Combs v. Bank of America N.A. et al
Filing
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MEMORANDUM OPINION Signed by Judge George Jarrod Hazel on 8/20/2015. (cags, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
CRYSTAL A. COMBS
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Plaintiff,
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v.
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Case No.: GJH-14-3372
BANK OF AMERICA, N.A., et al.
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Defendants.
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MEMORANDUM OPINION
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In this case, unrepresented Plaintiff Crystal A. Combs alleges that Defendants Bank of
America, N.A. (“BANA”) and McCabe, Weisberg & Conway, LLC (“McCabe”) violated several
federal laws in connection with her mortgage on the real property located at 2603 Vicarage
Court, Bowie, Maryland 20721. This Memorandum Opinion and accompanying Order address
BANA’s and McCabe’s Motions to Dismiss 1 (ECF Nos. 10 & 14). A hearing on the motions is
unnecessary. See Local R. 105.6 (Md.). For the reasons stated below, McCabe’s Motion to
Dismiss is GRANTED and BANA’s Motion to Dismiss is GRANTED, in part, and DENIED, in
part.
I.
BACKGROUND
Although Plaintiff’s Complaint provides very little in the way of background information,
Plaintiff attaches several documents to her Complaint that help provide the context for her
claims. On December 18, 2008, Plaintiff and her then-husband, Walter L. Cook, Jr., executed a
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Plaintiff’s Motion for Leave to File Surreply (ECF No. 21) is DENIED. Under Local R.
105.2(a), surreply memoranda are not permitted to be filed unless the Court grants leave for a
party to do so. Here, a surreply is unnecessary as Defendant raised no new issues in its Reply to
Plaintiff’s Opposition. See ECF No. 13.
promissory note (the “Note”) with Equifirst Corporation in the amount of $549,152 to purchase a
residential property located at 2603 Vicarage Court, Bowie, Maryland 20721 (the “Property”).
See ECF No. 1-2. The Note was secured by a Purchase Money Deed of Trust (“Deed of Trust”)
against the Property. See id.
On March 31, 2010, the law firm of Cohn, Goldberg & Deutsch, LLC (“Cohn”) sent
Plaintiff a letter explaining that the current holder of the Note was BAC Home Loans Servicing,
LP and that the loan had been referred to Cohn for legal action due to default under the terms of
the loan agreement. See ECF No. 1-19. Plaintiff was given thirty days from receipt of the letter to
dispute all or part of the debt. See id. In response to correspondence from Plaintiff dated May 15,
2010, Cohn provided Plaintiff with the Note and Deed of Trust corresponding to the Property
and stated that she no longer had a right to dispute the debt because her response was untimely.
See ECF No. 1-20. Plaintiff alleges that, on or about August 2010, BAC Home Loans Servicing,
LP entered into a loan modification agreement with her then-husband even though she did not
sign the modification agreement. See ECF No. 1 at 8. On December 15, 2011, an assignment of
the deed of trust was recorded, assigning BANA all beneficial interests under the Deed of Trust
attached to the Property. See ECF No. 1-18 at 25.
On January 5, 2012, the Circuit Court for Prince George’s County, Maryland granted
Plaintiff and her husband a judgment of absolute divorce. See ECF No. 1-9. According to the
judgment, Plaintiff’s husband was ordered to pay the mortgage, taxes, insurance, and utilities on
the Property during his occupation of it. See id. He failed to do so and Plaintiff began occupying
the Property in November 2012. See ECF No. 1-10. On October 26, 2012, Plaintiff sent a letter
to Bank of America Home Loans requesting a mortgage modification. See ECF No. 1-29.
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On April 23, 2013, Plaintiff filed a petition under Chapter 13 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland. See ECF
No. 1-17 at ¶ 1. On April 29, 2014, Michael Cantrell, an attorney at McCabe, filed a motion for
relief from the automatic stay on BANA’s behalf. See id.
On May 1, 2014, Plaintiff sent a letter to BANA, demanding, among other things,
documentation concerning all transfers of ownership and a full loan accounting. See ECF No. 127. On July 12, 2014, Plaintiff sent another correspondence to BANA and BANA responded
through counsel on September 22, 2014, providing Plaintiff with payment history and indicating
that the loan modifications were denied for failure to provide proper financial documents. See
ECF No. 1-45.
Plaintiff filed the current lawsuit on October 28, 2014 and both Defendants have moved
to dismiss. See ECF Nos. 10 & 14.
II.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) permits a defendant to present a motion to
dismiss for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). To
survive a motion to dismiss invoking 12(b)(6), “a complaint must contain sufficient factual
matter, accepted as true, ‘to state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A
claim has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 663.
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. at 678–79; Twombly, 550 U.S. at 545 (“a plaintiff’s obligation to
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provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions,
and a formulaic recitation of a cause of action’s elements will not do.”).
When deciding a motion to dismiss under Rule 12(b)(6), 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 and internal quotation marks omitted). The Court
need not, however, accept unsupported legal allegations, see Revene v. Charles County
Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as factual allegations,
Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations devoid of any
reference to actual events. United Black Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th
Cir. 1979).
Pleadings submitted by self-represented litigants 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 and internal quotation marks omitted). “However, liberal construction
does not absolve Plaintiff from pleading a plausible claim.” Bey v. Shapiro Brown & Alt, LLP,
997 F.Supp. 2d 310, 314 (D. Md. Feb. 20, 2014); see also Coulibaly v. J.P. Morgan Chase Bank,
N.A., No. DKC 10–3517, 2011 WL 3476994, at *6 (D. Md. Aug. 8, 2011) (“[E]ven when pro se
litigants are involved, the court cannot ignore a clear failure to allege facts that support a viable
claim.”) (citation omitted), aff’d, 526 F. Appx. 255 (4th Cir. 2013).
III.
DISCUSSION
A. Equal Credit Opportunity Act (“ECOA”) and Maryland Equal Credit
Opportunity Act (“MEOCA”) allegations against BANA
The ECOA prohibits creditors from discriminating “with respect to any credit transaction
on the basis of race, color, religion, national origin, sex or marital status, or age.” Piotrowski v.
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Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549 at *6 (D. Md. Jan. 22, 2013);
(quoting Capitol Indem. Corp. v. Aulakh, 313 F.3d 200, 202 (4th Cir. 2002) (quoting 15 U.S.C. §
1691(a)(1))) (internal quotation marks omitted). The MECOA is modeled after the federal
ECOA. See Patton v. Wells Fargo Fin. Md., Inc., 85 A.3d 167, 176 (Md. 2014). “The credit
applicant may prove discrimination in violation of the ECOA by relying on any one of three
different approaches used in the employment discrimination context: (1) direct evidence of
discrimination; (2) disparate impact analysis; and (3) disparate treatment analysis.” Faulkner v.
Glickman, 172 F.Supp. 2d 732, 737 (D. Md. 2001) (citation omitted). If the approach is disparate
treatment, “the McDonnell Douglas formulation [, typically employed in Title VII discrimination
cases,] requires that the plaintiff make out a prima facie case of discrimination by offering
evidence indicating: (1) that the plaintiff belongs to a class protected by the statute; (2) that [s]he
applied for credit for which [s]he was qualified; and (3) that [s]he was rejected despite h[er]
qualifications.” See id. (citation omitted); see also McDonnell Douglas Corp. v. Green, 411 U.S.
792 (1973). Once the plaintiff has made out a prima facie case, the defendant must articulate
legitimate, nondiscriminatory reasons for rejecting plaintiff despite her qualifications. See
McDonnell Douglas Corp., 411 U.S. at 804. If the defendant is able to articulate legitimate,
nondiscriminatory reasons for the action taken, the burden then shifts back to the plaintiff to
prove that the explanation offered was in fact a pretext for discrimination. See id.
Here, Plaintiff fails to allege a prima facie case of discrimination. Although she alleges
that she is a member of a protected class, she fails to adequately allege that she met the
qualifications for loan modification and was denied despite her qualifications. In fact, Plaintiff
does not indicate what qualifications were at issue. Instead, Plaintiff has attached a September
22, 2014 letter from BANA’s then-counsel, indicating that loan modification was denied because
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Plaintiff did not provide the financial documents necessary for the review. See ECF No. 1-45.
Thus, Plaintiff has failed to allege facts that would support a viable claim under the ECOA or the
MECOA and these claims must be dismissed.
B. Real Estate Settlement Procedures Act (“RESPA”) allegation against BANA
RESPA requires a loan servicer to respond to a borrower’s “qualified written request”
(“QWR”). See 12 U.S.C. § 2605(e)(1)(B)(2). A QWR is a written correspondence that “includes,
or otherwise enables the servicer to identify, the name and account of the borrower” and includes
either a statement of reasons for the borrower’s belief that the account is in error or provides
sufficient detail for the servicer to know what information the borrower seeks. See 12 U.S.C. §
2605(e)(1)(B).
Here, Plaintiff alleges that she sent a QWR to BANA on May 1, 2014. See ECF Nos. 1 at
15 & 1-27. Plaintiff alleges that BANA’s response was late and inadequate. See ECF No. 1 at 15.
However, the correspondence sent by Plaintiff does not qualify as a QWR because it does not
relate to the servicing of the loan. See Minson v. CitiMortgage, Inc., DKC-12-2233, 2013 WL
2383658 at **4–5 (D. Md. May 29, 2013) (finding that “courts have drawn a distinction between
communications related to the servicing of the loan, which are covered under RESPA, and those
challenging the validity of a loan, which are not”). To relate to the servicing of the loan, the
request must complain of irregularities or errors with the borrower’s account. See id. (citations
omitted). Here, although Plaintiff’s correspondence is partly labeled a QWR, it requests account
documents and information related to ownership of the loan and does not point to any errors with
the account. See ECF No. 1-27. Regardless, even if the request were assumed to be a QWR,
Plaintiff still would fail to state a claim because she fails to allege any damages related to the late
response. See 12 U.S.C. § 2605(f)(1); see also Minson, 2013 WL 2383658 at *5; Ward v. Sec.
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Atlantic Mortg. Electr. Registration Sys., Inc., 858 F.Supp.2d 561, 575 (E.D.N.C. 2012). Thus,
Plaintiff has failed to state a plausible claim under RESPA, and this claim must be dismissed.
C. Truth in Lending Act (“TILA”) allegation against BANA
One of TILA’s requirements is that “[u]pon written request by the obligor, the servicer
shall provide the obligor, to the best knowledge of the servicer, with the name, address, and
telephone number of the owner of his obligation or the master servicer of the obligation.” 15
U.S.C. § 1641(f)(2). TILA creates a private cause of action for actual and statutory damages for
this violation. See 15 U.S.C. § 1640(a).
Plaintiff alleges that BANA failed to respond to her May 1, 2014 request that BANA
provide her the names of each entity that has owned the promissory note. See ECF No. 1 at 19 &
ECF No. 1-27 at 2. BANA contends that 15 U.S.C. § 1641(f)(2) only applies when the servicer
and owner of a loan are different entities. See ECF No. 13 at 4. That is not the case. See Kievman
v. Fed. Nat’l Mortg. Ass’n, 901 F.Supp. 2d 1348, 1352–53 (S.D. Fla. 2012) (“In the case of an
owner-servicer, then, failure to comply with subsection (f) does subject it to liability.”) (citations
omitted); see also 15 U.S.C. § 1641(f)(3) & 12 U.S.C. § 2605(i)(1) (defining servicer to include
holder of loan if such a person also services the loan). Accepting Plaintiff’s allegations as true,
Plaintiff has stated a claim against BANA for violation of 15 U.S.C. § 1641(f)(2). See Cezair v.
JPMorgan Chase Bank, N.A., DKC-13-2928, 2014 WL 4295048 at *6 (D. Md. Aug. 29, 2014)
(finding plaintiff had stated a TILA claim where servicer did not provide address or phone
number of obligation owner). 2
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To the extent that BANA complains that “Plaintiff fails to attach BANA’s response to the May
1, 2014 letter” as an exhibit to the Complaint, see ECF No. 10-1 at 5, and thus implies that the
response did adequately respond to Plaintiff’s letter, the appropriate course would be for BANA
to file a Motion for Summary Judgment attaching the response as an exhibit.
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D. Fair Debt Collection Practices Act (“FDCPA”) allegations against both BANA &
McCabe
The FDCPA protects consumers from the abusive and deceptive practices employed by
unscrupulous debt collectors. See United States v. Nat’l Fin. Servs. Inc., 98 F.3d 131, 135 (4th
Cir. 1996). To state a claim for relief under the FDCPA, Plaintiff must allege that “(1) [she] 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 act or omission
prohibited by the FDCPA.” Stewart v. Bierman, 859 F. Supp. 2d 754, 759–60 (D. Md. 2012)
(citations and internal quotation marks and brackets omitted). Relevant to this case, the FDCPA
prohibits a debt collector from using “unfair or unconscionable means to collect or attempt to
collect any debt,” including collecting any amount that is not “expressly authorized by the
agreement creating the debt or permitted by law.” 15 U.S.C. § 1692f(1).
BANA contends that it is not a debt collector. See ECF No. 10-1 at 8. A “debt collector”
is “any person who uses any instrumentality of interstate commerce . . . 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). Here, Plaintiff alleges that BANA is a debt collector because the loan was in
default when it was assigned to BANA. See ECF No. 1 at 24. A mortgage servicer may be a
“debt collector” under the act where it acquires a mortgage in default “solely for the purpose of
facilitating collection of such debt . . . ” 15 U.S.C. § 1692a(4). However, in the circumstances of
this case, BANA is a “creditor” under the FDCPA “because it ‘stepped into the shoes’ of [the
previous creditor] when it began servicing [Plaintiff’s] mortgage . . .” Allen v. Bank of America,
N.A., 933 F.Supp. 2d 716, 729 (D. Md. 2013) (citing Padgett v. OneWest Bank, FSB, 2010 WL
1539839, at *15 (N.D.W.Va. April 19, 2010)). Indeed, Plaintiff’s attempt to discuss loan
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modification with BANA, see ECF No. 1-29, demonstrates that BANA is a creditor and “did not
acquire the mortgage primarily to collect any amount that may have been in default.” See Allen,
933 F.Supp. 2d at 729 (citation omitted). Thus, Plaintiff has failed to state a claim against BANA
under the FDCPA.
McCabe also moves to dismiss Plaintiff’s FDCPA count. McCabe asserts that Plaintiff
has failed to allege that it engaged in any debt collection activity. See ECF No. 14 at 13. Plaintiff
alleges that McCabe represented BANA in Plaintiff’s bankruptcy case where it filed a proof of
claim and motion for relief from the bankruptcy stay. See ECF No. 1 at 20–21. Courts in this
district have found that filing a proof of claim in a bankruptcy case does not constitute an act to
collect a debt. See generally Covert v. LVNV Funding, LLC, 2013 WL 6490318 at *6–8 (D. Md.
Dec. 9, 2013) (collecting cases). Plaintiff has thus failed to allege that McCabe engaged in any
debt collection activity covered by the FDCPA.
E. Unjust Enrichment against BANA
To state a claim for unjust enrichment, a plaintiff must allege that (1) the plaintiff
conferred a benefit on the defendant; (2) the defendant knew and appreciated the benefit; and (3)
under the circumstances, the defendant’s acceptance or retention of the benefit would be
inequitable without paying of value in return. Mona v. Mona Elec. Group, Inc., 934 A.2d 450,
473 (Md. Ct. Spec. App. 2007). “Where a contract exists between the parties covering the same
subject matter as the unjust enrichment claim, however, a plaintiff’s claim for unjust enrichment
must include an allegation of fraud or bad faith in the formation of the contract.” Jones v.
Pohanka Auto North, Inc., 43 F.Supp. 3d 554, 573 (D. Md. 2014) (citing Kwang Dong Pharm.
Co. v. Han, 205 F.Supp.2d 489, 497 (D. Md. 2002); Cnty. Com’rs of Caroline Cnty. v. J. Roland
Dashiell & Sons, Inc., 747 A.2d 600, 608–09 (Md. 2000) (“Generally, courts are hesitant to
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deviate from the principle of the rule and allow unjust enrichment claims only when there is
evidence of fraud or bad faith, there has been a breach of contract or a mutual rescission of the
contract, when rescission is warranted, or when the express contract does not fully address a
subject matter.”)) (emphasis in original). Here, Plaintiff cites to the Deed of Trust to show that
BANA charged inappropriate fees and failed to credit Plaintiff’s account with her payments, and
neither party contends that the Deed of Trust is not a valid contract. See ECF No. 1 at 32–39.
Thus, the Deed of Trust covers the same subject matter as the unjust enrichment claim, and
Plaintiff has failed to allege that there was fraud or bad faith in the formation of the contract.
This claim will be dismissed.
F. Maryland Consumer Protection Act (Unfair and Deceptive Trade Practice Act)
allegations against both BANA & McCabe
Under Maryland law, it is unlawful for a person to use unfair or deceptive trade practices
by means of false or misleading statements in the extension of credit or the collection of
consumer debts. Md. Code, Com. Law §§ 13–301 & 13–303. Because a claim for unfair or
deceptive trade practices under the MCPA sounds in fraud, it is subject to the heightened
pleading standards of Federal Rule of Civil Procedure 9(b). See Haley v. Corcoran, 659
F.Supp.2d 714, 724 n. 10 (D. Md. 2009). Rule 9(b) requires a plaintiff to plead “with
particularity the circumstances constituting fraud.” Fed.R.Civ.P. 9(b). These “circumstances”
include “the time, place, and contents of ... false representations, as well as the identity of the
person making the misrepresentation and what he obtained thereby.” Harrison v. Westinghouse
Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999) (citation and internal quotation marks
omitted). In addition, to assert a claim for false or misleading statements under the MCPA,
Plaintiff must allege that the defendant’s statement caused her an actual loss or injury. See
Citaramanis v. Hallowell, 613 A.2d 964, 967–71 (Md. 1992) (holding that the MCPA explicitly
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requires proof of actual damages). To state a claim under the MCPA, “the consumer must have
suffered an identifiable loss, measured by the amount the consumer spent or lost as a result of his
or her reliance on the sellers’ misrepresentation.” See Lloyd v. General Motors Corp., 916 A.2d
257, 277 (Md. 2007) (citations omitted).
Here, Plaintiff makes several allegations that BANA engaged in acts that do not amount
to false or misleading statements and therefore are not covered under the MCPA. Plaintiff also
alleges that BANA misapplied or failed to apply her payments to her account. See ECF No. 1 at
43. However, Plaintiff fails to allege that she relied on BANA’s representations. She further fails
to identify any loss or injury suffered. Cf. Marchese v. JPMorgan Chase Bank, N.A., 917 F.Supp.
2d 452, 465 (D. Md. 2013). Indeed, Plaintiff alleges that she knows BANA misapplied her
payments. See ECF No. 1 at 43. While Plaintiff may have some claim against BANA for
misapplication of her payments, it does not arise from the MCPA.
Additionally, Plaintiff fails to state a claim against McCabe under the MCPA because
lawyers, acting in their professional capacity, are exempt from the MCPA. See Stewart, 859
F.Supp. 2d at 768 (“Section 13–104 exempts various professional services from the MCPA,
including lawyers.”) (citing Md.Code Ann. Com. Law § 13–104(1)); Robinson v. Fountainhead
Title Group Corp., 447 F.Supp. 2d 478, 490 (D. Md. 2006)).
IV.
CONCLUSION
For the reasons stated above, McCabe’s Motion to Dismiss is GRANTED and BANA’s
Motion to Dismiss is GRANTED, in part, and DENIED, in part.
A separate Order follows.
Dated: August 20, 2015
/S/
GEORGE J. HAZEL
United States District Judge
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