Green et al v. Wells Fargo Bank, N.A.
Filing
38
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 1/31/14. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
SHIRLEY M. GREEN, et al.
:
v.
:
Civil Action No. DKC 12-1040
:
WELLS FARGO BANK, N.A.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this consumer
lending action is the motion to dismiss filed by Defendant Wells
Fargo Bank, N.A. (“Wells Fargo” or “Defendant”).
(ECF No. 36).
The issues have been fully briefed, and the court now rules, no
hearing being deemed necessary.
Local Rule 105.6.
For the
following reasons, the motion to dismiss will be granted.
I.
Background
The facts of this case as alleged in the first amended
complaint were described in full in a prior opinion, thus only a
brief background of the underlying factual and procedural issues
in the case is necessary.
See Green v. Wells Fargo Bank, N.A.,
927 F.Supp.2d 244 (D.Md. 2013).
Plaintiffs Shirley M. Green,
Ralph E. Green, and Antoinette Green took out a mortgage of just
under $1 million from Southern Trust Mortgage, LLC on May 31,
2006
to
finance
their
purchase
of
home.1
a
Defendant
subsequently acquired servicing rights to the loan.
fell
behind
contacted
inquire
on
their
mortgage
payments
in
Wells
Fargo
in
March
early
about
a
loan
late
or
modification.
Plaintiffs
October
(ECF
2010
April
No.
and
2011
24
¶
to
18).
Plaintiffs assert that Wells Fargo represented that it would
process
their
loan
modification
request
and
perform
a
loss
mitigation analysis, provided Plaintiffs submitted documentation
in
connection
with
their
request
letter, dated April 8, 2011.2
within
ten
days
(ECF No. 24-1 ¶ 20.1).
from
the
Plaintiffs
concede that they did not timely submit all of the required
documentation; instead, they submitted the documentation on May
24, 2011, over a month late.
24,
2011
purposely
Greens.
Fargo
forward,
Wells
disregarded,
Plaintiffs assert that “from May
Fargo
the
lost
or
documentation
lost
track
submitted
of,
by
or
the
Indeed, in its June 20, 2011 correspondence, Wells
falsely
required
suggested
documentation,
documentation
they
had
the
when
Greens
it
already
told
had
not
the
Greens
submitted.”
submitted
to
(Id.
the
resubmit
¶
23).
1
Antoinette Green is a co-borrower under the deed of trust
and was added as a necessary party to the instant litigation
when Plaintiffs filed an amended complaint after the case was
removed from the Circuit Court for Prince George’s County.
2
The April 8, 2011 letter from Wells Fargo to Plaintiffs
identified the specific documents Plaintiffs had to submit for
consideration.
2
Plaintiffs then submitted the same and additional documents on
June 29, 2011.
Plaintiffs contend that Wells Fargo responded
with a letter, dated November 4, 2011, which stated that the
Greens had not provided any input and were nonresponsive to
Wells Fargo’s attempts to contact them.
(Id. ¶ 25).
The letter
further advised Plaintiffs that Wells Fargo would continue to
work
with
them
to
help
avoid
a
foreclosure
sale,
but
“if
[Plaintiffs’] mortgage has been referred to foreclosure, that
process moves forward at the same time.
Also, as part of the
foreclosure process, [Plaintiffs] may . . . see steps being
taken to proceed with a foreclosure sale of [Plaintiffs’] home.”
(ECF No. 24-7, at 3).
Plaintiffs responded to this letter on
December 1, 2011, and Wells Fargo sent another letter to the
Greens on December 14, 2011, requesting that the Greens call
them immediately to determine available options.
(See ECF No.
24-9).
Plaintiffs filed an initial complaint in the Circuit Court
for
Prince
George’s
County
on
February
1,
2012.
removed the action to this court on April 4, 2012.
Defendant
(ECF No. 1).
Plaintiffs later amended the complaint on May 7, 2012, alleging
violations of the Maryland Consumer Protection Act (“MPCA”), Md.
Code
Ann.,
promissory
Com.
Law
§
estoppel,
misrepresentation.
13-101
et
seq.,
negligence,
(ECF No. 24).
3
common
and
law
fraud,
negligent
Defendant moved to dismiss on
May
21,
2012
(ECF
No.
25),
and
the
undersigned
issued
a
memorandum opinion and order on February 27, 2013 (ECF Nos. 33 &
34) dismissing Plaintiffs’ promissory estoppel, negligence, and
negligent misrepresentation claims, and dismissing the MCPA and
common law fraud claims without prejudice to Plaintiffs’ right
to file a second amended complaint within fourteen (14) days.
Plaintiffs
subsequently
March 13, 2014.
filed
(ECF No. 35).
a
second
amended
complaint
on
Wells Fargo moved to dismiss the
second amended complaint on March 27, 2013 (ECF No. 36), and
Plaintiffs opposed the motion on April 24, 2013 (ECF No. 37).
II.
Standard of Review
The purpose of a motion to dismiss under Rule 12(b)(6) is
to test the sufficiency of the complaint.
Charlottesville,
464
F.3d
480,
483
(4th
Presley v. City of
Cir.
2006).
A
plaintiff’s complaint need only satisfy the standard of Rule
8(a), which requires a “short and plain statement of the claim
showing that the pleader is entitled to relief.”
8(a)(2).
Fed.R.Civ.P.
“Rule 8(a)(2) still requires a ‘showing,’ rather than
a blanket assertion, of entitlement to relief.”
v. Twombly, 550 U.S. 554, 556 n.3 (2007).
Bell Atl. Corp.
That showing must
consist of more than “a formulaic recitation of the elements of
a cause of action” or “naked assertion[s] devoid of further
factual enhancement.”
Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (internal citations omitted).
4
At this stage, all well-pleaded allegations in a complaint
must be considered as true, Albright v. Oliver, 510 U.S. 266,
268 (1994), and all factual allegations must be construed in the
light
most
favorable
to
the
plaintiff,
see
Harrison
v.
Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).
In evaluating the complaint, unsupported legal
allegations
not
need
be
accepted.
Revene
Com’rs, 882 F.2d 870, 873 (4th Cir. 1989).
v.
Charles
Cnty.
Legal conclusions
couched as factual allegations are insufficient, Iqbal, 556 U.S.
at 678, as are conclusory factual allegations devoid of any
reference to actual events, United Black Firefighters v. Hirst,
604
F.2d
844,
847
(4th
Cir.
1979);
see
also
Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009).
Francis
v.
“[W]here the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged,
but it has not ‘show[n] . . . that the pleader is entitled to
relief.’”
8(a)(2)).
Iqbal,
556
U.S.
at
679
(quoting
Fed.R.Civ.P.
Thus, “[d]etermining whether a complaint states a
plausible claim for relief will . . . be a context-specific task
that
requires
the
reviewing
experience and common sense.”
Plaintiffs’
claims
court
to
draw
on
its
judicial
Id.
alleging
fraud
and
violations
of
the
MCPA are subject to the heightened pleading standard of Rule
5
9(b).
See Harrison, 176 F.3d at 783-84; Dwoskin v. Bank of Am.,
N.A., 850 F.Supp.2d 557, 569 (D.Md. 2012).
Rule 9(b) provides
that, “in alleging a fraud or mistake, a party must state with
particularity
mistake.
the
circumstances
constituting
the
fraud
or
Malice, intent, knowledge, and other conditions of a
person’s
mind
may
be
alleged
generally.”
Such
allegations
typically “include the ‘time, place and contents of the false
representation, as well as the identity of the person making the
misrepresentation and what [was] obtained thereby.’”
Superior
Bank, F.S.B. v. Tandem Nat’l Mortg., Inc., 197 F.Supp.2d 298,
313-14 (D.Md. 2000) (quoting Windsor Assocs., Inc. v. Greenfeld,
564
F.Supp.
273,
280
(D.Md.
1983)).
In
cases
involving
concealment or omission of material facts, however, meeting Rule
9(b)’s particularity requirement will likely take a different
form.
539,
See Shaw v. Brown & Williamson Tobacco Corp., 973 F.Supp.
552
(D.Md.
1997)
(recognizing
that
an
omission
likely
“cannot be described in terms of the time, place, and contents
of the misrepresentation or the identity of the person making
the
misrepresentation”
purposes
of
Rule
9(b)
(internal
are
to
quotations
provide
the
omitted)).
defendant
The
with
sufficient notice of the basis for the plaintiff’s claim; to
protect
the
defendant
against
frivolous
suits;
to
eliminate
fraud actions where all of the facts are learned only after
6
discovery; and to safeguard the defendant’s reputation.
See
Harrison, 176 F.3d at 784.
III. MCPA (Count I) and Common Law Fraud (Count II)
The MCPA prohibits “unfair or deceptive trade practices.”
Md. Code Ann., Com. Law, § 13-301.
The MCPA proscribes fourteen
categories of unfair or deceptive practices, including “any . .
. [f]alse . . . 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” and “any . . . [f]ailure to state a material fact if
the failure deceives or tends to deceive.”3
Similarly, to bring
a common law fraud claim in Maryland, the plaintiff must show:
(1)
that
the
defendant
made
a
false
representation; (2) that its falsity was
either known to the defendant, or the
misrepresentation
was
made
with
such
reckless indifference to the truth as to be
equivalent to actual knowledge; (3) that it
was made for the purpose of defrauding the
person claiming to be injured thereby; (4)
that such person not only relied upon the
misrepresentation, but had a right to rely
upon it in the full belief of its truth, and
would not have done the thing from which the
3
As mentioned in the prior memorandum opinion, private
parties who bring a suit must establish that they “suffered an
identifiable loss, measured by the amount the consumer spent or
lost as a result of his or her reliance on the sellers’
misrepresentation.”
(ECF No. 33, at 22 n.8).
Even when a
consumer decides to pursue public enforcement, “the Division
must
determine
that
the
consumer
relied
upon
the
misrepresentation” before it can order a violator to pay
restitution to that particular consumer.”
Consumer Prot. Div.
v. Morgan, 387 Md. 125, 164 (2005).
7
injury
had
resulted
had
not
such
misrepresentation been made; and (5) that
such
person
actually
suffered
damage
directly resulting from such fraudulent
misrepresentation.
Parker v. Columbia Bank, 91 Md.App. 346, 359 (1992); Gourdine v.
Crews, 405 Md. 722 (2008).
The
second
amended
complaint
alleges
that
Wells
Fargo
deceptively misled Plaintiffs by making the following false or
misleading statements: (1) the statement in an April 8, 2011
letter from Wells Fargo that “our goal is to ensure you have
every opportunity to retain your home” and promise to process
the
Greens’
loan
modification
request
if
they
submitted
the
required documentation; (2) Wells Fargo’s statements after May
24, 2011 that it had not received documentation from Plaintiffs,
when
in
fact
the
Greens
had
submitted
the
requested
documentation; (3) Wells Fargo’s statement in the November 4,
2011 correspondence that Plaintiffs had not provided any input
and that Defendant made unsuccessful attempts to contact the
Greens; and (4)
Wells Fargo’s misrepresentation in a “Final
Loss Mitigation Affidavit” filed in the foreclosure proceeding
in the Circuit Court for Prince George’s County that the Greens
omitted the signed second page from their 2009 tax returns.
(ECF No. 35-1, at 14-15).
that
Plaintiffs
The second amended complaint states
detrimentally
relied
on
these
alleged
misrepresentations by taking time out of their lives to complete
8
the
applications
attending
and
resubmit
court-ordered
paperwork;
mediation
in
the
requesting
state
and
foreclosure
action to explain that the full tax returns were signed and
submitted; experiencing mental anguish as a result of supplying
the applications and paperwork and by knowing that Defendant
made
false
disrespect,
or
and
misleading
wasted
statements,
time
devoted
“and
to
thus
futile
insult
and
and
tedious
applications and paperwork”; generally taking time to work with
Defendant.
(Id.
at
15-18).
Plaintiffs
assert
that
they
reasonably relied on the alleged false or misleading statements
because “Plaintiffs had no cause to distrust Defendant until the
November 4, 2011 letter [], which blatantly falsely stated the
Greens had supplied no input, despite voluminous faxes and other
acts of working closely with Defendant,” and “it was reasonable
to request foreclosure mediation . . . because the Greens felt
the court system could be of assistance.”
The
allegations
in
Plaintiffs’
(Id. at 18-19).
second
amended
complaint
still do not support claims for MCPA violations and common law
fraud.
In
the
February
27,
2013
opinion,
the
undersigned
concluded that Plaintiffs have not made a sufficient showing of
damages resulting from their reliance on Defendant’s promises or
misrepresentations.
(See ECF No. 33, at 24).
in the second amended complaint fare no better.
The allegations
The undersigned
held that “if Plaintiffs can show that they suffered damages as
9
a
result
of
their
reasonable
reliance
misrepresentations,
they
could
assert
relief.”
30).
The
Maryland
(Id.
at
on
the
plausible
Court
of
alleged
claims
for
Appeals
has
“established that, in order to articulate a cognizable injury
under
the
Consumer
Protection
objectively identifiable.
Act,
the
injury
must
be
In other words, the consumer must
have suffered an identifiable loss, measured by the amount the
consumer spent or lost as a result of his or her reliance on the
sellers’ misrepresentation.”
Md. 108, 143 (2007).
Lloyd v. Gen. Motors Corp., 397
Actual injury or loss under the MCPA
includes “emotional distress and mental anguish” provided “there
was at least consequential physical injury” in the sense that
“the injury for which recovery is sought is capable of objective
determination.”
See Hoffman v. Stamper, 385 Md. 1, 32 (2005).
“Thus, a complaint will adequately plead damages under the MCPA
when it contains plausible allegations that the plaintiff relied
upon the defendant’s false or misleading statements and suffered
actual loss or injury as a result of that reliance.”
Butler v.
Wells Fargo Bank, N.A., Civil Action No. MJG-12-2705, 2013 WL
3816973, at *3 (D.Md. July 22, 2013) (emphasis in original).
Here, Plaintiffs assert that they suffered mental anguish –
which also manifested itself in physical symptoms – because they
expended
time
resubmitting
documents
which
were
allegedly
already provided to Wells Fargo, albeit over a month past the
10
ten-day
deadline
letter.
indicated
in
Wells
Fargo’s
April
8,
2011
But Plaintiffs acknowledge that they “would have done
this even if Defendant had the intent to properly process the
loan.”
(ECF
contention
No.
that
35-1,
they
at
“knew
16).
and
Furthermore,
accepted
that
Plaintiffs’
they
were
in
default . . . for Plaintiffs, it was the principle of the matter
that caused the stress to culminate in physical symptoms” also
undermines that they suffered damages as a result of reasonable
reliance on the alleged false representations.
(emphasis added).
damages
caused
plausible
to
(Id.
at 18)
Such allegations that Defendant is liable for
to
Plaintiffs
support
MCPA
“out
of
violations
principle”
or
common
are
law
not
fraud.
Nevertheless, Plaintiffs urge that “the controlling fact of the
matter is that Defendant did not have [] an intent [to process
their loan modification], and had Plaintiffs known the truth of
the matter . . . Plaintiffs would not have devoted said time to
said activities.”
second
amended
(Id.).
complaint
But Plaintiffs’ allegations in the
again
do
not
show
that
Defendants’
alleged misrepresentations caused them to miss work, lose wages,
or to forego any actions in connection with their foreclosure
proceedings.
As Defendant points out “[i]t is equally true that
any alternative efforts to avoid foreclosure would have required
some time and effort.”
(ECF No. 36-1, at 4).
See, e.g.,
Butler, 2013 WL 3816973, at *6 (distinguishing cases involving
11
actionable MCPA claims; “[i]n each of those cases, the plaintiff
had made payments under a TPP agreement or other modified plan,
received inconsistent communication from the mortgage services
regarding a permanent modification or loan reinstatement, and
claimed to have suffered resulting injury in the form of lower
credit scores, lost time at work, and emotional distress.”).
The allegations in the second amended complaint contain the
same deficiencies as the amended complaint, as Plaintiffs also
cannot show that they reasonably relied to their detriment on
any of the alleged misrepresentations.
First, Plaintiffs still
do not allege that Defendant specifically directed them to do,
or to refrain from doing, anything that adversely affected the
state
of
affairs
misrepresentations.
that
To
existed
the
prior
extent
to
the
Plaintiffs
alleged
maintain
that
Wells Fargo’s communications gave them a false sense of comfort
that their loan would be modified and foreclosure proceedings
would
be
point.
avoided,
Defendant’s
correspondence
undercuts
this
Indeed, in the December 14, 2011 correspondence, Wells
Fargo advised Plaintiffs that “[e]ven though [it would] continue
to work with [Plaintiffs] to help [] avoid a foreclosure sale,
it’s
important
to
understand
that
[Plaintiffs’]
already been referred to foreclosure.”
mortgage
has
(ECF No. 24-9, at 2).
The letter further stated that Plaintiffs may “see steps being
taken
to
proceed
with
a
foreclosure
12
sale
of
[their]
home.”
(Id.).
The November 4, 2011 letter from Wells Fargo included a
similar
warning
that
if
a
mortgage
has
been
referred
foreclosure, “the process moves forward at the same time.”
to
(ECF
No. 24-7).
Furthermore, the court in Butler rejected the very same
allegations premised on the MCPA as Plaintiffs offer here.
2013 WL 3816973, at *4.
See
Specifically, the plaintiff in that
case alleged the following facts in support of the MCPA claim:
Ms. Butler did rely to her detriment on the
false or misleading statements by being
lulled into a false state of comfort, taking
time out of her life to submit paperwork to
Wells Fargo and otherwise work closely with
Wells Fargo in pursuit of the promised loan
modification, and by giving up her rights to
raise objections in the foreclosure action.
As a direct and proximate cause of Wells
Fargo’s conduct, Ms. Butler suffered severe
mental anguish, which manifested physically
through vomiting, headaches, sleep loss, and
other physical symptoms.
Id.
The
court
concluded
“Butler’s
‘false
resulting
therefrom
claim.”
Id.
state
are
that
of
these
comfort’
inadequate
allegations
and
to
relating
emotional
present
a
Judge Garbis reasoned that:
[w]hile Wells Fargo can be faulted for
erroneous and inconsistent statements, it is
hardly plausible to contend that Butler –
faced with conflicting statements – could
rely upon some and ignore contrary ones. . .
.
[a]lthough the Court must draw all
13
to
distress
plausible
reasonable inferences in favor of Butler, it
is not rational to conclude that she would,
or could, draw any reasonable inference
other than that Wells Fargo’s statements
could not be relied upon to tell definitely
what the status of her loan modification
was.
Id. at *5.
The same logic applies to these facts.
Notably, in
Butler, Wells Fargo made inconsistent statements to plaintiff,
representing
that
she
“qualified
for
the
loan
modification,”
later stating that it was still “working in good faith towards a
loan workout,” and then stating that Wells Fargo would respond
to her loan modification request.
In contrast, Plaintiffs here
do not allege that Wells Fargo ever indicated that it would
approve the Greens’ request for a loan modification.
as
Defendant
points
out,
“the
foreclosure
Moreover,
docket
reflects
clearly that the foreclosure sale had not been scheduled as of
the date they filed the lawsuit and the Plaintiffs had not lost
any ability to assert defenses and challenges, to the extent
they believed there were any, to the foreclosure.”
(ECF No. 36-
1, at 3); Goss v. Bank of America, N.A., 917 F.Supp.2d 445, 450
(D.Md. 2013) (“because they Gosses cannot show they reasonably
and detrimentally relied on any of BANA’s statements, the Gosses
have not stated a valid MCPA or fraud claim.”).
The allegations
in Plaintiffs’ second amended complaint fail to show that they
took any action to their detriment in reasonable reliance on
Wells
Fargo’s
statements
or
representations.
14
Plaintiffs’
principal
contention
is
that
they
“wasted
their
time”
resubmitting paperwork and performed “tedious tasks,” (ECF No.
37-1, at 4), but this does not rise to the level of damages in
reasonable and detrimental reliance to be actionable under the
MCPA or as common law fraud.
Butler, 2013 WL 3816973, at *4 n.9
(“Even if Butler were still seeking damages for filling out
paperwork or foregoing action in the foreclosure proceedings,
the
Court
would
dismiss
these
claims.
.
.
.
The
Amended
Complaint contains no allegations as to what action Butler would
or
could
have
taken
in
the
foreclosure
action
absent
the
Representations and/or whether any such action could have been
timely
under
particular
applicable
state
Representation
law
and
based
upon
date
of
in
occurrence
the
a
the
state
foreclosure proceedings.”).
Plaintiffs’ attempt to show detrimental reliance by having
to participate in mediation in connection with the foreclosure
proceedings
“[t]he
is
defect
similarly
in
this
unavailing.
theory
is
As
obvious
Defendant
–
there
argues,
was
no
misrepresentation made to the Plaintiffs which they justifiably
relied upon to their detriment.
To the contrary, Plaintiffs are
alleging that they believed the representation made to the Court
[in the ‘Final Loss Mitigation Affidavit’] was incorrect and
that they knew it was incorrect at the time it was made.”
(ECF
No. 36-1, at 6); see Coulibaly v. J.P. Morgan Chase Bank, Civil
15
Action No. DKC 10-3517, 2011 WL 3476994, at *19 (D.Md. Aug. 8,
2011) (dismissing fraud claims arising out of HAMP process for
lack of reliance, where “the complaint indicates that Plaintiff
protested many of [Defendant]’s actions at every opportunity”).
Furthermore,
Plaintiffs
have
not
alleged
that
they
suffered
damages as a result of having participated in mediation.
fact,
Plaintiffs
acknowledge
that
they
decided
to
In
pursue
mediation because they recognized the potential value in that
process.
Based on the foregoing, Plaintiffs’ MCPA and common law
fraud claims will be dismissed.
IV.
Conclusion
For the foregoing reasons, the motion to dismiss filed by
Defendant will be granted.
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
16
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