Ward et al v. Branch Banking and Trust et al

Filing 28

MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 06/13/2014. (bas, Deputy Clerk)(c/m 6/13/2014 bca)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
PHILLIP WARD, et al.
Plaintiffs,
v.

Civil Action No. ELH-13-01968

BRANCH BANKING & TRUST CO.,
et al.
Defendants.
MEMORANDUM OPINION
Plaintiffs Phillip Ward and Deidre B. Ward, who are self-represented, filed suit against
defendants Branch Banking & Trust Co. (“BB&T”) and Fisher Law Group, PLLC (“Fisher”), in
connection with a mortgage loan plaintiffs obtained on July 25, 2005, in the sum of $356,000.1
The mortgage loan was used to finance plaintiffs’ purchase of real property located at 9710
Dubarry Street, Glendale, Maryland 20769 (the “Property”). During most of the relevant time
period, BB&T was the servicer of the mortgage loan. A dispute arose because of BB&T’s
alleged refusal to disclose, and plaintiffs’ resultant inability to determine, the identity of the
current owner of the mortgage loan. Over time, the dispute developed into one centered on
plaintiffs’ failure to make their loan payments, BB&T’s alleged failure to comply with various
mortgage-related laws, and the nature of BB&T’s interest in the Property.
Plaintiffs, frustrated by their inability to uncover the owner of the Note, and afraid they
were the victims of mortgage fraud, eventually stopped making payments on the Note. In April
2013, BB&T, which ostensibly acquired a security interest in the loan, directed its substitute
trustees, who were represented by Fisher, to initiate foreclosure proceedings in the Circuit Court
for Prince George’s County, Maryland. See Fisher v. Ward, Case No. CAE13-09860 (the
1

Plaintiffs filed suit in the Circuit Court for Prince George’s County. BB&T removed
the case to this Court pursuant to 28 U.S.C. §1331 (federal question jurisdiction) and 28 U.S.C.
§ 1367 (supplemental jurisdiction).

“Foreclosure Action”). Several of plaintiffs’ claims in this case relate to the authenticity vel non
of the documents presented by defendants in the Foreclosure Action.
On June 6, 2013, after the Foreclosure Action was initiated, plaintiffs filed the underlying
suit against defendants. At the outset, BB&T filed a motion to dismiss for insufficient service of
process. ECF 8. Judge Alexander Williams, to whom the case was initially assigned, granted
that motion in part, while also granting plaintiffs an extension of time to file an Amended
Complaint and to effectuate service of process. ECF 12. Plaintiffs filed an Amended Complaint
(“Am. Comp.,” ECF 14) on September 9, 2013, to which numerous exhibits were appended.2 In
the Amended Complaint, plaintiffs alleged Wrongful Foreclosure and Fraud (Count I); violations
of the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. (Count II); violations of the Fair Debt
Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (Count III); unjust enrichment (Count IV);
and violation of the Maryland Uniform Commercial Code (Count V). In addition, they seek to
enjoin defendants “from taking any further foreclosure action or asserting any further debt or
economic interest” in the Property; the “awarding of Quiet Title to plaintiffs” with respect to the
Property; as well as compensatory and punitive damages. See ECF 14 at 12–13.
Both defendants filed motions to dismiss the Amended Complaint. BB&T’s Motion
(“BB&T Motion) is at ECF 17, and is supported by a Memorandum of Law (“BB&T Memo,”
ECF 17-1), and several exhibits.

Fisher’s motion, which includes its legal memorandum,

(“Fisher Motion”), is at ECF 20, and is also supported by exhibits. Plaintiffs submitted a
2

Plaintiffs served the Amended Complaint on BB&T and Fisher on October 18, 2013
and November 4, 2013, respectively. ECF 19. Notably, Philip Ward signed the Amended
Complaint “for Pro Se Plaintiffs.” However, because he is not an attorney, he is not allowed to
represent his spouse. See Local Rule 101.1. Although BB&T points out this error, Memo at 1
n.1, BB&T has not moved to strike the Amended Complaint, nor does it seek any other relief.
2

combined opposition to both motions (“Opp.,” ECF 24), supported by exhibits.3 Thereafter, on
December 13, 2013, the case was reassigned to me. BB&T subsequently filed a Reply (ECF 25).
In the meantime, on November 15, 2013, the Property was sold at public auction to
Fannie Mae. See ECF 20 at 2. According to Fisher, the Foreclosure sale awaits ratification in
State Court. Id.
No hearing is necessary to resolve the defense motions. See Local Rule 105.6. For the
reasons set forth below, the Fisher Motion will be granted and the BB&T Motion will be granted,
in part, and denied, in part. Because plaintiffs have already amended their Complaint once, and
because further amendment would likely be futile, I will not grant plaintiffs leave to further
amend their Amended Complaint. However, if plaintiffs believe that amendment would not be
futile, they may file a motion for leave to amend, explaining the nature of the proposed
amendments and why the amendments would not be futile. See Anand v. Ocwen Loan Servicing,
LLC, _____ F.3d ____, No. 13-1900, slip op. at 10 (4th Cir. June 6, 2014) (noting that leave to
amend may “‘be denied on the ground of futility when the proposed amendment is clearly
insufficient or frivolous on its face.’”) (quoting Johnson v. Oroweat Foods Co., 785 F.2d 503, 510
(4th Cir. 1986) (alteration in Anand)).

Factual Background

3

Contemporaneously with their Opposition, plaintiffs filed a motion for extension of
time to submit their opposition to the motions to dismiss, which was filed more than 17 days
after the BB&T Motion. ECF 23. That motion will be granted.
3

The briefing does not paint a clear picture of the loan’s history. But, it appears that on or
about July 25, 2005, plaintiffs borrowed $356,000 from Southern Trust Mortgage, LLC
(“Southern Trust”) to finance their purchase of the Property. Am. Comp. ¶ 12. In connection
with the mortgage loan, plaintiffs executed a promissory note on July 25, 2005 (the “Note”), in
the amount of $356,000, in favor of Southern Trust. See id.; Note, Ex. A to BB&T Mot., ECF
17-2. On the same date, plaintiffs also executed a first-priority Deed of Trust for the same
amount, encumbering the Property and securing payment of the Note. Am. Comp. ¶ 12; see
Deed of Trust, Ex. B to BB&T Mot., ECF 17-3. The Deed of Trust is recorded in the land
records of Prince George’s County.
Soon thereafter, BB&T contacted plaintiffs to notify them that BB&T had become the
servicer of the loan. Am. Comp. ¶ 13. From that point forward, plaintiffs made payments on the
loan directly to BB&T. Id.
At some point, Southern Trust assigned the Note and the Deed of Trust to another entity,
but the “when” and the “to whom” of that transaction remain unclear. Plaintiffs allege that they
made several inquiries to BB&T regarding the identity of the new owner of the Note, but were
repeatedly rebuffed.
Plaintiffs later learned “from well publicized news reports and common knowledge” that
“many homeowners had been wrongfully scammed out of their homes by dishonest financial
institutions and the self-serving lawyers who worked for them.” Id. ¶ 14. Accordingly, plaintiffs
contacted BB&T and “asked them to simply answer a few questions regarding the actual owner
of [plaintiffs’] debt and the validity of [plaintiffs’] loan.” Id. However, “instead of receiving
simple answers regarding the actual financier of their debt[,] Plaintiffs received stonewalling and
4

no answers.” Id. According to plaintiffs, “[s]imple and reasonable questions asked were met
with major resistance,” and BB&T refused to disclose the owner of plaintiffs’ debt. Id. ¶ 16. As
time went on, BB&T’s “actions become more bizarre” and plaintiffs “started to rethink this blind
trust they had for [BB&T] and started to doubt [BB&T’s] veracity.” Id. ¶ 17.
According to plaintiffs, as a result of “the financial crisis of 2008,” which “was
engendered in large part due to the securitization of mortgage notes,” such notes were
transformed into “investment vehicles” that were ultimately unenforceable. Id. ¶ 19. They assert
that, as a result of the government “bail out” of “big banks,” many “toxic loans were paid off or
extinguished as a matter of law.” Id. ¶ 10. Yet, “these financial institutions unscrupulously
required payment again from the same homeowner who had been initially victimized by “the
inappropriate loan practices” of these “financial institutions.” Id.
Plaintiffs explain that, “after receiving no independent proof regarding who was the
actual owner of their debt obligation,” they stopped making their monthly mortgage payments
and “demanded proof that the debt they owed – which they have never disputed – was in fact
owed to the mysterious financier that Defendant BB&T represented as its servicer.” Id. ¶ 21.
Plaintiffs sent “multiple letters and made multiple calls to the Defendants demanding that they
provide written documentation explaining who actually owned their loan and allegedly had a
legal right to payments from them.”

Id. ¶ 22.

However, BB&T did not provide “any

independent legal proof of who allegedly owns the note in question,” id., and the information
BB&T did provide “tended to conflict” with other information BB&T had provided or with
information BB&T provided to the Court in connection with the first motion to dismiss. Id. ¶ 23.

5

On April 12, 2013, BB&T’s substitute trustees, represented by Fisher, instituted
foreclosure proceedings in the Circuit Court for Prince George’s County against plaintiffs. As
noted, the Foreclosure Action is styled Fisher v. Ward, Case No. CAE13-09860. According to
the circuit court’s online docket, the Foreclosure Action remains open as the foreclosure sale
awaits ratification.
A few months later, on June 6, 2013, plaintiffs filed suit this against BB&T and Fisher.
They explain that they were “tired of the run around and misdirection” and were “convinced that
they had been victims of fraud and misrepresentations concerning who actually had the right to
enforce a debt obligation against them.” Am. Comp. ¶ 26; see ECF 2.
The record contains several documents that plaintiffs allege are inconsistent with each
other or otherwise suspect. For example, BB&T sent a letter to plaintiffs on July 30, 2012,
informing them that BB&T was the servicer for the Federal National Mortgage Association
(“Fannie Mae”), which was the owner of the loan. Am. Compl. ¶ 23; see ECF 14-2, BB&T
Letter, Ex. B to Am. Comp.

However, plaintiffs maintain that BB&T later “submit[ted]

documentation to this Court stating that the note was indorsed over to Defendant BB&T from
Southern Trust when according to their own previous letter to the Plaintiffs the [Note] should
have been indorsed over to FANNIE MAE, the true owner . . . .” Am. Comp. ¶ 23; see Note,
ECF 17-2 at 4. Moreover, plaintiffs question the authenticity of the indorsement of the Note to
BB&T, pointing out that the stamp which purports to effectuate the indorsement appears on a
blank page that contains no reference to the actual Note. Am. Comp. ¶ 25; see Note, ECF 17-2
at 4.

6

Plaintiffs also point out potential inconsistencies in a document purporting to be an
Assignment of the Deed of Trust from Southern Trust to BB&T on March 28, 2012. See
Assignment of Deed of Trust, Ex. D to Am. Comp., ECF 14-4. According to the document,
Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for Southern Trust,
assigned the Note and the Deed of Trust to BB&T. Id. An individual named Chilton Morris
signed the document on behalf of MERS. Id. However, according to plaintiffs, Morris “never
worked for MERS and has always worked in the collections department for Defendant BB&T.”
Am. Comp. ¶ 24. In support of this allegation, plaintiffs attach a print-out of Morris’s LinkedIn
profile, on which Morris lists BB&T, not MERS, as his employer. See ECF 14-4 at 4–5.
The Wards also take issue with a letter they received from Southern Trust on September
10, 2012. In the letter, Southern Trust states that it sold the original loan more than 25 months
prior, meaning that the sale occurred during or before 2010. See Ex. F to Am. Comp., ECF 14-6.
However, BB&T stated in its first motion to dismiss that on March 28, 2012, “Southern sold and
assigned all rights, title, and interests in Plaintiffs’ mortgage loan to BB&T,” and the
documentation BB&T submitted in support of that claim also indicates that the assignment
occurred on March 28, 2012. See ECF 8-1 at 4; Assignment of Deed of Trust, ECF 14-4.
Additional facts will be included in the Discussion.
Standard of Review
A motion to dismiss pursuant to Rule 12(b)(6) constitutes an assertion by a defendant
that, even if the facts alleged by the plaintiff are true, the complaint fails as a matter of law “to
state a claim upon which relief can be granted.” Whether a complaint states a claim for relief is
assessed by reference to the pleading requirements of Fed. R. Civ. P. 8(a)(2). It provides that a
7

complaint must contain a “short and plain statement of the claim showing that the pleader is
entitled to relief.” The purpose of the rule is to provide the defendant with “fair notice” of the
claim and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555–56 n.3 (2007); see Ashcroft v. Iqbal, 556 U.S. 662 (2009).
A plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2).
Twombly, 550 U.S. at 555.

But, the rule demands more than bald accusations or mere

speculation. Id.; see Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). To
satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual
matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of
those facts is improbable and . . . recovery is very remote and unlikely.” Twombly, 550 U.S. at
556. In other words, the complaint must contain facts sufficient to “state a claim to relief that is
plausible on its face.” Id. at 570; see Iqbal, 556 U.S. at 684; Simmons v. United Mortg. and Loan
Inv., LLC, 634 F.3d 754, 768 (4th Cir. 2011).
In reviewing such a motion, a court “‘must accept as true all of the factual allegations
contained in the complaint,’” and must “‘draw all reasonable inferences [from those facts] in
favor of the plaintiff.’” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440
(4th Cir. 2011) (citations omitted); see Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir.), cert.
denied, ____ U.S. ____, 132 S. Ct. 402 (2011); Monroe v. City of Charlottesville, 579 F.3d 380,
385–86 (4th Cir. 2009), cert. denied, 559 U.S. 991 (2010). However, a complaint that provides
no more than “labels and conclusions,” or “a formulaic recitation of the elements of a cause of
action,” is insufficient. Twombly, 550 U.S. at 555. Moreover, the court is not required to accept

8

legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986);
Monroe, 579 F.3d at 385–86.
A Rule 12(b)(6) motion will be granted if the “well-pleaded facts do not permit the court
to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679 (citation omitted).
“A court decides whether [the pleading] standard is met by separating the legal conclusions from
the factual allegations, assuming the truth of only the factual allegations, and then determining
whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to the
legal remedy he or she seeks. A Society Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir.
2011), cert. denied, ___ U.S. ___, 132 S. Ct. 1960 (2012). “‘Dismissal under Rule 12(b)(6) is
appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to
support a cognizable legal theory.’” Hartmann v. Calif. Dept. of Corr. & Rehab., 707 F.3d 1114,
1122 (9th Cir. 2013) (citation omitted); accord Commonwealth Prop. Advocates, LLC v. Mortg.
Elec. Reg. Sys., Inc., 680 F.3d 1194, 1201–02 (10th Cir. 2011) (“When reviewing a 12(b)(6)
dismissal, ‘we must determine whether the complaint sufficiently alleges facts supporting all the
elements necessary to establish an entitlement to relief under the legal theory proposed.’
Dismissal is appropriate if the law simply affords no relief.”) (citation omitted).
A motion asserting failure of the complaint to state a claim typically “does not resolve
contests surrounding the facts, the merits of a claim, or the applicability of defenses,” Edwards v.
City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999) (internal quotation marks omitted), unless
such a defense can be resolved on the basis of the facts alleged in the complaint. See Goodman
v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). “This principle only applies, however, if all
facts necessary to the affirmative defense ‘clearly appear[ ] on the face of the complaint,’” or in
9

other documents that are proper subjects of consideration under Rule 12(b)(6). Id. (quoting
Richmond, Fredericksburg & Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993)) (emphasis
in Goodman).
Plaintiffs’ allegations of fraud implicate the heightened pleading standard under Fed. R.
Civ. P. 9(b). Cozzarelli, 549 F.3d at 629. The rule states: “In alleging fraud . . . a party must
state with particularity the circumstances constituting fraud . . . .” Under the rule, a plaintiff
alleging claims that sound in fraud “‘must, at a minimum, describe the time, place, and contents
of the false representations, as well as the identity of the person making the misrepresentation
and what he obtained thereby.’” United States ex rel. Owens v. First Kuwaiti Gen’l Trading &
Contracting Co., 612 F.3d 724, 731 (4th Cir. 2010) (citation omitted); see also Harrison v.
Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999). In other words, “‘Rule
9(b) requires plaintiffs to plead the who, what, when, where, and how: the first paragraph of any
newspaper story.’” Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011) (citation
omitted).
As the Fourth Circuit has said, Fed. R. Civ. P. 9(b) serves several salutary purposes:
“First, the rule ensures that the defendant has sufficient information to
formulate a defense by putting it on notice of the conduct complained of . . . .
Second, Rule 9(b) exists to protect defendants from frivolous suits. A third
reason for the rule is to eliminate fraud actions in which all the facts are learned
after discovery. Finally, Rule 9(b) protects defendants from harm to their
goodwill and reputation.”
Harrison, 176 F.3d at 784 (quoting United States ex rel. Stinson, Lyons, Gerlin & Bustamante,
P.A. v. Blue Cross Blue Shield of Ga., Inc., 755 F. Supp. 1055, 1056–57 (S.D. Ga. 1990)).

10

By its terms, however, Rule 9(b) permits a general averment of aspects of fraud that
relate to a defendant’s state of mind. It states, in part: “Malice, intent, knowledge, and other
conditions of a person’s mind may be alleged generally.” Moreover, Rule 9(b) is “less strictly
applied with respect to claims of fraud by concealment” or omission of material facts, as opposed
to affirmative misrepresentations, because “an omission ‘cannot be described in terms of the
time, place, and contents of the misrepresentation or the identity of the person making the
misrepresentation.’” Shaw v. Brown & Williamson Tobacco Corp., 973 F. Supp. 539, 552 (D.
Md. 1997) (quoting Flynn v. Everything Yogurt, Civ. No. HAR-92-3421, 1993 WL 454355, at *9
(D. Md. Sept. 14, 1993)); accord Gadson v. Supershuttle Int’l, Civ. No. AW-10-1057, 2011 WL
1231311, at * 9 (D. Md. Mar. 30, 2011). Thus, “[i]n cases involving concealment or omissions
of material facts, . . . meeting Rule 9(b)’s particularity requirement will likely take a different
form.” Piotrowski v. Wells Fargo Bank, N.A., Civ. No. DKC 11-3758, 2013 WL 247549 (D.
Md. Jan. 22, 2013) (citing Shaw, 973 F. Supp. at 552). And, a “court should hesitate to dismiss a
complaint under Rule 9(b) if the court is satisfied (1) that the defendant has been made aware of
the particular circumstances for which she will have to prepare a defense at trial, and (2) that
plaintiff has substantial prediscovery evidence of those facts.” Harrison, 176 F.3d at 784.
Because plaintiffs are self-represented, their pleadings are “‘liberally construed’” and
“‘held to less stringent standards than formal pleadings drafted by lawyers.’”

Erickson v.

Pardus, 551 U.S. 89, 94 (2007) (citation omitted). “However, liberal construction does not
absolve Plaintiff from pleading a plausible claim.” Bey v. Shapiro Brown & Alt, LLP, ___ F.
Supp. 2d ___, 2014 WL 661586, at *3 (D. Md. Feb. 20, 2014). As the Fourth Circuit has said,
Harris v. Angliker, 955 F.2d 41, 41 (4th Cir. 1992):
11

It is neither unfair nor unreasonable to require a pleader to put his
complaint in an intelligible, coherent, and manageable form, and his failure to do
so may warrant dismissal. Corcoran v. Yorty, 347 F.2d 222, 223 (9th Cir.), cert.
denied, 382 U.S. 966 (1965); Holsey v. Collins, 90 F.R.D. 122, 128 (D. Md.
1981). District courts are not required to be mind readers, or to conjure questions
not squarely presented to them. Beaudett v. City of Hampton, 775 F.2d 1274,
1278 (4th Cir. 1985), cert. denied, 475 U.S. 1088 (1986).
In evaluating the sufficiency of a complaint in connection with a Rule 12(b)(6) motion, a
court ordinarily “may not consider any documents that are outside of the complaint, or not
expressly incorporated therein . . . .” Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557
(4th Cir. 2013). In considering a challenge to the adequacy of the Complaint, however, the court
“may properly consider documents attached to a complaint or motion to dismiss ‘so long as they
are integral to the complaint and authentic.’” Anand v. Ocwen Loan Servicing, LLC, supra, slip
op. at 4 (quoting Philips v. Pitt County Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009)); see
also E.I. du Pont de Nemours & Co., 637 F.3d at 448. To be “integral,” a document must be one
“that by its ‘very existence, and not the mere information it contains, gives rise to the legal rights
asserted.’” Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F. Supp. 2d
602, 611 (D. Md. 2011) (citation omitted) (emphasis in original).
Therefore, I may consider, among other documents, the Assignment of Deed of Trust
attached to the Amended Complaint, and the Note and the Deed of Trust, attached to the BB&T
Motion.4 They are all integral to plaintiffs’ claims, as they are legal instruments whose “‘very
existence’” has an operative effect on the rights at issue in the suit. Id. (citation omitted).
Accordingly, they are a proper subject of consideration under Rule 12(b)(6), and there is no

4

Plaintiffs attached a portion of the Deed of Trust to the Amended Complaint as Exhibit

H.
12

dispute as to the authenticity of the copies of the Note and the Deed of Trust submitted by
defendants. See Stokes v. JPMorgan Chase Bank, NA, Civil No. JFM 8:11-cv-02620, 2012 WL
527600, at *7 n.5 (D. Md. Feb. 16, 2012) (noting that “it is widely acknowledged” that courts
can consider documents such as notes or deeds of trusts as matters of public record without
converting a motion to dismiss into one for summary judgment).
Discussion
Fisher’s Motion to Dismiss
Fisher urges dismissal of all counts against it, claiming that the Amended Complaint
“fails to state a cause of action upon which relief may be granted.” Fisher Memo at 1. In
particular, Fisher avers, id. at 3: “[N]owhere in the Amended Complaint do the Plaintiffs allege
that [Fisher] has taken any action, or omitted to take any action which would in any way give
rise to a claim for relief.” I agree with Fisher.
The Amended Complaint mentions Fisher only in passing, making it difficult to
determine which causes of action are asserted against Fisher. In fact, the only place where Fisher
is explicitly mentioned is in the context of plaintiffs’ FDCPA claim. For example, ¶ 32 of the
Amended Complaint states: “[BB&T] and their attorneys conducted themselves as debt
collectors by filing false, deceptive, and misleading documentation . . . .” (Emphasis added). In
any event, the allegations regarding Fisher are entirely conclusory; the Amended Complaint does
not contain any specific factual allegations about acts or omissions by Fisher. And, even if the
Amended Complaint contained enough factual matter to support an FDCPA claim, I would
dismiss the claim against Fisher for the reasons discussed below regarding the FDCPA claim
against BB&T. Accordingly, I will grant the Fisher Motion (ECF 20).
13

BB&T’s Motion to Dismiss
As noted, the Amended Complaint contains five Counts: Wrongful Foreclosure and
Fraud (Count I); violations of the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. (Count II);
violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (Count III); unjust
enrichment (Count IV); and violation of the Maryland Uniform Commercial Code (Count V). I
will address each in turn.
Count I: Wrongful Foreclosure and Fraud
In Count I, plaintiffs allege that defendants have committed “wrongful foreclosure and
fraud.” The source of the cause of action is not entirely clear, as plaintiffs labeled Count I as
both “wrongful foreclosure” and “fraud,” and they also allege violations of Maryland Code
(2010 Repl. Vol., 2013 Supp.), §§ 7-105.1–7-105.2 of the Real Property Article (“R.P.”), which
set forth procedural requirements in foreclosure sales. In any event, the essence of this claim is
that defendants submitted falsified and invalid documents in the Foreclosure Action.
No matter how Count I is construed, I must abstain from deciding plaintiffs’ claim,
pursuant to Younger v. Harris, 401 U.S. 37 (1971), and its progeny. The Younger abstention
doctrine “requires a federal court to abstain from interfering in state proceedings, even if
jurisdiction exists,” if there is: “(1) an ongoing state judicial proceeding, instituted prior to any
substantial progress in the federal proceeding; that (2) implicates important, substantial, or vital
state interests; and (3) provides an adequate opportunity for the plaintiff to raise the federal
constitutional claim advanced in the federal lawsuit.” Laurel Sand & Gravel, Inc. v. Wilson, 519
F.3d 156, 165 (4th Cir. 2008). “‘Younger is not merely a principle of abstention; rather, the case
sets forth a mandatory rule of equitable restraint, requiring the dismissal of a federal action.’”
14

Williams v. Lubin, 516 F. Supp. 2d 535, 539 (D. Md. 2007) (quoting Nivens v. Gilchrist, 444
F.3d 237, 247 (4th Cir. 2006)).
All three elements of the Younger test are satisfied here. Because the Property is located
in Maryland, the Maryland foreclosure procedures apply. See R.P. §§ 7-105-1 et seq.; Md. Rules
14-201 et seq. As discussed, foreclosure proceedings are ongoing in the Circuit Court for Prince
George’s County, satisfying the first element. The second element is satisfied because Maryland
has a substantial interest in its own property law. See Harper v. Pub. Serv. Comm’n of W. VA.,
396 F.3d 348, 352 (4th Cir. 2005) (“[P]roperty law concerns, such as land use and zoning
questions, are frequently ‘important’ state interests justifying Younger abstention.”); Fisher v.
Fed. Nat. Mortgage Ass’n, 360 F. Supp. 207, 210 (D. Md. 1973). Finally, plaintiffs have had
ample opportunity to dispute the authenticity of the documents relied upon by BB&T in the
context of the Foreclosure Action. Indeed, the docket of the Foreclosure Action shows that
plaintiffs have filed multiple motions seeking to enjoin or stay a foreclosure sale. See Doc. No. 9
in Foreclosure Action; Doc. No. 22 in Foreclosure Action. See, e.g., Md. Rule 14-211; see also
Bates v. Cohn, 417 Md. 309, 329, 9 A.3d 846, 858 (2010) (“Rule 14-211 allows homeowners to
prevent a foreclosure sale by challenging, among other things, the ‘right of the [lender] to
foreclose . . . .’ Md. Rule 14-211(a)(3)(B).”).
To be sure, in recent years, the State of Maryland has made substantial changes to the
rules governing foreclosures. See Attorney Grievance Comm'n of Maryland v. Chapman, 430
Md. 238, 279 n.1, 60 A.3d 25, 50 n.1 (2013) (McDonald, J., concurring) (“Less scrupulous
providers have engaged in abuses that prompted the Legislature to enact various protections for
homeowners. See Chapters 5, 6, Laws of Maryland 2008; Chapter 509, Laws of Maryland
15

2005.”). Nevertheless, it would be improper for this Court to make a determination about the
authenticity of documents that have already been, or will be, examined by the Circuit Court for
Prince George’s County. Therefore, I am required by Younger to dismiss plaintiffs’ claim that
BB&T has relied on falsified and invalid documents in the Foreclosure Action.
Alternatively, to the extent plaintiffs seek to quiet title to the Property, their claim is
barred by R.P. § 14–108(a), which only allows a quiet title action “if an action at law or
proceeding in equity is not pending to enforce or test the validity of the title, lien, encumbrance,
or other adverse claim . . . .” Id.; see Anand v. Ocwen Loan Servicing, LLC, et al., No 13-900,
slip op. at 3 n.1 (4th Cir. May 14, 2014) (addressing Maryland law and stating: “[A] pending
foreclosure proceeding . . . would bar the current quiet title claim.”); Haley v. Corcoran, 659 F.
Supp. 2d 714, 721 (D. Md. 2009) (dismissing quiet title claim when foreclosure action was
pending in state court); see also Braxton v. Citibank, N.A., 2011 WL 4368011, at *2 (D. Md.
Sept. 15, 2011) (“[A] quiet title action cannot be maintained in Maryland while an underlying
foreclosure suit is pending.”).
Count II: Truth in Lending Act
In Count II, plaintiffs allege that BB&T violated the Truth in Lending Act (“TILA”), 15
U.S.C. §§ 1601 et seq. The TILA was passed in 1968 to “‘assure a meaningful disclosure of
credit terms so that the consumer will be able to compare more readily the various credit terms
available to him and avoid the uninformed use of credit.’” Mourning v. Family Publications
Serv., Inc., 411 U.S. 356, 364–65 (1973) (quoting 15 U.S.C. § 1601(a)). Among other things, the
TILA “requires lenders ‘clearly and conspicuously’ to make a number of disclosures to
borrowers, including the disclosure of the borrowers’ right to rescind a consumer credit
16

transaction.” Watkins v. SunTrust Mortgage, Inc., 663 F.3d 232, 234 (4th Cir. 2011) (quoting 15
U.S.C. §§ 1601(a)). More recently, Congress passed the Helping Families Save Their Homes
Act of 2009, Pub. L. No. 111–22, 123 Stat. 1632, which amended various sections of the TILA.
As relevant here, the Act provides: “[N]ot later than 30 days after the date on which a mortgage
loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new
owner or assignee of the debt shall notify the borrower in writing of such transfer.” 15 U.S.C.
§ 1641(g)(1).
Plaintiffs allege that they never received notice from BB&T or any other party when
plaintiffs’ loan was transferred or assigned from Southern Trust, in violation of 15 U.S.C.
§ 1641(g)(1). Indeed, plaintiffs allege that the question of who currently owns their loan “is still
not definitively answered.” Am. Comp. ¶ 31. Notwithstanding the lack of clarity regarding
ownership of the loan, plaintiffs suggest that BB&T acquired the loan at some point and failed to
make the requisite disclosures.
BB&T interposes two objections to plaintiffs’ TILA claim. First, BB&T contends that
“BB&T is alleged to be only a servicer of the subject mortgage loan,” and “the requirements of
TILA apply only to the original creditor and assignees of that creditor.” BB&T Memo at 10–11.
Thus, BB&T maintains that it “cannot be held liable under the TILA.” Id. Second, BB&T
claims that plaintiffs’ TILA claim is time-barred. Id. at 12–14.
As a legal matter, it is true that TILA’s disclosure requirements apply only to creditors
and their assignees. In particular, “[t]he only parties who can be liable for [TILA] violations are
the original creditor, 15 U.S.C. § 1640, and assignees of that creditor, 15 U.S.C. § 1641.” Chow
v. Aegis Mortgage Corp., 286 F. Supp. 2d 956, 959 (N.D. Ill. 2003). As for servicers, the TILA
17

expressly provides that a “servicer of a consumer obligation arising from a consumer credit
transaction shall not be treated as an assignee . . . unless the servicer is or was the owner of the
obligation.” 15 U.S.C. § 1641(f)(1); see Sall v. Wells Fargo Bank, N.A., 2012 WL 5463027, at
*4 (D. Md. Nov. 7, 2012) (“Generally, a servicer of a mortgage loan that is not an assignee or
owner of the loan has no liability for alleged violations of TILA.” (internal quotation marks
omitted)). Thus, only creditors and their assignees—and not mere servicers lacking ownership
interest in the loan—may be held liable under the TILA.
Accordingly, the relevant factual inquiry is whether plaintiffs have adequately alleged
that BB&T is a creditor or assignee of the loan, thereby subjecting it to the TILA. Keeping in
mind the liberal construction standard of pro se pleadings mandated by Pardus, 551 U.S. at 94,
the Amended Complaint satisfactorily alleges that BB&T is, was, or may be the owner of
plaintiffs’ mortgage loan, and it sets forth “enough factual matter (taken as true)” to make the
allegation “plausible.” Twombly, 550 U.S. at 556, 570. In the Amended Complaint, plaintiffs
accurately note that the TILA requires “[t]he purchaser or assignee[] that acquires the loan [to]
provide the required disclosures.” Am. Comp. ¶ 31 (emphasis added). Plaintiffs then allege that
the TILA “was clearly violated [by BB&T] because Plaintiffs have had to jump over unnecessary
hurdles just to learn who was actually the party in interest in this matter.” Am. Comp. ¶ 31.
Thus, plaintiffs acknowledge that the TILA imposes liability only on creditors and assignees, and
they then allege that BB&T violated the TILA. This allegation, construed liberally and taken as
true, suggests that BB&T is or was the owner of the loan.
Moreover, plausibility of the allegation is strengthened by the exhibits attached to the
Amended Complaint. For example, plaintiffs included what appears to be an assignment of the
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Note from Southern Trust to BB&T. See Ex. C to Am. Comp., ECF 14-3; Note, ECF 17-2 at 4.
This same document was previously submitted to the Court by BB&T in connection with
BB&T’s first motion to dismiss, and BB&T does not dispute its authenticity. See ECF 8-2. If,
as appears to be the case, the Note was assigned from Southern Trust to BB&T, then BB&T
would be the owner of the Note and, as a result, an assignee potentially subject to liability under
the TILA. And, notably, although BB&T claims that plaintiffs failed to allege that BB&T was a
creditor or assignee, BB&T never actually disclaims ownership of the loan.
To be sure, the record is replete with contradictory information regarding ownership of
the loan and the date on which any change in ownership took place. For example, BB&T states
in its Memo that “Mortgage Electronic Registration Systems, Inc., as nominee for Southern
[Trust], assigned the Deed of Trust and Note to BB&T” on March 28, 2012. Memo at 3.
However, Exhibit F to the Amended Complaint is a letter dated September 10, 2012, sent by
Southern Trust to Mr. Ward. The letter advises Mr. Ward that Southern Trust sold plaintiffs’
loan more than 25 months prior to the date of the letter, which seems to be inconsistent with
BB&T’s representation to the Court that Southern Trust assigned the loan to BB&T in March
2012.

In other words, if Southern Trust assigned the loan to another entity in 2010, it

presumably could not have also assigned the loan to BB&T in 2012. And, to add to the
confusion, on July 30, 2012, BB&T apparently sent a letter informing plaintiffs that the Federal
National Mortgage Association (“Fannie Mae”) was the owner of the loan. See Ex. B to Am.
Comp., ECF 14-2.
Needless to say, the chain of ownership of the loan is not entirely clear. The lack of
clarity makes several factual scenarios plausible, one of which is that BB&T became the owner
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of the loan at some point, subjecting BB&T to the TILA’s disclosure requirements. Because
such a claim is plausible, and because the pro se plaintiffs have alleged that they did not receive
the disclosures mandated by the TILA, plaintiffs have adequately alleged that BB&T violated the
TILA.
BB&T also argues that plaintiffs’ TILA claim is time-barred, under both the one-year
statute of limitations for monetary damages and the three-year limitation on rescission under the
TILA. Id. at 12–14. Pursuant to 15 U.S.C. § 1640(e), any action for monetary damages under
TILA can “be brought . . . within one year from the date of the occurrence of the violation.” As
noted, the alleged violation here is BB&T’s failure to notify plaintiffs, within 30 days of the
alleged assignment, that it had been assigned the Note. Thus, plaintiffs’ cause of action accrued
at the expiration of the 30-day period. See 15 U.S.C. § 1641(g). The exact date of the alleged
assignment is unclear (and immaterial at this stage), but according to BB&T’s Memo, the Note
was transferred from Southern Trust to BB&T on March 28, 2012. Memo at 3. Thirty days after
March 28, 2012 is April 27, 2012; thus, the statute of limitations on damages claims expired on
April 27, 2013. Plaintiffs did not file their suit until June 6, 2013. See ECF 2.
However, several courts, including courts in this district, have held that the equitable
doctrine of fraudulent concealment can toll the statute of limitations for monetary damages
claims under TILA. See Kerby v. Mortgage Funding Corp., 992 F. Supp. 787, 798 (D. Md.
1998) (holding that the doctrine of fraudulent concealment can toll the statute of limitations
established in 15 U.S.C. § 1640(e) for monetary damages claims under TILA); Elman v. JP
Morgan Chase Bank, NA, 2010 WL 2813351, at *2 (D. Md. July 13, 2010); see also Espejo v.
George Mason Mortgage, LLC, 2010 WL 447009, at *6 (E.D. Va. Feb. 2, 2010) (identifying
20

four different federal appellate courts that have held that the statute of limitations for monetary
damages under TILA is subject to equitable tolling).
As the Court of Appeals for the Fourth Circuit has explained, “the fraudulent
concealment doctrine tolls the statute of limitations ‘until the plaintiff in the exercise of
reasonable diligence discovered or should have discovered the alleged fraud or concealment.’”
Browning v. Tiger’s Eye Benefits Consulting, 313 F. App’x 656, 663 (4th Cir. 2009) (citation
omitted). In order to justify equitable tolling on the basis of fraudulent concealment, a plaintiff
must prove “(i) that the party asserting the statute of limitations concealed facts that are the basis
of the plaintiff’s claim; (ii) that the plaintiff failed to discover those facts within the statutory
period; and (iii) that the plaintiff failed to do so despite the exercise of due diligence.” Roach v.
Option One Mortgage Corp., 598 F. Supp. 2d 741, 751–52 (E.D. Va. 2009) (internal quotation
marks and alteration omitted), aff’d, 332 F. App’x 113 (4th Cir. 2009).
At this stage of the proceedings, plaintiffs have alleged sufficient facts to receive the
benefit of equitable tolling. The first element is satisfied because plaintiffs allege that they sent
repeated inquiries to BB&T about who owned plaintiffs’ loan, only to be met with “stonewalling
and no answers.” Am. Comp ¶ 14; see id. ¶¶ 15–16, 21–23. If, as plaintiffs allege, BB&T itself
owns or owned plaintiffs’ loan, then BB&T’s alleged refusal to provide that information to
plaintiffs, despite the requirements of the TILA, would amount to concealment of the facts that
now form the basis of plaintiffs’ TILA claim. The second element is satisfied because plaintiffs
allege that they still do not know who owns their loan. The third element is satisfied because
plaintiffs allege that they made repeated efforts to discover who owns their loan, thereby
satisfying the requirement of diligence by plaintiffs in seeking to uncover the withheld
21

information. Thus, plaintiffs’ allegations, which I must assume to be true in the present posture
of the case, entitle them to proceed on their TILA claim, despite the fact that more than one year
has passed since the alleged violation. This, of course, does not guarantee that the Court
ultimately will hold that the statute of limitations was tolled. Rather, “[w]hat this holding does is
give the [plaintiffs] a chance to prove that the requirements for equitable tolling are met.” Kerby,
992 F. Supp. at 798.
BB&T also argues that, to the extent plaintiffs seek the remedy of rescission, the TILA’s
three-year limitation on such a remedy has expired. I need not address this argument at this time.
As an initial matter, it is unclear whether plaintiffs even seek the remedy of rescission, as the
Amended Complaint refers broadly to injunctive relief and “awarding of Quiet Title,” without
any explicit mention of rescission. Am. Comp. ¶ 37a–b. In any event, plaintiffs’ TILA claim for
monetary damages will proceed regardless of whether rescission is also available to them, so a
ruling on whether rescission is available can be decided, if necessary, in the context of summary
judgment or trial.
For the foregoing reasons, I will deny BB&T’s motion to dismiss Count II.
Count III: Fair Debt Collection Practices Act
Plaintiffs allege in Count III that BB&T violated the FDCPA, which “protects consumers
from abusive and deceptive practices by debt collectors, and protects non-abusive debt collectors
from competitive disadvantage.” United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 135 (4th
Cir. 1996); see 15 U.S.C. § 1692e. To establish an FDCPA claim, a plaintiff must prove that:
“(1) the plaintiff has been the object of collection activity arising from consumer debt; (2) the
defendant is a debt collector as defined by the FDCPA; and (3) the defendant has engaged in an
22

act or omission prohibited by the FDCPA.” Boosahda v. Providence Dane LLC, 462 F. App’x
331, 333 n.3 (4th Cir. 2012) (quotation marks omitted).
BB&T argues that it is not a “debt collector” within the meaning of the FDCPA and that,
in any event, plaintiffs have failed to allege a violation of the FDCPA by BB&T. See BB&T
Memo at 14–17. I agree with BB&T that plaintiffs have failed to allege a violation of the
FDCPA, and I therefore will not address whether BB&T is a “debt collector.”5
Although the precise nature of the alleged violation of the FDCPA is unclear, plaintiffs
cite 15 U.S.C. § 1692f(6), which prohibits:
(6) Taking or threatening to take any nonjudicial action to effect dispossession or
disablement of property if-(A) there is no present right to possession of the property claimed as
collateral through an enforceable security interest;
(B) there is no present intention to take possession of the property; or
(C) the property is exempt by law from such dispossession or disablement.
Plaintiffs provide no factual basis to support any liability on the part of BB&T for
violation of § 1692f(6). Indeed, the Amended Complaint contains no more than the conclusory
legal boilerplate that BB&T “fil[ed] false, deceptive, misleading documentation to make their

5

The FDCPA defines a “debt collector” as “any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of which is the collection
of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or
due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). The term excludes, id.
§ 1692(a)(6)(F):
any person collecting or attempting to collect any debt owed or due or asserted to
be owed or due another to the extent such activity (i) is incidental to a bona fide
fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which
was originated by such person; (iii) concerns a debt which was not in default at
the time it was obtained by such person; or (iv) concerns a debt obtained by such
person as a secured party in a commercial credit transaction involving the
creditor.
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actions after the fact seem in compliance with applicable law.” Am. Comp. ¶ 32; see Iqbal, 556
U.S. at 680 (“[Conclusory allegations] are not entitled to the assumption of truth.”). Plaintiffs
certainly do not offer any facts that would give rise to liability under 15 U.S.C. § 1692f(6)(B) or
(C): In particular, nothing in the Amended Complaint suggests that BB&T “threaten[ed] to take
. . . nonjudicial action” when it had “no present intention to take possession of the property,” see
15 U.S.C. § 1692f(6)(B), and plaintiffs do not allege that the Property is “exempt by law” from
“dispossession or disablement.” Id. § 1692f(6)(C).
It appears most likely that plaintiffs are attempting to allege that BB&T initiated
foreclosure proceedings, or threatened to do so, without the “present right to possession of the
[Property] . . . through an enforceable security interest,” in violation of 15 U.S.C. § 1692f(6)(A).
If this is indeed what plaintiffs sought to allege, then Count III must be dismissed for the same
reason as Count I: the enforceability of BB&T’s security interest in the Property is an issue that
must be determined in the Foreclosure Action. See Younger, 401 U.S. 37.
For the foregoing reasons, I will dismiss Count III of the Amended Complaint.
Count IV: Unjust Enrichment
In Count IV, plaintiffs allege that “BB&T will be unjustly enriched if a wrongful
foreclosure is allowed.”

Am Comp. ¶ 34.

As an initial matter, this claim appears to be

duplicative of Count I, which will be dismissed under the Younger abstention doctrine. In any
event, the claim is not ripe.
Ripeness “‘concerns the appropriate timing of judicial intervention.’” Cooksey, 721 F.3d
at 240 (quoting Va. Soc’y for Human Life, Inc. v. FEC, 263 F.3d 379, 389 (4th Cir. 2001)). The
ripeness doctrine, which overlaps with standing, is “drawn both from Article III limitations on
24

judicial power and from prudential reasons for refusing to exercise jurisdiction.” Nat’l Park
Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 808 (2003) (internal quotations omitted).
Generally speaking, “a case is fit for judicial decision when the issues are purely legal and when
the action in controversy is final and not dependent on future uncertainties.” Doe v. Virginia
Dep't of State Police, 713 F.3d 745, 758 (4th Cir. 2013) (internal quotation marks omitted). On
the other hand, a claim “should be dismissed as unripe if the plaintiff has not yet suffered injury
and any future impact remains wholly speculative.” Id. (internal quotation marks omitted).
Here, it is evident from the face of the Amended Complaint that plaintiffs’ unjust
enrichment claim is not ripe. Plaintiffs do not allege that BB&T has been unjustly enriched;
rather, they allege that BB&T will be unjustly enriched in the future if “a wrongful foreclosure is
allowed.” Am. Comp. ¶ 34. Clearly, this claim is “dependent on future uncertainties” and is
therefore unfit for judicial resolution at this time.
Plaintiffs also allege that “BB&T may have already [been] unjustly enriched based on
insurance claims potentially received related to Plaintiffs[’] alleged default.” Id. ¶ 35. This
claim is far too speculative to state a claim for relief. Plaintiffs allege no facts to flesh out the
substance of this inscrutable claim and, accordingly, it does “not permit the court to infer more
than the mere possibility of misconduct,” such that the claim may survive the motion to dismiss.
See Iqbal, 556 U.S. at 679; Twombly, 550 U.S. at 556.
For the foregoing reasons, Count IV of the Amended Complaint will be dismissed.
Count V: Maryland Uniform Commercial Code
In Count V of the Amended Complaint, plaintiffs allege that BB&T violated sections 3407 and 3-203 of the Maryland Uniform Commercial Code. Maryland’s version of the Uniform
25

Commercial Code is codified in the Commercial Law Article (“C.L.”) of the Maryland Code
(2013 Repl. Vol.). C.L. § 3-407 deals with alterations of negotiable instruments. An alteration is
defined as “(i) an unauthorized change in an instrument that purports to modify in any respect the
obligation of a party, or (ii) an unauthorized addition of words or numbers or other change to an
incomplete instrument relating to the obligation of a party.”

C.L. § 3-407(a).

Generally

speaking, “an alteration fraudulently made discharges a party whose obligation is affected by the
alteration.” Id. § 3-407(b). C.L. 3-203 provides that a transferee of a negotiable instrument
“cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder
in due course if the transferee engaged in fraud or illegality affecting the instrument.”
Plaintiffs claim that BB&T violated these provisions by “alter[ing] documents [and]
misrepresent[ing] who they are on official documents.” Am. Comp. ¶ 37. This allegation is
duplicative of the allegations in Count I, which alleged that defendants submitted falsified
documents in the Foreclosure Action. Accordingly, as with Count I, I must abstain from ruling
on the claim, pursuant to the Younger abstention doctrine. See 401 U.S. 37. The authenticity of
the documents submitted to the Court in the Foreclosure Action is an issue that must be
determined by the circuit court in the Foreclosure Action. Therefore, Count V will be dismissed.
Conclusion
For the foregoing reasons, the Fisher Motion will be granted and the BB&T Motion will
be granted, in part, and denied, in part. As noted, I will not presently grant plaintiffs leave to
further amend their Amended Complaint, but plaintiffs may file a motion for leave to amend
within 21 days of the date of this Memorandum, explaining the nature of the proposed
amendments and why the amendments would not be futile. An Order follows.
26

Date: June 13, 2014

/s/
Ellen Lipton Hollander
United States District Judge

27