Strickland-Lucas et al v. Citibank, N.A.
MEMORANDUM OPINION of June 8, 2017 with technical corrections for publication by West. Signed by Judge Ellen L. Hollander on 6/8/2017. (dass, Deputy Clerk) (c/m 7/6/17-das)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
JOWANDA STRICKLAND-LUCAS, et.
Civil Action No. ELH-16-0805
CITIBANK, N.A. DOING BUSINESS AS
CWABS, INC., ASSET-BACKED
CERTIFICATES, SERIES 2007-QH2,
JoWanda and James Strickland-Lucas, the self-represented plaintiffs, filed suit on March
18, 2016, against Citibank, N.A., “DBA CWABS, Inc., Asset-Backed Certificates, Series 2007QH2” (“Citibank”). Several exhibits are appended to the suit. The litigation is rooted in a
foreclosure action pending in the Circuit Court for Harford County as to plaintiffs‟ property. In
this case, plaintiffs allege violations of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1635 &
1640, in connection with a 2007 loan that they obtained to finance the purchase of their property.
ECF 1.1 According to plaintiffs, they were not provided with the requisite disclosures during the
Plaintiffs sued Citibank, N.A. d/b/a CWABS, Inc. Asset-Backed Certificates, Series
2007-QH2. However, Citibank asserts that it “has never done business as „CWABS, Inc. AssetBacked Certificates, Series 2007-QH2‟. The underlying Deed of Trust at issue in this case was
assigned to Citibank, NA. [sic] as trustee for the Certificateholders of CWABS, Inc. AssetBacked Certificates, Series 2007-QH2. Accordingly, Citibank, N.A. assumes that Plaintiffs
intended to name it in its capacity as trustee, and Citibank, N.A. responds accordingly.” ECF 161 at 1 n. 1.
origination of the loan, and they properly rescinded their obligations under the loan in 2015.
On June 23, 2016, a summons return was executed evidencing service on defendant on
June 21, 2016, via Corporation Trust, Inc. ECF 9. Because the defendant did not respond to the
Complaint, the Court entered an Order on September 6, 2016 (ECF 10), setting a deadline for
plaintiffs to move for entry of default or show cause why such action was not appropriate. In
response, on September 12, 2016, plaintiffs filed a Motion for Clerk‟s Entry of Default as to
Citibank, pursuant to Fed. R. Civ. P. 55(a). ECF 11. The Clerk entered an order of default as to
the defendant on September 14, 2016. ECF 12.
Citibank filed a motion to set aside entry of default on October 28, 2016. ECF 16; ECF
16-1. Plaintiffs opposed the motion (ECF 17) and Citibank replied. ECF 18. Pursuant to a
Memorandum (ECF 19) and Order (ECF 20) of November 29, 2016, I granted Citibank‟s motion
and directed Citibank to respond to the Complaint within fourteen days.
Thereafter, Citibank filed a motion to dismiss (ECF 21) pursuant to Fed. R. Civ. P. 8(a)
and 12(b)(6), supported by a memorandum of law (ECF 21-1) (collectively, “Motion”), and two
exhibits. ECF 21-2; ECF 21-3. Plaintiffs oppose the Motion (ECF 24, “Opposition”), supported
by an exhibit. ECF 24-1. Citibank has replied. ECF 25, “Reply.”
No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons
that follow, I shall grant the Motion.
On March 2, 2007, plaintiffs executed a Deed of Trust to secure payment of a promissory
note payable to Quality Home Loans in connection with a loan to plaintiffs in the amount of
$161,000.00 (the “Loan”). ECF 1 at 2; ECF 21-2 (Deed of Trust, recorded on April 10, 2007, in
the land records for Harford County, Maryland at Liber 07296, Folio 595).3 The Loan was
secured by the property located on Old Stepney Road in Aberdeen, MD (the “Property”). Id.4
Quality Home Loans, the original lender, is not a party to this case. Notably, Citibank
was not involved in the origination of the Loan. However, on August 26, 2011, four years after
the Loan transaction, the Deed of Trust was assigned to Citibank, as Trustee for the
Certificateholders of CWABS, Inc. Asset-Backed Certificates, Series 2007-QH2, on August 26,
2011. ECF 21-3 (Assignment to Citibank, recorded on September 6, 2011, in the land records
for Harford County, Maryland at Liber 09310, Folio 364.)
Unless otherwise noted, the facts are derived from the Complaint. Based on the
procedural posture of the case, I must assume the truth of any well-pleaded factual allegations.
See E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011). In
addition, because plaintiffs are self-represented, their pleadings must be “„liberally construed‟”
and “„held to less stringent standards than formal pleadings drafted by lawyers.‟” Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (citation omitted).
As discussed, infra, in the context of a motion to dismiss, “a court may properly take
judicial notice of „matters of public record‟ and other information that, under Federal Rule of
Evidence 201, constitute „adjudicative facts.‟” Goldfarb v. Mayor & City Council of Baltimore,
791 F.3d 500, 508 (4th Cir. 2015). In addition, “[a] court may take judicial notice of docket
entries, pleadings and papers in other cases without converting a motion to dismiss into a motion
for summary judgment.” Brown v. Ocwen Loan Servicing, LLC, PJM-14-3454, 2015 WL
5008763, at *1 n.3 (D. Md. Aug. 20, 2015), aff'd, 639 Fed. App‟x. 200 (4th Cir. 2016). Cf.
Anderson v. Fed. Deposit Ins. Corp., 918 F.2d 1139, 1141 n. 1 (4th Cir. 1990) (holding that a
district court may “properly take judicial notice of its own records”).
The Deed of Trust reflects that the “Borrower” also executed a promissory note dated
March 2, 2007, in the amount of $161,000. ECF 21-2 at 2-3. In addition, on the same date,
plaintiffs executed an “Adjustable Rate Rider.” Id. at 18-22.
On August 12, 2014, a foreclosure action was initiated against the Property in the Circuit
Court for Harford County, Case No. 12C14002475, Richard A Lash, et al. v. Jowanda
StricklandLucas, et al. (the “Foreclosure Case”). See Maryland Judiciary Case Search Criteria,
http://casesearch.courts.state.md.us/casesearch//process Disclaimer.jis (searching by court and
case number) (last visited May 26, 2017); see also Foreclosure Case Docket, ECF 16-2. By
Order of November 4, 2016, in the Foreclosure Case, the Strickland-Lucas‟s motion to dismiss
and stay the Foreclosure Case was denied. Foreclosure Case, Case No. 12C14002475, Doc. No.
45. Then, on December 6, 2016, the Strickland-Lucases noted an appeal to the Maryland Court
of Special Appeals. Foreclosure Case, Case No. 12C14002475, Doc. No. 48. As of this date, that
appeal remains pending.
On March 18, 2016, approximately nine years after plaintiffs obtained the Loan at issue
in this case, plaintiffs filed suit in this Court. They allege: “The creditor failed to provide the
plaintiffs with the appropriate form of written notice published and adopted under [TILA] . . .
and a comparable written notice of the rights of the plaintiff [sic]. . . .” ECF 1 at 2. Further,
plaintiffs allege that on or about October 24, 2015, they sent a “notice to rescind” to Citibank
with respect to the Deed of Trust and Note, but Citibank failed to respond or “re-establish” the
Loan following rescission. Id. at 3; see also ECF 1-1 (“Notice to Rescind Deed of Trust and
Note”, dated October 21, 2015).5 Accordingly, plaintiffs conclude that the Deed of Trust and
Note are void and unenforceable. ECF 1 at 3. Nevertheless, they complain that the “defendant
Citibank asserts: “[I]n an apparent attempt to avoid the lawful foreclosure on the
property, Plaintiff JoWanda Strickland-Lucas also filed for bankruptcy on October 5, 2015 (prior
to sending the purported rescission) (Case No. 1:15-bk-23811) and on February 1, 2016 (l:16-bk11067). Both of these bankruptcies were dismissed for failure to file information.” ECF 21-1 at
2-3, n. 4.
continued to act as if the note and trust deed were enforceable and subsequently foreclosure
continued upon the plaintiff‟s [sic] property.” Id.
On the basis of these facts, plaintiffs assert that the parties to this case “were parties to a
consumer credit transaction that existed or was consummated on or after September 30, 1995.”
ECF 1 at 2. Further, they assert that defendant is a creditor within the meaning of 15 U.S.C. §§
1601 and 1635 et seq. Id. And, plaintiffs seek $314,200.00 in damages. Id. at 4.
Standard of Review
A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss
under Rule 12(b)(6). Goines v. Valley Cmty, Servs, Bd., 822 F.3d 159, 165-66 (4th Cir. 2016);
McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. McBurney v. Young,
___ U.S. ____, 133 S. Ct. 1709 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th
Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts
alleged by a plaintiff are true, the complaint fails as a matter of law “to state a claim upon which
relief can be granted.”
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 defendants with “fair notice” of the claims and the “grounds” for
entitlement to relief. Bell Atl., Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).
To survive a motion under Fed. R. Civ. P. 12(b)(6), 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
Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in Twombly expounded the pleading
standard for „all civil actions‟ . . . .” (citation omitted)); see also Simmons v. United Mortg. &
Loan Inv., LLC, 634 F.3d 754, 768 (4th Cir. 2011). But, a plaintiff need not include “detailed
factual allegations” in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover,
federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of
the legal theory supporting the claim asserted.” Johnson v. City of Shelby, ___ U.S. ____, 135 S.
Ct. 346, 346 (2014) (per curiam).
Nevertheless, the rule demands more than bald accusations or mere speculation.
Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir.
2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation
of the elements of a cause of action,” it is insufficient. Twombly, 550 U.S. at 555. Rather, 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.” Id. at 556 (internal
In reviewing a Rule 12(b)(6) 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); see Semenova v. Maryland Transit Admin., 845 F.3d
564, 567 (4th Cir. 2017); Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697, 705 (4th Cir.
2016); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v.
Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But, a court is
not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S.
265, 286 (1986). “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 sought. A Society Without a Name v. Virginia, 655 F.3d 342, 346
(4th. Cir. 2011), cert. denied, ___ U.S. ____, 132 S. Ct. 1960 (2012).
In general, courts do not “resolve contests surrounding the facts, the merits of a claim, or
the applicability of defenses” through a Rule 12(b)(6) motion. Edwards v. City of Goldsboro,
178 F.3d 231, 243 (4th Cir. 1999). The purpose of the rule is to ensure that defendants are
“given adequate notice of the nature of a claim” made against them. Twombly, 550 U.S. at 555–
But, “in the relatively rare circumstances where facts sufficient to rule on an
affirmative defense are alleged in the complaint, the defense may be reached by a motion to
dismiss filed under Rule 12(b)(6).” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007)
(en banc); accord Pressley v. Tupperware Long Term Disability Plan, 533 F.3d 334, 336 (4th
Cir. 2009); see also U.S. ex rel. Oberg v. Penn. Higher Educ. Assistance Agency, 745 F.3d 131,
148 (4th Cir. 2014). However, because Rule 12(b)(6) “is intended [only] to test the legal
adequacy of the complaint,” Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d
244, 250 (4th Cir. 1993), “[t]his principle only applies . . . if all facts necessary to the affirmative
defense „clearly appear[ ] on the face of the complaint.‟” Goodman, 494 F.3d at 464 (quoting
Forst, 4 F.3d at 250) (emphasis added in Goodman ).
Under limited exceptions, a court may consider documents beyond the complaint without
converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City
Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015). A court may properly consider
documents that are “explicitly incorporated into the complaint by reference and those attached to
the complaint as exhibits....” Goines, 822 F.3d at 166 (citations omitted); see U.S. ex rel. Oberg,
745 F.3d at 136 (quoting Philips v. Pitt Cty Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009));
Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic
Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979
(2004); Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999).
A court may also “consider a document submitted by the movant that was not attached to
or expressly incorporated in a complaint, so long as the document was integral to the complaint
and there is no dispute about the document's authenticity.” Goines, 822 F.3d at 166 (citations
omitted); see also Int'l Longshoreman's Ass'n., Local 333 v. Int'l Longshoremen's Ass'n., AFLCIO, __Fed. Appx.__, 2017 WL 1628979 (4th Cir. May 2, 2017) (per curiam); Kensington
Volunteer Fire Dep't. v. Montgomery Cnty., 684 F.3d 462, 467 (4th Cir. 2012). 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).
However, “before treating the contents of an attached or incorporated document as true,
the district court should consider the nature of the document and why the plaintiff attached it.”
Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d
449, 455 (7th Cir. 1998)). “When the plaintiff attaches or incorporates a document upon which
his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the
contents of the document, crediting the document over conflicting allegations in the complaint is
proper.” Goines, 822 F.3d at 167. Conversely, “where the plaintiff attaches or incorporates a
document for purposes other than the truthfulness of the document, it is inappropriate to treat the
contents of that document as true.” Id.
The exhibits plaintiffs attached to their Complaint relate to when they gave notice of
rescission to Citibank. ECF 1-1 to ECF 1-3. Under the principles articulated above, I may
consider these exhibits.
In addition, “a court may properly take judicial notice of „matters of public record‟ and
other information that, under Federal Rule of Evidence 201, constitute „adjudicative facts.‟”
Goldfarb, 791 F.3d at 508; see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308,
322 (2007); Katyle v. Penn Nat'l Gaming, Inc., 637 F.3d 462, 466 (4th Cir. 2011), cert. denied,
565 U.S. 825 (2011); Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
Pursuant to Fed. R. Evid. 201, a court may take judicial notice of adjudicative facts if they are
“not subject to reasonable dispute,” in that they are “(1) generally known within the territorial
jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to
sources whose accuracy cannot reasonably be questioned.”
The exhibits that Citibank attached to its Motion are publicly recorded documents related
to the Loan, and are integral to the allegations in the Complaint. ECF 21-2 (Deed of Trust); ECF
21-3 (Assignment to Citibank). Indeed, plaintiffs refer to the documents. Under the principles
articulated above, I may consider these exhibits.
Moreover, in the context of a motion to dismiss, “[a] court may take judicial notice of
docket entries, pleadings and papers in other cases without converting a motion to dismiss into a
motion for summary judgment.” Brown v. Ocwen Loan Servicing, LLC, PJM-14-3454, 2015 WL
5008763, at *1 n.3 (D. Md. Aug. 20, 2015), aff'd, 639 Fed. Appx. 200 (4th Cir. 2016). Cf.
Anderson v. Fed. Deposit Ins. Corp., 918 F.2d 1139, 1141 n. 1 (4th Cir. 1990) (holding that a
district court may “properly take judicial notice of its own records”). However, “these facts
[must be] construed in the light most favorable” to the non-movant. Clatterbuck v. City of
Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013) (abrogated on other grounds by Reed v. Town
of Gilbert, Ariz., ___ U.S. ____, 135 S. Ct. 2218 (2015), as recognized in Cahaly v. Larosa, 796
F. 3d 399 (4th Cir. 2015)).
Citibank contends that from the “timing of this Complaint” it “is clear” “that this action is
a last-ditch attempt to thwart the lawful foreclosure of the subject property, currently pending in
the Circuit Court of Harford County, Maryland[.]” ECF 21-1 at 1-2. Citibank argues, id. at 2:
“Given the pending Foreclosure Case, this Court should dismiss this matter pursuant to the
Younger [v. Harris, 401 U.S. 37 (1971)] Doctrine. However, even if this Court decides to hear
this case, it should still be dismissed because Plaintiffs‟ TILA claims are time-barred.”
In their Opposition (ECF 24), plaintiffs argue, inter alia, that equitable tolling applies
here because “the defendant has deceptively concealed and mislead [sic] the plaintiff[s] into
believing that [Ms. Strickland-Lucas] had no remedies other than to simply believe that the
defendant had the rights to foreclose against her home, even without having any legal interests
under the trust deed.” Id. at 2-3.
Plaintiffs did not respond to Citibank‟s Younger abstention
A. Younger Abstention
The Fourth Circuit has said that the Younger abstention doctrine “requires a federal court
to abstain from interfering in state proceedings, even if jurisdiction exists,” if there is: “(1) an
ongoing state judicial proceeding, instituted prior to any substantial progress in the federal
proceeding; that (2) implicates important, substantial, or vital state interests; and (3) provides an
adequate opportunity for the plaintiff to raise the federal constitutional claim advanced in the
federal lawsuit.” Laurel Sand & Gravel, Inc. v. Wilson, 519 F.3d 156, 165 (4th Cir. 2008).
Citibank argues this case meets all three Younger factors. ECF 21-1 at 5. As to the first
element, Citibank explains, id.:
[I]t is undisputed that the Foreclosure Case is an ongoing state judicial
proceeding. The sale of the property has not occurred or been ratified. Plaintiffs‟
Complaint explicitly asserts that they rescinded the Loan, and that the Deed of
Trust and note are void, while the Foreclosure Case seeks to enforce the same
Deed of Trust and Note. (Doc. No. 1, p. 3.) In other words, this is a blatant request
for this Court to interfere in the state court proceeding.
As to the second element, Citibank notes that Maryland „has a “substantial interest in its
property law.‟” ECF 21-1 at 5 (quoting Fiallo v. PNC Bank, N.A., No. PWG-14-1857, 2014 WL
6983690, at *3 (D. Md. Dec. 9, 2014)). And, Citibank notes, ECF 21-1 at 5, that the Fourth
Circuit has said that “property law concerns, such as land use and zoning questions, are
frequently „important‟ state interests justifying Younger abstention.” See Harper v. Pub. Serv.
Comm'n of W. Va., 396 F.3d 348, 352 (4th Cir. 2005).
With respect to the third element, Citibank maintains: “Plaintiffs fail to even assert that
the Circuit Court for Harford County is the improper court to hear any federal claims.” ECF 211 at 6.
To be sure, “federal circuit and district courts, including this Court, have relied upon the
doctrine of abstention articulated in Younger v. Harris, 401 U.S. 37 (1971), as a basis for the
dismissal of cases concerning real property interests when the property at issue is the subject of
ongoing foreclosure proceedings in state court.” Lindsay v. Rushmore Loan Mgmt., Servs., LLC,
PWG-15-1031, 2017 WL 167832, at *2 (D. Md. Jan. 17, 2017) (citing Tucker v. Specialized
Loan Servicing, LLC, 83 F. Supp. 3d 635, 643–44 (D. Md. 2015) (collecting cases)). But,
Citibank failed to mention the case of Sprint Communications, Inc. v. Jacobs, __U.S.__, 134 S.
Ct. 584 (2013), in which the Supreme Court narrowed considerably the reach of the Younger
As noted by Judge Paul Grimm of this Court, the case of Sprint Communications, Inc.
“casts doubt on the earlier circuit court analyses that led district courts to rely on Younger to
abstain from considering cases such as this one”, when there is a pending foreclosure action in
state court. Lindsay, PWG-15-1031, 2017 WL 167832, at *2 (internal quotation marks and
citation omitted). Judge Grimm explained, id. at *2-3:
The Sprint Court “sought to provide guidance on the limited scope of Younger” so
that courts would not consider the three factors from Middlesex County Ethics
Committee v. Garden State Bar Association, 457 U.S. 423, 432 (1982), outside of
“„their quasi-criminal context‟” and, as a result, erroneously “„extend Younger to
virtually all parallel state and federal proceedings.‟” Tucker, 83 F. Supp. 3d at
644–45 (quoting Sprint, 134 S. Ct. at 593). To that end, the Supreme Court
cautioned the lower courts that “the three factors from Middlesex „were not
dispositive; they were, instead, additional factors appropriately considered by the
federal court before invoking Younger.‟” Id. (quoting Sprint, 134 S. Ct. at 593).
The Supreme Court observed that it had “review[ed] and restate[d]
[its] Younger jurisprudence in New Orleans Public Service, Inc. v.
Council of City of New Orleans, 491 U.S. 350 (1989) (“NOPSI”),
in which it “reaffirmed” that “„only exceptional circumstances
justify a federal court's refusal to decide a case in deference to the
States.‟” Sprint, 134 S. Ct. at 591 (quoting NOPSI). The NOPSI
Court identified “three types of proceedings” in which “[t]hose
„exceptional circumstances' exist”: (1) “ongoing state criminal
prosecutions,” (2) “certain „civil enforcement proceedings,‟” and
(3) “pending „civil proceedings involving certain orders... uniquely
in furtherance of the state courts' ability to perform their judicial
functions,‟” and the Sprint Court held that those “ „exceptional‟
categories... define Younger's scope.” Sprint, 134 S. Ct. at 591
(quoting NOPSI, 491 U.S. at 368).
Tucker, 83 F. Supp. 3d at 645. Cases in the second category “generally concern[ ]
state proceedings „akin to a criminal prosecution‟ in „important respects,‟” where,
typically, the “actions are ... initiated to sanction the federal plaintiff.” Sprint, 134 S.
Ct. at 592 (quoting Huffman v. Pursue, Ltd., 420 U.S. 592, 604 (1975)). Cases in the
third category generally involve a state's contempt process or a state court's efforts to
enforce its own order or judgment. Id. at 591 (citing Juidice v. Vail, 430 U.S. 327
(1977); Pennzoil v. Texaco Inc., 481 U.S. 1 (1987)).
Accordingly, Judge Grimm determined that Younger abstention was not appropriate
because the ongoing state foreclosure proceeding was not a criminal proceeding or akin to one,
and because “„it is not clear that an order of foreclosure is “uniquely in furtherance of the state
court['s] ability to perform [its] judicial function[ ],” or that these are the “exceptional
circumstances” in which to exercise this discretion.‟” Lindsay, PWG-15-1031, 2017 WL 167832,
at *4 (citations omitted, alterations in Lindsay). Moreover, he noted that, “even if exceptional
circumstances were present, this Court only could stay, but not dismiss, on Younger abstention
grounds, because the [plaintiffs] seek damages and not declaratory relief.”
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 721 (1996)).
I am persuaded by Judge Grimm‟s reasoning that, in light of Sprint Communications,
Inc., 134 S. Ct. 584, it is not clear that, under Younger, foreclosure proceedings in State court
present the “exceptional circumstances” necessary to “justify a federal court's refusal to decide a
case in deference to the States.” New Orleans Public Service, Inc. v. Council of City of New
Orleans, 491 U.S. 350, 368 (1989). Therefore, I will neither dismiss nor stay plaintiffs' claims
for damages on Younger abstention grounds.
As indicated, plaintiffs allege that Citibank violated TILA by failing to provide required
disclosures at the origination of the Loan and by failing to recognize plaintiffs‟ purported
rescission in 2015. ECF 1. Citibank asserts that plaintiffs‟ TILA claims are time-barred. ECF
21-1 at 6. Because the defense of statute of limitations is an affirmative defense, Fed. R. Civ. P.
8(c)(1), plaintiffs‟ TILA claims are only subject to dismissal on this ground “if the time bar is
apparent on the face of the complaint.” Dean v. Pilgrim's Pride Corp., 395 F.3d 471, 474 (4th
Cir. 2005) (citing Bethel v. Jendoco Construction Corp., 570 F.2d 1168 (3d Cir. 1978)).
TILA, 15 U.S.C. §§ 1601, et seq., was passed in 1968 to “„assure a meaningful disclosure
of credit terms so that the consumer will be able to compare more readily the various credit terms
available to him and avoid the uninformed use of credit.‟” Mourning v. Family Publications
Serv., Inc., 411 U.S. 356, 364–65 (1973) (quoting 15 U.S.C. § 1601(a)). More recently, Congress
passed the Helping Families Save Their Homes Act of 2009, Pub.L. No. 111–22, 123 Stat. 1632,
which amended various sections of TILA.
Among other things, TILA “requires lenders „clearly and conspicuously‟ to make a
number of disclosures to borrowers, including the disclosure of the borrowers' right to rescind a
consumer credit transaction.” Watkins v. SunTrust Mortgage, Inc., 663 F.3d 232, 234 (4th
Cir.2011) (quoting 15 U.S.C. §§ 1601(a)). Creditors are also required “to provide borrowers
with clear and accurate disclosures of terms dealing with things like finance charges, annual
percentage rates of interest, and the borrower's rights.” Beach v. Ocwen Fed. Bank, 523 U.S. 410,
412 (1998); see generally 15 U.S.C. §§ 1601-1667f.
TILA's disclosure requirements apply only to creditors and their assignees. In particular,
“[t]he only parties who can be liable for [TILA] violations are the original creditor, 15 U.S.C. §
1640, and assignees of that creditor, 15 U.S.C. § 1641.” Chow v. Aegis Mortgage Corp., 286
F.Supp.2d 956, 959 (N.D. Ill. 2003).
Section 1640 of TILA 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). 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.) The “date of the occurrence of the violation‟ is the date on
which the borrower accepts the creditor's extension of credit.” Brown, 2015 WL 5008763, at *7
(internal quotation marks and citation omitted).
Plaintiffs filed suit approximately nine years after they entered into the Loan in March
2007. Therefore, Citibank reasons that the claim related to disclosures at origination is barred by
the statute of limitations.
In their Opposition (ECF 24), plaintiffs argue that equitable tolling applies here because
“the defendant has deceptively concealed and mislead [sic] the plaintiff[s] into believing that
[Ms. Strickland-Lucas] had no remedies other than to simply believe that the defendant had the
rights to foreclose against her home, even without having any legal interests under the trust
deed.” Id. at 2-3.
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”). As noted, TILA's limitations provision begins to run on the “date of
the occurrence of the violation.” 15 U.S.C. § 1640(e).
However, several courts, including courts in this district, have held that the equitable
doctrine of fraudulent concealment may toll the statute of limitations for claims under TILA to
recover monetary damages. See Kerby v. Mortgage Funding Corp., 992 F. Supp. 787, 798 (D.
Md.1998) (holding that the doctrine of fraudulent concealment can toll the statute of limitations
established in 15 U.S.C. § 1640(e) for monetary damages claims under TILA); Elman v. JP
Morgan Chase Bank, NA, 2010 WL 2813351, at * 2 (D. Md. July 13, 2010); see also Stephens v.
Bank of Am. Home Loans, Inc., No. 5:16-CV-660-F, 2017 WL 384315, at *5 (E.D.N.C. Jan. 25,
2017) (identifying three different federal appellate courts that have held that the statute of
limitations for monetary damages under TILA is subject to equitable tolling); Espejo v. George
Mason Mortgage, LLC, No. 1:09CV1295 (JCC), 2010 WL 447009, at *6 (E.D. Va. Feb. 2, 2010)
(identifying four different federal appellate courts that have held that the statute of limitations for
monetary damages under TILA is subject to equitable tolling).
The Court of Appeals for the Fourth Circuit has explained that “the fraudulent
concealment doctrine tolls the statute of limitations „until the plaintiff in the exercise of
reasonable diligence discovered or should have discovered the alleged fraud or concealment.‟”
Browning v. Tiger's Eye Benefits Consulting, 313 F. App'x 656, 663 (4th Cir. 2009) (citation
omitted). In order to justify equitable tolling on the basis of fraudulent concealment, a plaintiff
must prove “(i) that the party asserting the statute of limitations concealed facts that are the basis
of the plaintiff's claim; (ii) that the plaintiff failed to discover those facts within the statutory
period; and (iii) that the plaintiff failed to do so despite the exercise of due diligence.” Roach v.
Option One Mortgage Corp., 598 F. Supp. 2d 741, 751–52 (E.D. Va. 2009) (internal quotation
marks and alteration omitted), aff'd, 332 F. App'x 113 (4th Cir. 2009).
The late Judge Frank Kaufman aptly explained in Davis v. Edgemere Fin. Co., 523 F.
Supp. 1121, 1126 (D. Md.1981):
Application of the fraudulent concealment doctrine in the context of the disclosure
requirements of the TILA requires more than mere nondisclosure.... 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)....
Plaintiffs maintain that equitable tolling applies to their claims because Citibank
“deceptively concealed and mislead [sic] the plaintiff[s] into believing that [Ms. StricklandLucas] had no remedies other than to simply believe that the defendant had the rights to foreclose
against her home, even without having any legal interests under the trust deed.” ECF 24 at 2-3.
But, plaintiffs have not alleged, nor is there any indication, that either the original creditor or
Citibank, which was not involved in the origination of the Loan, took any action fraudulently to
conceal the alleged failure to make disclosures required under TILA. See Wiseman v. First
Mariner Bank, ELH-12-2423, 2013 WL 5375248, at *27 (D. Md. Sept. 23, 2013) (concluding, in
the context of a Rule 12(c) motion for failure to state a claim, that plaintiff‟s TILA claims were
time-barred and equitable tolling did not apply where there was “no indication that
the…Defendants took any action to fraudulently conceal their alleged failure to make disclosures
required under the TILA”). Accordingly, I conclude that plaintiffs‟ TILA claim that they were
not provided required disclosures with the loan origination is time-barred.
Plaintiffs maintain that Citibank violated TILA by failing to recognize plaintiffs‟
purported rescission in 2015.
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(f).6 The Fourth Circuit has said
that a borrower's right to rescind under TILA is contingent on the borrower's ability to tender the
Under TILA, a borrower may rescind anytime within three days of the loan closing. See
15 U.S.C. § 1635(a). If a creditor fails to provide the required disclosure notices under TILA, or
if the disclosures are deficient, then section 1635(f) extends the period within which rescission is
available to “three years after the date of consummation of the transaction or upon the sale of the
property, whichever occurs first.” 15 U.S.C. § 1635(f).
loan proceeds back to the lender. Am. Mortgage Network, Inc., v. Shelton, 486 F.3d 815, 821 (4th
Plaintiffs sent their notice to rescind to Citibank on or about October 21, 2015 (ECF 1-1),
more than eight years after the origination of the Loan. In their Opposition, plaintiffs rely on
Jesinoski v. Countrywide Home Loans, __U.S.__, 135 S. Ct. 790 (2015), in which the Supreme
Court held that TILA only requires written notice of intent to seek rescission, rather than filing
suit, within the three-year period for exercising that right (id. at 792). On this basis, they argue
that their claim is not time-barred. ECF 24 at 2. They state, id. at 3 (alteration added):
The plaintiff lacked actual notice of the filing requirement until shortly before
sending the notice to rescind, she discovered the recent Supreme Court ruling [of
Jesinoski v. Countrywide Home Loans, 135 S. Ct. 790 (2015)]. The plaintiff
lacked constructive knowledge of the filing requirement but acted diligently in
pursuing her rights by articulating various causes of action against the defendant
in this court, to the best of her ability (having had no formal, legal training
whatsoever)…. Under the circumstances, it was reasonable that the plaintiff
remained ignorant of the notice requirement until discovering the January
Supreme Court ruling as announced by Justice Scalia in behalf of the Court.
But, as explained by Citibank in its Reply, Jesinoski actually “supports dismissal of this
case.” ECF 25 at 3. In Jesinoski, 135 S. Ct. 790, the Supreme Court determined that TILA only
requires written notice of intent to seek rescission, rather than filing suit, within the three-year
period for exercising that right. Id. at 792. Accordingly, Citibank correctly concludes that the
claim related to rescission is also time-barred because “Plaintiffs had, at most, three years to
rescind the Loan or until March 2, 2010. Plaintiffs allege that they sent the purported rescission
to Citibank on October 24, 2015 – more than eight years after origination and more than five
years after the statute of repose expired under 15 U.S.C. § 1635(f).” ECF 21-1 at 7.
According to plaintiffs, any delay should be excused under the principle of equitable
tolling. ECF 24 at 2. However, “TILA rescissions are not subject to equitable tolling.” Mosley
v. OneWest Bank, RDB-11-00698, 2011 WL 5005193, at *4 (D. Md. Oct. 19, 2011). Of import
here, the “conditional right to rescind does not last forever.” Jesinoski, 135 S. Ct. at 792.
Judge Richard Bennett of this Court has explained, Mosley, 2011 WL 5005193, at *4:
The United States Court of Appeals for the Fourth Circuit has stressed that §
1635(f) “is an absolute time limit,” and that the statute “precludes a right of action
after a specified period of time ... [and] the time period stated therein is typically
not tolled for any reason.” Jones v. Saxon Mortg. Inc., 537 F.3d 320, 327 (4th Cir.
1998). Additionally, the Supreme Court has ruled that the “manifest intent” of
Congress in § 1635(f) “permits no federal right to rescind, defensively or
otherwise, after the three year period of § 1635(f) has run.” Beach v. Ocwen
Federal Bank, 523 U.S. 410, 416–17, 118 S.Ct. 1408, 140 L.Ed.2d 566, (1998).
The Supreme Court interpreted § 1635(f) as an unbendable prohibition which
speaks “in terms so straightforward as to render any limitation on the time for
seeking a remedy superfluous.” Id. at 417.
Accord Brown v. Wilmington Fin., CCB-11-699, 2012 WL 975541, at *4 (D. Md. Mar. 21, 2012)
(“§ 1635(f) is a statute of repose, and therefore is an „absolute time limit‟ not subject to equitable
tolling.”) (Citation omitted).
Accordingly, plaintiffs‟ claim that Citibank violated TILA by failing to recognize
plaintiffs‟ purported rescission in 2015 is time-barred.
For the reasons stated above, I shall GRANT defendants‟ Motion (ECF 21). An Order
Date: June 8, 2017
Ellen Lipton Hollander
United States District Judge
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