United States Court of Appeals

For the First Circuit

No. 11-1650

SUZETTE MCKENNA,

Plaintiff, Appellant,

v.

WELLS FARGO BANK, N.A.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Joseph L. Tauro, U.S. District Judge]

Before

Torruella, Circuit Judge,

Souter, Associate Justice, *

and Boudin, Circuit Judge.

Glenn F. Russell, Jr. with whom Law Office of Glenn F.

Russell, Jr. was on brief for appellant.

Jeffrey S. Patterson with whom Morgan T. Nickerson and Nelson

Mullins Riley & Scarborough LLP were on brief for appellee.

August 16, 2012

The Hon. David H. Souter, Associate Justice (Ret.) of the *

Supreme Court of the United States, sitting by designation.
BOUDIN, Circuit Judge. On November 9, 2006, Charles

McKenna entered into a loan refinancing agreement with Wells Fargo

Bank, N.A., evidently to help pay for his children's college

education. As part of the transaction, Charles McKenna and his

wife, Suzette McKenna, granted Wells Fargo a mortgage on their

residence in South Orleans, Massachusetts. On the same day, Wells

Fargo provided the McKennas with a disclosure form stating the loan

amount and terms. On November 15, 2006, the mortgage was recorded

at the Barnstable County Registry of Deeds.

Charles McKenna died of a heart attack on May 24, 2009,

at age 54, leaving his wife as administratrix of his estate. Some

time thereafter, Suzette McKenna fell behind on her monthly

mortgage payments. Under Massachusetts law, if a mortgage gives

the mortgage holder the "power of sale" (as the McKennas' mortgage

did), the mortgagee may foreclose--without a court judgment

ordering the sale--after a "limited judicial procedure" to

establish that the mortgagor is not a present or recent member of

the armed forces, which Suzette McKenna was not.1

Wells Fargo successfully brought such a proceeding in

Massachusetts Land Court in October 2009. Then, on January 14,

2010, Wells Fargo sent Suzette McKenna a statutory notice of

See U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40, 49 (Mass. 1

2011). The Servicemembers Civil Relief Act, 50 U.S.C.S. App'x §

533 (LexisNexis 2012), precludes foreclosure if the mortgagor has

been an active member of the uniformed services within the previous

nine months.

-2-
foreclosure sale informing her that the bank intended to auction

her home on or after February 16 of that year. Suzette McKenna

countered by writing to assert a right to rescind the mortgage and

then filing suit to preclude the foreclosure sale--her lawsuit

being the origin of the appeal now before us.

In a letter that she sent to Wells Fargo on February 6,

2010, Suzette McKenna claimed a right to rescind on the grounds

that (1) Wells Fargo had provided her and Charles McKenna with only

one Truth in Lending disclosure statement at the time of the loan

rather than two copies, and (2) Wells Fargo had understated the

finance charge in its Truth in Lending statement by "more than

$35.00." On February 11, 2010, Suzette McKenna filed a complaint

in Barnstable County Superior Court seeking an injunction to

prevent Wells Fargo from proceeding with the foreclosure sale. 

Five days later, the Superior Court issued a preliminary injunction

restraining Wells Fargo from taking further action to sell Suzette

McKenna's home.2

On March 10, 2010, Wells Fargo removed the case to the

federal district court in Massachusetts. The bank asserted that

Wells Fargo informs us in its supplemental brief that Suzette 2

McKenna's home was sold at a foreclosure auction in February 2012. 

This fact suggests that Suzette McKenna's claims for injunctive

relief may be moot, but her amended complaint includes a request

for damages, and a "generalized claim" for monetary damages may be

sufficient to prevent dismissal on grounds of mootness, even where

claims for injunctive relief "appear to be moot." Ellis v. Bhd. of

Ry., Airline & S.S. Clerks, Freight Handlers, Express & Station

Emps., 466 U.S. 435, 441-42 & n.5 (1984).

-3-
federal question jurisdiction existed over what it deemed

(incorrectly) to be Suzette McKenna's federal claims, supplemental

jurisdiction over her related state law claims, and diversity

jurisdiction over the entire action due to the amount in

controversy and diversity of citizenship. No one thereafter

appears to have contested subject matter jurisdiction, although

Wells Fargo has raised challenges to our appellate jurisdiction,

which we address below.

Following a seven-count amended complaint filed on

September 3, 2010, Wells Fargo moved to dismiss for failure to

state a claim, Fed. R. Civ. P. 12(b)(6), and the district court

granted the motion. McKenna v. Wells Fargo Bank, N.A., No.

10-10417-JLT, 2011 U.S. Dist. LEXIS 28719, 2011 WL 1100160 (D.

Mass. Mar. 21, 2011) (the "12(b)(6) order"). Suzette McKenna's

timely motion to alter, amend, or vacate the judgment, Fed. R. Civ.

P. 59(e), 60(b)(2) (the "motion for reconsideration"), was denied

on May 11, 2011. Suzette McKenna filed a notice of appeal on June

6, 2011.

At the outset we face questions relating to the district

court's subject matter jurisdiction which we are required to

consider sua sponte where jurisdiction is in doubt. McCulloch v.

Velez, 364 F.3d 1, 5 (1st Cir. 2004). Here, Wells Fargo's primary

assertion in its removal papers--that there is federal question

jurisdiction present in this case--turns out to be mistaken because

-4-
no federal claim is presented. In the end, however, diversity

jurisdiction does appear sufficient to support the state statutory

claims that are asserted in the complaint.

The federal Truth in Lending Act ("TILA") gives

homeowners a right to rescind certain credit transactions, 15

U.S.C. § 1635(a) (2006), and creates a private right of action for

damages, 15 U.S.C. § 1640, which would ordinarily satisfy federal

question jurisdiction. 28 U.S.C. § 1331. But although Suzette

McKenna's amended complaint makes passing reference to the federal

TILA, she styles all of her claims as arising under state law,

including the Massachusetts Consumer Credit Cost Disclosure Act

("MCCCDA"), Mass. Gen. Laws ch. 140D.

This may have been done because a federal TILA claim for

rescission must be brought within three years of the transaction,

15 U.S.C. § 1635(f), while the MCCCDA allows four years, Mass. Gen.

Laws ch. 140D, § 10(f), and McKenna's suit appears to satisfy the

latter time requirement but not the former. There are also

unsettled questions as to what federal rights are displaced and

what others remain where, as is the case with Massachusetts, the

Federal Reserve has exempted a state from various TILA's provisions

on the grounds that state law establishes "substantially similar"

requirements. See Palmer v. Champion Mortg., 465 F.3d 24, 27 n.4

(1st Cir. 2006) (discussing one such "unsettled" question); cf. 15

-5-
U.S.C. § 1633; 12 C.F.R. § 226.29 (2011); 47 Fed. Reg. 42,171

(Sept. 24, 1982).

While "the MCCCDA was 'closely modeled' after the TILA

and, in most respects, 'mirrors its federal counterpart,'"

DiVittorio v. HSBC Bank USA, NA (In re DiVittorio), 670 F.3d 273,

282-83 (1st Cir. 2012) (quoting McKenna v. First Horizon Home Loan

Corp., 475 F.3d 418, 422 (1st Cir. 2007)), an MCCCDA claim on its

own almost surely does not satisfy federal question jurisdiction, 

cf. Belini, 412 F.3d at 28 (relying on supplemental jurisdiction

statute, 28 U.S.C. § 1367, for federal jurisdiction over MCCCDA

claim). 

One out-of-circuit precedent suggests that "federal

courts continue to have [federal question] jurisdiction over any

civil suit claiming violation of [an exempt state]'s disclosure

requirements," Ives v. W. T. Grant Co., 522 F.2d 749, 753-54 (2d

Cir. 1975). But we are not persuaded; our circuit has only found

such federal question jurisdiction to exist where, unlike this

case, the plaintiff explicitly pleads a federal section 1640 claim

under TILA. See Belini, 412 F.3d at 28; Bizier v. Globe Fin.

Servs., Inc., 654 F.2d 1, 4 (1st Cir. 1981).

However, the removal can be supported by diversity

jurisdiction, which requires that the parties be citizens of

different states and that the amount in controversy exceed $75,000. 

See 28 U.S.C. §§ 1332(a), 1441. Suzette McKenna is a citizen of

-6-
Massachusetts. Well Fargo, a national bank, is a citizen of the

state where it is "located," 28 U.S.C. § 1348; this is "the State

designated in its articles of association as its main office," 

Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 318 (2006); and 

"Wells Fargo is a citizen of South Dakota for diversity purposes." 

Hargrow v. Wells Fargo Bank N.A., No. 11-1806, 2012 U.S. App. LEXIS

13638, at *4, 2012 WL 2552805, at *2 (6th Cir. July 3, 2012).

As for the $75,000 amount-in-controversy requirement,

"[n]umerous [district] courts have held that, where a complaint

seeks to invalidate a loan secured by a deed of trust, the amount

in controversy is the loan amount," Ngoc Nguyen v. Wells Fargo

Bank, N.A., 749 F. Supp. 2d 1022, 1028 (N.D. Cal. 2010), although 3

other courts have calculated the amount in controversy by reference

to alternative criteria, including, inter alia, "the unpaid

principal balance on the note as of the date of removal," see RC

Lodge, LLC v. SE Prop. Holdings, LLC, No. 12-0112, 2012 U.S. Dist.

LEXIS 98199, at *4, 2012 WL 2898815, at *1 (S.D. Ala. July 16,

2012). 

4

See, e.g., Davis v. World Sav. Bank, FSB, 806 F. Supp. 2d 3

159, 165 (D.D.C. 2011); Olander v. ReconTrust Corp., No. C11-177,

2011 U.S. Dist. LEXIS 22397, at *6-7, 2011 WL 841313, at *2-3 (W.D.

Wash. Mar. 7, 2011); Stonebridge Bank v. Nita Props., LLC, No.

09-5145, 2011 U.S. Dist. LEXIS 9674, at *6, 2011 WL 380759, at *3

(D.N.J. Jan. 31, 2011); Kirby v. Bank of Am., N.A., No. 09-182,

2009 U.S. Dist. LEXIS 124229, at *11-12, 2010 WL 114201, at *2

(S.D. Miss. Jan. 6, 2009).

Other variations include "the fair market value of the 4

property" in question, see Reyes v. Wells Fargo Bank, N.A., No.

-7-
The face-value-of-the-loan rule, of course, has the

advantage of perfect simplicity, cf. Hertz Corp. v. Friend, 130

S. Ct. 1181, 1185-86 (2010) ("we place primary weight upon the need

for judicial administration of a jurisdictional statute to remain

as simple as possible"); and unlike a rule based on the amount

already paid or the balance still due, the face-value-of-the-loan

approach cannot be manipulated through strategic timing of a

filing. Cf. ConnectU LLC v. Zuckerberg, 522 F.3d 82, 93 (1st Cir.

2008) ("concerns about forum-shopping and strategic behavior" may

"offer special justifications" for jurisdictional rules). So there

is much to be said for such an approach.

However, the subject has not been briefed (or indeed even

raised), so it is wiser to reserve the question of which test this

circuit would approve; it is enough here that by any of the

suggested tests the matter in controversy exceeds $75,000. This is

readily demonstrated, particularly because for dismissal on amountin-controversy grounds, "[i]t must appear to a legal certainty that

the claim is really for less than the jurisdictional amount,"

Stewart v. Tupperware Corp., 356 F.3d 335, 338 (1st Cir. 2004)

C10-01667, 2010 U.S. Dist. LEXIS 113821, at *16, 2010 WL 2629785,

at *5-6 (N.D. Cal. June 29, 2010); and the "finance and other

charges, earnest money, down payments, . . . [and] damages" that

the plaintiffs would be entitled to recover if they succeeded in

their suit, see Belini v. Wash. Mut. Bank, F.A., No. 03-30175, at

4 (D. Mass. Oct. 26, 2004), rev'd on other grounds, 412 F.3d 17

(1st Cir. 2005).

-8-
(quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,

288-89 (1938)).

Wells Fargo's disclosure statement listed the loan amount

as $430,000 and the annual percentage rate as 8.269 percent, with

monthly payments over a 30-year period, ending with a balloon

payment of $251,430.05 due in December 2036. Thus, both the face

value and the amount still due exceed the $75,000 threshold, as

does the sum of the monthly payments already made ($3,030.25 a

month over about a thirty-month period). Wells Fargo deemed the

property to be adequate security for a $430,000 loan as of November

2006, making it highly likely that on removal, the property was

worth at least $75,000. 

Having settled the district court's jurisdiction, we next

must confront the extent of our own appellate jurisdiction. In her

notice of appeal, Suzette McKenna stated that she "hereby appeals

. . . from the Order on Plaintiff's Motion for Reconsideration of

this [District] Court's Memorandum of Order entered in this action

on May 11, 2011" (underlining in original). But whereas the notice

of appeal lists only the denial of the motion for reconsideration,

McKenna's opening (and only) brief on appeal directly attacks only

the district court's original Rule 12(b)(6) order.

The problem here has regularly bedeviled circuit courts

and has not been consistently resolved. A notice of appeal from a

final order of the district court must "designate the judgment,

-9-
order, or part thereof being appealed," Fed. R. App. P. 3(c)(1)(B);

and, with certain exceptions, the notice must be filed "within 30

days after entry of the judgment or order appealed from." Fed. R.

App. P. 4(a)(1)(A). The Supreme Court deems these Rule 3 and 4

requirements to be "jurisdictional." Torres v. Oakland Scavenger

Co., 487 U.S. 312, 316 (1988).

"Jurisdiction" is a term used multiple ways, but it is

settled that a civil appeal filed out of time is barred, that the

error in timing cannot be waived, and that circuit courts are

expected to notice the error sua sponte if not raised by the

opponent. Browder v. Dir., Ill. Dep't of Corr., 434 U.S. 257, 264

(1978). Thus, if Suzette McKenna had filed no reconsideration

motion but waited 31 days before appealing from the original

dismissal of her case, the appeal would be barred, and Suzette

McKenna would be left only with a malpractice suit against her

lawyer.

While McKenna's appeal was not filed within 30 days of

the original March 21, 2011, dismissal, that time limit was

suspended once she filed a motion for reconsideration under Rule

59(e) and 60(b) on April 12. See Fed. R. App. P. 4(a)(4)(A) (time

to file an appeal does not begin to run until last order on a Rule

59 motion, provided that motion is timely filed, or last order on

a Rule 60 motion, provided that motion is filed no later than 28

days after judgment is entered). And, after that motion for

-10-
reconsideration was denied (May 11, 2011), Suzette McKenna filed a

timely notice of appeal (June 6, 2011), but one limited to the

order on reconsideration, raising a prickly recurring problem.

Technically, an appeal that attacks only an order denying 

reconsideration can fairly be limited by the court solely to issues

raised in the reconsideration motion; but so long as that order is

timely appealed, courts have some latitude to consider other

grounds originally urged against the underlying dismissal,

especially where the issues on original dismissal and the

reconsideration order overlap or are intertwined. After all, 5

Rules 3 and 4 govern the appeal of orders and not of issues, and it

is debatable how far the "wrong order" objection is truly one of

Compare, e.g., Rojas-Velázquez v. Figueroa-Sancha, 676 F.3d 5

206, 209 (1st Cir. 2012) (court can consider 12(b)(6) order on

appeal because review of the Rule 59(e) denial "will entail testing

the cogency of the [12(b)(6) order]"), and Alstom Caribe, Inc. v.

Geo. P. Reintjes Co., 484 F.3d 106, 112 (1st Cir. 2007) (denial of

reconsideration "inextricably intertwined with the correctness of

the original order"), with Zukowski v. St. Lukes Home Care Program,

326 F.3d 278, 282 (1st Cir. 2003) ("appellant's notice of appeal

seeks review of only the district court's denial of her motion for

reconsideration . . . and our review is accordingly limited to the

court's refusal to reopen the case"), and Mariani-Giron v. AcevedoRuiz, 945 F.2d 1, 3 (1st Cir. 1991) (attack on order dismissing

complaint "not permitted" because "an appeal from the denial of a

Rule 59(e) motion is not an appeal from the underlying judgment"). 

See also Chamorro v. Puerto Rican Cars, Inc., 304 F.3d 1, 3 (1st

Cir. 2002) ("courts faced with poorly drafted notices of appeal

occasionally have been known to rescue the technically defaulted

portion of an appeal," but "[w]e caution . . . that such rescue

missions are not automatic, and litigants will do well to draft

notices of appeal with care").

-11-
"jurisdiction." See 15A Wright & Miller, Federal Practice &

Procedure § 3901 (Thomson Reuters 2012).

The need to provide finality argues strongly against

court-made exceptions where no timely appeal is taken, Torres, 487

U.S. at 317 (rejecting any "good cause" exception to Rules 3 and

4), even though a court may be generous in finding that an appeal

was timely, e.g., Scarpa v. Murphy, 782 F.2d 300, 301 (1st Cir.

1986) (citing "inexcusable neglect by the Post Office"). But a

timely appeal, although limited to the denial of a Rule 59(e)

motion, tells the appellee that the judgment is not final. Whether

and when a court should go beyond the grounds raised is the more

difficult question.

Even in our own circuit, "[t]he law on this issue is less

clear than the cases claim it to be." Town of Norwood v. New Eng.

Power Co., 202 F.3d 408, 415 (1st Cir.), cert. denied, 531 U.S. 818

(2000). See note 5, above. But we need not pursue the issue

because full as opposed to limited review does not alter the

outcome in this case. See Markel Am. Ins. Co. v. Díaz-Santiago,

674 F.3d 21, 27 (1st Cir. 2012); cf. United States v.

Fernández-Hernández, 652 F.3d 56, 73 (1st Cir.), cert. denied, 132

S. Ct. 353 (2011) ("Regardless of the standard of review, we find

no error.").

Turning to the merits, the first, second, third and

fourth counts of Suzette McKenna's complaint all state essentially

-12-
the same claim: that Wells Fargo is no longer the holder of the

note for Suzette McKenna's loan and therefore cannot foreclose on

her home. This is a claim that has some force both in doctrine 6

and policy; but it depends entirely on the law of Massachusetts

which--in the absence of a federal claim or defense--governs the

terms on which a mortgage can be foreclosed. To understand the

problem, some mortgage mechanics must be understood.

Typically, the borrower (mortgagor) grants to the lender

(mortgagee) both a right to recover the outstanding balance

evidenced by a promissory note and a security interest in the

property, which is evidenced by a mortgage instrument. Eaton v.

Fed. Nat'l Mortg. Ass'n, 969 N.E.2d 1118, 1124-25 (Mass. 2012); 4

Powell on Real Property § 37.27[2] (Matthew Bender & Co. 2012). 

Yet "[t]he holder of the mortgage and the holder of the note may be

different persons," Lamson & Co. v. Abrams, 25 N.E.2d 374, 378

(Mass. 1940), because the note may be transferred after the

mortgage is made. See generally Unif. Commercial Code §§ 3-103 to

-104, 3-301 to -302 (on negotiability of promissory notes).

Allowing a mortgagee who is not also a note holder to foreclose

creates a risk that the borrower might remain liable to the true

The counts respectively urge this straightforwardly; then as 6

a standing objection; then phrased as an issue of the real party in

interest; and finally by reference to the state statute on which

Wells Fargo relies. Each of these formulations simply contests the

right of a mortgage holder who lacks the note to foreclose.

-13-
note holder even after the mortgagee had seized and sold the

property. See 4 Powell on Real Property § 37.33[3][b][i].

The common-law rule appears to have been that a mortgagee

who was not also a note holder could only foreclose on mortgaged

property if it were acting as the note holder's trustee. Eaton,

969 N.E.2d at 1126 n.11 (discussing 19th and early 20th century

case law). However, the relevant Massachusetts foreclosure statute

states that "[t]he mortgagee . . . or person acting in the name of

such mortgagee . . . may, upon breach of condition and without

action, do all the acts authorized or required by the power [of

sale]." Mass. Gen. Laws ch. 244, § 14 (emphasis added). 

This language, which imposed no requirement that the

mortgagee also hold and surrender the note, was sometimes read--as

the district court did in this case--to allow foreclosure of

Massachusetts mortgages by someone who held the mortgage but did

not demonstrate ownership of the note. E.g., Aliberti v. GMAC

Mortg., LLC, 779 F. Supp. 2d 242, 249 (D. Mass. 2011); Valerio v.

U.S. Bank, N.A., 716 F. Supp. 2d 124, 128-29 (D. Mass. 2010). 

While Suzette McKenna's appeal was pending before us, the issue

came before the Supreme Judicial Court of Massachusetts ("SJC"),

and we held Suzette McKenna's case in abeyance. 

On June 22, 2012, the SJC decided Eaton v. Federal

National Mortgage Association, 969 N.E.2d 1118, which held that

Massachusetts' foreclosure statutes should hereafter be construed

-14-
as Suzette McKenna urges, that is, to require the foreclosing

mortgage holder to possess the note as well (or be acting as agent

of the note holder, see id. at 1129-31); but, given concerns about

past reliance on the statutory language and the possible impact on

past title transfers, the SJC made its new rule applicable "only to

mortgage foreclosure sales for which the mandatory notice of sale

has been given after the date of this opinion." Id. at 1133.

Eaton, of course, is binding upon us, including its

decision to make the new mortgagor-protective rule apply only

prospectively. See Wainwright v. Stone, 414 U.S. 21, 24 (1973)

(federal courts bound by state high court's holding that

construction of state statute will only be prospective). As Wells

Fargo issued the mandatory notice of sale to Suzette McKenna on

January 14, 2010, more than 30 months before the date of the

decision in Eaton, the SJC's decision gives her no protection. Nor

does Suzette McKenna claim that anyone else has sought to sue her

on the note.

Suzette McKenna's fifth count asserts that she has a

right to rescind her mortgage loan pursuant to the Massachusetts

Consumer Credit Cost Disclosure Act ("MCCCDA"), Mass. Gen. Laws ch.

140D. Under section 10 of the MCCCDA, a borrower who mortgages her

"principal dwelling" as part of a consumer credit transaction may

rescind the transaction for up to three days. Mass. Gen. Laws ch.

140D, § 10(a). However, if the creditor does not provide the

-15-
borrower with the required information and rescission forms, then

the right of rescission extends until the required documents are

provided (although no longer than four years). Id. § 10(f).

The MCCCDA regulations echo this statutory provision,

describing the required documents as "all material disclosures";

209 Mass. Code Regs. § 32.15(1)(c) (LexisNexis 2012); specifying

that the creditor provide each borrower with two copies of a

"notice of the right to rescind," id. § 32.15(2); and obligating

the creditor to disclose, inter alia, the "finance charge"

associated with the transaction, id. § 32.18. Suzette McKenna

alleges that Wells Fargo "did not provide the required amount of

copies of the Notice to Cancel" and "underdisclosed the amount of

the finance charge," allegedly giving rise to an extended right of

rescission under Mass. Gen. Laws ch. 140D, § 10.

Suzette McKenna does not dispute that she received one

copy of a document entitled "Notice of Right to Cancel" on November

9, 2006. The district court stated that "as long as a borrower

receives one such notice, the rescission period is not extended." 

McKenna, 2011 U.S. Dist. LEXIS 28719, at *8, 2011 WL 1100160, at

*2. The district court cited King v. Long Beach Mortgage Co., 672

F. Supp. 2d 238, 250-51 (D. Mass. 2009), where another district

judge so construed the counterpart federal scheme, similar in

substance to the Massachusetts rules, compare 12 C.F.R. § 226.23,

with 209 Mass. Code Regs. § 32.15. 

-16-
The Massachusetts rescission statute may not cleanly

resolve the matter but it says nothing about the lack of multiple

copies being a basis for rescission; the time period for rescission

is only extended from three days to four years if the borrower does

not receive an appropriate "written notice" (singular), Mass. Gen.

Laws ch. 140D, § 10(h), (i)(1)(B); and the relevant regulations

specify the conditions under which a borrower has an extended right

of rescission, 209 Mass. Code Regs. § 32.15(1)(c)-(d), in a

different subsection than the multiple-copy requirement, id. §

32.15(2). 

If it were necessary to go beyond the language of the

statutes and regulations, one might fairly point out that the

purpose of the four-year extension is to give the consumer the

information needed to decide intelligently whether to cancel; one

copy performs this function as well as two, at least in a case

where the McKennas never parted with their first copy of the form. 

Anyway, the more straightforward reading of the statute and

regulations makes lack of notice, not the number of copies, the

predicate for rescission.

Suzette McKenna's fifth count also asserts that Wells

Fargo's TILA disclosure statement "underdisclosed the amount of the

finance charge . . . by more than $35.00," that figure being the

regulation's threshold to give rise to an extended right to rescind

under Mass. Gen. Laws ch. 140D, § 10. See 209 Mass. Code Regs.

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32.15(c). A letter attached to the complaint alleges that "the

closing attorney overcharged us for title insurance."

 The district court dismissed this claim on the grounds

that "fees for title insurance are not finance charges" under the

relevant regulations, McKenna, 2011 U.S. Dist. LEXIS 28719, at *8,

2011 WL 1100160, at *2, although it acknowledged in a footnote that

fees for title insurance in a transaction secured by real property

may qualify as finance charges if the fees are not "bona fide and

reasonable in amount," id., 2011 U.S. Dist. LEXIS 28719, at *9-10

n.36, 2011 WL 1100160, at *2 n.36 (quoting 209 Mass. Code Regs.

32.04(3)(g)(1)). 

However, to invoke this qualification, the complaint had

to allege a factual basis for a claim that the bank's charges were

not "bona fide" or were unreasonable. Cf. Guise v. BWM Mortg.,

LLC, 377 F.3d 795, 800 (7th Cir. 2004) (construing counterpart

federal regulation); Brannam v. Huntington Mortg. Co., 287 F.3d

601, 606 (6th Cir.), cert. denied, 537 U.S. 1048 (2011) (same);

McDermott v. Mortg. Elec. Registration Sys., No. 08-12121, 2010

U.S. Dist. LEXIS 104912, at *11-12, 2010 WL 3895460, at *4 (D.

Mass. Sept. 30, 2010) (interpreting Massachusetts law).

Nothing in Suzette McKenna's complaint or attached to it

provided any such factual basis for such a claim; the references to

overcharge and the regulation's $35 figure are wholly conclusory; 

and dismissal on a 12(b)(6) motion is appropriate where "statements

-18-
in the complaint . . . merely offer legal conclusions couched as

facts or are threadbare or conclusory." This reflects the Supreme 7

Court's insistence, see Ashcroft v. Iqbal, 556 U.S. 662 (2009);

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), on more than

conclusory allegations or rote repetition of statutory language

before further costs and discovery burdens are imposed on the

parties.

Here, on motion for reconsideration, Suzette McKenna by

affidavit furnished information suggesting that the lawyer who

represented Wells Fargo in the loan refinancing "charged $712.00

[for title insurance] rather than the base policy rate of $667.00"

and that the latter was a "typical" rate for title insurance on a

$430,000 loan. This is effectively an attempted amendment to the

complaint, which must be done within 21 days of a motion to dismiss

unless the opposing party consents to a later amendment or the

court grants leave, see Fed. R. Civ. P. 15(a), and here, the

attempt was too late by more than six months.

The denial of an attempt to bolster a complaint by motion

for reconsideration after dismissal is tested for abuse of

discretion, Crawford v. Clarke, 578 F.3d 39, 44 (1st Cir. 2009),

and it is not an abuse to refuse to consider factual allegations in

Air Sunshine, Inc. v. Carl,, 33 (1st Cir. 2011) (quoting 7

Soto-Torres v. Fraticelli, 654 F.3d 153 (1st Cir. 2011)); accord

Pruell v. Christi, 678 F.3d 10, 13 (1st Cir. 2012) (dismissal on

12(b)(6) motion appropriate where "language [in the complaint] is

little more than a paraphrase of the statute").

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a Rule 59(e) motion "that could and should have been presented to

the district court prior to the judgment." Aybar v. Crispin-Reyes,

118 F.3d 10, 16 (1st Cir. 1997), cert. denied, 522 U.S. 1078 (1998)

(quoting Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir. 1996)). 

Moreover, even if the affidavit were part of the complaint, it does

not show that the charge was unreasonable or not bona fide.8

The sixth count of Suzette McKenna's amended complaint

alleges that Wells Fargo has engaged in "unfair or deceptive acts

or practices in the conduct of any trade or commerce," Mass. Gen.

Laws ch. 93A, § 2(a), which creates a private right of action

against violators, id. § 11. The claimed wrongful conduct

comprises the failure to provide the second rescission notice, the

lawyer's alleged overcharge for title insurance, other claims that

assume that the foreclosure was unlawful, and a largely unexplained

but unpromising final act, to wit, that "Wells Fargo forced

Plaintiff to unnecessarily open probate, as a condition precedent

Suzette McKenna attaches to her motion for reconsideration a

8

print-out from the Fidelity National Title Insurance Co.'s website

indicating that the "typical" title insurance premium for a

$430,000 mortgage loan in Barnstable County, Massachusetts, was

$667 as of April 5, 2011. (The McKennas were charged $712 for

title insurance.) Not only are there countless "bona fide" reasons

why a title insurance premium might vary from the "typical" rate by

at least $45, but the print-out reflects rates for transactions

occurring four-and-a-half years after the McKennas' mortgage loan,

and Suzette McKenna gives us no reason to conclude that the

"typical" rate at the later date also applied at the time of the

transaction.

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before entertain [sic] discussions, further increasing burdens and

costs upon Plaintiff."

The Massachusetts unfair trade practices statute also

requires plaintiffs to submit a demand letter to defendants 30 days

prior to filing a private action under chapter 93A, id. § 9(3),

which Suzette McKenna did not do. The demand letter requirement

"is not merely a procedural nicety, but, rather, 'a prerequisite to

suit,'" Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5, 19 (1st Cir.

2004) (quoting Entrialgo v. Twin City Dodge, Inc., 333 N.E.2d 202,

204 (Mass. 1975)), designed "to encourage negotiation and

settlement" and "as a control on the amount of damages." Slaney v.

Westwood Auto, Inc., 322 N.E.2d 768, 779 (Mass. 1975).

The district judge dismissed the count for lack of a

demand letter, McKenna, 2011 U.S. Dist. LEXIS 28719, at *11-12,

2011 WL 1100160, at *3. Suzette McKenna now claims that no demand

letter was required because (she says) a violation of the

Massachusetts Consumer Credit Cost Disclosure Act is a per se

violation of chapter 93A, see Mass. Gen Law ch. 140D, § 34. But

the purposes of the demand letter requirement would be served

whether the violation was easily proved or not, and no such

exception for "per se" violations is supported by Massachusetts

law.

The demand letter requirement does not apply "if the

claim is asserted by way of counterclaim or cross-claim, or if the

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prospective respondent does not maintain a place of business or

does not keep assets within the commonwealth." Mass. Gen Laws ch.

93A, § 9(3). In addition to her contention regarding per se

violations, Suzette McKenna argues that the demand letter

requirement does not apply here because she is "asserting her

claims defensively against a foreclosure action" and because Wells

Fargo "does not maintain a place of business and/or keep assets

within the Commonwealth."

No counterclaim or cross-claim is involved in this case,

and the purposes of the demand letter requirement are implicated by

the relief McKenna seeks in her complaint, in particular the claim

for damages. And Wells Fargo clearly keep assets within

Massachusetts, one of those assets being a real property interest

in the home where Suzette McKenna resided. See U.S. Bank Nat'l

Ass'n v. Ibanez, 941 N.E.2d 40, 51 (Mass. 2011) (under

Massachusetts law, mortgagee holds legal title to mortgaged

property); see also Wells Fargo Bank NA v. Premier Capital, LLC, 81

Mass. App. Ct. 1110 (Mass. App. Ct. 2012) (case involving Wells

Fargo real property interest in Centerville, Massachusetts).

Suzette McKenna's seventh and final count alleges

intentional misrepresentation on the part of Wells Fargo. Under

Rule 9(b) of the Federal Rules of Civil Procedure, a party alleging

fraud--"and for this purpose, misrepresentation is considered a

species of fraud," see Alternative Sys. Concepts, Inc. v. Synopsys,

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Inc., 374 F.3d 23, 29 (1st Cir. 2004)--must "state with

particularity the circumstances constituting fraud." Fed. R. Civ.

P. 9(b); see also Universal Commc'n Sys., Inc. v. Lycos, Inc., 478

F.3d 413, 427 (1st Cir. 2007).

Here, Suzette McKenna's complaint alleges that Wells

Fargo's misrepresentations included, "without limitation,"

"[m]aking preliminary oral and written disclosures pertaining to

the settlement charges of the loan" and "[p]roviding a loan that

was not what [Wells Fargo] purported it to be, which contained an

overall higher interest rate than what was 'disclosed' to

Plaintiff." The complaint fails to specify the time or place of

these misrepresentations or their real content and, as the district

court held, these assertions are "too vague to meet the

particularity requirement of Rule 9." McKenna, 2011 U.S. Dist.

LEXIS 28719, at *13, 2011 WL 1100160, at *3. 

 Affirmed.

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