Lewis v. Brady et al
Filing
24
MEMORANDUM OPINION (c/m to Plaintiff 8/4/14 sat). Signed by Chief Judge Deborah K. Chasanow on 8/4/14. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
BERNARD LEWIS
:
v.
:
Civil Action No. DKC 13-1561
:
MCCABE, WEISBERG & CONWAY,
LLC et al.
:
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this consumer
lending
action
are
a
motion
to
dismiss
filed
by
Defendant
McCabe, Weisberg & Conway, LLC (“McCabe”) (ECF No. 14) and a
motion
to
dismiss
LLC.,
Deutsche
filed
Bank
by
Defendants
National
Residential, Inc. (ECF No. 17).
Trust
Ocwen
Loan
Company,
Servicing,
and
Homeward
The issues have been briefed,
and the court now rules, no hearing being deemed necessary.
Local Rule 105.6.
For the following reasons, both motions will
be granted.
I.
Background
A. Factual Background
On
December
(“Plaintiff”),
and
13,
his
2004,
wife,
Plaintiff
Melvina
Lewis,
Bernard
obtained
Lewis
from
Ameriquest Mortgage Company a home mortgage loan, in the amount
of $285,000, to purchase residential property located at 3100
Altair Lane, Upper Marlboro, Maryland 20774.1
ECF No. 14-1, at 1).
(ECF No. 10 ¶ 8;
The loan was evidenced by a promissory
note (“Note”) and secured by a Deed of Trust dated December 13,
2004.
(ECF No. 14-1, at 5-19).
The Deed of Trust was signed by
both Bernard and Melvina Lewis.
(Id. at 18).
The version of
the Note that Defendants provide appears to have been signed
only by Plaintiff Bernard Lewis, but Plaintiff insists that the
original
Plaintiff
enforce
Note
contained
believes
any
that
lien
“fabricated” Note.
his
on
wife’s
Defendants
his
signature
do
Property
(Id. at 4).
not
as
have
because
well.
Thus,
authority
they
hold
to
a
Defendant Homeward Residential,
Inc. (“Homeward”) serviced the loan until that responsibility
was transferred to Defendant Ocwen Loan Servicing, LLC (“Ocwen”)
sometime in 2013.
On January 16, 2009, Citi Residential Lending, Inc., as
attorney-in-fact for Ameriquest Mortgage Company, assigned or
transferred the Note and Deed of Trust to Deutsche Bank National
Trust
Company
(“Deutsche
Bank”),
as
trustee
for
Ameriquest
1
The following facts are either set forth in the complaint,
supported by documents referenced or relied upon in the
complaint, or are matters of public record of which the court is
permitted to take judicial notice. American Chiropractic Assoc.
v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004)
(noting that as a general rule, courts should not consider
extrinsic evidence at the 12(b)(6) stage, but the court may
consider a document that a party attaches to a motion to dismiss
if “it was integral to and explicitly relied on in the complaint
and if the plaintiffs do not challenge its authenticity.”).
2
Mortgage
Securities,
Certificates,
Series
Inc.,
Asset-Backed
2005-R1,
pursuant
to
was
recorded
among
the
land
Pooling
and
(Id. at 25).2
Servicing Agreement dated February 1, 2005.
assignment
Pass-Through
a
The
records
George’s County, Maryland on February 19, 2009.
of
Prince
(Id.).
The
Deed of Appointment of Substitute Trustees, recorded in the land
records
of
Prince
George’s
County
on
February
29,
2012,
indicates that Deutsche Bank is the present holder or authorized
agent of the holder of the Note secured by the Deed of Trust.
(Id. at 27).
The Deed of Appointment of Substitute Trustees
appointed as substitute trustees certain attorneys from the law
firm McCabe, Weisberg & Conway, LLC, one of the Defendants here,
including: Laura H.G. O’Sullivan; Deborah K. Curran; Erin M.
Brady; Diana C. Theologou; Laura L. Latta; Jonathan Elefant; and
Chasity Brown (collectively “Substitute Trustees”).
Plaintiff
asserts
that
Defendants
default in the spring or summer of 2011.
a
result
Substitute
of
Property
the
loan
Trustees
in
the
default,
docketed
Circuit
a
Court
on
declared
Note
in
(ECF No. 10 ¶ 15).
As
February
foreclosure
for
(Id.).
Prince
the
29,
action
2012,
as
George’s
to
the
the
County,
2
“The Pooling and Servicing agreement generally establishes
the two entities – a trustee and a servicer – that are
responsible for maintaining the trust into which a mortgage is
bundled and sold during the securitization process.”
Lomp v.
Y.S. Mortg. Finance Corp., Civil Action No. WMN-13-1099, 2013 WL
6528909, at *1 n.2 (D.Md. Dec. 11, 2013).
3
Maryland.
Plaintiff states that Deutsche Bank misrepresented
that it was the holder of the Note because the Note it presented
in connection with the foreclosure proceeding in February 2012
lacked
Melvina
Lewis’s
signature;
Plaintiff
Melvina Lewis signed the original Note.
represents
(Id. ¶ 10).
that
Thus,
Plaintiff believes that the Note which Deutsche Bank possesses
is “fabricated.”
(Id. ¶ 18).
Defendant McCabe sent Plaintiff a letter notifying him of
the foreclosure sale scheduled for February 5, 2013.
19).
(Id. ¶
On December 4, 2012, during the course of the foreclosure
proceedings, Plaintiff filed a voluntary bankruptcy petition in
the United States Bankruptcy Court for the District of Maryland,
Case No. 12-31619.
(ECF No. 14-1, at 29).3
On December 20,
2012, Judge Lipp dismissed the petition based on Plaintiff’s
failure to complete required filings.
(Id. at 30).
Plaintiff asserts that on January 19, 2013, he notified
Defendant Homeward - the servicer of Plaintiff’s loan prior to
Ocwen - that the Note attached to the foreclosure action was not
3
Previously, on April 19, 2007, Plaintiff filed a
bankruptcy petition under Chapter 13 of the bankruptcy code. In
re
Bernard
Stevenson
Lewis,
Jr.,
Case
No.
07-13576
(Bankr.D.Md.). On July 13, 2007, Deutsche Bank moved for relief
from the automatic stay, and attached the Note and Deed of Trust
to the motion. (ECF No. 14-1, at 33). Defendants maintain that
Plaintiff did not challenge the validity of these documents
during the 2007 bankruptcy proceeding.
On November 26, 2007,
this bankruptcy case was dismissed at Plaintiff’s request.
In
re Bernard Stevenson Lewis, Jr., Case No. 07-13576, ECF No. 39.
4
the original Note.
(ECF No. 10 ¶ 20).
Plaintiff does not
attach the actual letter to his amended complaint, but avers
that
in
this
correspondence,
he
arranged
to
pay
the
debt,
requested a payoff statement, a current certified copy of the
note, the opportunity to inspect the original note, and for an
accounting
Plaintiff
of
payments
asserts
and
that
charges
Defendants
on
the
loan.
cancelled
the
(Id.).
scheduled
foreclosure sale after receiving Plaintiff’s January 19, 2013
letter.
On
or
around
March
12,
2013,
Defendant
Homeward
responded to Plaintiff’s January 19, 2013 letter; this response
stated that Melvina Lewis did not sign the original Note and
attached
an
Plaintiff.
uncertified
(Id. ¶ 22).
copy
of
the
Note
signed
only
by
According to Plaintiff, the letter from
Defendant Homeward claimed to include a payment history, but
there was no payment history enclosed.
Furthermore, Defendant
Homeward referred Plaintiff to Ocwen, the new loan servicer.
On
March
26,
2013,
Plaintiff
sent
a
letter
to
Ocwen
requesting a current and certified copy of the Note and a date
and time to inspect the original Note.
(Id. ¶ 23).
Plaintiff
avers that he made this request to Ocwen to establish that it
was the holder of the Note and, therefore, legally entitled to
enforce and collect payment on the mortgage loan.
Although
Plaintiff also does not include a copy of this letter as an
exhibit to the complaint, he asserts that he informed Ocwen that
5
he is “prepared to satisfy the debt and would like to verify
that [he] is paying the ‘holder’ and that the original note will
be
returned
Maryland
to
[him]
law.”
as
(Id.).
required
by
Plaintiff
the
avers
Deed
that
of
Trust
Ocwen
and
did
not
respond to this letter.
On May 21, 2013, McCabe sent Plaintiff another notice of a
foreclosure
sale
set
cancelled the sale.
to
occur
on
June
(Id. ¶¶ 24-26).
4,
2013,
but
then
McCabe again notified
Plaintiff of a foreclosure sale in September or October 2013,
scheduled for October 29, 2013.
(Id. ¶ 27).
Plaintiff avers
that unlike the two prior notices regarding a foreclosure sale,
McCabe did not cancel the October 29, 2013 sale.
Plaintiff
states that he was then forced to file for Chapter 13 bankruptcy
in
the
United
States
Bankruptcy
Court
for
the
District
of
Maryland on October 28, 2013 in order to prevent his property
from being sold.
(Id. ¶ 28); see In re Bernard S. Lewis, Jr.,
Case No. 13-28233, ECF No. 1 (Bankr.D.Md.).
voluntarily
cancelled
the
foreclosure
Consequently, Ocwen
sale
of
the
Property
scheduled for October 29, 2013 and dismissed the foreclosure
case.
Plaintiff’s Chapter 13 bankruptcy case was closed on
December 17, 2013.
In re Bernard S. Lewis, Jr., Case No. 13-
28233, ECF No. 18.
Although
Plaintiff
does
not
identify
the
date
of
this
event, he avers that Ocwen sent agents to the Property to take
6
possession of Plaintiff’s home.
(ECF No. 10 ¶ 29).
Plaintiff
believes that Ocwen’s agents trespassed onto the Property and
attempted
to
change
the
locks
to
the
house.
According
to
Plaintiff, he spoke to Owen’s agents on the phone and learned
that
Ocwen
told
the
agents
that
the
Property
was
vacant.
Plaintiff asserts that the Property was not vacant and, as such,
Ocwen
did
not
Property.
satisfy
conditions
precedent
to
enter
the
(Id. ¶ 34).
B. Procedural Background
On May 30, 2013, Plaintiff, proceeding pro se, commenced
this action against Defendants Erin M. Brady, McCabe, Homeward,
Ocwen, and Deutsche Bank, alleging violations of the Fair Debt
Collection
Practices
Act
(“FDCPA”)
Debt Collection Act (“MCDCA”).
and
the
Maryland
(ECF No. 1).
Consumer
On October, 21,
2013, Defendant McCabe moved to dismiss the complaint as to
McCabe
and
Erin
(ECF
trustees.
M.
Brady,
No.
one
7).
of
the
Plaintiff
appointed
then
filed
substitute
an
amended
complaint on November 7, 2013, terminating Erin M. Brady as a
party and removing the FDCPA claim.
amended
complaint
Settlement
alleges
Procedures
Act
(ECF No. 10).
violations
(“RESPA”)
of
(count
Plaintiff’s
the
Real
I),
the
Estate
Maryland
Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law,
§
14-201
et
seq.,
and
the
Maryland
Consumer
Protection
Act
(“MCPA”), Md. Code Ann., Com. Law § 13-101 et seq. (count II),
7
and a breach of contract claim (count IV).4
includes
as
a
separate
count
(count
Plaintiff also
III)
a
request
for
declaratory judgment that the Note was signed by both Bernard
and
Melvina
Lewis
original Note.
and
that
Defendants
do
not
possess
the
(Id. ¶ 61).
Defendant McCabe moved to dismiss on November 29, 2013.
(ECF No. 14).
Defendants Homeward, Ocwen, and Deutsche Bank
filed a separate motion to dismiss on December 24, 2013.
No. 17).
Plaintiff opposed both motions.
(ECF
(ECF Nos. 16 & 22).
Defendants Homeward, Ocwen, and Deutsche Bank filed a reply on
January 27, 2014.
II.
(ECF No. 23).
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.”
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, 556 (2007).
Bell Atl. Corp.
That showing must consist
of more than “a formulaic recitation of the elements of a cause
4
Plaintiff clarifies in the opposition to McCabe’s motion
to dismiss that he is not asserting RESPA and breach of contract
claims against McCabe. (ECF No. 16, at 1 n.1).
8
of
action”
or
“naked
enhancement.”
assertion[s]
Ashcroft
v.
Iqbal,
devoid
556
of
U.S.
further
662,
factual
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
A.
Judicial Estoppel
Plaintiff asserts that Defendants cannot enforce the Note
because they do not have the original Note, which Plaintiff
alleges
contained
his
wife’s
signature.
Defendant
McCabe
asserts that Plaintiff’s claims are barred by judicial estoppel.
Judicial estoppel is a preventative measure that courts may take
to prevent a party from successfully asserting a position in a
9
prior proceeding and then attempting to assert a contradictory
position in a subsequent proceeding.
219, 223-24 (4th Cir. 1996).
Lowery v. Stovall, 92 F.3d
As explained by the Fourth Circuit:
While
“the
circumstances
under
which
judicial
estoppel
may
appropriately
be
invoked are probably not reducible to any
general
formulation
of
principle,
New
Hampshire v. Maine, 532 U.S. 742, 750 (2001)
[], in this circuit we generally require the
presence of the following elements:
First, the party sought to be estopped must
be seeking to adopt a position that is
inconsistent with a stance taken in prior
litigation.
The position at issue must be
one of fact as opposed to one of law or
legal
theory.
Second,
the
prior
inconsistent
position
must
have
been
accepted by the court.
Lastly, the party
against whom judicial estoppel is to be
applied must have intentionally misled the
court to gain unfair advantage.
Whitten v. Fred’s, Inc., 601 F. 3d 231, 241 (4th Cir. 2010); In
re Rood, 448 B.R. 149, 160-61 (Bankr.D.Md. 2011).
McCabe states that Plaintiff did not previously challenge
the validity of the Note, when Deutshe Bank attached copies of
it in connection with the 2007 bankruptcy proceeding in which
Plaintiff was a party.
(ECF No. 14, at 6).
the
filed
Note
–
which
was
with
Deutsche
McCabe asserts that
Bank’s
motion
for
relief from the automatic stay in the 2007 bankruptcy proceeding
- also lacked Melvina Lewis’s signature, but Plaintiff did not
object.
McCabe believes that Plaintiff’s failure to disclose
any cause of action regarding the Note or to file an adversary
10
proceeding challenging the Note or the rights of Deutsche Bank
precludes his current action challenging the validity of the
Note
and
Defendants’
authority
to
enforce
it.
Plaintiff
counters that none of the elements necessary to invoke judicial
estoppel have been satisfied.
McCabe’s arguments are unavailing.
First, McCabe has not
shown that Plaintiff took an inconsistent position in a prior
litigation by failing to challenge the validity of the Note.
Second,
there
accepted
this
Plaintiff
is
no
indication
prior
inconsistent
voluntarily
November 26, 2007.
dismissed
Plaintiff
the
Bankruptcy
position,
his
Court
considering
Chapter
13
that
petition
on
In re Bernard Stevenson Lewis, Jr., Case No.
07-13576, ECF No. 39.
that
that
Furthermore, McCabe does not even argue
acted
with
the
intent
to
mislead
the
court.
Accordingly, judicial estoppel does not bar Plaintiff’s claims.
B.
RESPA Violations
Plaintiff
Homeward
and
asserts
March
that
25,
the
2013
January
letter
26,
to
2013
Ocwen
letter
to
constituted
“qualified written requests” (“QWR”) and that both Ocwen and
Homeward failed to investigate and respond promptly under RESPA,
as required by 12 U.S.C. § 2605(e).
12 U.S.C. § 2605(e) states that “[i]f any servicer of a
federally
related
mortgage
loan
receives
a
qualified
written
request from the borrower . . . for information relating to the
11
servicing of such loan, the servicer shall provide a written
response acknowledging receipt of the correspondence within 20
days.”
A qualified written request is defined as:
a written correspondence, other than notice
on a payment coupon or other payment medium
supplied by the servicer, that (i) includes,
or
otherwise
enables
the
servicer
to
identify, the name and account of the
borrower; and (ii) includes a statement of
the reasons for the belief of the borrower,
to the extent applicable, that the account
is in error or provides sufficient detail to
the servicer regarding other information
sought by the borrower.
12
U.S.C.
§
2605(e)(1)(B).
Creditors
have
sixty
(60)
days
following the receipt of a QWR to make requested changes to the
borrower’s account, notify the borrower of the results of any
investigation pertaining to the account, and transmit the name
and telephone number of a representative who can answer any
questions about the account.
12 U.S.C. § 2605(e)(2).
In moving to dismiss Plaintiff’s RESPA claim, Defendants
argue that Plaintiff’s claim is deficient because he does not
attach either the January or March 2013 letter to his complaint,
but even crediting his allegations of the requests made therein,
they do not constitute QWRs as they do not relate to servicing
of his mortgage loan.
“receiving
any
Under RESPA, “servicing” is defined as
scheduled
periodic
payments
from
a
borrower
pursuant to the terms of any loan, including amounts for escrow
accounts . . . and making the payments of principal and interest
12
and such other payments with respect to the amounts received
from the borrower as may be required pursuant to the terms of
the loan.”
12 U.S.C. § 2605(i)(3).
Although Plaintiff does not
attach the two letters to his amended complaint, he alleges that
in the January 19, 2013 letter to Homeward, he: (1) stated that
the
Note
was
“fabricated”
and
not
the
original
Note;
(2)
announced that he made arrangements to pay the debt; (3) asked
for a payoff statement and a current certified copy of the Note;
and (4) requested to inspect the original Note and asked for an
accounting of payments and charges on the loan.
20).
In
the
March
26,
2013
letter
to
(ECF No. 10 ¶
Ocwen,
Plaintiff
allegedly: (1) requested a current, certified copy of the Note;
(2) requested a date and time to inspect the original Note; (3)
explained
that
his
purpose
was
to
establish
that
Ocwen
was
legally entitled to enforce the Note and collect payment; and
(4) stated that he was prepared to satisfy the debt, but wanted
to verify that Ocwen was the “holder” and that the original Note
would be returned to him.
(Id. ¶ 23).
In determining whether a given request constitutes a QWR,
courts have drawn a distinction between communications related
to the servicing of the loan, which are covered under RESPA, and
those
challenging
the
validity
of
a
loan,
which
are
not.
Plaintiff’s allegations concerning the information contained in
the January and March letters are insufficient to make these
13
documents QWRs.
Although Plaintiff likely intended that they
serve
in
as
QWRs,
substance,
he
sought
the
original
loan
documents, “verification of the identity of the holder in due
course of the loan, and proof of the servicer’s authority to
service the loan[.]”
Bravo v. MERSCORP, Inc., No. 12-CV-884
(ENVV) (LB), 2013 WL 1652325, at *3 (E.D.N.Y. Apr. 16, 2013)
(finding
a
“correspondence
falls
short
of
the
statutory
definition of a QWR” where it merely seeks documents to verify
the loan).
The two letters do not relate to “servicing,” as
that term is defined under RESPA, because they “say[] nothing
about defendant[’s] receipt of scheduled periodic payments or
the amounts of such payments.”
Ocwen
Loan
Servicing,
LLC,
Id. at *3; see also Dides v.
Civ.
No.
WMN-12-2989,
2013
WL
2285371, at *2 (D.Md. May 21, 2013) (“the permissible scope of
Qualified Written Requests under RESPA is limited to information
related to the servicing of loans, specifically the receipt of
payments from a borrower and the making of payments of principal
and interest”).
reflect
The January 19, 2013 and March 26, 2013 letters
Plaintiff’s
belief
that
Homeward
and
Ocwen
did
not
possess the original Note and did not have authority to collect
loan payments.
March
2013
Indeed, Plaintiff explicitly indicated in his
correspondence
to
Ocwen
that
the
purpose
of
the
letter was to establish that Ocwen “was legally entitled to
14
enforce the Note and collect payment,” which does not relate to
servicing.
In
(ECF No. 10 ¶ 23).
his
Homeward,
opposition
Ocwen,
and
to
the
Deutsche
motion
Bank,
to
dismiss
Plaintiff
filed
contends
by
that
Homeward violated RESPA because it did not provide “a payoff
statement
or
accounting
January 2013 letter.
that
his
inquiry
of
the
loan,”
as
(ECF No. 22, at 4).
about
“Ocwen’s
legal
requested
in
the
He further argues
authority
to
collect
payment [] is undoubtedly a central function of a servicer.”
(Id.).
Plaintiff’s
arguments
are
unavailing.
Although
Plaintiff requested a payoff statement and accounting of the
loan, this “bare assertion [did] not provide the servicer with
‘sufficient detail’ as to why plaintiff[] believe[d] the balance
[was] incorrect.”
Marsh v. BAC Home Loans Servicing, No. 2:09-
cv-813-Ftm-29DNF,
2011
2011)
12
(quoting
WL
1196415
U.S.C.
§
at
*8
(M.D.Fla.
2605(e)(1)(B));
March
29,
Minson
v.
CitiMortgage, Inc., No. DKC–12–2233, 2013 WL 2383658, at *3-5
(D.Md. May 29, 2013) (finding that, inter alia, requests for a
certified
copy
of
the
original
promissory
note
and
deed
of
trust, and a copy of the account and general ledger statement
showing the loan history did not constitute as a QWR); Ward v.
Security Atlantic Mortg. Electronic Registration Systems, Inc.,
858 F.Supp.2d 561, 574-75 (E.D.N.C. 2012) (finding that a letter
seeking, inter alia, copies of loan documents, assignments of
15
the deed of trust and promissory note, and a loan transactional
history did not qualify as a valid QWR).
Plaintiff’s requests
challenge Homeward’s and Ocwen’s authority to collect payments,
which do not constitute valid QWRs, and Defendants cannot be
liable under RESPA for failing to respond fully.
Accordingly,
Plaintiff’s RESPA claim will be dismissed.
C. MCDCA and MCPA Violations
In count two of the amended complaint, Plaintiff alleges
that McCabe and Deutsche Bank violated the MCDCA and the MCPA,
which are actually two separate causes of action.
¶¶ 44-52).5
202(8)
of
(ECF No. 10
Plaintiff asserts that McCabe violated Section 14the
MCDCA
by
threatening
a
foreclosure
sale
on
February 5 and June 4, 2013 “with knowledge it had no right to
foreclose.”
(Id. ¶ 46).
Plaintiff further contends that McCabe
violated the MCDCA by attempting a foreclosure sale on October
29,
2013
knowing
it
had
no
right
to
foreclose
because
“Defendants were not in possession of the original Note.”
¶ 47).
(Id.
Plaintiff believes that Deutsche Bank is liable for
McCabe’s violations because it retained McCabe to collect the
debt.
(Id. ¶ 49).
The
MCDCA
provides
that
in
collecting
or
attempting
to
collect an alleged debt, a collector may not engage in various
5
Plaintiff does not allege that Homeward and Ocwen violated
the MCDCA and MCPA.
16
activities,
including
“claim[ing],
attempt[ing],
or
threaten[ing] to enforce a right with knowledge that the right
does not exist.”
a
claim
under
allegations
Md. Code Ann., Com. Law § 14-202(8).
the
MCDCA,
tending
to
Plaintiff
establish
must
two
set
To plead
forth
elements:
factual
(1)
that
Defendants did not possess the right to collect the amount of
debt sought; and (2) that Defendants attempted to collect the
debt knowing that they lacked the right to do so.
See Pugh v.
Corelogic Credco, LLC, Civil Action No. DKC 13-1602, 2013 WL
5655705, at *4 (D.Md. Oct. 16, 2013).
The key to prevailing on
a claim of MCDCA is to demonstrate that the defendants “acted
with knowledge as to the invalidity of the debt.”
Bierman,
859
F.Supp.2d
754,
769
(D.Md.
2012)
Stewart v.
(emphasis
in
original).
There are several problems with Plaintiff’s MCDCA claim.
Although Plaintiff asserts that McCabe attempted to collect a
debt
by
sending
foreclosure
notices
to
him,
the
Substitute
Trustees (who are attorneys with the law firm McCabe, Weisberg &
Conway, LLC) were involved in the foreclosure proceeding, not
the law firm itself.
But even assuming McCabe attempted to
collect a debt, Plaintiff has not shown that it knew it lacked
the right to do so.
Plaintiff’s only basis for the MCDCA claim
is that McCabe did not possess the original Note and thus was
not
authorized
to
enforce
the
17
lien
on
the
Property
through
foreclosure.
Plaintiff’s challenge is based on false premises.
Maryland Rule of Procedure 14-204 allows “any successor trustee”
of a deed of trust to file a foreclosure action.
of
Appointment
records
of
of
Substitute
Prince
George’s
Trustees,
County
Here, the Deed
recorded
on
in
February
the
29,
land
2012,
explicitly identified Deutsche Bank as the holder or authorized
holder of the Note secured by the Deed of Trust and further
appointed Substitute Trustees, acknowledging that they “shall
have all the rights, powers and authority, and be charged with
all
the
duties
that
were
conferred
trustee(s) named in said Deed of Trust.”
or
charged
upon
the
(ECF No. 14-1, at 27).
The Deed of Trust – the validity of which Plaintiff does not
challenge
-
granted
the
lender
or
the
authority to foreclose on the Property.
lender’s
agent
the
As McCabe points out,
even if the original Note contained Melvina Lewis’s signature,
the validity of the Deed of Trust as security for the debt
against the Property would not be affected; assuming the Note
contained her signature, Melvina Lewis would merely be added as
a debtor, and this purported discrepancy “would not affect the
validity of the debt as to [Plaintiff].”
(ECF No. 14, at 9).
Plaintiff does not dispute that he signed the Note.
asserts
that
Deutsche
Bank
is
liable
under
retaining McCabe to collect the alleged debt.
the
Plaintiff
MCDCA
for
Plaintiff has not
shown that either McCabe or Deutsche Bank attempted to collect a
18
debt which they knew was invalid, thus the MCDCA claim will be
dismissed.
The only allegation pertaining to the MCPA claim is that
Defendants are liable for attorney’s fees under the MCPA “for
McCabe’s
MCDCA
violation.”
(ECF
No.
10
¶
52).
The
MCPA
establishes that, by definition, the violation of several other
enumerated Maryland statutes, including the MCDCA, constitutes
unfair or deceptive trade practices proscribed by the MCPA.
generally
Md.
Code
Ann.,
incorporated statutes).
a number of reasons.
Com.
Law
§
13-301(14)
See
(enumerating
Plaintiff’s MCPA claim is meritless for
First, Plaintiff has not alleged an MCDCA
violation, thus his MCPA claim premised on an MCDCA violation
cannot
withstand
dismissal.
Second,
Section
13-104
exempts
certain professionals and their services from liability under
the MCPA, including lawyers, even when they are not acting in
their specific professional capacity.
Robinson v. Fountainhead
Title Group Corp., 447 F.Supp.2d 478, 490 (D.Md. 2006).
Thus,
McCabe, a law firm, is exempt from liability under the MCPA.
Accordingly, the MCPA claim will also be dismissed.
D. Breach of Contract
Plaintiff
asserts
that
Defendant
Ocwen
breached
its
contractual obligation under the Deed of Trust when its agents
entered the Property and attempted to change the locks without
giving prior notice to Plaintiff.
19
In the opposition to McCabe’s
motion to dismiss, Plaintiff states that his breach of contract
claim is against Defendants Ocwen, Homeward, and Deutsche Bank.
None of the allegations in the amended complaint explain how
Homeward breached a contract with Plaintiff, thus this claim
against Homeward will be dismissed.
It appears that Plaintiff
attempts to hold Ocwen and Deutsche Bank liable for breach of
contract, considering his allegation that Ocwen is an agent of
Deutsche Bank, thus Deutsche Bank is liable for Ocwen’s actions.
(ECF No. 22, at 7).
“To state a prima facie claim for breach of contract under
Maryland
obligation
law,
a
exists
obligation.”
plaintiff
must
and
the
McCray
that
v.
allege
defendant
Specialized
1316341, at *2 (D.Md. Mar. 28, 2013).
Loan
that
has
a
contractual
breached
Servicing,
that
2013
WL
Plaintiff believes that
Defendants breached the Deed of Trust by entering his Property
even though it was not abandoned.
Defendants argue that Ocwen’s
agents had authority to enter the Property in accordance with
the Deed of Trust.
Specifically, Paragraph 9 of the Deed of
Trust states:
If (a) Borrower fails to perform the
covenants and agreements contained in the
Security Instrument, (b) there is a legal
proceeding that might significantly affect
Lender’s interest in the Property and/or
rights under this Security Instrument (such
as a proceeding in bankruptcy, probate, for
condemnation or forfeiture, for enforcement
of a lien which may attain priority over
20
this Security Instrument or to enforce laws
or
regulations),
or
(c)
Borrower
has
abandoned the Property, then Lender may do
and pay for whatever is reasonable or
appropriate to protect Lender’s interest in
the Property and rights under this Security
Instrument, including . . . securing and/or
repairing the Property.
. . .
Securing the Property includes, but is not
limited to, entering the Property to make
repairs, [and] change locks.
(ECF
No.
14-1,
at
11-12)
(emphases
added).
This
section
authorized Ocwen to secure the Property and change the locks if
Plaintiff
failed
to
perform
the
covenants
and
agreements
contained in the Deed of Trust or there was a legal proceeding –
such
as
a
proceeding
in
bankruptcy
Lender’s interest in the property.
–
that
might
affect
the
Plaintiff’s own allegations
in the amended complaint reflect that he was notified of having
defaulted on the mortgage loan in the spring or summer of 2011
and received multiple notices regarding foreclosure sale on the
Property.
Moreover, Plaintiff voluntarily filed for bankruptcy
prior to the scheduled foreclosure sale on October 29, 2013.
(ECF No. 10 ¶ 28).
Plaintiff’s bankruptcy filing combined with
his default on the mortgage loan – thereby failing to perform
the covenants of the Deed of Trust – authorized the lender to do
“whatever
is
reasonable
or
appropriate
to
protect
Lender’s
interest in the Property,” which included securing the Property.
21
Plaintiff argues that Ocwen’s agents could only enter the
Property if it was vacant or abandoned, which he claims was not
the case here because he was still occupying the Property at the
time of entry.
Plaintiff points to Paragraph 7 of the Deed of
Trust as the controlling provision in this instance.
Paragraph
7 generally concerns preservation, maintenance, and protection
of
Property
and
allows
the
Lender
or
its
agent
to
“make
reasonable entries upon and inspections of the property.
If it
has reasonable cause, Lender may inspect the interior of the
improvements on the Property.
at
the
time
specifying
of
such
or
reasonable
(emphasis
added).
Property
without
provision.
prior
Lender shall give Borrower notice
to
cause.”
Plaintiff
giving
Plaintiff
is
such
him
an
(ECF
claims
No.
that
notice,
mistaken.
interior
by
Ocwen
inspection
14-1,
at
11)
entering
the
breached
Paragraph
7
this
applies
to
repairs of the premises by the borrower and the lender’s ability
to inspect the interior of the improvements on the Property.
It
does not appear that there were any improvements or maintenance
made to the Property which would trigger this provision.
Ocwen
acted within its rights pursuant to Paragraph 9 of the Deed of
Trust, which covers protection of the lender’s interests in the
Property and rights under the Deed of Trust.
breach of contract claim will be dismissed.
22
Accordingly, the
E. Declaratory Judgment
Plaintiff
includes
as
a
separate
count
in
his
amended
complaint a request for declaratory judgment that “the original
Note was signed by Mr. & Mrs. Lewis and that the Defendants are
not in possession of the original Note.”
The
Declaratory
Judgment
Act
provides
(ECF No. 10 ¶ 61).
that
“[i]n
a
case
of
actual controversy within its jurisdiction . . . any court of
the United States . . . may declare the rights and other legal
relations of any interested party seeking such a declaration,
whether or not further relief is or could be sought.”
§ 2201(a).
28 U.S.C.
The Fourth Circuit has explained:
[I]t is elementary that a federal court may
properly
exercise
jurisdiction
in
a
declaratory judgment proceeding when three
essentials
are
met:
(1)
the
complaint
alleges an actual controversy between the
parties of sufficient immediacy and reality
to
warrant
issuance
of
a
declaratory
judgment;
(2)
the
court
possesses
an
independent basis for the jurisdiction over
the parties (e.g., federal question or
diversity jurisdiction); and (3) the court
does not abuse its discretion in its
exercise of jurisdiction.
Volvo Const. Equip. N. Am., Inc. v. CLM Equip. Co., Inc., 386
F.3d
581,
592
(4th
Cir.
2004).
Defendants
contend
that
Plaintiff cannot bring a declaratory judgment action because no
actual controversy presently exists.
Specifically, Defendants
note that the validity of the Note concerns their rights to
foreclose on the Property, which is no longer an issue because
23
Plaintiff voluntarily filed for bankruptcy in October 2013 and
the bankruptcy case was closed in December 2013.
not
stated
settled.
the
of
a
controversy
which
should
be
See, e.g., Lomp, 2013 WL 6528909, at *4 (dismissing
action
for
effort
to
declaratory
foreclosure).
IV.
existence
Plaintiff has
enforce
judgment
the
Note
where
or
there
Deed
of
was
no
existing
Trust
through
Accordingly, count three will also be dismissed.
Conclusion
For the foregoing reasons, both motions to dismiss will be
granted.
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
24
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