Bowman et al v. Finance America, LLC et al

Filing 26

MEMORANDUM OPINION. Signed by Judge Alexander Williams, Jr on 08/19/2013. (bas, Deputy Clerk)(c/m on 8/19/2013 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 (1) Plaintiffs’ Motion to Vacate the Court’s May 8, 2013
Order that granted Defendant Aurora Loan Services, LLC’s Motion to Dismiss and terminated
Aurora from this action; (2) Plaintiffs’ Motion for Reconsideration of the Court’s June 13, 2013
Order that denied Plaintiffs’ Motion to add a new defendant; and (3) Plaintiffs’ response to the
Court’s June 13, 2013 Order that required Plaintiffs to explain certain discrepancies regarding
service of process on remaining Defendant Structured Assets Securities Corp. Mortgage Loan
Trust 2005-GEL3 (“2005-GEL3 Trust”). Doc. Nos. 24. The Court has reviewed the motion
papers and concludes that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2011). For the
reasons discussed below, Plaintiff’s Motions will be DENIED. The Court will also dismiss
Plaintiffs’ claims against Defendant 2005-GEL3 Trust because the trust is not an entity capable
of being sued.
I.

PLAINTIFFS’ MOTION TO VACATE
The Court dismissed Plaintiffs’ claims against Aurora because the Complaint contained

only scant references to and allegations regarding Aurora, failed to plead fraud with specificity,
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failed to plead the existence of a contract to which Aurora was a party, and failed to state a
plausible claim for relief on any ground. Doc. No. 14 at 4-6. The Court also found that
Plaintiffs’ claims against Aurora appeared to be time-barred. Id. at 6-7. Plaintiffs appear to rely
on Rule 60(b) of the Federal Rules of Civil Procedure in their Motion to Vacate, and claim that
vacatur is warranted because (1) it is “imperative” that Aurora be made available for discovery;
(2) the Court fell victim to confusion as to who was the true owner and investor of the
securitization trusts; and (3) evidence indicates that Aurora is the current holder of the Note and
has been or may have been Master Servicer and/or the purchaser of Plaintiffs’ mortgage. See
Doc. No. 24 Exs. 1-4.
Before a party may seek relief under Rule 60(b), it must first show “timeliness, a
meritorious defense, a lack of unfair prejudice to the opposing party, and exceptional
circumstances.” Dowell v. State Farm Fire & Cas. Auto. Ins. Co., 993 F.2d 46, 48 (4th Cir.
1993) (citations omitted). Once a party meets these threshold requirements, it must then satisfy
one of the six subsections of Rule 60(b). Id. Plaintiffs have failed to put forward a meritorious
defense, as their Motion does not satisfy the Court that the substantial pleading deficiencies
identified by the Court in its May 8 Memorandum Opinion could be cured. Furthermore, none of
Plaintiffs’ arguments would disturb the Court’s finding that their claims were time-barred. Even
if Plaintiffs met the threshold requirements, however, they have failed to satisfy any of the
subsections of Rule 60(b). Plaintiffs do not, for example, claim mistake or inadvertence in
failing to respond to Aurora’s Motion to Dismiss. Plaintiffs cite evidence in their Motion to
Vacate that was not attached to the Complaint, but they do not argue that this evidence is “newly
discovered.” None of the other subsections of Rule 60(b) appear to be relevant to Plaintiffs’
arguments. Accordingly, Plaintiffs’ Motion to Vacate will be DENIED.

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II.

PLAINTIFFS’ MOTION FOR RECONSIDERATION
Plaintiffs also seek reconsideration of the Court’s June 13, 2013 Order that denied

Plaintiffs’ Motion to Add SASCO Mortgage Loan Trust 2007-RNP1 (“2007-RNP1 Trust”) as a
defendant to this action. The Court denied Plaintiffs’ Motion on the grounds that their
Complaint contained one generalized reference to the 2007-RNP1 Trust entity and contained no
particularized allegations at all. See Doc. No. 22. Accordingly, the Court concluded that
Plaintiffs failed to state a plausible claim against the 2007-RNP1 Trust and that adding it as a
defendant would be futile. Id. Plaintiffs claim that the Court should reconsider its Order because
(1) Plaintiffs’ mistake in not listing the 2007-RNP1 Trust throughout its brief should be excused,
and (2) Plaintiffs require clarification as to which loan trust actually holds the Plaintiffs’
mortgage. There are three circumstances in which courts consider granting a motion for
reconsideration: (1) to accommodate an intervening change in controlling law; (2) to account for
new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest
injustice. U.S. ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir.
2002). Given the Court’s holding below that a trust such as the 2007-RNP1 Trust is not an entity
capable of being sued, see infra Part III, there are no grounds upon which to grant Plaintiffs the
relief they request. Accordingly, Plaintiffs’ Motion for Reconsideration will be DENIED.
III.

CLAIMS AGAINST THE TRUST
As part of its June 13, 2013 Order, the Court granted Plaintiffs twenty-one days to

explain certain discrepancies with respect to serving the Defendant 2005-GEL3 Trust. Doc. No.
22. Although the Court’s June 13 Order expressed concern with service of process, a
fundamental defect with Plaintiffs’ Complaint has captured the Court’s attention. The Court may
raise the viability of a plaintiff’s claim sua sponte where the failure to state a claim is clear. See,

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e.g., Glass v. Anne Arundel Cnty., No. WDQ-12-1901, 2013 WL 1120549, at *8 n.38 (D. Md.
Mar. 14, 2013); Pitkin v. Ocwen Fin. Corp., No. 12-cv-00573-AW, 2012 WL 5986480, at *4 (D.
Md. Nov. 27, 2012).
Plaintiffs’ claims against Defendant 2005-GEL3 Trust must be dismissed because the
trust is not an entity capable of being sued. Rule 17(b) of the Federal Rules of Civil Procedure
provides:
Capacity to Sue or Be Sued. Capacity to sue or be sued is determined as follows:
(1) for an individual who is not acting in a representative capacity, by the law of
the individual's domicile;
(2) for a corporation, by the law under which it was organized; and
(3) for all other parties, by the law of the state where the court is located, except
that:
(A) a partnership or other unincorporated association with no such
capacity under that state’s law may sue or be sued in its common name to
enforce a substantive right existing under the United States Constitution or
laws; and
(B) 28 U.S.C. §§ 754 and 959(a) govern the capacity of a receiver
appointed by a United States court to sue or be sued in a United States
court.
Fed. R. Civ. P. 17(b) (emphasis added). Accordingly, under Rule 17(b)(3), whether a trust has
the capacity to be sued in this Court is determined by the law of the state of Maryland. Federal
courts looking to Maryland law have previously held that trusts lack the capacity to sue or be
sued. See, e.g., Allegis Grp., Inc. Contractors Health Plan Trust v. Conn. Gen. Life Ins. Co., No.
JFM-04-16, 2004 WL 1289862, at *2-4 (D. Md. June 10, 2004); Limouze v. M.M. & P. Mar.
Advancement, Training, Educ. Program, 397 F. Supp. 784, 789 (D. Md. 1975); White v.
Lundeberg Md. Seamanship Sch., Inc., 57 F.R.D. 128, 130 (D. Md. 1972). As noted in White, “a
trust as an entity does not have the capacity to be sued and that . . . capacity exists only in its
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trustees.” 57 F.R.D. at 130. The Court discerns no reason to depart from the well-settled
Maryland rule in the circumstances of this case. The claims against Defendant 2005-GEL3 Trust
must be dismissed, and the Trust will be terminated as a party to this action. Claims against
Defendant GMAC Mortgage, LLC and BNC Mortgage LLC (as successor by merger to named
Defendant Finance America LLC) shall remain stayed, as articulated in the Court’s June 7 and
June 13, 2013 Orders. Doc. Nos. 17, 22. Aurora will not be reinstated as a party for the reasons
discussed herein. Accordingly, the Court will issue an order to the Clerk to close this case.
IV.

CONCLUSION
For the foregoing reasons, Plaintiffs’ Motion to Vacate and Motion to Reconsider will be

DENIED. Plaintiffs’ claims against Defendant 2005-GEL3 Trust will be dismissed, and the
Court will close this case. A separate Order follows.
August 19, 2013
Date

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

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