McGhee et al v. JPMorgan Chase Bank, National Association et al
Filing
39
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 8/20/13. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
RICHARD MCGHEE, et al.
:
v.
:
Civil Action No. DKC 12-3072
:
JP MORGAN CHASE BANK, N.A.,
et al.
:
MEMORANDUM OPINION
Presently pending and ready for review are the motions to
dismiss filed by Defendants JP Morgan Chase Bank, N.A. (“JP
Morgan”) and Mortgage Electronic Registration Systems (“MERS”)
(ECF No. 9); Kondaur Capital Corporation (“Kondaur”) (ECF No.
7); Fulton Bank, N.A. (ECF No. 5); Signature Group Holdings,
Inc. (“Signature”) (ECF No. 4); Shapiro & Burson, L.L.P. (ECF
No. 3), and BWW Law Group, L.L.C. (ECF No. 15).1
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 motions to dismiss will be granted.
1
BWW Law Group, L.L.C., was formerly Bierman, Gessing, Ward
& Wood, L.L.C.
I.
Background
The following facts are either set forth in the complaint,
evidenced
by
documents
referenced
or
relied
upon
in
the
complaint, or are matters of public record of which the court
may take judicial notice.2
A.
On
Thornville Drive Property
February
2,
2007,
Plaintiffs
Richard
McGhee
and
Jacqueline McGhee obtained a loan of $480,000 from Signature as
part
of
a
Thornville
refinance
transaction
Drive
Fort
in
on
Plaintiffs’
Washington,
Maryland
property
at
(“Thornville
2
“Although as a general rule extrinsic evidence should not
be considered at the 12(b)(6) stage,” the court may consider
such evidence where the plaintiff has notice of it, does not
dispute its authenticity, and relies on it in framing the
complaint.
American Chiropractic Ass’n v. Trigon Healthcare,
Inc., 367 F.3d 212, 234 (4th Cir. 2002); see also Douglass v.
NTI-TSS, Inc., 632 F.Supp.2d 486, 490 n. 1 (D.Md. 2009). Here,
Defendants have attached numerous documents – including deeds of
trust, promissory notes, and appointments of substitute trustees
– which are referenced or relied upon by the complaint.
In
their opposition papers, Plaintiffs do not challenge the
authenticity of the attached documents.
Thus, the court may
consider them in resolving the pending motions to dismiss.
Furthermore, “a federal court may consider matters of
public record such as documents from prior . . . court
proceedings in conjunction with a Rule 12(b)(6) motion.” Walker
This is
v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009).
particularly true where, as here, Defendants seek dismissal
pursuant to the doctrine of res judicata. See Brooks v. Arthur,
626 F.3d 194, 200 (4th Cir. 2010) (“[W]hen entertaining a motion
to dismiss on the ground of res judicata, a court may take
judicial notice of facts from a prior judicial proceeding when
the res judicata defense raises no disputed issue of fact.”
(internal marks and citation omitted)).
2
Drive”).
(ECF No. 4-1).3
The loan was secured by a deed of
trust granting Signature a security interest in the property,
and the deed of trust was recorded among the land records of
Prince George’s County.
trust’s beneficiary.
(Id.).
MERS was listed as the deed of
(ECF No. 4-2).
On March 23, 2009, MERS
assigned the deed of trust to JP Morgan and it was recorded
among the land records of Prince George’s County.
4).
(ECF No. 9-
On April 15, 2009, JP Morgan appointed John Burson and
others from the law firm Shapiro & Burson, LLP, as substitute
trustees of the deed of trust.4
This appointment was recorded
among the land records of Prince George’s County.
(ECF No. 9-
5).
On June 15, 2009, John Burson — as substitute trustee —
initiated
property
Maryland.
foreclosure
in
the
proceedings
Circuit
Court
on
for
the
Prince
Thornville
George’s
Drive
County,
(ECF No. 9-6, docket for case number CAE09-17323).
On or about September 11, 2009, Shapiro, by its agents, filed an
affidavit of indebtedness in the foreclosure case.
20).
(ECF No. 1 ¶
JP Morgan bought the property at a foreclosure sale.
(Id.
3
Fremont Investment & Loan provided the loan. Signature
Group Holdings is its successor in interest.
4
Plaintiff has erroneously named Mr. Burson’s law firm,
Shapiro & Burson, L.L.C., rather than Mr. Burson himself, as a
defendant in this case.
Given that the complaint will be
dismissed on other grounds, however, the misnomer is of no real
consequence.
3
at ¶ 21).
On November 12, 2010, Plaintiffs filed a “Verified
Counter Complaint and Injunctive Relief Pursuant to Civ. R. 65.”
(ECF No. 3-4).
John
Burson,
The counterclaim alleged that Shapiro & Burson,
and
JP
Morgan
failed
to
disclose
material
information pertaining to the loan and to provide Plaintiffs
important
documents
in
violation
of
numerous
provisions
federal law, resulting in loss of property and damages.
of
(Id.).
The circuit court did not credit these allegations and ratified
the
foreclosure
sale
on
December
29,
2010
(ECF
No.
9-7);
ratified the auditor’s report on April 15, 2011 (ECF 9-6, dkt.
no. 25); and awarded possession of Thornville Drive to JP Morgan
on September 20, 2011.
(Id., dkt. no. 034).
Plaintiffs subsequently appealed this ruling to the Court
of Special Appeals of Maryland and filed an Emergency Motion to
stay the judgment in the circuit court.
(Id., dkt nos. 19, 28).
The emergency motion was denied by the circuit court and the
Court
of
Special
Appeals,
(Id.,
dkt
nos.
33,
35),
and
Plaintiffs’ appeal was dismissed by the Court of Special Appeals
on its own motion pursuant to Maryland Rule 8-602(a)(8) for
failure to comply with the rules on style and formatting of
court filings.
Special Appeals).
(ECF No. 3-5, order of the Maryland Court of
On March 19, 2012, Plaintiffs filed a motion
in the circuit court for an ex parte temporary restraining order
and permanent injunction.
(Id., dkt. no. 43).
4
This motion was
denied by the circuit court.
(ECF No. 9-9).
The circuit court
acknowledged Plaintiffs’ continued allegations of fraud on the
part of the substitute trustees in the form of produced and
filed fraudulent documents upon the court, but found that the
allegations
necessary
did
for
ratification.
extrinsic
a
rise
court
to
is
trial’
when
as
the
to
(Id. at 2).
fraud
adversarial
not
level
revise
an
of
extrinsic
enrolled
fraud
order
of
The circuit court explained that
the
fraud
opposed
to
“‘actually
intrinsic,
prevents
when
fraud
an
is
‘employed during the course of the hearing which provides the
forum for the truth to appear, albeit, the truth was distorted
by the complained of fraud.’”
(Id. (quoting Jones v. Rosenberg,
178 Md. App. 54, 73 (2008))).
B.
Old Fort Road Property
On December 4, 2006, Plaintiffs obtained a loan of $684,000
from Fulton Bank.5
The loan was secured by a deed of trust
granting Fulton Bank a security interest in Plaintiffs’ property
located at Old Fort Road, in Fort Washington, Maryland, and the
deed of trust was recorded among the land records of Prince
George’s County (“Old Fort Road”).
(ECF No. 15, Ex. A).
On
February 18, 2010, DLJ Mortgage Capital, Inc., appointed Jacob
Gessing
5
and
others
Resource Bank
successor by merger.
from
the
provided
BWW
the
5
Law
loan.
Group
Fulton
as
substitute
Bank
is
the
trustees.
(ECF No. 7-2).6
This appointment was recorded among
the land records of Prince George’s County.
On
March
initiated
26,
2010,
foreclosure
Jacob
Gessing,
proceedings
Prince George’s County, Maryland.
number CAE10-08656).
as
in
(ECF No. 1 ¶ 28).
substitute
the
Circuit
trustee,
Court
(ECF No. 5-2, docket for case
On April 12, 2010, DLJ Mortgage Capital
recorded an assignment of the deed of trust to Kondaur.
No. 1 ¶ 30).
for
(ECF
On or about September 27th, 2010, Shapiro, by its
agents, filed an affidavit of indebtedness in the foreclosure
case.
(ECF No. 1 ¶ 31).
foreclosure sale.
Kondaur bought back the property at a
(Id. at ¶ 32).
The circuit court ratified
the sale on February 2, 2011 (ECF No. 7-3); the auditor’s report
on
March
29,
2011
(ECF
No.
5-2,
dkt
no.
23);
and
awarded
possession of Old Fort Road to Kondaur on June 15, 2011 (Id.,
dkt. no. 29).
Plaintiffs subsequently appealed this ruling to the Court
of Special Appeals and concomitantly filed an emergency motion
to stay the judgment in the circuit court.
38).
the
(Id., dkt nos. 30,
The emergency motion was denied by the circuit court and
Court
of
Special
Appeals
(Id.,
dkt
nos.
39,
41),
and
Plaintiffs’ appeal was dismissed by the Court of Special Appeals
6
Plaintiff has erroneously named Mr. Gessing’s law firm,
BWW Law Group, L.L.C., rather than Mr. Gessing himself, as a
defendant in this case.
Given that the complaint will be
dismissed on other grounds, however, the misnomer is of no real
consequence.
6
on its own motion pursuant to Maryland Rule 8-602(a)(8) for
failure to comply with the rules on style and formatting of
court
filings.
(Id.,
dkt.
no.
46).
On
March
19,
2012,
Plaintiffs filed a motion for an ex parte temporary restraining
order
and
permanent
injunction.
(Id.,
dkt.
no.
47).
This
motion was denied by the circuit court with an opinion identical
to
the
Thornville
Drive
opinion,
finding
that
Plaintiffs’
allegations of fraud did not rise to the level of extrinsic
fraud necessary to revise an enrolled order of ratification.
(ECF No. 5-5).
C.
On
Bankruptcy Filing
July
25,
2012,
Plaintiff
Jacqueline
McGhee
filed
a
Chapter 7 Voluntary Petition in the United States Bankruptcy
Court
for
the
District
of
Maryland.
(ECF
Bankruptcy Case No. 12-23657, dkt no. 1).
5-4,
docket
for
Kondaur and JP Morgan
filed motions for relief from the automatic stay on the Old Fort
Road and Thornville Drive properties, respectively.
nos. 16, 19).
court.
These motions were granted by the bankruptcy
(Id., dkt. no. 27).
proceedings
in
Kondaur
which
in
properties.
(Id., dkt
the
Jacqueline McGhee filed adversary
bankruptcy
she
court
sought
to
against
quiet
JP
title
Morgan
to
the
and
two
McGhee alleged that JP Morgan and Kondaur “did not
have standing to bring the foreclosure action[s] either because
the
Deed
of
Trust
was
not
7
properly
assigned
to
[JP
Morgan/Kondaur] or the Deed of Trust was unsecured at the time
the
foreclosure
Kondaur
action
“engaged
in
was
filed,”
practices
and
that
that
can
JP
fairly
Morgan
be
said
and
to
constitute intrinsic fraud in so far as [JP Morgan/Kondaur] made
intentional
misrepresentations
in
the
foreclosure
order to force a sale of the Property.”
ECF 9-10, at 2-3).
action
in
(ECF No. 5-5, at 2-3;
The bankruptcy court granted JP Morgan and
Kondaur’s motions to dismiss and dismissed the complaints with
prejudice on October 30, 2012.
(ECF No. 5-6; ECF No. 9-12).
On October 18, 2012, Plaintiffs filed a complaint in this
court.
(ECF
No.
1).
Plaintiffs
contend
that
Defendants
violated the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692
et seq.; the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq.; “wrongful
foreclosure”;
and
seek
an
order
moved to dismiss the complaint.
quieting
title.
Defendants
(ECF Nos. 3-5, 7, 9, 15).
Plaintiffs opposed each motion (ECF Nos. 20, 23-27), and each
Defendant replied.
II.
(ECF Nos. 30-35).
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
8
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. 544, 555 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).
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
Comm’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).
III. Analysis
All Defendants contend that the complaint is barred by the
doctrine of res judicata because the cause of action is based
9
fundamentally
on
circuit court.
foreclosure
the
foreclosure
actions
conducted
by
the
Plaintiffs contend that the validity of the
action
was
not
fully
litigated
and
therefore
available for review by this court.
The
principle
of
res
judicata
encompasses
two
concepts:
claim preclusion and issue preclusion, or collateral estoppel.
See In re Varat Enters., Inc., 81 F.3d 1310, 1315 (4th Cir. 1996)
(citing Allen v. McCurry, 449 U.S. 90, 94 (1980)).
The doctrine
of res judicata contemplates, at a minimum, that courts not be
required to adjudicate, nor defendants to address, successive
actions arising out of the same transaction and asserting breach
of the same duty.
See Nilsen v. City of Moss Point, Miss., 701
F.2d 556, 563 (5th Cir. 1983).
For a prior judgment to bar an
action on the basis of res judicata, the parties in the two
actions must be either identical or in privity; the claim in the
second
action
must
be
based
upon
the
same
cause
of
action
involved in the earlier proceeding; and the prior judgment must
be final, on the merits, and rendered by a court of competent
jurisdiction in accordance with due process.
See Grausz v.
Englander, 321 F.3d 467, 472 (4th Cir. 2003).
Three of the Defendants — MERS, Signature, and Fulton Bank
— are not in privity with the parties involved in Plaintiffs’
foreclosure actions.
The term “privity” refers to “a person so
identified in interest with another that he represents the same
10
legal
right.”
Hall
v.
St.
Mary’s
F.Supp.2d 679, 685 (D.Md. 2009).
Seminary
&
Univ.,
608
While MERS, Signature, and
Fulton Bank played some role in the events that eventually led
to Plaintiffs’ foreclosures, their interest in the properties
had
long
extinguished
foreclosures began.
before
the
events
surrounding
the
The loans provided by Signature and Fulton
Bank were pooled, securitized, and serviced by new parties in
2007.
(See ECF No. 1 ¶¶ 12-16, 24-27).
MERS’ interest in the
Thornville Drive property extinguished when it assigned the deed
of
trust
to
JP
Morgan
on
March
23,
2009.
(Id.
at
¶
18).
Therefore, Plaintiffs’ claims as to these defendants are not
barred by res judicata.
All three elements of res judicata are met for defendants
JP Morgan, Kondaur, Shapiro & Burson, and BWW Law Group.
the
parties
are
not
identical
to
those
action, they are in privity with them.
in
the
While
foreclosure
The plaintiffs in the
foreclosure case were the substitute trustees, including Jacob
Gessing of BWW Law Group and John Burson of Shapiro & Burson.
Each of these law firms are named defendants in the instant
case.
The substitute trustees were acting to enforce the rights
of JP Morgan, a defendant here, under the promissory note and
deed of trust associated with the Thornville Drive property.
Similarly,
Gessing
Kondaur
after
it
came
was
into
privity
assigned
the
11
with
deed
of
substitute
trust
trustee
during
the
foreclosure proceedings.
See Vaeth v. Mayor and City Council of
Baltimore City, Civ. No. WDQ–11–0182, 2011 WL 4711904, at *3
(D.Md. Oct. 4, 2011) (“Privity exists when a non-party to the
earlier litigation is ‘so identified with a party . . . that he
represents precisely the same legal right in respect to the
subject
matter
involved.’”)
(quoting
Martin
v.
Am.
Bancorporation Ret. Plan, 407 F.2d 643, 651 (4th Cir. 2005)).7
With regard to the second element, federal and Maryland
state courts have adopted the “transaction test” to determine
the identity of the causes of action.
See Adkins v. Allstate
Ins. Co., 729 F.2d 974, 976 (4th Cir. 1984); DeLeon v. Slear, 328
Md. 569, 589–90 (1992).
Under this test, claims are considered
a part of the same cause of action when they arise out of the
same transaction or series of transactions.
determination,
“whether
the
motivation,
whether
facts
whether
their
expectations
courts
are
such
related
they
treatment
or
consider
form
as
business
a
a
in
pragmatic
time,
conforms
understanding
7
factors
space,
convenient
unit
In making this
or
trial
to
as
origin,
or
unit,
and
the
usage.”
parties’
See
Furthermore, plaintiff Jacqueline McGhee, as part of her
bankruptcy case, filed an adversary action against JP Morgan and
Kondaur seeking to quiet title to the two properties, arguing
that
JP
Morgan
and
Kondaur
engaged
in
“intentional
misrepresentations in the foreclosure action in order to force a
sale of the Property.” (ECF No. 5-5, at 2-3; ECF 9-10, at 2-3).
On October 30, 2012, the bankruptcy court granted JP Morgan and
Kondaur’s motions to dismiss and dismissed the complaints with
prejudice. (ECF No. 5-6; ECF No. 9-12).
12
Restatement (Second) of Judgments § 24(2) (1982).
Claims may
also arise out of the same transaction or series of transactions
even if they involve different harms or different theories or
measures of relief.
that
if
the
later
Id.
“The rules of claim preclusion provide
litigation
arises
from
the
same
cause
of
action as the first, then the judgment in the prior action bars
litigation ‘not only of every matter actually adjudicated in the
earlier
case,
presented.’”
but
also
of
every
claim
that
might
have
been
Orca Yachts v. Mollican, Inc., 287 F.3d 316, 318
(4th Cir. 2002) (quoting Varat, 81 F.3d at 1315).
In the current case, the claims put forth in the complaint
are identical for res judicata purposes to those raised in the
foreclosure cases.
Plaintiffs’ claims all stem from actions
taken by lenders, servicers, and their trustees in connection
with the refinancing of their two properties and the subsequent
foreclosure of those properties based on what Plaintiffs claim
were predatory loans, willful misrepresentations, and failure to
comply with all legal requirements.
These claims could have
been raised and determined in the foreclosure proceeding or the
adversary proceeding in bankruptcy court.
See Jones v. HSBC
Bank USA, N.A., Civ. No. RWT-09-2904, 2011 WL 382371, at *5
(D.Md. Feb. 3, 2011) (plaintiff’s claim that the foreclosure was
improper
because
affidavits
in
defendants
connection
submitted
therewith,
13
is
false
a
and
claim
insufficient
that
clearly
could have been raised in the circuit court proceeding); Capel
v. Countrywide Home Loans, Inc., Civ. Nos. WDQ–09–2374, WDQ-092439, 2010 WL 457534, at *4 (D.Md. Feb. 3, 2010) (finding claims
are transactionally related when the current claims center on
alleged defects in contract formation and the foreclosure action
determined that the trustees had the right to foreclose).
In this case, the proper forum for Plaintiffs to raise
their claims about the misdeeds of those connected with their
foreclosure
was
Plaintiffs
were
at
the
given
foreclosure
multiple
proceeding
opportunities
objections to the foreclosure sales.
itself.
to
raise
The
their
The record reflects that
they in fact raised numerous claims in the Thornville Drive
case, filing a counterclaim to the foreclosure action predicated
almost entirely on violations of various federal laws.
No. 3-4).
adversary
(See ECF
Additionally, plaintiff Jacqueline McGhee brought an
action
in
bankruptcy
court
against
JP
Morgan
and
Kondaur to quiet title to the two properties, alleging that they
did not have standing to bring a foreclosure action and that
they committed fraud by making intentional misrepresentations to
support the foreclosure.
2-3).
(See ECF No. 5-5, at 2-3; ECF 9-10, at
To allow them to escape the doctrine of res judicata by
claiming they failed to raise all their claims “would allow
parties to frustrate the goals of res judicata through artful
pleading and claim splitting given that ‘[a] single cause of
14
action
can
manifest
itself
into
an
outpouring
of
different
claims, based variously on federal statutes, state statutes, and
the common law.’”
Pueschel v. United States, 369 F.3d 345, 355
(4th Cir. 2004) (quoting Kale v. Combined Ins. Co. of Am., 923
F.2d 1161, 1166 (1st Cir. 1991)).
Finally,
February
2,
the
circuit
2011,
courts’
ratification
December
orders
29,
were
2010,
clearly
and
final
judgments on the merits of the foreclosure proceeding (ECF No.
7-3, 9-7), which
Plaintiffs unsuccessfully challenged by filing
emergency motions to stay the judgments. (ECF No. 5-2, 9-6).
addition,
Plaintiffs
filed
appeals
Appeals, which were dismissed.
to
the
Court
of
In
Special
(ECF No. 3-5, 5-2, dkt. no. 46).
Plaintiffs argue that the validity of the foreclosure actions
was not fully litigated in state court.
As evidence of this
contention, Plaintiffs point to the circuit court’s opinions on
their
motions
specifically
intrinsic
for
its
fraud.
an
ex
parte
refusal
to
(See,
e.g.,
temporary
address
ECF
opposition to motion to dismiss).
No.
restraining
Plaintiffs’
20,
at
5,
order,
claims
of
plaintiffs
Plaintiffs contend that they
attempted to raise all their claims in the foreclosure action,
but because they did not do so until the post-sale exceptions
phase, the court did not address the claims.
(Id.).
Plaintiffs
appear to be characterizing that refusal as akin to the circuit
court not ruling on the merits of their claims, thereby failing
15
to meet one element of the res judicata doctrine.
This is a
mischaracterization.
refuse
consider
The
Plaintiffs’
claims;
stated just the opposite.
of
the
file
Defendants’
in
this
continued
circuit
in
court
fact,
did
the
not
court
to
explicitly
(See ECF No. 9-9, at 3 (“Upon review
case,
this
allegations
of
Court
has
fraud.”)).
acknowledged
The
circuit
court acknowledged Plaintiffs’ allegations, but found that they
did not rise to the level of “extrinsic fraud” needed to reopen
an enrolled order of ratification.
In any event, Plaintiffs’
use of the ex parte opinions to evidence an absence of rulings
on
the
merits
is
a
red
herring.
The
important
ruling
in
foreclosure cases is the circuit court’s ratification of the
foreclosure sale.
See Capel, 2010 WL 457534, at *4 (“When a
state court finalizes a foreclosure after the ‘plaintiff was
given an opportunity to raise all objections to the foreclosure
sale of [a] property, that adjudication is a final judgment on
the merits.”) (quoting Anyanwutaku v. Fleet Mortgage Group, 85
F.Supp.2d 566, 572 (D.Md. 2000)).
Plaintiffs have provided no
indication they were unable to present their claims prior to the
circuit court ratifying the foreclosure sales.
Plaintiffs had
ample opportunity to raise their claims and, judging by the
circuit
court
dockets
and
the
documents
advantage of their opportunities.
of
res
judicata
are
met
for
they
took
Therefore, all three elements
Defendants
16
provided,
JP
Morgan,
Kondaur,
Shapiro & Burson, and BWW Law Group and the claims against them
will be dismissed.8
Upon dismissal of the claims against defendants JP Morgan,
Kondaur, Shapiro & Burson, and BWW Law Group, three defendants
remain: MERS, Signature, and Fulton Bank.
against
these
defendants
are
subject
to
Plaintiffs’ claims
dismissal
on
other
grounds.
First,
plaintiffs’
FDCPA
claims
are
time-barred.9
The
FDCPA’s statute of limitations provides that “[a]n action to
8
Furthermore, the Rooker–Feldman doctrine bars lower
federal courts from considering “cases brought by state-court
losers complaining of injuries caused by state-court judgments
rendered before the district court proceedings commenced and
inviting
district
court
review
and
rejection
of
those
judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544
U.S. 280, 284 (2005). “The key inquiry is not whether the state
court ruled on the precise issue raised in federal court, but
whether the ‘state-court loser who files suit in federal court
seeks redress for an injury caused by the state-court decision
itself.’” Willner v. Frey, 243 F.App’x 744, 747 (4th Cir. 2007)
(quoting Davani v. Virginia Dep’t of Transp., 434 F.3d 712, 718
(4th Cir. 2005)). This court has no authority to consider claims
that assert injuries based on the state court foreclosure
judgments.
9
The statute of limitations is an affirmative defense that
a party typically must raise in a pleading under Fed.R.Civ.P.
8(c), rather than in a motion pursuant to Rule 12(b)(6).
Dismissal is proper, however, “when the face of the complaint
clearly reveals the existence of a meritorious affirmative
defense.” Brooks v. City of Winston–Salem, 85 F.3d 178, 181 (4th
Cir. 1996); see also 5B Charles A. Wright & Arthur R. Miller,
Federal Practice & Procedure § 1357, at 714 (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
17
enforce any liability . . . may be brought in any appropriate
United States district court . . . within one year from the date
on which the violation occurs.”
15 U.S.C. § 1692k(d).
Because
the current case was filed on October 18, 2012, Defendants’
alleged conduct had to have occurred after October 18, 2011 to
be within the statute of limitations.
But the alleged FDCPA-
violative conduct of MERS, Signature, and Fulton Bank occurred
well before October 18, 2011.
The latest act taken by Signature
and Fulton Bank in connection with this complaint was providing
the loans to Plaintiffs on December 4, 2006, and February 2,
2007 respectively.
(ECF No. 1 ¶¶ 9, 22).
MERS’s latest act was
assigning the Thornville Drive deed of trust to JP Morgan on
March 23, 2009.
(ECF No. 9-4).
Because Plaintiffs did not
commence their action in this court within one year of the date
on
which
the
violations
occurred,
their
FDCPA
claims
as
to
Defendants MERS, Signature, and Fulton Bank are time-barred.10
under Rule 12(b)(6).”).
The face of Plaintiffs’ complaint
clearly reveals the merit of Defendants’ limitations defense;
thus, dismissal on that ground is proper.
10
Even if the claims against Defendants JP Morgan, Kondaur,
Shapiro & Burson, and BWW Law Group were not barred by res
judicata, the FDCPA claims against them would also be time
barred.
BBW Law Group and Shapiro & Burson—on behalf of JP
Morgan—commenced their foreclosure actions on June 15, 2009
(Thornville Drive), and March 26, 2010 (Old Fort Drive).
Kondaur was assigned the deed of trust on April 12, 2010. (ECF
No. 1 ¶ 30).
All of this occurred prior to the October 18,
2011, limitations period.
18
Second, Plaintiffs allege that Defendants violated RICO.
Defendants Fulton Bank, MERS, and Signature each opposed this
claim, arguing that the complaint did not plead all requisite
elements of a RICO; Plaintiffs’ allegations were supported by
only
bare
assertions
and
conclusory
statements
that
fail
to
satisfy the pleading requirements; and the claim is time-barred.
(ECF No. 4-10, at 8-9; ECF No. 7-1, at 6-8; ECF 9-1, at 12-14).
In their opposition to Defendants’ motions, however, Plaintiffs
do
not
discuss
these
claims.
(See
ECF
Nos.
24,
27,
28).
Therefore, the claim has been abandoned. See Ferdinand–Davenport
v. Children's Guild, 742 F.Supp.2d 772, 777 (D.Md. 2010) (“By
her failure to respond to [defendant’s] argument” in a motion to
dismiss, “the plaintiff abandons her claim.”).
Finally, the state law claims of wrongful foreclosure and
an action to quiet title fail as against MERS, Signature, and
Fulton Bank.
Even assuming a “wrongful foreclosure” cause of
Additionally, even if Plaintiffs were to allege later
violations, the limitations period for FDCPA claims commences
“from the date of the first violation, and subsequent violations
of
the
same
type
do
not
restart
the
limitations
period.”
Fontell v. Hassett, 870 F.Supp.2d 395, 404 (D.Md.
2012); see also Alston v. Cavalry Portfolio Servs., LLC, Civ.
No. AW-12–3589, 2013 WL 665036, at *3 (D.Md. Feb. 22, 2013);
Reid v. New Century Morg. Corp., Civ. No. AW-12–2083, 2012 WL
6562887, at *4 (D.Md. Dec. 13, 2012).
Plaintiffs’ complaint
revolves around alleged improper loans and illegal foreclosures.
Those events commenced well before the October 18, 2011
limitations period.
19
action exists,11 Plaintiffs have failed to state such a claim
against these three defendants.
Plaintiffs’ allegations against
these three defendants include predatory lending, overvaluation
of property, and illegal assignment.
(See ECF No. 1 ¶¶ 77-95).
As discussed above, the interest of MERS, Signature, and Fulton
Bank
in
Plaintiffs’
properties
ended
long
before
the
foreclosures commenced and Plaintiffs have made no allegations
that these three defendants were involved in any way with the
actual
foreclosure
wrongful
foreclosure
Because
these
actions.
foreclosure
fails.
three
actions
Consequently,
See
defendants
nor
Twombly,
were
currently
not
have
their
550
claim
for
U.S.
at
570.
involved
in
the
any
interest
in
Plaintiffs’ properties, their action to quiet title must also
fail.
IV.
Conclusion
For the foregoing reasons, the court will grant Defendants’
motions to dismiss.
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
11
See Davis v. Wilmington Finance, Inc., Civ. No. PJM-091505, 2010 WL 1375363, at *7 (D.Md. Mar. 26, 2010) (“Plaintiffs
cite no authority, and the Court can find none, that ‘Wrongful
Foreclosure’ is a separate cause of action in Maryland.”).
20
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