Dorsey et al v. Clarke et al
Filing
28
MEMORANDUM OPINION. Signed by Judge William M Nickerson on 8/10/2016. (c/m)(hmls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
LARRY N. DORSEY et al.
*
*
*
v.
* Civil Action No. WMN-15-3506
*
JAMES E. CLARKE et al.
*
*
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MEMORANDUM
Before the Court are Motions to Dismiss filed by Defendants
James E. Clarke, Renee Dyson, Erin M. Cohen, Hugh J. Green,
Patrick M. A. Decker, and Brian Thomas (collectively, the
“Substitute Trustees”), ECF No. 16; and by Defendants Select
Portfolio Servicing, Inc.1 (Select Portfolio) and U.S. Bank,
National Association, as Trustee, Successor in Interest to Bank
of America, National Association, as Trustee, Successor by
Merger to LaSalle Bank National Association as Trustee for Bear
Stearns Asset Backed Securities I Trust 2005-AQ2 Asset-Backed
Certificates, Series 2005-AQ, (U.S. Bank).
ECF No. 18.2
Upon a
1
This Defendant was incorrectly named in the Amended Complaint
as “Select Portfolio Services, Inc.”
2
After those motions were fully briefed, but before the Court
issued an order resolving them, Plaintiffs filed a “Request for
Leave to Amend under Rule 60.” ECF No. 24. Rule 60 of the
Federal Rules of Civil Procedure provides relief from a judgment
or order and, as there has been no such judgment or order, the
rule is inapplicable. To the extent Plaintiffs are seeking
leave to amend their Amended Complaint, that request will be
review of the pleadings and the applicable case law, the Court
determines that no hearing is necessary, Local Rule 105.6, and
that the Motions to Dismiss should be granted.
This action arises out of a foreclosure proceeding brought
by the Substitute Trustees in the Circuit Court for Carroll
County, Maryland, that is related to real property owned by
Plaintiffs in Reisterstown, Maryland.
James E. Clarke, et al.
v. Larry N. Dorsey et al., No. 06C15069451.
This foreclosure
action was filed on or about August 7, 2015.
On November 2,
2015, Plaintiffs filed a motion in the state court to stay the
foreclosure, arguing that the Substitute Trustees “usurped the
trusteeship of the trustee named in the trust deed under which
they each seek to foreclose.”
ECF No. 16-2 at 1.
Substitute Trustees’ Mot., Ex. B,
The gravamen of that motion was that the
Substitute Trustees had no right to foreclose on the subject
property.
The Substitute Trustees opposed that motion and on
December 14, 2015, the Circuit Court for Carroll County issued
an order denying Plaintiffs’ motion to stay.
ECF No. 16-4.
While their motion to stay was still pending in the state
court, Plaintiffs filed a 77-page Complaint in this Court on
November 18, 2015.
On November 24, 2015, the Court dismissed
that Complaint, explaining that, despite its length, the nature
denied in that, for the reasons stated below, amendment would be
futile.
2
of Plaintiffs’ cause of action could not be easily discerned.
ECF No. 3 at 2.
The Court posited that it appeared Plaintiffs
might be claiming that the entities involved in the foreclosure
violated the federal Fair Debt Collection Practices Act (FDCPA).
The Court also noted, however, that because the allegations
arose out of a pending state foreclosure proceeding, “[t]o the
extent the claims advanced in the instant case are matters
appropriately raised in the pending state litigation, Plaintiffs
must raise them in that context.”
Id. at 3.
Nonetheless, Plaintiffs filed a motion to amend the
Complaint and reinstate their action in this Court.
ECF No. 4.
While the pleading that they attached as their Amended Complaint
was essentially the same as their original Complaint, the Court
granted Plaintiffs’ motion and permitted the amendment, opining
that after shifting through all the superfluous language, there
was sufficient clarity to provide Defendants fair notice of the
claims against them.
ECF No. 5 at 1.
The Court also opined
that Plaintiffs’ assertion of claims under the FDCPA “could
potentially provide this Court with jurisdiction over this
action.”
Id. at 2.
The Amended Complaint contains 15 counts asserting 5
purported causes of action separately against the Substitute
Trustees, Select Portfolio, and U.S. Bank:
Counts I-III, Violations of the FDCPA;
3
Counts IV-VI, “Identity Theft;”
Counts VIII-X,3 “Breach of Contract and Liquidated
Damages;”
Counts XI-XIII, Violations of the “Maryland Fair Debt
Collection Practices Act;”4
Counts XIV-XVI, Violations of the Maryland Consumer
Protection Act.
Defendants have moved to dismiss the Amended Complaint, noting
how the factual allegations fail to support any of the causes of
action asserted.
More broadly, however, the Substitute Trustees
argue that, because the instant claims are premised on the same
argument raised in the foreclosure action and rejected by the
Circuit Court, Plaintiffs’ claims here are barred by res
judicata or collateral estoppel.
In a somewhat related
argument, Select Portfolio and U.S. Bank argue that, under the
Younger5 abstention doctrine, this Court should abstain from
exercising jurisdiction over this action so as not to interfere
with the pending state foreclosure action.
3
Now that the Court
The Counts are mis-numbered and there is no Count VII.
4
As Defendants observe, there is no “Maryland Fair Debt
Collection Practices Act.” In these Counts, Plaintiffs
reference Ҥ 7-102(b) of the Maryland Fair Debt Collection
Practices Act.” Section 7-102(b) of the Business Regulation
provisions of the Maryland Code is part of the Maryland
Collection Agency Licensing Act, which prohibits conducting
business as a collection agency without a license. Plaintiffs
make no allegation that Defendants are collecting debts without
a license.
5
Younger v. Harris, 401 U.S. 37 (1971).
4
is more fully informed of the nature of the foreclosure action
and the issues raised therein, the Court finds that the
doctrines of both collateral estoppel and Younger abstention are
applicable here.6
Under collateral estoppel, once a court has decided an issue
of fact or law necessary to its judgment, that decision may
preclude re-litigation of the issue in a suit on a different cause
of action involving a party to the first case.
States, 440 U.S. 147, 153 (1979).
Montana v. United
Plaintiffs’ claims here are all
premised on the same argument rejected by the Circuit Court when it
denied their motion to stay the foreclosure action.
Plaintiffs
continue to allege, however, that “[t]he defendant7 has
misrepresented itself and deceived the plaintiffs into believing
that it had some rights to collect a debt against the
plaintiffs.”
Am. Compl. at 2; see also, id. at 18 (“The
defendant has obtained the plaintiffs’ banking, financial,
personal, credit and private identifying information by threats
and deception and has used that information to make it appear as
6
While Plaintiffs filed an opposition to Defendants’ motions,
ECF No. 20, they address neither of these arguments.
Significant portions of the opposition, in fact, appear to have
been simply copied and pasted from a pleading from some other
unrelated action. See, e.g., id. at 7 (referring to some entity
named “Northwest” as the foreclosure trustee).
7
For reasons that are unclear, Plaintiffs refer throughout the
Amended Complaint to Defendants in the singular, without
specifying which Defendants they are associating with any
particular factual allegation.
5
if the defendant had some legal rights or interest in the
plaintiffs’ property.”).
In permitting the foreclosure action
to go forward, the Circuit Court necessarily rejected that same
argument and found that the Substitute Trustees had the right to
commence foreclosure proceedings on the subject property.
Were Plaintiffs’ claims not barred by collateral estoppel,
the Court would, nonetheless, abstain from deciding Plaintiffs’
claims pursuant to Younger and its progeny.
Abstention under
Younger arises out of “the strong policy against federal court
interference with any pending state judicial proceeding unless
extraordinary circumstances so warrant.”
43, 45.
Younger, 401 U.S. at
For a federal district court to abstain under this
doctrine, the following factors must be satisfied: “(1) there
are ongoing state judicial proceedings; (2) the proceedings
implicate important state interests; and (3) there is an
adequate opportunity to raise federal claims in the state
proceedings.”
Martin Marietta Corp. v. Maryland Comm’n on Human
Relations, 38 F.3d 1392, 1396 (4th Cir. 1994).
Here, the foreclosure proceeding in the Carroll County
Circuit Court is an ongoing judicial proceeding;8 Maryland has a
8
On or about June 1, 2016, the foreclosure case was closed. In
response to an inquiry from this Court as to the status of that
case, the Substitute Trustees stated that the case was closed
“through inadvertence and error.” ECF No. 27 at 1. The
Substitute Trustees filed a motion to reopen the foreclosure
case which was granted on July 28, 2016. See http://casesearch.
6
substantial interest in its property law; and Plaintiffs can
certainly raise their FDCPA claim in the foreclosure proceeding.
As Defendants note, this Court has frequently applied Younger
abstention where there are ongoing foreclosure proceedings in
the state court.
See, e.g., Barilone v. OneWest Bank, FSB,
Civil Action No. ELH–13–00752, 2013 WL 6909423, at *5 (D. Md.
Dec. 31, 2013) (dismissing plaintiff’s claims under Younger
where there was a pending foreclosure action in state court);
Graves v. One West Bank, FSB, No. DKC–13–3343, 2014 WL 994366,
at *2 (D. Md. Mar. 13, 2014) (denying motion for reconsideration
because Younger abstention doctrine mandated dismissal due to
pending foreclosure action in state court and noting that the
plaintiffs could raise their FDCPA claim in the foreclosure
proceeding); Fiallo v. PNC Bank, Nat’l Ass’n, No. PWG–14–1857,
2014 WL 6983690, at *2–3 (D. Md. Dec. 9, 2014) (discussing
Younger doctrine as alternative grounds for dismissal).
As
noted above, Plaintiffs have offered no argument in their
Opposition as to why this Court should not abstain under
Younger.
For these reasons, the Court will grant Defendants’ Motions
courts.state.md.us/casesearch/inquiryDetail.jis?caseId=06C150694
51&loc=61&detailLoc=CC.
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to Dismiss.
A separate order will issue.
____________/s/___________________
William M. Nickerson
Senior United States District Judge
DATED: August 10, 2016
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