Walsh v. Bank of New York Mellon et al
MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 1/19/2017. (kns, Deputy Clerk)(c/m 1/19/17)
IN TilE UNITED STATES J)ISTRICT COURT
FOR THE DISTRICT OF MARYLAND
GREGORY.1. WALSH and
Case No.: G,JH-15-0093.t
BANK OF NEW YORK MELLON,
Plaintiffs Gregory Walsh and Christina Walsh (collectively. "Plaintitrs") bring this action
against Bank of New York Mellon. N.A. ("BNY Mellon"). Select Portfolio Servicing. Inc.
("SI'S"). MERSCORP. Inc. ("MERSCORP"). and.ll' Morgan Chasc Bank. N.A. ("Chasc")
(collcctivcly. "Defcndants") alleging violations of the Truth in Lcnding Act. 15 U.S.c. ~ 1601 1'1
seq. and various state common law claims. In thc Court's previous Mcmorandum Opinion datcd
March 25. 2016. the Court granted Dcfendants' Motions to Dismiss. ECF Nos. 5. 6. and 16. but
allowed Mr. Walsh to amcnd his Complaint. ECF No. 27. Mr. Walsh added his wifc Christina
Walsh as a plaintitI and Plaintiffs tilcd an Amcndcd Complaint on April 8.2016. Now pending
before the Court is Dcfendant Chasc's Motion to Dismiss. ECF No. 30. Defendant MERSCORP
Holdings. Inc.'sl Motion to Dismiss. ECF No. 35. and Dcfcndants BNY Mcllon and SI'S's
Motion to Dismiss. ECF No. 36. No hcaring is ncccssary. See Loc. R. 105.6 (D. Md.). For thc
following reasons. Dcfcndants' Motions to Dismiss arc grantcd.
In Defendant MERSCORP Holdings. Inc.'s Motion to Dismiss. MERSCORP Holdings. Inc. notes that the entity
formally known as "Merscorp. Inc:' is I1m"'- knO\vn as "MERSCORP Holdings. Inc,'" ECF No. 35.
The facts of this casc wcrc sct forth in the Court's earlier Mcmorandum Opinion. ECF
No. 27 at 1_2.2 On Novcmber 12, 2004, Gregory and Christina Walsh purchased thc propcrty
located at 8913 56th Avenue, Collcgc Park, Maryland 20740 (the "Propcrty") for $340.000. See
ECF No. 1 ~ 13: ECF No. 5-7 at 1.-' Plaintiffs obtaincd two mortgagc loans for the Propcrty li'om
Grcenpoint Mortgagc Funding Corp. ("Greenpoint" or the "Lcndcr"), an entity that is now
dcfunct. ECF No. I ~~ 15-18. Thc mortgagcs wcrc secured by a Dced of Trust (thc "Deed of
Trust"") naming Mortgage Electronic Registration Systems, Inc. C'MERS")
as the bcncliciary of
the Deed and thc nominee "for Lcnder and Lender's successors and assigns:' ECF No. 5-8 at 2.
Plaintiffs conveyed the Property "in fee simple absolute" to the 56th Avenue Family Holding and
Improvement Trust on May 27. 2005. ECF No. 5-2 at 1. According to Prince Gcorgc's County
land records datcd May 26, 2015, the 56th Avenue Family Ilolding and Improvcmcnt Trust is the
current owner of the Property. ECF No. 5-3 at 1.
On June 8, 2012, MERS, as "Nominec for Greenpoint Mortgage Funding, Inc.. its
Successors and Assigns:' signed an Assignment of Decd of Trust (the "AssignmenC) conveying
the Deed of Trust to the "Bank of New York, as Successor-in-Intcrest to.ll' Morgan Chase
Bank:' ECF No. 35-3 at 1.; This Assignmcnt was signcd by two individuals, Iquisha Criffand
Ashley Clegg, purportcdly as "Vice Presidents" of MERS. Id. Much of this dispute has centered
Pin cites to documents filed 011 the Court"s electronic tiling system (CM/ECF) refer to the page numbers generated
by that system .
. In addressing a Motion to DisJ11
iss. the Court may "properly taken judicial notice of mailers of public record." such
as land records. and may consider documents attached to the Motion(s) to Dismiss. "50 long as they arc integral to
the complaint and authentic." Phi/ips \'. Pill. 0)". Melli. Hosp .. 572 F.3d 176, 180 (4th Cir. 2009).
I Pursuant to Fed. R. Civ. P. 7.1 and Local Rule 103.3, Defendant MERSCORP
Holdings. Inc. suhmiued a
Disclosure of Corporate Affiliates. ECF NO.9. and an Amended Disclosure of Corporate Affiliates, ECF No. 41.
stating that "Mortgage Electronic Registration Systems, Inc. C'MERS") is a wholly o\'med subsidiary of
MERSCORP Holdings." ECF NO.9 at I; ECF No. 41 at I. The disclosure funher slates that "Itjhis defendant
believes that Plaintiff intended to name MERS as defendant and thus it would have a financial interest in the
The Assignment of Deed of Trust was recorded on July 14, 2012. ECF No. 35-3 at 12.
on the authenticity
of these signatures
of various Defendants
and the validity of the Assignment.
and therefore the
to enforce the Deed of Trust.
ECF No. I. the Court analyzed the claims as
ones of fraud and quiet title. ECF No. 27 at 2. The Court held in its earlier Memorandum
that PlaintifT did not plead his claims of Iraud with particularity,
to specify which Defendants
forged the signatures
of the fraud.
as to which claims were asselted
Iii. The Court thus dismissed PlaintilTs claims. but allowed bim time to submit an
ECF No. 27 at 8.
under the Truth in Lending Act. IS U.S.c.
(Count 11), common
under the Uniform Commercial
also request "declaratory
to stop foreclosure
they bring this suit as a "class action:'
on April 8.2016.
and now assert claims
~ 1601 el seq. (Count I). breach of fiduciary duty
law Irmld and intentional
as he was not an actual party
Iii. at 7. Finally. the Court held that the Plaintiff failed to plead his injury with
specific facts and did not provide proper notice to Defendants
Iii. at 6. Plaintiff
because he was neither the record owner of the Property. nor a party or beneliciary
to the Assignment.
and failed to
Iii. The Court also held that Plaintiff did not have standing to challenge the
to the Assignment.
on the Assignment
as to the circumstances
further failed to show how he relied on such fraudulent
because Plaintiff failed
distrcss (Count Ill). and
Code ~ 3.501 (Count IV). ECF No.
relief in the nature of an order of cease and
iel. at 28. The majority of Plaintitl's'
or lack thereof to effectuate
Plaintiff's contend that ..the signer ol'the Assignment
iii. at I. and that
of Deed of Trust.
appears to be an employee
Chase Bank. NA and not a MERS executive. as alleged:' ECF No. 29 at 19. Plaintiffs allege that
"in court proceedings MERS has publicly disavowed any ownership interest in mortgage notes"
and ..there is no power of attorneys from the lenders giving MERS authority to assign the
mortgages or deeds of trust:' Id at 8-9. Plaintiffs further claim that "MERS does not have a
surticient agency relationship with the lender [Greenpointr
and "there is no agreement in
writing. as required by the Maryland Statute of Frauds. between MERS and Greenpoint:' Id at
10. Plaintiffs argue that "MERS never owned the note and had no right to payments made on the
note:' Id. at II. PlaintifTs also make allegations relating to their obligations to pay on the
mortgage loans. Specifically. they argue that because BNY Mellon and Chase do not have the
original note in their possession. but rather a scanned copy. there is no chain of title from the
Lender to Defendants. and BNY Mellon and Chase cannot enforce the note. Id at 20.
lJefendant Chase submitted a Motion to Dismiss on April 26. 2016. ECF No. 30.
Defendant MERSCORP filed a Motion to Dismiss on May II. 2016. ECF No. 35. Defendants
BNY Mellon and SPS also submitted their Motion to Dismiss on May 11.2016. ECF No. 36.
The Court sent letters describing Plaintiffs' rights under Fed. R. Civ. P. 12 and 56 to Plaintiffs on
April 27. 2016 and May 12. 2016. As of January 9. 2017. Plaintiffs have not filed a Response to
any of Defendants' Motions to Dismiss. Upon review of the relevant pleadings. the Court will
now dismiss Plaintiffs' Amended Complaint with prejudice.
"A defendant may test the adequacy of a complaint by way of a motion to dismiss under
Rule 12(b)(6):' /vlailell
!Jank of Am .. N.II .. No. 12-CV -508. 2012 WL 1744536. at *4 (D. Md.
May 14.2012) (citing German
Fox. 267 F. App'x 231. 233 (4th Cir. 2008)). To overcome a
Rule 12(b)(6) motion. a complaint must allege enough facts to state a plausible claim for rclief.
Ashcr()fi \'. Iqhal. 556 U.S. 662. 678 (2009). A claim is plausible when "the plaintilTpleads
factual contcnt that allows the Court to draw the reasonable inlerence that thc defendant is liable
fi.)rthe misconduct alleged:' Ill.
In evaluating the sufficiency of the Plaintiffs' claims. the Court accepts factual
allegations in the Complaint as true and construes the factual allegations in the light most
favorable to the plaintin~ Alhright \'. ()/il'er. 510 U.S. 266. 268 (1994): I.alllheth
01' Da\'id.l'O/1 0)'.. 407
FJd 266. 268 (4th Cir. 2005). Complaints liled by pro se
plaintifTs. as here. are ..to be liberally construed" and "must be held to less stringent standards
than lonnal pleadings dralied by lawyers:' Erickso/1 \'. !'ardlls. 551 U.S. 89.94 (2007).
However. the Complaint must contain more than "legal conclusions. clements of a cause of
action. and bare assertions devoid of further factual enhancement." Nelllet Chel'rolet. Ltd \'.
l/1c.. 591 F.3d 250. 255 (4th Cir. 2009).
Further. in claims "alleging fraud or mistake. a party must state with particularity the
circumstances constituting fraud or mistake:' Fed. R. Civ. P. 9(b). Rule 9(b) requires "that a
plainti ITalleging fraud must make particular allegations of the time. place. speaker. and contents
of the allegedly I[llse acts or statements:' Adallls
(D. Md. 2000):
u.s. ex rei.
NVR HOllies. l/1c.. 193 F.R.D. 243. 249-50
Wilso/1 \'. Kel/og}!. BrowlI & Root. l/1c.. 525 F.3d 370. 379 (4th Cir.
2008) (describing the "who. what. when. where. and how of the fraud claim"). "Even where a
plaintiffis proceeding pro se. the particularity requirements of Rule 9(b) apply:' COliliha}' \'. .I.!'.
Mor}!.a/1 Chase Ba/1k. N.A .. No. DKC 10-3517.2011 WL 3476994. at *19n.23 (D.Md. Aug. 8.
A. Violations of Truth in Lending Act ("T1LA")
Plaintiffs first assert violations of TIL A against Defendants SPS and BNY Mellon. and
allege that they "eanmake a claim in recoupment pursuant to 15 U.S.c. ~~ 164I(a) and 1641(d)
and 1635(i):' the provisilins of which govern the liability of mortgage assignees. Eel' No. 29 at
31. Plaintiffs also claim that ..the 56th Avenue loan failed the TILA Iinanee charge tesC and
"failed the Good Faith Estimate Disclosure date test:' fd at 32-33.
Defendant SPS. as a loan "servicer:' is not subject to assignee liability under TILA.
"TILA 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 .... /Vard \'. Brallch Ballkill}!. & Trust Co .. No. CIV.A. ELH-13-0 196&.2014 WL
270776&. at * I0 (D. Md. June 13. 2014 ) (citing IS lJ.S.c. ~ 1641(1)(I »: see a/so Sail \'. /Veils
Fargo Balik. iVA .. 2012 WL 5463027. at *4 (D. Md. Nov. 7.2012) ("Generally. a servicer ofa
mortgage loan that is not an assignee or owner of the loan has no liability for alleged violations
of TIL A."). "[Olnly creditors and their assignees-and
interest in the loan-may
not mere servicers lacking ownership
be held liable under the TILA:' /Vard. 2014 WL 270776&. at * IO.
Because Plaintiffs allege no f(lcts indicating that SPS was the owner of the loan. Count I is
dismissed as to Defendant SPS. Hence. only Plaintiffs' claims against Defendant BNY Mellon
must be addressed.
Regarding Plaintiffs claims against Defendant BNY Mellon. to the extent Plaintiff
makes claims regarding the original transaction or origination of the loan in 2005. such claims
arc clearly time-barred by the applicable statute of limitations. IS lJ.S.c. ~ 1640 provides that
"any action under this section may be brought in any United States district court. or in any other
court of competent jurisdiction. within one year from the date of the occurrence of the violation:'
~ 1640(e). As Plainti ffs brought these claims in 2015 at the earliest. see ECF No. I. they are
With respect to the Assignment of Deed of Trust in June 01'2012. Plaintiffs lail to state a
legally cognizable claim for mulliplc reasons. Notwithstanding the fact that this claim is also
barred by the one-year statute of limitations. as the Court previously hcld ... the land records
indicate that Plaintiff is no longer the owner of the property:' ECF No. 27 at 6 (citing ECF No.
5-2: ECF No. 5-3). Even if Plaintiffs were the owner of the Property. they would not have
standing to challenge the validity of the Assignment. as they were not parties to the contract. See
IVa/son \'. Bank II/America. N.A .. No. PJM 14-1335.2015 WL 1517405 (D. Md. March 30,
2015) ("Generally speaking. an obligor under a contract. including a mortgagor contract. Jacks
standing to challenge the assignment of the underlying obligations by the oblige to a thirdparty."): see also .!amheri \'. .!I'Mol'gan Chase Bank. N.A .. NO.2: 1O-CY-08185-0DW. 2012 WL
3426278, at *6 (C.D. Cal. Aug. 13.2012).
aii'd, 561 F. App'x
611 (9th Cir. 2014) (finding the
Plaintiff lacked standing to challenge a Substitution of Trustee assignment that was allegedly
Plaintiffs' claims in Count I are therefore dismissed.
B. Breach of Fiduciary
Plaintiffs next allege "breach of fiduciary duty:' ECF No. 29 at 36. Although Plaintiffs
bring these claims "against all Defendants:' all of their lactual allegations describe actions taken
by the original lender. Greenpoint Mortgage Funding. Inc. ld. at 36-37. For example. Plaintiffs
state that "Greenpoint Mortgage Funding violated its fiduciary duties by ... failing to disclose
alternative. less costly options. as well as the risks inherent in increasing the secured interest in
Greg Walsh and his wife Christina's residence:' ld. at 37. Plaintiffs argue that Greenpoint had a
duty to ensure that they understood the [loan] documents and breached this duty by failing to
reasonably explain the documents. lei.
The Amended Complaint fails to correct the flaws noted by the Court in its original
Opinion. Specilically. Plaintiffs have failed to "provide notice to Defendants regarding what
claims are individually alleged against them:' or as relevant here. how the alleged actions by
Greenpoint arc atlributable to Defendants BNY Mellon. Chase. SPS. and MERSCORP Holdings.
5;ee Baglrelll'. Dillion. NO.1 :14-cv-495. 2015 WL 2374614. at * 7 (M.D.N.C. May 18.2015)
(noting that "[uJnder Rule 8(a). grouping multiple defendants together in a broad allegation is
insufficient to provide the defendants with fair notice of the claims against them and the grounds
for relief.") (quoting A/elegrilo
CiliA/orlgage Inc.. No. C 11-01765 LB. 2011 WL 2197534. at
*6 (N.D. Cal. June 6. 2011 ). As evident
the face of Amended Complaint. all the
allegations relating to breach of Iiduciary duty relate to Greenpoint Mortgage Funding. And even
if the actions by Greenpoint could be atlributed to the other Defendants. such claims are timebarred -
as they concern the origination of the loan. which as discussed. took place in 2004.
Plaintiffs have not provided any reason. as they have not responded to Defendants' Motions to
Dismiss. why such claims arc not barred by the applicable statute of limitations.
Moreover. as the Fourth Circuit has noted. "banks typically do not have a liduciary duty
to their customers:' Spaulding \'. /Veils Fargo Bank. N.A .. 714 F.3d 769. 778-79 (4th Cir. 2013) .
..It is well established that .the relationship of a bank to its customer in a loan transaction is
ordinarily a contractual relationship between debtor and creditor and is not liduciary in nature:'
lei. (quoting Kuechler \', Peoples Bank. 602 F. Supp. 2d 625. 633 (D. Md. 2009». "Courts have
been exceedingly reluctant to lind special circumstances sufficient to transform an ordinary
contractual relationship between a bank and its customer into a Iiduciary relationship or to
impose any duties on the bank not found in the loan agreement:' Id. (citing Parker \'. Calumhia
Balik. 91 Md. App. 346. 604 (1992)). The Maryland Coul1 of Spccial Appcals has dcscribed only
four spccial circumstances whcre a lender may become a tiduciary for the borrower. Polek \'. ./.1'.
iv/orgall Chase Balik. N.A .. 424 Md. 333. 366 (Md. 2012) (citing Parker
Columhia Balik. 91
Md. App. 346 (Md. Ct. Spec. App. 1992)). These special circumstances exist where the lender:
"( I) took on any extra services on behalf of [the borrowers] other than furnishing ... money ... :
(2) received a greater economic benclit Irom the transaction othcr than the normal mortgage: (3)
exercised extensive control ... : or (4) was asked by [the borrowers] if there were any lien
actions pending:' Id. Plaintiffs have pleaded no facts to this effect. and therefore have failed to
state a claim that any of the Defendants breached a tidueiary duty owed to them. Count II is
C. Common Law Fraud and Intentional
Infliction of Emotionall)istress
Plaintiffs next bring claims of common law traud and intentional intliction of emotional
distress "against all Defendants:'
ECF No. 29 at 38. Plaintiffs' deficiencies here arc similar to
the deticiencies in the original Complaint. Plaintiffs allege that the entities "Greenpoint
Mortgage Funding. Inc:' and "Total Mortgage Services" acted in "bad faith" and "intended to
dcceive Gregory and Christina Walsh" by making "false and misleading representations and
omissions of material facts:' ECF No. 29 at 38. Plaintiffs further state that "Sclect Portfolio
Servicers. Inc. failed and refused to idcntify the actual lender and assignee of the loan:' and
Plaintiffs "relied upon [the identity of the assignee] as accurate:' thus suffering economic and
emotional damages. Id at 39. Considering Plaintiffs' Amended Complaint as a whole. Plaintill's
also secm to allege that the other Defendants are liable for fraud lor the purportedly forged
signatures on the Assignment of the Deed of Trust. See. e.g. ECF No. 29 at 12-13. 19.
To state a claim for fraud. a plaintiff must show: "(I) a false representation. (2) of
material fact. (3) made intentionally and knowingly. (4) with intent to mislead. (5) reliance by
the party misled. and (6) resulting damage to the party misled:' Wolf'\'. Feel. Nal. lv!orlg Ass '11.
512 F. App'x 336. 343 (4th Cir. 2(13). As with any other claim, the Court is "not bound to
accept as true a legal conclusion couched as a factual allegation." I'apasall\'.
Allaill. 478 U.S.
265 (1986). Here. while Plainti ITsmake conclusory statements of reliance and injury. they have
not shown how they relied on documents. such as the Assignment of Deed of Trust. nor shown
how such documents caused them harm. See lVii/is \'. Balik of Am. Corp .. No. CIV.A. ELH-1302615.2014
WL 3829520. at *20 (D. Md. Aug. I. 2014) (dismissing fraud claim where
"plaintiff does not allege any lacts to show that he justifiably rel ied on the alleged robo-signing
of foreclosure documents" and did not allege "facts to show he suffered a compensable injury
proximately caused by defendants' use of documents:').
Even assuming that the signatures on
the Assignment were lorged or otherwise invalid. PlaintilTs have not disputed ..the accuracy of
any of the salient laets. such as the amount owed or the amount in delault:. lei. at *21.
To succeed on a claim of intentional inlliction of cmotional distress. plaintiffs must
demonstrate (I) intcntional or reckless conduct that is (2) outrageous and extreme and (3)
causally connected to (4) extreme emotional distress. See Caldor,
BOIl'dell, 330 Md, 632.
641-42 (1993). Just as in Sll!\l'l1rl \'. Biermall. 859 F. Supp. 2d 754, 767 n.7 (D, Md. 2012).
Plaintiffs' "Amended Complaint contains only conclusory statements that the foreclosure process
has caused mental anguish:' While the Court is sympathetic that ..the loss of a person!, Is
residence is a traumatic event:' ECF No, 29 at 7. Plaintiffs' Amended Complaint lails to state a
legally cognizable claim for intentional inlliction of emotional distress. Therefore. Plaintiffs'
claims under Count III are dismissed,
D. C:tnccllation of Instrumcnts Undcr U.e.e.
Finally. Plaintiff asks the Court to "cancer' the June 8. 2012 Assignment of Mortgage
"because the original lender was not in business at the time that this assignment was signed and
recorded." ECF No. 29 at 40. Plaintiffs argue that because of this circumstance. "Defendants.
especially the Bank of New York Mellon. NA do not have an enforceable interest in the notes
and deeds of trust for the subject property" Id.
"Because the U.c.e. is a model code. it has no legal effect in and of itself. However. it
has been codified in Maryland as the Commercial Law." Quattlehaul1I \'. Balik olAIII.. NA .. No.
ClV.A. TDC-14-2688. 2015 WL 1085707. at *7 (D. Md. Mar. 10.2(15). Therefore the Court
will construe Plaintitl's' claim under the U.e.e. "as a state law claim made pursuant to
* 3-501. which is identical to the U.C.e.
Code .. Com. Law * 3-50 I provides in relevant part:
provision in all respects."Id.
Upon demand of the person to whom presentment is made. the
person making presentment must (i) exhibit the instrument. (ii)
give reasonable identilieation and. if presentment is made on
behal f of another person. reasonable evidence of authority to do so.
and (iii) sign a receipt on the instrument for any payment made or
surrender the instrument if full payment is made.
Md. Code. Com. Law
thus appear to claim that because Bank of
America cannot produce the "original note." ECF No. 29 at 16. it lacks the authority to enf()rce
the note. However. courts in this jurisdiction "have ... repeatedly rejected this 'show me the
note' argument:" Quattlehaul1I. 2015 WI. 1085707. at *5: see also .folies \'. Balik (!fN
No. DKC-13-3005. 2014 WL 3778685. at *4 (D. Md. July 29. 2014): flarris
Fillallce COIl) .. RWT-14-606. 2014 WL 3571981. at *2 (D. Md . .July 18.2014) (finding that
..there is no recognizable claim" that a mortgagor must produce "wet ink" signature documents
in order for a mortgage to be valid).
Additionally. under Maryland law... the right to enforce the deed of trust automatically
follows the note. making the two inseparable:' Quott/ehoulI1. 2015 WL 1085707. at *5. Thus. the
title to any promissory or mortgage note. "conclusively is presumed to be vested in the person
holding the record title to the mortgage:' Id. Accordingly. when BNY Mellon's assignment to
the Deed of Trust was recorded on July 24. 2012. BNY Mellon was presumed to have the right to
enli.)rce the note attached to that Deed of Trust. See id."
As a linal basis ti.)rdismissal of this e1aim. when a note is transferred it "carries with it
the security provided by the [corresponding
of trust:' Mahl}' \'. MERS, No. CIV.A. WMN-
WL 5487858. at *3 (D. Md. Oct. I. 2013) (citing Dell/selie Bank Nat'/7i'ust Co.
Brock. 430 Md. 714 (Md.2013)). Even if the Court assumed ..that the assignment of the Deed
of Trust was somehow invalid. it docs not impact the security provided by that instrument." !d
Once again. Plaintitl's have not contested the validity or accuracy of the underlying security
interest. and nothing in the Maryland Commercial Code warrants cancellation of the instrument
in question. Plaintitl's' e1aims under Count IV arc thus dismissed.
For the li.lI'egoing reasons. Defendants' Motions to Dismiss. ECF Nos. 30. 35. and 36. arc
granted. A separate Order shall issue.
20 t 7
As additional grounds
United States District Judge
dismissal. the Court already found that as non.parties to the Assignment of Deed of
Trust, Plaintiffs had 110 standing to challenge it. ECF No. 27 at 6-7.
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