Cezair v. JPMorgan Chase Bank, N.A. et al
Filing
39
MEMORANDUM OPINION (c/m to Plaintiff 8/29/14 sat). Signed by Chief Judge Deborah K. Chasanow on 8/29/14. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
RONALD CEZAIR
:
v.
:
Civil Action No. DKC 13-2928
:
JPMORGAN CHASE BANK, N.A., et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this mortgage
lending case are the motions to dismiss filed by Defendants
Federal Home Loan Mortgage Corporation (“FHLMC”) and JPMorgan
Chase
Bank,
N.A.
(“Chase”)
(ECF
No.
14),
and
Defendant
LendingTree, LLC (ECF No. 30), and the motion to dismiss or, in
the alternative, for summary judgment filed by Defendant First
Commonwealth Mortgage Corporation (“FCMC”) (ECF No. 16).
The
issues have been fully briefed, and the court now rules, no
hearing being deemed necessary.
Local Rule 105.6.
For the
following reasons, the motions will be denied.
I.
Background
The following facts are set forth in the amended complaint.
(ECF
No.
Cezair
11).
On
obtained
or
a
about
mortgage
March
30,
refinance
2009,
loan
Plaintiff
from
Ronald
Defendant
LendingTree on property in College Park, Maryland (“2009 Loan”).1
The proceeds from this loan satisfied a previous loan created on
February 15, 2008 (“2008 Loan”).
His monthly payments due on
the 2009 Loan were less than the 2008 loan.
The 2008 Loan was
payable to FCMC, a lender who originated the loan.
did
not
provide
documents,
Plaintiff
including
a
with
copy
a
of
copy
the
2009
of
all
Note.
LendingTree
the
closing
LendingTree
stated that Plaintiff’s servicer - Chase - would send him a
copy.
Plaintiff contacted Chase to inquire about the 2009 Note
and the fact that it was still requesting mortgage payments on
the
2008
Loan.
Chase
was
unresponsive.
Plaintiff
made
the
higher loan payments for about a year and during this time still
did
not
receive
Plaintiff
was
a
copy
delinquent
of
the
and
2009
began
Note.
Chase
soliciting
him
claimed
for
a
modification, which Plaintiff applied for numerous times over a
two year period without any success.
On May 2, 2012, Plaintiff wrote to Chase informing it that
he
had
a
information
purchaser
to
for
consummate
the
property
the
sale,
and
that
he
needed
a
payoff
specifically:
statement; a payment history; and a copy of the note.
On May
18, 2012, Chase sent Plaintiff a letter stating that it was
looking into his inquiry.
The law firm McCabe, Weisberg, and
1
The alleged wrongdoer was actually SurePoint, which was
purchased by LendingTree in 2010.
For ease of comprehension,
this opinion will refer to LendingTree exclusively.
2
Conway, LLC (“the Substitute Trustees”) sent Plaintiff a letter
on June 7, 2012, threatening to foreclose on the property if
Plaintiff did not pay off or reinstate the mortgage loan.2
This
letter did not provide a copy of the note, a history of loan
payments,
or
an
information.
for
omission
of
the
requested
Chase issued a Notice of Intent to Foreclose on
June 20, 2012.
about
explanation
Chase’s
Plaintiff responded on July 2, 2012, complaining
failure
to
respond
to
his
May
2
letter
and
requesting that Chase provide the requested information within
ten (10) days and rescind the foreclosure notice.
Plaintiff
received
Chase
no
response
and
wrote
another
letter
to
on
September 25, 2012, in which he complained about Chase’s failure
to provide the requested documents which caused him to lose the
contract to sell the property.
He requested to be told the
identity of the owner of the loan and again requested a copy of
the note.
Chase again ignored these requests.
Plaintiff gave
up trying to get the documentation and decided to wait.
Nearly a year later, on August 1, 2013, Plaintiff restarted
his attempts to learn the identity of the owner of the loan and
obtain a copy of the note through a letter to Chase.
Chase
responded on August 12, providing a purported copy of the note.
2
The law firm of the Substitute Trustees was named as a
Defendant, but Plaintiff voluntarily dismissed his claims
against it pursuant to Fed.R.Civ.P. 41(a)(1)(A)(i) on March 19,
2014. (ECF No. 20).
3
On August 19, it provided a loan payment history.
the
Substitute
Trustees
sent
a
letter
which
On August 16,
claimed
that
a
foreclosure sale of the property may occur at any time fortyfive (45) days from the date of the letter.
On or about August
28, 2013, Plaintiff was served with the foreclosure order to
docket which identified FHMLC as the owner or secured creditor
of
the
mortgage
loan.
Plaintiff
alleges
that
he
was
never
provided any notice from FHMLC that it was the owner of the
loan.
The foreclosure order to docket included a purported copy
of the note that was endorsed to Chase.
On January 31, 2014, Plaintiff, proceeding pro se, filed an
amended complaint in this court, asserting four claims.3
First,
he claims that Chase and FHMLC violated two sections of the
Truth in Lending Act (“TILA”), 15 U.S.C. § 1641(f), (g), by
failing to notify Plaintiff that ownership of the loan had been
transferred and failing to provide the identity of the investor
upon Plaintiff’s written requests.
Second, he claims that Chase
committed
the
numerous
violations
of
Real
Estate
Settlement
Procedures Act (“RESPA”), 12 U.S.C. § 2605(e), by failing to
take appropriate action after receiving Plaintiff’s requests.
Third,
Plaintiff
claims
that
Chase
3
and
FHMLC
violated
the
The complaint lists five claims, but Count Three violations of the Fair Debt Collection Practices Act - is
addressed only against law firm of the Substitute Trustees,
which was subsequently dismissed.
4
Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann.,
Com. Law § 14-201, et seq., under the doctrine of respondeat
superior for the acts of the Substitute Trustees in threatening
to foreclose.
Finally, Plaintiff claims a breach of contract
against FCMC for its failure to release the Deed of Trust upon
satisfaction of the 2008 Loan, and against LendingTree for its
failure to provide Plaintiff with a copy of the 2009 Note and
Deed of Trust pursuant to its loan agreement with Plaintiff.
Motions to dismiss were filed by Chase and FHLMC on February 12,
2014 (ECF No. 14); FCMC on March 4, 2014 (ECF No. 16); and
LendingTree on April 24, 2014 (ECF No. 30).
In accordance with
Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), the clerk of
court mailed a letter to Plaintiff following the filing of each
motion, notifying him that a dispositive motion had been filed
and that he was entitled to file opposition material or risk
entry of judgment against him.
(ECF Nos. 15, 18, and 33).
Plaintiff opposed each motion (ECF Nos. 17, 24, and 37), to
which each Defendant replied (ECF Nos. 22, 25, and 38).
II.
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
5
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, 555 n.3 (2007).
Bell Atl. Corp.
That showing must
consist of more than “a formulaic recitation of the elements of
a cause of action” or “naked assertion[s] devoid of further
factual enhancement.”
Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (internal citations omitted).
At this stage, all well-pleaded allegations in a complaint
must be considered as true, Albright v. Oliver, 510 U.S. 266,
268 (1994), and all factual allegations must be construed in the
light
most
favorable
to
the
plaintiff.
See
Harrison
v.
Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).
In evaluating the complaint, unsupported legal
allegations
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).
Finally,
pleadings
“to
while
courts
less
stringent
generally
standards
should
than
hold
formal
pro
se
pleadings
drafted by lawyers,” they may nevertheless dismiss complaints
6
that
lack
a
cognizable
legal
theory
or
that
fail
sufficient facts under a cognizable legal theory.
to
allege
Haines v.
Kerner, 404 U.S. 519, 520 (1972); Turner v. Kight, 192 F.Supp.2d
391, 398 (D.Md. 2002), aff’d, 121 F.App’x. 9 (4th Cir. 2005).
III. Analysis
A.
LendingTree
Plaintiff brings one claim against LendingTree for breach
of
contract,
specifically
that
LendingTree
violated
its
obligation under paragraph 17 of the 2009 Loan agreement between
it and Plaintiff to provide Plaintiff with the 2009 Note and
Deed of Trust.
According to the complaint, due to LendingTree’s
failure, Plaintiff could not stop Chase from pursuing him on the
2008
Note
and
Deed
of
Trust,
which
resulted
in
Plaintiff
incurring charges, expenses, and payments he would not otherwise
have
incurred.
(ECF
No.
11
¶¶
68-71).
In
its
motion
to
dismiss, LendingTree argues that this action is barred by the
statute of limitations.
Generally, a civil action must be filed within three years
of the date when the cause of action accrues.
Cts. & Jud. Proc. § 5-101.
Md. Code Ann.,
The complaint alleges that the 2009
Loan was obtained on March 30, 2009, but the complaint was not
filed until October 4, 2013.
In opposition, Plaintiff argues
that “the deed of trust is a contract and/or instrument under
seal”
and
is
therefore
subject
7
to
a
twelve
year
statute
of
limitations.
Id. § 5-102.
Plaintiff
attempting
is
In reply, LendingTree contends that
to
amend
his
complaint
through
his
opposition, something that is not permitted.
The statute of limitations is an affirmative defense that
should
only
be
employed
to
dismiss
claims
pursuant
to
Fed.R.Civ.P. 12(b)(6) when it is clear from the face of the
complaint that the claims are time barred.
City
of
Greensboro,
801
F.Supp.2d
429,
See Alexander v.
445
(M.D.N.C.
2011)
(“[A]n affirmative defense . . . may only be reached at the
[motion to dismiss] stage if the facts necessary to deciding the
issue
clearly
appear
on
the
face
of
the
pleadings.”).
The
burden is on the party asserting the defense, here LendingTree,
to plead and prove it.
See Newell v. Richards, 323 Md. 717, 725
(1991)
rule,
(“As
a
general
the
party
raising
a
statute
of
limitations defense has the burden of proving that the cause of
action accrued prior to the statutory time limit for filing
suit.”).
A plaintiff is under no obligation to plead facts in a
complaint to show the timeliness of his claims.
Here,
while
any
claim
with
a
three
year
statute
of
limitations based on the asserted contract entered into on March
30, 2009 would be barred, it is not immediately clear that any
purported contract, and an action relating to it, would not be
subject
to
specialties.
the
twelve
Defendant
year
is
statute
caught
8
of
somewhat
limitations
in
a
“Catch
for
22”
situation.
It claims that there was no contract at all, much
less one under seal.4
It is LendingTree’s burden, however, to
prove that any such claim is untimely and without a contract
document to rely on, that task is impossible on a motion to
dismiss.
Rather, the issue will have to be deferred.
LendingTree
plausible.
obligation
also
argues
that
Plaintiff’s
claim
is
not
“A breach of contract action requires a contractual
in
the
first
instance.”
Davis
v.
Balt.
Congregation, 985 F.Supp.2d 701, 717 (D.Md. 2013).
Hebrew
LendingTree
represents that it did not purchase any SurePoint loans as part
of its purchase of the company, and therefore does not know
whether SurePoint made the 2009 Loan.
The evidence suggests no
such loan exists, as the public records do not have any deed of
trust
recorded
on
the
2009
Loan.
(See
ECF
No.
14-9
(land
records search for “Ronald Cezair” as grantor/grantee, showing
no
reference
to
a
deed
of
trust
in
2009)).
Furthermore,
LendingTree argues that because Plaintiff never alleged that he
performed under the 2009 contract, he should not be able to rely
upon it as the proximate cause for the foreclosure of another,
prior loan.
In response, Plaintiff states that his complaint
alleges that LendingTree failed to record the Deed of Trust.
If
it had done so, Chase would have had constructive notice of it
4
Neither party has provided the 2009 Note or Deed of Trust.
9
and, additionally, Plaintiff would be able to retrieve a copy
from the land records instead of having to rely on LendingTree.
LendingTree is criticizing Plaintiff improperly for failing
to
provide
a
copy
of
the
2009
Deed
of
Trust
when
it
was
LendingTree that allegedly breached its duty to provide a copy.
As
to
proximate
cause,
Plaintiff
argues
that
LendingTree’s
failure to comply with its contractual obligations to provide a
copy
of
the
2009
Deed
of
Trust
prevented
Plaintiff
from
challenging Chase’s alleged legal right to pursue him on the
2008
Loan.
Plaintiff’s
arguments
are
plausible
and
LendingTree’s motion to dismiss will be denied.
B.
Chase and FHMLC
1.
Truth in Lending Act
Plaintiff
brings
two
claims
provisions
against
Chase
and
of
Truth
in
the
FHMLC
for
Lending
Act
violations
of
(“TILA”).5
First, 15 U.S.C. § 1641(g) (“Notice of new creditor”)
provides that:
not 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,
including-(A) the identity, address,
number of the new creditor;
5
TILA became law on May 20, 2009.
1632.
10
telephone
P.L. 111-22, 123 Stat.
(B) the date of transfer;
(C) how to reach an agent or party
having authority to act on behalf of
the new creditor;
(D) the location of the place where
transfer of ownership of the debt is
recorded; and
(E) any other relevant
regarding the new creditor.
Plaintiff
alleges
that
Chase
and/or
information
FHMLC
violated
this
provision by failing to notify him that ownership of the 2008
Loan
had
been
transferred
to
FHMLC,
and,
additionally,
that
Chase failed to notify him of MERS’s assignment of the Deed of
Trust
from
First
Commonwealth
to
Chase.
Plaintiff
monetary damages for Defendants’ alleged violations.
seeks
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.”
Defendants contend that the claim as to the transfer to
FHMLC is time barred.
Neither the complaint nor Defendants’
motion states when the transfer happened, but Defendants argue
that the precise date is immaterial because even applying the
equitable doctrine of fraudulent concealment to toll the statute
of limitations, Plaintiff’s claim is untimely.6
6
Defendants point
“[T]he fraudulent concealment doctrine tolls the statute
of limitations until the plaintiff in the exercise of reasonable
11
to the June 20, 2012 Notice of Intent to Foreclose sent by
Chase, which lists FHMLC as the secured party and provides its
telephone
number
(ECF
No.
14-13,
at
5),
contending
that
Plaintiff was on notice of the transfer in June 2012 at the
latest and had until June 2013 to file his claim.
Plaintiff’s
original complaint, however, was filed on October 4, 2013.
The statute of limitations is an affirmative defense that
ordinarily must be pleaded and proven by the party asserting it
through a pleading under Fed.R.Civ.P. 8(c) and is not usually an
appropriate
ground
for
dismissal.
See
Eniola
Corp., 214 F.Supp.2d 520, 525 (D.Md. 2002).
v.
Leasecomm
Dismissal, however,
is proper “when the face of the complaint clearly reveals the
existence of a meritorious affirmative defense.”
Brooks v. City
of Winston-Salem, N.C., 85 F.3d 178, 181 (4th Cir. 1996).
A
court “may properly consider documents attached to a complaint
or
motion
to
dismiss
so
complaint and authentic.”
long
as
they
are
integral
to
the
Anand v. Ocwen Loan Servicing, LLC,
754 F.3d 195, 198 (4th Cir. 2014) (quotation marks and citation
omitted).
“To be ‘integral,’ a document must be one ‘that by
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).
“[S]everal 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.”
Ward v.
Branch Banking & Trust Co., No. ELH-13-01968, 2014 WL 2707768,
at *14 (D.Md. June 13, 2014) (citing cases).
12
its very existence, and not the mere information it contains,
gives rise to the legal rights asserted.’”
Hart v. Lew, 973
F.Supp.2d 561, 574 (D.Md. 2013) (quoting Chesapeake Bay Found.,
Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 622
(D.Md. 2011) (emphasis in original)).
The face of Plaintiff’s
amended complaint does not reveal the date on which the transfer
happened.
Furthermore, the Notice of Intent to Foreclose, while
referenced in the amended complaint, is not integral to the
legal
rights
asserted.
It
is
merely
one
more
instance
of
communication between Plaintiff and his lenders and servicers.
It is not appropriate at this juncture to consider Defendants’
statute of limitations defense.
Plaintiff
also
contends
that
the
assignment
of
the
Deed of Trust by MERS7 to Chase (ECF No. 14-7) was a transfer
that required notice under TILA.
While Defendants acknowledge
that the Appointment of Substitute Trustees lists Chase as the
holder
of
the
note
(ECF
No.
14-8),
they
contend
that
the
assignment to Chase was for the administrative convenience of
Chase
to
appointment
this
fact
service
of
the
2008
substitute
absolves
them
Loan,
because
trustees.
of
TILA
it
supported
Defendants
liability,
as
contend
15
its
that
U.S.C.
§
1641(f)(2) provides that:
7
MERS stands
Systems, Inc.
for
the
Mortgage
13
Electronic
Registration
[a] servicer of consumer obligation arising
from a consumer credit transaction shall not
be treated as the owner of the obligation
for purposes of this section on the basis of
an assignment of the obligation from the
creditor or another assignee to the servicer
solely for the administrative convenience of
the servicer in servicing the obligation.
It points to the Appointment of Substitute Trustees (ECF No. 148), and the Ownership Affidavit (ECF No. 14-20), that swears
that Chase is the servicer of the loan and that FHLMC is the
owner.
This
argument
will
be
rejected.
While
the
Ownership
Affidavit may be considered as it is part of the foreclosure
order
to
docket
that
Plaintiff
explicitly
relies
upon
in
asserting his legal rights, the Assignment of Deed of Trust
states that it assigns and transfers unto Chase “all [FCMC’s]
right, title and interest in and to a certain [2008 Deed of
Trust].”
(ECF No. 14-7).
This suggests that Chase was the
owner of the Deed of Trust.
Plaintiff’s allegations, along with
the documents properly before the court presently, have pled
sufficiently a TILA violation.
Plaintiff also alleges violation of 15 U.S.C. § 1641(f)(2),
which requires a servicer, upon written request by the obligor,
to provide “to the best knowledge of the servicer, [] the name,
address, and telephone number of the owner of the obligation or
the master servicer of the obligation.”
14
Plaintiff’s complaint
alleges that he wrote letters on September 25, 2012 and August
1, 2013 to Chase requesting the identity of the owner of the
loan.
(ECF No. 11 ¶¶ 24 and 26).
In the motion to dismiss,
Defendants argue that at the time of the September 2012 letter,
Plaintiff was well aware of the owner of the loan based on the
above referenced June 2012 notice of intent to foreclose.
as
discussed
considered
at
above,
this
that
document
time.
As
to
is
the
not
August
But
appropriately
2013
letter,
Defendants refer to Plaintiff’s admission that he received the
foreclosure order to docket on August 28, 2013 and that that
order identified FHMLC as the owner or secured creditor of the
mortgage (Id. ¶¶ 29 and 34).
Affidavit,
which
was
part
Defendants provide the Ownership
of
the
foreclosure
action,
which
states that FHLMC is the owner of the loan.
(ECF No. 14-20).
But
as
Plaintiff
affidavit
does
not
correctly
list
points
FHLMC’s
out,
at
a
minimum,
address
or
phone
required to be provided by the servicer, if known.
this
number
as
Plaintiff
has stated a claim for violations of Section 1641(f)(2) of TILA.
2.
Real Estate Settlement Procedures Act
Plaintiff asserts that Chase violated RESPA, 12 U.S.C. §
2605(e), by failing to respond to four letters sent by Plaintiff
in May, July, and September 2012, and in August 2013.
12 U.S.C. § 2605(e) states that:
15
[i]f any servicer of a federally related
mortgage loan receives a qualified written
request from the borrower . . . for
information relating to the servicing of
such loan, the servicer shall provide a
written response acknowledging receipt of
the correspondence within 20 days (excluding
legal
public
holidays,
Saturdays,
and
Sundays).8
A qualified written request (“QWR”) is defined as:
8
The Dodd-Frank Wall Street Reform and Consumer Protection
Act amended RESPA to reduce the time period to acknowledge
receipt from twenty (20) days to five (5) days. It also reduced
the time a servicer had to respond from sixty (60) days to
thirty (30) days, with an additional fifteen (15) day extension
if, before the end of the thirty day period, the servicer
notifies the borrower of the extension and the reasons for delay
in responding.
Pub. L. 111-203 § 1463(c)(2), (3), 124 Stat.
1376, 2184 (2010).
These new time periods went into effect on
January 10, 2014, when the implementing regulations took effect.
12 C.F.R. § 1024, et seq.; Pub. L. 111-203 § 1400(c)(2), 124
Stat. 1376, 2136 (law shall take effect on the date on which the
final regulations implementing such section take effect;
regulations shall take effect twelve months after their
issuance). The last alleged QWR is dated August 1, 2013, before
the new time limits became effective.
Defendants submit that these amendments became effective in
January 2013. That is not a correct reading of the law, which
states that provisions of the law will take effect on the date
on which the final regulations implementing such provision take
effect. § 1400(c)(2). Where regulations “have not been issued
on the date that is 18 months after the designated transfer date
shall take effect on such date.” § 1400(c)(3). The designated
transfer date was July 21, 2011.
75 Fed.Reg. 57252-02 (Sept.
20, 2010).
The regulations implementing these provisions were
issued on January 17, 2013, within 18 months of the designated
transfer date.
78 Fed.Reg. 10696, 10899.
Therefore, the
provisions became effective upon the regulations effective date:
January 10, 2014. See Roth v. CitiMortgage Inc., 756 F.3d 178,
181 n.3 (2d Cir. 2014) (“As of January 10, 2014, servicers have
five days to acknowledge receipt and thirty days to respond,
subject to limited extensions.”); Berneike v. CitiMortgage,
Inc., 708 F.3d 1141, 1145 n.3 (10th Cir. 2013) (same).
16
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).
Within sixty (60) days from receipt
of the QWR (excluding Saturdays, Sundays, and holidays), the
loan servicer shall:
after conducting an investigation, provide
the borrower with a written explanation or
clarification that includes (i)
information
requested
by
the
borrower or an explanation of why the
information requested is unavailable or
cannot be obtained by the servicer; and
(ii) the name and telephone number of
an individual employed by, or the
office or department of, the servicer
who can provide assistance to the
borrower.
12
U.S.C.
violated
§
this
2605(e)(2)(C).
provision
on
Plaintiff
numerous
alleges
occasions
by
that
Chase
failing
to
conduct a reasonable investigation that provided the information
requested by Plaintiff or an explanation of why the information
requested
was
unavailable
or
cannot
17
be
obtained
by
Chase.
Plaintiff
also
occasions
by
alleges
providing
that
Chase
information
violated
to
RESPA
Experian,
on
several
Equifax,
and
Trans Union in violation of 12 U.S.C. § 2605(e)(3), which states
that for a sixty-day (60) period beginning upon receipt of the
borrower’s
servicer
QWR
may
relating
not
to
provide
a
dispute
regarding
information
payments,
regarding
any
“a
overdue
payment, owed by such borrower and relating to such period or
qualified written request, to any consumer reporting agency.”
Finally, Plaintiff alleges that all of these RESPA violations
constituted a pattern or practice of noncompliance.
A servicer
who violates these provisions is liable to an individual for
actual damages “as a result of the failure [to comply],” as well
as statutory damages not to exceed $2,000 in the case of a
“pattern or practice of noncompliance.”
12 U.S.C. § 2605(f)(1).
Chase acknowledges that the request in the May 2, 2012
letter for a payoff statement and payment history could qualify
as a QWR, but argues that Plaintiff has not pled any damages
that
he
suffered
as
a
result
of
Chase’s
alleged
failure
to
produce timely the payment history.
The June 2012 response from
the
that
Substitute
Trustees
indicates
as
of
June
7,
2012,
Plaintiff’s mortgage payment for May 1, 2010 had not been paid.
Plaintiff also admitted that he had stopped making payments.
(ECF No. 11 ¶ 14).
Chase contends that Plaintiff was well aware
that he had last made a mortgage payment in May 2010, and that
18
by June 2012, he was over two years delinquent.
Furthermore,
Chase asserts that Plaintiff has not pled facts in support of
his contention that Chase engaged in a pattern or practice of
noncompliance.
These arguments are unconvincing.
As Plaintiff points out,
the complaint alleged pecuniary losses (ECF No. 11 ¶ 47), which
he clarifies in his opposition includes costs associated with
mailing letters and costs such as interest, fees, and other
charges accruing as a result of Chase obstructing Plaintiff’s
sale of the property.
Such losses can constitute recoverable
damages,
least
at
the
very
for
time
and
effort
expended
reengaging the servicer after it fails to respond to a QWR.
See
McCray v. Fed. Home Loan Mortg. Corp., No. GLR-13-1518, 2014 WL
293535, at *14 (D.Md. Jan. 24, 2014) (allegations that plaintiff
accrued expenses in her attempts to receive responses to her
QWRs, including sending certified mail, traveling to and from
the post office, and copying documents and research information
is sufficient (citing Rawlings v. Dovenmuehle Mortg., Inc., 64
F.Supp.2d 1156, 1164 (M.D.Ala. 1999)); Marais v. Chase Home Fin.
LLC, 736 F.3d 711, 721 (6th Cir. 2013) (remanding to the district
court to consider plaintiff’s argument that costs incurred in
preparing her QWR were actual damages when servicer ignored its
statutory duties to respond adequately); Johnstone v. Bank of
Am., N.A., 173 F.Supp.2d 809, 816 (N.D.Ill. 2001) (noting that
19
time spent on corresponding with servicer could be compensable
(citing Cortez v. Keystone Bank, No. 98-2457, 2000 WL 536666
(E.D.Pa. May. 2, 2000)); Steele v. Quantum Servicing Corp., No.
3:12-CV-2897-L, 2013 WL 3196544, at *8 (N.D.Tex. June 25, 2013)
(explaining that only damages incurred after the alleged RESPA
violation are recoverable; costs incurred in sending an initial
QWR
are
not
recoverable
because
they
would
have
incurred
regardless of whether the servicer complied with RESPA).9
Chase
letter,
also
“in
takes
which
he
issue
with
complained
Plaintiff’s
about
July
[Chase’s]
2,
2012
failure
to
respond to his May 2, 2012 letter and requested that [Chase]
provide the requested information within 10 days.”
¶ 23).
(ECF No. 11
Chase argues that this letter cannot be a QWR because it
was received prior to the expiration of its 60 day deadline to
respond
to
the
May
2,
2012
letter,
and
did
not
make
an
additional demand for information, nor did it report any error
that
needed
convincing.
to
be
corrected.
These
arguments
are
not
Nothing on the face of RESPA prevents a borrower
from inundating his servicer with QWRs, even where the period to
9
Because Plaintiff has pled sufficiently some actual
damages, it is unnecessary at this juncture to analyze whether
emotional damages are recoverable under RESPA and, additionally,
whether Plaintiff incurred damages by losing the opportunity to
sell his property.
See Hutchinson v. Del. Sav. Bank FSB, 410
F.Supp.2d 374, 383 n.14 (D.N.J. 2006) (declining to decide on a
motion to dismiss whether plaintiffs may recover damages for
emotional distress where they have stated a claim under RESPA
independent of their allegations of emotional distress).
20
respond has not passed.
In such a situation, presumably the
servicer could satisfy the multiple requests in one response.
In
about
the
September
[Chase’s]
25,
failure
2012
to
letter,
provide
the
Plaintiff
“complained
requested
documents
[which he alleges] caused him to lose his contract to sell the
property.
He concluded with a request for the identity of the
owner of the loan and another request for a copy of the Note.”
(ECF No. 11 ¶ 24).10
Plaintiff attaches a copy of the letter to
his opposition which paints a different picture.
He first notes
that he previously requested a payoff statement and history of
loan
payments,
but
the
letter
concludes
by
requesting
“documentation revealing the identity of the owner of the loan.”
(ECF No. 17-3).
Plaintiff also specified in his letter that
“[i]ncluded in the documents should be a complete and current
copy of the note establishing the current owner.
The copy of
the note should be a direct copy from the actual (original) note
that was copied on or after September 25, 2012.”
is not a QWR.
(Id.).
This
See Willis v. Bank of Am. Corp., No. ELH-13-
02615, 2014 WL 3829520, at *31 (D.Md. Aug. 1, 2014) (noting that
a letter asking for a copy of the deed of trust and note, among
10
The Dodd-Frank Act added a requirement that servicers
respond to borrower’s request for the identity and contact
information of the loan’s owner or assignee within ten (10)
business days.
Pub L. 111-203 § 1463(a), 124 Stat. 1376, 2182
(codified at 12 U.S.C. § 2605(k)(1)(D)). As with the amendments
described above, this requirement became effective January 10,
2014.
21
other
documents
“is
not
the
type
of
information
RESPA
contemplates.” (quoting Junod v. Dream House Mortg. Co., No. 117035-ODW,
2012
WL
94355,
at
*3-4
(C.D.Cal.
Jan.
5,
2012)
(explaining that copies of the promissory note, deed of trust,
and “a complete life of loan transactional history” are “not the
type of information RESPA contemplates”))); 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); Ward v. Sec. Atl. Morg. Elec.
Reg.
Sys.,
Inc.,
858
F.Supp.2d
561,
574-75
(E.D.N.C.
2012)
(finding that plaintiff’s letter was not a QWR where the letter
sought “inter alia copies of loan documents, assignments of the
deed
of
trust
inspection
and
reports
promissory
and
history”).
Similarly,
“request[ed]
the
note
appraisals
Plaintiff’s
identity
of
the
and
and
a
copies
loan
August
owner
request[ed] a current copy of the Note.”
1,
of
of
property
transactional
2013
the
letter
loan
and
(ECF No. 11 ¶ 26).
This is not a QWR, and the requirement that servicers provide
the identity of the owner of the loan when requested is not
applicable as this letter was sent before January 10, 2014.
See
Steele, 2013 WL 3196544, at *6 (“The Dodd-Frank amendments . . .
are not effective until January 10, 2014.”).
In sum, while some
of Plaintiff’s alleged communications do not constitutes a QWR,
22
some do and Plaintiff has pled sufficiently that Chase failed to
respond and that Plaintiff suffered damages as a result.
His
RESPA claim will not be dismissed.
Plaintiff’s complaint also alleged that Chase violated 12
U.S.C.
§
2605(e)(3)
information
to
on
Experian,
several
Equifax,
occasions
and
Trans
by
providing
Union
regarding
delinquent and/or overdue payments owed by Plaintiff during the
sixty day period following Chase’s receipt of Plaintiff’s QWRs.
(ECF No. 11 ¶ 45).
Chase argues that Section 2605(e)(3) only
prohibits servicers from reporting to credit reporting agencies
when
the
borrower
has
sent
a
QWR
regarding the borrower’s payments.”
“relating
to
a
dispute
Here, the complaint does
not allege that Plaintiff used any of his QWRs to call attention
to an error in his account; instead, he was simply requesting
information.
claim.
In his opposition, Plaintiff does not discuss this
Therefore, the claim has been abandoned.
See Ferdinand-
Davenport v. Children’s Guild, 742 F.Supp.2d 772, 777 (D.Md.
2010) (“By her failure to respond to [defendant’s] argument” in
a motion to dismiss, “the plaintiff abandons her claim.”).11
11
The parties also dispute whether Plaintiff’s complaint
sufficiently pled a “pattern or practice of misconduct” such
that he is entitled to statutory damages. Because Plaintiff has
pled sufficiently actual damages, the court declines to consider
this question presently.
23
3.
Maryland Consumer Debt Collection Act
Plaintiff claims that the Substitute Trustees violated Md.
Code Ann., Com. Law § 14-202(8), which provides that a debt
collector may not “[c]laim, attempt, or threaten to enforce a
right with knowledge that the right does not exist,” when it
threatened to foreclose and/or claimed a right to foreclose on
September
30,
foreclose.
2013
with
knowledge
that
it
had
no
right
to
A debt collector who violates this provision is
“liable for any damages proximately caused by the violation,
including
damages
Id. § 14-203.
FHMLC
for
the
for
emotional
distress
or
mental
anguish.”
Plaintiff brings this claim against Chase and
actions
of
the
Substitute
Trustees
under
the
theory of respondeat superior and/or vicarious liability.
To plead a claim under the MCDCA, Plaintiff must set forth
factual allegations tending to establish two elements: (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.
McCabe,
Weisberg
&
Conway,
LLC,
No.
3845833, at *6 (D.Md. Aug. 4, 2014).
DKC
See Lewis v.
13-1561,
2014
WL
The key to prevailing on a
claim under the MCDCA is to demonstrate that the defendants
“acted
with
Stewart
v.
knowledge
Bierman,
as
859
to
the
F.Supp.2d
(emphasis in original).
24
invalidity
754,
769
of
the
(D.Md.
debt.”
2012)
The
complaint
states
that
the
Substitute
Trustees
Plaintiff the Notice to Occupants dated August 16, 2013.
sent
This
notice stated that a foreclosure sale “may” occur at any time
after forty-five days from the date of the notice.
According to
Plaintiff, the Substitute Trustees were, in essence, threatening
foreclosure at any time after September 30, 2013, or forty-five
days after August 16.
Maryland law states that a foreclosure
sale of residential property may not occur until at least fortyfive days after service of process of the foreclosure order to
docket.
Md.
foreclosure
Code
order
to
Ann.,
Real
docket,
Prop.
§
however,
7-105.1(n).
was
not
served
The
on
Plaintiff until August 28, 2013, twelve days after the notice.
According to Plaintiff, the Substitute Trustees were threatening
to sell his property through foreclosure as early as September
30, 2013, when they had no right to do so until October 14, 2013
at
the
earliest
(October
12
was
a
Saturday).
For
this
violation, Plaintiff suffered “actual damages consisting of both
pecuniary expenses and emotional/mental distress.”
(ECF No. 11
¶ 59).
Defendants argue that they were simply following Maryland
law
by
sending
the
notice
foreclosure order to docket.
to
occupants
earlier
than
the
They point to Md. Code Ann., Real
Prop. § 7-105.9, which requires the person authorized to make a
sale in a foreclosure action to send, “at the same time as the
25
notice
required
under
§
7-105.1(h)(2)
of
this
subtitle,
a
written notice addressed to ‘all occupants’ at the address of
the residential property.”
The subsection goes on to spell out
the form the notice should take, including that “[a] foreclosure
sale of the property may occur at any time after 45 days from
the
date
of
this
notice.”
Section
7-105.1(h)(2)
refers
to
service of documents on the mortgagor or grantor required in
paragraph
(1),
complaint
to
which
are
foreclose
a
on
copy
of
the
residential
order
to
or
Thus,
property.
docket
it
appears that when service of the foreclosure order to docket is
made, the notice to occupants should be made simultaneously, and
not when the foreclosure order to docket is filed in the Circuit
Court, which would occur before service.
Defendants next argue that the notice to occupants only
stated that a foreclosure sale “may occur at any time after 45
days from the date of this notice.”
Such language is not in the
definite to constitute a threat.
But generally, when one says
something
intimating
may
happen,
they
are
that
there
is
a
greater than zero chance of it occurring.
If such a statement
is
so
made
before
the
legal
right
to
do
exists,
it
can
constitute a threat to act that is made with knowledge of the
threat’s illegality.
Defendants next argue that Section 14-
202(8) requires an alleged wrongdoer not to have the right to
collect
the
debt.
Because
26
the
complaint
and
exhibits
demonstrate that the 2008 Loan was in default, Defendants argue
that
they
had
foreclosure
law
every
and
right
to
foreclose
procedures.
But
under
Defendants
Maryland
confuse
the
validity of a debt, and the methods one takes to collect that
debt.
“Section 14-202(8) only makes grammatical sense if the
underlying debt, expressly defined to include an alleged debt,
is
assumed
to
exist,
and
the
specific
prohibitions
are
interpreted as proscribing certain methods of debt collection
rather than the debt itself.”
395,
405
(D.Md.
2012)
Fontell v. Hassett, 870 F.Supp.2d
(emphasis
in
original);
see
also
Richardson v. Rosenberg & Assocs. LLC, No. WDQ-13-0822, 2014 WL
823655, at *9 (D.Md. Feb. 27, 2014) (“[I]f a collection agency
attempted
to
collect
a
debt
with
knowledge
that
it
was
not
licensed, it would be liable for damages under the MCDCA.”).
For purposes of Section 14-202(8), whether the 2008 Loan was in
default
is
beside
the
point;
even
assuming
the
loan
was
in
default, if the debt collector went about collecting the debt in
the wrong way, it violates the law.
Here, Plaintiff alleges
that Defendants - through the Substitute Trustees - threatened
to collect his debt through foreclosure before they had the
legal right to do so.
Finally, Defendants argue that Plaintiff has not pled with
sufficient particularity the damages he allegedly suffered.
his
opposition,
Plaintiff
states
27
that
he
suffered
In
emotional
distress fearing a foreclosure of the property between October 1
and
October
13,
when
Defendants
had
no
right
to
foreclose.
Plaintiff’s allegations of Defendants’ violation of the MCDCA
are sufficient to survive a motion to dismiss.
See Piotrowski
v. Wells Fargo Bank, N.A., No. DKC 11-3758, 2013 WL 247549, at
*12 (D.Md. Jan. 22, 2013) (noting that emotional distress in the
form
of
anxiety
and
insomnia
is
sufficient);
Allen
v.
CitiMortgage, Inc., No. CCB-10-2740, 2011 WL 3425665, at *10
(D.Md. Aug. 4, 2011) (finding that plaintiff’s allegations of
“damage
to
[her]
credit
score
[and]
emotional
damages”
sufficient to allege “an actual injury or loss as a result of a
prohibited
practice
under
the
[Maryland
Consumer
Protection
Act]”).
C.
First Commonwealth Mortgage Corporation
Plaintiff brings a breach of contract claim against FCMC,
alleging that the 2008 Deed of Trust obligated FCMC to release
it upon satisfaction of the 2008 Loan.
he
satisfied
the
2008
Loan
but
FCMC
Plaintiff alleges that
failed
obligation to release the Deed of Trust.
to
fulfill
its
Because of FCMC’s
failure, Chase has pursued Plaintiff on the 2008 Note and Deed
of Trust, which has resulted in charges, expenses, and payments
that would not otherwise have been incurred.
Plaintiff
has
failed
to
satisfy
28
a
FCMC argues that
contractual
condition
precedent to suit, specifically Section 20 of the 2008 Deed of
Trust:
Neither Borrower nor Lender may commence,
join, or be joined to any judicial action .
. . until such Borrower or Lender has
notified the other party (with such notice
given in compliance with the requirements of
Section 15) of such alleged breach and
afforded the other party hereto a reasonable
period after the giving of such notice to
take corrective action.
(ECF No. 16-3, at 10).
FCMC contends that Plaintiff’s complaint
fails to allege that Plaintiff gave notice as required.
“To state a prima facie claim for breach of contract under
Maryland
law,
obligation
a
exists
obligation.”
plaintiff
must
and
the
that
allege
that
defendant
has
a
contractual
breached
that
McCray v. Specialized Loan Servicing, No. RDB-12-
02200, 2013 WL 1316341, at *2 (D.Md. Mar. 28, 2013).
FCMC’s
arguments concerning conditions precedent is a defense and is
not appropriate at the motion to dismiss stage, a fact further
illustrated by the dueling affidavits concerning who said what
on which dates.
See Nat’l Labor Coll., Inc. v. Hillier Grp.
Architecture N.J., Inc., No. DKC 09-1954, 2012 WL 3264959, at
*5-6 (D.Md. Aug. 9, 2012) (Fed.R.Civ.P. 9(c) does not require
that performance of conditions be pled -- “if [defendant] wishes
to
raise
affirmative
failure
to
defense,
satisfy
it
is
a
free
pleading and/or motion.”).
29
condition
precedent
to
in
do
so
a
as
an
subsequent
FCMC moved, in the alternative, for summary judgment.
It
argues that “FCMC transferred all its right, title, and interest
to
the
2008
Loan,
including
all
servicing
rights
and
obligations, to Chase sometime between the origination of the
loan on February 15, 2008 and the first payment due-date, April
1, 2008.”
(ECF No. 16-2, at 5 (citing
No. 16-4 ¶¶ 5-6)).
Furthermore, it contends that Plaintiff was aware that servicing
of
the
closing
loan
in
was
transferred
February
2008,
to
Chase
pointing
to
contemporaneously
evidence
it
with
provides
indicating that Plaintiff made payments to Chase starting in
2008.
(See
ECF
No.
14-16
(Chase’s
response
to
Plaintiff’s
August 2013 request, documenting payments to Chase in 2008)).
Plaintiff’s complaint states that he contacted Chase to inquire
“about
the
new
mortgage
payment
because
[Chase]
was
still
requesting mortgage payments as stipulated in the 2008 Loan.”
(ECF No. 11 ¶ 12).
Furthermore, a May 5, 2008 letter sent by
Plaintiff
requested
to
Chase
that
Chase
cease
charging
him
Private Mortgage Insurance on his loan, where he refers to FCMC
as his “initial lender.”
(ECF No. 14-11).
FCMC also provides
the February 15, 2008 notice of assignment, signed by Plaintiff,
which indicates that servicing of the loan is being assigned,
sold or transferred from FCMC to Chase effective April 1, 2008.
(ECF No. 16-5).
FCMC argues that if Plaintiff satisfied the
2008 Loan, it would have been Chase, as holder and servicer of
30
the loan, not FCMC, that would have been obligated to record a
certificate of satisfaction.
In response, Plaintiff requests an opportunity to conduct
discovery on the issue prior to the court ruling on the summary
judgment
motion.
Plaintiff
submits
a
Rule
56(d)
affidavit
declaring that he “need[s] an opportunity to conduct discovery
to determine whether [FCMC] transferred its ownership of the
loan prior to March 30, 2009.”
(ECF No. 24-1 ¶ 5).
He contends
that his discovery request will determine whether FCMC had an
obligation on March 30, 2009 to release the Deed of Trust, and
FCMC has never sent him any documentation or information stating
that it transferred ownership of the loan, and he has no such
documentation in his possession.
Ordinarily,
summary
(Id. ¶¶ 6-8).
judgment
is
inappropriate
if
“the
parties have not had an opportunity for reasonable discovery.”
E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d
435, 448 (4th Cir. 2011).
Rule 56(d) allows the court to deny a
motion for summary judgment or delay ruling on the motion until
discovery has occurred if the “nonmovant shows by affidavit or
declaration that, for specific reasons, it cannot present facts
essential to justify its opposition.”
Rule
56(d)
discovery.”
“cannot
simply
demand
Notably, requests under
discovery
for
the
sake
of
Hamilton v. Mayor & City Council of Balt., 807
F.Supp.2d 331, 342 (D.Md. 2011).
31
Courts interpreting Rule 56(d)
have consistently held that a nonmovant’s request may be denied
if “the additional evidence sought for discovery would not have
by itself created a genuine issue of material fact sufficient to
defeat summary judgment.”
Ingle ex rel. Estate of Ingle v.
Yelton, 439 F.3d 191, 195 (4th Cir. 2006) (internal quotation
marks
omitted).
Put
simply,
“fishing expedition[s].”
Rule
56(d)
does
not
authorize
Morrow v. Farrell, 187 F.Supp.2d 548,
551 (D.Md. 2002), aff’d, 50 F.App’x 179 (4th Cir. 2002).
FCMC argues that Plaintiff is seeking nothing more than a
fishing expedition.
It has searched its records and declared
that the 2008 Loan was assigned prior to April 1, 2008 and
Plaintiff has offered no evidence to the contrary, or how he
intends
to
discovery.
prove
or
disprove
FCMC’s
representations
FCMC’s motion will be denied.
through
Plaintiff’s breach of
contract claim is fairly simple: he and FCMC entered into a
contract for a loan - the Deed of Trust - that once Plaintiff
satisfied, obligated FCMC to release the Deed of Trust.
FCMC
breached that contractual obligation by failing to release the
Deed of Trust once Plaintiff satisfied the loan.
that
it
transferred
its
obligations
to
Chase
FCMC contends
shortly
after
originating the loan and, therefore, if Plaintiff satisfied the
loan, it would be Chase that was responsible for releasing it.
There is no evidence in the record that FCMC transferred its
ownership rights, only that it transferred its servicing rights.
32
FCMC’s CEO states that ownership of the loan was sold to Chase
sometime between February 15, 2008 and April 1, 2008.
It is
premature to rely on the sworn declaration of the moving party
when
the
nonmovant
documentation.
states
FCMC’s
that
motion
he
for
never
received
summary
judgment
any
such
will
be
denied.
IV.
Conclusion
For the foregoing reasons, the motions to dismiss or, in
the
alternative,
for
summary
judgment
will
be
denied.
separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
33
A
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?