Pitts et al v. Mozilo et al

Filing 31

MEMORANDUM OPINION Signed by Judge George Jarrod Hazel on 8/11/2015. Associated Cases: 8:15-cv-00451-GJH, 8:15-cv-00933-GJH(cags, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT COURT OF MARYLAND
Southern Division
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HERCULES O. PITTS, et al.
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Plaintiffs,
v.
* Case No.: GJH-15-451
Member Case No.: GJH-15-933
ANGELO MOZILO, et al.
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Defendants.
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MEMORANDUM OPINION
Defendants removed this action from the Circuit Court for Prince George’s County,
Maryland (the “Circuit Court”) to this Court on February 18, 2015. See ECF No. 1. Plaintiffs
challenge Defendants’ actions with regard to a loan on a residential property and the ultimate
foreclosure on that property. Defendants have filed motions to dismiss based primarily on failure
to state a claim. See ECF Nos. 12, 16, 22 & 30.1 A hearing on these motions is unnecessary. See
Loc. R. 105.6 (Md.). For the reasons that follow, the motions to dismiss are GRANTED.
I.

BACKGROUND
Plaintiffs bought or refinanced a residential property located at 11609 Bonaventure Drive,

Upper Marlboro, MD 20774 (the “Property”) on November 22, 2006. See ECF No. 16-2. To do
so, Plaintiffs borrowed $704,700.00 from Countrywide Home Loans, Inc. The loan was secured
by a deed of trust against the Property. Id.

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In response, Plaintiffs filed a “Order to Dismiss All Fraudulent Filings on Behalf of the
Defendants and Bar Defendants from Filing any Orders to have Anything Dismissed with
Plaintiffs Name Attached As,” see ECF No. 21, which the Court construes as an opposition to
the motions to dismiss.

A foreclosure was docketed against the Property on July 28, 2014 in the Circuit Court.
See ECF No. 12-2. On October 22, 2014, the Plaintiffs filed a motion to stay the foreclosure,
arguing that their constitutional rights had been violated. See ECF No. 12-2. On October 27,
2014, the Circuit Court denied Plaintiffs’ motion and permitted the foreclosure to proceed. See
ECF No. 12-3. On October 28, 2014, the Property was sold at a public foreclosure auction. See
ECF No. 12-4.
Plaintiffs filed a lawsuit against Defendants on December 16, 2014 in the Circuit Court.2
See ECF No. 1 at 1. Plaintiffs allege that Defendants Angelo Mozilo and Countrywide Home
Loans, Inc. originally provided Plaintiffs with the loan for the Property. See ECF No. 2 at 2.
Plaintiffs assert that Defendant Samuel I. White was a trustee and participated in the
securitization of Plaintiffs’ loan. See id. Plaintiffs further allege that Defendants Bank of
America, NA; Laurel H.G. O’Sullivan; McCabe, Weisberg & Conway; Specialize Loan
Servicing, LLC; and Bank of New York Mellon were involved in the improper securitization of
Plaintiffs’ loan. See id. Plaintiffs also claim there are other potential defendants whom Plaintiffs
cannot yet identify. See id. at 3.
Plaintiffs’ lawsuit disputes that Defendants own the title and deed of trust to the Property.
See ECF No. 2 at 3–7. Plaintiffs suggest that Defendants violated laws and committed fraud in
the original loan transaction and subsequent securitization of the loan. See id. Further, Plaintiffs
believe Defendants have assigned the title and deed of trust and, therefore, did not have the right
to foreclose on the property and owe Plaintiffs monetary damages. See id. Plaintiffs claim
Defendants’ actions constitute violations of the Truth in Lending Act (“TlLA”) and the Real
2

This case was removed on February 18, 2015. See ECF No. 1. Plaintiffs then filed a subsequent
case in this Court against the same parties, making the same allegations. That case was
consolidated with this case. See Pitts, et al. v. Mozilo, et al., GJH-15-933, ECF No. 23. Thus, the
Court’s analysis and decisions are applicable to both cases.
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Estate Settlement Procedures Act (“RESPA”), fraud, intentional infliction of emotional distress,
and slander of title. Plaintiffs assert that due to Defendants’ violations of these laws, Defendants
lacked standing to foreclose on the Property and Plaintiffs are entitled to quiet title of the
property, a declaration that Defendants do not have an interest in the Property, a rescission of the
loan, and monetary damages. See id. at 8–16.
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).
“When it appears on the face of the complaint that the limitation period has run, a defendant may
properly assert a limitations defense through a Rule 12(b)(6) motion to dismiss.” See Miller v.
Pac. Shore Funding, 224 F.Supp. 2d 977, 985 (D. Md. 2002), aff’d, 92 F. Appx. 933 (4th Cir.
2004); see also Dean v. Pilgrim’s Pride Corp., 395 F.3d 471, 474 (4th Cir. 2005) (“The raising
of the statute of limitations as a bar to plaintiffs’ cause of action constitutes an affirmative
defense and may be raised by motion pursuant to Fed. R. Civ. P. 12(b)(6), if the time bar is
apparent on the face of the complaint.”).
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

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obligation to 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). Self-represented litigants’ 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 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. TILA
Plaintiffs assert that Defendants violated TILA “by failing to provide Plaintiffs with

accurate material disclosures required under TILA and not taking into account the intent of the
State legislature in approving this status which was to fully inform home buyers of the pros and

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cons of adjustable rate mortgage[s] in a language both written and spoken that they understand
and comprehend; and advise them to compare similar loan products with other lender[s.]” ECF
No. 2 at 12. According to Plaintiffs, Defendants also failed to “offer other loan products that
might be more [advantageous] for the borrower under the same qualifying matrix.” Id.
In adopting TILA, Congress declared that “[i]t is the purpose of this subchapter 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.” 15
U.S.C. § 1601(a). As such, TILA requires that a creditor make certain material disclosures at the
time the loan is made. Id. § 1638(a). TILA is subject to a limitations period of one year from the
date of closing for all claims for money damages. 15 U.S.C. § 1640(e); Davis v. Edgemere
Finance Co., 523 F.Supp. 1121, 1123 (D. Md. 1981). A rescission claim under TILA must be
brought within three years of the loan closing. 15 U.S.C. § 1635(f); Davis, 523 F.Supp. at 1124.
Under either limitations period, Plaintiffs’ claims were filed in 2014 and arise from a 2006 loan
closing. Thus, on the face of the complaint, they are barred by limitations and are DISMISSED.
Jesinoski v. Countrywide Home Loans, Inc., 135 S.Ct. 790, 792 (2015).3

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While Plaintiffs assert that the statute of limitations should be tolled due to Defendants “failure
to effectively provide the required disclosures and notice,” see ECF No. 2 at 12, the Fourth
Circuit has previously outlined the narrow circumstances under which equitable tolling has been
permitted:
Equitable tolling has been allowed in situations where the claimant
has actively pursued his judicial remedies by filing a defective
pleading during the statutory period, or where the complainant has
been induced or tricked by his adversary's misconduct into
allowing the filing deadline to pass. We have also recognized that
equitable tolling is appropriate when extraordinary circumstances
beyond plaintiffs' control made it impossible to file the claims on
time. Equitable tolling is not appropriate, however, where the
claimant failed to exercise due diligence in preserving his legal
rights.
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B. RESPA
Plaintiffs assert that Defendants violated RESPA because they did not provide “separate
fee agreements regarding the use of Country Wide Home Loan, Inc. as the [i]ndex for basis of
loan, [d]isclosures of additional income due to interest rate increases[,] or the proper form and
procedure in relation to the [b]orrower’s [r]ight to [c]ancel.” ECF No. 2 at 12. Plaintiffs also
contend that the “payments between the Defendants were misleading and designed to create a
windfall.” Id.
Congress enacted RESPA to “insure that consumers . . . are provided with greater and
more timely information on the nature and costs of the settlement process and are protected from
unnecessarily high settlement charges caused by certain abusive practices . . . .” 12 U.S.C. §
2601. A RESPA claim brought by a private litigant must be brought within either one or three
years from the date of the occurrence of the violation, depending on the type of violation. See 12
U.S.C. § 2614. The limitations period begins to run “from the date of the occurrence of the
violation,” which generally refers to the date of closing for loan origination violations. Brown v.
Wilmington Fin., No. CCB–11–699, 2012 WL 975541, at *4 (D. Md. Mar. 21, 2012) (citation
omitted).
Plaintiffs’ RESPA claim references fees and fee splitting, which is discussed under 12
U.S.C. § 2607 and subject to a one-year limitations period. See 12 U.S.C. § 2614. Nonetheless,
applying either a one-year or three-year limitations period, Plaintiffs filed this action eight years

Chao v. Va. DOT, 291 F.3d 276, 283 (4th Cir. 2002). “For the court to find the TILA and
RESPA statutes equitably tolled . . . the plaintiff must have properly alleged both fraudulent
concealment on the part of the defendants and the inability of the plaintiffs, despite due
diligence, to discover the fraud.” Brown v. Wilmington Fin., No. CCB–11–699, 2012 WL
975541, at *4 (D. Md. Mar. 21, 2012) (citing Kerby v. Mortg. Funding Corp., 992 F.Supp. 787,
797 (D. Md. 1998)) (additional citation omitted). Here, Plaintiffs have failed to allege facts
sufficient to show that equitable tolling would be applicable in this case.
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after the closing date. Thus, the RESPA claim is DISMISSED as barred by the statute of
limitations.
C. Fraud in the concealment and fraud in the inducement
Plaintiffs allege that “Defendants concealed the fact that the [l]oan [was] securitized . . .
financial incentives paid . . . [the] existence of [c]redit [e]nhancement [a]greements and . . . [the]
existence of acquisition provisions.” See ECF No. 2 at 9. The statute of limitations for a civil
action under Maryland law is three years from the date it accrues. See Maryland Code, Courts
and Judicial Proceedings Article (“CJP”) § 5-101. Notably, this period can be extended if there is
ignorance of the cause of action induced by fraud. In that case, “the cause of action shall be
deemed to accrue at the time when the party discovered, or by exercise of ordinary diligence
should have discovered the fraud.” See CJP § 5-203. Here, Plaintiffs have not even suggested
that they were unable to discover the fraud within three years of the loan closing in 2006 (the
action giving rise to their claim). See Doe v. Archdiocese of Wash., 689 A.2d 634, 643 (Md. Ct.
Spec. App. 1997) (“the complaint relying on the fraudulent concealment must also contain
specific allegations of how the fraud kept plaintiff in ignorance of a cause of action, how the
fraud was discovered, and why there was a delay in discovering the fraud, despite plaintiff’s
diligence.”) (citations omitted). Plaintiffs’ fraud claims are DISMISSED as barred by the statute
of limitations.
D. Intentional infliction of emotional distress
Plaintiffs allege that Defendants have “threatened [Plaintiffs] with the loss of the
Property.” See ECF No. 2 at 9–10. In Maryland, to state a claim for intentional infliction of
emotional distress, the plaintiff must allege that the defendant intentionally or recklessly engaged
in extreme and outrageous conduct, and the wrongful conduct caused the plaintiff severe

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emotional distress. See Takacs v. Fiore, 473 F.Supp. 2d 647, 651–52 (D. Md. 2007) (citation
omitted). “IIED [(Intentional infliction of emotional distress)] claims are rarely viable in a case
brought under Maryland law.” Id. at 652 (citation and internal quotation marks omitted). Here,
Plaintiffs have failed to allege that they have been caused severe emotional distress. Further,
threatening Plaintiffs with the loss of property does not qualify as extreme or outrageous conduct
under Maryland tort law. See Ayers v. Ocwen Loan Servicing, LLC, WDQ-13-1597, 2014 WL
4269051 at * 9 (D. Md. Aug. 27, 2014) (granting motion to dismiss where threatening
foreclosure not so extreme and outrageous as to be actionable under Maryland law); Hamilton v.
Ford Motor Credit Co., 502 A.2d 1057, 1064 (Md. Ct. Spec. App. 1986) (conduct was not
extreme or outrageous when defendants harassed the plaintiff with repeated calls in connection
with debt collection). Plaintiffs’ intentional infliction of emotional distress claim is DISMISSED
for failure to state a claim.
E. Slander of Title
Plaintiffs assert that the “Notice of Default, Notice of Trustee’s Sale, and Trustee’s
Deed” disparaged Plaintiffs’ valid title. See ECF No. 2 at 10. Plaintiff allege that Defendants
published these documents while knowing that “Defendants had no right, title[,] or interest in the
Property.” Id. Plaintiffs allege that Defendants published these documents to injure Plaintiffs and
obtain the Property unlawfully. Id. “To support a claim for slander of title, a plaintiff must plead
facts sufficient to show (1) a false statement, (2) that the false statement was communicated to
someone else (publication), (3) malice, and (4) special damages.” Rounds v. Maryland-Nat.
Capital Park and Planning Comm’n, 109 A.3d 639, 663–64 (Md. 2015) (citing Beane v.
McMullen, 291 A.2d 37, 49 (Md. 1972) (additional citations omitted). Here, as in Simmons v.
Bank of America, N.A., PJM-13-0733, 2014 WL 509386 at *5 (D. Md. Feb. 6, 2014),

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“[Plaintiffs] fail[] to allege what publication [they] believe[] is false, which of one or more of
Defendants created the supposedly false publication, or whether such publication played ‘a
material and substantial part’ in causing ‘special damage’ to [them].” Further, “[d]ominating
everything else, of course, is the fact that the Deed of Trust gives the mortgagee or assignee the
right to foreclose on the Property.” Id. Thus, the Notice of Default or Notice of Foreclosure sent
to Plaintiffs could hardly be false.4 See id; see also ECF NO. 16-3. This claim is DISMISSED.
F. Quiet Title
“[T]o state a successful quiet title action, the plaintiff must show his claim to title and
allege an invalid or defective adverse interest.” Koehler v. Wells Fargo Bank, 2011 WL 691583
at *4 (D. Md. Feb.18, 2011). In dismissing plaintiff’s quiet title action in Koehler, the court
stated that since “the plaintiff admits he received and defaulted on a mortgage from the
defendant, and conveyed the deed of trust, the quiet title action should be dismissed if the
plaintiff has not shown a right to rescission of the mortgage.” Id. at *13. Here, the Plaintiffs
admit that they entered into the mortgage but have not properly pled or demonstrated a right to
rescission of their mortgage. See ECF No. 12-4. Indeed, the Property has been sold so Plaintiff
cannot show they have a claim to the title. The action for quiet title is therefore DISMISSED.
G. Lack of Standing to Foreclosure
Plaintiffs contend that Defendants lacked standing to foreclose on the Property. See ECF

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The Rooker–Feldman likely serves as an additional bar to this Court’s ability to find in
Plaintiffs’ favor on this claim. The Rooker–Feldman doctrine bars “lower federal courts from
considering not only issues raised and decided in the state courts, but also issues that are
‘inextricably intertwined’ with the issues that were before the state court.” Washington v.
Wilmore, 407 F.3d 274, 279 (4th Cir. 2005) (quoting District of Columbia Court of Appeals v.
Feldman, 460 U .S. 462, 486 (1983)). Here, the state court foreclosure proceeding’s records
demonstrate that Plaintiffs challenged the foreclosure process. See ECF No. 12-2. Nevertheless,
the Property was sold at a foreclosure sale and the Circuit Court ratified the sale. Thus, this court
has no authority to consider allegations related to the propriety of that sale.
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No. 2 at 8. “After confronting this precise issue on multiple occasions, courts in this district have
repeatedly concluded that a claim for lack of standing is not viable where a defendant has not
sought affirmative relief.” Heaney v. Quicken Loans, Inc., JFM-14-1002, 2014 WL 4686682 at
*3 (D. Md. Sept. 16, 2014) (citing Simmons.,2014 WL 509386 at *3) (other citations omitted).
Here, Defendants are simply defending a suit brought against them and this claim fails to state a
claim.
H. Declaratory Relief and Rescission
Plaintiffs have failed to state a claim for any of the claims discussed above and thus fail
to show that they are entitled to relief of any kind, including declaratory relief or rescission.
Also, under the doctrine of res judicata, “a judgment between the same parties and their privies
is a final bar to any other suit upon the same cause of action and is conclusive, not only as to all
matters decided in the original suit, but also as to matters that could have been litigated in the
original suit.” Colandrea v. Wilde Lake Cmty. Ass’n, Inc., 761 A.2d 899, 910 (Md. 2000) (citing
Lockett v. West, 914 F.Supp. 1229 (D. Md. 1995)) (additional citations omitted) (emphasis
omitted). Thus, because the Circuit Court permitted foreclosure over Plaintiffs’ objection and
ratified the sale, res judicata would be an additional bar to Plaintiffs’ request for declaratory
relief that Defendants did not have the right to foreclosure and request for rescission of the loan.
Even if these claims were not otherwise dismissed, the Anti-Injunction Act, 28 U.S.C.§
2283, would serve as yet another bar to these forms of relief as it bars federal courts from
enjoining state court proceedings. See Tucker v. Specialized Loan Servicing, LLC, -- F.Supp. 3d -, PWG-14-813, 2015 WL 452285 *2 (D. Md. Feb. 3, 2015). Where injunctive relief is barred,
declaratory relief that would have the same effect is barred. Id. (citations omitted).

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IV.

CONCLUSION
For the reasons discussed above, the Court GRANTS Defendants’ motions to dismiss.

Plaintiffs’ claims are dismissed with prejudice.
A separate Order follows.

Dated: August 11, 2015

/S/
George Jarrod Hazel
United States District Judge

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