Court Opinion

ID: 9742687
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:18:04.185701+00
Date Added: 2024-06-11T07:24:34.859602
License: Public Domain

Brown, J.
(dissenting). I strongly disagree. In my view, summary judgment should not have been granted by the lower court. Construing the disputed facts, as we must (and which the majority failed to do), in the light most favorable to the plaintiff, the following scenario emerges.
Unable to obtain conventional financing to buy out her husband’s share of the marital home, Pauline Hogan contacted a mortgage broker, Loan Depot, which in turn (for a $5,700 commission) referred her to Robert L. Riemer, doing business as Pickwick Financial Associates. Pickwick’s loan officer, Mark Cohen, with whom Hogan dealt throughout this transaction, informed her that it would be willing to lend her up to $150,000 to be repaid in monthly payments not exceeding $1,200. It is undisputed that Cohen knew that Hogan’s average monthly income at this time was approximately $2,000. The payments required by Pickwick’s loan documents, however, called for estimated monthly payments of $2,157.
Hogan was never informed before the closing as to the specific terms of the loan. At the closing, none of the loan provisions was read or explained to her either by Cohen or her own counsel. Hogan did not review the documents prior to signing them. She did not realize until after she had signed them that the terms of the loan were drastically different from what Cohen had represented to her.1 For example, al*369though Hogan had specifically requested a long-term fixed mortgage, the loan documents provided for a short-term, variable rate loan, with monthly payments of interest only and a balloon payment of the full principal in two years.
At the closing, presumably to allay Hogan’s concerns about repayment, Cohen assured her that if there was a problem Pickwick would “work with” her and would not take her house. On June 17, 1988, however, just sixteen days after Pickwick claims Hogan’s first payment was due, the note was accelerated and foreclosure proceedings were commenced.
Based on these facts, if proven, a fact finder could determine that Pickwick’s conduct constituted an unfair practice in violation of G. L. c. 93A, §§ 2 and 9. It is settled that conduct not otherwise illegal may nonetheless be unfair within the meaning of c. 93A. PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass. 593, 595-596 (1975).
The facts rehearsed above easily meet the PMP Assocs. test for unfairness. The circumstances of this case fall within the penumbra of G. L. c. 140D (the Consumer Credit Disclosure Act).2 The “immoral, oppressive, unethical [and] unscrupulous” nature of this loan is underscored by the fact that the borrower’s limited means with which to repay the loan were known to the lender. Indeed, a fact finder reasonably could conclude that in these circumstances the lender knew, or could reasonably have predicted to a virtual certainty, that the borrower had no capacity to repay. More to the point, it appears to me that the loan was made, not for the purpose of assisting a temporarily distressed borrower, but rather to acquire her equity in the property and to gain additional financial benefit from the panoply of generous fees appurtenant to the loan origination, the closing, and the all *370but inevitable foreclosure.3 That the lender pulled the trigger a mere sixteen days after the initial default supports this theory, and suggests that Pickwick never harbored any intention to work with the borrower. This loan is so obviously contrary to prudent lending practices that no conscientious lender could in good faith have made it. Cf. Carter v. Empire Mut. Ins. Co., 6 Mass. App. Ct. 114 (1978).
For the purposes of c. 93A, unfairness is determined from all the circumstances of the transaction, Martin v. Factory Mut. Research Corp., 401 Mass. 621, 623 (1988), and the issue whether the defendant’s conduct was unfair is ultimately a question of fact. Spence v. Boston Edison Co., 390 Mass. 604, 616 (1983). As to that issue the plaintiff, on this record, has, in my view, met her burden in opposition to the defendant’s motion for summary judgment.
That Pickwick’s conduct was also “deceptive” within the meaning of G. L. c. 93A, § 2, is almost axiomatic. Throughout their negotiations, the plaintiff was promised loan terms far more favorable than those with which she was finally presented at the closing. Under the gun of a Probate Court order requiring her to pay her former husband $85,000 by January 31, 1988,4 — only sixteen days after the closing — Hogan believed she had no choice but to sign the agreements as presented to her by the defendant.
I concur with the majority that, with respect to a common law claim of fraud, the plaintiff’s written acceptance of the new terms of the loan served to vitiate whatever fraud may have occurred previously. However, in the light of abundant decisional precedent, I think it clear that defenses to common law claims are not always available to chapter 93A claims. See Heller v. Silverbranch Constr. Corp., 376 Mass 621, 626 (1978).
In addition, the defendant’s assurances to the plaintiff that it would “work out” any financial problems that arose and *371that it “did not want her house,” reasonably could have caused a person in the plaintiff’s position to go forward with the loan even when presented with materially different, and more onerous, terms. See Fraser Engr. Co. v. Desmond, 26 Mass. App. Ct. 99, 104 (1988). That issue should have been left for the fact finder, and was not appropriately determined on the record before the Superior Court.
Finally, the context of the entire transaction has been cause for concern throughout the litigation. Therefore, I feel compelled to comment upon it. The plaintiff entered into this transaction in order to comply with her divorce decree. While the decree is not before this court, Pickwick’s representations to Hogan are inextricably intertwined with her divorce settlement, as she relied on them in negotiating that settlement.
Granted, this plaintiff was represented at the closing by an attorney — her divorce attorney. But she should not be penalized for her counsel’s apparent failure to render sound professional advice about the transaction.5 I place little stock in his self-serving deposition testimony explaining his “understanding” of the contemporaneous statements made at the loan closing.
A final observation: the plaintiff lost her home in the wake of her divorce, a reality consistent with the all too familiar trend in which women experience a significant drop in their standard of living after divorce. See Gender Bias Study of the Supreme Judicial Court 27-39 (1989).
In sum, the plaintiff was doomed from the time that Pickwick glimpsed her financial circumstances and saw the significant equity in her home available for potential plundering.

The onerous loan provisions, which are not disputed, include the following: (a) "a variable interest rate with a minimum of 18.5 percent and a maximum of 28 percent (at the time of the closing the interest rate was 23.75 percent); (b) a prepayment penalty of four months interest (more *369than $8,000); (c) a late charge of one percent per month (a minimum of $1,380), and (d) additional interest upon default of 3.5 percent per month.

See also the newly enacted regulations (840 Code Mass. Regs. §§ 8.00 et seq. [1993]) promulgated specifically to address the unfair and deceptive trade practices of the second-mortgage loan industry.

It should be noted that it appears that virtually all of these ancillary services were performed by the lender and its attorney.

In entering into her divorce settlement, Hogan relied on Pickwick’s representations as to favorable loan terms.

Whether her attorney was preoccupied with getting his fee from the loan proceeds, or was simply incompetent, cannot be determined from this record. In either case, the most that can be said of his role was that he acted, to use the vernacular, as a “potted plant.”