Fowler v. Wells Fargo Home Mortgage, Inc. et al

Filing 39

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 5/13/2015. (kns, Deputy Clerk)

IN THE UNITEJ) STATES I)ISTRICT COURT::::=:'L:ro
FOR THE DISTRICT OF MARYLANJ)
SOl/them Divisio/l

MAY 132015

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SANJ)RA FOWLER

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AT 8RECNaclT
CLEIII<llS.ll1IT~iCT COURT

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DISTllICTOF MARVUNO
DEPUTY

Plaintiff,

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Casc No.: G.IH-15-108-t

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WELLS FARGO HOME MORTGAGE,
INC., et al.

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J)cfcndants.

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MEMORANDUM

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OPINION

Plaintiff Sandra Fowler purchased a home in Princc Gcorgc's County. Maryland on
March 30. 2006. See ECF NO.2 at

'i~

I. 20. According to PlaintilI

Dcfcndant Mid-Atlantic

Buildcrs of Beechtree. Inc. (""Mid-Atlantic") was the homebuilder. Dclcndants Southern Trust
Mortgage Company. Inc. ("Southern TrusC) and Dennis Sullivan were the lenders. Defcndant
Wells Fargo Home Mortgage. Inc. ("'Wells Fargo") was the escrow agent. and Defcndant Village
Settlemcnts. Inc. ("Village Settlements") conducted the closing. See it!. at ~~ 12- 20. Plaintiff
tiled for bankruptcy in October 2013 and March 2014 and both cases were dismissed. See it!. at
~~ 34-35. Wells Fargo later initiated a foreclosure proceeding in thc Circuit Court ilJr Prince
George's County. Maryland. See it!. at

'i 40.

The home was scheduled to be sold on March 20.

2015: howcver, the circuit court has stayed the foreclosure sale while it considers Plaintiffs
motions

f()r temporary

restraining

order ("TRO"),

prcliminary

injunction.

and permanent

injunction. See ECF No. J 6-1.
In the mcantime, Plaintiff tiled a complaint against DetCndants in thc Circuit Court for
Prince George's County. \\hich was rcmoved to this Court.

.',a

lOCI'No. I. Plaintiff alleges that

Defendants
would

engaged

eventually

ultimately
Motion

in "predatory
strip

their home:'

minority
ECF NO.2

for TRO and preliminary

Plaintiffs

home in the foreclosure

lending and targeting
buyers

of their

down

at ~ 17. Currently
injunction

to prevent

mortgage

and

befl)('e this Court is Plaintiff-s

Defendant

Wells

at 21. A hearing

below. Plaintiffs

payments

Fargo from selling
is unnecessary.

See

motion is DENIED.

BACKGROUND
Plaintiff

by Delendant

Defendants
Defendant

alleges that in 2006 she became
Mid-Atlantic

and located

See ECF NO.2

Maryland.

[lenders]
Village

interested

at 2410 Moores

at ~~ 1. 12. Defendant

Sullivan
Settlement

and Southern
conducted

Trust:'

the closing

in purchasing
Plains

'i

At the closing.

Defendants

by several lederal

initial servicing

on adjustable

rate mortgage.

failed to provide

laws. See iel. Spccifieally.
rate mortgages.

transfer disclosure.

Credit Opportunity

"steered

with Sulli,'an

were $1.455. See iel. at ~ 23 & p. 23. Defendants

interest only payment and an adjustable

the handbook

Upper
the

Marlboro.
Plaintiff

and Southern

Trust as the
amount was

monthly income was $12.283
offered

Plaintiff a five-year

See hi. at ~ 24.
Plaintiff

with certain

Defendants

a good faith cstimate.

loan doeuments

did not provide

Plaintiff

as
with

a booklet on closing costs. an

notice of the right to receive copy of the appraisal.

Act notice of home application.

to

14. On or about March 30. 2006.

$952.130.32. See iel. at ~ 22. At the time of the closing. PlaintifTs
and her expenses

Boulevard.

Mid-Atlantic

ld at

a home that was built

Wells Fargo as the escrow agent. See iel. ~ 20. The mortgage

lender and Defendant

required

in a pattern and schemc that

paymcnts.

pending

sale.] See ECF NO.3

Local Rule 105.6. For the reasons explained

I.

minorities

or the "Consumer

Information

an Equal

and Privacy

While Plaintilftitles
her motion a "Motion IlJr Temporary Restraining Order. Preliminary
Injunction and Permanent Injunction:' she limits the issue to whethcr she should receive a TRO
and preliminary injunction. See ECF NO.3 at 5. Indeed. she concludes by only requesting a
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TRO. See iel. at 16.
2

See it!. at ~ 25. Further. Plaintiff alleges. the loan was an "improvident

Policy:'
credit"

in violation

after the closing.

of federal and state unfair or deceptive

Southern

Trust transferred

the mortgage

28. Wells Fargo then sold the loan to a "Mortgage
Fargo

told

Plaintin:

government
provided

"does

moditication
a cash incentive

minority

lost her job on September

ceased operations.

fell behind in her mortgage
modilication
eligible

it!. at ~~ 34-35.

On both occasions.

40. Plaintiff

payments

subprime

mortgages

in

loans as "ghetto loans:' See it!.
where shc had been

over $300.000 in savings. Plaintiff

31. Plaintiff asserts that Wells Fargo offered a

modification.

rcduction

the bankruptcy

to the bankruptcy

See it!. at

trustee.

her with a loan that

'1'[ 36-38.

was dismissed

because

PlaintifTwas

See it!. Plaintiff-s

not able

home went into

fCJrMarch 20. 20 IS. See it!. at

in the Circuit

County and the motion was granted. See ECF No. 16-1.

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but that she learned for

2013 and once in March 2014. See

the sale of the property

to stay the foreclosurc

program.

Wells Fargo provided

twice. once in October

and Wells Fargo scheduled
filed a motion

ftH

claims that Defendants

28. 2007. when the company

18.2014. that Defendant

tiled for bankruptcy

to make the required

market

or qualify

are alleged to have referred to those in minority

Department"s

did not quality her for any government
Plaintiff

to change

which, Wclls

See it!. at ~ 33. Plaintiff alleges that she should have been

that was an unfilir "ruse:'

the lirst time on December

("MBS"):'

additionally

to "aggressively

See it!. at'i

for the United States Treasury

foreclosure

Plaintiff

See it!. at ~ 30. After exhausting
payments.

Wells Fargo. See it!. at'l

to Defendant

any Ilexibility

as "mud people" and refCrred to subprime

Plaintiff
employcd

for loan ofticers

'i 29,

!d at ~ 27. Defendants

neighborhoods:'

neighborhoods

!d at

programs:'

of

laws. See it!. Immediately

practices

Backed Securities

not give the borrowers

extension

Court

for Prince

Gcorgc's

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In this case, Plaintiff alleges six counts-a

request for injunctive relie!: violation of the

Racketeering Inllucnced and Corrupt Organization ("RICO") Act. Fraud. Violation of the Real
Estate Settlement Procedure Act ("RESPA"), Violation of the Truth in Lending Act ("T1LA").
and unfair and deceptive trade practices under the Federal Trade Commission Act ("FTCA "). See
ECF NO.2 at ~~ 42-74. Currently pending before this Court is Plaintifrs Motion for TRO and
prcliminary injunction against Wells Fargo. See ECF NO.3. Wells Fargo opposcs the motion. See
ECF No. 29.
II.

STANDARD OF' RF:VIEW
The purpose of a temporary restraining order ("TRO") or a preliminary injunction is to

"protcct the status quo and to prevent irreparable harm during the pendency of a lawsuit.
ultimately to preserve the court's ability to render a meaningfilljudgment
Micl'Osofi Corp. Ami/rlis/

Lilig,

on the merits:'

111re

333 F.3d 517. 525 (4th Cir. 2003). The grant of a TRO or a

preliminary injunction is an "extraordinary

rcmcdy that may only bc awardcd upon a clear

showing that the plaintiff is entitled to such rclieC' Dell'hurs/ \'. Cmy. Alumil1um Co .. 649 F.3d
287,290

(4th Cir. 2011) (quoting Wimer \'. Na/uml

Resources

Defel1se Coul1cil. 555 U.S. 7. 22

(2008)) (internal quotation marks omittcd). Thus. the burden placcd upon Plaintiff to state a
elaim for a TRO is high. The Supremc Court and the Fourth Circuit rccognize f(Hlrrequircments
that a party must show to be granted a TRO or preliminary injunction:
(I) thcrc is a likelihood of succcss on thc merits: (2) thcrc is a likclihood thc
movant will sutTcr irreparable harm in the abscncc of prcliminary relicI': (3) the
balancc of cquitics tips in movant's favor: and (4) thc injunction is in the puhlic
interest.
The Real Trwh Ahou/ Ohama. 111C.\'. Fed

Elec/iol1 Comm'l1. 575 FJd 342. 347 (4th Cir. 2(09)

(citing Wil1/l!/'. 555 U.S. at 20): see also Dell'hurs/.

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649 FJd at 290 (rcalllrming

thc !(Hlr

requirements). All lour of these requirements must be met in order fiH a TRO or preliminary
injunction to be granted. See Dewhurst.
III.

649 F.3d at 290.

DISCUSSION
PlaintifTasserts that she has a ..high probability of success". See ECF NO.3 at 14. In

support. she makes several conelusory statements. She states that .'Defendants are barred by law
not to make predatory loans. violate laws in making such 10ansl.1 and arc barred Irom
unilaterally placing a mortgage in a non-modifiable seeurity baeked instrumenl..' !d. Plaintiff
claims that "[vJirtually all the Defendants. actions in formulating the Plaintilfs mortgage and in
further prohibiting the Plaintiff Irom qualifying for a government baeked mortgage relief
program are illegal and deceptive trade praetiees'" Id Importantly. however. Plaintiff docs not
address how success on the merits of her claims would entitle her to a permanent injunetion
preventing foreclosure.
PlaintifTalso fails to address the timing of her claims. All ofPlaintifrs

allegations stem

li'om Delendants' actions in 2006. and. thus. appear to be barred by the relevant statute of
limitations periods. First. PlaintifTalleges that Defendants violated the RICO Aet. There is a
lour-year statute of limitations period lill"civil RICO actions. See Klehr \".A.o. Smith Corp.. 521
U.S. 179. 188-89 (1997) (citing AXellLT l/o/dinX ,'. Malley Du[rl//1t1 Assoc.I ... IlIc.. 483 U.S. 143.
156 (1987)). Here. Plaintiff alleges that the action giving risc to hcr RICO claim occurred in
2006. when she obtained the relevant mortgage. See ECF NO.2 at

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12-41. Plaintiff has given

no indieation as to why the statute of limitations should be tolled in this case. To thc extent
PlaintilTsuggests that she was unaware that Defendants. actions violated laws until reeently. thc
Court notes that. in a civil RICO ease. "a plaintilTwho is not reasonably diligcnt may not assert
'fraudulent coneealment .... Klehr. 52\ U.S. at 194. Furthcr. it is the Plaintiffs knowledge of her

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own injury that controls thc running of the statute of limitations.
thc underlying
provided

RICO pattcrn. See Rotella

no rationale

1".

Wood. 529 U.S. 549. 556-57

for why she was unable to discover

the Court will not read a rationale

and not Plaintiffs

into Plaintiffs

knowledge

of

(2000).2 Plaintiff has

her injury through due diligence.

and

motion. Thus. on these facts. the Court cannot

find that Plaintiff is likcly to succeed on her RICO claim.
PlaintilTalso
numerous

alleges that Delendants

laws in not providing

details of Plaintiffs

mortgage.

action undcr Maryland
and Judicial Proceedings
ignorance

plaintilTwith

committed

Iraud in 2006 when they violated

several documents

n 62-69.

See ECF NO.2 at

and not explaining

Thc statute of limitations

law is three years Irom the date it accrues. See Maryland
Articlc ("'CJp")

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5-101.

certain
I()r a civil

Code. Courts

otably. this period can be extended

if there is

of the cause of action induced by fraud. In that case ... the causc of action shall be

deemed to accrue at the time when the party discovered.
should have discovered

the t('aud." See CJP

* 5-203.

or by exercisc of ordinary diligence

Here. as with her RICO claim. PlaintilThas

2 Even if the statute of limitations was tolled. the Court would still be concerned over whether
Plaintiff is likely to succeed on her RICO claim. RICO is "'a unique cause of action that is
concerned with eradicating organized. long-term. habitual criminal activity ....
Airlil1e Pilots
Flss'l1l". Fl\l'al'l'a. LLC'. 615 F.3d 312. 317 (4th Cir. 2010) (citation omitted). Section 1962 of the
RICO Act. which Plaintiffrelies
on. provides that: "(b) It shall be unlawful for any person
through a pattern of racketeering activity or through collectionllf
an unlawful debt to acquire or
maintain. directly or indirectly. any interest in or control of any enterprise which is engaged in.
or the activities of which affect. interstate or foreign commercc'"
18 U.s.c.
1962(b). Violation
of
18 U.S.c.
1962 rcquires (I) conduct (2) of an enterprise (3) through a pattern (4) of
racketeering activity. See Sedima. S./'. R. L. \'. IlIIrex Co .. 473 U.S. 479. 496 (1985).
"Racketeering
activity" is delined as any of a number of predicate criminal acts. including mail
fraud. wire li'aLld. and interstate transport of money fraudulently obtained. See 18 U.S.c.
1961 (I )(13). Here. while Plaintiff alleges fraud. she has not noted which of the predicate acts
make up her RICO claim. Further. a pattern of racketeering requires at least two predicate acts.
See 18 U.S.c.
196/ (5). To establish a pattern of racketeering activity. the plaintifT must
establish that (1) the predicate acts are related. and (2) they pose a threat of continued criminal
activity. See H..I., Illc. \'. NOI'I/nrestel'l1 Bell Tel. Co .. 492 U.S. 229. 239 (1989). Ilere. Plaintiff
alleges that Delendants ..target(J minorities with 'ghetto loans .... ECI' NO.2 at 58. Ilowever.
Plaintiff only asserts one occasion of alleged fraud. the sale of her own property. See id. at
12-41. 57 & 60,

u.s.

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not even suggested that she was unable to discover the fraud within three years of the sale of the
property in 2006 (the action giving rise to her claim). See Doe \'. Archdiocese o{ Wash.. 689 A.2d
634. 643 (Md. Cl. Spec. App. 1997) (..the complaint relying on the fraudulent concealment must
also contain speeilic allegations of how the lraud kept plainti ITin ignorance of a causc of action.
how the fraud was discovered. and why there was a delay in diseovering the fraud. despite
plaintiffs diligence.") (citations omitted). Thus. the Court also cannot lind that Plaintiff is likely
to succeed on her fraud claim.
Plaintiffalso alleges violations ofRESPA and TILA. See Eel' NO.2 at

'i~
70-73.

Specifically. Plaintiff alleges that. in violation of RESP A. she was not provided with a good l(lith
estimate. a booklet on closing costs. or an initial servicing transfer disclosure: and in violation of
TILA. she was not provided with a handbook on adjustable rate mortgages. See iii.
As to the RESPA violations. first. there is no private cause of action under RESPA Ii.Jr
failure to provide a good faith estimate or a booklet on closing costs. See Granl \'. Shapim &
Burso/1, UP. 871 I'.Supp. 2d 462. 470 (D. Md. 2012) (explaining that failure to provide "Special
infi.mnation Booklet" and "Good Faith Estimate" arc not covered by RESPA). Thus. Plaintiffis
unlikely to succeed on these claims. Second. the remaining alleged RESPA violation. lailurc to
provide an initial servicing transfer disclosure. must be brought within three years fj'OInthe date
of the violation. See 12 U.S.c. ~ 2614. lIere.Plaintiffindicates

that her loan was transferred

"immediately alier the closing and the Plaintiff made the lirst payment," ECI' NO.2 at 'i 28.
Thus. this claim is likely time-barred.
As flJr the TILA violations. thc statute of limitations for claims Ii.Jrmonetary damages
arising under TILA. which are the damages requcsted here. is "one year Ii'om the datc of the
occurrence of the violation," 15 U.S.c. ~ 1640(e). "This limitations period begins to run when

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the borrower accepts the creditor" s extension of crcdit:'

(Jrlllli.

871 F.Supp. 2d at 472 (citations

omilled). Here. the credit was extended in 2006 and Plaintiff does not argue against application
of this limitations period in her TRO motion. Further. although equitable tolling may apply in
RESPA and TILA claims. "selling aside the statutc of limitations as to such claims is no easy
task:' See id. at 470 n. 10 & 472n. 14 (internal quotation marks. brackcts. and citations omitted).
To do so. Plaintiff must show Iraudulent concealment and thc "inability of the plaintifL despite
due diligence. to discover the Iraud:' Id. at 470 n. 10. As these violations allegedly took place in
March 2006. and Plaintiff makes no argument for equitable tolling. they are likely to be found
time-barred and Plaintiff is unlikely to succeed on these claims.
Plaintiff is also unlikely to succeed on her linal count. unfair and deceptive trade
practices under the FTCA. For one. this claim is based on violations of 1'1LA. which the Court
has already found would be unlikely to succeed. Additionally. the FTCA "docs not contain a
private right of action and cannot provide a basis for a claim by an individual:' MUllcy \'. Cell/ex
HOllie Equi/yCo .. L.L.C .. 1:14 CV 00016. 2014 WL 3359335 at *2 (W.£). Va. July 9. 2014)
(citing Reilly \'. Balik Ii/Alii .. NO.3: 13-cv-329-RJC-DSC.

2014 WL 198315. at *2 (W.D.N.C.

.Ian. 15.2014» (internal quotation marks and additional citations omilled). As Plaintiffis
unlikely to succeed on the above counts. she is also unlikely to receive injunctive relief
preventing the sale of her property. which is count one of her complaint. See ECI' NO.2 at
42-52. Given the linding thatPlaintiffhas

','1

tailed to demonstrate a likelihood ofsucccss on her

claims. she is not entitled to a TRO or a preliminary injunction. See De\rhursl. 649 1'.3d at 290

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(explaining that each of the four TRO requirements must be met for the Court to grant that
reliet).3
VI.

CONCLUSION
Accordingly. for the aforementioned reasons. Plainti!l's Motion fbr Temporary

Restraining Order and Preliminary Injunction. ECF NO.3. is DENIED.
A separate Order shall issue.

Dated: May~.

,~g--

2015

George Jarrod Hazel
United States District Judge

3 Citing out-of-date case law. PlaintitT incorrectly states that the likelihood of success test is
displaced if Plaintiffs harm is greater than Defendant's harm. See ECF NO.3 at 13. Having
found that Plaintiff is not likely to succeed on the merits. the Court will not address the
remaining requirements.
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