Federal Deposit Insurance Corp. v. Drew Mortgage Associates, Inc.
Docket: Civil Action No. 15-14012-NMG
Court: District Court, D. Massachusetts; April 21, 2017; Federal District Court
The memorandum, issued by Judge Gorton, pertains to a legal dispute involving the FDIC as the plaintiff against Drew Mortgage Associates, Inc. (Drew) regarding alleged misrepresentations in loan underwriting packages submitted to AmTrust Bank. Drew has filed a third-party complaint against several borrowers, including Jane F. Ferreira, who provided information for the loan packages. Ferreira has moved to dismiss the claims against her.
Key points include:
1. **Background of the Case**: Drew entered a loan purchase agreement with AmTrust in June 2013, requiring Drew to collect and submit borrower information. Ferreira had two loans approved by AmTrust in 2006, for which she later mortgaged property in Florida. A foreclosure action by AmTrust in 2009 was resolved through a short sale.
2. **Procedural History**: The FDIC, as receiver for AmTrust, filed a complaint against Drew in December 2015 for breach of the loan purchase agreement. Drew responded by filing a third-party complaint against Ferreira and other borrowers in April 2016, alleging breach of contract, fraud, negligent misrepresentation, indemnification, and contribution. Ferreira is the only borrower to respond, seeking to dismiss the claims against her.
3. **Choice of Law**: The parties agreed that Florida law applies to the case, as established in a prior court order.
4. **Motion to Dismiss Standards**: The memorandum outlines the legal standards for a motion to dismiss under Fed. R. Civ. P. 12(b)(6), indicating that the complaint must contain sufficient factual matter to state a plausible claim for relief. The court evaluates the reasonableness of inferred liability based on non-conclusory allegations without considering the probability of proof.
The court’s decision on Ferreira's motion to dismiss will allow some claims to proceed while denying others, though specific outcomes are not detailed in the excerpt.
Ferreira seeks dismissal of Drew's claims based on two main arguments: 1) the claims are barred by statutes of limitations, and 2) Drew has failed to state a claim for which relief can be granted.
Count I, alleging breach of contract, is governed by a five-year statute of limitations under Florida law. The alleged breach occurred in November 2006, when Ferreira misrepresented facts on loan applications. Drew filed its complaint nearly ten years later, making the breach of contract claim time-barred. The limitations period begins at the time of the breach, not when harm was discovered, thus leading to the dismissal of Count I.
Count II pertains to fraud, which has a four-year limitations period. Ferreira argues that Drew was aware or should have been aware of the false information in November 2006. However, Drew contends it was not obligated to verify Ferreira's information and did not realize it was false until the FDIC's lawsuit in December 2015. The discovery rule allows for tolling of the statute until the facts supporting the fraud claim are discovered or should have been discovered. Accepting Drew's allegations as true, the court finds the fraud claim timely since Drew filed its complaint in April 2016, within the four-year period.
Count III involves negligent misrepresentation, also subject to a four-year statute of limitations, which can be tolled under the discovery rule. Although Drew may have had suspicions about potential harm from Ferreira's information in 2006, the limitations period does not commence until actual harm occurs. Here, harm was not realized until the FDIC's lawsuit in 2015, making Drew's negligent misrepresentation claim timely as well.
Count IV involves Drew's request for indemnification from Ferreira and other third-party defendants in the event Drew is found liable to the FDIC. Ferreira argues that the claim lacks a contractual basis and is barred by the statute of limitations. However, the court rules that the indemnity claim is not time-barred since, under Florida law, the statute of limitations does not commence until a judgment is rendered or the defendant has made a payment, neither of which has occurred. Furthermore, the court finds Ferreira's argument regarding the lack of a contractual obligation unconvincing, noting that Florida law allows for indemnity claims based on common law. Consequently, Count IV will not be dismissed.
Count V pertains to Drew's claim for contribution from Ferreira, contingent upon Drew being found liable to the FDIC. Florida law restricts contribution claims to joint tortfeasors. Since the FDIC's claim against Drew is for breach of contract rather than tort, Ferreira cannot be considered a joint tortfeasor, leading to the dismissal of Count V.
The court's order states that Ferreira's motion to dismiss is granted for Counts I and V, but denied for Counts II, III, and IV. The FDIC was appointed as receiver for AmTrust in 2009 following the bank's failure.
