Wiseman v. First Mariner Bank et al

Filing 47

MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 9/23/13. (jnls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
RUTH WISEMAN,
Plaintiff,
v.

Civil Action No. ELH-12-2423

FIRST MARINER BANK, et al.,
Defendants.
MEMORANDUM OPINION
This case arises from a reverse mortgage transaction. Ruth Wiseman, plaintiff, and her
late husband, John H. Wiseman, Sr., entered into a reverse mortgage for their home in Severna
Park, Maryland (the “Residence”) in 2009.1 At that time, the Wisemans were both elderly and
living on a fixed income, and Mr. Wiseman was in declining health. See Amended Complaint
Id. ¶¶ 22-23, 28. Defendant First Mariner Bank (“First Mariner”) was the lender for the reverse
mortgage, and defendant Charles J. Pastore, a loan originator and broker, acted as First Mariner’s
agent; he recommended the reverse mortgage transaction to the Wisemans and arranged for it.
Id. ¶¶ 26-27 (ECF 33). The reverse mortgage was serviced by defendant MetLife Home Loans,
LLC (“MetLife”).
1

The United States Court of Appeals for the D.C. Circuit recently explained the concept
of a “reverse mortgage” in Bennett v. Donovan, 703 F.3d 582, 584-85 (D.C. Cir. 2013):
A “reverse mortgage” is a form of equity release in which a mortgage
lender (typically, a bank) makes payments to a borrower based on the borrower’s
accumulated equity in his or her home. Unlike a traditional mortgage, in which
the borrower receives a lump sum and steadily repays the balance over time, the
borrower in a reverse mortgage receives periodic payments (or a lump sum) and
need not repay the outstanding loan balance until certain triggering events occur
(like the death of the borrower or the sale of the home). Because repayment can
usually be deferred until death, reverse mortgages function as a means for elderly
homeowners to receive funds based on their home equity.

Before the Wisemans entered into the reverse mortgage, they owned the Residence
jointly, as tenants by the entireties. Id. ¶ 21. On the basis of Mr. Pastore’s alleged advice and
recommendation, Ms. Wiseman conveyed her interest in the Residence to Mr. Wiseman in
conjunction with the reverse mortgage transaction, reserving to herself “a remainder interest to
title by means of a life estate deed.” Id. ¶ 32.
Mr. Wiseman passed away on or about December 13, 2011. Id. ¶ 39. Within one month,
MetLife began contacting Ms. Wiseman, stating that the loan secured by the reverse mortgage
was in default and that Ms. Wiseman was required to satisfy immediately the full balance due on
the loan or be dispossessed of her home. Id. ¶ 40. MetLife sent notices of default and other
communications to Ms. Wiseman asserting this position, and sent agents to “photograph, trespass
upon, and attempt to gain access to, the Wiseman Residence.” Id. ¶ 41. Despite Ms. Wiseman’s
attempts to “inform” MetLife that, under the terms of the reverse mortgage transaction, the loan
was not in default so long as she was alive, id. ¶ 42, MetLife persisted in its “efforts to declare
default and remove Ruth Wiseman from her home.” Id. ¶ 43.
Accordingly, Ms. Wiseman initiated suit, asserting causes of action under federal and
Maryland state law. In addition to First Mariner, Mr. Pastore, and MetLife, she has sued
Resource Real Estate Services, LLC (“Resource”), the company that conducted the settlement of
the reverse mortgage transaction, and has named as “interested parties” the Estate of John H.
Wiseman (the “Estate”) and Shaun Donovan, in his capacity as Secretary of Housing and Urban
Development (“HUD”).2

2

Ms. Wiseman filed suit in the Circuit Court for Anne Arundel County, Maryland on or
about June 14, 2012. See Complaint (ECF 2). On August 15, 2012, First Mariner and Mr.
Pastore, who were the only defendants who had been served at that time, timely removed the suit
-2-

Ms. Wiseman’s complaint includes eleven counts. Count 1 asserts a cause of action for
“Predatory Lending” against First Mariner, Pastore, and Resource. Count 2 charges negligent
misrepresentation, also against First Mariner, Pastore, and Resource. Count 3 alleges that First
Mariner and Pastore violated the Maryland Consumer Protection Act (“CPA”), Md. Code (2005
Repl. Vol., 2012 Supp.), §§ 13-101 et seq. of the Commercial Law Article (“C.L.”).
Count 4 is captioned “Breach of Contract – Reformation” and names First Mariner,
Pastore, and Resource as defendants; it seeks rescission or reformation of the life estate deed and
reformation of the note and deed of trust securing the reverse mortgage, on the basis of “mutual
mistake,” because the parties allegedly intended that the Wisemans would both be able to reside
in the Residence until death. Count 5, captioned “Intentional Misrepresentation – Rescission,”
also seeks rescission or reformation of the life estate deed and reformation of the note and deed
of trust, on the basis of intentional misrepresentation by First Mariner, Pastore, and Resource.
Count 6 asserts the tort of intentional misrepresentation by concealment (also known as
fraudulent concealment) against First Mariner, Pastore, and Resource. Count 7 is captioned
“Breach of Contract – Reformation,” the same caption as Count 4; unlike Count 4, however,
Count 7 is asserted against all defendants, and seeks rescission or reformation of the life estate
deed and reformation of the note and deed of trust, on the basis that the documents do not
comply with the federal Home Equity Conversion Mortgage statute (“HECM”), 12 U.S.C.

to federal court on the basis of federal question jurisdiction, with supplemental jurisdiction over
plaintiff’s state law claims. See 28 U.S.C. §§ 1331, 1367, 1441, 1446. Plaintiff subsequently
filed her Amended Complaint, which is the operative pleading. In her original Complaint, Ms.
Wiseman had named a fifth defendant, the Federal National Mortgage Association (“Fannie
Mae”). However, she filed a notice of voluntary dismissal as to Fannie Mae, see ECF 15, and
did not name Fannie Mae as a defendant in her Amended Complaint. Hereafter, references to
plaintiff’s “complaint” refer to the Amended Complaint, unless otherwise noted.
-3-

§ 1715z-20, a provision of the National Housing Act (“NHA”), codified as amended at 12 U.S.C.
§§ 1701 et seq. Count 8 asserts negligence against First Mariner, Pastore, and Resource.
Count 9 asserts claims against MetLife and Resource under the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq., and the Maryland Consumer Debt
Collection Act (“MCDCA”), C.L. §§ 14-201 et seq. Count 10, captioned “Statutory Violations
Generally,” asserts against all defendants violations of the HECM statute and its implementing
regulations, see 24 C.F.R. part 206; the Maryland Reverse Mortgage Loans Act (“Reverse
Mortgage Act”), C.L. §§ 12-1201 et seq.; and 15 U.S.C. § 1648, which is a provision of the
federal Truth In Lending Act (“TILA”), codified as amended at 15 U.S.C. §§ 1601 et seq.,
governing reverse mortgages. Finally, Count 11 asserts that Resource is liable as an aider and
abettor of First Mariner and Pastore.
To summarize with respect to each defendant: Resource is named as defendant in all
counts except Count 3, which asserts claims under the CPA; First Mariner and Pastore are named
as defendants in all counts except Count 9, which asserts claims under the FDCPA and MCDCA,
and Count 11, which asserts an aiding and abetting theory of liability against Resource; and
MetLife is a defendant only as to Count 7 (breach of contract), Count 9 (FDCPA & MCDCA),
and Count 10 (“Statutory Violations Generally”).
Two motions are now pending for decision. Resource has filed a motion to dismiss for
failure to state a claim upon which relief can be granted, pursuant to Fed. R. Civ. P. 12(b)(6)
(“Resource Motion”) (ECF 36). After filing an answer to the complaint, see ECF 35, First
Mariner and Pastore (collectively, “Mariner Defendants”) filed a motion for judgment on the

-4-

pleadings, pursuant to Fed. R. Civ. P. 12(c) (“Mariner Motion”) (ECF 40).3 Both motions have
been fully briefed,4 and no hearing is necessary to resolve them. See Local Rule 105.6. For the
reasons that follow, both motions will be granted in part and denied in part.
Factual Background5
As noted, the Wisemans owned the Residence as tenants by the entireties, a form of joint
ownership under Maryland law that is available only to married couples, by which a couple holds
title to real estate as a couple, rather than as individuals. See generally Bruce v. Dyer, 309 Md.
421, 426-31, 524 A.2d 777, 780-82 (1987). One feature of a tenancy by the entireties is that both
spouses have the right of survivorship: when one spouse dies, the surviving spouse becomes
vested with sole title to the property by operation of law. See, e.g., Hutson v. Hutson, 168 Md.
182, 188, 177 A.2d 177, 179 (1935) (describing right of survivorship as “‘[t]he most important
incident of tenancy by the entireties’”) (quoting TIFFANY ON REAL PROPERTY).
In June 2009, when the reverse mortgage transaction took place, Mr. Wiseman was 78
years of age and Ms. Wiseman was 75. Amended Complaint ¶ 22. Mr. Wiseman was suffering
from lung cancer and kidney failure; as a consequence of these ailments, he used a walker or
other device for mobility. Id. ¶ 28. The Wisemans were retired and living on a fixed income.

3

MetLife filed an answer to plaintiff’s original Complaint. See ECF 27. However,
MetLife did not join in either motion, nor has MetLife otherwise responded to the Amended
Complaint. Accordingly, MetLife’s liability is not at issue in this Opinion.
4

Plaintiff filed an opposition to the Resource Motion (“Resource Opp.”) (ECF 38) (the
opposition was erroneously flagged in the electronic filing system as a motion; the Clerk will be
directed to administratively terminate it), and Resource filed a reply (ECF 39). Plaintiff filed an
opposition to the Mariner Motion (“Mariner Opp.”) (ECF 43), and the Mariner Defendants filed
a reply (“Mariner Reply”) (ECF 46).
5

The facts are drawn from plaintiff’s complaint and are construed in her favor.
-5-

Id. ¶ 23. They desired to find a financially feasible way to live in their Residence “for the
remainder of their days.” Id. ¶ 24.
At some point in 2009, the Wisemans contacted First Mariner and Mr. Pastore. Id. ¶ 26.
According to plaintiff, Pastore “was acting as a mortgage broker and originating loans for and
otherwise promoting and selling . . . reverse mortgage[s] for First Mariner . . . as [First
Mariner’s] agent.” Id. Mr. Pastore met with the Wisemans in their home to discuss the prospect
of a reverse mortgage and to obtain an application from the Wisemans. Id. ¶ 27. When Pastore
met with the Wisemans he learned their ages and that Mr. Wiseman was in poor health. Id. ¶ 28.
Plaintiff also alleged that Mr. Wiseman’s poor health would have been “readily apparent” to Mr.
Pastore. Id.
Pastore advised the Wisemans that “reverse mortgages were part of a program initiated
by Congress and regulated by HUD designed particularly with the needs and circumstances of
senior citizens in mind,” and that they were “good candidates for the program.” Id. ¶ 29.

He

also represented to the Wisemans that, by obtaining a reverse mortgage, they “could pay-off their
exiting deed of trust note/mortgage with the proceeds of the new loan, but would not have to
make any future payments of mortgage installments,” because the reverse mortgage loan “would
be repaid by sale of the property after they had both passed away or decided to sell or not to
reside in their home any longer.”

Id.

And, Pastore advised the Wisemans that, if they

participated in First Mariner’s reverse mortgage program, “then as long as they lived they would
each be able to stay in their home.” Id. ¶ 30. The Wisemans submitted an application to Pastore.
Id. ¶ 31.

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Subsequently, Mr. Pastore “recommended a [reverse mortgage] to the Wisemans that
would accomplish not only the payoff of their existing deed of trust, but also allow for a lump
sum payment of . . . $31,610.00.” Id. ¶ 32. However, the reverse mortgage that “he advised
them to obtain required Ruth Wiseman to convey her interest in their home to Mr. Wiseman
granting unto herself a remainder interest to title by means of a life estate deed.” Id. Pastore
advised the Wisemans to execute a life estate deed based on the “misrepresentation” that doing
so would allow Ms. Wiseman to become the sole owner of the Residence after Mr. Wiseman’s
death (in fact, she already enjoyed that right as a tenant by the entireties), and that doing so
would allow Ms. Wiseman to “remain entitled to reside in the Wiseman Residence for the
duration of her life without consequence” to the reverse mortgage. Id. ¶ 33. Based on Mr.
Pastore’s representations, the Wisemans agreed to enter into the reverse mortgage with the
understanding that doing so would free them from “the burden of making a monthly installment
payment on a note or mortgage,” and that “they would each be able to reside in the property for
the rest of their lives.” Id. ¶ 34.
The settlement for the reverse mortgage took place on June 17, 2009, conducted by a
representative of Resource at the Residence, due to the Wisemans’ limited mobility. Id. ¶¶ 3435. Plaintiff alleges that “Resource authored and/or prepared all documentation necessary to
complete the transaction,” including a “Life Estate Deed,” a “Fixed Rate Home Equity
Conversion Deed of Trust” (“Deed of Trust”), and a Note, id. ¶¶ 35, 38,6 and its agent presented

6

A copy of the Life Estate Deed, which is titled “Deed, Fee Simple, Reservation of a Life
Estate,” was submitted by the Mariner Defendants as Exhibit B to the Mariner Motion. See ECF
40-4. A copy of the Deed of Trust was submitted as Exhibit D to the Mariner Motion. See ECF
40-6. A copy of the Note, entitled “Fixed Rate Note Closed End (Home Equity Conversion),”
was submitted as Exhibit C to the Mariner Motion. See ECF 40-5.
-7-

these documents to the Wisemans. Id. ¶ 35. Plaintiff alleges that the Life Estate Deed was
“prepared by Resource at the request or instruction of Pastore and/or First Mariner.” Id. ¶ 36.
The Wisemans both executed the Life Estate Deed, under which the Wisemans, as tenants by the
entireties, granted a life estate to Mr. Wiseman, as grantee, with a remainder interest to Ms.
Wiseman. See Life Estate Deed at 1-2. Only Mr. Wiseman signed the Note and the Deed of
Trust.7 See Note at 3; Deed of Trust at 6. Resource caused the documents to be recorded in the
Land Records of Anne Arundel County. Amended Complaint ¶ 36.
According to plaintiff, the “counseling received by Ruth Wiseman” prior to entering into
the transaction “did not include an explanation or assessment of the risk inherent in participating
in the reverse mortgage” or of “the legal impact or consequences of the requirement that she
convey her interest in her home to her husband.” Id. ¶ 37. And, she “did not understand the
consequences of doing so” or the “terms of the promissory note or deed of trust.” Id.
As noted, Mr. Wiseman died on or about December 13, 2011. Id. ¶ 39. Thereafter,
MetLife, the servicer of the reverse mortgage, asserted that the Note was in default, and began
“frequently calling the Wiseman Residence at all hours of the day and evening, sending
numerous notices of default and other demands, and even sent individuals to photograph,
trespass upon, and attempt to gain access to, the Wiseman Residence.” Id. ¶ 41. Despite several
attempts by Ms. Wiseman and her adult son to convince MetLife that it was mistaken, see id.
¶ 42, MetLife persisted in its “efforts to declare default and remove Ruth Wiseman from her

7

Although Ms. Wiseman did not sign the Deed of Trust, it defined the “Grantor” as
“John H. Wiseman, Sr., as sole owner and Ruth M. Wiseman as remainderman.” Deed of Trust
at 1. Plaintiff also alleges that Mr. Wiseman executed a “Second Note” and “Second Deed of
Trust” in favor of HUD, pursuant to the HECM statute. Amended Complaint ¶ 38. Copies of
the Second Note and Second Deed of Trust are not contained in the record.
-8-

home.” Id. ¶ 43. Plaintiff alleges that the “actions of MetLife caused Ruth Wiseman, now a
woman of seventy-eight (78) years to suffer severe emotional distress and mental anguish, to
such an extent that she became fearful of answering her phone or opening the front door of her
own home without family present.” Id. ¶ 44.
Additional facts will be included in the Discussion.
Discussion
A. Standard of Review
Resource has moved to dismiss, pursuant to Fed. R. Civ. P. 12(b)(6), and the Mariner
Defendants have moved for judgment on the pleadings, pursuant to Fed. R. Civ. P. 12(c). A
motion pursuant to Rule 12(b)(6) constitutes an assertion by the defendant that, even if the facts
alleged by the plaintiff are true, the complaint fails as a matter of law “to state a claim upon
which relief can be granted.”

A Rule 12(b)(6) motion must be filed “before pleading if

responsive pleading is allowed.” However, pursuant to Fed. R. Civ. P. 12(h)(2)(B), which
governs the time when defenses may be raised, a defendant may also assert “[f]ailure to state a
claim upon which relief can be granted” in “a motion under Rule 12(c).” A Rule 12(c) motion
for “judgment on the pleadings” may be filed “[a]fter the pleadings are closed,” so long as it is
“early enough not to delay trial.” Regardless of whether failure to state a claim for relief is
asserted in a Rule 12(b)(6) motion or a Rule 12(c) motion, the standard of review is the same:
courts apply “the same standard for Rule 12(c) motions as for motions made pursuant to Rule
12(b)(6).” Burbach Broadcasting Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir.
2002).

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Whether a complaint states a claim for relief is assessed by reference to the pleading
requirements of Fed. R. Civ. P. 8(a)(2). It provides that a complaint must contain a “short and
plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the
rule is to provide the defendant with “fair notice” of the claim and the “grounds” for entitlement
to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 n.3 (2007).
A plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2).
Id. at 555. But, the rule demands more than bald accusations or mere speculation. Id.; see
Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). To satisfy the minimal
requirements of Rule 8(a)(2), the complaint must set forth “enough factual matter (taken as true)
to suggest” a cognizable cause of action, “even if . . . [the] actual proof of those facts is
improbable and . . . recovery is very remote and unlikely.” Twombly, 550 U.S. at 556. A
complaint that provides no more than “labels and conclusions,” or “a formulaic recitation of the
elements of a cause of action,” is insufficient. Id. at 555.
Both Twombly, 550 U.S. 544, and Ashcroft v. Iqbal, 556 U.S. 662 (2009), make clear
that, in order to survive a motion under Rule 12(b)(6) (or Rule 12(c)), a complaint must contain
facts sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570;
see Iqbal, 556 U.S. at 684 (“Our decision in Twombly expounded the pleading standard for ‘all
civil actions’ . . . .”); see also Simmons v. United Mortg. & Loan Inv., 634 F.3d 754, 768 (4th
Cir. 2011); Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009); Giarratano v. Johnson, 521 F.3d
298, 302 (4th Cir. 2008). Thus, the defendant’s motion will be granted if the “well-pleaded facts
do not permit the court to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at
679 (citation omitted).
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In reviewing such a motion, a court “‘must accept as true all of the factual allegations
contained in the complaint,’” and must “‘draw all reasonable inferences [from those facts] in
favor of the plaintiff.’” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440
(4th Cir. 2011) (citations omitted).

However, the court is not required to accept legal

conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986); Monroe v.
City of Charlottesville, 579 F.3d 380, 385-86 (4th Cir. 2009), cert. denied, 130 S. Ct. 1740
(2010).
“A court decides whether [the pleading] standard is met by separating the legal
conclusions from the factual allegations, assuming the truth of only the factual allegations, and
then determining whether those allegations allow the court to reasonably infer” that the plaintiff
is entitled to the legal remedy he or she seeks. A Society Without A Name v. Virginia, 655 F.3d
342, 346 (4th Cir. 2011), cert. denied, ___ U.S. ___, 132 S. Ct. 1960 (2012). “‘Dismissal under
Rule 12(b)(6) [or judgment for the defendant under Rule 12(c)] is appropriate only where the
complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal
theory.’” Hartmann v. Calif. Dept. of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013)
(citation omitted); accord Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Reg. Sys., Inc.,
680 F.3d 1194, 1201-02 (10th Cir. 2011) (“When reviewing a 12(b)(6) dismissal, ‘we must
determine whether the complaint sufficiently alleges facts supporting all the elements necessary
to establish an entitlement to relief under the legal theory proposed.’ Dismissal is appropriate if
the law simply affords no relief.”) (internal citation omitted).
A motion asserting failure of the complaint to state a claim typically “does not resolve
contests surrounding the facts, the merits of a claim, or the applicability of defenses,” Edwards v.
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City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999) (internal quotation marks omitted), unless
such a defense can be resolved on the basis of the facts alleged in the complaint. In addition, a
court “[o]rdinarily . . . may not consider any documents that are outside of the complaint, or not
expressly incorporated therein . . . .” Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557
(4th Cir. 2013). In considering a challenge to the adequacy of plaintiff’s pleading, however, the
court may properly consider documents “attached or incorporated into the complaint,” as well as
documents attached to the defendant’s motion, “so long as they are integral to the complaint and
authentic.” Philips v. Pitt County Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009); see also
E.I. du Pont de Nemours & Co., 637 F.3d at 448. To be “integral,” a document must be one
“that by its ‘very existence, and not the mere information it contains, gives rise to the legal rights
asserted.’” Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F. Supp. 2d 602,
611 (D. Md. 2011) (citation omitted) (emphasis in original).
The Life Estate Deed, the Note, and the Deed of Trust are explicitly discussed in the
complaint and are integral to plaintiff’s claims.

They are legal instruments whose “‘very

existence’” has an operative effect on the rights at issue in the suit. Id. (citation omitted).
Accordingly, they are proper subjects of consideration under Rule 12(b)(6) and Rule 12(c), and
there is no dispute as to the authenticity of the copies submitted by the Mariner Defendants.
The Mariner Defendants have also submitted another document, a “Certificate of HECM
Counseling” (“Counseling Certificate”), as Exhibit A to the Mariner Motion (ECF 40-3). The
Counseling Certificate was prepared and signed by Pamela Bilal, a Housing Counselor with the
Howard County Office on Aging, a “HUD-Approved Counseling Agency,” and was also signed
by Mr. and Ms. Wiseman in May 2009.

Although the complaint refers ambiguously to
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“counseling” that plaintiff received, the Counseling Certificate is not expressly mentioned in the
complaint and does not appear to be integral to plaintiff’s claim. Plaintiff has submitted a
“Representation of Total Annual Loan Cost Rate” (“Loan Terms”) Ex.1 to Mariner Opp. (ECF
43-1), which she contends was prepared by Ms. Bilal as part of the counseling program that
produced the Counseling Certificate. Plaintiff asserts that, if the Court considers the Counseling
Certificate, it should also consider the Loan Terms under the “rule of completeness.” Mariner
Opp. at 2 n.1.
Although documents that are not integral to the complaint ordinarily may not be
considered in a challenge to the pleading, Fed. R. Civ. P. 12(d) grants a court discretion to
consider “matters outside the pleadings” on “a motion under Rule 12(b)(6) or 12(c).” However,
if the court does so, it must treat the motion “as one for summary judgment under Rule 56,” Fed.
R. Civ. P. 12(d), must give all parties “a reasonable opportunity to present all the material that is
pertinent to the motion,” id., and must give the parties notice of its intent to consider the motion
under a summary judgment standard. See Finley Lines Joint Protective Bd. Unit 200 v. Norfolk
So. Corp., 109 F.3d 993, 997 (4th Cir. 1997) (“[A] Rule 12(b)(6) motion to dismiss supported by
extraneous materials cannot be regarded as one for summary judgment until the district court acts
to convert the motion by indicating that it will not exclude from its consideration of the motion
the supporting extraneous materials.”); accord Laughlin v. Metro. Wash. Airports Auth., 149
F.3d 253, 261 (4th Cir. 1998).
For reasons explained infra, I have not considered the Counseling Certificate or the Loan
Terms in my ruling on the Mariner Motion. Accordingly, the Mariner Motion need not be
considered as one for summary judgment pursuant to Rule 12(d).
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B. Predatory Lending
Resource and the Mariner Defendants both argue for dismissal of Count 1 on the ground
that “predatory lending,” as such, is not a recognized cause of action in Maryland. 8 They
correctly observe that no reported Maryland appellate decision has recognized such a cause of
action in tort.
Defendants also rely on several cases in which judges in this district have dismissed
claims alleging “predatory lending” where the plaintiffs failed to “cite any law that [the
defendants] violated by engaging in . . . allegedly predatory behavior” or otherwise “provide a
plausible legal basis for [their] predatory lending claim[s].” Willis v. Countrywide Home Loans
Serv’g, Civ. No. CCB-09-1455, 2009 WL 5206475, at *8 (D. Md. Dec. 23, 2009); see id., 2010
WL 2857801, at *3 (D. Md. July 19, 2010) (dismissing subsequent amended complaint because
limitations had expired as to statutes asserted as basis for “predatory lending” claim). See also
Smart v. Decision One Mortg. Co., LLC, Civ. No. AW-10-320, 2011 WL 829212, at *2 (D. Md.
Mar. 7, 2011) (dismissing count of “Predatory Lending Practices” where “[p]laintiffs never
specif[ied] . . . what they mean[t] by ‘Predatory Lending Practices,’ despite [defendant’s]

8

All of the state law claims in this case arise under Maryland law. “When choosing the
applicable state substantive law while exercising diversity or supplemental jurisdiction, a federal
district court applies the choice of law rules of the forum state.” Ground Zero Museum
Workshop v. Wilson, 813 F. Supp. 2d 678, 696 (D. Md. 2011) (citing, inter alia, ITCO Corp. v.
Michelin Tire Corp., 722 F.2d 42, 49 n.11 (4th Cir. 1983), cert. denied, 469 U.S. 1215 (1985)).
Maryland is, of course, the forum state of this Court. Under Maryland’s choice-of-law
principles, tort claims are governed by the law of the state where the alleged harm occurred (“lex
loci delicto”). See, e.g., Proctor v. Washington Metropolitan Area Transit Auth., 412 Md. 691,
726, 990 A.2d 1048, 1068 (2010). And, contract claims are ordinarily governed by the law of
the state where the contract was made (“lex loci contractus”), unless the parties to the contract
agreed to be bound by the law of another jurisdiction. See, e.g., Am. Motorists Ins. Co. v.
ARTRA Group, Inc., 338 Md. 560, 573, 659 A.2d 1295, 1301 (1995). All events alleged in the
complaint occurred in Maryland.
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repeated contention that no such cause of action exists under Maryland law”); Davis v.
Wilmington Fin., Inc., Civ. No. PJM-09-1505, 2010 WL 1375363, at *7 (D. Md. Mar. 26, 2010)
(dismissing claim that consisted of “vague allegations and labels of ‘predatory lending’” in
“‘violation of the local Civil Code’” because complaint “fail[ed] to articulate any purported act
of predatory lending by any Defendant, and fail[ed] to cite the ‘local Civil Code’ upon which
Plaintiffs [sought] to base their claim”) (quoting complaint).
In particular, defendants rely on the decision of Judge Quarles in Sucklal v. MTGLQ
Investors LP, Civ. No. WDQ-10-1536, 2011 WL 663754 (D. Md. Feb. 14, 2011). In that case,
Judge Quarles observed that “predatory lending” is simply “a term that describes ‘abusive
practices in home mortgage lending.’” Id. at *4 (citation omitted). He opined that, “[t]o state a
predatory lending claim,” a plaintiff must plead “facts that would support a ‘reasonable
inference’ that the defendants engaged in abusive lending practices,” and “must allege the
specific law violated by the defendant’s predatory behavior.” Id. (citation omitted).
In opposition to both motions, plaintiff accepts the pleading standard articulated by Judge
Quarles in Sucklal, requiring the plaintiff to specify a statutory cause of action as the basis for
such a claim, and asserts that Count 1 states a claim for violation of the Maryland Mortgage
Fraud Protection Act (“MMFPA”), Md. Code (2010 Repl. Vol., 2012 Supp.), §§ 7-401 et seq. of
the Real Property Article (“R.P.”).9

The MMFPA prohibits the commission of “mortgage

fraud,” R.P. § 7-402, which is defined in R.P. § 7-402(d) as:

9

Plaintiff does not urge this Court to recognize a new, freestanding cause of action in tort
for “predatory lending” under Maryland law. Even if she did, the Court would not be at liberty
to accept her invitation. See Guy v. Travenol Labs., Inc., 812 F.2d 911, 915 (4th Cir. 1987)
(stating that a “federal court sitting in diversity simply cannot compel a state to provide a cause
of action in tort”); accord Burris Chem., Inc. v. USX Corp., 10 F.3d 243, 247 (4th Cir. 1993)
- 15 -

[A]ny action by a person made with the intent to defraud that involves:
(1) Knowingly making any deliberate misstatement, misrepresentation, or
omission during the mortgage lending process with the intent that the
misstatement, misrepresentation, or omission be relied on by a mortgage lender,
borrower, or any other party to the mortgage lending process;
(2) Knowingly creating or producing a document for use during the mortgage
lending process that contains a deliberate misstatement, misrepresentation, or
omission with the intent that the document containing the misstatement,
misrepresentation, or omission be relied on by a mortgage lender, borrower, or
any other party to the mortgage lending process;
(3) Knowingly using or facilitating the use of any deliberate misstatement,
misrepresentation, or omission during the mortgage lending process with the
intent that the misstatement, misrepresentation, or omission be relied on by a
mortgage lender, borrower, or any other party to the mortgage lending process;
(4) Receiving any proceeds or any other funds in connection with a mortgage
closing that the person knows resulted from a violation of item (1), (2), or (3) of
this subsection;
(5) Conspiring to violate any of the provisions of item (1), (2), (3), or (4) of this
subsection; or
(6) Filing or causing to be filed in the land records in the county where a
residential real property is located, any document relating to a mortgage loan that
the person knows to contain a deliberate misstatement, misrepresentation, or
omission.
In turn, the “mortgage lending process” encompasses the entire “process by which a
person seeks or obtains a mortgage loan,” R.P. § 7-401(e)(1), including the “solicitation,
application, origination, negotiation, servicing, underwriting, signing, closing, and funding of a
mortgage loan,” id. § 7-401(e)(2)(i), and the “notarizing of any document in connection with a
mortgage loan.” Id. § 7-401(e)(2)(ii). Among other enforcement mechanisms, the MMFPA
authorizes a private right of action for damages, attorneys’ fees, and treble damages. Id. § 7-406.
In response to plaintiff’s invocation of the MMFPA, defendants correctly observe that the
MMFPA was never mentioned in plaintiff’s complaint, and protest that “‘[i]t is axiomatic that a
(“[T]he federal courts sitting in diversity rule upon state law as it exists and do not surmise or
suggest its expansion.”) (citing cases declining to create novel state law causes of action).
- 16 -

complaint may not be amended by the briefs in opposition to a motion to dismiss.’” Sager v.
Hous. Comm’n of Anne Arundel County, 855 F. Supp. 2d 524, 557 (D. Md. 2012) (quoting
Arbitraje Casa de Cambio, S.A. v. U.S. Postal Serv., 297 F. Supp. 2d 165, 170 (D.D.C. 2003)).
I agree with defendants that the complaint does not expressly allege a violation of the
MMFPA. Accordingly, I will dismiss Count 1, without prejudice, and with leave to amend the
suit to assert a claim under the MMFPA.10
C. Fraud
Several counts of plaintiff’s complaint sound in fraud. Count 5 seeks rescission of the
Life Estate Deed on the basis of fraudulent inducement. Count 6 asserts the tort of fraudulent
concealment. And, Count 3 alleges violation of the CPA, an anti-fraud statute. Defendants
argue that plaintiff has not satisfied the elements of a claim of fraud.
1. Rule 9(b) Pleading Standard
Claims that sound in fraud, regardless of whether they are claims at common law or arise
under an anti-fraud statute, implicate the heightened pleading standard of Fed. R. Civ. P. 9(b).
See, e.g., E-Shops Corp. v. U.S. Bank N.A., 678 F.3d 659, 665 (8th Cir. 2012) (“Rule 9(b)’s
heightened pleading requirement also applies to statutory fraud claims.”); see also Spaulding v.
Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4th Cir. 2013) (stating that a Maryland CPA claim

10

Even if a count captioned as “predatory lending” might be sufficient to survive a
motion to dismiss if in substance it asserted a cause of action under a particular statute, better
pleading practice would be to dispense with the legally meaningless “predatory lending” label
and simply plead the statutory cause of action. Plaintiff is cautioned that judges in this district
have determined that claims under the MMFPA “sound[ ] in fraud” and thus are “subject to Rule
9’s heightened pleading requirements,” discussed infra. Currie v. Wells Fargo Bank, N.A., ___
F. Supp. 2d ___, 2013 WL 2295695, at *9 (D. Md. May 23, 2013); accord Ademiluyi v.
PennyMac Mortg. Inv. Trust Holdings I, LLC, ___ F. Supp. 2d ___, 2013 WL 932525, at *26 (D.
Md. Mar. 11, 2013).
- 17 -

that “sounds in fraud, is subject to the heightened pleading standards of Federal Rule of Civil
Procedure 9(b)”).
Rule 9(b) states: “In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of
a person’s mind may be alleged generally.” Under the rule, a plaintiff alleging claims that sound
in fraud “‘must, at a minimum, describe the time, place, and contents of the false representations,
as well as the identity of the person making the misrepresentation and what he obtained
thereby.’” United States ex rel. Owens v. First Kuwaiti Gen’l Trading & Contracting Co., 612
F.3d 724, 731 (4th Cir. 2010) (citation omitted). In other words, “‘Rule 9(b) requires plaintiffs
to plead the who, what, when, where, and how: the first paragraph of any newspaper story.’”
Crest Construction II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011) (citation omitted).
Rule 9(b) serves several salutary purposes:
“First, the rule ensures that the defendant has sufficient information to
formulate a defense by putting it on notice of the conduct complained of . . . .
Second, Rule 9(b) exists to protect defendants from frivolous suits. A third
reason for the rule is to eliminate fraud actions in which all the facts are learned
after discovery. Finally, Rule 9(b) protects defendants from harm to their
goodwill and reputation.
Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999).
Notably, however, Rule 9(b) by its plain text permits general averment of aspects of fraud
that relate to a defendant’s state of mind. And, a “court should hesitate to dismiss a complaint
under Rule 9(b) if the court is satisfied (1) that the defendant has been made aware of the
particular circumstances for which she will have to prepare a defense at trial, and (2) that
plaintiff has substantial prediscovery evidence of those facts.” Id. Moreover, Rule 9(b) is “less
strictly applied with respect to claims of fraud by concealment” or omission of material facts, as
- 18 -

opposed to affirmative misrepresentations, because “an omission ‘cannot be described in terms
of the time, place, and contents of the misrepresentation or the identity of the person making the
misrepresentation.’” Shaw v. Brown & Williamson Tobacco Corp., 973 F. Supp. 539, 552 (D.
Md. 1997) (quoting Flynn v. Everything Yogurt, Civ. No. HAR-92-3421, 1993 WL 454355, at *9
(D. Md. Sept. 14, 1993)); accord Gadson v. Supershuttle International, Civ. No. AW-10-1057,
2011 WL 1231311, at * 9 (D. Md. Mar. 30, 2011).
2. Maryland Law of Fraud
Under Maryland law, “‘[f]raud encompasses, among other things, theories of fraudulent
misrepresentation, fraudulent concealment, and fraudulent inducement.’” Sass v. Andrew, 152
Md. App. 406, 432, 832 A.2d 247, 261 (2003) (citation omitted). Regardless of the particular
theory, the plaintiff must establish the elements of fraud “by clear and convincing evidence.”
Md. Envir. Trust v. Gaynor, 370 Md. 89, 97, 803 A.2d 512, 516 (2002).
In an action for fraudulent misrepresentation (which is the garden variety of fraud and
often is described simply as “fraud”), the plaintiff ordinarily must show:
1) that the defendant made a false representation to the plaintiff;
2) that its falsity was either known to the defendant or that the representation was
made with reckless indifference as to its truth;
3) that the misrepresentation was made for the purpose of defrauding the plaintiff;
4) that the plaintiff relied on the misrepresentation and had the right to rely on it;
and
5) that the plaintiff suffered compensable injury resulting from the
misrepresentation.
Nails v. S&R, Inc., 334 Md. 398, 415, 639 A.2d 660, 668 (1994); accord Thomas v. Nadel, 427
Md. 441, 451 n.18, 48 A.3d 276, 282 n.18 (2012); Sass, 152 Md. App. at 429, 832 A.2d at 260.
To be actionable, a false representation “must be of a material fact.” Gross v. Sussex,
- 19 -

Inc., 332 Md. 247, 258, 630 A.2d 1156, 1161 (1993). “A ‘material’ fact is one on which a
reasonable person would rely in making a decision,” Sass, 152 Md. App. at 430, 832 A.2d at
260, or a fact that “‘the maker of the misrepresentation knows . . . [the] recipient is likely to
regard . . . as important.’” Gross, 332 Md. at 258, 630 A.2d at 1161 (citation omitted). The
“misrepresentation must be made with the deliberate intent to deceive,” Sass, 152 Md. App. at
430, 832 A.2d at 260 (citing VF Corp. v. Wrexham Aviation Corp., 350 Md. 693, 704, 715 A.2d
188 (1998)), and the defendant must “know[ ] that his representation is false” or be “recklessly
indifferent in the sense that he knows that he lacks knowledge as to its truth or falsity.” Ellerin
v. Fairfax Savings, F.S.B., 337 Md. 216, 232, 652 A.2d 1117 (1995).
A mere failure to disclose a material fact does not constitute fraud, in the absence of a
legal duty to disclose that inheres in certain types of transactions, because “Maryland recognizes
no general duty upon a party to a transaction to disclose facts to the other party.” Gaynor, 370
Md. at 97, 803 A.2d at 516. However, “[e]ven in the absence of a duty of disclosure, one who
suppresses or conceals facts which materially qualify representations made to another may be
guilty of fraud.” Finch v. Hughes Aircraft Co., 57 Md. App. 190, 239, 469 A.2d 867 (emphasis
added), cert. denied, 300 Md. 88, 475 A.2d 1200 (1984), cert. denied, 469 U.S. 1215 (1985).
A fraud based on active suppression or concealment of material facts or an intentional
failure to disclose facts that the defendant is legally obligated to disclose is the variety of fraud
referred to as “fraudulent concealment.” With respect to active suppression or concealment of
facts, “Fraudulent Concealment ‘is any statement or other conduct which prevents another from
acquiring knowledge of a fact, such as diverting the attention of a prospective buyer from a
defect which otherwise, he would have observed.’” Lloyd v. Gen’l Motors Corp., 397 Md. 108,
- 20 -

138, 916 A.2d 257, 274 (2007). In other words, it describes a “situation where the defendant
actively undertakes conduct or utters statements designed to, or that would, divert attention away
from” a material fact. Id. at 138 n.11, 916 A.2d at 274 n.11.
“‘To create a cause of action, concealment must have been intentional and effective—the
hiding of a material fact with the attained object of creating or continuing a false impression as to
that fact. The affirmative suppression of the truth must have been with intent to deceive.’”
Fegeas v. Sherrill, 218 Md. 472, 476-77, 147 A.2d 223, 225-26 (1958) (citation omitted); accord
Rhee v. Highland Dev. Corp., 182 Md. App. 516, 524, 958 A.2d 385, 390 (2008). As the Rhee
Court explained, id. at 536, 958 A.2d at 396 (internal citation omitted) (alterations in Rhee):
[T]he concealment or suppression [of a material fact] is in effect a representation
that what is disclosed is the whole truth. The gist of the action [for fraud] is
fraudulently producing a false impression upon the mind of the other party; and if
this result is accomplished, it is unimportant whether the means of accomplishing
it are words or acts of the defendant . . . .
A “claim of failure to disclose, on the other hand, requires only that the defendant remain
silent about, or omit, facts,” and is not actionable unless “the defendant had a duty to disclose.”
Lloyd, 397 Md. at 138 n.11, 916 A.2d at 274 n.11. Where the fraudulent concealment claim is
based on a duty to disclose, Maryland courts have formulated the elements of the cause of
actions as follows:
“(1) [T]he defendant owed a duty to the plaintiff to disclose a material fact; (2)
the defendant failed to disclose that fact; (3) the defendant intended to defraud or
deceive the plaintiff; (4) the plaintiff took action in justifiable reliance on the
concealment; and (5) the plaintiff suffered damages as a result of the defendant’s
concealment.”
Blondell v. Littlepage, 413 Md. 96, 119, 991 A.2d 80, 94 (2010) (quoting Lloyd, 397 Md. at 138,
916 A.2d at 274) (emphasis omitted).
- 21 -

The Maryland Court of Appeals encapsulated the foregoing principles in Frederick Road
Limited Partnership v. Brown & Sturm, 360 Md. 76, 100 n.14, 756 A.2d 963, 976 n.14 (2000)
(internal citations omitted):
Ordinarily, non-disclosure does not constitute fraud unless there exists a duty of
disclosure. Absent a fiduciary relationship, this Court has held that a plaintiff
seeking to establish fraudulent concealment must prove that the defendant took
affirmative action to conceal the cause of action and that the plaintiff could not
have discovered the cause of action despite the exercise of reasonable diligence,
and that, in such cases, the affirmative act on the part of the defendant must be
more than mere silence; there must be some act intended to exclude suspicion and
prevent injury, or there must be a duty on the part of the defendant to disclose
such facts, if known.
“The tort of fraudulent inducement ‘means that one has been led by another’s guile,
surreptitiousness or other form of deceit to enter into an agreement to his detriment.’” Rozen v.
Greenberg, 165 Md. App. 665, 674, 886 A.2d 924, 929 (2005) (quoting Sec. Constr. Co. v.
Maietta, 25 Md. App. 303, 307, 334 A.2d 133, 136 (1975)). In other words, it incorporates all of
the elements of fraudulent misrepresentation or fraudulent concealment, with the added element
that the defendant’s fraud led the plaintiff to enter into a detrimental contractual agreement. “In
fraudulent inducement cases, a defrauded party may elect between two remedies, which are
exclusive.”

Paul Mark Sandler & James K. Archibald, PLEADING CAUSES

MARYLAND § 3.92, at 346 (5th ed. 2013) (“PLEADING CAUSES

OF

OF

ACTION

IN

ACTION”). “Persons who

discover that they have been induced into a contract by fraud must decide, or the law will decide
for them, whether unilaterally to rescind the contract or to ratify the contract and seek damages,
either affirmatively or by recoupment.” Sonnenberg v. Sec. Mgmt. Corp., 325 Md. 117, 127, 599
A.2d 820, 823 (1992). The prerequisites to obtain rescission of a contract or other instrument are
discussed, infra.
- 22 -

3. Fraud Claims Against Resource
Resource argues that plaintiff’s fraud claims fail because the complaint does not clearly
allege, under Rule 9(b) standards or otherwise, that Resource made any misrepresentations to
plaintiff.

Rather, the alleged misrepresentations were made by the Mariner Defendants.

Moreover, with regard to fraudulent concealment, Resource reasons that the complaint fails to
establish any basis for imputing a duty on Resource to make any particular disclosures to
plaintiff.11
I agree with Resource that plaintiff fails to describe the actual content of any
misrepresentation made by Resource. Although Ms. Wiseman’s complaint pleads a specific
misrepresentation on the part of Pastore, that “as long as [the Wisemans] lived they would each
be able to stay in their home,” Amended Complaint ¶ 30, the complaint contains no comparable
allegations regarding any specific misrepresentation made by Resource or its employee who
conducted the closing of the reverse mortgage (who, in any event, has not been identified).
Although the complaint alleges that Resource’s employee visited “the Wiseman Residence on
June 17, 2009, to conduct the settlement of the loan,” there is no evidence that Resource made
any representation at that time beyond what was contained in the “loan arranged and
recommended by Pastore.” Id. ¶ 34.
Moreover, I agree that, on the facts as pleaded, plaintiff has articulated no basis to impose
a duty of disclosure on Resource. Resource relies upon a recent decision of the Maryland Court
11

Resource also maintains that the complaint establishes no basis to hold it vicariously
liable for any fraud committed by the Mariner Defendants, because the Mariner Defendants were
not Resource’s employees or agents. Plaintiff does not argue in her Opposition that her claims
against Resource arise under a theory of vicarious liability, nor does she expressly plead such a
theory in her complaint. Accordingly, I need not further consider Resource’s potential vicarious
liability.
- 23 -

of Special Appeals, Iglesias v. Pentagon Title & Escrow, LLC, 206 Md. App. 624, 51 A.3d 51
(2012), cert. denied, 430 Md. 346, 61 A.3d 19 (2013), which is illuminating. In that case, the
plaintiff, Iglesias, had been the victim of an identity fraud scheme, whereby another person had
purchased two parcels of real property in Iglesias’s name, using a forged power of attorney. The
court considered whether Pentagon, the company that conducted the settlements of the real estate
transactions (and an individual member of Pentagon who acted as the settlement agent), owed a
duty in tort to Iglesias to detect and disclose the fraud.
The Iglesias Court explained the standard under Maryland law for recognition of a tort
duty in cases involving economic loss, drawn from the seminal case of Jacques v. First National
Bank of Maryland, 307 Md. 527, 515 A.2d 756 (1986):
“Where the failure to exercise due care creates a risk of economic loss only,
courts have generally required an intimate nexus between the parties as a
condition to the imposition of tort liability. This intimate nexus is satisfied by
contractual privity or its equivalent. By contrast, where the risk created is one of
personal injury, no such direct relationship need be shown, and the principal
determinant of duty becomes foreseeability.”
Iglesias, 206 Md. App. at 638, 51 A.3d at 59 (quoting Jacques, 307 Md. at 534-35, 515 A.2d at
759-60) (footnote and citations omitted in Iglesias). This doctrine is sometimes called the
“economic loss rule.” See, e.g., Farmers Bank of Md. v. Chicago Title Ins. Co., 163 Md. App.
158, 172, 877 A.3d 1145, 1153 (2005).
The Iglesias Court thought it “plain that Iglesias was not in contractual privity with
Pentagon,” 206 Md. App. at 659, 51 A.3d at 72, because Iglesias did not actually participate in
the transaction at all; rather, an impostor falsely purporting to use her power of attorney

- 24 -

participated.12

Moreover, similar to the relationship between Resource and the Wisemans,

“Pentagon did not enter into any contractual relationship with Iglesias or her imposter. Rather, it
was acting as an agent for the lender in each transaction to facilitate the closing of the subject
loans.” Id. at 660, 51 A.3d at 72 (emphasis in original). However, Iglesias argued that there were
several “‘red flags’” in the transactions that “should have put Pentagon on notice that fraud was
afoot, and therefore created a circumstance akin to contractual privity, which gave rise to a duty
on Pentagon’s part to investigate whether a fraud was being perpetrated before allowing the sales
to proceed.” Id. at 661, 51 A.3d at 73. The Iglesias Court rejected this argument, reasoning that
the power of attorney used by the impostor was facially valid. Id. at 663, 51 A.3d at 74.
Moreover, and of import here, Iglesias contended that there were “‘irreconcilable
discrepancies’” in the “loan documents prepared by the lender,” id. at 664, 51 A.3d at 74-75,
including that “it was highly unusual that [Iglesias] as a buyer was undertaking the sole
obligation for the loans and [deeds of trust] but was obtaining only joint title to the properties”
with another person (one of the fraudsters). Id. at 660-61, 51 A.3d at 73. Iglesias argued that
these discrepancies also should have put Pentagon on notice that the transaction was fraudulent.
The Maryland Court of Special Appeals disagreed, reasoning: “As the settlement agent,
Pentagon was not charged with a duty to compare or investigate the lenders’ closing documents.
[I]ts obligation was to carry out the lenders’ instructions and . . . there is nothing in the summary
judgment record to show that Pentagon did not do so.” Id. at 664, 51 A.3d at 75.

12

The Iglesias Court rejected the argument that either Pentagon or the purchase money
lender in the real estate transactions should have been considered in privity with Iglesias because
they thought they were dealing with Iglesias, although actually dealing with an impostor. See
Iglesias, 206 Md. App. at 654-56, 660, 51 A.3d at 69-70, 72.
- 25 -

Similarly, the complaint here affirmatively alleges that Resource carried out the
instructions of the lender, First Mariner.

Iglesias stands for the proposition that, absent

extraordinary circumstances, a title company conducting a real estate closing is not “charged
with a duty to compare or investigate the lenders’ closing documents,” id., or to disclose to a
purchaser that features of the transaction appear “highly unusual” and potentially detrimental to
the purchaser. Id. at 660, 51 A.3d at 73.
Plaintiff argues that Resource’s reliance on Iglesias is “misplaced,” Resource Opp. at 5,
because the Iglesias Court distinguished the case before it from two other cases, Weisman v.
Connors, 312 Md. 428, 540 A.2d 783 (1988), and Walpert, Smullian & Blumenthal, P.A. v. Katz,
361 Md. 645, 762 A.2d 582 (2000), “in which the ‘equivalent’ of contractual privity was found
to exist,” because in “each of those cases, the parties met face-to-face and the defendant had
specific knowledge that the plaintiff was taking actions in reliance on the defendant’s conduct.”
Iglesias, 206 Md. App. at 653, 51 A.3d at 68. But, the facts alleged in the complaint give no
indication that the Wisemans relied upon Resource’s conduct or that Resource knew or should
have known that the Wisemans placed special reliance on Resource to protect their interests.
To be sure, the complaint supports a reasonable inference that it would have been
apparent to the Resource employee who conducted the closing that the Wisemans were elderly
and that Mr. Wiseman, in particular, was in frail physical condition. But, without more, that
does not impose a duty of care on Resource. I find salient what Judge Messitte said in Biggs v.
Eaglewood Mortgage, LLC, 582 F. Supp. 2d 707 (D. Md. 2008), aff’d, 353 F. App’x 864 (4th
Cir. 2009), cert. denied, ___ U.S. ___, 130 S. Ct. 3360 (2010), in response to elderly borrowers’
claim that their mortgage lender owed them a tort duty not to “put[ ] them into [a type of loan],
- 26 -

the high risk features of which were not suitable for borrowers of their age and station.” Id. at
718. He stated: “No authority stands for the proposition that banks owe a duty to elderly
borrowers to place them in a more ‘suitable’ loan, even while the borrowers are actively seeking
and ultimately agree to some other, more burdensome loan,” at least so long as “there is no
indication that the [borrowers] were suffering from mental disabilities that impaired their ability
to enter into a loan contract.” Id. at 719. In my view, Judge Messitte’s observation has even
greater force in the context of a claim that a settlement company has a duty to protect an elderly
borrower from “unsuitable” loan terms than in a claim against a lender.
Plaintiff also suggests that a Maryland statute, C.L. § 12-119, establishes that “Resource
was presumptively selected by the Wisemans with the understanding that [Resource] could act
independent of, and not merely as an agent of, First Mariner.” Resource Opp. at 5-6. I do not
discern how C.L. § 12-119 establishes such a presumption. The statute requires a mortgage
lender, under certain circumstances, to notify the borrower of the borrower’s “ability to choose”
an “attorney, title insurance company, or other person to perform settlement services relating to
the purchase of the real property.” C.L. § 12-119(b)(1)-(2). But, the statute does not purport to
establish a presumption that a settlement agent acts as an agent of the borrower rather than the
lender, nor does it establish any particular duty of disclosure that a settlement agent owes a
borrower, and I have found no case law to that effect.
Accordingly, because the complaint alleges no misrepresentations by Resource or facts
that would give rise to an affirmative duty of disclosure by Resource, plaintiff’s fraud claims
against Resource are not viable.

- 27 -

4. Fraud Claims Against the Mariner Defendants
In contrast to plaintiff’s allegations against Resource, plaintiff’s complaint does allege
particular misrepresentations made by Pastore, on First Mariner’s behalf.13 In particular, the
complaint alleges that Pastore affirmatively represented to the Wisemans that the reverse
mortgage would permit Ms. Wiseman to live in the Residence after Mr. Wiseman’s death, for the
rest of her life, without having to make payments on the loan.
The Mariner Defendants suggest that plaintiff’s misrepresentation claims fail to comply
with Rule 9(b) because she “fails to specifically allege the time or date at which the alleged
statement was made.” Mariner Motion at 25. However, a complaint “need not plead precise
dates and times of the alleged misrepresentations” to comply with Rule 9(b). Petrakopoulou v.
DHR Int’l, Inc., 626 F. Supp. 2d 866, 870 (N.D. Ill. 2009). Rather, a complaint is sufficiently
specific to meet the Rule 9(b) bar when it provides dates “or some other measure of precision
and substantiation” of the particulars of the fraud alleged. Jurista v. Amerinox Processing, Inc.,
492 B.R. 707, 751 (D.N.J. 2013). See, e.g., Smith v. Bank of Am. Home Loans, ___ F. Supp. 2d
___, 2013 WL 4080325, at *6 (M.D. Fla. Aug. 13, 2013) (holding that complaint satisfied Rule
9(b) where it did “not allege precise dates as to when alleged fraudulent statements were made,”
but alleged “the substance of the [fraudulent] statements, the Bank of America representatives
who made the statements, and even provide[d] the statement maker’s telephone extensions”);
Woodland Harvesting, Inc. v. Ga. Pac. Corp., 693 F. Supp. 2d 732, 739 (E.D. Mich. 2010)
(“[A]bsolute precision is not necessarily needed and a complaint alleging that defendant made
13

The Mariner Defendants analyze their alleged liability together and do not contend that
the complaint fails to allege facts supporting vicarious liability of First Mariner for Pastore’s
conduct. Accordingly, I need not discuss principles of vicarious liability with respect to the
Mariner Defendants.
- 28 -

representations during meetings held between October 7, 1996 and January 10, 1997 [is]
sufficient even though precise dates or locations were not provided,” where “the complaint did
specify the individuals who made and heard the alleged misrepresentations.”). The core purpose
of Rule 9(b) is to ensure that “the complaint provides the defendant with sufficient notice [to]
answer and defend the claim.” Woodland Harvesting, 693 F. Supp. 2d at 739.
Here, although the complaint does not identify the precise date on which the alleged
misrepresentations were made, it makes clear that the misrepresentations were made by Pastore
during a visit to the Wisemans’ home in 2009 and in subsequent discussions that culminated in
the closing of the reverse mortgage on June 17, 2009. I am “satisfied (1) that the defendant[s]
ha[ve] been made aware of the particular circumstances for which [they] will have to prepare a
defense at trial, and (2) that plaintiff has substantial prediscovery evidence of those facts.”
Harrison, supra, 176 F.3d at 784.
The Mariner Defendants’ most substantial argument against plaintiff’s fraud claims is
that, assuming that the Mariner Defendants made false representations, the misrepresentations
were not material and plaintiff’s reliance on the representations was unreasonable, as a matter of
law.

This argument is based entirely on the Counseling Certificate that Mr. and Ms. Wiseman

signed as a precursor to obtaining the loan. Specifically, the Mariner Defendants rely on a
statement in the certificate that the “Home Equity Conversion Mortgage will be due and payable
when no remaining borrower lives in the mortgaged property . . . . (Borrowers are those parties
who have signed the Note and Mortgage or Deed of Trust.).”

ECF 40-3. However, the

Counseling Certificate constitutes matter outside the pleadings that cannot be considered unless
the Mariner Defendants’ motion is converted to a motion for summary judgment. In my view,

- 29 -

summary judgment is premature. No discovery has yet occurred. The factual circumstances of
the counseling the Wisemans received and the specific advice they received from the counselor
are not in evidence.14 Also not in evidence is the explanation, if any, given to the Wisemans by
Pastore regarding the effect of the Life Estate Deed on whether Ms. Wiseman would be
considered a “borrower.” Accordingly, this defense is not suitable for resolution at the motion to
dismiss stage.
D. Rescission and Reformation Claims
Plaintiff asserts several claims that seek reformation and/or rescission of the instruments
comprising the reverse mortgage transaction. In particular, both Count 4 and Count 7 seek the
remedy of rescission or reformation of the Life Estate Deed, and reformation of the Note and
Deed of Trust, on the basis of alleged “mutual mistakes” in the transaction.15 Count 5 argues
fraudulent inducement as a basis to rescind or reform the Life Estate Deed and reform the Note
and Deed of Trust.
Reformation and rescission are closely related equitable remedies. “Reformation differs
from rescission in that a reformed document remains in force and effect, but in a modified form,”
so as to reflect the parties’ true intent, PLEADING CAUSES

OF

ACTION § 2.23, at 126 (citing

Higgins v. Barnes, 310 Md. 532, 538, 530 A.2d 724, 727 (1987)), while rescission “involves
voiding the [instrument] ab initio and restoring the parties to their status prior to the
14

Notably, plaintiff contends that, at the time the Wisemans received the counseling, the
reverse mortgage arrangement they were contemplating did not include execution of a life estate
deed and would have entailed both Mr. and Ms. Wiseman acting as borrowers.
15

As noted, the differences between the two counts are that Count 4 is asserted against
Resource and the Mariner Defendants, and is based on Pastore’s representations that the
Wisemans would be able to live in the Residence for both of their lives, while Count 7 is asserted
against all defendants, and is based on the alleged failure of the transactional documents to
comply with the HECM statute.
- 30 -

[transaction].” PLEADING CAUSES OF ACTION § 2.24, at 130 (citing Creamer v. Helferstay, 294
Md. 107, 448 A.2d 332 (1982), and Dialist Co. v. Pulford, 42 Md. App. 173, 399 A.2d 1374
(1979)).
Synthesizing the elements of a reformation claim from Maryland case law, the authors of
PLEADING CAUSES OF ACTION state:
To prevail on a claim for reformation of a written instrument, the plaintiff must
allege and prove:
1) There was a mutual mistake . . . , or the instrument or contract was induced by
fraud, duress, undue influence, or misrepresentation;
2) The written agreement or instrument was not the agreement or instrument
intended by the parties; and
3) The intention of the parties as originally contemplated at the time the
agreement or instrument was executed, which must be shown by clear and
convincing evidence.
PLEADING CAUSES OF ACTION § 2.23, at 126 (citing, inter alia, Higgins, supra, 310 Md. 532, 530
A.2d 724, Mattingly v. Houston, 235 Md. 54, 200 A.2d 160 (1964); and Moyer v. Title
Guarantee Co., 227 Md. 499, 177 A.2d 714 (1962)).
In contrast, the elements of a claim for rescission are:
1) That [the plaintiff] was induced into assenting to the contract as the result of
fraud, negligent misrepresentation, undue influence or duress, or there was a
material breach by the other party, or there was a mutual or unilateral mistake in
contracting;
2) That he or she returned the consideration or was unconditionally willing to
return to the other party both the consideration that was given and any benefits
received under the contract;
3) That he or she exercised the right to rescind promptly and did not treat the
contract as a continuing obligation; and
4) That he or she gave notice of the intention to rescind.

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PLEADING CAUSES

OF

ACTION § 2.24, at 130 (citing Md. Port Admin. v. John W. Brawner

Contracting Co., 303 Md. 44, 492 A.2d 281 (1985); Plitt v. McMillan, 244 Md. 450, 223 A.2d
772 (1966); Hale v. Hale, 66 Md. App. 228, 503 A.2d 271 (1986); Bagel Enter., Inc. v. Baskin &
Sears, 56 Md. App. 184, 467 A.2d 533 (1983); and Cutler v. Sugarman Org., Ltd., 88 Md. App.
567, 596 A.2d 105 (1991)).
With respect to reformation or rescission on the basis of mutual mistake, Maryland courts
recognize a “general rule . . . that a mistake of law in the making of an agreement is not a ground
for reformation” or rescission. Hoffman v. Chapman, 182 Md. 208, 213, 34 A.2d 438, 441
(1943). Ordinarily, the mutual mistake must be one of fact. Id. The Maryland Court of Special
Appeals has described the foregoing quotation from Hoffman as “loose dicta,” and opined, based
on an analysis of prior Maryland case law and modern treatises, that “the correct rule of law is
that even if the mutual mistake is one of law,” reformation or rescission may be awarded in some
circumstances. Hearn v. Hearn, 177 Md. App. 525, 542, 936 A.2d 400, 410 (2007). However,
in Janusz v. Gilliam, 404 Md. 524, 947 A.2d 560 (2008), the Maryland Court of Appeals
reiterated (albeit without citing Hearn) that a “mutual mistake of law made by the parties is not,
as a matter of law, grounds for rescission,” at least where “both parties were represented by
counsel in the negotiation of the Agreement, [and so] were on an equal footing to know or learn
what relevant law applied to their interests.” Id. at 536-37, 947 A.2d at 567. “‘Although
reformation requires that the mistake be mutual, rescission may be granted whether the mistake
be that of one or of both of the parties.’” Md. Port Admin., supra, 303 Md. at 56, 492 A.2d at
287 (quoting Baltimore v. DeLuca-Davis Co., 210 Md. 518, 526, 124 A.2d 557, 561 (1956)).

- 32 -

Claims for reformation or rescission must be proved by clear and convincing evidence.
See, e.g., Faller v. Faller, 247 Md. 631, 636, 233 A.2d 807, 809 (1967) (rescission); LaSalle
Bank, N.A. v. Reeves, 173 Md. App. 392, 412, 919 A.2d 738, 751 (reformation), cert. denied, 400
Md. 649, 929 A.2d 891 (2007). “‘[N]o party has a right to rescind or modify a contract merely
because he finds, in the light of changed conditions, that he has made a bad deal.’” Harford
County v. Town of Bel Air, 348 Md. 363, 384, 704 A.2d 421, 431 (1998) (citation omitted).
“‘Equity reforms an instrument not for the purpose of relieving against a hard or oppressive
bargain, but simply to enforce the actual agreement of the parties to prevent an injustice which
would ensue if this were not done.’” Hous. Auth. of College Park v. Macro Housing, Inc., 275
Md. 281, 287, 340 A.2d 216, 219 (1975) (citation omitted).
Both Resource and the Mariner Defendants seize on the fact that plaintiff has captioned
Count 4 and Count 7 as claims for “Breach of Contract,” and argue that Ms. Wiseman cannot
assert a contract-based claim against them because she is not a party to any contract or
instrument to which they are also party. Rather, as defendants see it, neither Resource nor either
of the the Mariner Defendants is a party to the Life Estate Deed, which was a conveyance
between Mr. Wiseman and Ms. Wiseman, and Ms. Wiseman is not a party to the Note or Deed of
Trust, both of which were executed only by Mr. Wiseman.
Defendants’ argument is understandable, in light of the labels affixed to the counts, but
ultimately inapt. Although Count 4 and Count 7 are labeled “Breach of Contract,” the substance
of the counts seeks rescission or reformation of all of the instruments comprising the reverse
mortgage transaction on the basis of mutual mistake. In evaluating a complaint under the
pleading standard established by Iqbal and Twombly, a court must focus on whether the
- 33 -

complaint contains “enough factual matter (taken as true) to suggest” a cognizable cause of
action, Twombly, 550 U.S. at 556, that “is plausible on its face.” Id. at 570. How a claim is
labeled is of secondary importance, because a reviewing court must disregard “labels and
conclusions.” Id. at 555. There is no indication in the Maryland case law defining the elements
of a claim for reformation or rescission that a plaintiff seeking those equitable remedies must be
named as a party in the instrument she seeks to rescind or reform in order to be eligible for relief.
Such a formal requirement would be incompatible with the essence of a reformation or rescission
claim, which is that the formal terms contained in the instrument should be disregarded, because
they are a product of mistake or fraud.
The Court’s research has not uncovered a Maryland case directly addressing the
argument defendants make, nor have defendants provided case law expressly supporting their
view. But, the Eighth Circuit made short work of the same argument in Santucci v. Allstate Life
Insurance Co., 221 F.3d 1045 (8th Cir. 2000).

There, the plaintiff, individually and as

administratrix of her late ex-husband’s estate, sought to reform an accidental death insurance
policy to reflect that her ex-husband, rather than she, was the primary insured under the policy.
The issue arose because the ex-husband had been killed in a motorcycle accident, and the insurer
refused to pay a death benefit because the ex-husband was neither the primary insured nor (due
to his divorce from the plaintiff) the spouse of the primary insured. See id. at 1047. After a
bench trial, the district court determined that, “[a]lthough the policy named [the plaintiff] as the
primary insured such a policy could only be issued to SearsCharge account holders.” Id. And,
“[a]t the time that the policy was issued, [the then-husband] was the only account holder in the
household. Premiums were charged to [husband’s] Sears credit card and he made the requested
- 34 -

payments.” Id. Thus, the “district court . . . found by clear and convincing evidence that at the
time the contract was formed there was a mutual mistake made by the parties because [wife] not
[husband] was named as the primary insured. [The insurer] had clearly intended to insure the
SearsCharge account holder, [husband], along with his spouse and children.” Id.
On appeal, the insurer argued that the district court should not have permitted the exhusband’s estate to seek reformation, because he was not a party to the policy, and should not
have permitted the plaintiff to seek reformation in her individual capacity, because the benefit at
issue would not accrue to her. Roundly rejecting that proposition, Eighth Circuit said, id. at 1048
(internal citation omitted):
This argument is nothing more than a procedural slip knot designed to
keep anyone and everyone out of the case who possibly had standing to seek
reformation of the policy. At a minimum the Estate of [the ex-husband] had
standing to bring this action. The right to seek reformation of an insurance policy
is not limited to the person or persons named in the policy but may be exercised
by a person not so named where reformation is sought to set forth his interest. . . .
[The insurer’s] argument that none of the parties has standing to sue for
reformation is novel but without merit. (Emphasis added.)
To be sure, a complete stranger to the transaction would lack standing to seek rescission
or reformation. But, Ms. Wiseman was not a stranger to the transaction. She was married to Mr.
Wiseman, and she, Mr. Wiseman, First Mariner, and Resource are all parties to instruments that
form the transaction—they simply are not all listed as parties to the same instruments. Because
Ms. Wiseman seeks reformation of the reverse mortgage instruments “to set forth [her] interest,”
id., she has standing to seek reformation of the documents, despite the fact that she was not a
signatory to the Note or Deed of Trust. Of course, she will only be able to obtain reformation if
she is able to prove the claim, which will require her to demonstrate, by clear and convincing
evidence, the intended form of the instruments. But, for defendants to argue that she is not
- 35 -

entitled to the opportunity to prove that she was intended to be listed a party to the instruments
because she was not listed as a party to the instruments is question begging.
Resource also argues that, having acted only as a settlement agent, it was not a party to
the transaction at all. Resource is mistaken, in my view. In addition to acting as the settlement
agent, Resource was named as the trustee in the Deed of Trust and is therefore a party to that
instrument. “‘The parties to a deed of trust to secure [property] are the grantor (debtor), the
grantee (trustee), and the cestui que trust (creditor).’” Chicago Title Ins. Co. v. Mary B., 190
Md. App. 305, 314, 988 A.2d 1044, 1049 (quoting Richard M. Venable, THE LAW
PROPERTY AND LEASEHOLD ESTATES

IN

OF

REAL

MARYLAND at 253 (1892)), cert. granted, 415 Md. 38,

997 A.2d 789, cert. dismissed, 417 Md. 384, 10 A.3d 199 (2010).

Therefore, it is a necessary

party to plaintiff’s claims for reformation of the Deed of Trust.16
The Mariner Defendants level two additional arguments against plaintiff’s reformation
and rescission claims, but neither has merit. First, the Mariner Defendants argue that plaintiff
fails clearly to allege the original intention of the parties. See Mariner Motion at 27. It is hard to
fathom the basis for this assertion (on which the Mariner Defendants do not elaborate), given that
the complaint iterates many times the Wisemans’ intent to remain in the Residence for the rest of
16

As indicated, Resource is a necessary party to the reformation claims because it is a
party to the Deed of Trust. This is not inconsistent with the fact that plaintiff’s complaint fails to
state a claim that Resource is liable for fraudulent concealment. Although fraudulent
concealment is one of plaintiff’s asserted grounds for reformation, all of the parties to the
document she seeks to reform are necessary parties, even if they are not liable as fraudfeasors.
See, e.g., Albert v. Hamilton, 76 Md. 304, 310, 25 A. 341, 343 (1892) (“These complainants
were proper and necessary parties to [the] suit . . . , inasmuch as it sought the rescission of a deed
of which they were comakers . . . .”); Trupp v. Wolff, 24 Md. App. 588, 622, 335 A.2d 171, 191
(“‘All the parties to a contract are ordinarily indispensable parties to a bill in equity for . . . its
rescission and cancellation . . . . The recision [sic] of an agreement requires the presence of all
claiming property through such agreement.’”) (citation omitted), cert. denied, 275 Md. 757
(1975).
- 36 -

their lives, without the need for a mortgage payment, which Pastore allegedly told them was
possible with the reverse mortgage he brokered. The Mariner Defendants advert to the clear and
convincing standard of proof applicable to reformation claims, but the standard of proof,
although it will be relevant at the summary judgment stage or at trial, has no bearing at the
motion to dismiss stage, at which there is no evidence to evaluate. See, e.g., United Transp.
Union v. BNSF Ry. Co., 710 F.3d 915, 933 (9th Cir. 2013) (“Of course, the Union would have to
substantiate its allegations by clear and convincing evidence at the summary judgment phase, or
perhaps at a trial. Because we deal only with this case at the motion to dismiss stage, we need
conclude only that the Union’s allegations state a plausible claim upon which relief can be
granted.”).
Second, the Mariner Defendants argue that plaintiff fails to state a claim for rescission
because she has not averred that she returned the consideration or was unconditionally willing to
return the consideration, so as to satisfy the second element of a rescission claim, and has not
averred that she exercised the right to rescind promptly, so as to satisfy the third element. But,
the only instrument that plaintiff seeks to rescind is the Life Estate Deed, to which the Mariner
Defendants are not parties and for which they paid no consideration. Moreover, according to the
allegations of the complaint, as soon as MetLife declared default following Mr. Wiseman’s
death, Ms. Wiseman asserted her present position, which she has consistently maintained.
Therefore, I cannot conclude, on the basis of the pleadings, that plaintiff failed to exercise her
right to rescind promptly.

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E. Negligence
In Maryland, “to assert a claim in negligence, the plaintiff must prove: ‘(1) that the
defendant was under a duty to protect the plaintiff from injury, (2) that the defendant breached
that duty, (3) that the plaintiff suffered actual injury or loss, and (4) that the loss or injury
proximately resulted from the defendant’s breach of the duty.’” 100 Inv. Ltd. P’ship v. Columbia
Town Ctr. Title Co., 430 Md. 197, 212-13, 60 A.3d 1, 10 (2013) (quoting Lloyd v. Gen’l Motors
Corp., 397 Md. 108, 131-32, 916 A.2d 257, 270-71 (2007)) (emphasis omitted); accord Schultz
v. Bank of Am., N.A., 413 Md. 15, 27, 990 A.2d 1078, 1086 (2010) (“In a negligence case, there
are four elements that the plaintiff must prove to prevail: ‘a duty owed to him [or her] (or to a
class of which he [or she] is a part), a breach of that duty, a legally cognizable causal relationship
between the breach of duty and the harm suffered, and damages.’”) (quoting Jacques, supra, 307
Md. at 531, 515 A.2d at 758) (alterations in Schultz).
Plaintiff alleges that Pastore and First Mariner “owed a duty to the Wisemans to produce
or obtain a reverse mortgage that met their desire to be able to remain in their home until their
respective deaths free from the obligation to pay periodic mortgage installment payments.”
Amended Complaint ¶ 89.
As already discussed, under the economic loss rule, Maryland courts require the parties to
be in contractual privity or its equivalent in order to impose a duty in tort, where the risk of
injury involves only monetary loss. Resource argues that it cannot be liable for negligence
because it owed no duty to plaintiff, given that Ms. Wiseman and Resource were not in
contractual privity or its equivalent. For the same reason that Resource had no duty as a matter

- 38 -

of law to undertake affirmative disclosures, in the context of the fraudulent concealment tort,
Resource had no duty of care applicable here for purposes of a negligence claim.
The Mariner Defendants concede that that “[c]ontractual privity or its equivalent can be
assumed between [Ms. Wiseman] and the [Mariner] Defendants” because “Mr. Wiseman was in
privity with the [Mariner] Defendants as a party to the Note and [Deed of Trust], and Mr.
Wiseman and [Ms. Wiseman] were in privity as husband and wife, and in any event, [Ms.
Wiseman] executed the Life Estate Deed in connection with Mr. Wiseman entering into the Note
and [Deed of Trust].” Mariner Motion at 14. Nevertheless, the Mariner Defendants insist that
plaintiff fails to plead a breach of a duty owed to her and, moreover, fails to aver that the alleged
negligence caused actual injury or loss.
The Mariner Defendants’ claim regarding the duty element is predicated on a statement
in Yousef v. Trustbank Savings, F.S.B., 81 Md. App. 527, 568 A.2d 1134 (1990). There, in
discussing the economic loss rule, as derived from Jacques, the Maryland Court of Special
Appeals stated: “Where, as here, the alleged breach of duty creates a risk of economic loss only,
tort liability may be imposed based upon contractual privity or its equivalent. Before liability
may be imposed, however, there must have been a breach of the duty owed under the terms of
the contract.” Id. at 536, 568 A.2d at 1138 (citing Jacques, 307 Md. at 531, 515 A.2d 756)
(internal citations omitted) (emphasis added). Seizing on this language, the Mariner Defendants
argue that plaintiff has failed to plead “that Defendants have breached a duty owed under the
terms of a contract.” Mariner Motion at 15.
Yousef relied on Jacques for the proposition that, in a tort claim subject to the economic
loss rule, the duty applicable to the claim must be a duty owed under the terms of a contract.
- 39 -

But, Jacques does not state that proposition. To the contrary, the Jacques Court said: “The duty
with which we are here concerned is a duty imposed by law as a matter of sound policy, for the
violation of which a person may be held to respond in damages in tort.” Jacques, 307 Md. at
533, 515 A.2d at 759 (emphasis added). Further, the court said: “‘The mere negligent breach of
a contract, absent a duty or obligation imposed by law independent of that arising out of the
contract itself, is not enough to sustain an action sounding in tort.’” Id. at 534, 515 A.2d at 759
(emphasis added) (citation omitted).

The language from Yousef on which the Mariner

Defendants rely has been reiterated on only one other occasion, again by the Court of Special
Appeals. See Hrehorovich v. Harbor Hosp. Ctr., supra, 93 Md. App. at 798, 614 A.2d at 1034.
Subsequent case law from the Maryland Court of Appeals makes clear that the statement
in Yousef was an inaccurate statement of the law. See, e.g., Walpert, supra, 361 Md. at 682, 693,
762 A.2d at 602, 608 (recognizing tort liability of accountants “for negligence and negligent
misrepresentation to parties with whom they have no contractural [sic] relationship,” where
accountants are on notice of “the purpose for which [their] work product is to be used, who is
intended at the time of the engagement to use it for that purpose, and some connection with that
party that is the equivalent of privity, such as knowledge of that party’s reliance”) (emphasis
added) (internal citation omitted). Accordingly, it is unnecessary for plaintiff to allege a duty
imposed by the terms of a contract in order to assert a viable negligence claim against the
Mariner Defendants.
The Mariner Defendants also assert that plaintiff fails to allege any compensable injury,
an element of the negligence tort. Plaintiff counters that, among other things, Ms. Wiseman “has
suffered severe emotional distress and mental anguish to such an extent that she [is] fearful of
- 40 -

answering her phone or opening the front door without other family present.” Mariner Opp. at
15. As the Maryland Court of Appeals explained in Hoffman v. Stamper, 385 Md. 1, 32-38, 867
A.2d 276, 295-98 (2005), Maryland adheres, in both negligence cases and fraud cases, to the socalled “modern rule” articulated in Vance v. Vance, 286 Md. 490, 408 A.2d 728 (1979), which
permits “recovery of damages for emotional distress if there was at least a ‘consequential’
physical injury,” in the sense that “‘the injury for which recovery is sought is capable of
objective determination.’” Hoffman, 385 Md. at 34, 867 A.2d at 296 (quoting Vance). This
“physical” injury standard permits recovery for “such things as depression, inability to work or
perform routine household chores, loss of appetite, insomnia, nightmares, loss of weight,
extreme nervousness and irritability, withdrawal from socialization, fainting, chest pains,
headaches, and upset stomachs,” id. at 34–35, 867 A.2d at 296, but excludes recovery “based on
the plaintiff simply saying, ‘This made me feel bad; this upset me.’” Id. at 34, 867 A.2d at 296.
At the pleading stage, I cannot conclude, as a matter of law, that plaintiff has failed to
sufficiently allege damages.
F. Negligent Misrepresentation
The tort of negligent misrepresentation arises “when the defendant owes a duty of care in
communicating information to the plaintiff and that duty is breached, causing pecuniary or
personal injury to the plaintiff.” Griesi v. Atl. Gen. Hosp. Corp., 360 Md. 1, 11, 756 A.2d 548,
553 (2000). The tort consists of the following elements:
“(1) the defendant, owing a duty of care to the plaintiff, negligently asserts a false
statement;
(2) the defendant intends that his statement will be acted upon by the plaintiff;
(3) the defendant has knowledge that the plaintiff will probably rely on the
statement, which, if erroneous, will cause loss or injury;
- 41 -

(4) the plaintiff, justifiably, takes action in reliance on the statement; and
(5) the plaintiff suffers damage proximately caused by the defendant's
negligence.”
Lloyd, supra, 397 Md. at 136, 916 A.2d at 273 (citation and some internal quotation marks
omitted).
Resource argues that plaintiff has failed to allege that it made any misrepresentations to
plaintiff, or that it owed plaintiff a duty of care. For all of the reasons already expressed, I agree
with Resource and will dismiss the negligent misrepresentation claim against it.
The Mariner Defendants’ arguments against the negligent misrepresentation count are
also largely repetitive of arguments already addressed (i.e., that the Mariner Defendants made no
misrepresentations to plaintiff; that the Mariner Defendants had no contract-based duty to
plaintiff; that the Counseling Certificate negates justified reliance). I reject those arguments for
the reasons already discussed.
In addition, the Mariner Defendants contend that the complaint fails to plead sufficiently
that they intended for plaintiff to rely on their alleged misrepresentations, that they knew that
plaintiff was likely to rely on the misrepresentations, and that plaintiff’s damages were caused by
their misrepresentations. See Mariner Motion at 16-17. Knowledge and intent may be pleaded
in general terms. See Fed. R. Civ. P. 9(b). Moreover, knowledge, intent, and causation “‘can
rarely be established by direct evidence, and must often be proved circumstantially and by
inference.’” Laws v. Thompson, 78 Md. App. 665, 678, 554 A.2d 1264, 1271 (citation omitted),
cert. denied, 316 Md. 428, 559 A.2d 791 (1989). At the motion to dismiss stage, taking the facts
in the light most favorable to plaintiff, I am satisfied that plaintiff’s pleading of knowledge,
intent, and causation is sufficient to state a plausible claim.
- 42 -

G. Consumer Protection Act
Count 3 of the complaint, lodged only against the Mariner Defendants, asserts the
violation of the Maryland CPA. In a suit by a private litigant, the CPA authorizes the plaintiff to
“recover for injury or loss sustained by him as the result” of an unfair or deceptive trade practice.
C.L. § 13-408(a).
In C.L. § 13-303, the CPA prohibits engaging in an unfair or deceptive trade practice in
the following scenarios:
(1) The sale, lease, rental, loan, or bailment of any consumer goods, consumer
realty, or consumer services;
(2) The offer for sale, lease, rental, loan, or bailment of consumer goods,
consumer realty, or consumer services;
(3) The offer for sale of course credit or other educational services;
(4) The extension of consumer credit;
(5) The collection of consumer debts; or
(6) The purchase or offer for purchase of consumer goods or consumer realty
from a consumer by a merchant whose business includes paying off consumer
debt in connection with the purchase of any consumer goods or consumer realty
from a consumer.
Among other things, any of the following constitutes an unfair or deceptive trade practice
under the statute, C.L. § 13-301:
(1) [A f]alse, falsely disparaging, or misleading oral or written statement, visual
description, or other representation of any kind which has the capacity, tendency,
or effect of deceiving or misleading consumers;
(2) [A r]epresentation that . . . Consumer goods, consumer realty, or consumer
services have a sponsorship, approval, accessory, characteristic, ingredient, use,
benefit, or quantity which they do not have;
* * *
(3) Failure to state a material fact if the failure deceives or tends to deceive;
* * *
(9) Deception, fraud, false pretense, false premise, misrepresentation, or knowing
concealment, suppression, or omission of any material fact with the intent that a
- 43 -

consumer rely on the same in connection with . . . [t]he promotion or sale of any
consumer goods, consumer realty, or consumer service . . . .
The CPA also establishes that, by definition, the violation of several other enumerated Maryland
statutes constitutes unfair or deceptive trade practices proscribed by the CPA. See generally C.L.
§ 13-301(14) (enumerating incorporated statutes).
A “consumer” is defined under the CPA as “an actual or prospective purchaser, lessee, or
recipient of consumer goods, consumer services, consumer realty, or consumer credit.” C.L.
§ 13-101(c)(1). “‘Consumer credit’, ‘consumer debts’, ‘consumer goods’, ‘consumer realty’, and
‘consumer services’ mean, respectively, credit, debts or obligations, goods, real property, and
services which are primarily for personal, household, family, or agricultural purposes.” C.L.
§ 13-101(d).
In her complaint, plaintiff alleges that the Mariner Defendants engaged in virtually all of
the unfair or deceptive trade practices enumerated above. In particular, she asserts that the
Mariner Defendants “represented to the Wisemans that their reverse mortgage product has a
characteristic, use, or benefit . . . that it did not have, namely that Ruth Wiseman would not be
dispossessed of the Wiseman Residence during her lifetime,” Amended Complaint ¶ 63; that the
Mariner Defendants made a false or misleading statement “which deceived or tended to deceive,
namely that Ruth Wiseman would not be dispossessed of the Wiseman Residence during her
lifetime by executing the Life Estate Deed as an incident to the reverse mortgage transaction,” id.
¶ 64; and that the Mariner Defendants violated the CPA by violating the Maryland Reverse
Mortgage Act. Id. ¶ 66.
It is plain from the CPA’s statutory text that several of its provisions do not apply. As the
Mariner Defendants point out, the only qualifying conduct they engaged in was the “extension of
- 44 -

consumer credit,” under C.L. § 13-303(4). And, conduct with respect to consumer credit is
excluded from the text of several of the definitions of unfair or deceptive trade practices. See
C.L. § 13-301(2), (9). Moreover, as the Mariner Defendants point out, the Reverse Mortgage
Act is not one of the statutes enumerated in C.L. § 13-301(14), and so violation of the Reverse
Mortgage Act is not, ipso facto, a violation of the CPA.
Nevertheless, in the context of extension of consumer credit, several CPA provisions are
applicable, including the making of false or misleading representations that have the “capacity,
tendency, or effect of deceiving or misleading consumers,” C.L. § 13-301(1), and the “[f]ailure
to state a material fact if the failure deceives or tends to deceive.” C.L. § 13-301(3). Maryland
courts consider two components in analyzing whether a statement violates C.L. § 13-301(1). A
misrepresentation “falls within the scope of C.L. § 13-301(1) if it is ‘false’ or ‘misleading’ and it
has ‘the capacity, tendency, or effect of deceiving or misleading’ consumers.” McGraw v.
Loyola Ford, Inc., 124 Md. App. 560, 577, 723 A.2d 502, 510 (emphasis in original), cert.
denied, 353 Md. 473, 727 A.2d 382 (1999).
In Maryland, whether a statement is “misleading” is judged from the point of view of a
reasonable, but unsophisticated consumer. See Luskin’s, Inc. v. Consumer Protection Div., 353
Md. 335, 356-57, 726 A.2d 702, 712 (1999). In assessing the “capacity, tendency, or effect” of a
statement to deceive or mislead, courts consider whether “a significant number of
unsophisticated consumers would find [the] information [at issue] important in determining a
course of action.” Green v. H & R Block, Inc., 355 Md. 488, 524, 735 A.2d 1039, 1059 (1999).
Put another way, a court should ask whether the information is “‘important to consumers and,
hence, likely to affect their choice.’” Luskin’s, 353 Md. at 359, 726 A.2d at 713 (citation
- 45 -

omitted). In this respect, a statement “cannot be viewed in a vacuum”; rather, it must be viewed
in the context in which it was made, along with other representations to the consumer. McGraw,
124 Md. App. at 580, 723 A.2d at 511.
The Mariner Defendants argue that plaintiff’s complaint fails to state a claim for any
CPA violation because, they contend, Ms. Wiseman was not a “consumer,” within the meaning
of the statute. As the Mariner Defendants see it, they extended consumer credit only to Mr.
Wiseman. Because Ms. Wiseman did not sign the Note or Deed of Trust, they reason, she does
not come within the protection of the statute.
The Mariner Defendants’ argument overlooks that the definition of a “consumer” under
the CPA includes “an actual or prospective . . . recipient of . . . consumer credit.” C.L. § 13101(c)(1) (emphasis added). Although First Mariner ultimately executed the Note only with Mr.
Wiseman, the complaint clearly alleges that the Mariner Defendants dealt prospectively with the
Wisemans as a couple and offered to extend consumer credit to both of them, including obtaining
an application from the couple. Accordingly, Ms. Wiseman comes within the CPA’s definition
of a “consumer.”17
Plaintiff also contends that the Mariner Defendants conspired to violate the CPA. I agree
with the Mariner Defendants that the complaint fails to allege facts suggesting that the Mariner
Defendants conspired with any other entity (including Resource or MetLife) and that the
intracorporate conspiracy doctrine precludes as a matter of law any claim that First Mariner and
Pastore conspired with each other. See, e.g., Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342,

17

Because Ms. Wiseman was a “prospective . . . recipient of . . . consumer credit,” C.L.
§ 13-101(c)(1), I need not resolve whether she could also state a CPA claim even if the Mariner
Defendants had marketed the reverse mortgage only to Mr. Wiseman from the outset.
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352 (4th Cir. 2013) (“The intracorporate conspiracy doctrine recognizes that a corporation
cannot conspire with its agents because the agents’ acts are the corporation’s own.”).
The Mariner Defendants’ remaining arguments against liability under the CPA mirror
their arguments against plaintiff’s fraud claims: that the complaint fails to allege the materiality
of their alleged misrepresentations or omissions; that it fails to allege plaintiff’s reasonable
reliance on the misrepresentations or omissions; and that it fails to comport with the heightened
pleading requirements of Rule 9(b). I reject these arguments for the same reasons already
discussed.18
H. Fair Debt Collection Claims
In Count 9, plaintiff alleges violation of the FDCPA and MCDCA, i.e., federal and state
fair debt collection law. Both the FDCPA and MCDCA impose a variety of obligations and
potential liabilities on debt collectors. Count 9 names as defendants only Resource and MetLife.
However, as Resource points out, in the text of Count 9, plaintiff expressly disavows Resource’s
liability. The complaint states: “Plaintiff notes that as of the date of this filing Defendant
Resource has not taken any action in violation of the [MCDCA] or the FDCPA, but is named
herein in its capacity as ‘Trustee’ of the operative deeds of trust out of an abundance of caution,
and if/when injunctive relief is sought incident to foreclosure proceedings.”

Amended

Complaint ¶ 100. At the risk of stating the obvious, a cause of action that affirmatively states
18

In the Mariner Defendants’ argument against the materiality of the alleged
misrepresentations or omissions, one contention is noteworthy: they posit that the complaint fails
to allege that Ms. Wiseman made any “choice” in response to the misrepresentations and so
cannot demonstrate that the information was “‘important to [Ms. Wiseman] and, hence, likely to
affect [her] choice.’” Luskin’s, 353 Md. at 359, 726 A.2d at 713 (citation omitted). This
contention is puzzling. In my view, the complaint clearly alleges that the Wisemans made a
choice to enter into the reverse mortgage transaction, including Ms. Wiseman’s execution of the
Life Estate Deed, on the basis of Pastore’s representations.
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that the defendant has not violated the applicable statute fails to state a claim upon which relief
can be granted for violation of the statute. Accordingly, Count 9 will be dismissed as to
Resource.19
I. “Statutory Violations Generally”
In Count 10, titled “Statutory Violations Generally,” plaintiff asserts that all four
defendants violated three statutory provisions: the Maryland Reverse Mortgage Act, the federal
HECM statute (and its implementing regulations), and the federal Truth In Lending Act. She
seeks money damages for the alleged statutory violations. See Amended Complaint ¶ 113. In
her opposition to Resource’s motion, plaintiff “consents to the dismissal” of Count 10 against
Resource. Resource Opp. at 2. Accordingly, I need only consider Count 10 as against the
Mariner Defendants.
1. Reverse Mortgage Act
As the Mariner Defendants point out, and as plaintiff concedes, see Mariner Opp. at 16,
plaintiff fails to state a claim upon which relief can be granted under the Reverse Mortgage Act
because the statute had not yet been enacted when the Wisemans entered into the reverse
mortgage transaction at issue. As discussed, closing on the reverse mortgage took place on June
17, 2009. The Reverse Mortgage Act was enacted into Maryland law on May 20, 2010, as
Chapters 622 and 623 of the 2010 Maryland Laws. The Act came into effect on October 1,
2010, see 2010 Md. Laws ch. 622 § 3, ch. 626 § 3, and expressly provided: “[T]his Act shall be
construed prospectively to apply only to reverse mortgage loans applied for on or after the
19

Plaintiff suggests that it is proper to name Resource as an “Interested Party” to Count
9. Although Resource is a necessary interested party to Counts 4, 5, and 7, discussed supra,
seeking reformation and/or rescission, it is unclear what role Resource would play as an
interested party in a fair debt collection claim under the FDCPA or the MCDCA.
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effective date of this Act.” 2010 Md. Laws ch. 622 § 2, ch. 626 § 2. Accordingly, it has no
application here.
2. Home Equity Conversion Mortgage statute
The HECM statute, 12 U.S.C. § 1715z-20, and its implementing regulations, see 24
C.F.R. part 206, require and authorize HUD to regulate the offering of reverse mortgages. The
Mariner Defendants contend, however, that the statute does not authorize a private right of
action. Plaintiff concedes that she cannot pursue a private right of action under the HECM
statute. See Mariner Opp. at 16.20 Accordingly, her claims under that statute will be dismissed.
3. Truth In Lending Act
Section 1648 of 15 U.S.C., a provision of the TILA, also governs reverse mortgages.
Specifically, it requires the “creditor” under a reverse mortgage to “disclose to the consumer in
conspicuous type a good faith estimate of the projected total cost of the mortgage to the
consumer expressed as a table of annual interest rates,” no later than three days before closing.
15 U.S.C. § 1648(a). The disclosure must include, id.:
(1) statements of the annual interest rates for not less than 3 projected
appreciation rates and not less than 3 credit transaction periods, as determined by
the Bureau, including—
(A) a short-term reverse mortgage;
(B) a term equaling the actuarial life expectancy of the consumer; and
(C) such longer term as the Bureau deems appropriate; and
(2) a statement that the consumer is not obligated to complete the reverse
mortgage transaction merely because the consumer has received the disclosure
required under this section or has signed an application for the reverse mortgage.

20

Nevertheless, plaintiff maintains that the HECM statute “remains a vital backdrop to
the action generally.” Mariner Opp. at 16.
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The statute also lists several factors that the creditor must “take into account” in “determining the
projected total cost of the mortgage to be disclosed to the consumer.” Id. § 1648(b); see id.
§ 1648(b)(1)-(4) (enumerating factors).
The Mariner Defendants argue that the complaint fails to specify what statutorilyrequired disclosures they failed to provide or any other facts in support of the claim. Moreover,
they contend that any claim under the TILA is time-barred under 15 U.S.C. § 1640(e).
Section 1640 authorizes a civil action for damages against “any creditor who fails to
comply with any requirement imposed under” sections 1631–1651 and 1666–1667f (i.e., Parts
B, D, and E of the TILA), including § 1648. However, § 1640(e) provides, with exceptions not
relevant here, that an “action under this section may be brought in any United States district
court, or in any other court of competent jurisdiction, within one year from the date of the
occurrence of the violation . . . .” (Emphasis added.) Accordingly, because plaintiff filed suit
well over a year after the closing on the reverse mortgage, the Mariner Defendants reason that
the claim is barred by the statute of limitations.21
Plaintiff argues that case law interpreting TILA holds that its limitations period does not
begin to run until the plaintiff became “aware, or should have been aware” of the violation.
Pricer v. Deutsche Bank, 842 F. Supp. 2d 162, 166 (D.D.C. 2012). In her view, she was not
aware of the violations until MetLife began sending her debt acceleration notices after Mr.
Wiseman’s death in December 2011, and she filed suit within one year thereafter, in June 2012.

21

In addition to suits for money damages authorized by 15 U.S.C. § 1640, TILA
authorizes an obligor to rescind certain consumer credit transactions for TILA violations within
three years after the consummation of the transaction. See 15 U.S.C. § 1635. However, plaintiff
does not seek relief under this section. Accordingly, I need not consider its applicability.
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Unlike some statutes of limitations, TILA’s statute of limitations is not expressly based
on when a claim “accrues.” The concept of accrual is ordinarily thought to include a discovery
rule, by which accrual cannot occur until the plaintiff has (or should have) “possession of the
critical facts that he has been hurt and who has inflicted the injury.” United States v. Kubrick,
444 U.S. 111, 122 (1979) (discussing discovery rule in the context of the Federal Tort Claims
Act, which contains a statute of limitations requiring notice to the government “within two years
after such claim accrues”). However, as noted, TILA’s limitations provision begins running on
the “date of the occurrence of the violation.” 15 U.S.C. § 1640(e).
To be sure, the equitable doctrine of fraudulent concealment is “‘read into every federal
statute of limitation.’” GO Computer, Inc. v. Microsoft Corp., 508 F.3d 170, 177-78 (4th Cir.
2007) (quoting Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946)). Decisions in this district
have held that TILA’s limitations period can be equitably tolled on the basis of fraudulent
concealment. See, e.g., Kerby v. Mortg. Funding Corp., 992 F. Supp. 787, 797 (D. Md. 1998);
Davis v. Edgemere Fin. Co., 523 F. Supp. 1121, 1125 (D. Md. 1981); accord Elman v. JP
Morgan Chase Bank, NA, Civ. No. PJM-10-31, 2010 WL 2813351, at *2 (D. Md. July 13, 2010).
However, the doctrine of fraudulent concealment requires the plaintiff to establish three
elements: “‘that (1) the party pleading the statute [of limitations] fraudulently concealed facts
which are the basis of a claim, and that (2) the claimant failed to discover those facts within the
statutory period, despite (3) the exercise of due diligence.’” GO Computer, 508 F.3d at 178
(citation omitted).
As the late Judge Kaufman explained in Davis, 523 F. Supp. at 1126:
Application of the fraudulent concealment doctrine in the context of the
disclosure requirements of the TILA requires more than mere nondisclosure . . . .
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Otherwise, in a context in which nondisclosure is the gravamen of the violation,
then just about every failure by defendant to disclose as required by the TILA
would seemingly bring about tolling and would tend to eviscerate the limitations
provision set forth in § 1640(e) . . . .
There is no indication that the Mariner Defendants took any action to fraudulently
conceal their alleged failure to make disclosures required under the TILA. Accordingly, I
conclude that plaintiff’s TILA claim is time-barred.
Even if the claim were not time-barred, it fails on the merits. In response to the Mariner
Defendants’ contention that the complaint fails to allege what statutorily-required disclosures
they failed to make, plaintiff argues that the Mariner Defendants violated the TILA by
“represent[ing] to Ruth [Wiseman] that her participation in their recommended product would
allow her to live in her home” after Mr. Wiseman’s death. Mariner Opp. at 16. But, the TILA
does not impose a general anti-fraud regime on reverse mortgage transactions. Rather, § 1648
requires a specific disclosure: “a good faith estimate of the projected total cost of the mortgage to
the consumer,” calculated and presented on a specified basis. 15 U.S.C. § 1648(a). Plaintiff’s
complaint fails to allege that the Mariner Defendants did not provide the disclosure required by
the TILA, and so her TILA claim will be dismissed.
J. Aiding & Abetting
Count 11, the final count of plaintiff’s complaint, is asserted only against Resource. It
contends that Resource aided and abetted the torts of the Mariner Defendants, as principal
tortfeasors. According to plaintiff, Resource “acted with knowledge of the scheme to damage
Plaintiff, or should have known of the potential harm to Plaintiff.” Amended Complaint ¶ 116.
She elaborates: “By way of Resource’s preparation of the transactional documents, disbursement
of funds, and conduct of the settlement of the transaction in the Wiseman Residence such as to
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accommodate the immobility of the then visibl[y] ailing John Wiseman, Resource was keenly
aware that Ruth Wiseman’s removal from title could expose her to the risk of the loss of her
home.” Id. ¶ 117.
Both plaintiff and Resource look to Saadeh v. Saadeh, 150 Md. App. 305, 819 A.2d
1158, cert. denied, 376 Md. 52, 827 A.2d 114 (2003), for the elements of civil liability for aiding
and abetting in Maryland. In Saadeh, the Maryland Court of Special Appeals stated, id. at 325,
327-28, 819 A.2d at 1170, 1171:
Maryland recognizes that one may be held civilly liable in tort as an aider
and abettor to a tort committed by another.
* * *
[W]hile proof of criminal aiding and abetting requires a heightened showing that
the aider and abettor had the purpose to accomplish the underlying criminal act,
proof of tortious aiding and abetting requires a lesser showing that the aider and
abettor engaged in conduct knowing that the criminal (or tortious) act would be
the natural consequence of his conduct. . . . [A]ider and abettor tort liability is
predicated upon the wrongdoer’s engaging in acts of encouragement or assistance
to the person actually committing the wrongful act. To be liable in tort, the aider
or abettor must have engaged in assistive conduct that he would know would
contribute to the happening of that act.
Resource contends that plaintiff’s allegations as to its knowledge are “completely
conclusory.” Resource Motion at 30. In its view, the fact that Resource knew that Mr. Wiseman
was elderly, “ailing,” and “immobile” does not mean that Resource knew or should have known
of a scheme to damage Ms. Wiseman or the possibility that she would be harmed. Id. Resource
notes that “homeowners in reverse mortgage transactions are inevitably elderly, given the
statutory requirements for such loans,” and poor health is “not an uncommon circumstance
among the elderly population of homeowners that qualifies for reverse mortgages.” Id. at 30 n.5.
I agree with Resource that, without more, the complaint does not assert a claim on which
relief can be granted for aider and abettor liability. Assuming the truth of plaintiff’s claims of
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fraudulent inducement against the Mariner Defendants, there is no factual allegation in the
complaint to suggest that Resource was aware of the Mariner Defendants’ alleged
misrepresentations. As Resource forcefully points out, Resource Reply at 20:
There are no allegations in the [complaint] that Defendant Pastore told Resource
of any pre-settlement representations regarding the transaction he may have made
to Plaintiff. There are no allegations in the [complaint] that Resource had
knowledge from any other source regarding Defendant Pastore’s alleged
presettlement misrepresentations to Plaintiff. There are no allegations in the
[complaint] that Plaintiff had any communications or interactions with Resource
prior to settlement, much less that Plaintiff ha[d] any pre-settlement
communications with Resource through which Plaintiff made Resource aware of
her supposed subjective “understanding.” Likewise, there are no allegations in
the [complaint] regarding substantive communications by Plaintiff to Resource’s
representative at the settlement, much less allegations that Plaintiff told
Resource’s representative about her “understanding” or that Plaintiff told
Resource’s representative anything regarding her future “intentions” in terms of
living in the home if her husband died before her. (Emphasis and internal
citations omitted.)
In the absence of express allegations that Resource had knowledge of either Ms.
Wiseman’s expectation of residing in the home after Mr. Wiseman’s death or First Mariner’s
representation that her expectation would be met, plaintiff is left with the contention that
Resource should have known of the Mariner Defendants’ alleged tort simply from the terms of
the transaction and Mr. Wiseman’s evident age and physical frailty. If aider and abettor liability
could be imposed on such a flimsy basis, it would result in an end run around the analysis of
whether Resource owed Ms. Wiseman a duty in tort directly under the parameters of Jacques and
Iglesias—even though the same factual scenario is insufficient to generate a duty in tort as a
principal, it would be sufficient to impose a duty to intuit from the circumstances the tortious
conduct of others. Iglesias negates that proposition. Accordingly, I will dismiss Count 11.

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Conclusion
For the foregoing reasons, I will grant both motions in part and deny them in part. In
particular, all substantive claims against Resource will be dismissed, but Resource remains a
necessary party to Counts 4, 5, and 7, seeking reformation and/or rescission. Count 1 will be
dismissed, without prejudice; plaintiff is granted leave to file a second amended complaint
alleging a violation of the Maryland Mortgage Fraud Prevention Act. Counts 2, 4, 5, 6, 7, and 8
will not be dismissed as against the Mariner Defendants. Count 3 also will not be dismissed as
against the Mariner Defendants, to the extent that Count 3 asserts violations of the CPA
occurring in the “extension of consumer credit.” Count 10 will be dismissed as against the
Mariner Defendants.
An Order implementing my rulings follows.

Date: September 23, 2013

/s/
Ellen Lipton Hollander
United States District Judge

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