Bowman et al v. Finance America, LLC et al

Filing 14

MEMORANDUM OPINION. Signed by Judge Alexander Williams, Jr on 05/08/2013. (bas, Deputy Clerk)(c/m on 5/08/2013 bca)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SOUTHERN DIVISION
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Plaintiffs,
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Civil Action No. AW-13-208
v.
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FINANCE AMERICA, LLC, et al.
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Defendants.
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TIA BOWMAN, et al.,

MEMORANDUM OPINION
Pending before the Court is Defendant Aurora Loan Services, LLC’s Motion to Dismiss
for failure to state a claim. Doc. No. 8. The Court has reviewed the record and concludes that no
hearing is necessary. See Loc. R. 105.6 (D. Md. 2011). For the reasons discussed below,
Defendant’s Motion will be GRANTED.
I.

FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs Tia and Roy Bowman, proceeding pro se in this matter, assert a series of claims

against Defendants related to the origination and securitization of a mortgage loan secured by
Plaintiffs’ property.1
On May 27, 2005, Plaintiffs executed a Note in favor of Defendant Finance America,
LLC (Finance America) in the amount of $382,500. Compl. ¶ 7. To secure the loan, Plaintiffs
granted Finance America a security interest in the property through a Deed which was recorded
in the land records of Charles County, Maryland. Id. ¶ 8. Plaintiffs learned through a Real

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The Court notes that the Complaint in this case is remarkably similar in form and substance to the Complaint in
another case before this Court, Bell v. Intervale Mortgage Corp. et al., No. 13-cv-582-AW. Indeed, several portions
of the Complaints are identical.

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Estate Securitization Audit that the Note was sold by Finance America to Defendant Structured
Asset Securities Corp. Mortgage Loan Trust 2005-GEL3 (hereinafter, the Trust) without
Plaintiffs’ knowledge or consent. Id. ¶¶ 9–10.2 Foreclosure proceedings began in April 2009
after Plaintiffs allegedly defaulted on their payments. Id. ¶ 16.
Plaintiffs filed their Complaint on January 18, 2013, and claim that they are entitled to
compensatory and punitive damages based on Defendants’ Deceit and Actual Fraud (Count I),
Conspiracy to Defraud (Count II), and Breach of Implied Covenant of Good Faith and Fair
Dealing (Count III). The Complaint names as Defendants Finance America,3 the Trust,4 GMAC
Mortgage, LLC (GMAC),5 and Aurora Loan Services, LLC (Aurora).
On March 11, 2013, Aurora filed a Motion to Dismiss Plaintiffs’ claims against it
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doc. No. 8. The Clerk of the
Court sent Plaintiffs a letter dated March 14, 2013 informing them that their case may be subject
to dismissal and that they had the right to file a response within seventeen days of the date of the
letter. Doc. No. 10. On the seventeenth day, April 1, 2013, Plaintiffs filed a Motion for an
extension of time to respond to Aurora’s Motion on the grounds that they needed additional time
to research the relevant points of law and file an accurate response. Doc. No. 12. Plaintiffs
requested an extension up to and including April 19, 2013. Id. However, Plaintiffs did not file
an opposition brief by April 19, 2013. On April 24, 2013, the Court granted Plaintiffs’
unopposed Motion for extension and granted them ten additional days in which to file a

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Plaintiffs state in their Complaint that the Note, Deed, Audit, and Voluntary Liens Report were attached as exhibits
to the complaint, but no such exhibits were attached.
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On January 9, 2009, BNC Mortgage, LLC (BNC), successor to Finance America by merger, filed a petition under
chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
Doc. No. 7, Notice of Bankruptcy and Effect of Stay.
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The Trust has not yet answered Plaintiffs’ Complaint.
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On May 14, 2012, Residential Capital, LLC and certain of its subsidiaries, including GMAC, filed a petition under
chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
Doc. No. 4, Notice of Bankruptcy and Effect of Automatic Stay.

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response. Doc. No. 13. Again, Plaintiffs filed no opposition brief. Accordingly, Aurora’s
Motion to Dismiss is ripe for the Court’s consideration.
II.

STANDARD OF REVIEW
The purpose of a motion to dismiss under Rule 12(b)(6) is “to test the sufficiency of [the]

complaint.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). Except in certain
specified cases, the complaint need only satisfy Rule 8(a) of the Federal Rules of Civil
Procedure, which requires a “short and plain statement of the claim showing that the pleader is
entitled to relief.” FED. R. CIV. P. 8(a)(2). A plaintiff must plead “enough facts to state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In
resolving a motion to dismiss, the Court should proceed in two steps. First, the Court should
determine which allegations in the Complaint are factual allegations entitled to deference, and
which are mere legal conclusions that receive no deference. See Ashcroft v. Iqbal, 556 U.S. 662,
678–79 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 678. Second, “[w]hen there are well-pleaded
factual allegations, a court should assume their veracity and then determine whether they
plausibly give rise to an entitlement to relief.” Id. at 679.
In its determination, the Court must “accept the well-pleaded allegations of the complaint
as true,” Albright v. Oliver, 510 U.S. 266, 268 (1994), and “must construe factual allegations in
the light most favorable to the plaintiff,” Harrison v. Westinghouse Savannah River Co., 176
F.3d 776, 783 (4th Cir. 1999). The Court should not, however, accept unsupported legal
allegations, Revene v. Charles Cnty. Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989), “legal
conclusion[s] couched as . . . factual allegation[s],” Papasan v. Allain, 478 U.S. 265, 286 (1986),
or conclusory factual allegations devoid of any reference to actual events, United Black

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Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). “Factual allegations must be
enough to raise a right to relief above the speculative level . . . on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555.
III.

ANALYSIS
As a preliminary matter, Plaintiff’s Complaint contains only two specific references to

Aurora. First, Plaintiffs allege that Aurora exists under the laws of Delaware, and that a search
of the Maryland State Department of Taxation shows that Aurora is not in good standing with the
state and has forfeited its status to do business in Maryland. Compl. ¶6. Second, Plaintiffs
allege, under the heading for its conspiracy claim, that “GMAC Mortgage, LLC falsely stated
that Aurora Loan Services LLC was the owner of the note in order to proceed with the
foreclosure illegally.” Id. ¶ 33. These allegations, considered with the remaining allegations in
Plaintiffs’ Complaint, fail to demonstrate a plausible claim for relief from Aurora. Although
complaints filed by pro se litigants are to be liberally construed, Erickson v. Pardus, 551 U.S. 89,
94 (2007), “even a pro se complaint must meet a minimum threshold of plausibility,” Hawkins v.
Hairston, No. 12-cv-1366-JKB, 2012 WL 5503839, at *2 (D. Md. Nov. 8, 2012).
In Count I of their Complaint, Plaintiffs allege that Defendants are liable for fraud and
actual deceit.6 The basis for Plaintiffs’ fraud allegation is that Finance America entered into a
mortgage agreement with Plaintiffs without disclosing its intent to sell the Note to the Defendant
Trust. See Compl. ¶ 20. However, Count I makes no mention of Aurora at all, and the Court
gleans nothing from the Complaint indicating that Aurora played any role in the transaction
underlying Count I. Indeed, the only allegation specifically tying Aurora to Plaintiffs is
GMAC’s allegedly false statement that Aurora owned the Note in order to proceed with

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Plaintiffs cite various provisions of the California Civil Code regarding fraud and deceit. Compl. ¶ 19. Because
none of the alleged activity occurred in California, the Court construes Plaintiff’s Complaint as asserting a claim of
fraud and deceit under Maryland law.

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foreclosure. Id. ¶ 33. Even if the Court accepted that Aurora was somehow involved in the
subsequent foreclosure, there is no allegation that it was involved in the transaction which
occurred nearly four years earlier. On this basis alone, Count I against Aurora must be
dismissed. See, e.g., Parillon v. Fremont Inv. & Loan, No. L-09-3352, 2010 WL 1328425, at *2
(D. Md. Mar. 25, 2010) (dismissing defendant bank where the complaint included no specific
information regarding its role in the events at issue). Furthermore, even if the Court adopted the
position that Count I implicated Aurora, Plaintiffs have failed to state the basis of their fraud
allegation with particularity, as is required by Rule 9(b) of the Federal Rules of Civil Procedure.
See, e.g., Woodrow v. Vericrest Fin., Inc., No. AW-09-1612, 2009 WL 4348594, at *3 (D. Md.
Nov. 30, 2009) (dismissal of fraud and deceit claims was proper where plaintiff only made
conclusory statement about reliance on defendant’s representations but provided no specific facts
in support of its fraud allegations and consistent with the particularity requirements of Rule 9(b).
Accordingly, Count I against Aurora will be dismissed.
For similar reasons, Plaintiffs’ claim that Aurora conspired to defraud them is without a
plausible basis. To the extent the conspiracy claim is based on fraudulent conduct underlying the
original loan, Plaintiffs have failed to demonstrate any connection between Aurora and that
transaction. More likely, Plaintiffs’ conspiracy to defraud claim is based on GMAC’s and/or
Aurora’s attempts to foreclose on Plaintiffs’ property despite lacking legal standing to do so. See
Compl. ¶¶ 33–34. Plaintiffs’ claim fails because Plaintiffs have not adequately pled a plausible
claim for conspiracy. The Complaint fails to allege that any agreement was entered, much less
when it was entered and who was a party to it. See, e.g., Gallman v. Sovereign Equity Grp., Inc.,
No. AW-11-2750, 2012 WL 2923170, at *9 (D. Md. July 17, 2012) (“The more specific
requirements for an allegation of conspiracy are that the pleader provide, whenever possible,

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some details of the time, place and alleged effect of the conspiracy.”) (citations and internal
quotations omitted); Walker v. Butkovich, 584 F. Supp. 909, 931 (M.D.N.C. 1984) (“In most
cases, a bare conclusory allegation of conspiracy or concerted action will not suffice. The
plaintiffs must expressly allege an agreement or make averments of communication,
consultation, cooperation, or command from which such an agreement can be inferred.”)
(citations and internal quotations omitted). Therefore, the Court will dismiss Count II against
Aurora.
In Count III, Plaintiffs claim that Defendants breached the implied covenant of good faith
and fair dealing. “Maryland law does not recognize an independent cause of action for breach of
the implied covenant of good faith and fair dealing.” Cutler v. Wal-Mart Stores, Inc., 927 A.2d
1, 11 (Md. Ct. Spec. App. 2007). A breach of the implied covenant simply supports another
cause of action, e.g., breach of contract. “The implied duty of good faith prohibits one party to a
contract from acting in such a manner as to prevent the other party from performing his
obligations under the contract.” Id. (quoting Mount Vernon Props., LLC v. Branch Banking and
Trust Co., 907 A.2d 373, 381 (Md. Ct. Spec. App. 2006)). Plaintiffs’ claim fails because they
have not alleged that they were a party to any contract with Aurora. As discussed above, Aurora
played no role at all in the original loan transaction. And although the Complaint identifies a
“Pooling and Servicing Agreement” to which Plaintiffs were a party, there is no allegation that
Aurora was a party to that agreement. See Compl. ¶ 15. Accordingly, the Court will dismiss
Count III against Aurora.
Finally, it appears that all of Plaintiffs’ claims against Aurora are barred by Maryland’s
statute of limitations, which provides that “[a] civil action at law shall be filed within three years
from the date it accrues.” MD. CODE ANN., CTS. & JUD. PROC. § 5-101. The Court of Appeals of

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Maryland has held that the discovery rule generally applies to a cause of action brought under
§ 5-101 and that “the cause of action accrues when the claimant in fact knew or reasonably
should have known of the wrong.” Poffenberger v. Risser, 431 A.2d 677, 680 (Md. 1981).
Whether Plaintiffs’ claims against Aurora are based on the original loan made in 2005 or the
foreclosure in 2009, they accrued more than three years ago. There is no indication from
Plaintiff’s Complaint that they only became aware of their causes of action at a later date. And
as indicated above, Plaintiffs did not respond to Aurora’s Motion, including the statute of
limitations argument, despite having ample time to do so. For these reasons, the claims against
Aurora will be dismissed.
IV.

CONCLUSION
For the foregoing reasons, Aurora’s Motion to Dismiss for failure to state a claim will be

GRANTED. A separate Order follows.

___May 8, 2013__
Date

/s/
Alexander Williams, Jr.
United States District Judge

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