Opinion
16-P-427
02-14-2017
Gregory J. MISTOVICH & another v. WELLS FARGO BANK, N.A. & another
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Gregory J. and Carol A. Mistovich brought this action against Wells Fargo Bank, N.A., claiming that it engaged in misconduct in connection with a primary mortgage loan secured by the Mistoviches' home. A judge of the Superior Court dismissed several counts of the complaint under the doctrine of claim preclusion, and a different judge then dismissed the remaining counts under Mass.R.Civ.P. 8, 365 Mass. 749 (1974), and Mass.R.Civ.P. 12(b)(6), 365 Mass. 755 (1974). The Mistoviches appeal, raising numerous claims of error. We affirm.
Background . Wells Fargo is the servicer and holder of a primary mortgage loan and a home equity loan secured by the Mistoviches' home in Sutton. Wachovia Mortgage Corporation, which is now owned by Wells Fargo, was the originator of both loans.
In October of 2011, Wells Fargo brought a collection action against the Mistoviches in Superior Court to recover the balance owed on the home equity loan. The Mistoviches filed numerous counterclaims, many of which challenged Wells Fargo's lending and trading practices. According to the counterclaims, these lending and trading practices precipitated the "great recession," forced Gregory Mistovich to leave his position with Wachovia Securities, and led to a decline in the value of the Mistoviches' home, all causing the Mistoviches to suffer emotional, physical, and financial harm. The counterclaims further challenged Wells Fargo's collection practices, alleging that they too caused the Mistoviches to suffer emotional, physical, and financial harm.
In April of 2012, the judge dismissed most of the counterclaims under Mass.R.Civ.P. 12(b)(6), finding that they lacked a sufficient factual basis to meet the pleading standards of Iannacchino v. Ford Motor Co ., 451 Mass. 623 (2008). The judge also found dismissal appropriate under Mass.R.Civ.P. 8 and Mass.R.Civ.P.12(e), 365 Mass. 756 (1974), because the counterclaims were "verbose," "nearly incomprehensible," and generally based on the Mistoviches' status as " ‘participant[s] in the U.S. economy’ which does not provide standing to show entitlement to [the] relief requested." Several months later, the same judge ordered summary judgment for Wells Fargo on the remaining counterclaims for intentional and negligent infliction of emotional distress. The Mistoviches appealed the summary judgment decision (but not the earlier dismissal order), and a panel of this court affirmed in a memorandum and order pursuant to our rule 1:28. See Wells Fargo Bank, N.A . v. Mistovich , 85 Mass. App. Ct. 1115 (2014).
Meanwhile, Wells Fargo determined that the Mistoviches had defaulted on their primary mortgage loan. As a result, in May of 2012, the Harmon Law Offices, as attorney for Wells Fargo, notified the Mistoviches of Wells Fargo's intention to conduct a foreclosure sale. A month later the Mistoviches initiated this action.
Wells Fargo then moved to dismiss the counts against it on the ground that they were barred by res judicata. The motion was heard by the same judge who decided Wells Fargo's motion to dismiss and motion for summary judgment in the 2011 action. In a detailed decision, the judge concluded that claim preclusion barred twelve of the counts because they arose out of the same allegations that formed the basis of the counterclaims in the 2011 action—i.e., that Wells Fargo engaged in unlawful lending and trading practices and collection practices, causing the Mistoviches emotional, physical, and financial injury. The judge ruled, however, that the remaining counts against Wells Fargo could go forward because they "appear[ed] to specifically arise from Wells Fargo's attempt to foreclose on the primary mortgage loan," which "is a transaction/occurrence different from that which served as the basis for the 2011 counterclaims."
Soon thereafter, Wells Fargo filed a motion to dismiss the remaining counts under Mass.R.Civ.P. 12(b)(6) on the ground that each of them failed as a matter of law. A second judge allowed the motion, agreeing that the remaining counts failed to state cognizable claims under Mass.R.Civ.P. 12(b)(6). In addition, the judge found the complaint to be "so verbose, confusing and dominated by allegations not legally material to any claim that plaintiffs have standing to bring" that it failed to give Wells Fargo fair notice of the basis for the claims, in violation of Mass.R.Civ.P. 8. Final judgment entered, and this appeal followed.
The complaint, which the Mistoviches amended once, spans eighty-four single-spaced pages and contains 656 numbered paragraphs and twenty-eight causes of action, twenty-four against Wells Fargo.
Discussion . We construe the Mistoviches' brief to be raising six claims of error and will address them in the order raised.
First, the Mistoviches challenge the first judge's determination that twelve of the counts are barred by claim preclusion. They fail, however, to put forth any cogent argument to support their position. Despite the prolixity of the complaint, the judge carefully went through each of the counts to determine which arose out of the same transaction or occurrence that was the basis of the counterclaims in the 2011 action. The Mistoviches have presented us with no reason to overturn the judge's decision. To the extent they are arguing that a dismissal under Mass.R.Civ.P. 12(b)(6) is not a binding adjudication on the merits, they cite no authority for that proposition, which is, in any event, incorrect. See Mestek, Inc . v. United Pac. Ins. Co ., 40 Mass. App. Ct. 729, 731 (1996).
Second, the Mistoviches argue that the first judge erred by failing to issue a ruling on the viability of their claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq. (2012). The judge determined, however, that the RICO counts were among the twelve claims barred by claim preclusion and dismissed them accordingly. Having done so, there was no need for the judge to issue any further rulings.
Third, the Mistoviches argue that the second judge allowed Wells Fargo to file an "illicit" second motion to dismiss the counts that survived the original motion to dismiss and, relatedly, that the judge should have found Wells Fargo in default for not filing an answer. Procedural issues, such as those relating to default, are committed to the discretion of the trial judge. See Eagle Fund, Ltd . v. Sarkans , 63 Mass. App. Ct. 79, 85 (2005). Here, the judge explained that he allowed Wells Fargo to file a second motion to dismiss because its original motion "specifically reserved the right" to do so. This was a reasonable course of action and did not constitute an abuse of discretion. Cf. ibid . ("The consideration[s] to be balanced in deciding a default question ... are, on one hand, a concern about giving parties their day in court, and, on the other, not so blunting the rules that they may be ignored ‘with impunity.’ "), quoting from Greenleaf v. Massachusetts Bay Transp. Authy ., 22 Mass. App. Ct. 426, 429–430 (1986).
In particular, Wells Fargo's original motion to dismiss stated, "It should be noted that Plaintiffs' Amended Complaint fails to state sufficient claims against Wells Fargo .... Should this Court find that any claims are not barred by res judicata, Wells Fargo specifically reserves its rights to file another motion to dismiss based upon the grounds that Plaintiffs['] Amended Complaint fails to state a claim."
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Fourth, the Mistoviches contend that the second judge erred by not issuing a ruling on their motion for summary judgment. The judge heard the summary judgment motion on the same day he heard Wells Fargo's second motion to dismiss. Once he allowed Wells Fargo's motion, on the ground that the claims were legally deficient, the summary judgment motion was rendered moot. No further decision was necessary.
Fifth, while not raising any substantive challenge to the second judge's decision, the Mistoviches contend that it should be vacated because it improperly overruled the first judge's decision. That is not an accurate characterization. Wells Fargo's original motion to dismiss was based solely on claim preclusion, and that was the only issue considered by the first judge. Thus, in determining the legal sufficiency of the remaining claims, the second judge did not rule on any issue that was previously decided by the first judge.
Finally, the Mistoviches level a number of accusations against Wells Fargo's attorneys, alleging that they "perpetuated a fraud upon the Court" in violation of the Massachusetts Rules of Professional Conduct. We find nothing in the record to substantiate these accusations, and we reject them.
Judgment affirmed .