Title: Moronta v. Nationstar Mortgage, LLC

State: massachusetts

Issuer: Massachusetts Supreme Court

Document:

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SJC-12042 
 
ELNEDIS A. MORONTA  vs.  NATIONSTAR MORTGAGE, LLC, & another.1 
 
 
December 22, 2016. 
 
 
Consumer Protection Act, Demand letter. 
 
 
 
Elnedis A. Moronta commenced this action in the Superior 
Court, alleging that the defendants, Nationstar Mortgage, LLC 
(Nationstar), and Fremont Investment and Loan, among other 
things, violated his rights under G. L. c. 93A.  Summary 
judgment was entered against Moronta on all his claims.  On 
Moronta's appeal, the Appeals Court concluded that there was a 
genuine issue of material fact as to Moronta's c. 93A claim and 
reversed the grant of summary judgment.  Moronta v. Nationstar 
Mortgage, LLC, 88 Mass. App. Ct. 621, 622 (2015).  In doing so, 
the Appeals Court rejected the defendants' argument that 
Moronta's c. 93A claim was barred due to his failure to serve a 
demand letter, on the ground that no demand letter is required 
under G. L. c. 93A, § 9 (3), where "the prospective respondent 
does not maintain a place of business . . . within the 
commonwealth," regardless of whether it "keep[s] assets" here.  
Moronta, supra at 626 n.11.  We granted Nationstar's application 
for further appellate review, and we subsequently limited the 
scope of review to issues concerning the demand letter.2 
                     
 
1 Signature Group Holdings, Inc., successor to Fremont 
Investment & Loan.  After the case was entered in this court, a 
stipulation of dismissal was filed as to this defendant. 
 
 
2 Our initial order allowing further appellate review was 
unlimited as to the scope of review, meaning that all issues 
that were properly before the Appeals Court were before us anew.  
See Bradford v. Baystate Med. Ctr., 415 Mass. 202, 204 (1993) 
("Our general rule is that we shall review all issues that were 
2 
 
 
 
 
The underlying facts of the case are set forth in the 
Appeals Court's opinion and need not be repeated here.  Moronta, 
88 Mass. App. Ct. at 622-625.  Before us is a purely legal 
question concerning the correct interpretation of G. L. c. 93A, 
§ 9 (3).  The question is whether, as Moronta argues, a 
plaintiff is excused from serving a demand letter if the 
defendant lacks either a place of business or assets in the 
Commonwealth, or whether, as Nationstar argues, a plaintiff must 
serve a demand letter unless the defendant has neither a place 
of business nor assets in the Commonwealth.  Put another way, 
the question is this:  if the defendant keeps assets in the 
Commonwealth, but does not maintain a place of business here, 
must the plaintiff serve a demand letter?  We conclude, as did 
the Appeals Court, that the plaintiff need not do so. 
 
 
We begin with the "general and familiar rule . . . that a 
statute must be interpreted according to the intent of the 
Legislature ascertained from all its words construed by the 
ordinary and approved usage of the language, considered in 
connection with the cause of its enactment, the mischief or 
imperfection to be remedied and the main object to be 
accomplished."  Meikle v. Nurse, 474 Mass. 207, 209-210 (2016), 
quoting Lowery v. Klemm, 446 Mass. 572, 576-577 (2006).  In 
relevant part, § 9 (3) provides, "The demand requirements of 
this paragraph shall not apply . . . if the prospective 
respondent does not maintain a place of business or does not 
keep assets within the commonwealth . . ." (emphasis added).  
The use of the word "or" to separate the prongs of a statute 
indicates that the prongs are alternatives, that is, that either 
one would be sufficient on its own and that it is not necessary 
to establish both.  See, e.g., Bleich v. Maimonides Sch., 447 
Mass. 38, 46-47 (2006), citing Eastern Mass. St. Ry. v. 
Massachusetts Bay Transp. Auth., 350 Mass. 340, 343 (1966) 
(where statute used "or" to specify criteria for religious 
                                                                  
before the Appeals Court [and not limit our review just to those 
issues urged as grounds for further appellate review], unless 
our order allowing further review indicates otherwise").  
However, the parties subsequently filed new briefs in this court 
that addressed only the demand letter issue, thereby effectively 
waiving all other issues.  See 81 Spooner Rd., LLC v. Zoning Bd. 
of Appeals of Brookline, 461 Mass. 692, 693 n.3 (2012).  See 
also 1 Appellate Practice in Massachusetts § 3.3.3 (Mass. Cont. 
Legal Educ. 4th ed. 2016).  Because it appeared that the parties 
otherwise accepted the decision of the Appeals Court, we issued 
an amended order formally limiting the scope of review. 
3 
 
 
exemption from State unemployment taxation, one criterion -- 
that school was "principally supported" by religious 
organizations -- sufficed).  If the Legislature had intended to 
excuse the plaintiff from the demand requirement only where both 
prongs are satisfied, it could have made this clear by using the 
word "and." 
 
 
The grammatical structure of this provision further 
supports our interpretation.  In the dependent clause, "if the 
prospective respondent does not maintain a place of business or 
does not keep assets within the commonwealth," each of the 
phrases, "does not maintain a place of business" and "does not 
keep assets," is a predicate of "the prospective respondent."  
These two phrases are elements of a parallel series, indicating 
that they are functional matches of each other and that they 
serve the same grammatical function in the clause.  See The 
Chicago Manual of Style § 5.212, at 259 (16th ed. 2010).  The 
clause can be rephrased to provide that the demand requirements 
do not apply "if the prospective respondent does not maintain a 
place of business within the commonwealth or if the prospective 
respondent does not keep assets within the commonwealth."3  So 
rephrased, the provision clearly excuses the plaintiff from 
serving a demand letter if the prospective respondent either 
lacks a place of business in Massachusetts or does not keep 
assets in Massachusetts. 
 
 
Our interpretation is further supported by the purposes of 
c. 93A generally and of the demand letter requirement in 
particular.  "General Laws c. 93A is a 'broad remedial' 
statute," intended "to deter misconduct" and "to 'encourage 
vindicative lawsuits.'"  Auto Flat Car Crushers, Inc. v. Hanover 
Ins. Co., 469 Mass. 813, 825 (2014), and cases cited.  It 
protects consumers from unfair conduct and provides them with a 
remedy.  The demand letter requirement is intended to encourage 
settlement of disputes and to limit damages, not to place an 
arbitrary obstacle in the consumer's path.  Moreover, it is 
difficult for us to imagine that the Legislature intended, in 
1969 when § 9 was added to the statute to provide a private 
cause of action, that a consumer undertake the formidable task 
of verifying that a respondent have no assets in Massachusetts 
before being relieved of having to send a demand letter.  
Ordinary consumers simply did not have such information 
available at their fingertips in 1969, and the Legislature 
surely did not predict that it might become easier to obtain 
                     
 
3 There is no dispute that the territorial limitation, 
"within the commonwealth," applies to both prongs. 
4 
 
 
such information years in the future.  In light of these 
important considerations, we interpret the statute to enable 
consumers' access to the remedies provided by G. L. c. 93A, not 
to frustrate it. 
 
 
Our decision today does not put respondents who are not 
entitled to receive a demand letter in an appreciably worse 
position than those who are so entitled.  When any of the 
exceptions to the demand letter requirement applies, the 
"respondent may otherwise employ the provisions of this section 
by making a written offer of relief and paying the rejected 
tender into court as soon as practicable after receiving notice 
of an action commenced under this section."  G. L. c. 93A, 
§ 9 (3).  This permits a respondent to limit its damages even if 
it is not entitled to receive a demand letter because it 
maintains no place of business in Massachusetts. 
 
 
For the foregoing reasons and those stated by the Appeals 
Court, the judgment of the Superior Court is reversed. 
 
 
 
 
 
 
 
 
So ordered. 
 
 
 
Irene H. Bagdoian for the plaintiff. 
 
Matthew A. Gens for the defendant.