d 1191, 1199 (E.D. Cal. 2009) (granting motion to dismiss as to RESPA claim, because of failure by plaintiffs to allege that certain defendant was a servicer at all or that it ever serviced plaintiff’s loan); see also Giordano v. MGC Mortgage, Inc., 160 F. Supp. 3d 778, 784-85 (D. N.J. 2016) (holding that mortgagor’s conclusory allegations regarding alleged provision of qualified written requests to mortgagee failed to sufficiently allege facts required to state a claim under RESPA). Finally, Plaintiff’s claims that the complained-of conduct was a “pattern or practice” of RESPA violations are nothing more than unsupported and speculative legal conclusions. This Court need not accept these accusations as true in deciding this motion, and they should not be credited as plausible. Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 11 of 15 PageID #: 145 - 12 - Having failed to meet the pleading standards of Twombly and Iqbal, Plaintiff’s RESPA claim against MERS in Count III should be dismissed with prejudice. C. Plaintiff’s Claims in Counts IV and V are Time-Barred. In addition to being deficient for the reasons discussed above, it is apparent from the face of the Amended Complaint that Plaintiff’s common law and statutory claims in Counts IV and V are time-barred by the applicable ten year limitations periods. First, with respect to Plaintiff’s claim in Count IV for “breach of contract, good faith and fair dealing,” Plaintiff alleges that on or about January 5, 2006,2 “Defendant” failed to inform him of the actual terms and conditions of his mortgage loan, did not provide him with copies of the closing documents and various “required” disclosures. (See Am. Compl. ¶¶ 32-33.) As a result, Plaintiff claims he was “wrongfully induced” into the loan transaction, and did not sign the loan documents “with informed consent.” (Id. ¶¶ 34-35.) R.I. Gen. Laws § 9-1-13 provides a default 10-year statute of limitations for civil actions. See § 9-1-13 (“all civil actions shall be commenced within ten (10) years next after the cause of action shall accrue, and not after.”). This general limitations period applies to claims for breaches of contract which do not involve the sale of goods. See generally Estate of Frusher v. Abt Associates, Inc., 643 F. Supp. 2d 220, 226 (D.R.I. 2009); Trustees of Local Union No. 17 Sheet Metal Workers’ Apprenticeship Fund v. May Eng’g, Co., 951 F. Supp. 346, 348 (D.R.I. 1997); Vanlaarhoven v. Newman, 564 F. Supp. 145, 150 (D.R.I. 1983). Here, Plaintiff complains that Aegis and/or MERS allegedly failed to inform him of the true terms of his loan at origination, on or about January 5, 2006. Any claim for breach of 2 In the Amended Complaint, Plaintiff appears to incorrectly reference this date as “January 5, 2016,” and not January 5, 2006. (See Am. Compl. ¶¶ 32-33.) However, based on the context of this claim, as well as the remainder of the allegations in the Amended Complaint pertaining to the alleged closing date of January 5, 2006, MERS believes the reference to “January 5, 2016” is a typographical or clerical error. Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 12 of 15 PageID #: 146 - 13 - contract or breach of any duty of good faith and fair dealing accrued as of that date and thus should have been filed within ten years – by January 5, 2016. That did not happen. Plaintiff filed his original Complaint on November 22, 2016, well after the limitations period on this claim already had run. Accordingly, based on the face of the Amended Complaint, Plaintiff’s claim in Count IV must be dismissed due to the expiration of the ten-year limitations period. See Trans-Spec Truck Service, Inc. v. Caterpillar, Inc., 524 F.3d 315, 320 (1st Cir. 2008) (“Affirmative defenses, such as the statute of limitations, may be raised in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), provided that the facts establishing the defense [are] clear on the face of the plaintiff's pleadings.”) (internal citations omitted). Second, in Count V of the Amended Complaint, Plaintiff alleges that on or about January 5, 2006, Aegis misrepresented the material terms and conditions of Plaintiff’s mortgage loan, and that such misrepresentations were “likely to … affect [Plaintiff’s] decision making with respect to [entering into the loan] transaction and Plaintiff’s relationship with [Aegis] following the transaction.” (Am. Compl. ¶¶ 44-46.) Based on these allegations, Plaintiff contends “Defendant” violated the Rhode Island Deceptive Trade Practices Act, R.I. Gen. Laws § 6–13.1– 1, et seq. (“DTPA”). While the DTPA does not have its own statute of limitations, the Rhode Island Supreme Court has held that the limitations period for DTPA claims depends on the underlying nature of the claim itself. Kennedy v. Acura, 2002 WL 31331373, *6 (R.I. Sup. Ct. Aug. 28, 2002) (citing Paul v. City of Woonsocket, 745 A.2d 169 (R.I. 2000) (holding that courts must look to the limitations period of the state’s most analogous cause of action)). Here, the underlying claim is essentially one for fraud, because Plaintiff alleges that material misrepresentations of loan terms by “Defendant” affected his decision to enter into the loan Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 13 of 15 PageID #: 147 - 14 - transaction. In Rhode Island, the limitations period to bring a claim for fraud is ten years. See § 9-1-13. Because Plaintiff’s DTPA claim concerns alleged misrepresentations committed at the loan origination by “Defendant” on or about January 5, 2006, any action pertaining to deceptive trade practices must have been brought within ten years, or by January 5, 2016. Plaintiff’s Complaint was not filed until November 22, 2016, however. His DTPA claim is clearly time-barred.3 Accordingly, Count V of Plaintiff’s Amended Complaint must be dismissed with prejudice. V. CONCLUSION For all the foregoing reasons, MERS respectfully request that this Court grant its Motion to Dismiss, dismiss Counts I-V of Plaintiff’s Amended Complaint with prejudice, and grant such other relief which is just and proper. Respectfully submitted, /s/David J. Pellegrino March 15, 2017 David J. Pellegrino (#7326) Partridge Snow & Hahm, LLP 40 Westminster Street, Suite 1100 Providence, RI 02903 (401) 861-8200 (401)861-8210 (fax) djp@psh.com Counsel for Defendant, Mortgage Electronic Registration Systems, Inc., improperly named as Aegis Funding d/b/a Aegis Home Equity by and Through its Nominee, MERS 3 Further, the DTPA likely does not apply to MERS. In interpreting § 6–13.1–4, the Rhode Island Supreme Court has held that “the Act expressly sets forth an exemption for all activities and businesses that are subject to monitoring by state and federal regulatory bodies or officers.” See Kelley v. Cowesett Hills Assocs., 768 A.2d 425, 431–32 (R.I. 2001). Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 14 of 15 PageID #: 148 CERTIFICATE OF SERVICE I, David J. Pellegrino, hereby certify that the foregoing Motion to Dismiss Plaintiff’s Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6) was filed electronically through the Court’s ECF system. /s/ David J. Pellegrino David J. Pellegrino Date: March 15, 2017 2993457.1/7078-20 Case 1:17-cv-00034-S-PAS Document 6-1 Filed 03/15/17 Page 15 of 15 PageID #: 149