Stokes v. JP Mogan Chase Bank, N.A. et al

Filing 37

MEMORANDUM signed by Judge J. Frederick Motz on 2/16/2012. (bf2, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Ardrina Stokes,
Plaintiff,
v.
JPMorgan Chase Bank, NA, et al.,
Defendants.

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Civil No. JFM 8: 11-cv-02620

MEMORANDUM
Plaintiff, Ardrina Stokes (―Stokes‖ or ―plaintiff‖), filed a complaint in this court on
September 14, 2011 against defendants JPMorgan Chase Bank, N.A. (―JPMorgan‖); SouthStar
Funding, LLC (―SouthStar‖); Kirk K. Smith (―Smith‖); Ocwen Financial Corporation
(―Ocwen‖); Barclays, PLC (―Barclays‖); and Universal American Mortgage Company, LLC
(―Universal‖), (collectively, ―defendants‖). Stokes seeks an undisclosed amount of actual,
compensatory, and punitive damages, as well as statutory damages resulting from defendants‘
allegedly discriminatory subprime lending practices. In her three-count complaint, Stokes
alleges defendants violated (1) the Fair Housing Act (―FHA‖), 42 U.S.C. §§ 3601 et seq.; (2) the
Equal Credit Opportunity Act (―ECOA‖), 15 U.S.C. §§ 1691 et seq.; and (3) § 1982 of the Civil
Rights Act (―§ 1982‖), 42 U.S.C. § 1982. Now pending before the court are (1) Smith‘s motion
to dismiss for, inter alia, lack of personal jurisdiction (ECF No. 16), (2) non-party Barclay‘s
Bank LC aka Barclay‘s Bank PLC (―Barclay‘s Bank‖) motion to quash service (ECF No. 31),
and (3) JPMorgan, Ocwen, and Universal‘s motions to dismiss for failure to state a claim. (ECF
Nos. 12, 13, 14). All issues have been fully briefed and no oral argument is necessary. See
Local Rule 105.6. For the reasons that follow, all motions are granted and all claims against
defendants are dismissed.
1

BACKGROUND
Over the course of several years, Stokes, a resident of Prince George‘s County,
Maryland, obtained subprime loans1 from Encore Credit Corporation (―Encore‖), SouthStar,
Fremont Investment & Loan (―Fremont‖), BNC Mortgage, Inc. (―BNC‖), and Universal.
(Compl. ¶¶ 7–16.) Stokes‘s claims stem from those loans. She alleges defendant lenders utilized
discriminatory policies, practices, and procedures to sell subprime loans in disproportionate
numbers to minority borrowers to reap heightened financial rewards from buyers in the
secondary mortgage market. (Compl. ¶ 2.) More important to her specifically, Stokes avers that
because of her race, defendants ―steered‖ her into purchasing a subprime loan without evaluating
her credit, financials, and other relevant qualifications. (Compl. ¶¶ 1–2.) As a result, Stokes
brings this action against defendants JPMorgan, SouthStar, Smith (a former principal of now
defunct SouthStar), Ocwen, Barclays, and Universal for violations of the ECOA, FHA, and
§ 1982.2 (Compl. ¶ 3.)
Stokes describes a nearly identical interaction with each financial institution. She alleges
that during the application phase, representatives of the institution asked her race and noted on

1

Each loan at issue was secured by one of the six Prince George‘s County properties Ms. Stokes
owned at the time: 9014 Oriley Drive, Clinton, MD 20735 (the ―Oriley Property‖); 8912
Pinehurst Drive, Fort Washington, MD 20744 (the ―Pinehurst Property‖); 2919 Pumpkin Street,
Clinton, MD 20735 (the ―Pumpkin Property‖); 14700 Turner Wootton Parkway, Upper
Marlboro, MD 20774 (the ―Turner Wootton Property‖); 4305 Hatties Progress Drive, Bowie MD
20720 (the ―Hatties Progress Property‖); and 8695 Greenbelt Road # C-1, Greenbelt, MD 20770
(the ―Greenbelt‖ property). (Compl. ¶ 4–5.)
2

Several of the claims against defendants relate to mortgage loans sold by defendants‘
predecessors in interest. Due to acquisitions, JPMorgan, Ocwen, and Barclays assumed liability
for the actions of Encore, Fremont, and BNC, respectively. (Compl. ¶¶ 8, 13, 15, 42, 81, 92.)
Additionally, SouthStar dissolved in 2007; therefore, Stokes is suing Smith, an alleged former
principal of SouthStar, seeking to hold him personally liable for SouthStar‘s actions. (Compl.
¶¶ 11, 57–58.)
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her loan application that she is African American. (Compl. ¶¶ 45, 61, 70, 84, 95, 106.)
Furthermore, Stokes contends that none of the defendants considered her for anything but a
subprime loan, (Compl. ¶¶ 44, 60, 69, 83, 94, 105), and never assessed her ability to repay the
loan. (Compl. ¶¶ 54, 65, 78, 89, 111.) According to Stokes, none of the defendants verified her
income or took further action to evaluate her creditworthiness by looking at financial documents
including her tax returns, W-2s, payroll receipts, bank statements, and retirement account
records. (Compl. ¶¶ 51, 64, 75, 88, 99, 110.) Instead, she contends, defendants each asked
―targeted questions to obtain the right information to secure loan approval‖ and then ―steered‖
her into purchasing the loans. (Compl. ¶¶ 48, 55–56, 63, 66–67,72, 79–80, 87, 90–91, 98, 101–
02, 109, 112–13.) By allegedly targeting her because of her race, and pushing her to accept
subprime mortgages without regard to objective criteria such as credit scores and income, Stokes
avers defendants unlawfully discriminated against her in violation of the FHA, ECOA, and
§ 1982. (Compl. ¶¶ 114–15.)
Now pending are separate motions to dismiss filed by JPMorgan (ECF No. 12), Ocwen
(ECF No. 13), Universal (ECF No. 15), Smith (ECF No. 16), and a motion to quash by non-party
Barclay‘s Bank. (ECF No. 31.)
ANALYSIS
The defendants have each filed motions to dismiss. Pursuant to Federal Rule of Civil
Procedure 12(b)(2), defendant Smith seeks to have the claims against him dismissed for lack of
personal jurisdiction. Pursuant to Federal Rules of Civil Procedure 12(b)(4), Barclay‘s Bank
moves to quash service. Lastly, defendants JPMorgan, Ocwen, and Universal move to have their
claims dismissed pursuant to Federal Rules of Civil Procedure 12(b)(6). I will discuss each in
turn.
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a. Smith‘s Motion to Dismiss for Lack of Personal Jurisdiction
Two conditions must be met for a district court to assert personal jurisdiction over a
nonresident defendant: ―(1) the exercise of jurisdiction must be authorized under the state's longarm statute; and (2) the exercise of jurisdiction must comport with the due process requirements
of the Fourteenth Amendment.‖ Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334
F.3d 390, 396 (4th Cir. 2003) (citing Christian Sci. Bd. of Dirs. of the First Church of Christ v.
Nolan, 259 F.3d 209, 215 (4th Cir. 2001)). ―With regard to the first requirement, [the district
court] must accept as binding the interpretation of Maryland's long-arm statute rendered by the
Maryland Court of Appeals.‖ Id. (citing Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 61 (4th Cir.
1993)). Maryland courts have held that the statutory inquiry merges with the constitutional
inquiry. Id. (citing Stover v. O’Connell Assocs., Inc., 84 F.3d 132, 135 (4th Cir. 1996)); see
Kortobi v. Kass, 978 A.2d 247, 256 (Md. 2009) (―The purview of the long arm statute is
coextensive with the limits of personal jurisdiction set by the due process clause of the Federal
Constitution. . . . As a result, our statutory inquiry merges with our constitutional examination.‖)
(internal quotation marks and citations omitted). The Maryland Court of Appeals has clarified,
however, that even though they are coextensive, assessing personal jurisdiction still requires the
two-step inquiry—statutory and constitutional. See Mackey v. Compass Mktg., Inc., 892 A.2d
479, 493 n.6 (noting that ―coextensive‖ does not mean ―that it is now permissible to simply
dispense with analysis under the long-arm statute‖). Thus, determining personal jurisdiction
over a non-resident requires first, assessing whether Maryland‘s long-arm statutes permits
service on the non-resident defendant, and second, whether such service satisfies constitutional
due process requirements. See Holfield v. Power Chem. Co., 382 F. Supp. 388, 390 (D. Md.
1974).

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The Maryland long-arm statute provides:
(b) A court may exercise personal jurisdiction over a person, who directly or by an
agent:
(1) Transacts any business or performs any character of work
or service in the State;
(2) Contracts to supply goods, food, services, or manufactured
products in the State;
(3) Causes tortious injury in the State by an act or omission in
the State;
(4) Causes tortious injury in the State or outside of the State by
an act or omission outside the State if he regularly does or
solicits business, engages in any other persistent course of
conduct in the State or derives substantial revenue from goods,
food, services, or manufactured products used or consumed in
the State;
(5) Has an interest in, uses, or possesses real property in the
State; or
(6) Contracts to insure or act as surety for, or on, any person,
property, risk, contract, obligation, or agreement located,
executed, or to be performed within the State at the time the
contract is made, unless the parties otherwise provide in
writing.
Md. Code Ann. Cts. & Jud. Proc. § 6-103(b). If the nonresident defendant‘s connection with the
State of Maryland comes within the reach of the long-arm statute, the court must then consider
whether its exercise of jurisdiction is constitutionally permissible. In order to pass constitutional
muster under the Due Process Clause, there must be sufficient ―minimum contacts‖ between the
defendant and Maryland such that the exercise of personal jurisdiction in Maryland ―does not
offend ‗traditional notions of fair play and substantial justice.‘‖ Int’l Shoe Co. v. Washington,
326 U.S. 310, 316 (1945) (citing Milliken v. Meyer, 311 U.S. 457, 463 (1940)); see also Hanson
v. Denckla, 357 U.S. 235, 253 (1958) (―[I]t is essential in each case that there be some act by
which the defendant purposefully avails itself of the privilege of conducting activities within the
forum State, thus invoking the benefit and protection of its laws.‖)). In its assessment, the court
should focus on ―the relationship among the defendant, the forum, and the litigation,‖ Shaffer v.
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Heitner, 433 U.S. 186, 204 (1977), to determine whether the defendant ―should reasonably
anticipate being haled into court‖ in Maryland. World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286, 297 (1980).
Personal jurisdiction can be specific or general, depending upon the connection between
the defendant and the State of Maryland. See Miserandino v. Resort Props., Inc., 691 A.2d 208,
211 (Md. 1995). A court exercises specific jurisdiction over the defendant when the cause of
action arises out of or is related to the defendant‘s contacts with the forum state. See
Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984). A court exercises
general jurisdiction over the defendant when the defendant‘s contacts with the state are not also
the basis for the suit, but the defendant‘s contacts with the state are ―continuous, systematic, and
fairly extensive.‖ Id.; see Cole–Tuve, Inc. v. Am. Mach. Tools Corp., 342 F. Supp. 2d 362, 366
(D. Md. 2004).
The plaintiff bears the burden of proving grounds for personal jurisdiction by a
preponderance of the evidence. Carefirst, 334 F.3d 390, 396 (citing Mylan, 2 F.3d at 59–60).
But when a court decides a pretrial personal jurisdiction motion without conducting an
evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction.
Id. (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)). In determining whether the
plaintiff has met its burden, ―the court must construe all relevant pleading allegations in the light
most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the
existence of jurisdiction.‖ Combs, 886 F.2d at 676. All relevant pleadings means the court is
―not required . . . to look solely to the plaintiff‘s proof in drawing [all reasonable inferences in
the plaintiff‘s favor],‖ and may also look at defendant‘s assertions and proffered proof regarding
defendant‘s lack of contacts with the forum. Mylan, 2 F.3d at 62.
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Smith avers this court has no personal jurisdiction. (Smith Mot. Dismiss 1, ECF No. 16.)
To support his 12(b)(2) motion, Smith has established several facts by affidavit: he is a resident
of the State of Georgia and has resided there since 1974 (Smith Aff. ¶ 3, ECF No. 16-2), he has
never resided, conducted any business or solicited sales, owned or leased property, maintained a
mailing address, paid taxes, held any license, or was employed in the State of Maryland (Smith
Aff. ¶¶ 4–9), and he was never involved with SouthStar‘s originating, approving, or funding of
loan transactions in Maryland. (Smith Aff. ¶ 12.) In effect, he claims he has no contacts with
the State of Maryland. None of these assertions are disputed by Stokes. Stokes‘s only proffered
basis of Smith‘s sufficient contact with the state of Maryland is Smith‘s position as a former
principal of co-defendant SouthStar, a Delaware limited liability company, which filed for
Chapter 7 bankruptcy in April of 2007 and is no longer in business. (Compl. ¶ 11; Smith Mem.
Supp. Mot. Dismiss 3; Smith Aff. ¶ 2.) Looking at the jurisdictional facts presented in the light
most favorable to Stokes, this court does not have general personal jurisdiction because Smith
did not engage in continuous and systematic activities within Maryland. The issue, then, is
whether Smith‘s relationship with SouthStar, provides sufficient contact with the State of
Maryland for this court to exercise specific personal jurisdiction.
Stokes argues that because Smith was a principal of SouthStar, a financial institution that
negotiated a loan with her in Maryland, SouthStar‘s Maryland contacts should be attributed to
Smith for jurisdictional purposes. It is an accepted legal tenet, however, that an individual and a
corporation of which that individual is the principal are separate legal entities. See, e.g., Birrane
v. Master Collectors, Inc., 738 F. Supp. 167, 169 (D. Md. 1990) (citing United States v. Van
Diviner, 822 F.2d 960, 963 (10th Cir. 1987)). Based on this, ―the general rule . . . [is] that the
corporate entity will normally insulate corporate employees, officers, directors, etc., from
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personal jurisdiction where suit is brought against them individually.‖ Holfield v. Power Chem.
Co., 382 F. Supp. 388, 393 (D. Md. 1974). Thus, ―the fact that a corporation is doing business in
a state is not sufficient to establish in personam jurisdiction over the corporation‘s directors,
officers and agents.‖ Topik v. Catalyst Research Corp., 339 F. Supp. 1102, 1107 (D. Md. 1972),
aff’d, 473 F.2d 907 (4th Cir. 1972). A corporate officer may ―only be hailed into a foreign court
based on the corporate officer‘s individual contacts in the forum.‖ AGV Sports Group, Inc. v.
Protus IP Solutions, Inc., No. RDB 08-3388, 2009 WL 1921152, at *7 (D. Md. July 1, 2009);
see Harte-Hanks Direct Mkt. v. Varilease Tech., 299 F. Supp. 2d 505, 513 (D. Md 2004)
(―Personal jurisdiction over an individual officer, director, or employee of a corporation does not
automatically flow from personal jurisdiction over the corporation.‖); Quinn v. Bowmar Publ’g
Co., 445 F. Supp. 780, 785 (D. Md. 1978) (―Jurisdiction over individual officers or employees of
a corporation may not be predicated upon jurisdiction over the corporation, absent activities by
the individuals sufficient to subject them to a long arm statute.‖). There is no evidence to
suggest that Smith was involved in any way in SouthStar‘s loan transactions in Maryland, let
alone in Stokes‘s specific transaction. (Smith Aff. ¶ 12.) The jurisdiction this court has over
SouthStar, which sold a loan to Stokes in Maryland, does not pass to Smith merely because he
was a principal of SouthStar in the absence of any individual contacts between Smith and the
State of Maryland. It would ―offend traditional notions of fair play and substantial justice to
attribute corporate acts‖ to Smith to form the basis of personal jurisdiction. See Quinn, 445 F.
Supp. at 786.
In response to Smith‘s motion, and seemingly acknowledging her failure to allege
sufficient contacts with the State of Maryland, Stokes asks this court to stay the motion to
dismiss and allow limited discovery before the motion is ruled upon. Jurisdictional discovery is

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inappropriate, however, where, as here, the plaintiff ―offers only speculation or conclusory
assertions about contacts with a forum state.‖ Carefirst, 334 F.3d 390, 402 (4th Cir. 2003); see
also McLaughlin v. McPhail, 707 F.2d 800, 806 (4th Cir. 1983) (holding district court properly
exercised its discretion in denying jurisdictional discovery because plaintiff ―had made an
insufficient showing that the defendants fell within the reach of Maryland‘s long-arm statute‖);
Lehigh Valley Industries, Inc. v. Birenbaum, 527 F.2d 87, 93–95 (2d Cir. 1975) (upholding
district court‘s denying jurisdictional discovery because plaintiff‘s ―threshold failure‖ to
establish personal jurisdiction); Rich v. KIS Cal., Inc., 121 F.R.D. 254, 259 (M.D.N.C. 1988)
(―[W]here a plaintiff‘s claim of personal jurisdiction appears to be both attenuated and based on
bare allegations in the face of specific denials made by defendants, the Court need not permit
even limited discovery confined to issues of personal jurisdiction should it conclude that such
discovery will be a fishing expedition.‖).
Stokes fails to identify any interaction between Smith and the State of Maryland, alleging
only that SouthStar brokered and financed her loan in Maryland and that Smith was a former
principal of SouthStar. (Compl. ¶ 11; Pl.‘s Opp. 11.) Smith‘s potential contacts as a principal of
SouthStar are insufficient to make out even a threshold showing of specific jurisdiction.
Therefore, as in Carefirst, since Stokes‘s claims of personal jurisdiction are so attenuated, lack
any ―concrete proffer,‖ and are based on bare allegations in the face of specific denials made by
Smith in his affidavit, jurisdictional discovery is unwarranted as Stokes has not made even a
prima facie showing of personal jurisdiction. Carefirst, 334 F.3d at 402–03 (―When a plaintiff
offers only speculation or conclusory assertions about contacts with a forum state, a court is
within its discretion in denying jurisdictional discovery.‖).

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Because Stokes failed to make a sufficient prima facie showing to survive Smith‘s
jurisdictional challenge, pursuant to Federal Rule of Civil Procedure 12(b)(2), all claims against
Smith are dismissed.
b. Barclay‘s Bank‘s Motion to Quash Service
Non-party Barclay‘s Bank moves to quash service pursuant to Federal Rule of Civil
Procedure 12(b)(4), on the grounds that the contents of the summons served on Barclay‘s Bank
was defective because the entity named in the summons, Barclay‘s Bank LC, is a separate entity
from Barclays, PLC, the named party in the complaint, and pursuant to Federal Rule of Civil
Procedure 12(b)(5), on the grounds that the wrong party—Barclay‘s Bank LC and not Barclays,
PLC—has been served. Counsel for Barclay‘s Bank LC advised plaintiff‘s counsel that the
incorrect entity was served and requested that plaintiff either withdraw the service issued or
amend the complaint to include allegations against Barclay‘s Bank LC. (Barclay‘s Bank Mem.
Supp. Mot. Quash Service 1–3 ECF No. 31-1, Ex. A). Stokes did neither.
The summons in question was served upon Barclay‘s Bank LC. (Summons Issued
Against Barclay‘s Bank LC, ECF No. 9.) Barclay‘s Bank LC is not identified in the caption or
body of the complaint. Rather, the complaint identifies and discusses claims against Barclays,
PLC. (Compl. ¶ 14.) Before Stokes requested and the Clerk issued a summons against Barclay‘s
Bank LC, she requested and the Clerk issued a summons against Barclays, PLC. (Summons
Issued Against Barclays, PLC, ECF No. 2.) It seems that after failing to effect service on an
agent authorized to accept service on behalf of Barclay, PLC, Stokes attempted to effect service
on Barclay‘s Bank LC. It is also telling that not only has Stokes failed to respond in opposition
to Barclay‘s Bank LC‘s motion to quash, but after the motion was filed, Stokes requested and the

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Clerk again issued a summons against Barclays, PLC. (Summons Issued Against Barclays, PLC,
ECF No. 35).
Federal Rule of Civil Procedure 4, which sets forth the procedural requirements for
proper service, requires that the summons be directed to a party named as a defendant in the
complaint. See Fed. R. Civ. P. 4(a)(1)(B). When process is served on a person who ―is not the
agent of the defendant and is not authorized to receive service of process issued against such
defendant, the motion to quash service and to dismiss the defendant from the action should be
granted.‖ Ballard v. PNC Fin. Servs. Grp., Inc., 620 F. Supp. 2d 733, 735 (S.D. W. Va. 2009)
(citing Sunbeam Corp v. Payless Drug Stores, 113 F. Supp. 31, 46 (N.D. Cal. 1953)). Barclay‘s
Bank LC is not named as a defendant and there is no indication that it is authorized to accept
service for Barclays, PLC. Stokes does not provide any evidence to the contrary. Where the
validity of service is contested, the burden is on the party claiming proper service has been
effected to establish the validity of service. See Lee v. FEMA, No. 1:09-0028, 2010 WL
1027124, at *9 (S.D. W. Va. Feb. 26, 2010), aff’d, 406 F. App‘x 688 (4th Cir. 2010).
Stokes has clearly not met her burden. The summons was defective in failing to be
directed to a named defendant; therefore, pursuant to Federal Rules of Civil Procedure 12(b)(4)
and 12(b)(5), Barclay‘s Bank LC‘s motion to quash is granted and Barclay‘s Bank LC is
dismissed from this litigation.
c. JPMorgan, Ocwen, and Universal‘s Motions to Dismiss
―While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiff‘s obligation to provide the ‗grounds' of his ‗entitlement to relief
requires more than labels and conclusions . . . .‖ Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554
(2007) (internal citations omitted). Consequently, to survive a motion to dismiss under Federal

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Rule of Civil Procedure 12(b)(6), the factual allegations of a complaint must contain sufficient
facts to ―state a claim for relief that is plausible on its face,‖ Id. at 570, meaning the factual
allegations ―must be enough to raise a right to relief above the speculative level, . . . on the
assumption that all the allegations in the complaint are true (even if doubtful in fact).‖ Id. at 555
(internal citations and alterations omitted). When ruling on the sufficiency of the claims
asserted, the court must ―accept the well-pled allegations of the complaint as true,‖ and ―construe
facts and reasonable inferences in the light most favorable to the plaintiff.‖ Ibarra v. United
States, 120 F.3d 472, 474 (4th Cir. 1997). But the court need not accept legal conclusions
couched as factual allegations, Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory
factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst,
604 F.2d 844, 847 (4th Cir. 1979). In essence, the facts pled must permit the court to draw a
reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. The
plaintiff must provide ―more than an unadorned, the-defendant-unlawfully-harmed-me
accusation.‖ Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). A plaintiff, therefore, cannot
overcome a motion to dismiss where the ―well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct.‖ Id. at 1950.
Defendants JPMorgan, Ocwen, and Universal each file motions to dismiss on the grounds
that Stokes‘s failed to assert claims upon which relief can be granted.3 The defendants focus
principally on a statute of limitations argument, but also argue for dismissal based on insufficient

3

Although all three file separate motions, the arguments in each are identical and therefore I
discuss them together. All three focus principally on a statute of limitations argument, but also
argue for dismissal based on insufficient pleading. Because I ultimately find the statute of
limitations argument conclusive I do not reach their insufficient pleading argument. I do,
however, have substantial doubts that Stokes‘s claims are sufficient to form the basis for a cause
of action under the FHA, ECOA, or § 1982.
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pleading. I ultimately find the statute of limitations argument conclusive and therefore do not
reach defendants‘ insufficient pleading argument.
Defendants argue Stokes‘s claims are time barred by the FHA and ECOA‘s two-year
limitations statute, and by § 1982‘s three-year limitations statute. (JPMorgan Mem. Supp. Mot.
Dismiss 5–7, ECF No. 12-1; Ocwen Mem. Supp. Mot. Dismiss 5–7, ECF No. 13-1; Universal
Mem. Supp. Mot. Dismiss 6–11, ECF No. 15-1.)
The FHA states that ―[a]n aggrieved person may commence a civil action in an
appropriate United States district court or State court not later than 2 years after the occurrence
or the termination of an allegedly discriminatory housing practice . . . whichever occurs last.‖ 42
U.S.C. § 3613(a)(1)(A); see Shield Out Constitutional Rights & Justice v. Hicks, No. DKC 090940, 2009 WL 3747199, at *7 (D. Md. Nov. 4, 2009). Similarly, the ECOA provides that, ―no
action shall be brought later than two years from the date of the occurrence of the violation.‖4 15
U.S.C. § 1691e(f), amended by 2010 Amendments, Pub. L. 111-203, § 1085(7). Although
§ 1982 does not itself contain a time limitation, the Fourth Circuit has held that the statute of
limitations found in the ―most analogous‖ state law applies. See Franks v. Ross, 313 F.3d 184,
194 (4th Cir. 2002); see also Goodman v. Lukens Steel Co., 482 U.S. 656, 660 (1987).
Maryland‘s general three year statute of limitations for personal injury claims is most
appropriate. See Md. Cts & Jud. Proc. Code Ann. § 5–101; Jersey Heights Neighborhood Ass’n

4

As of July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act
amended the ECOA by providing for a five-year statute of limitations. 12 U.S.C. §§ 5301 et
seq., Pub. Law No. 111-203, H.R. 4173 (July 21, 2010), §§ 1085(7). However, as a general
principle, claims that would have expired under the previous two-year statute of limitations
cannot retroactively be revived. See generally 54 C.J.S. Limitations of Actions § 15 (―[O]nce a
statute of limitations has run, [the party relying on the statute has a vested property right in the
statute of limitations defense, and changes to the period of limitations cannot be applied
retroactively to extinguish that right.‖). In any event, the amendment contains no express
language and no indication that it is to retroactively alter the limitations period of prior actions.
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v. Glendening, 174 F.3d 180, 187 (4th Cir. 1999) (―[T]he personal nature of the right against
discrimination justifies applying the state personal injury limitations period.‖). In sum, the
relevant statutes of limitations for Stokes‘s claims are two years under the FHA and ECOA, and
three years under § 1982.
Although Stokes fails to specify in her complaint the dates she entered into the loans,
defendants provide the missing information through exhibits containing notes to evidence the
loans and deeds of trust to secure her obligations.5 From the loan documents provided by
defendants, it is undisputed that Stokes entered into the loans at issue in 2005 and 2006, more
than three years ago. (JPMorgan Mem. Supp. Mot. Dismiss, Ex. B (executed December 22,
2005); Ocwen Mem. Supp. Mot. Dismiss, Ex. A (executed February 28, 2005); Universal Mem.
Supp. Mot. Dismiss, Ex. A (executed November 20, 2006). The relevant statutes of limitations
began to run on the dates Stokes entered each loan. At the time of the loans, Stokes was aware
of her alleged injury because all aspects of the discriminatory subprime lending practices that she
alleges as the basis of her cause of action had occurred by that time, overtly, to her directly. See
Nat’l Adver. Co. v. City of Raleigh, 947 F.2d 1158, 1162 (4th Cir. 1991). (―Federal law holds
that the time of accrual is when [the] plaintiff knows or has reason to know of the injury which is

5

It is widely acknowledged that in certain circumstances a court may consider documents, such
as notes or deeds of trust, outside the plaintiff‘s complaint without converting a motion to
dismiss into a motion for summary judgment. See Fed. R. Civ. P. 10(c); 5A Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure § 1327 (3d ed. 2004); see also Am.
Chriopractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004) (―[W]hen a
defendant attaches a document to its motion to dismiss, ‗a court may consider it in determining
whether to dismiss the complaint [if] it was integral to and explicitly relied on in the complaint
and [if] the plaintiffs do not challenge its authenticity.‘‖) (citing Phillips v. LCI Int’l Inc., 190
F.3d 609, 618 (4th Cir. 1999)). Additionally, a judge may take judicial notice of matters of
public record. Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009); Sec’y of
State for Def. v. Trimble Navigation, Ltd., 484 F.3d 700, 705 (4th Cir. 2007); Hall v. Virginia,
385 F.3d 421, 424 (4th Cir. 2004).
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the basis of the action.‖); Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 875
(N.D. Cal. 2010) (dismissing FHA claim as untimely where the plaintiff had not alleged any
unlawful conduct after the origination and culmination of her loan, which occurred more than
two years prior to her filing her complaint); Goodwin v. Exec. Tr. Servs., LLC, 680 F. Supp. 2d
1244, 1251 (D. Nev. 2010) (dismissing FHA claim where ―[t]he conduct giving rise to [the]
claim [was] the issuance of a ‗less-than-favorable loan,‘ ‖ and the statute of limitations began
running on the date the plaintiff executed the deed of trust, more than two years before she
initiated the action). Stokes‘s claim that defendants steered her into a subprime loan because of
her race is based on conduct that undoubtedly concluded with the close of the loan transactions.
Therefore, to ensure her claims were not time-barred, Stokes needed to file suit under the FHA
and ECOA in 2007 or 2008, depending on the loan at issue, and under § 1982 by 2008 or 2009,
depending on the loan at issue. Stokes filed the complaint in this case on September 14, 2011;
thus, her claims are time-barred.
In her opposition to defendants‘ motions to dismiss, Stokes does not contest the fact that
she entered into the loans nearly five years ago or that under a straight application of the relevant
statutes of limitations her claims are stale. She argues, however, that based on a ―continuing
violations‖ theory, the relevant statutes of limitations should be tolled in order to make her
claims timely. (Pl.‘s Opp. 7–8, ECF No. 22.) Unfortunately, there is a critical mistake in
Stokes‘s understanding and application of this theory.
Relying principally on Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982), Stokes
avers her claims are timely by application of the continuing violation doctrine. (Pl.‘s Opp. 8.)
Although her reading of Havens Realty and the continuing violation doctrine is correct, she fails
to see that her claims are easily distinguished from those brought in that case. In Havens,
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African-American plaintiffs brought claims against Havens Realty under § 804 of the FHA,
alleging the apartment complex owners falsely informed them about apartment availability on
multiple occasions. Havens, 455 U.S. at 368. The majority of times they received false
information occurred beyond the relevant 180-day statute of limitations period. Id. at 380. But,
one of the occasions occurred within the statutory period and was therefore not time-barred. Id.
The Supreme Court held that by way of the continuing violation doctrine, all claims, including
those time-barred, could come in because at least one of the alleged incidents fell within the
limitations period. Id. at 380–82. Conversely, in the case at hand, none of the allegedly
discriminatory loans closed within the relevant limitations period. Additionally, the allegations
that five separate and independent defendants engaged in discrete, discriminatory lending
transactions with Stokes are easily distinguished from the ―continuing violation‖ in Havens,
where a single defendant discriminated against multiple plaintiffs. The continuing violation
doctrine as expressed in Havens is therefore inapplicable and does not revive Stokes‘s claims.
See Grimes v. Fremont Gen. Corp., 785 F. Supp. 2d 269, 291 (S.D.N.Y. 2011) (―[C]ourts that
have found a continuing violation . . . have done so in cases involving multiple plaintiffs alleging
multiple, specific, and ongoing acts of discrimination, on specific dates, as opposed to general
assertions that the defendants engaged in discriminatory practices . . . vague or conclusory claims
regularly meet dismissal.‖)
Finally, Stokes tries to prevent dismissal of her claims as untimely by contending ―there
is no information as to when the discriminatory practices last occurred‖ and cites to an
unreported District of Maryland case, Ragland v. A.W. Indus., No. DKC 2008-1817, 2009 WL
2507426, at *2 (D. Md. Aug. 13, 2009), for the proposition that a statute of limitations defense in
unavailable at the 12(b)(6) stage when the statute of limitations applicability is not clear from the
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face of the complaint. Ragland, 2009 WL 2507426, at * 2. Stokes is correct that dismissal is
proper only ―when the face of the complaint clearly reveals the existence of a meritorious
affirmative defense.‖ Brooks v. City of Winston-Salem, N.C., 85 F.3d 178, 181 (4th Cir. 1996).
However, while Stokes states ―it is unknown when the last instance of discriminatory conduct
took place,‖ and that ―Defendants‘ asserted defense is not clearly available from the face of the
complaint,‖ (Opp. Mem 10), I find these statements to be erroneous. Each loan transaction was
recorded and Stokes‘s purposeful omission of these dates does not make them ―unknown.‖ The
face of the complaint, appropriately supplemented by public records, establishes that Stokes
waited until September 14, 2011 to file this action—just under five years since she executed the
last mortgage loan in question. Therefore, her claims are stale, far past the relevant two-year and
three-year statutes of limitations.
In sum, looking at the pleaded allegations in the light most favorable to Stokes, it is
undeniable that defendants raise a valid affirmative defense and meet their burden of establishing
that, on the face of the complaint, the relevant statutes of limitations bar Stokes‘s claims. See
Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007); 5B Charles Alan Wright & Arthur
R. Miller, Federal Practice and Procedure § 1357 (3d ed. 2004) (―A complaint showing that the
governing statute of limitations has run on the plaintiff‘s claim for relief is the most common
situation in which the affirmative defense appears on the face of the pleading and provides a
basis for a motion to dismiss under Rule 12(b)(6).‖). Thus, Stokes‘s claims are untimely, and
pursuant to Federal Rule of Civil Procedure 12(b)(6), claims against JPMorgan, Ocwen, and
Universal are dismissed.

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CONCLUSION
I find that pursuant to Federal Rule of Civil Procedure 12(b)(2) this court has no personal
jurisdiction over defendant Smith and therefore dismiss all claims against him. Additionally,
pursuant to Federal Rule of Civil Procedure 12(b)(4), service on Barclay‘s Bank LC is quashed
and Barclay‘s Bank LC is dismissed from this suit. Finally, pursuant to Federal Rule of Civil
Procedure 12(b)(6), Stokes‘s claims against defendants JPMorgan, Ocwen, and Universal are
time-barred and therefore dismissed.
A separate order to this effect is being entered herewith
February 16, 2012
Date

/s/
J. Frederick Motz
United States District Judge

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