Salois v. Dime Savings Bank

United States Court of Appeals
For the First Circuit

No. 97-1049

ROBERT SALOIS AND DIANNE E. SALOIS, NINON R. L. FREEMAN, AND DAVID M.
LEARY AND LINDA SCURINI-LEARY, INDIVIDUALLY AND ON BEHALF OF OTHERS
SIMILARLY SITUATED,

Plaintiffs, Appellants,

v.

THE DIME SAVINGS BANK OF NEW YORK, FSB, HARRY W. ALBRIGHT, JR., JOHN
B. PETTIT, JR., WILLIAM J. MELLIN, WILLIAM J. CANDEE III, WILLIAM A.
VOLCKHAUSEN, JAMES E. KELLY, RALPH SPITZER, ROBERT G. TURNER, BRIAN
GERAGHTY, LAWRENCE W. PETERS, E. JUDD STALEY III, AND JOHN DOE
COMPANIES,

Defendants, Appellees.

No. 97-1050

ROBERT SALOIS, ET AL.

Plaintiffs, Appellees,

v.

THE DIME SAVINGS BANK OF NEW YORK, ET AL.

Defendants, Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Patti B. Saris, U.S. District Judge]

Before
Selya, Boudin, and Stahl,

Circuit Judges.

Evans J. Carter with whom Hargraves, Karb, Wilcox & Galvani was

on brief for appellants.
William S. Eggeling with whom Roscoe Trimmier, Jr., Darlene C.

Lynch, Jane E. Willis, and Ropes & Gray were on brief for appellees.

November 3, 1997

STAHL, Circuit Judge. In the mid-1980s defendant
STAHL, Circuit Judge.

The Dime Savings Bank of New York, FSB ("Dime") made mortgage

loans to plaintiffs Dianne and Robert Salois, David M. Leary

and Linda Scurini-Leary, and Ninon R. L. Freeman. Plaintiffs

now appeal from the district court's dismissal on statutes of

limitations grounds of various federal and Massachusetts

statutory claims as well as common-law contract and fraud

claims arising from the mortgage transactions.1 Defendant

cross-appeals from the court's denial of its motion for Fed.

R. Civ. P. 11 sanctions against plaintiffs' attorneys. We

affirm the district court's ruling that statutes of

limitations barred all of plaintiffs' claims and uphold the

district court's denial of Dime's motion for Rule 11

sanctions because that denial was not an abuse of the court's

discretion.

1. The amended complaint alleges (1) violation of the
Racketeer Influenced and Corrupt Organizations Act (RICO), 18
U.S.C. 1961-1968, (2) violation of the federal Truth in
Lending Act (TILA), 15 U.S.C. 1601 et seq. and Regulation

Z, 12 C.F.R. pt. 226, (3) violation of the Real Estate
Settlement Procedures Act (RESPA), 12 U.S.C. 2601-2617 and
Regulation X, 24 C.F.R. pt. 3500, (4) violation of the
federal Alternative Mortgage Transaction Parity Act, 12
U.S.C. 3801-3806, (5) violation of the Massachusetts
Consumer Credit Cost Disclosure Act, Mass. Gen. Laws ch.
140D, (6) violation of the Massachusetts Consumer Protection
Act, Mass. Gen. Laws ch. 93A, (7) breach of contract, (8)
breach of the implied covenant of good faith and fair
dealing, (9) breach of fiduciary duty, (10) fraud, deceit,
and misrepresentation, (11) civil conspiracy, and (12)
negligent misrepresentation, negligent hiring and
supervision, and vicarious liability.

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I.

BACKGROUND AND PRIOR PROCEEDINGS

Because plaintiffs challenge the district court's

dismissal of their claims under Fed. R. Civ. P. 12(b)(6), we

recite the facts and reasonable inferences raised by the

facts in their favor. See Aybar v. Crispin-Reyes, 118 F.3d

10, 13 (1st Cir. 1997).

Dime is a federally-chartered savings bank.

Between July 1, 1986, and December 31, 1989, Dime, through

its wholly owned subsidiary, Dime Real Estate Services --

Massachusetts, Inc. ("DRES-MA"), made over four thousand

(4,000) home mortgage loans on residential homes located in

Massachusetts, totalling over six hundred million dollars

($600,000,000). DRES-MA ceased to exist in 1990.2

Dime marketed to Massachusetts residential home

purchasers an adjustable rate loan product known as the

Impact Loan. In evaluating applications for Impact Loans,

Dime required only minimal verification of the employment

status, assets, and income of prospective borrowers, basing

its lending decisions instead on the value of the property

subject to the mortgage. Moreover, Dime loan officers

operated under instructions to push Impact Loans to the

virtual exclusion of other types of mortgage loans. This

2. It is unclear from the record whether DRES-MA was merged
into Dime or whether it was dissolved.

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effort was part of Dime's national campaign to expand rapidly

its home lending business.

A principal feature of an Impact Loan was an

initial "teaser" interest rate of 7.5 percent for the first

six months with a cap of 9.5 percent for the second six

months. Thereafter, the rate would adjust to conform to the

Cost of Funds Index plus three percent, with a cap of 13.9

percent. This arrangement was designed to result in negative

amortization, a situation in which monthly loan payments fall

short of the actual monthly interest due on the loan. The

unpaid interest, or "deferred interest," is then added to the

principal and begins to accrue interest itself, causing the

principal owed to increase despite the borrower's regular

payments. The terms of the Impact Loan provided that no

payments or portions of payments would apply to the principal

until all "deferred interest," or negative amortization, had

been paid. Once the principal balance reached 110 percent of

the original principal amount, the loan contracts required

mortgagors to make fully amortizing payments; that is,

mortgagors were required to increase their monthly payments

to cover the additional principal plus interest.

Plaintiffs secured residential Impact Loans from

DRES-MA in 1986 and 1987. To induce plaintiffs to enter the

loan contracts, Dime downplayed the negative amortization

feature of the Impact Loans, and discouraged plaintiffs from

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hiring their own attorneys by telling them that Dime

attorneys would "handle things" and "protect" them. Six

months into the loans, monthly statements revealed increases

in the owed principal, and, in the second year, deferred

interest began to appear on the statements. Although the

initial loan documents contained the information from which

plaintiffs could have discovered that their loan payments

would increase, plaintiffs contend that teasing this

information out of the documents would have required

computation skills, computer software, and a level of

sophistication that they did not, and could not have been

expected to, possess. In addition, plaintiffs argue that

Dime charged them excessive fees for closing the loan

contracts, serviced their loans improperly by providing

unsatisfactory responses to their queries about negative

amortization, and altered the Saloises' loan impermissibly by

requesting that the Saloises sign "corrective" documents that

lifted a two percent per month cap on the interest rate

applicable to the loan.

At the time of the complaint, plaintiffs Robert and

Diane Salois continued to hold their mortgage. Plaintiffs

David M. Leary and Linda Scurini-Leary had defaulted, and the

mortgage on their home was foreclosed on in 1991. Plaintiff

Ninon R. L. Freeman paid her loan in full in 1993. The

Saloises were alerted to their potential claims when they

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consulted an attorney about their financial situation in late

September, 1994, and Ms. Freeman and the Learys were

similarly advised in mid-1995. The Saloises filed this

action on September 1, 1995, in the United States District

Court for the District of Massachusetts, as a putative class

action on behalf of all persons who secured residential

mortgage loans from Dime in Massachusetts between July 1,

1986, and December 31, 1989. Dime responded on October 5,

1995, with a motion to dismiss the complaint as untimely. On

November 10, 1995, Dime further moved for Rule 11 sanctions,

alleging that there was no legal or factual basis for

plaintiffs' claims. The Saloises filed an amended complaint

on February 9, 1996, which added the Learys and Ms. Freeman

as plaintiffs. In a margin order dated November 6, 1996, the

district court denied the Rule 11 motion and, on November 13,

1996, dismissed the complaint on statutes of limitations

grounds. Because the court never acted on plaintiffs' motion

for class certification, no class was certified. This appeal

and cross-appeal followed.

II.

DISCUSSION

A. Plaintiffs' Claims

On appeal, plaintiffs contend that the district

court erred in dismissing their actions on statutes of

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limitations grounds, arguing that the claims are subject to

equitable tolling and thus are timely. They further contend

that their claims warrant relief on the merits. We begin

with the statutes of limitations issue because, if plaintiffs

claims in fact are time-barred, that finishes the case.

Arguing for equitable tolling, plaintiffs draw on

federal and Massachusetts law providing that fraud,

fraudulent concealment, and wrongs resulting in inherently

unknowable injuries toll limitations periods, and on

Massachusetts law providing that limitations periods may be

tolled by the existence of and breach of a fiduciary duty.

The heart of plaintiffs' allegations is that Dime

fraudulently concealed the fact that their loans would

definitely, rather than only possibly, go into negative

amortization and accrue deferred interest. Plaintiffs assert

that this information became available only after they

consulted a knowledgeable attorney who was able to decipher

the meaning of the facts and figures contained in their loan

documents. Further, plaintiffs contend that issues of fact

relating to the propriety of tolling should have precluded

the district court from dismissing their claims based on the

pleadings alone. We are not persuaded.

As an initial matter we note that plaintiffs' TILA,

RESPA, and Parity Act claims are subject to one-year statutes

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of limitations.3 Thus, these claims must have accrued no

earlier than September 1, 1994. The claims for breach of

fiduciary duty; fraud, deceit, and misrepresentation; civil

conspiracy; and negligent misrepresentation, negligent hiring

and supervision, and vicarious liability are governed by a

three-year limitations period.4 These claims must therefore

have accrued no earlier than September 1, 1992. Plaintiffs'

claims under RICO and the Massachusetts Consumer Credit Cost

Disclosure and Consumer Protection Acts are subject to four-

year limitations periods.5 Thus, these claims must have

3. The TILA states that "[a]ny action under this section may
be brought . . . within one year from the date of the
occurrence of the violation." 15 U.S.C. 1640(e). The
RESPA provides that "[a]ny action pursuant to the provisions
of section . . . 2607 . . . of [Title 12] may be brought . .
. within 1 year . . . from the date of the occurrence of the
violation." 12 U.S.C. 2614. The Parity Act states that
"[a]ny violation of this section shall be treated as a
violation of the Truth in Lending Act." 12 U.S.C. 3806(c).
We note that one other court of appeals has held that the
RESPA is not subject to tolling doctrines. See Hardin v.

City Title & Escrow Co., 797 F.2d 1037, 1041 (D.C. Cir.

1986). We need not address the correctness of this ruling
because, for reasons we shall explain, equitable tolling is
not warranted on the facts of this case.

4. Massachusetts law provides that "actions of tort . . .
shall be commenced only within three years next after the
cause of action accrues." Mass. Gen. Laws ch. 260, 2A.

5. Massachusetts law provides that "[a]ctions arising on
account of violations of any law intended for the protection
of consumers, including but not limited to . . . chapter
ninety-three A . . . [and] chapter one hundred and forty D .
. . whether for damages, penalties or other relief and
brought by any person . . . shall be commenced only within
four years next after the cause of action accrues." Mass.
Gen. Laws ch. 260, 5A.

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accrued no earlier than September 1, 1991. Finally,

plaintiffs' claim for breach of contract is governed by a

six-year limitations period.6 Thus, the contract cause of

action must have accrued no earlier than September 1, 1989.

A cause of action generally accrues at the time of

the plaintiff's injury, or, in the case of a breach of

contract, at the time of the breach. See Cambridge Plating

Co., Inc. v. Napco, Inc., 991 F.2d 21, 25 (1st Cir. 1993)

(discussing Massachusetts law). Therefore, plaintiffs'

claims arose when Dime allegedly induced them to sign loan

contracts by misrepresenting and/or omitting facts about the

terms of the mortgage, charged them excessive closing fees,

and serviced their loans improperly by giving inadequate

answers to telephone inquiries about negative amortization

and by having the Saloises sign corrective documents that

improperly altered their loan.

The district court examined each of plaintiffs'

claims and concluded that virtually all federal causes of

action accrued when plaintiffs entered their respective loan

With regard to RICO claims, the Supreme Court has
held that "the federal policies that lie behind RICO and the
practicalities of RICO litigation make the selection of the
4-year statute of limitations for Clayton Act actions, 15
U.S.C. 15b, the most appropriate limitations period for
RICO actions." Agency Holding Corp. v. Malley-Duff & Assoc.

Inc., 483 U.S. 143, 156 (1987).

6. Massachusetts law provides that "[a]ctions of contract .
. . shall . . . be commenced only within six years next after
the cause of action accrues." Mass. Gen. Laws ch. 260, 2.

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contracts7 and, in any event, no later than mid-1988, when

the Saloises signed the corrective documents. The district

court also concluded that, with the exception of plaintiffs'

claims based on Mass. Gen. Laws ch. 167E, see infra, the

state claims accrued no later than either the point at which

the corrective documents were signed or the point at which

plaintiffs called Dime and were provided inaccurate answers

about deferred interest. Although there may be a dispute as

to when, exactly, some of the causes of action accrued,8

plaintiffs do not dispute that their claims accrued outside

the relevant limitations periods. Accordingly, the viability

of plaintiffs' claims depends on whether principles of

equitable tolling apply.

7. The Freemans and the Learys entered into their loan
contracts with Dime no later than November 18, 1986, and
April 15, 1987, respectively; the Saloises executed a note
and mortgage on June 16, 1987, and executed corrective notes
on February 29, 1988, and June 1, 1988. Plaintiffs
telephoned Dime sometime in the second year of their loans
when deferred interest began to appear on their monthly
statements. This must have occurred no later than mid-1989.
See infra note 8.

8. Although the district court concluded that the events
giving rise to plaintiffs' claims all must have taken place
no later than mid-1988, we conclude that the phone calls may
have taken place as late as mid-1989. Construing facts in
the light most favorable to plaintiffs, we assume that it was
the Saloises who placed the calls, and that it was the end of

the "second year of their loan" when they did so, which means
the calls may not have been made until June 16, 1989. Even
using this later date as the benchmark, however, plaintiffs'
causes of action accrued at least six years and almost three
months prior to the date plaintiffs filed their original
complaint.

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1. Federal Claims

Although, under federal law, equitable tolling is

applied to statutes of limitations "to prevent unjust results

or to maintain the integrity of a statute," King v.

California, 784 F.2d 910, 915 (9th Cir. 1986), courts have

taken a narrow view of equitable exceptions to limitations

periods, see Earnhardt v. Puerto Rico, 691 F.2d 69, 71 (1st

Cir. 1982). Indeed, equitable tolling of a federal statute

of limitations is "appropriate only when the circumstances

that cause a plaintiff to miss a filing deadline are out of

his hands." Heideman v. PFL, Inc., 904 F.2d 1262, 1266 (8th

Cir. 1990), cert. denied, 498 U.S. 1026 (1991).

The federal doctrine of fraudulent concealment

operates to toll the statute of limitations "where a

plaintiff has been injured by fraud and 'remains in ignorance

of it without any fault or want of diligence or care on his

part.'" Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946)

(quoting Bailey v. Glover, 88 U.S. (21 Wall.) 342, 348

(1874)); see Maggio v. Gerard Freezer & Ice Co., 824 F.2d

123, 127 (1st Cir. 1987). For plaintiffs to be successful in

their argument, we must determine that "(1) sufficient facts

were [not] available to put a reasonable [borrower] in

plaintiff[s'] position on inquiry notice of the possibility

of fraud, and (2) plaintiff[s] exercised due diligence in

attempting to uncover the factual basis underlying this

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alleged fraudulent conduct." Maggio, 824 F.2d at 128. Thus,

allegations of fraudulent concealment do not modify the

requirement that plaintiffs must have exercised reasonable

diligence. See Truck Drivers & Helpers Union v. NLRB, 993

F.2d 990, 998 (1st Cir. 1993) ("Irrespective of the extent of

the effort to conceal, the fraudulent concealment doctrine

will not save a charging party who fails to exercise due

diligence, and is thus charged with notice of a potential

claim."). In simpler terms, fraud may render reasonable a

plaintiff's otherwise unreasonable conduct, but there are

limits: plaintiffs must still exercise reasonable diligence

in discovering that they have been the victims of fraud.

In this case, the inquiry is over before it begins.

Regardless whether negative amortization was inevitable with

Impact Loans, the documents contained all of the information

necessary to determine the interaction of Dime's formula with

prevailing interest rates. It was attorney consultation,

rather than newly-discovered information, that prompted

plaintiffs' lawsuit. Therefore, sufficient facts -- indeed,

all the facts -- were available to place plaintiffs on

inquiry notice of fraudulent conduct. Moreover, even if we

regard plaintiffs' consultation with an attorney as

"discovered" information that revealed Dime's alleged

concealment, it cannot be said that plaintiffs were

reasonable in waiting until 1994 to consult an attorney, when

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it was clear as early as 1988 that their loans had begun to

accrue deferred interest.9 As the district court observed,

"The loan documents notified plaintiffs of the possibility of

negative amortization, when it would apply, and how it would

work," so that even "[i]f [Dime] had misrepresented the

nature of the loans, the loan documents plaintiffs signed

would have put them on notice of the fraud." Salois v. Dime

Savings Bank, No. 95-11967-PBS, slip op. at 14 (D. Mass. Nov.

13, 1996).10

Plaintiffs argue that whether they were reasonably

diligent in ascertaining their claims is a matter of fact to

be determined by a jury. Even if we accept all facts as

9. Once deferred interest began to accrue, after the first
year of the repayments, the bases of all of the plaintiffs'
present claims had come to their attention. That they did
not seek legal advice in 1988 (or, in any event, before the
running of the relevant statutes of limitations) seems to be
more a matter of happenstance than lack of relevant
information. We think the district court stated the issue
well: "No facts are alleged as to what prompted plaintiffs to
consult an attorney, if not their loan documents and monthly
statements. . . . If the plaintiffs' loan documents and
statements prompted them to consult an attorney in 1994 and
1995, unprompted by any new disclosure, there is no reason
they could not have consulted an attorney several years
earlier." Salois v. Dime Savings Bank, No. 95-11967-PBS,

slip op. at 15 (D. Mass. Nov. 13, 1996).

10. In addition, we note that, under Massachusetts law, "one
who signs a writing that is designed to serve as a legal
document . . . is presumed to know its contents." Hull v.

Attleboro Savings Bank, 33 Mass. App. Ct. 18, 24 (1992); see

Lerra v. Monsanto Co., 521 F. Supp. 1257, 1262 (D. Mass.

1981); Connecticut Jr. Republic v. Doherty, 20 Mass. App. Ct.

107, 110 (1985). Thus, as a matter of Massachusetts law,
plaintiffs were on notice of their claims when they signed
their loan documents in 1986 and 1987.

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plaintiffs present them, however, nothing in the record

supports the conclusion that plaintiffs exercised reasonable

diligence as a matter of law. Cf. Sleeper v. Kidder,

Peabody & Co., 480 F. Supp. 1264, 1265 (D. Mass. 1979)

(noting that although the issue of reasonable diligence is

factually based, it may be determined as a matter of law

where the underlying facts are admitted or established

without dispute), aff'd mem., 627 F.2d 1088 (1st Cir. 1980).

Thus, the district court's dismissal of plaintiffs' claims

was proper.11

2. State Claims

The foregoing analysis likewise disposes of

plaintiffs' argument for tolling on the basis of state

fraudulent concealment doctrine. Massachusetts law provides

that, "[i]f a person liable to a personal action fraudulently

conceals the cause of such action from the knowledge of the

person entitled to bring it, the period prior to the

discovery of his cause of action by the person so entitled

11. Plaintiffs also contend that there are issues of fact
regarding whether Dime was a fiduciary to plaintiffs and
whether Dime fraudulently concealed information, and that the
existence of such factual issues precludes dismissal. To
this we note that, first, simply alleging fraudulent
concealment or the existence of a fiduciary duty does not
suffice to avoid dismissal. See General Builders Supply Co.

v. River Hill Coal Venture, 796 F.2d 8, 12 (1st Cir. 1986).

Second, plaintiffs' claims may be dismissed without
determining these issues because, even if plaintiffs'
allegations regarding fraud and fiduciary duties are true,
plaintiffs still fail the ultimate test, that of
reasonableness in discovering and pursuing their claims.

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shall be excluded in determining the time limited for the

commencement of the action." Mass. Gen. Laws ch. 260, 12.

Specifically, a statute of limitations may be tolled "if the

wrongdoer, either through actual fraud or in breach of a

fiduciary duty of full disclosure, keeps from the person

injured knowledge of the facts giving rise to a cause of

action and the means of acquiring knowledge of such facts."

Maggio, 824 F.2d at 131 (emphasis omitted) (quoting Frank

Cooke, Inc. v. Hurwitz, 10 Mass. App. Ct. 99, 106 (1980)).

Here, an analysis of whether Dime concealed the means of

acquiring the facts giving rise to their claims would

parallel a reasonable diligence inquiry, which, as we have

already concluded, plaintiffs fail. Yet we need not rely on

that analysis because, again, Dime did not conceal from

plaintiffs the facts themselves and therefore cannot be said

to have kept plaintiffs from acquiring the requisite

knowledge.

But plaintiffs persist, focusing on the possibility

of a fiduciary relationship between themselves and Dime and

arguing that Massachusetts limitations periods should be

tolled because Dime's breach of an alleged fiduciary duty to

them is sufficient to constitute fraud. Although plaintiffs

do not develop this line of analysis, presumably their

argument is that, even if Dime did not actively conceal

information, it nonetheless committed fraud because it owed

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plaintiffs a special duty of disclosure. Under this theory

as well, however, "[a] plaintiff must be able to show not

only that crucial facts were withheld by defendants owing a

duty of full disclosure, but also that he lacked the means to

uncover these facts." Maggio, 824 F.2d at 131. If a

plaintiff has failed to "undertake even a minimal effort to

pursue the investigative opportunities available to him[,

then] not even the combination of fiduciary duties and

section 12 are sufficient to excuse a delay in bringing

suit." Id. In this case, we need not determine whether Dime

was a fiduciary to plaintiffs because, even if such a

relationship existed, the fact remains that no revelation of

information occurred subsequent to plaintiffs' discovery of

negative amortization in 1988. Because plaintiffs had the

"means to uncover" the relevant facts as early as 1988, and,

indeed, possessed the facts themselves in 1988, their state

law claim based on the existence of a fiduciary duty in

combination with fraudulent concealment fails.

Finally, the district court dismissed one of

plaintiffs' claims based on the Massachusetts Consumer

Protection Act, Mass. Gen. Laws ch. 93A, on the basis that,

although Dime may have been in violation of Mass. Gen. Laws

ch. 167E, 2(B)(9) and (10) -- which prohibit the

alteration of a payment amount more than once a year and the

alteration of the interest rate more than every six months --

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plaintiffs had not alleged that Dime was subject to

regulation by the Massachusetts Commissioner of Banks.12 The

court was correct. Dime, a federally-chartered bank, is

regulated by the federal Office of Thrift Supervision, and

DRES-MA, a non-bank subsidiary, was incorporated under New

York law. The Massachusetts statutes on which plaintiffs

rely apply only to Massachusetts-chartered banks. See Mass.

Gen. Laws ch. 167E, 1.13

B. Dime's Motion for Rule 11 Sanctions

Dime argues that the district court erred in

denying its motion for sanctions against plaintiffs'

attorneys, and that the court should have, at a minimum,

12. The district court noted that plaintiffs' ch. 93A claim
based on Dime's alleged violation of Mass. Gen. Laws ch. 167E
2(B)(9) was not time-barred if the owed monthly payment
amount had changed more than once during any of the four
years prior to the date plaintiffs brought this action.
Plaintiffs' complaint did not foreclose this issue. The
court observed as well that the claim based on Dime's alleged
violation of Mass. Gen. Laws ch. 167E 2(B)(10) was not
time-barred because the interest rate changed five times in
1995.

13. Plaintiffs argue in addition that DRES-MA, as a non-
banking corporation, was prohibited under Mass. Gen. Laws ch.
167, 37, from engaging in banking activity, regardless
whether DRES-MA was a foreign or domestic corporation. This
argument fails because DRES-MA was a real-estate subsidiary,

not a banking subsidiary. As such, although it would
presently be subject to regulation under Mass. Gen. Laws ch.
255, 2, that statute was not in force at the time
plaintiffs' claims arose.

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conducted a hearing to determine whether plaintiffs made

reasonable inquiries prior to bringing their claims.14

Rule 11 calls for the imposition of sanctions on a

party "for making arguments or filing claims that are

frivolous, legally unreasonable, without factual foundation,

or asserted for an 'improper purpose.'" S. Bravo Sys. v.

Containment Tech. Corp., 96 F.3d 1372, 1374-75 (Fed. Cir.

1996) (citing Conn v. Borjorquez, 967 F.2d 1418, 1420 (9th

Cir. 1992)). In reviewing the district court's denial of

defendant's Rule 11 motion, we apply an abuse of discretion

standard. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384,

405 (1990). As we have noted before, our review of denials

of Rule 11 motions "calls for somewhat more restraint than

review of positive actions imposing sanctions and shifting

fees." Anderson v. Boston Sch. Comm., 105 F.3d 762, 769 (1st

Cir. 1997). The trial judge should be accorded not only

"additional deference in the entire area of sanctions," but

also "extraordinary deference in denying sanctions." Id. at

768.

It would have been preferable for the district

court to have more extensively set forth its rationale. See

14. The district court disposed of Dime's motion in two
sentences: "While I agree that the action should be
dismissed, plaintiffs amended the complaint to eliminate the
frivolous claims. Moreover, while the claims are time-
barred, the breach of contract claims and the [Mass. Gen.]
Laws ch. 93A claims were colorable at least in part."

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Figueroa-Ruiz v. Alegria, 905 F.2d 545, 549 (1st Cir. 1990).

Nonetheless, "although the rationale for a denial of a motion

for fees or sanctions under Rule 11 . . . should be

unambiguously communicated, the lack of explicit findings is

not fatal where the record itself, evidence or colloquy,

clearly indicates one or more sufficient supporting reasons."

Anderson, 105 F.3d at 769.

Here, the record contains adequate rationale for

the denial of the motion. The court noted that plaintiffs'

breach of contract and Massachusetts Consumer Protection Act

claims were time-barred but nonetheless "colorable at least

in part." Although we reiterate that district courts should

provide specific findings in support of Rule 11 rulings, we

conclude that, in light of the record, the court did not here

abuse its discretion by holding that plaintiffs' claims were

not without foundation in law or in fact.

Affirmed.

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