Webb v. Green Tree Servicing LLC

Filing 52

MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 6/7/12. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SANDY N. WEBB,
Plaintiff,
v.
GREEN TREE SERVICING, LLC,
Defendant.
Civil Action No. ELH-11-2105

GREEN TREE SERVICING, LLC,
Third-Party Plaintiff,
v.
FIVE BROTHERS MORTGAGE
COMPANY SERVICES AND
SECURING, INC.,
Third-Party Defendant.

MEMORANDUM OPINION
This Memorandum Opinion resolves the “Motion to Strike Plaintiff’s Amended
Complaint” (“Motion to Strike”) (ECF 27), filed by defendant Green Tree Servicing, LLC
(“Green Tree”). Sandy N. Webb, plaintiff, has filed an Opposition (ECF 31) to the motion, and
Green Tree has filed a Reply (ECF 45).1 No hearing is necessary. See Local Rule 105.6. I will
grant Green Tree’s motion in part and deny it in part, for the reasons that follow.
Background
Plaintiff’s factual allegations are set forth in the Court’s Memorandum Opinion of
December 9, 2011 (ECF 16), and I need not reiterate them in detail.
1

Five Brothers Mortgage Company Services and Securing, Inc. (“Five Brothers”), the
third-party defendant, entered its appearance after the Motion to Strike was fully briefed, and has
not articulated a position as to the Motion to Strike.

In brief, plaintiff owns a parcel of residential real property over which Green Tree holds a
mortgage. Plaintiff leased the property to a tenant. Plaintiff then became delinquent on her
mortgage payments. Plaintiff’s claims arise out of a series of alleged incidents in which she
contends that employees of Green Tree telephoned her tenant at work on several occasions, and
an employee of Green Tree’s alleged agent, Five Brothers, appeared in person at the property,
falsely claiming that the property was foreclosed and that the tenant would be evicted and the
property boarded up on the following day. According to plaintiff, this series of events prompted
the tenant to demand successfully that plaintiff release her from the lease, causing plaintiff to
lose her rental income and, in turn, to fall further into delinquency on the mortgage.
In my earlier Memorandum Opinion, I granted in part and denied in part a motion to
dismiss filed by Green Tree. As a result of that decision, three counts remained viable: tortious
interference with a business relationship (Count I); breach of contract (Count II); and trespass to
land (Count III). Thereafter, I issued a Scheduling Order (ECF 21), which established several
deadlines, including February 6, 2012 (later amended to February 13, 2012) as the deadline for
“[m]oving for joinder of additional parties and amendment of pleadings.” On February 13, 2012,
without moving for leave to do so as required by Fed. R. Civ. P. 15(a)(2), plaintiff filed an
Amended Complaint (ECF 26), which prompted Green Tree’s Motion to Strike.2

2

As I explained in a subsequent Order, dated March 14, 2012 (ECF 29), the deadline in
the Scheduling Order
did not dispense with applicable requirements to seek leave of court, by motion,
for joinder of additional parties or amendment of pleadings. It merely established
a deadline by which such motions had to be filed. The significance of the
deadline established by the scheduling order is that, if such a motion is filed after
the deadline, the moving party must not only obtain the court’s leave under the
applicable standard (e.g., for amendment of pleadings, the “freely . . . when
justice so requires” standard of Fed. R. Civ. P. 15(a)(2)), but must also show
“good cause” for modification of the schedule under Fed. R. Civ. P. 16(b)(4). See
Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298 (4th Cir. 2008).
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The Amended Complaint does not significantly alter plaintiff’s first three counts, which
survived Green Tree’s motion to dismiss.3 Nor has plaintiff attempted to reassert Counts IV and
V, which did not. The primary change is the addition of two new counts, denominated as Count
VI and Count VII.

Count VI alleges violation of the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. § 1692 et seq. Count VII is captioned “Negligence PerSe [sic]”; in
Count VII, plaintiff argues that Green Tree “owed a duty” under the “Protecting Tenants in
Foreclosure Act” and the FDCPA, Amended Complaint ¶ 57, and that it breached that duty by
calling her tenant at work and sending agents to the property to “inspect and secure” it, despite
the fact that no foreclosure had occurred nor was the property “in danger of
destruction/waste/damage,” thereby causing damage to plaintiff. Id. ¶¶ 58-59.
Discussion
Although plaintiff failed to move for leave to amend her complaint, Green Tree’s Motion
to Strike invokes the same standard that the Court would apply in considering a motion for leave
to amend—specifically, the standard governing amendment of pleadings that is imposed by Rule
15(a)(2) of the Federal Rules of Civil Procedure. Accordingly, I will consider the issues as if I
were ruling on a motion for leave to file an amended complaint.
Rule 15(a)(2) instructs that courts should “freely” grant leave to amend pleadings “when
justice so requires,” Fed. R. Civ. P. 15(a)(2), and commits the matter to the discretion of the
district court. See Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 769 (4th Cir.
2011). A district court may deny leave to amend “when the amendment would be prejudicial to
the opposing party, the moving party has acted in bad faith, or the amendment would be futile.”
3

Plaintiff adds a contention that Green Tree was “assigned the rights under” numerous
mortgages previously held by National City Mortgage, in the alternative to “having purchased”
them. Amended Complaint ¶ 2. She also has revised the damages demands in Counts II and III
so as to be consistent with each other. Both counts now demand $227,115.19 in damages. Id. at
7-8. Green Tree does not object to either of these amendments.
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Equal Rights Center v. Niles Bolton Assocs., 602 F.3d 597, 603 (4th Cir. 2010); see also Foman
v. Davis, 371 U.S. 178, 182 (1962); Laber v. Harvey, 438 F.3d 404, 426-29 (4th Cir. 2006) (en
banc).
In this case, Green Tree does not assert prejudice or bad faith. Rather, it contends that the
Amended Complaint is futile, because Count VI and Count VII fail to state claims upon which
relief can be granted. The Fourth Circuit has said that “[f]utility is apparent if the proposed
amended complaint fails to state a claim under the applicable rules and accompanying
standards,” thereby seeming to equate the futility inquiry with the standard for dismissal under
Rule 12(b)(6). Katyle v. Penn Nat’l Gaming, Inc., 637 F.3d 462, 471 (4th Cir. 2011) (citing
United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008)
(“Because [the] proposed amended complaint does not properly state a claim under Fed. R. Civ.
P. 12(b)(6) . . . , we find the district court correctly determined that further amendment would be
futile.”)); see also Dickson v. Microsoft Corp., 309 F.3d 193, 200 (4th Cir. 2002); Szaller v.
American Nat’l Red Cross, 293 F.3d 148, 153 n.2 (4th Cir. 2002).
A. Count VI (FDCPA)
The FDCPA imposes a variety of obligations and potential liabilities on “debt collectors,”
who are generally defined as entities that “use[ ] any instrumentality of interstate commerce or
the mails in any business the principal purpose of which is the collection of any debts, or [that]
regularly collect[ ] or attempt[ ] to collect, directly or indirectly, debts owed or due or asserted to
be owed or due to another.” 15 U.S.C. § 1692a(6). In other words, the FDCPA is concerned
with “rights for consumers whose debts are placed in the hands of professional debt collectors
for collection.” DeSantis v. Computer Credit, Inc., 269 F.3d 159, 161 (2d Cir. 2001) (emphasis
added). The statute does not “‘apply to creditors collecting debts in their own names and whose

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primary business is not debt collection,’ or to the individual employees of such creditors.”
Betskoff v. Enterprise Rent A Car Co., Civ. No. ELH-11-2333, 2012 WL 32575, at *5 (D. Md.
Jan. 4, 2012) (quoting Kennedy v. Lendmark Fin. Servs., Civ. No. RDB-10-2667, 2011 WL
4351534, at *3 (D. Md. Sept. 15, 2011)); see also Akpan v. First Premier Bank, Civ. No. DKC–
09-1120, 2010 WL 917886, at *4 (D. Md. Mar. 8, 2010). As the Seventh Circuit recently said,
“An entity that tries to collect money owed to itself is outside the FDCPA.” Carter v. AMC,
LLC, 645 F.3d 840, 842 (7th Cir. 2011). An entity to which a debt is owed falls outside the
definition of “creditor” and qualifies as a “debt collector” only if the entity “receives an
assignment or transfer of a debt in default solely for the purpose of facilitating collection of such
debt for another,” 15 U.S.C. § 1692a(4), or if the “principal purpose” of the entity’s business is
debt collection. Id. § 1692a(6).
Moreover, the definition of “debt collector” contains an exemption for an entity, such as a
mortgage servicer, that collects debts that were “not in default at the time [they were] obtained”
by the entity. 15 U.S.C. § 1692a(6)(F)(iii). Thus, it “is well-settled . . . that . . . mortgage
servicing companies are not debt collectors and are statutorily exempt from liability under the
FDCPA,” to the extent that they take action to collect debts that were not in default at the time
they acquired the debts. Scott v. Wells Fargo Home Mortgage, Inc., 326 F. Supp. 2d 709, 718
(E.D. Va.) (emphasis omitted), aff’d, 67 F. App’x 238 (4th Cir. 2003); accord Adam v. Wells
Fargo Bank, N.A., Civ. No. ELH-09-2387, 2011 WL 3841547, at *20 (D. Md. Aug.26, 2011);
Flores v. Deutsche Bank Nat’l Trust Co., Civ. No. DKC-10-217, 2010 WL 2719849, at *6 (D.
Md. July 7, 2010); Sparrow v. SLM Corp., Civ. No. RWT-08-12, 2009 WL 77462, at *2 (D. Md.
Jan. 7, 2009); see also De Dios v. Int’l Realty & Investments, 641 F.3d 1071, 1075 n.3 (9th Cir.
2011) (citing legislative history of the FDCPA indicating that the exception in § 1692a(6)(F)(iii)

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was intended to provide that “‘mortgage service companies and others who service outstanding
debts for others, so long as the debts were not in default when taken for servicing,’” are not debt
collectors).
In her Amended Complaint, plaintiff alleges that Green Tree “is a debt collector as
defined by 15 USC 1692a(6),” and avers, on the basis of belief, that Green Tree is “involved
with the debt collection business.” Amended Complaint ¶ 52. And, the Amended Complaint
makes clear that Green Tree was not plaintiff’s original mortgage lender. See id. ¶¶ 2, 27.
However, plaintiff does not allege that the principal purpose of Green Tree’s business is debt
collection, nor does she specifically allege that Green Tree obtained her mortgage (either through
assignment or for servicing) when the mortgage was in default. Notably, neither the date that
Green Tree acquired plaintiff’s mortgage nor the date of plaintiff’s default is alleged in the
Amended Complaint.
As I observed in my prior Memorandum Opinion, ECF 16 at 15-16, there may be some
dispute in this case as to whether Green Tree was plaintiff’s mortgage creditor or, instead, her
mortgage servicer. Regardless of that dispute, the FDCPA does not impose liability either on a
creditor that is not principally in the debt collection business or on the servicer of a mortgage that
is not in default when taken for servicing. Neither such entity qualifies as a “debt collector”
within the meaning of the FDCPA. Thus, Green Tree maintains that plaintiff cannot plausibly
claim that it is a “debt collector” under the FDCPA.
Plaintiff offers two responses. First, she argues that the mortgage was in default when
Green Tree acquired it. Second, she claims that the mortgage was never validly assigned from

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National City Mortgage (“National City”), plaintiff’s original mortgage lender, to Green Tree. I
will consider these claims in reverse order.4
Plaintiff’s argument as to the validity of the assignment is difficult to comprehend. She
claims that the “Notice of Assignment has an erroneous call to the deed; the deed is correctly at
Liber 1638, Folio 648, and not as the assignment states at Liber 1638, Folio 653.” Opposition at
2. In addition, she states: “The document number stated on the Notice of Assignment is also
incorrect, stating the Document No. is 361239 when if it were correctly stated it would have been
no. 361238.”

Id.

As plaintiff sees it, these alleged discrepancies render the assignment

“deficient, making Green Tree a third party to this mortgage.” Id. I assume, for the sake of
argument, that an inaccurate cross-reference to a deed of trust by liber and folio in a purported
assignment of that deed of trust could render the assignment defective. Copies of both the
assignment to Green Tree and the deed of trust in favor of National City, as they appear in the
Land Records of Queen Anne’s County, were attached as exhibits to plaintiff’s opposition to
Green Tree’s earlier motion to dismiss. The first page of the deed of trust (ECF 11-6) is stamped
at “LIBER 1638 FOLIO 653,” and “DOC. NO. 361239.” The deed of trust was executed by Ms.
Webb in favor of National City, and dated December 21, 2006. The assignment (ECF 11-5)
states, in relevant part:
PNC BANK, NATIONAL ASSOCIATION SUCCESSORT BY MERGER [to]
National City Mortgage a Division of National City Bank, . . . (ASSIGNOR), by
these presents does convey, grant, sell, assign, transfer and set over the described
deed of trust together with the certain note(s) described therein together with all
interest secured thereby, all liens, and any rights due or to become due thereon to
GREEN TREE SERVICING LLC, . . . ITS SUCCESSORS OR ASSIGNS,
(ASSIGNEE).
4

In support of both of her arguments, plaintiff cites documents that are outside the
pleadings, which Green Tree contends is improper. I need not resolve Green Tree’s contention
because plaintiff’s arguments either fail on their merits even when the matter outside the
pleadings is considered, or succeed under a Rule 12(b)(6) standard without reference to matter
outside the pleadings.
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Said deed dated 12/21/2006 executed by SANDY WEBB and recorded among the
land records of GRASONVILLE (city), QUEEN ANNES (county), Maryland in
Liber 1638, page 653 or as Instr# 361239. (Emphasis added.)
Simply put, the discrepancy that plaintiff alleges does not exist. The assignment refers
accurately to the deed of trust that it assigns.5
Plaintiff’s contention that the mortgage was in default when Green Tree acquired it bears
more discussion. Plaintiff’s contention is based on provisions of the promissory note (the
“Note”) that the deed of trust secured. She submitted a partial purported copy of the Note as an
exhibit to her Opposition. See Note, Ex.2 to Opposition (ECF 31 at 10-11). The Note provided
that plaintiff would be “in default” if she did “not pay the full amount of each monthly payment
on the date it is due.” Note at 2. It also required monthly payments to be made “on the 1st day
of each month.” Note at 1. And, the Note contained a provision imposing late charges if a
monthly payment was not received “by the end of 15 calendar days after the date it is due.” Note
at 2. Plaintiff contends that she typically made her monthly mortgage payment on the fifteenth
of each month, and has submitted unauthenticated bank statements indicating that her mortgage
payment was made on or about the fifteenth of the month in November 2009 and March 2010.6
If she had not made payment by the first of the month in the month that Green Tree acquired the

5

Plaintiff has not submitted a copy of the document allegedly found at Liber 1638, Folio
648 (Instrument No. 361238) in the Land Records of Queen Anne’s County, to which she
contends the assignment ought to have referred. If that document is the title deed by which the
previous owner of the property conveyed the property to plaintiff, plaintiff is clearly mistaken in
asserting that the assignment should have referred to that deed. The assignment conveyed to
Green Tree the interest of the mortgagee (i.e., National City or its successor), which was secured
by the deed of trust; the mortgagee could not have conveyed plaintiff’s interest, represented by
the title deed.
6

The assignment was executed February 18, 2010, and was recorded in the land records
on March 30, 2010, but contains a notation stating: “Effective Date 11/01/2009.” ECF 11-5 at 1.
Plaintiff did not submit her bank statement for February 2010.
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mortgage, her argument goes, the mortgage was “in default,” under the terms of the Note, when
Green Tree acquired it.
Although the definition of a “debt collector” under the FDCPA depends, in part, on
whether a debt is in “default” at the time the defendant acquires it, the statute does not contain a
definition of “default.” See, e.g., McKinney v. Cadleway Props., Inc., 548 F.3d 496, 501-02 (7th
Cir. 2008) (“The FDCPA does not define ‘default’ . . . .”). There is authority for the proposition
that courts should look to the contractual definition of “default,” if any, in the document
establishing the debt, or to other state or federal law governing the debt at issue, to determine
whether a particular debt is “in default” for FDCPA purposes. See, e.g., Hartman v. Meridian
Fin. Servs., Inc., 191 F. Supp. 2d 1031, 1042-44 (W.D. Wis. 2002); Skerry v. Mass. Higher
Educ. Assistance Corp., 73 F. Supp. 2d 47 (D. Mass. 1999).
However, I need not resolve at the pleading stage whether the debt was in default when
Green Tree acquired it, or consider plaintiff’s contention, based on allegations and evidence
outside the pleadings, that late payment in the month that Green Tree acquired the mortgage
rendered the debt “in default” for FDCPA purposes. Although there is no definitive Fourth
Circuit precedent on the standard for pleading that a defendant is a “debt collector” in an FDCPA
claim, several courts have held that, in order to state an FDCPA claim, a plaintiff does not need
to allege that “no exception to th[e] definition [of debt collector] applies” to the defendant.
Wood v. Capital One Servs., LLC, 718 F. Supp. 2d 286, 290 (N.D.N.Y. 2010). In Deuel v.
Santander Consumer USA, Inc., 700 F. Supp. 2d 1306 (S.D. Fla. 2010), for example, the court
determined that the pleading of an FDCPA violation was sufficient where the plaintiff alleged
“that Defendant is ‘engaged in the practice of debt collection’ and that ‘[a]t all times material to
the allegations of the complaint, Defendant was acting as a debt collector with respect to the

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collection of Plaintiff's alleged debt’” and the complaint did “not allege any information to
undermine the assertion that Defendant is a debt collector.” Id. at 1309 (quoting complaint). The
court reasoned: “Plaintiff has certainly given the defendant fair notice of what the claim is and
the grounds upon which it rests. . . . The Complaint . . . need not plead ‘the inapplicability of
every exception to [the debt collector] definition.’” Id. at 1310 (citation omitted).
To the extent that Fourth Circuit case law speaks to this issue, it has described as an
“affirmative defense” the assertion that a defendant falls into an exception to the definition of
“debt collector.” Scott v. Jones, 964 F.2d 314, 316 (4th Cir. 1992). Typically, the applicability
of an affirmative defense can only be resolved under a Rule 12(b)(6) standard “if all facts
necessary to the affirmative defense ‘clearly appear[ ] on the face of the complaint.’” Goodman
v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (quoting Richmond, Fredericksburg &
Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993)) (emphasis in Goodman). Otherwise,
resolution of the issue must await summary judgment, after discovery. Particularly because
discovery is already well underway in this case, and because inclusion of the FDCPA claim will
not appreciably broaden the scope of discovery in any event, I will deny the Motion to Strike as
to Count VI. Whether Green Tree was a “debt collector” with respect to plaintiff’s mortgage can
be resolved at the summary judgment stage.
B. Count VII (Negligence Per Se)
Negligence per se is a common law doctrine that transforms statutory duties of care into
bases for tort liability. The RESTATEMENT (THIRD)

OF

TORTS § 14 provides the following

formulation of the negligence per se doctrine: “An actor is negligent if, without excuse, the actor
violates a statute that is designed to protect against the type of accident the actor’s conduct
causes, and if the accident victim is within the class of persons the statute is designed to protect.”

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Count VII, which is captioned “Negligence PerSe [sic],” is predicated on Green Tree’s
alleged violation of the FDCPA and the federal “Protecting Tenants in Foreclosure Act.” The
text of Count VI does not make it entirely clear whether plaintiff invokes the federal Protecting
Tenants at Foreclosure Act (“PTFA”), Pub. L. No. 111-22, 123 Stat. 1632, §§ 701 et seq. (2009),
as amended by Pub. L. No. 111-203, 124 Stat. 1376, § 1484 (2010), or its Maryland state-law
counterpart, Md. Code (2010 Repl. Vol., 2011 Supp.), § 7-105.6(b)(2) of the Real Property
Article (“R.P.”). In her Opposition to the Motion to Strike, plaintiff relies on both the federal
and state enactments.
As Green Tree correctly points out, Maryland does not recognize the negligence per se
doctrine, as such.7 In jurisdictions that recognize negligence per se, as the name of the doctrine
suggests, when the plaintiff is a member of a class for whose protection a statute was enacted,
and the plaintiff is harmed by the defendant’s violation of that statute, the defendant’s negligence
is established per se, i.e., as a matter of law. “Maryland is among the minority of states that treat
the [statutory] violation simply as evidence of negligence.” Joseph v. Bozzuto Mgmt. Co., 173
Md. App. 305, 329, 918 A.2d 1230, 1243 (2007). But, even though Maryland does not apply the
doctrine of negligence per se, “[t]he standard for establishing a prima facie case of negligence in
a statutory-based negligence action is different from the general standard for establishing a prima
facie case of negligence in cases that are not governed by a statute.” Polakoff v. Turner, 385 Md.
467, 476 n.5, 869 A.2d 837, 843 n.5 (2005). Therefore, although it is perhaps technically
incorrect to assert a claim of “negligence per se” under Maryland law, this inaccurate verbiage in
the caption of the count is not a basis to dismiss an otherwise properly pleaded cause of action
for negligence based on an alleged statutory violation.
7

As I explained in my earlier Memorandum Opinion, the state law claims in this
diversity case are governed by substantive Maryland law. See ECF 16 at 7 n.12.
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Under Maryland law, when a plaintiff alleges that a defendant’s duty is established by
statute, “all that a plaintiff must show is: (a) the violation of a statute or ordinance designed to
protect a specific class of persons which includes the plaintiff, and (b) that the violation
proximately caused the injury complained of.” Brooks v. Lewin Realty III, Inc., 378 Md. 70, 79,
835 A.2d 616, 621 (2003).

Once the statutory violation is shown, “[p]roximate cause is

established by determining whether the plaintiff is within the class of persons sought to be
protected, and the harm suffered is of a kind which the drafters intended the statute to prevent. It
is the existence of this cause and effect relationship that makes the violation of a statute prima
facie evidence of negligence.”

Brown v. Dermer, 357 Md. 344, 359, 744 A.2d 47, 55 (2000)

(internal citations omitted), overruled in part on other grounds by Brooks, 378 Md. 70, 835 A.2d
616; accord Gourdine v. Crews, 405 Md. 722, 755, 955 A.2d 769, 789 (2008); Brooks, 378 Md.
at 79, 835 A.2d at 621. If the plaintiff establishes a prima facie case, the defendant’s negligence
becomes a question for the fact finder, which must “evaluate whether the actions taken by the
defendant were reasonable under all the circumstances.” Brooks, 378 Md. at 79, 835 A.2d at
621. See generally Allen v. Dackman, 413 Md. 132, 143-44, 991 A.2d 1216, 1222-23 (2010)
(discussing standards of liability in negligence actions based on statutory violations); Rivers v.
Hagner Management Corp., 182 Md. App. 632, 959 A.2d 110 (2008) (same), cert. denied, 407
Md. 276, 964 A.2d 676 (2009).
With respect to the portion of Count VII based on violation of the FDCPA, Green Tree
argues that it fails because, as it argued with respect to Count VI, plaintiff fails to state an
FDCPA violation. However, as explained, I will not resolve the viability of plaintiff’s FDCPA
claim at this juncture. Green Tree does not assert any other basis for dismissal of the FDCPA
portion of Count VII, other than the argument that Maryland does not recognize the doctrine of

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negligence per se, already discussed.

Neither party has cited any authority specifically

addressing whether a negligence claim based on violation of the FDCPA is viable in Maryland.
Ordinarily, such a claim would be redundant if, as here, the plaintiff has also asserted a claim
arising directly under the FDCPA. Because the negligence claim would not expand the scope of
discovery, however, there is no occasion to resolve the viability of an FDCPA-based negligence
claim at the pleading stage, especially in the absence of authority or analysis from the parties.
As to the aspect of plaintiff’s negligence claim that is based on the PTFA or its state-law
counterpart, R.P. § 7-105.6(b)(2), Green Tree argues that such a negligence claim is not viable
because plaintiff is not “within the class of persons sought to be protected,” Brown, 357 Md. at
359, 744 A.2d at 55, by the federal and state enactments.8 Green Tree may well be correct.
Indeed, the very title of the PTFA refers to protecting tenants at foreclosure—not to protecting a
mortgagor such as plaintiff who, until foreclosure proceedings are consummated, is the tenant’s
landlord.9 I need not resolve this issue, however, because even if a violation of the PTFA or R.P.
§ 7-105.6 could, in theory, support a statutory negligence claim brought by a landlord-

8

Green Tree also argues that the PTFA and R.P. § 7-105.6 do not create private rights of
action. However, it is unnecessary to resolve whether either statute otherwise supports a private
right of action, because plaintiff has explicitly asserted a negligence claim, and has not attempted
to assert a cause of action directly arising under either statute. (In contrast, with respect to the
FDCPA, she has asserted both a statutory action and a negligence claim based on the alleged
statutory violation.) The existence of an express or implied private right of action is not
necessary to a negligence claim based on a statutory violation. As the Maryland Court of
Appeals explained in Bentley v. Carroll, 355 Md. 312, 326 n.8, 734 A.2d 697, 705 n.8 (1999),
“case law governing tort claims in Maryland courts views the rule that the violation of a statute is
evidence of negligence strictly as a rule of evidence, and not as a rule of substantive law
implying a cause of action within any given statute relied upon for such evidence.” Therefore,
assertion of such a tort claim does not depend on “implication into the [statute] of a private right
of action.” Id.
9

Similarly, the caption of R.P. § 7-105.6 refers to “[r]ights and remedies as between
purchasers and tenants.”
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mortgagor, I agree with Green Tree that plaintiff’s claim fails because her Amended Complaint
does not state a violation of the PTFA or R.P. § 7-105.6.
Both the PTFA and R.P. § 7-105.6 provide that a tenant of residential real property under
a “bona fide” lease is ordinarily entitled to occupy the leased premises at least until the
expiration of the lease term, despite the sale of the residential property at foreclosure. 10 Thus, as
I explained in my prior Memorandum Opinion, if Green Tree’s agents had, in fact, evicted
plaintiff’s tenant by “clear[ing] the tenant’s stuff out of the Residence, put[ting] new locks on the
doors, and board[ing] up the windows,” Amended Complaint ¶ 7, the day after allegedly
threatening to do so, such an eviction would have been unlawful for several reasons, including
but not limited to violation of the tenant’s rights under the PTFA and R.P. § 7-105.6. The
tenant’s rights aside, according to the allegations in the Amended Complaint, no foreclosure
proceedings had even commenced, let alone concluded in a sale of the property, at the time of
these alleged threats by Five Brothers’ employee. Thus, even if plaintiff had resided at the
Property herself, and did not rent it to a tenant, Green Tree would not have been entitled to evict
plaintiff at that time because it had no possessory right over the property.
In my earlier Memorandum Opinion, I concluded, taking the facts in the light most
favorable to plaintiff, that the alleged threat to evict the tenant constituted an independently
“wrongful or unlawful act[],” akin to “‘violence or intimidation, defamation, injurious falsehood
10

Under both the PTFA and R.P. § 7-105.6, a “bona fide” lease is defined as one where
the tenant is not a child, spouse, or parent of the property owner; that was the result of an arm’s
length transaction; and that requires receipt of rent that is not substantially below a fair market
rent for the property. See Pub. L. No. 111-22, 123 Stat. 1632, § 702(b) (2009); R.P.
§ 7-105.6(b)(1). The federal and state enactments contain an exception permitting a purchaser of
residential real property subsequent to a foreclosure sale to terminate the tenancy of a tenant if
the purchaser will occupy the property as the purchaser’s primary residence. See Pub. L. No.
111-22, 123 Stat. 1632, § 702(a)(2)(A); R.P. § 7-105.6(b)(3). The PTFA contains a sunset
provision, by which it will expire as of December 31, 2014. See Pub. L. No. 111-203, 124 Stat.
1376, § 1484 (2010). However, R.P. § 7-105.6 does not contain a sunset provision.
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or other fraud, violation of criminal law, and the institution or threat of groundless civil suits or
criminal prosecutions in bad faith,’” Berry & Gould, P.A. v. Berry, 360 Md. 142, 153, 757 A.2d
108, 113 (2000) (citation omitted), so as to satisfy one of the elements of the tort of interference
with a business relationship. As the illustrative list in Berry & Gould indicates, intimidation and
threats to engage in unlawful activity, and not only actual unlawful activity itself, may qualify as
“wrongful or unlawful acts” for purposes of the interference tort.
In contrast, a statutory-based negligence action requires the plaintiff to demonstrate a
“violation of a statute or ordinance.” Brooks, supra, 378 Md. at 79, 835 A.2d at 621. The
Amended Complaint is devoid of any allegation that Green Tree or its agents actually violated
the tenant’s rights under the PTFA and R.P. § 7-105.6 by dispossessing the tenant of the
property.

Rather, the Amended Complaint asserts that the tenant and plaintiff agreed to

terminate the lease because, in light of the alleged actions of Green Tree and its agents, plaintiff
felt she could no longer promise the tenant quiet enjoyment of the property.
Because the Amended Complaint fails to state an actual violation of the PTFA or R.P.
§ 7-105.6, any negligence claim based on breach of a duty imposed by those statutes is futile.
Therefore, I will strike the portion of Count VII that is based on those statutes. In particular, in
Paragraph 57 of the Amended Complaint, the words “Protecting Tenants in Foreclosure Act and”
are stricken. To that extent, Green Tree’s Motion to Strike will be granted
An Order consistent with these rulings follows.

Date: June 7, 2012

/s/
Ellen Lipton Hollander
United States District Judge

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