Bailey v. Deutsche Bank Trust Company et al

Filing 29

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 6/12/13. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
SHERRY J. BAILEY
:
v.

:

Civil Action No. DKC 13-0144

:
DEUTSCHE BANK TRUST COMPANY,
et al.

:

MEMORANDUM OPINION
Presently pending and ready for resolution are motions to
dismiss

filed

by

Defendants

Deutsche

Bank

Trust

Company

(“Deutsche Bank”) and Ocwen Loan Servicing, LLC (“Ocwen”) (ECF
No. 13), Saxon Mortgage Services, Inc. (“Saxon”) (ECF No. 14),
and

Novation

(“Novation”)

Companies,
(ECF

No.

Inc.,
19).

f/k/a
The

NovaStar

relevant

Financial,

issues

have

Inc.
been

briefed and the court now rules pursuant to Local Rule 105.6, no
hearing being deemed necessary.
Novation

will

be

dismissed

For the reasons that follow,
pursuant

to

the

doctrine

of

fraudulent joinder; its motion to dismiss for failure to state a
claim will be denied as moot; and the motions to dismiss filed
by the remaining defendants will be granted.
I.

Background
Plaintiff

Sherry

J.

Bailey

commenced

this

action

on

or

about November 15, 2012, by filing a complaint in the Circuit
Court

for

Prince

George’s

County,

Maryland.

The

complaint

relates to a parcel of real property in Oxon Hill, Maryland,
that Plaintiff purchased in 2006 (“the Property”).

Seeking a

loan

“contacted

for

the

[Novation]

to

application

.

purchased

for

entire

purchase

discuss
.

.

amount,

financing”

indicating

investment

Plaintiff

and

that

“completed

the

purposes.”

[a]

Property
(ECF

No.

was
2

loan
being

¶

10).

Plaintiff was unaware at the time that “100 percent loans were
only available for properties being purchased as residences by
the buyer”; thus, she “did not qualify . . . since she was
buying for investment purposes.”

(Id. at ¶ 12).

The requested

loan was approved, however, because Novation allegedly “changed
[Plaintiff’s] loan application to reflect that the Property was
being purchased as [her] principal residence.”

(Id. at ¶ 13).

Plaintiff noticed this alteration at closing and “changed the
application

back

to

investment,”

but,

“[a]t

some

time

after

closing and unbeknownst to [P]laintiff, [Novation] changed the
application back to residential use.”

(Id. at ¶¶

14, 15).1

In 2008, Plaintiff fell behind on her mortgage payments and
defaulted

on

the

loan.

On

December

21,

2009,

Novation

transferred the defaulted loan to “Deutsche Bank as trustee for
a

securitized

trust.”

(Id.

at

1

¶

16).

Saxon,

the

initial

At another point in the complaint, Plaintiff asserts that
she objected to the initial alteration at closing and was told
by a Novation representative that it “was unimportant and that
she should go ahead with the transaction.” (ECF No. 2 ¶ 28).
2

servicer, commenced a foreclosure action in January 2010.

On or

about May 20, 2010, “Deutsche Bank appointed Ocwen as the loan
service[r.]”

(Id.

at

¶

17).

Plaintiff

asserts

that

she

“contacted the mortgage servicers, Saxon and Ocwen, . . . about
her [financial] problems, and she was advised by both that they
would work with her to modify the loan so that she would be able
to retain the Property and it would not be foreclosed upon.”
(Id. at ¶ 19).

“As a result of th[o]se assurances, [P]laintiff

invested over $60,000 . . . to improve the Property.”
Nevertheless,

the

loan

was

never

modified,

the

(Id.).

foreclosure

action proceeded, and the Property was sold at a foreclosure
sale on October 8, 2010.
As to Novation and Deutsche Bank, Plaintiff alleges fraud
related to the alteration of her loan application.
alleges
Saxon,

negligent
and

Ocwen

misrepresentation
based

on

the

concerning a loan modification.

against

servicers’

She further

Deutsche
false

Bank,

assurances

Plaintiff seeks an award of

compensatory damages in the amount of $300,000.00.
Deutsche Bank and Ocwen removed to this court on January
14, 2013, citing diversity of citizenship as the jurisdictional
basis.

The removal notice indicates that Plaintiff is a citizen

of Maryland, that Deutsche Bank is a New York corporation, and
that the sole member of Ocwen, a limited liability company, is a
Delaware corporation with its principal place of business in
3

Florida.

The

notice

further

reflects

that

Saxon,

a

Texas

corporation, consented to removal and that Novation, a Maryland
corporation, was “fraudulently joined.”

(ECF No. 1, at 3).

On January 18, counsel for Novation entered an appearance,
filed a disclosure statement pursuant to Local Rule 103.3, and
requested an extension of time to respond to the complaint,
asserting that he had “contacted Plaintiff’s counsel to explain
that . . . [Novation] did not originate the loan at issue in
this case” and that “[a] brief extension of time would allow the
parties additional time to look into this matter and confirm
that the correct entities have been named” (ECF No. 10 ¶ 7).
On January 22, Deutsche Bank and Ocwen filed a joint motion
to dismiss for failure to state a claim upon which relief may be
granted.

(ECF

following day.

No.

13).

Saxon

(ECF No. 14).

filed

a

similar

motion

the

Approximately one week later,

Novation filed a consent to removal – advising that its consent
was “without prejudice to its Motion to Dismiss for improper
joinder” (ECF No. 18) – along with a motion to dismiss pursuant
to

Fed.R.Civ.P.

12(b)(6)

and

(9)(b)

(ECF

Nos.

19,

20).2

Plaintiff opposed each of these motions (ECF Nos. 23-25) and
Defendants filed replies (ECF Nos. 26-28).

2

Novation separately filed its motion (ECF No. 19) and
memorandum (ECF No. 20).
4

II.

Fraudulent Joinder
Although this case was removed on the basis of diversity of

citizenship,
Plaintiff

the

and

parties
Novation

are

not

fully

are

Maryland

diverse,
citizens.

as

both
Thus,

jurisdiction could only be proper if Novation was “fraudulently
joined.”
As Judge Nickerson recently explained in Barlow v. John
Crane Houdaille, Inc., Civ. No. WMN-12-1780, 2012 WL 538883, at
*2 (D.Md. Nov. 1, 2012):
The doctrine of fraudulent joinder is
an exception to the complete diversity rule
normally required for a federal court to
exercise diversity jurisdiction. Bendy v.
C.B. Fleet Co., Civ. No. CCB–10–3385, 2011
WL 1161733, *3 (D.Md. Mar. 28, 2011).
Defendants opposing remand, when removal was
based on the doctrine of fraudulent joinder,
carry
a
very
heavy
burden.
Mayes
v.
Rapoport, 198 F.3d 457, 464 (4th Cir. 1999).
The defendant must show either that (1)
there has been outright fraud in the
plaintiff’s pleading, or (2) “there is no
possibility that the plaintiff would be able
to establish a cause of action against the
in-state defendant in state court.” Id.
(quoting Marshall v. Manville Sales Corp., 6
F.3d
229,
232
(4th
Cir.
1993)).
In
considering
whether
a
party
has
been
fraudulently
joined,
the
court
is
not
confined
to
the
allegations
of
the
complaint, but may consider the entire
record. AIDS Counseling & Testing Ctrs. v.
Group W Television, Inc., 903 F.2d 1000,
1004 (4th Cir. 1990).
(Internal footnote omitted).

5

Where, as here, there is no allegation of outright fraud in
the

challenged

conclusively

pleading,

show

that

the

there

removing

is

no

defendants

possibility

must

that

the

plaintiff could establish a cause of action against the alleged
fraudulently joined defendant.
Courts around the country have devoted
considerable time and energy to explaining
that “no possibility” does actually mean, no
possibility.
See
e.g.,
Hartley
v.
CSX
Transp., Inc., 187 F.3d 422, 426 (4th Cir.
1999) (a plaintiff need only show “a slight
possibility of a right to relief” or that he
or she has a “glimmer of hope” of succeeding
on claim); In re Maine Asbestos Cases, 44
F.Supp.2d 368 (D.Maine 1999) (court must be
able to say “to a legal certainty” plaintiff
will be unsuccessful); Green v. Amerada Hess
Corp., 707 F.2d 201, 205 (5th Cir. 1983)
(“The removing party must prove that there
is
absolutely
no
possibility
that
the
plaintiff will be able to establish a cause
of action against the in-state defendant in
state court.”); see also 13F Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper,
Federal Practice and Procedure § 3641.1 (3d
ed. 2009) (and cases cited therein).
Barlow, 2012 WL 5388883, at *2 n.1.
Defendants

have

made

the

requisite

showing

here.

In

response to Novation’s motion to dismiss, Plaintiff has conceded
that Novation was not a party to the underlying loan.

Rather,

“the loan in question was made by . . . Novastar Mortgage,” a
subsidiary of Novation.
Plaintiff

asserts,

“it

(ECF No. 25-1, at 6).
is

too

early

in

the

Nevertheless,
process

for

a

decision to be made on whether the parent has any liability for
6

the acts of its subsidiary.”

(Id.).

She further suggests that

because the Maryland State Department of Assessment and Taxation
reports that “Novastar Mortgage’s standing in Maryland has been
forfeited[,] . . . the parent may be liable for its acts.”
(Id.).
The problem, of course, is that the complaint does not so
much

as

Novation

mention
as

a

“Novastar
parent

Mortgage,”

corporation

tortious conduct of its subsidiary.
Novation

directly

liable

for

nor

allegedly

does

it

liable

identify
for

the

Rather, it seeks to hold

alleged

tortious

conduct

in

a

transaction in which, Plaintiff now acknowledges, it was not
involved.
Judge Hollander’s recent opinion in Ademiluyi v. PennyMac
Mortg. Inv. Trust Holdings I, LLC, --- F.Supp.2d ----, 2013 WL
932525 (D.Md. Mar. 11, 2013), is instructive.

In dismissing a

parent corporation based on the alleged fraudulent conduct of
its subsidiary, the court explained:
The Complaint does not allege facts
that, even if true, would establish that
PennyMac Trust is liable for the conduct of
PennyMac Holdings. Plaintiff offers only
conclusory
assertions
as
to
control
allegedly exerted by PennyMac Trust over
PennyMac Holdings. For example, plaintiff
does not allege that PennyMac Trust itself
committed, inspired, or participated in the
wrongs alleged. Moreover, plaintiff does not
claim that PennyMac Trust held an interest
in any mortgage debt, let alone plaintiff’s
mortgage. And, plaintiff does not assert
7

facts
showing
that
PennyMac
Trust
communicated with or serviced plaintiff’s
debt payments. See Antigua Condominium Ass’n
v. Melba Invs. Atl., Inc., 307 Md. 700, 735,
517 A.2d 75, 93 (1986) (“The Plaintiffs do
not allege any ground of [the parent[]
corporation’s] liability to them which is
independent of [the subsidiary’s] alleged
liability to them. The entire thrust of the
allegations against [the parent corporation]
is an attempt to reach [it] through piercing
the corporate veil of [the subsidiary].”).
Nor is there a claim that the parent and
subsidiary commingled funds or assets, or
that the parent misused funds of the
subsidiary, or otherwise disregarded the
corporate structure. See Cancun Adventure
[Tours, Inc. v. Underwater Designer Co.],
862 F.2d [1044,] 1047–48 [(4th Cir. 1988)].
When a plaintiff seeks to pierce the
corporate veil, the complaint must offer
more than general and conclusory allegations
of fraud, undue control exercised by a
parent over its subsidiary, or paramount
equity. Antigua, 307 Md. at 736, 517 A.2d at
93. To justify veil piercing on the basis of
fraud, for example, the plaintiff “would
have to show that [the parent’s] use of [the
subsidiary] worked a fraud against [her].”
Id. at 735, 517 A.2d at 93 (emphasis added).
As the Maryland Court of Appeals explained,
“[a] plaintiff must allege facts which
indicate fraud or from which fraud is
necessarily implied.” Id. at 736, 517 A.2d
at 93.
Ademiluyi, 2013 WL 932525, at *9-10.
Here, Plaintiff presents a much less compelling case for
derivative liability than the plaintiff in Ademiluyi, as her
complaint does not even hint at any theory other than direct
liability,

let

alone

provide

a

8

basis

for

corporate

veil

piercing.
and

Indeed, Novastar Mortgage is not named as a defendant

Plaintiff

has

not

sought

leave

to

add

that

party,

even

though, under the theory she now espouses, it would seem to be
indispensable.

See Jurimex Kommerz Transit G.m.b.H. v. Case

Corp., 201 F.R.D. 337, 340 (D.Del. 2001) (“when a plaintiff
seeks to hold a parent company liable for the conduct of the
parent’s

subsidiary,

indispensable

party

the

under

subsidiary
Rule

19”)

is

a

(citing

necessary
Polanco

v.

and
H.B.

Fuller Co., 941 F.Supp. 1512, 1520-22 (D.Minn. 1996) (collecting
cases holding that subsidiary is an indispensable party)).
The instant record conclusively establishes that Plaintiff
has no “glimmer of hope” of success on its fraud claim against
Novation.

Hartley,

187

F.3d

at

426.

Accordingly,

defendant will be dismissed as fraudulently joined.

that

Upon its

dismissal, the court may exercise jurisdiction to consider the
other pending motions.
III. Motions to Dismiss
A.

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.”
9

Fed.R.Civ.P.

8(a)(2).

“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 need not be accepted.

Revene v. Charles County

Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989).

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
10

relief.’”

Iqbal,

8(a)(2)).

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.”

court

to

draw

on

its

judicial

Id.

Plaintiff’s allegations of fraud against Deutsche Bank are
subject

to

a

Harrison,

176

alleging

a

particularity
mistake.
person's

heightened
F.3d
fraud
the

pleading

standard

at

783–84.3

Rule

or

mistake,

a

circumstances

under

9(b)

party

Rule

states
must

constituting

9(b).

that

state

the

fraud

“in
with
or

Malice, intent, knowledge, and other conditions of a
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)).

The purposes of Rule 9(b)

are to provide the defendant with sufficient notice of the basis
for

the

plaintiff’s

claim;

to

3

protect

the

defendant

against

Plaintiff’s negligent misrepresentation claims are not
subject to the Rule 9(b) standard.
See Baltimore County v.
Cigna Healthcare, 238 Fed.Appx. 914, 921 (4th Cir. 2007) (citing
Tricontinental Indus., Ltd. v. PricewaterhouseCooopers, LLP, 475
F.3d 824, 833 (7th Cir. 2007); Gen. Elec. Capital Corp. v. Posey,
415 F.3d 391, 395-96 (5th Cir. 2005)).
11

frivolous suits; to eliminate fraud actions where all of the
facts are learned only after discovery; and to safeguard the
defendant’s reputation.
B.

See Harrison, 176 F.3d at 784.

Fraud

Plaintiff’s claim of fraud against Deutsche Bank fails for
the same reason as the claim against Novation: Deutsche Bank did
not

originate

the

loan.

The

fraudulent

conduct

alleged

by

Plaintiff relates entirely to the alteration of her original
loan application to reflect that she was purchasing the Property
as her principal residence rather than for investment purposes.
Under

Plaintiff’s

altered,

she

theory,

would

not

if

have

the
been

application
approved

had

for

not

the

been

loan

in

question and, consequently, would not have defaulted and lost
the

Property

in

foreclosure.

According

to

the

complaint,

however, Deutsche Bank did not acquire the loan until December
21, 2009, well after it was in default.

(ECF No. 2 ¶ 16).

Plaintiff suggests in her opposition to Deutsche Bank’s motion
that she seeks to hold this defendant liable as the successor in
interest of Novastar Mortgage (ECF No. 24-1, at 4-5), but this
distinction

finds

no

support

in

the

complaint.

Moreover,

Plaintiff has pointed to no legal authority supporting liability
under

these

circumstances,

nor

is

the

court

aware

of

any.

Accordingly, her fraud claim against Deutsche Bank is subject to
dismissal.
12

C.

Negligent Misrepresentation

Plaintiff also alleges negligent misrepresentation against
Saxon and Ocwen – the servicers of the loan at different times –
and Deutsche Bank – apparently, under an agency theory – based
on the servicers’ assurances that they “would work with her to
modify the loan so that she would be able to retain the Property
and

it

would

not

be

foreclosed

upon.”

(ECF

No.

2

¶

19).

Defendants contend that these claims are subject to dismissal
because they did not owe a tort duty to Plaintiff, which is an
essential element of negligent misrepresentation under Maryland
law.
As
Bank,

Judge

N.A.,

Russell

Civ.

No.

explained

in

GLR-11-2733,

Spaulding
2012

WL

v.

Wells

3025116,

(D.Md. July 23, 2012):
Counts
II
(negligence)
and
IV
(negligent misrepresentation) of Plaintiffs’
Complaint must fail because Wells Fargo did
not owe Plaintiffs a tort duty. In Maryland,
causes of action based on negligence or
negligent
misrepresentation
require
the
plaintiff to prove a duty owed to them.
Jacques v. First Nat’l Bank of Maryland, 307
Md. 527, 515 A.2d 756, 758 (Md. 1986).
Plaintiffs
cannot,
therefore,
allege
actionable
claims
of
negligence
and
negligent misrepresentation without first
demonstrating Wells Fargo owed them a duty
in tort. Id. (“Absent a duty of care there
can
be
no
liability
in
negligence.”)
(citations omitted);
Parker v. Columbia
Bank, 91 Md.App. 346, 604 A.2d 521, 531
(Md.Ct.Spec.App. 1992) (“In order to state a
cause of action as to . . . negligent
13

at

Fargo
*4-5

misrepresentation, [and] negligence . . .
the [plaintiffs] must demonstrate a duty
owed
to
them
by
[the
defendants].”)
(citations omitted).
It is well established in Maryland that
the
relationship
between
the
bank
and
borrower is contractual, not fiduciary, in
nature. Yousef v. Trustbank Sav., F.S.B., 81
Md.App.
527,
568
A.2d
1134,
1138
(Md.Ct.Spec.App. 990). Moreover, “[t]he mere
negligent breach of a contract, absent a
duty
or
obligation
imposed
by
law
independent of that arising out of the
contract itself, is not enough to sustain an
action sounding in tort.” Jacques, 515 A.2d
at 759. In cases involving economic loss,
the imposition of tort liability requires
“an intimate nexus between the parties” that
is satisfied by “contractual privity or its
equivalent.” Id. at 759–60. Absent special
circumstances, the court is reluctant to
“transform
an
ordinary
contractual
relationship between a bank and its customer
into a fiduciary relationship or to impose
any duties on the bank not found in the loan
agreement.”
Parker,
604
A.2d
at
532
(citations omitted).
See also Green v. Wells Fargo Bank, N.A., --- F.Supp.2d ----,
2013

WL

766196,

at

*7

(D.Md.

Feb.

27,

2013)

(finding

communications between the plaintiffs and lender regarding loan
modification

“did

not

create

an

enforceable

contract

with

Defendant, nor was there otherwise a nexus between the parties
sufficient to impose a tort duty,” citing Spaulding and related
cases).
In

opposing

Defendants’

motions

to

dismiss,

Plaintiff

asserts, “[i]n recent years, Maryland courts have increasingly

14

found that sufficient privity exists between a bank or financial
institution and a customer to establish a duty by the bank to
its customer so that the customer may rely on representations
and promises made by the bank.”
cases

she

cites

in

(ECF No. 24-1, at 6).

support,

however,

are

The

readily

distinguishable.
In
(D.Md.

Dwoskin
2012),

v.

the

Bank

of

America,

plaintiffs

850

alleged

F.Supp.2d

that,

in

557,

562

accepting

the

bank’s approval of their loan, they relied on a promise that
“their loan was truly no fee and that no PMI [private mortgage
insurance]

would

be

required.”

When

the

plaintiffs

later

attempted to refinance their mortgage, they learned that the
bank

“had

their

paid

home

for

LPMI

without

[lender-paid

their

mortgage

knowledge

or

insurance]
consent”

on

and,

consequently, “they were unable to qualify for refinancing[.]”
Id. at 563.
Bank

can

Under those circumstances, the court found, “the

fairly

be

said

to

have

a

duty

to

give

correct

information, as it had knowledge the information was desired for
a serious purpose, that potential borrowers would rely on it,
and that if the information was false these borrowers would be
injured.”

Id. at 572.

Plaintiff also cites Cooper v. Berkshire Life Ins. Co., 148
Md.App.

41,

51

misrepresentation

(2002),

which

against

an
15

involved

claims

insurance

of

negligent

company

whose

representatives

induced

the

plaintiff

to

purchase

a

life

insurance policy based on a “sales illustration” suggesting that
“a $1 million policy would cost only $9,000 a year for nine
years.”

Regarding

“between

a

promise

the

illustration,

of

future

the
and

events

court
an

distinguished

estimate

by

one

knowledgeable in a particular field,” noting that “courts have
been increasingly willing to hold predictive statements material
where

the

circumstances

indicate

to

the

addressee

that

the

speaker has a factual basis for his predictions so that the
existence of facts is implied by the representations.”
148

Md.App.

at

73-74

(quoting

Ward

Dev.

Co.

v.

Cooper,

Ingrao,

Md.App. 645, 656 (1985)) (internal emphasis omitted).
that

the

plaintiffs

were

“entitled

to

assume

63

Finding
that

the

projections made by [the defendants] . . . had some basis in
fact that made them realistic,” the court determined that a
negligent misrepresentation claim was viable.

Id. at 75.

Finally, Plaintiff relies on Giant Food, Inc. v. Ice King,
Inc.,

74

Md.App.

misrepresentations
never materialized.

183
during

(1988),

a

case

negotiations

involving

over

a

negligent

contract

that

As the Court of Special Appeals of Maryland

later summarized:
Giant’s representations about its commitment
to buy ice from Ice King included very
specific terms: “the type, price, quality,
and quantity of ice;” “the delivery terms;”
“the location of Ice King’s plant at a site
16

most suitable to Giant;” “the size of the
storage facility needed to satisfy Giant’s
demand;” “arrangements for inspection of Ice
King’s plant by Giant representatives;” and
“the demand by Giant that Ice King supply
further samples of ice and a certificate of
insurance.” Id. at 191, 536 A.2d 1182.
First Union Nat. Bank v. Steele Software Systems Corp., 154
Md.App. 97, 164-65 (2003).
Here, by contrast, Plaintiff alleges that she merely made
contact

with

the

servicers

about

a

loan

modification

after

default; that the servicers advised that they would “work with
her” to modify the loan; and that, in purported reliance on
those statements, she “invested over $60,000 . . . to improve
the Property,” which she subsequently lost when the Property was
sold at a foreclosure sale.

(ECF No. 2 ¶ 19).

The complaint

does not reflect that an application for a loan modification was
ever presented or that any representation was made by Defendants
with respect to such an application.

Unlike the parties in

Dwoskin, there was no contractual privity with respect to the
operative

transaction.

See

Green,

2013

Wl

766196,

at

*7

(“Plaintiffs’ allegations relate to . . . their request for loan
modification, which was an entirely different transaction [than
the underlying mortgage]”) (citing Neal v. Residential Credit
Solutions, Inc., Civ. No. JKB-11-3707, 2013 WL 428675, at *6
(D.Md.

Feb.

contractual

1,

2013)

privity

(“Although

with

RCS

by
17

it

is

virtue

true
of

the
their

Neals

had

original

mortgage, that does not govern whether RCS owed the Neals a duty
of

care

in

the

application.”)).

processing

of

their

loan

modification

Plaintiff has not identified any predictive

representation made by Defendants similar to the illustration at
issue in Cooper.

See Bierman v. United Farm Family Ins. Co.,

Civ. No. RDB-12-2445, 2013 WL 1897781, at *6 (D.Md. May 6, 2013)
(distinguishing

Cooper,

where

“the

plaintiff

specifically

detailed the insurance company’s statements that misled him into
buying

the

plaintiffs

insurance

policy,”

“neglect[ed]

to

from

offer

any

a

case

which

the

illustrating

facts

in

Farm

Family’s allegedly incorrect statements”); see also Mayor and
City Council of Baltimore v. Unisys Corp., Civ. No. 12-614-JKB,
2012 WL 3561850, at *3 (D.Md. Aug. 16, 2012) (characterizing
Cooper

as

“an

insurance”).
forth

any

specific

to

the

purchase

of

life

Moreover, unlike Giant Food, Plaintiff has not set
detail

conversations
special

analysis

with

as

to

the

relationship

the

context

servicers

between

the

that

or

substance

could

parties.

give
See

Montgomery, 376 Md. 568, 589 n.9 (2003) (finding

of

rise

her
to

Remsburg

a
v.

Giant Food

“factually inapposite and inapplicable” for similar reasons).
Even if Plaintiff were able to establish that Defendants
owed her a duty of care, she could not make out a negligent
misrepresentation claim on these facts.

18

To state a claim for

negligent misrepresentation under Maryland law, the plaintiff
must show:
(1) the defendant, owing a duty of care to
the plaintiff, negligently asserts a false
statement; (2) the defendant intends that
his statement will be acted upon by the
plaintiff; (3) the defendant has knowledge
that the plaintiff will probably rely on the
statement, which, if erroneous, will cause
loss
or
injury;
(4)
the
plaintiff,
justifiably, takes action in reliance on the
statement; and (5) the plaintiff suffers
damage proximately caused by the defendant’s
negligence.
Dwoskin,

850

F.Supp.2d

at

571.

Assuming,

arguendo,

the

existence of a duty, Defendants could not have foreseen that
simply advising Plaintiff that they would “work with” her to
modify the loan would compel her to invest “over $60,000” in
improvements to her property, particularly when the loan was in
default

and

a

foreclosure

action

was

pending.

Under

these

circumstances, the damages allegedly suffered by Plaintiff could
not

have

been

negligence.”

“proximately
Accordingly,

caused

by

the

Plaintiff’s

defendant’s
negligent

misrepresentation claims against Saxon, Ocwen, and Deutsche Bank
must be dismissed.
IV.

Conclusion
For the foregoing reasons, Novation will be dismissed as

fraudulently joined and the motions to dismiss filed by Deutsche

19

Bank, Ocwen, and Saxon will be granted.

A separate order will

follow.

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

20