DiMare v. Ameriquest Mortgage Company et al

UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS
EASTERN DIVISION
______________________________________
IN RE:
DONNA M. DIMARE, 	Chapter 13
DEBTOR. 	Case No. 08-10598-WCH
_______________________________________
_______________________________________
DONNA M. DIMARE,
PLAINTIFF,
v.
Adversary Proceeding
AMERIQUEST MORTGAGE COMPANY 	No. 08-1046
AND OPTION ONE MORTGAGE CORP.,
DEFENDANTS.
______________________________________
MEMORANDUM OF DECISION
I. 	INTRODUCTION
The 	matters 	before 	the 	Court 	are 	Ameriquest 	Mortgage 	Company’s
(“Ameriquest’s”) Motion for Summary Judgment (the “Motion for Summary Judgment”)
and 	Donna 	M. 	DiMare’s 	(“DiMare’s”) 	Opposition 	thereto 	(the 	“Opposition”),
Ameriquest’s motion to strike the affidavit of Barbara Santiano, DiMare’s motion to
strike the affidavit of Gregory Blase and the opposition thereto, and DiMare’s motion to
strike the affidavit of Devi Vijjeswarapu and the opposition thereto (collectively, the
“Motions to Strike”). 	Through the Motion for Summary Judgment, Ameriquest seeks
summary judgment on DiMare’s claim that it violated the Truth in Lending Act
(“TILA”)1 and Massachusetts Consumer Credit Cost Disclosure Act (“MCCCDA”),2
1 15 U.S.C. § 1601 et seq.
2 Mass. Gen. Laws ch. 140D, § 1 et seq.
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contending that DiMare released Ameriquest from liability from all past and future
claims, or alternatively, that they satisfied the requirements of the TILA and the
MCCCDA. 	For the reasons set forth below, I will enter an order granting summary
judgment and finding the Motions to Strike moot.
II. BACKGROUND
DiMare resides at 19 Alcine Lane, Burlington, Massachusetts (the “Property”).3
In 2001, DiMare and her husband divorced.4 Under the terms of the divorce, DiMare
was awarded full ownership of the Property.5 At the time of the divorce, the Property
was encumbered by a mortgage that DiMare and her ex-husband had obtained from
Washington Mutual Bank (“WaMu”).6
Following the divorce, DiMare approached WaMu to obtain information on how
to remove her ex-husband’s name from the mortgage.7 To achieve this end, DiMare was
told she would have to refinance the mortgage.8
On or around February 2004, DiMare entered into discussions with Ameriquest
regarding the refinancing of the WaMu loan (the “Ameriquest Loan”).9 The parties
agreed on terms and closed on the Ameriquest Loan on February 20, 2004 (the
3 Verified Adversary Complaint, Docket No 1, (the “Complaint”) at I ¶ 2.
4 Id. at IV. ¶ 15.
5 Id.
6 Id.
7 Id. at ¶ 17.
8 Id.
9 Id. at ¶¶ 19-20.
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“Closing”).10 At the Closing, DiMare executed a note and granted a mortgage in favor of
Ameriquest.11 The events surrounding the Closing and multiple terms of the Ameriquest
Loan and loan documents are the basis for the current litigation.
While Ameriquest asserts that they sent DiMare pre-closing disclosures dated
“February 	17, 	2004,” 	DiMare 	contends 	that 	she 	did 	not 	receive 	any 	pre-closing
disclosures from Ameriquest and that any post-closing documents she received from
them were dated “February 20, 2004.”12
Within two weeks after the Closing (i.e., by March 5, 2004 at the latest), DiMare
received copies of loan documents from Ameriquest in the mail.13 Included among these
documents were copies of DiMare’s Adjustable Rate Note, Mortgage, Adjustable Rate
Rider, and a Final Truth-in-Lending Disclosure.14
Also included in the packet of documents were five Notices of Right to Cancel
(“NORCs”). 	According to the Statement of Undisputed Material Facts in Support of
Ameriquest Mortgage Company’s Motion for Summary Judgment, each NORC states, in
relevant part, that:
You are entering into a transaction that will result in a
mortgage/lien/security interest on your home. You have a legal
right under federal law to cancel this transaction, without cost,
within THREE BUSINESS DAYS from whichever of the following
events occurs LAST:
(1) The date of the transaction, which is _______________ ; or
10 Id. at ¶ 25.
11 Statement of Undisputed Material Facts (“SUMF”), Docket No. 60, at ¶ 6.
12 DiMare’s Opposition to Ameriquest’s Motion for Summary Judgment, Docket No. 83
(the “Opposition”) at 3.
13 SUMF at ¶ 8.
14 Id.
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(2) The date you receive your Truth in Lending disclosures; or
(3) The date you received this notice of your right to cancel.
***
HOW TO CANCEL
If you decide to cancel this transaction, you may do so by notifying
us in writing....
You may use any written statement that is signed and dated by you
and states your intention to cancel, or you may use this notice by
dating and signing below. Keep one copy of this notice because it
contains important information about your rights.
If you cancel by mail or telegram, you must send the notice no
later than MIDNIGHT of 	(or MIDNIGHT of the
THIRD BUSINESS DAY following the latest of the three events
listed above). If you send or deliver your written notice to cancel
some other way, it must be delivered to the above address no later
than that time.15
The boxes on two of the NORCs were filled in with “2/20/04" in the box for the
transaction date and “2/24/04" in the box for the cancellation date. 	The boxes on the
other three NORCs are left blank.16 Each of the five NORCs identifies, among other
things: (1) the Closing date (February 20, 2004) printed on the top corner; (2) DiMare’s
name; (3) the Property’s address; and (4) Ameriquest as the lender.17 Though DiMare
claims that she did not read the NORCs when she received them, she testified in her
deposition that if she had read them, she would have understood them to mean that she
15 Id. at ¶ 9. In the Opposition at 3, DiMare contends that on the NORCs she received,
the word “last” is not in capital letters on the NORCs that DiMare received and that the
word “receive” is in the past tense. She does not otherwise dispute the accuracy of the
language reproduced in the SUMF.
16 Id. at ¶ 10.
17 Id. at ¶ 12.
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had three business days to cancel her mortgage loan.18 DiMare never sent a notice
requesting to cancel or rescind the Ameriquest Loan.19
After three months of timely payments, DiMare defaulted on the Ameriquest
Loan.20 In order to become current on the loan and to cure her defaults, DiMare entered
into discussions with Ameriquest regarding a forbearance agreement.21 Pursuant to these
discussions, Ameriquest claims that it sent DiMare a proposed forbearance agreement
(the “Forbearance Agreement”) that provided for the ratification of terms of the
[Ameriquest Loan] and released Ameriquest from:
any and all past, present and future claims for damages or losses to
borrowers’ property or person (whether these damages or losses are
known or unknown, foreseen or unforeseen, or patent or latent) including
without limitation, tort claims, demands, actions and causes of Action of
any nature, whatsoever arising out of or relating to this Forbearance
Agreement, the Loan Agreement or any of the transactions related thereto
or hereto.22
In contrast, DiMare claims that she only received a signature page (the “Signature Page”)
and not a full copy of the Forbearance Agreement including the release clause (the
“Release”).23 She contends that she signed the Signature Page and that her daughter
immediately faxed it back to Ameriquest because she feared that her home would be
18 Id. at ¶ 20 and Opposition at 3.
19 Id. at ¶ 14.
20 Id. at ¶ 15.
21 Id. at ¶ 16.
22 Id. at ¶ 18.
23 Opposition at 3.
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foreclosed if she did not.24 DiMare asserts that the first time she saw the entire
Forbearance Agreement, including the Release, was immediately prior to her deposition,
almost four years after Ameriquest claims that she signed and returned the entire
Forbearance Agreement.25
In August 2005, DiMare entered into a refinancing transaction with Option One
Mortgage Corporation (“Option One”).26 As a result of this transaction, the Ameriquest
Loan was paid off in full.27 Shortly after the closing with Option One, DiMare began
having difficulties making her monthly payments.28 Unable to reach a compromise,
Option One initiated a foreclosure proceeding.29
On December 15, 2006, DiMare filed a voluntary petition for relief under Chapter
13 of the Bankruptcy Code. 	During the pendency of that case, DiMare commenced an
adversary 	proceeding 	against 	Ameriquest 	and 	Option 	One 	(collectively 	the
“Defendants”). In her complaint, DiMare asserted that the Defendants were liable to her
for negligence, fraud, emotional distress, breach of contract, and violations of the TILA
and the MCCCDA. 	Prior to a decision on the matter, DiMare’s bankruptcy case was
24 Id. at 3-4.
25 Id. at 3. I note that Ameriquest failed to submit a copy of the Forbearance Agreement
with an attached signed signature page. Instead, Ameriquest was only able to submit
separate copies of the Signature Page, with DiMare’s signature, and the Forbearance
Agreement with an unsigned signature page.
26 SUMF at ¶ 23.
27 Id.
28 Complaint at IV. ¶ 50.
29 Id. at ¶ 51.
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dismissed on January 2, 2008 for failure to make plan payments, resulting in the
dismissal of the adversary proceeding on January 23, 2008, for lack of jurisdiction.
On January 29, 2008, DiMare filed a second bankruptcy petition and subsequently
commenced an adversary proceeding against Ameriquest and Option One on March 9,
2008.30 Through her seven-count Verified Adversary Complaint (the “Complaint”)
DiMare sought recovery from Ameriquest and Option One for: Negligence, Promissory
Fraud, Violations of TILA and MCCCDA, Borrower’s Interest, Unconscionability,
Restitution, and Emotional Distress.31 The substance of DiMare’s TILA and MCCCDA
claims were that the Defendants allegedly failed to provide her with certain pre-closing
disclosures and the required number of accurately completed NORCs.32 DiMare’s
desired relief included rescission of the Ameriquest Loan and compensatory, actual,
punitive, and statutory damages under TILA and MCCCDA.33 Ameriquest filed a
Motion to Dismiss on June 11, 2008 (the “Motion to Dismiss”).34 DiMare filed an
Objection on July 16, 2008.35 I held a hearing on the Motion to Dismiss on September
11, 2008, and at its conclusion, took the matter under advisement.36 On November 6,
30 Complaint at I. ¶ 1.
31 See Complaint.
32 Id.
33 Id. at VI. ¶ 82.
34 Docket No. 16.
35 Docket No. 22.
36 Docket No. 31.
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2008, I issued a Memorandum of Decision dismissing all of DiMare’s claims except for
those under TILA and MCCCDA.37
On August 14, 2009, Ameriquest filed the Motion for Summary Judgment
asserting that summary judgment on the TILA and MCCCDA claim is appropriate
because: (1) DiMare released all claims against Ameriquest by entering into the
Forbearance Agreement; (2) DiMare is not entitled to rescission under MCCCDA
because she received the five NORCs within two weeks after the Closing and the notice
on said forms was adequate; and (3) DiMare is not entitled to statutory damages under
the MCCCDA because at the time of the Ameriquest Loan, the MCCCDA did not require
Ameriquest to mail pre-closing disclosures in connection with the Ameriquest Loan.38 In
support of the Motion for Summary Judgment, Ameriquest filed the Declaration of
Gregory 	N. 	Blase 	(the 	“Blase 	Declaration”), 	counsel 	of 	record 	for 	Ameriquest
(“Blase”).39 Various documents including five copies of the NORC, two with the
transaction date and the cancellation date filled in and three left blank, a copy of the
Forbearance Agreement, and the Signature Page were attached to the Blase Declaration
through which Blase attested to their truth and accuracy.40
On September 1, 2009, DiMare filed a Motion to Amend the Complaint (the
“Motion to Amend”).41 On September 11, 2009, Ameriquest filed an opposition to the
37 Docket No. 34.
38 Docket Nos. 58 & 59.
39 Docket No. 61.
40 Id.
41 Docket No. 66.
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Motion to Amend.42 As grounds for said opposition, Ameriquest claimed that through
the Motion to Amend DiMare was seeking to rehash old, previously-dismissed, time-
barred claims of fraud and unconscionability and to assert newly-minted allegations that
Ameriquest did not provide DiMare with certain documents-including the complete
Forbearance Agreement.43
On September 22, 2009, DiMare filed the Opposition which is premised in part on
the allegations and causes of action raised for the first time in the amended complaint.44
In support of the Opposition, DiMare filed the Affidavit of Barbara Santiano (the
“Santiano Affidavit”), counsel of record for DiMare (“Santiano”), in which she describes
conversations she had with employees of Federal Express and UPS Express Critical for
the purpose of disputing that DiMare received a complete copy of the Forbearance
Agreement.45 On October 23, 2009, Ameriquest filed a Motion to Strike the Santiano
Affidavit asserting that it violates the Massachusetts Rules of Professional Conduct and
that it contains inadmissible hearsay.46 DiMare did not oppose said motion.
On October 27, 2009 Ameriquest replied to the Opposition (the “Reply”).47 In
the Reply, Ameriquest argued that in the Opposition, DiMare raised new or previously
dismissed grounds for holding Ameriquest liable to DiMare, namely that the Ameriquest
42 Docket No. 70.
43 Id. at 1-3.
44 Docket No. 83.
45 Docket No. 83 Exhibit 10.
46 Docket No. 86.
47 Docket No. 92.
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Loan and process leading up to it were unconscionable or otherwise unfair or deceptive,
that Ameriquest entered into the Refinancing Agreement in bad faith and unfair dealing,
and fraud.48 In connection with the Reply, Ameriquest filed the Affidavit of Devi
Vijjeswarapu 	(the 	“Vijjeswarapu 	Affidavit”), 	a 	former 	employee 	of 	Ameriquest
(“Vijjeswarapu”), 	containing 	an 	analysis 	of 	the 	circumstances 	surrounding 	the
Forbearance Agreement and its contents.49
On the same day, DiMare filed a motion to strike the Vijjeswarapu Affidavit
contending that Vijjeswarapu was not previously disclosed as a person with knowledge of
the matter, barring any investigation as to his claims.50 Simultaneously, DiMare filed a
Motion to Strike the Blase Declaration, contending the Blase Declaration violates the
Massachusetts Rules of Professional Conduct, does not satisfy the requirements of the
Federal Rules of Civil Procedure, and is inadmissible hearsay.51
On October 30, 2009, Ameriquest filed an opposition to the Motion to Strike the
Blase Declaration.52 On November 5, 2009, Ameriquest filed an opposition to the
motion to strike the Vijjeswarapu Affidavit, asserting that the Vijjeswarapu Affidavit was
filed in response to DiMare’s unconscionability arguments raised in the Opposition.53 I
48 Id.
49 Docket No. 93.
50 Docket No. 97.
51 Docket No. 96.
52 Docket No. 112.
53 Docket No. 116.
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held a hearing on all matters on October 28, 2009, and at its conclusion, I denied the
Motion to Amend and took the remaining matters under advisement. 54
III. POSITION OF THE PARTIES
Ameriquest
In seeking summary judgment, Ameriquest argues that DiMare released all claims
against Ameriquest in July 2004 when she entered into the Forbearance Agreement that
contained, among other things, a ratification of the terms of the Ameriquest Loan and a
comprehensive release. Alternatively, Ameriquest contends that DiMare is not entitled to
rescission under the MCCCDA because she received five NORCs in the mail within two
weeks after the Closing which provided adequate notice of her right of rescission.
Furthermore, Ameriquest asserts that DiMare is not entitled to statutory damages under
the MCCCDA because at the time of the Ameriquest Loan closed, Ameriquest was not
required to mail DiMare pre-closing disclosures.
DiMare
In opposition, DiMare argues that she is not bound by the Release contained in
the Forbearance Agreement because the Release was not part of the Signature Page she
signed. 	Moreover, she asserts that she may rescind the Ameriquest Loan because
Ameriquest failed to properly and conspicuously disclose her right of rescission. Finally,
she argues that she is entitled to damages under the MCCCDA because Ameriquest failed
to provide her with required pre-Closing disclosures.
54 Docket No. 102. After the hearing, Ameriquest filed Supplemental Authority in
Support of the Motion for Summary Judgment (Docket No. 118), DiMare filed
Supplemental Authority in support of the Opposition (Docket No. 120), and Ameriquest
filed a response to DiMare’s Supplemental Authority (Docket No. 124).
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IV. DISCUSSION
A. The Summary Judgment Standard
Summary judgment should be granted “if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as to
any material fact and that the movant is entitled to judgment as a matter of law.”55 The
burden of proof is upon the moving party in the first instance.56 To defeat the motion, the
opposing party must produce substantial evidence of a genuine dispute as to a material
fact.57 A material fact is one that has the “potential to affect the outcome of the suit
under applicable law.”58
In responding to a motion for summary judgment, the opposing party “may not
rely merely on allegations or denials in its own pleading; rather, its response must–by
affidavits or as otherwise provided in this rule–set out specific facts showing a genuine
issue for trial.”59 Further, “if the opposing party does not so respond, summary judgment
should, if appropriate, be entered against that party.”60 The United States Court of
Appeals for the First Circuit has explained this provision to mean that the absence of a
material factual dispute is a “condition necessary,” but not a “condition sufficient” to
55 Fed. R. Civ. P. 56(c), made applicable to adversary proceedings by Fed. R. Bankr. P.
7056.
56 Steel Hector & Davis v. Wang Labs., Inc. (In re Wang Labs., Inc.), 155 B.R. 289, 290
(Bankr. D. Mass. 1993).
57 Id.
58 Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir. 1993).
59 Fed. R. Civ. P. 56(e)(2).
60 Id. (emphasis added).
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summary judgment.61 The moving party, therefore, must show that it is entitled to
judgment as a matter of law.62
B. The Forbearance Agreement and the Motions to Strike the Vijjeswarapu and
Santiano Affidavits
Ameriquest contends that the Release exculpates them. DiMare claims that prior
to her deposition the only page of the Forbearance Agreement that she saw was the
Signature Page. In support of the Motion for Summary Judgment, Ameriquest filed both
a blank signature page annexed to the Forbearance Agreement and, separately, the
Signature Page. 	The Signature Page is substantively identical to the signature page
appended to the Forbearance Agreement except for the presence of DiMare’s signature
on the Signature Page. The Release is not contained in the Signature Page.
Because Ameriquest is unable to produce a complete signed copy of the
Forbearance Agreement and DiMare contends she never received it, the enforceability of
the Forbearance Agreement is subject to a genuine dispute. 	Therefore, Ameriquest has
not shown that it is entitled to judgment as matter of law on this basis.
Because the sole purpose of both the Vijjeswarapu Affidavit and the Santiano
Affidavit was to address the effectiveness of the Forbearance Agreement, which for the
reasons stated above I will not consider on the merits at this time, both the Motion to
Strike the Vijjeswarapu Affidavit and the Motion to Strike the Santiano Affidavit are
moot.
61 In re Varrasso, 37 F.3d 760, 764 (1st Cir. 1994).
62 Id.
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C. TILA & MCCCDA
“Both TILA and [MCCCDA] were enacted ‘to assure a meaningful disclosure of
credit terms so that the consumer will be able to compare more readily the various credit
terms available to him and avoid the uninformed use of credit, and to protect the
consumer against inaccurate and unfair credit billing and credit card practices.’”63 “Both
acts provide that a borrower whose loan is secured by his principal dwelling and who has
been 	denied 	the 	requisite 	disclosures 	may 	rescind 	the 	loan 	transaction,” 	or 	seek
damages.64 “In Massachusetts, however, credit transactions subject to [MCCCDA] are
exempt from many of the provisions of TILA.”65 “Nonetheless, the MCCCDA is
modeled after TILA and the provisions of the two statutes are substantially the same.”66
“It is, therefore, common ground that the [M]CCCDA should be construed in accordance
with the TILA.”67
63 Fidler v. Cent. Coop Bank, (In re Fidler), 226 B.R. 734, 736 (Bankr. D. Mass. 1998)
(quoting Beach v .Ocwn Federal Bank, 523 U.S. 410, 412, 118 S.Ct. 1408, 140 L.Ed.2d
566 (1998)).
64 Id.; See 15 U.S.C. §§ 1635, 1640; Mass. Gen. Laws ch. 140D, §§ 10, 32.
65 Dvittorio v. HSBC Bank USA, N.A., (In re Divittorio), No. 09-1089, 2009 WL
2246138, *8 n. 66 (Bankr. D. Mass. July 23, 2009) (“The Federal Reserve Board has
exempted credit transactions within Massachusetts subject to the [MCCCDA] from
chapters two and four of TILA. 12 C.F.R. Pt. 226, Supp. I, 12 C.F.R. § 226.29(a) ¶ 4; see
Laudani v. Tribecca Lending Corp. (In re Laudani), 401 B.R. 9, 25 n. 13 (Bankr.
D.Mass.2009). Chapter two of TILA includes sections 1631 through 1646. The
displacement of federal law is not absolute, however, and it is well established that
borrowers retain at least the ability to file suits pursuant to 15 U.S.C. § 1640. [Belini v.
Washington Mut. Bank, FA, 412 F.3d [17] at 20 [(1st.Cir. 2005)]”).
66 Divittorio, 2009 WL 2246138 at *5. See 48 Fed.Reg. 14882, 14890 (1983); Fidler,
226 B.R. at 736; Desrosiers v. Transamerica Fin. Corp. (In re Desrosiers), 212 B.R. 716,
722 fn. 6 (Bankr. D. Mass. 1997).
67 McKenna v. First Horizon Home Loan Corp., 475 F.3d 418, 422 (1st Cir. 2007).
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1. 	Adequate Notice of Right of Rescission and the Motion to Strike the
Blase Declaration
Like TILA, the MCCCDA provides that the period for canceling a residential loan
transaction ends three business days after the latest of three events: the closing; the date
the consumer receives required Truth-in-Lending disclosures; or the date the consumer
receives proper notice of the right to cancel.68 To comply with the MCCCDA, the
“creditor. . .must clearly disclose this rescission right to the debtor.”69 “The Board has
created a model form (the “Model Form”); a creditor must provide [the debtor] either the
model form or substantially ‘similar notice.’”70 “The use of the model form insulates the
creditor from most insufficient disclosure claims.”71 “Regulation Z says what the notice
of the right to cancel must clearly and conspicuously disclose; pertinently, the regulation
requires that the notice include ‘[t]he date the rescission period expires.’”72 “Courts must
evaluate the adequacy of TILA disclosures from the vantage point of a hypothetical
average consumer - a consumer who is neither particularly sophisticated nor particularly
68 Mass. Gen. Laws ch. 140D, § 10(a); 209 C.M.R. § 32.23(1)(c); 12 C.F.R. §
226.23(a)(3); 15 U.S.C. § 1635(a).
69 Palmer v. Champion Mortgage, 465 F.3d 24, 27 (1st Cir. 2006).
70 Melfi v. WMC Mortgage Corp., 568 F.3d 309, 311 (1st Cir. 2009); 12 C.F.R. §
226.23(b)(2). See also the model form in 12 C.F.R. Pt. 226 App. H-8, which in relevant
part provides that the borrower has “three business days after the latest of the following
events: (1) the date of this new transaction, which is _______; or (2) the date you
received your Truth-in-Lending disclosures; or (3) the date you received this notice of
your right to cancel.”
71 Melfi, 568 F.3d at 311; 15 U.S.C. § 1604(b).
72 Melfi, 568 F.3d at 311 (quoting 12 C.F.R. § 226.23(b)(1)(v)).
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dense.”73 “[T]echnical deficiencies do not matter if the borrower receives a notice that
effectively gives him notice as to the final date for rescission and has the three full days
to act.”74
According to Ameriquest’s SUMF, DiMare received five NORCs after the
Closing, two with the transaction date and cancellation date (the “Date Certain to
Rescind”) filled in, though expired by the time she received it, and three that were
blank.75 Although the NORCs are attached to the Blase Declaration, Ameriquest also
reproduced 	the 	text 	of 	the 	NORCs 	in 	the 	SUMF, 	demonstrating 	that 	they 	are
substantively identical to the Model Form.76 Aside from two non-material discrepancies
that appear to be scrivener’s errors, DiMare does not dispute the accuracy of the text in
the SUMF.77 Pursuant to Local Rule 56.1 of the United States District Court for the
District of Massachusetts, material facts set forth in the moving party’s statement of
undisputed material facts are deemed admitted for purposes of summary judgment if not
controverted by an opposing statement.78 Therefore, to the extent that the DiMare seeks
to strike the Blase Declaration and, in turn, the exhibits thereto, I find that she has already
73 Palmer, 465 F.3d at 28.
74 Melfi, 568 F.3d at 311.
75 SUMF at ¶¶ 9-10.
76 Id. at ¶ 9.
77 See Opposition at 3. See also SUMF at ¶ 8.
78 L.R., D. Mass. 56.1, adopted and made applicable to proceedings in the Bankruptcy
Court by Massachusetts Local Bankruptcy Rule 7056-1.
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admitted the content of the NORCs, rendering her motion to strike them moot.79 Even if
that were not the case, however, I would deny the motion to strike with respect to the
NORCs 	because 	they 	satisfy 	the 	requirements 	of 	Fed. 	R. 	Civ. 	P. 	56(e) 	as 	self
authenticating documents related to commercial paper.80
In Palmer v. Champion Mortgage, the First Circuit held that a NORC, which was
substantively identical to the Model Form, provided clear and conspicuous notice of the
borrower’s right to cancel even though the Date Certain to Rescind had expired by the
time the borrower received the NORC.81 The First Circuit reasoned that the NORC
provided gave the average consumer reasonable notice that the deadline would be the
latest of three alternative deadlines, namely, the Date Certain to Rescind, the date the
borrower received the Truth-in-Lending disclosures, or the date the borrower received
notice of her right to cancel.82 The First Circuit further stated that they “fail to see how
any reasonably alert person- that is, the average consumer- reading the [NORC] would be
drawn to the [Date Certain to Rescind] without also grasping the twice-repeated
alternative deadlines.”83
Building on Palmer, in Melfi v. WMC Mortgage Corp., the First Circuit held that
a NORC that is substantively identical to the Model Form but without the transaction date
79 Because the Debtor’s allegations are primarily based on the adequacy of the notice of
her right to cancel, the remainder of the documents attached to the Blase Declaration are
unnecessary to my determination, rendering the balance of the motion to strike moot.
80 See Fed. R. Evid. 902(9).
81 Palmer, 465 F.3d at 27-29.
82 Id. at 29.
83 Id.
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and Date Certain to Rescind completed still provides adequate notice of the borrower’s
right to rescind.84 The First Circuit reasoned that “[t]he date that [the borrower] closed
on the loan can hardly have been unknown to him.”85 Moreover, it concluded that “there
is no evidence in TILA or any Board regulation that either Congress or the Board
intended to render the form a nullity because of an uncompleted blank in the form or
similar flaw.”86
I see no significant difference between the notice provided in the current case and
those provided in Palmer and Melfi. 	The NORCs DiMare received were substantively
identical to the Model Form created by the Board.87 The First Circuit has made clear that
NORCs which are substantively identical to the Model Form that either contain an
expired Date Certain to Rescind or omit it entirely do not fail to give clear and
conspicuous notice of the right to cancel because the Model Form contains alternative
deadlines. 	Therefore, DiMare received adequate notice of her right to cancel, entitling
Ameriquest to summary judgment under this theory.
2. 	Statutory Damages under the MCCCDA
Creditors who fail to comply with provisions of the MCCCDA are liable to the
debtor for statutory damages.88 The MCCCDA obliges creditors to provide debtors with
84 Melfi, 568 F.3d at 312.
85 Id.
86 Id.
87 See 12 C.F.R. Pt. 226, Appendix H-8.
88 Mass. Gen. Laws 140D, § 32(a)(2)(a) (Statutory damages are capped at $1,000).
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pre-closing disclosures.89 The pre-closing disclosure requirement, in its 2003 form,
which was operative at the time of the refinancing, provides in relevant part that:
In a residential mortgage transaction subject to the Real Estate Settlement
Procedures Act (12 USC § 2601 et seq.) the creditor shall make good faith
estimates 	of 	the 	disclosures 	required 	by 	209 	CMR 	§ 	32.18 	before
consummation, or shall deliver or place them in the mail not later than
three business days after the creditor receives the consumer’s written
application, whichever is earlier.90
The regulation further defines the term “residential mortgage transaction” as:
a transaction in which a mortgage, deed of trust, purchase money security
interest arising under an installment sales contract, or equivalent
consensual security interest is created or retained in the consumer’s
principal dwelling to finance the acquisition or initial construction of that
dwelling.91
Under TILA, a refinancing loan is not a residential mortgage transaction.92 It is
undisputed that the transaction at issue in this case is a refinancing loan, and therefore,
Ameriquest was not obliged to provide DiMare with pre-closing disclosures, entitling it
to judgment as a matter of law with respect to their liability to DiMare for statutory
damages.
89 209 C.M.R. § 32.19 (2003).
90 209 C.M.R. § 32.19(1)(a) (2003) (emphasis added).
91 209 C.M.R. § 32.02 (2003) (emphasis added).
92 In re Vincent, 381 B.R. 564, 570, n. 4 (Bankr. D. Mass. 2008).
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V. CONCLUSION
In light of the foregoing, I find all of the Motions to Strike moot and will enter an
order granting the Motion for Summary Judgment.
______________________________
William C. Hillman
United States Bankruptcy Judge
Dated: December 22, 2009
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