Hoang et al v. Rosen et al

Filing 3

MEMORANDUM AND ORDER CONSTRUING the cover letter accompanying Plaintiffs complaint (ECF No. 1-2) as a motion for leave to proceed in forma pauperis, and, so construed, GRANTING, DISMISSING Plaintiffs' complaint, DENYING as moot 2 Plaintiffs' motion for temporary restraining order, and DIRECTING the Clerk of Court to CLOSE this case (c/m to Plaintiffs 5/10/12 sat). Signed by Chief Judge Deborah K. Chasanow on 5/10/12. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
MINH VU HOANG, et al.
:
v.

:

Civil Action No. DKC 12-1393

:
GARY ROSEN, et al.
:
MEMORANDUM OPINION AND ORDER
On May 10, 2005, Minh Vu Hoang filed a voluntary petition
under chapter 11 of the bankruptcy code in the United States
Bankruptcy Court for the District of Maryland.

Her husband,

Thanh Hoang, separately filed a chapter 11 petition on July 12,
2005.
the

Both cases were subsequently converted to chapter 7 and
bankruptcy

administered.

court
Gary

ordered
Rosen

was

that

the

appointed

estates
as

the

be

jointly

chapter

7

trustee.1
On December 2, 2005, Washington Mutual Bank, on behalf of
itself and its assignees and/or successors in interest, filed in
the bankruptcy case a motion for an order granting relief from
the automatic stay.

Washington Mutual asserted that it was “the

current payee of a promissory note secured by a deed of trust”
upon the Hoang’s residence, located at 9101 Clewerwall Drive in

1

A more complete recitation of the issues arising in the
bankruptcy case was set forth in In re Hoang, --- B.R. ----,
2012 WL 832816 (D.Md. Mar. 9, 2012).

Bethesda, Maryland (“the Property”); that Mr. and Mrs. Hoang
were in default for “3 monthly payments of $6,274.90” and “2
late charges of $279.45”; and that it had “elected to initiate
foreclosure

proceedings

on

the

Property

with

respect

to

the

subject Trust Deed,” but was prevented from doing so by the
automatic stay.
6).

(Bankr. No. 05-21078, ECF No. 268, at ¶¶ 3, 5,

The bankruptcy court granted that motion on June 1, 2007,

lifting the stay as to the successor in interest to Washington
Mutual Bank as holder of the promissory note, Quantum Servicing
Corporation (“Quantum”).

(Bankr. No. 05-21078, ECF No. 785).

The order further provided that the stay would remain in effect
until February 28, 2008, upon the following conditions:
1.
The Trustee shall tender adequate
protection payments to Movant in the amount
of $125,498.00 which represents payments
from January, 2006 through April, 2007
within five (5) days of the entry of this
Order[;]
2.
2008, the
lump sum
payments
February,

By not later than February 12,
Trustee shall tender to Movant a
equal to all monthly mortgage
owing
for
May,
2007
through
2008[; and]

3.
The Trustee shall have instituted
and diligently pursued such proceedings as
are necessary to secure possession of the
property in anticipation of the marketing
and sale of the property[.]
(Id.).

When the trustee failed to make the required payment by

February 12, 2008, Quantum filed a notice of secured creditor’s

2

right to commence foreclosure proceedings, advising that it was
exercising

its

“right

to

commence

foreclosure

proceedings

pursuant to the deed of trust dated May 9, 1990, . . . by virtue
of the lifting of the stay of 11 U.S.C. § 362(a).”

(Bankr. No.

05-21078, ECF No. 965).
On

January

12,

2011,

Mrs.

Hoang

filed

a

“motion

abandonment of estate property and debtors’ residence.”
No. 05-21078, ECF No. 1586).

for

(Bankr.

She asserted that, on or about

November 30, 2010, she received a notice of intent to foreclose
from the loan servicer, SN Servicing Corporation, advising that
the loan had been in default since April 10, 2007, and that the
successor

in

interest

to

Quantum,

Citigroup

Global

Markets

Realty Corp., was owed a total of $1,103,740.92 as of January
14, 2011, plus interest accruing at the rate of $152.87 per
diem.

She promptly requested mitigation of this debt, asserting

her belief that “once this bankruptcy case [is] closed we should
have

cash

to

pay

off

Markets Realty Corp.”
B).

Mrs.

abandon

the

Hoang

mortgage

loan

of

Citigroup

Global

(Bankr. No. 05-21078, ECF No. 1586-3, Ex.

asked

Debtor’s

[U.S.C.] § 554.”

the

the

court

residence

(Id. at 2).

to

“compel

under

Rule

the

Trustee

6007(b)

and

to
11

The bankruptcy court granted that

motion by an order dated February 28, 2011.
21078, ECF No. 1607).

3

(Bankr. No. 05-

On February 4, 2011, a deed of appointment of substitute
trustees was recorded “by and between Citi Property Holdings
Inc.

and

Trustees.”

Cindy

R.

Diamond

(ECF No. 2-5).

and

Bruce

D.

Brown,

Substitute

This document referenced “a Deed of

Trust dated May 4, 1990 from Thanh Hoang and Minh-Vu Hoang to
Randy Weiss, Esq., Trustee[],” which “was given to secure a loan
evidenced by a Promissory Note in the amount of One Million and
00/100 Dollars ($1,000,000.00) dated May 4, 1990, payable to
Home Savings of America, F.A.”

(Id.).

Pursuant to the deed of

trust, which “gives the irrevocable power to appoint Substitute
Trustees to the holder of the Note,” Citi Property Holdings,
Inc. (“Citi Property”), “as holder of the Note . . . appoint[ed]
Cindy R. Diamond and Bruce D. Brown as Substitute Trustees.”
(Id.).
Soon thereafter, an affidavit of right to foreclose and
statement of deed of trust debt was filed in the Circuit Court
for Montgomery County, Maryland, by Cynthia Burger, an “Asset
Manager of SN Servicing Corporation, servicing agent for Citi
Property,”

asserting

the

right

to

foreclose

on

the

Property

based on a review of “the files of Citi Property . . . , the
holder of the Deed of Trust between Thanh Hoang and Minh-Vu
Hoang

and

Cindy

R.

Diamond

and

Bruce

D.

Brown,

Trustees, dated May 4, 1990[.]”

(ECF No. 2-6).

that

as

affidavit,

the

debt

owed
4

of

March

Substitute

According to
3,

2011,

was

$1,112,745.38, with interest continuing to accrue at a rate of
$152.87 per diem.
in

the

circuit

At around the same time, Citi Property filed
court

an

affidavit

of

default

and

right

to

foreclose, attesting that default occurred on April 10, 2007,
and

that

notice

of

intent

Hoangs on November 30, 2010.

to

foreclose

was

(ECF No. 2-8).

provided

to

the

Citi Property also

filed an affidavit of note and note ownership, asserting that it
“is the current holder of that certain Promissory Note from
Thanh Hoang and Minh-Vu Hoang” and that “the copy of the Note
filed in these proceedings is a true and accurate copy of the
(ECF No. 2-7).2

original note.”

On or about April 27, 2012, the Hoangs were provided notice
from the substitute trustees that a foreclosure sale of the
Property is currently scheduled to take place on May 14, 2012,
at 10:30 a.m.
instant

(ECF No. 2-3).

action,

proceeding

In response, they commenced the

pro

se,

against

Mr.

Rosen,

the

substitute trustees, the loan servicer, and the note holder,
seeking to enjoin the foreclosure sale and quiet title to the
Property.

(ECF

No.

1).3

Concomitantly

with

the

complaint,

Plaintiffs filed a motion for a temporary restraining order,

2

Plaintiffs attach a copy of the note that was filed, but
it is largely illegible.
3

Ms. Hoang purports to sign the complaint on behalf of her
husband.
While the validity of this signature may be
questionable, the court deems it acceptable in this instance.
5

requesting that an emergency hearing be scheduled in advance of
the

foreclosure

sale.

(ECF

No.

2).

The

complaint

was

accompanied by a letter in which Ms. Hoang acknowledges the
requirement that she either pay the filing fee or file a motion
for leave to proceed in forma pauperis, and asserts that she is
currently incarcerated and “very limited in resource.”

(ECF No.

1-2).4
The
relate

complaint,
largely

to

which
the

is

inartfully

underlying

drafted,

promissory

appears

note.

to

While

Plaintiffs acknowledge that they executed the deed of trust on
May 4, 1990, they contend that they never signed the note, and
that the document filed in circuit court, which bears their
signatures, is a forgery.

On this basis, they challenge the

authority of the substitute trustees to proceed with the sale,
and seek, inter alia, rescission of the deed of trust on the
theory that because the promissory note is invalid, “the Deed of

4

Ms. Hoang is presently incarcerated at a federal
correctional facility in Florida pursuant to a tax and
bankruptcy fraud conviction in this court. In light of the fact
that she has been granted in forma pauperis status in numerous
prior cases (see, e.g., Civ. No. DKC 11-3431, ECF No. 9, at 2
(noting that Ms. Hoang “is entitled to proceed in forma pauperis
for the reasons stated in an order granting such relief in four
other appeals”)) and that she and her husband are both in
bankruptcy, the court construes the cover letter as a motion for
leave to proceed in forma pauperis.
So construed, the motion
will be granted.
6

Trust is null and void and without legal force[.]”

(ECF No. 1,

at 9).
Federal jurisdiction is based on alleged violations of the
Fair Debt Collection Practices Act (“FDCPA”).5
Plaintiffs,
statutory

“[a]ll

defendants

[definition]

of

except

‘debt

Gary

collector

According to

Rosen
.

.

meet
[and]

.

the
are

therefore [] covered by all sections of the FDCPA, regardless of
whether they are also enforc[ing] security interests.”
1,

at

15).

Plaintiffs

specifically

fault

the

(ECF No.
substitute

trustees for proceeding with the foreclosure sale on an invalid
promissory note.

They charge that the substitute trustees “are

using unfair and [un]conscionable means to collect the debt . .
. [by] demand[ing] interest, fee, charge and expense without
having [an] authorized agreement creating the debt.”
16).
the

(Id. at

They further contend that the substitute trustees violated
FDCPA

“by

furnishing

deceptive

affidavits

to

appoint

[themselves] to enforce [their] power of sale” and by failing to
ensure that all assignments of the allegedly nonexistent note
were “valid and legal.”

(Id.).

Given the fact that various note holders have, since 2005,
attempted

to

foreclose

on

the

Property

and

that

Plaintiffs

apparently made payments on the debt evidenced by the note for
5

Despite Plaintiffs’ assertion to the contrary, there is no
basis for diversity jurisdiction because Plaintiffs and multiple
defendants are Maryland residents. See 28 U.S.C. § 1332(a)(1).
7

approximately fifteen years before they filed for bankruptcy,
their present assertion that the note is invalid is dubious, at
best.

Nevertheless, their federal claims for violation of the

FDCPA cannot be sustained because they are untimely.
to

15

U.S.C.

§

1692k(d),

“[a]n

action

to

Pursuant

enforce

liability

created by [the FDCPA] may be brought in any appropriate United
States

district

court

without

regard

to

the

amount

in

controversy . . . within one year from the date on which the
violation occurred.”

Here, the alleged FDCPA violations appear

to have occurred at around the time the foreclosure action was
commenced in the Circuit Court for Montgomery County.
to

publicly

available

records,

the

foreclosure

According
action

was

reopened by the substitute trustees on February 17, 2011; Mr.
and Mrs. Hoang were served by no later March 1; and they both
filed answers by March 24.6

Thus, Plaintiffs were required to

bring their FDCPA claims by no later than March 2012.

Because

they did not commence this action until on or about May 7, 2012,
their federal claims are time-barred.7

6

The docket further reflects that Plaintiffs have actively
defended their interests in that case.
Indeed, they were
granted a hearing on their objection to final loss mitigation;
the case was stayed for 120 days pending foreclosure mediation;
and they filed multiple appeals to the Court of Special Appeals
of Maryland.
7

To the extent Plaintiffs intend to argue that the
substitute trustees’ letter, dated April 27, 2012, providing
notice of the foreclosure sale constitutes a violation of the
8

Pursuant to 28 U.S.C. § 1367(c), the court has discretion
to

retain

or

dismiss

nonfederal

claims

where,

as

here,

federal basis of the action is no longer applicable.

the

District

courts in the Fourth Circuit “enjoy wide latitude in determining
whether or not to retain jurisdiction over state claims when all
federal claims have been extinguished.”
F.3d 106, 110 (4th Cir. 1995).

Shanaghan v. Cahill, 58

In deciding whether to exercise

discretion, courts consider factors such as the “convenience and
fairness to the parties, the existence of any underlying issues
of

federal

economy.”

policy,

comity,

and

considerations

of

judicial

Id. (citing Carnegie–Melon Univ. v. Cohill, 484 U.S.

343, 350 n. 7 (1998)).

Ultimately, supplemental jurisdiction

“is a doctrine of flexibility, designed to allow courts to deal
with cases involving pendent claims in the manner that most
sensibly accommodates a range of concerns and values.”

Id.

(quoting Carnegie–Melon Univ., 484 U.S. at 350).
The court declines to exercise supplemental jurisdiction
over

Plaintiffs’

remaining

state

law

claims,

which

they

presumably would be free to litigate in the foreclosure action
in state court, if they have not already.

FDCPA, they have failed to state a claim.
Indeed, this notice
was required by statute.
See Md. Code Ann., Real Prop. § 7105.2(b).
9

For the foregoing reasons, it is this 10th day of May, 2012,
by

the

United

States

District

Court

for

the

District

of

Maryland, ORDERED that:
1.

The

court

construes

the

cover

letter

accompanying

Plaintiffs’ complaint (ECF No. 1-2) as a motion for leave to
proceed in forma pauperis, and, so construed, said motion BE,
and the same hereby IS, GRANTED;
2.
hereby

Plaintiffs’ complaint (ECF No. 1) BE, and the same
IS,

DISMISSED,

sua

sponte,

pursuant

to

28

U.S.C.

§

1915(e);
3.

Plaintiffs’

motion

for

temporary

restraining

order

(ECF No. 2) BE, and the same hereby IS, DENIED as moot; and
4.

The

clerk

is

directed

to

transmit

copies

of

this

Memorandum Opinion and Order directly to Plaintiffs and CLOSE
this case.

________/s/__________________
DEBORAH K. CHASANOW
United States District Judge

10