Opinion ID: 2659007
Heading Depth: 3
Heading Rank: 2

Heading: Claims Based on Assignee Liability

Text: Serra next seeks to have Quantum and Wells Fargo answer for what he believes are structurally unfair loan terms and predatory lending practices engaged in by EquiFirst. See Mass. Gen. Laws ch. 93A, § 2; id. ch. 183, § 28C (the Borrower's Interest Act). We need not explore whether the loan terms were in fact unlawful. Rather, because both his Chapter 93A claim for damages and his Borrower's Interest Act claim for equitable relief rise and fall on a common, mistaken, theory of assignee liability, we consider them in tandem. Serra's argument rests solely on a recent Massachusetts Supreme Judicial Court case, Drakopoulos v. U.S. Bank Nat'l Ass'n, 465 Mass. 775, 991 N.E.2d 1086 (2013), which he believes establishes assignee liability for his statutory claims. An independent review of Drakopoulos, however, reveals this argument's erroneous underpinnings. The plaintiffs in Drakopoulos brought six claims, three of which are relevant here. While two of these claims matched Serra's own, arising under Chapter 93A and the Borrower's Interest Act, the third arose under the Predatory Home Loan Practices Act (PHLPA), Mass. Gen. Laws ch. 183C. See Drakopoulos, 991 N.E.2d -7- at 1091. As recognized by the Supreme Judicial Court, PHLPA's text expressly includes a broad grant of assignee liability. Id. at 1092 n.11; see also Mass. Gen. Laws ch. 183C, § 15(a) (Any person who purchases or is otherwise assigned a high-cost home mortgage loan shall be subject to all affirmative claims and any defenses with respect to the loan that the borrower could assert against the original lender . . . .). Thus, PHLPA expands the common law of assignee liability in the limited instance of certain high cost loans. Drakopoulos, 991 N.E.2d at 1092 (To the extent that the bank may [] have liability as an assignee by virtue of the act, it would extend to . . . statutory [Chapter 93A and Borrower's Interest Act claims, as well]. (emphasis added)). In relying on Drakopoulos, Serra fails to acknowledge that his complaint alleged no violation of PHLPA,3 and thus cannot receive the advantage of that act's broad grant of assignee liability. Moreover, neither Chapter 93A nor the Borrower's Interest Act serves as an independent ground for extending liability to Serra's claims. See id. at 1095 n.16 (Where an assignee played no part in the unfair or deceptive acts of an 3 Beyond never referencing PHLPA, Serra did not plead facts sufficient to show his was a high cost loan. PHLPA specifically defines such loans as those in which: (1) the annual percentage rate exceed[s] by more than 8 percentage points for first-lien loans, or more than 9 percentage points for subordinate-lien loans, the yield on United States Treasury securities, or (2) the total points and fees exceed the greater of 5 per cent of the total loan amount or $400. Mass. Gen. Laws ch. 183C, § 2. -8- assignor, principles of assignee liability ordinarily will not render the assignee liable for affirmative damages for those acts.); id. at 1097 n.20 ([But for PHLPA], an assignee who took no part in the making of a home loan would not fall within the scope of liability of the Borrower's Interest Act.). In the absence of such statutorily created liability, Serra cannot hold Quantum and Wells Fargo responsible for the allegedly predatory practices of their predecessor-in-interest. Ford Motor Credit Co. v. Morgan, 404 Mass. 537, 545, 536 N.E.2d 587, 591 (1989)(The common law principle that the assignee stands in the assignor's shoes means only that the debtor can raise the same defenses against the assignee as he could have raised against the assignor.). The district court's grant of summary judgment on these claims is affirmed.