Moss v. Green Tree Servicing, LLC et al

Filing 33

MEMORANDUM OPINION AND ORDER granting in part and denying in part 22 Motion to Dismiss for Failure to State a Claim; Defendants' Answers are due on or before 8/22/2016. Signed by Judge Paul W. Grimm on 8/1/2016. (kns, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
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DARLA MOSS,
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Plaintiff,
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v.

Case No.: PWG-15-2065
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DITECH FINANCIAL, LLC, et al.,
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Defendants.
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MEMORANDUM OPINION AND ORDER
Plaintiff Darla Moss fell behind on the payments on her mortgage loan from Defendant
Federal National Mortgage Association (“Fannie Mae”), which Defendant Ditech Financial, LLC
(“Ditech”), f/k/a Green Tree Servicing, LLC serviced. Am. Compl. ¶¶ 17–18, 34, 39, ECF No.
18. Defendants’ agent BWW Law Group, LLC (“BWW”) instituted a foreclosure action and
informed Moss, in “a quote good through October 17, 2014” (“Reinstatement Quote”), that she
could bring her loan current and avoid foreclosure by paying a “Reinstatement Amount” of
$22,471.29, which would cure the default and cover attorney’s fees and expenses up until
October 17, 2014. Id. ¶¶ 19, 34–35, 40–41. Moss verified the amount and then paid $22,471.29
on October 10, 2014. Id. ¶¶ 42–43. Thereafter, Defendants dismissed the foreclosure action but
increased her monthly payments by $290.32 to cover “corporate advance[s],”1 such as legal fees
and expenses BWW charged, all but $165.00 of which had been incurred before October 17,

1

Defendants set up “Corporate Advances” on “account[s] in an effort to split the amounts due
into monthly payments to make the repayment process easier.” Apr. 3, 2015 Ltr., Am. Compl.
Ex. I, ECF No. 21-8. They represent amounts due for legal fees and costs, to be paid on a
monthly basis instead of in full. Id.

2014.2 Id. ¶¶ 46–48 & Ex. I, ECF No. 21-8. Unable to afford this additional monthly expense
and believing that Defendants had waived the uncharged corporate advances through the
Reinstatement Quote, Moss filed suit against Defendants. Compl., ECF No. 2.
She claims that Ditech and Fannie Mae violated various state and federal statutes,
breached the agreements the parties entered into in the Deed of Trust and Reinstatement Quote,
and acted negligently in representing the Reinstatement Amount to be sufficient to bring her loan
current and then increasing her monthly payments to cover expenses incurred before she paid the
Reinstatement Amount. Am. Compl. ¶¶ 2–6.3 Defendants have moved to dismiss, and the
parties fully briefed the motion. ECF Nos. 22, 22-1, 26, 26-1, 29. A hearing is unnecessary. See
Loc. R. 105.6.
Moss has not stated a claim against Fannie Mae under the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq. (Count II), or against either Defendant under the Real
Estate Settlement and Procedures Act (“RESPA”), 12 U.S.C. §§ 2601 et seq. (Count I), or in
negligence (Count VIII), and those claims are subject to dismissal. Yet, Defendants have not
shown that Moss failed to state a claim against Ditech under the FDCPA (Count II), or against
either Defendant for breach of contract (Counts III–IV) or a declaratory judgment (Count IX).
Nor have they demonstrated that she failed to state a claim for violations of the Maryland
Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law §§ 13-101 et seq.; the
Maryland Mortgage Fraud Protection Act (“MMFPA”), Md. Code Ann., Real Prop. §§ 7-401 et

2

Corporate advances of $15 and $150 were set up on October 30, 2014, representing legal costs.
On October 14, 2017, after Moss verified the amount but before the October 17, 2014 date
through which the Reinstatement Amount was supposed to be current, a corporate advance of
$250 was set up to cover attorneys’ fees. 
3

At this stage of the proceedings, I must accept the facts as alleged in Moss’s Amended
Complaint as true. See Aziz v. Alcolac, 658 F.3d 388, 390 (4th Cir. 2011).
2 

seq.; or the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law
§§ 14-201 et seq. (Counts V–VII). Accordingly, I will grant the motion in part and deny it in
part, and dismiss Counts I and VIII in their entirety and Count II as to Fannie Mae.
Standard of Review
Federal Rule of Civil Procedure 12(b)(6) provides for “the dismissal of a complaint if it
fails to state a claim upon which relief can be granted.” Velencia v. Drezhlo, No. RDB-12-237,
2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule’s purpose “‘is to test the sufficiency
of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the
applicability of defenses.’” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483
(4th Cir. 2006)). To that end, the Court bears in mind the requirements of Fed. R. Civ. P. 8, Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009),
when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must
contain “a short and plain statement of the claim showing that the pleader is entitled to relief,”
Fed. R. Civ. P. 8(a)(2), and must state “a plausible claim for relief,” as “[t]hreadbare recitals of
the elements of a cause of action, supported by mere conclusory statements, do not suffice,”
Iqbal, 556 U.S. at 678–79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from
Iqbal and Twombly). “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.” Iqbal, 556 U.S. at 678.
Plaintiff’s allegations of deceptive trade practices in violation of the Maryland Mortgage
Fraud Protection Act (“MMFPA”), Md. Code Ann., Real Prop. §§ 7-401 et seq., and the
Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law §§ 13-101 et seq.,
are “subject to the heightened pleading standards of Federal Rule of Civil Procedure 9(b).”
3 

Williams v. Dee Miracle Auto Grp. LLC, No. ELH-15-2466, 2016 WL 3411640, at *4 (D. Md.
June 22, 2016) (discussing MCPA) (quoting Combs v. Bank of Am., N.A., No. GJH-14-3372,
2015 WL 5008754, at *6 (D. Md. Aug. 20, 2015)); Crowley v. JPMorgan Chase Bank, Nat’l
Ass’n, No. RDB-15-00607, 2015 WL 6872896, at *10 (D. Md. Nov. 9, 2015) (discussing
MMFPA).
Rule 9(b) states that “in alleging a fraud or mistake, a party must state with
particularity the circumstances constituting the fraud or mistake. . . .” Such
allegations [of fraud] typically “include the ‘time, place and contents of the false
representation, as well as the identity of the person making the misrepresentation
and what [was] obtained thereby.’” In cases involving concealment or omissions
of material facts, however, meeting Rule 9(b)’s particularity requirement will
likely take a different form.
Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan.
22, 2013) (citations omitted); see Spaulding v. Wells Fargo Bank, N.A., No. 12-1973, 2013 WL
1694549, at *9 (4th Cir. Apr. 19, 2013).
When reviewing a motion to dismiss, “[t]he court may consider documents attached to
the complaint, as well as documents attached to the motion to dismiss, if they are integral to the
complaint and their authenticity is not disputed.” Sposato v. First Mariner Bank, No. CCB-121569, 2013 WL 1308582, at *2 (D. Md. Mar. 28, 2013); see CACI Int’l v. St. Paul Fire &
Marine Ins. Co., 566 F.3d 150, 154 (4th Cir. 2009); see also Fed. R. Civ. P. 10(c) (“A copy of a
written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”).
Moreover, where the allegations in the complaint conflict with an attached written instrument,
“the exhibit prevails.” Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1465
(4th Cir. 1991); see Azimirad v. HSBC Mortg. Corp., No. DKC-10-2853, 2011 WL 1375970, at
*2–3 (D. Md. Apr. 12, 2011).

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Real Estate Settlement and Procedures Act (Count I)
Congress enacted the Real Estate Settlement and Procedures Act (“RESPA”), 12 U.S.C.
§§ 2601 et seq., in part “to insure that consumers throughout the Nation are provided with greater
and more timely information on the nature and costs of the settlement process.” 12 U.S.C.
§ 2601(a). To this end, a loan servicer first must acknowledge receipt of a qualified written
request (“QWR”) within five days of receiving it. 12 U.S.C. § 2605(e)(1). Then, within thirty
days, the servicer must either (A) “make appropriate corrections in the account of the borrower,”
and “transmit to the borrower a written notification of such correction”; or (B) “after conducting
an investigation, provide the borrower with a written explanation or clarification that includes
. . . a statement of the reasons for which the servicer believes the account of the borrower is
correct as determined by the servicer”; or (C) if the borrower requested information rather than a
correction, investigate and provide the information or explain why it is unable to do so. See 12
U.S.C. § 2605(e)(2)(A)–(C). Significantly, the provision is disjunctive and therefore, a failure to
“make appropriate corrections,” as provided for in § 2605(e)(2)(A), is not necessarily a violation
of § 2605(e)(2), as the servicer may have complied with subsection (B) or (C) instead. See id.
Moss sent a QWR4 by mail and by fax to Ditech on February 4, 2015. Am. Compl. ¶ 50
& Ex. E, ECF No. 21-4. Ditech received it by mail on February 9, 2015, acknowledged receipt
three days later, on February 12, 2015, and sent a substantive response on March 3, 2015. Am.
Compl. ¶ 54–55 & Exs. F–G, ECF Nos. 21-5 – 21-6. Moss claims that Defendants violated
§ 2605 when “Ditech, as the agent of FNMA, failed to timely respond to [her February 4, 2015]
qualified written request and failed to make appropriate corrections to the account” and “failed to

4

For purposes of this section, I will assume without deciding that Plaintiff’s correspondence
with Defendants qualified as a QWR.
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take timely action to correct errors relating to allocation of payments, final balances for purposes
of reinstating and paying off the loan, or avoiding foreclosure, or other standard servicer’s
duties.” Am. Compl. ¶¶ 72, 74.
Defendants argue that their February 12, 2015 acknowledgment of Moss’s QWR was
timely, as they require QWRs to be submitted by mail, such that it was the February 9, and not
the February 4, date that triggered the five-day period for acknowledging receipt. Defs.’ Mem.
7–8. They also contend that their March 3, 2015 substantive response was timely and that,
although they did not correct the purported error that Moss identified, they complied with
§ 2605(e)(2)(B) by “providing Plaintiff with an explanation as to why [Ditech] believed the
account information was correct,” such that they were not required to correct the purported error.
Id. at 9.
In Opposition, Moss does not challenge the timeliness of Defendants’ responses. See
Pl.’s Opp’n 6. Rather, she insists that Defendants’ March 3, 2015 response “was false and
materially misleading” and consequently fell “woefully short of meeting the[] requirements” of
§ 2605(e)(2).5 Id. Thus, it is undisputed that Defendants sent Moss a response but did not
correct her account as she requested. See 2d Am. Compl. ¶ 55; Defs.’ Mem. 9. Therefore, they
did not comply with § 2605(e)(2)(A).
Yet, as noted, § 2605(e)(2) provides the servicer with two alternative responses to a
QWR, in lieu of making “appropriate corrections.” See 12 U.S.C. § 2605(e)(2)(A)–(C). The

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According to Moss, she also alleges in her Amended Complaint that “Ditech violated RESPA
by ‘impos[ing] a fee or charge without a reasonable basis to do so.’” Pl.’s Opp’n 6 n.2 (quoting
Am. Compl. ¶ 73). Notwithstanding the fact that Paragraph 73 of the Amended Complaint states
that “Ditech, as the agent of FNMA, is not permitted to impose a fee or charge without a
reasonable basis to do so,” without actually alleging that Defendants imposed any such fee, this
claim, also, alleges falsity in Defendants’ response that the fees it charged were correct.

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March 3, 2015 letter states: “Records indicate that additional fees and costs were assessed after
the reinstatement quote was provided to you. These are due and payable. We have enclosed a
payment history of the account for your review.” Am. Compl. Ex. G. Thus, it shows that
Defendants reviewed their records, and the letter provides “a written explanation or clarification
that includes . . . a statement of the reasons for which the servicer believes the account of the
borrower is correct.” See 12 U.S.C. § 2605(e)(2)(B). On the face of the letter, Defendants
complied with § 2605(e)(2)(B). Insofar as Moss challenges the veracity of their response,
RESPA is not the proper vehicle for recovering from damages from false or misleading
statements. See Yacoubou v. Wells Fargo Bank, N.A., 901 F. Supp. 2d 623, 630 (D. Md. 2012)
(“Unlike the defamation tort, which depends in part on the truth or falsity of communications,
RESPA governs the timing of communications.” (emphasis added)), aff’d sub nom. Adam v.
Wells Fargo Bank, 521 F. App’x 177 (4th Cir. 2013). Consequently, Moss fails to state a claim
for a violation of RESPA.
Fair Debt Collection Practices Act (Count II)
The Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq., “‘protects
consumers from abusive and deceptive practices by debt collectors, and protects non-abusive
debt collectors from competitive disadvantage.’” Stewart v. Bierman, 859 F. Supp. 2d 754, 759
(D. Md. 2012) (quoting United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 135 (4th Cir. 1996)
(quotation omitted)). 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.”

Id. at 759–60 (citation omitted); see Ademiluyi v.

PennyMac Mortg. Inv. Trust Holdings I, LLC, 929 F. Supp. 2d 502, 524 (D. Md. 2013) (citing 15
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U.S.C. § 1692). Moss claims that Defendants violated the FDCPA by “engaging in . . . conduct
the natural consequences of which is to harass, oppress, or abuse any person in connection with
the collection of a debt,” in violation of 15 U.S.C. §1692(d), “using false, deceptive, or
misleading representations or means in connection with the collection of a debt,” in violation of
15 U.S.C. §1692(e), and “using unfair or unconscionable means to collect or attempt a debt,” in
violation of 15 U.S.C. §1692(f).” Am. Compl. ¶¶ 79–81.
Defendants contend that Moss cannot state an FDCPA claim against them because
neither is a debt collector for purposes of the FDCPA. Defs.’ Mem. 10. It is undisputed that
Ditech is a mortgage loan servicer and Fannie Mae is a creditor. See Am. Compl. ¶ 28; Defs.’
Mem. 10. Defendants argue that servicers and creditors do not qualify as “debt collectors”
unless the loan was in default when Ditech began servicing it and when Fannie Mae acquired the
Note. Id. Moss counters that “Ditech became the servicer of Ms. Moss’s loan when she was
already in default,” such that “Ditech constitutes a debt collect[or] under the FDCPA.” Pl.’s
Opp’n 8–9 (emphasis added).
Notably, in her Opposition, Moss does not assert that Fannie Mae qualifies as a debt
collector. Indeed, in Henson v. Santander Consumer USA, Inc., the Fourth Circuit recently
concluded that “the default status of a debt has no bearing on whether a person qualifies as a debt
collector” or a creditor. 817 F.3d 131, 135 (4th Cir. 2016). Observing that 15 U.S.C. § 1692a
“excludes from the definition of creditor ‘any person to the extent that he receives an assignment
or transfer of a debt in default solely for the purposes of facilitating collection of such debt for
another,” the Fourth Circuit further concluded that the exclusion does not apply when a person
acquires debt “for its own account,” instead of “on behalf of others.” Id. Thus, it is immaterial
whether the debt was in default when Fannie Mae acquired it, as Fannie Mae acquired it “for its
8 

own account,” as a creditor. See id. Therefore, Moss cannot state an FDCPA claim against
Fannie Mae, and this claim is subject to dismissal with regard to Fannie Mae. See id.
With regard to Ditech, as a loan servicer, the company indeed would qualify as a debt
collector if the loan were in default when Ditech began servicing it. See id.; 15 U.S.C. § 1692a.
Moss does not allege explicitly that Ditech is a debt collector or that the loan was in default when
Ditech began servicing it. But she does allege that (1) Ditech began servicing the loan on
September 1, 2013; (2) her monthly payment was $787.94 (which is equivalent to $9,455.28 per
year); (3) she was sent a Notice of Intent to Foreclose on October 28, 2013; and (4) as of October
17, 2014, the amount to cure her default, including attorney’s fees and expenses, was $22,471.29
(which is more than twice what Moss’s monthly payments would have totaled for the period that
Ditech serviced her loan). Am. Compl. ¶¶ 31–34, 39–41. Additionally, the April 3, 2015
response to Moss’s second QWR (dated March 17, 2015) lists “corporate advances,” that is,
amounts due for legal fees and costs, as far back as August 21, 2013. Am. Compl. Ex. I, ECF
No. 21-8. Thus, while inartfully pleaded, it is clear that, drawing all reasonable inferences in
Moss’s favor, as I must, she was in default when Ditech began servicing her loan on September
1, 2013, and her FDCPA claim against Ditech is not subject to dismissal on this ground. See
Henson, 817 F.3d at 135; 15 U.S.C. § 1692a; Stewart, 859 F. Supp. 2d at 759–60.
Maryland Mortgage Fraud Protection Act (Count V) and
Maryland Consumer Protection Act (Count VII)
The Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law §§ 13101 et seq., provides that “‘a person may not engage in any unfair or deceptive trade practice,’”
such as a “false or misleading statement[ ],” in relation to “‘[t]he extension of consumer credit’
or the ‘collection of consumer debts.’” Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-

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3758, 2013 WL 247549, at *10 (D. Md. Jan. 22, 2013) (quoting Com. Law § 13-303). To state a
claim for a violation of the MCPA through “false or misleading statements,” Moss must allege
that Defendants “made a false or misleading statement and that “the statement caused [Plaintiff]
an actual loss or injury.” Id. Similarly, to state a claim under the Maryland Mortgage Fraud
Protection Act (“MMFPA”), Md. Code Ann., Real Prop. §§ 7-401 et seq., which provides that
“[a] person may not commit mortgage fraud,” Real Prop. § 7-402, Moss must allege that “the
defendant knowingly or recklessly made a false representation to the plaintiff with the intent to
defraud the plaintiff, and that the plaintiff’s reasonable reliance upon that misrepresentation
caused her compensable injury.” Bell v. Clarke, No. TDC-15-1621, 2016 WL 1045959, at *4 (D.
Md. Mar. 16, 2016) (quoting Ademiluyi, 929 F. Supp. 2d at 530).
Moss claims that Defendants violated the MMFPA because the Reinstatement Amount
that she was offered to bring her loan current “was a deliberate misstatement or
misrepresentation” that “omitted the ‘corporate advances’ allegedly still owed” when
Defendants’ agent BWW6 “knew of the ‘corporate advances’” she still would have to pay. Am.
Compl. ¶¶ 34, 106–07. Similarly, she alleges that Defendants violated the MCPA’s prohibition
on deceptive trade practices by “refus[ing] to honor the Reinstatement Amount, by demanding
that Ms. Moss pay $290.32 extra per month for ‘corporate advances.’” Id. ¶ 124.

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Defendants “challenge Plaintiff’s ability to assert claims against them based on a representation
made by a third-party.” Defs.’ Mem. 12 n.5. Defendants are wrong. It is well established that
“trustees who [like BWW] are plaintiffs in a foreclosure action represent the interests of the
mortgagee, and thus the two are ‘effectively one and the same.’” Marchese v. JPMorgan Chase
Bank, N.A., 917 F. Supp. 2d 452, 463 (D. Md. 2013) (quoting Cohn v. Charles, 857 F. Supp. 2d
544, 549 (D. Md. 2012)); see Jones v. HSBC Bank USA, N.A., 444 F. App’x 640, 644 (4th Cir.
2011) (finding that, in the context of claim preclusion, “privity exist[ed] between BHL and the
two additional parties involved [in the federal court proceedings], HSBC and [mortgage servicer]
Wells Fargo” because [substitute trustee] BHL prosecuted the state court foreclosure action on
behalf of Wells Fargo, which in turn serviced the underlying mortgage on behalf of HSBC”).
10 

Defendants argue that Moss fails to allege any misrepresentation or deceptive statement,
as is necessary to state a claim under either act, because “Plaintiff was specifically told that the
quoted amount represented an ‘estimated sum’ that was subject to ‘final verification by’ Ditech.”
Defs.’ Mem. 12 (emphasis added). Certainly, Moss acknowledges that she was told:
Based on the figures provided by the Servicer, the estimated sum required to cure
the default under the Deed of Trust as of October 17, 2014 is $22,471.29. This
Reinstatement Amount includes attorney’s fees and expenses that are expected to
be incurred on or before October 17, 2014 but does not include amounts that may
be incurred after that date. Interest, fees, and costs may continue to accrue in
accordance with the terms of the Deed of Trust….
Am. Compl. ¶ 41 (quoting Reinstatement Quote 1, Am. Compl. Ex. B, ECF No. 21-1) (emphasis
added). The Reinstatement Quote, which Moss attached to her Complaint, also stated: “To
verify the correct reinstatement amount due at the time you are ready to pay, please contact our
office at 301-961-6555[,]” and it cautioned that “[a]ny quoted reinstatement amount is subject to
final verification by the Servicer.” Reinstatement Quote 1, 2.
But, Moss also alleges that she “called BWW and verified the Reinstatement Amount
prior to making payment.” Am. Compl. ¶ 42. Further, she alleges that “[o]n October 10, 2014,
acting in reasonable reliance of the reinstatement correspondence,” she “used a substantial
amount of her savings and financial resources” to pay BWW $22,471.29, and thereafter, BWW
dismissed the foreclosure action but imposed charges for legal fees and expenses incurred prior
to when the Reinstatement Amount was verified.

Id. ¶¶ 41–46.

Also, she attaches

correspondence from BWW showing that, after BWW verified the Reinstatement Amount,
BWW informed her that “[t]he reinstatement amount did not include the whole bulk amount of
the advances due on the account.” Apr. 3, 2015 Ltr. 1. Thus, she has alleged a misrepresentation,
as she was told that the Reinstatement Amount was verified as the total amount she owed but
then, after she relied on the amount to submit payment, BWW acknowledged that it had not been
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the complete amount she owed. See Am. Compl. ¶¶ 41–43. Moreover, the inferences that
reasonably flow from Moss’s pleadings show that Ditech clearly verified the amount, because
the loan was reinstated and no additional amount was charged to reinstate it, and therefore the
fact that the Reinstatement Amount was “subject to final verification” does not eliminate the
misrepresentation. Moss’s MMFPA and MCPA claims are not subject to dismissal on this basis
because Defendants have failed to meet their burden of “‘prov[ing] that no legally cognizable
claim for relief exists.’” Doe v. Salisbury Univ., 123 F. Supp. 748, 762 (D. Md. 2015) (quoting
5B Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. § 1357 (3d ed. 2004)).
Defendants also argue that there was no injury because “Defendants reinstated Plaintiff’s
mortgage loan upon payment of the ‘estimated sum’ and dismissed the foreclosure action.”
Defs.’ Mem. 12–13.

To the contrary, Plaintiff claims that she relied on “Defendants’

representations and agreement that a Reinstatement Amount of over $22,000.00 dollars would
bring her current and up-to-date on her mortgage loan such that she could make regular
payments going forward with her limited disability income”; “used a substantial amount of her
savings

and

financial

resources”

to

pay

$22,471.29

in

reliance

on

Defendants’

misrepresentations; and “has experienced severe anxiety, depression, headaches, and loss of
appetite as a result of the default of her mortgage and the reinstatement situation with
Defendants”; and also has incurred “additional interest, late fees, and penalties resulting from the
misapplication of payments and costs.” Am. Compl. ¶¶ 5, 43, 67, 76. These allegations of injury
are more than sufficient to state a claim under the MMFPA and MCPA. See Marchese v.
JPMorgan Chase Bank, N.A., 917 F. Supp. 2d 452, 468–69 (D. Md. 2013) (allegations of
“emotional and physical distress, including severe anxiety, depression, insomnia, and stomach
pains, in addition to bogus late fees, attorney fees, and damages to his credit” sufficiently alleged

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injury under heightened pleading standard for MCPA claim, and “because the Court previously
determined that Mr. Marchese sufficiently pled actual loss or injury under the MCPA, Mr.
Marchese also sufficiently pled a claim under the MMFPA”); Butler v. Wells Fargo Bank, N.A.,
No. MJG-12-2705, 2013 WL 3816973, at *3 (D. Md. July 22, 2013) (“[A] complaint will
adequately plead damages under the MCPA when it contains plausible allegations that the
plaintiff relied upon the defendant’s false or misleading statements and suffered actual loss or
injury as a result of that reliance.”); Allen v. CitiMortgage, Inc., No. CCB-10-2740, 2011 WL
3425665, at *10 (D. Md. Aug. 4, 2011) (denying motion to dismiss after concluding that “the
plaintiffs . . . stated sufficiently an actual injury or loss as a result of a prohibited practice under
the MCPA” by “alleg[ing] that CitiMortgage’s misleading letters led to the following damages:
damage to Mrs. Allen’s credit score, emotional damages, and forgone alternative legal remedies
to save their home”). Therefore, Defendants’ motion will be denied as to Moss’s MCPA and
MMFPA claims.
Maryland Consumer Debt Collection Act (Count VI)
and Breach of Contract (Counts III and IV)
The Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law
§§ 14-201 et seq., “‘prohibits debt collectors from utilizing threatening or underhanded methods
in collecting or attempting to collect a delinquent debt.’” Piotrowski v. Wells Fargo Bank, N.A.,
No. DKC-11-3758, 2013 WL 247549, at *9 (D. Md. Jan. 22, 2013) (quoting Bradshaw v. Hilco
Receivables, LLC, 765 F. Supp. 2d 719, 731-32 (D. Md. 2011) (citing Md. Code Ann., Com.
Law § 14–202)). It specifically provides that a debt collector may not “[c]laim, attempt, or
threaten to enforce a right with knowledge that the right does not exist.” Com. Law § 14-202(8).

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Moss alleges that Defendants violated the MCDCA when they “claimed, attempted, or
threatened to enforce a right to improper fees and ‘corporate advances’ with knowledge or with
reckless disregard as to the falsity of the existence [of that] right . . . .” Am. Compl. ¶ 115. She
is claiming, not that Defendants never had the right to collect corporate advances, but rather that,
after representing the Reinstatement Amount as the entire payment necessary to bring the
account (including attorneys’ fees and expenses) current through October 17, 2014, Defendants
could not seek payment on fees incurred prior to October 17, 2014. See id.; Pl.’s Opp’n 13 &
n.8. This is the same claim she advances in Counts III and IV for breach of contract7: Moss
claims in Count III that the Reinstatement Quote was an agreement between the parties “to
reinstate her loan including all attorney’s fees and expenses, in exchange for the payment of
$22,471.29,” and that Defendants breached that agreement “by charging Ms. Moss improper
attorney’s fees and expenses after Ms. Moss paid $22,471.29 to reinstate the loan.” Am. Compl.
¶¶ 85–86. She claims in Count IV that the same act “breached the terms of the Deed of Trust,”
which “states that [Moss] has the right to reinstate the loan after a default and acceleration,”
when they “fail[ed] to properly reinstate Ms. Moss’s loan and instead impos[ed] additional
charges after the alleged reinstatement.” Id. ¶¶ 94–99.
Defendants argue that the MCDCA claim must fail because they “are lawfully entitled to
collect the corporate advances pursuant to the Deed of Trust, irrespective of when those amounts

7
  A breach of contract is “a failure without legal excuse to perform any promise which forms the

whole or part of a contract . . . .” In re Ashby Enters., Ltd., 250 B.R. 69, 72 (Bankr. D. Md.
2000) (quoting Conn. Pizza, Inc. v. Bell Atl.-Wash., D.C., Inc., 193 B.R. 217, 225 (Bankr. D. Md.
1996) (quoting Weiss v. Sheet Metal Fabricators, Inc., 110 A.2d 671, 675 (Md. 1955))
(quotation marks omitted)). A contract exists where there is “‘mutual assent (offer and
acceptance), an agreement definite in its terms, and sufficient consideration.’” Spaulding v. Wells
Fargo Bank, N.A., No. 12-1973, 2013 WL 1694549, at *9 (4th Cir. Apr. 19, 2013) (quoting
CTI/DC, Inc. v. Selective Ins. Co. of Am., 392 F.3d 114, 123 (4th Cir. 2004)). Defendants do not
challenge the existence of either contract; they disagree as to the terms of the contracts. See
Defs.’s Mem. 16–17. 
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are applied against Plaintiff’s account.” Defs.’ Mem. 15. Likewise, they insist that Moss fails to
allege a breach of either contract because she alleges that “she paid the reinstatement amount,
was given a receipt for ‘Reinstatement,’ and that, as a result, her loan was reinstated and the
foreclosure action was dismissed.” Defs.’ Mem. 16. Defendants note that the Reinstatement
Amount was “‘subject to final verification by’ Ditech.” Id.
It is true that the Deed of Trust provides that Fannie Mae could “charge [Moss] fees for
services performed in connection with [Moss’s] default, for the purpose of protecting [Fannie
Mae’s] interest in the Property and rights under this [Deed of Trust], including, but not limited
to, attorneys’ fees, property inspection and valuation fees.” Deed of Trust ¶ 14, Compl. Ex. A,
ECF No. 2-1. Additionally, it stated that “[a]ny forbearance by [Fannie Mae] in exercising any
right or remedy including, without limitation, [Fannie Mae’s] acceptance of payments . . . in
amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any
right or remedy.”

Id. ¶ 12.

But, it also stated that Moss would “have the right to have

enforcement of this [Deed of Trust] discontinued” if she
(a) pays [Fannie Mae] all sums which then would be due under this [Deed of
Trust] and the Note as if no acceleration had occurred; (b) cures any default of
any other covenants or agreements; (c) pays all expenses incurred in enforcing
this [Deed of Trust], including, but not limited to, reasonable attorneys’ fees,
property inspection and valuation fees, and other fees incurred for the purpose of
protecting [Fannie Mae’s] interest in the Property and rights under this [Deed of
Trust]; and (d) takes such action as [Fannie Mae] may reasonably require to
assure that [Fannie Mae’s] interest in the Property and rights under this [Deed of
Trust], and [Moss’s] obligation to pay the sums secured by this [Deed of Trust],
shall continue unchanged.
Id. ¶ 19.
At this stage, Moss sufficiently has alleged that the September 23, 2014 Reinstatement
Quote is an agreement by Defendants to waive the legal fees and costs already incurred but not
included in the quote once verified. If this is the case, then Defendants no longer have the right to
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collect, or attempt to collect, those fees and costs, and Moss has stated claims under the MCDCA
and for breach of contract. Defendants have not shown that they were entitled to the previouslyincurred fees and costs after Moss paid the Reinstatement Amount, and consequently they have
not “‘prov[en] that no legally cognizable claim for relief exists.’” See Doe, 123 F. Supp. at 762
(quoting Wright & Miller, Fed. Prac. & Proc. § 1357). Whether the Reinstatement Amount
actually was verified and whether it waived fees and costs that were not included is an issue to be
addressed at summary judgment or at trial.
Negligence (Count VIII)
To state a claim for negligence, Plaintiff must allege “(a) a duty owed by the defendant[s]
to the plaintiff, (b) a breach of that duty, and (c) injury proximately resulting from that breach.”
Barclay v. Briscoe, 47 A.3d 560, 574 (Md. 2012).

She claims that, “[u]nder the circumstances

alleged, in which Defendants and its agents [sic] engaged in significant communications and
activities with Ms. Moss and the loan, Defendants owed a duty to Ms. Moss to provide her with
accurate information about the mortgage loan and reinstatement figures and [Defendants’]
obligations and rights thereunder.” Am. Compl. ¶ 127. According to Moss,
Defendants breached that duty by instructing Ms. Moss to make the
Reinstatement Amount in the verified amount stated by Defendants’ agent BWW,
advising Ms. Moss that her mortgage loan would be completely paid and up-todate, and then instead subsequently charging unlawful attorney’s fees and
expenses to Ms. Moss’s account unilaterally without her knowledge or consent,
and ultimately placing Mr. Moss right back into default status.
Id. ¶ 128. She alleges that the breach caused her damage “in the amount of the Reinstatement
Amount, any and all accrued arrears stemming from the default, and emotional non-economic
damages.” Id. ¶ 129.

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The fault in Moss’s argument is that there is no universal duty to exercise reasonable
care. See Premium of Am., LLC v. Sanchez, 73 A.3d 343, 354 (Md. Ct. Spec. App. 2013).
Rather, tort liability exists only where “‘the law will give recognition and effect’” to “‘an
obligation . . . to conform to a particular standard of conduct toward another.’” Id. (quoting
Gourdine v. Crews, 955 A.2d 769 (Md. 2008) (citation omitted)). Significantly, “‘absent that
duty, there can be no negligence.’” Id. (quoting Barclay v. Briscoe, 47 A.3d 560, 574 (Md.
2012) (citation omitted)). Therefore, “‘when analyzing a negligence action it is customary to
begin with whether a legally cognizable duty exists.’” Id. (quoting Pendleton v. State, 921 A.2d
196, 204 (Md. 2007)).
Moss’s negligence claim against Fannie Mae cannot survive Defendants’ motion because
she does not allege any “legally cognizable duty” that Fannie Mae owed. See Pendleton, 921
A.2d at 204; Barclay, 47 A.3d at 574. As for Ditech, Plaintiff’s pleadings describe Ditech as “a
licensed real estate professional” that owed Ms. Moss “a duty of care due to the ‘intimate nexus’
which exists between . . . Ms. Moss and Ditech” and specifically “a duty under the Maryland
Consumer Protection Act and Maryland common law to make a ‘reasonable investigation’ of the
true facts in the real estate transaction on which the borrower (and other parties) would rely in
order to complete the transaction.” See Am. Compl. ¶¶ 25, 27 (quoting Hoffman v. Stamper, 867
A.2d 276 (Md. 2005)). According to Moss, Ditech, “[a]s a licensed Maryland mortgage lender,”
has
a “duty of good faith and fair dealing in communications, transactions, and course
of dealings with a borrower in connection with the advertisement, solicitation,
making, servicing, purchase, or sale of any mortgage loan” and to “promptly”
provide borrowers with an accounting of their loan when requested and to have
“trained” employees on staff to “promptly answer and respond to borrower
inquiries.”
Id. ¶ 26 (quoting Md. Code Regs. 09.03.06.20).
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Although “tort liability may be imposed upon contractual privity or its equivalent, . . .
there must have been a breach of the duty owed under the terms of the contract.” Yousef v.
Trustbank Sav. F.S.B., 568 A.2d 1134, 1138 (Md. Ct. Spec. App. 1990). Here, although Moss
has alleged the Deed of Trust and Reinstatement Quote as loan agreements, see Am. Compl.
¶¶ 85–86, 94–99, she has not alleged that either agreement imposed upon Dietch a duty to
exercise reasonable care. Therefore, it cannot be the basis for Ditech’s breach.
Thus, this claim must be based on an alleged breach of a fiduciary duty. See Paul Mark
Sandler & James K. Archibald, Pleading Causes of Action in Maryland 522–27 (5th ed. 2013)
(noting that, while no independent cause of action exists for breach of fiduciary duty, breach of
fiduciary duty can be alleged as an element of another cause of action, such as negligence). For
a fiduciary duty to be breached, Ditech must be in a fiduciary relationship with Moss. See id. at
525–26 (stating that elements of claim for negligence based on breach of a fiduciary duty are (1)
a fiduciary relationship existed, (2) the fiduciary breached the duty it owed to the beneficiary,
and (3) the breach caused harm to the beneficiary); Dynacorp Ltd. v. Aramtel Ltd., 56 A.3d 631,
685 n.46 (Md. Ct. Spec. App. 2012) (stating elements).
“‘A fiduciary relationship . . . involves a duty on the part of the fiduciary to act for the
benefit of the other party to the relation as to matters within the scope of the relation.’” Lasater v.
Guttman, 5 A.3d 79, 93 (Md. Ct. Spec. App. 2010) (quoting Buxton v. Buxton, 770 A.2d 152,
164 (Md. 2001) (citation and quotation marks omitted)).

It is more than a “‘confidential

relationship,’” which only requires that one party “‘has gained the confidence of the other and
purports to act or advise with the other’s interest in mind.’” Id. (quoting Buxton, 770 A.2d at 164
(citation and quotation marks omitted)). Examples of fiduciary relationships include “‘trustee
and beneficiary, guardian and ward, agent and principal, attorney and client, partners in a
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partnership, corporate directors and their corporation.’” Id. (citation and quotation marks
omitted).
Here, Ditech is “a licensed real estate professional,” “a licensed Maryland mortgage
lender,” and the “mortgage servicer” on the mortgage loan for which Plaintiff is the borrower.
Am. Compl. ¶¶ 17, 25–28. In contrast with the fiduciary relationships described above, “banks
and mortgage servicers do not owe customers a fiduciary duty.” Ayres v. Ocwen Loan Servicing,
LLC, No. WDQ-13-1597, 2014 WL 4269051, at *4 (D. Md. Aug. 27, 2014). Four “‘special
circumstances’” exist that are an exception to this rule,
under which a fiduciary relationship can exist between a lender and a borrower:
the lender: “(1) took on any extra services on behalf of [the borrowers] other than
furnishing ... money ...; (2) received a greater economic benefit from the
transaction other than the normal mortgage; (3) exercised extensive control ...; or
(4) was asked by [the borrowers] if there were any lien actions pending.”
Windesheim v. Larocca, 116 A.3d 954, 969 (Md. 2015) (quoting Polek v. J.P. Morgan Chase
Bank, N.A., 36 A.3d 399, 418 (Md. 2012)).

Moss has not alleged any of these “special

circumstances” giving rise to a fiduciary relationship under which to impose a fiduciary duty on
Ditech as lending institutions. See id. Therefore, she has failed to establish the duty element of
their claim for negligence. Dynacorp Ltd., 56 A.3d at 685 n.46. Defendants’ Motion to Dismiss
is granted with regard to this claim.
Declaratory Judgment and Injunctive Relief (Count IX)
Pursuant to Md. Code Ann., Cts. & Jud. Proc. §§ 3-401 – 3-415 and 28 U.S.C. §§ 2201–
2202, Plaintiff seeks “a declaration that the Defendants’ charges of attorney’s fees, costs, and
expenses through the corporate advances and escrow charges were a breach of their contract with
Plaintiff and a fraudulent misrepresentation,” and “an injunction preventing the Defendants from
imposing or attempting to collect any further corporate advances.” Am. Compl. ¶¶ 131–33. She
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also seeks an order “that Defendants must credit Ms. Moss for any and all payments made on her
[account], including payments being held in suspense accounts.” Id. ¶ 133.
Defendants argue that Moss’s claim for declaratory judgment and injunctive relief is
subject to dismissal because “it is entirely derivative of Counts I through VIII, which are subject
to dismissal.” Defs.’ Mem. 19. Because, as discussed above, Counts II through VII are not
subject to dismissal, I will not dismiss Moss’s claim for declaratory and injunctive relief on this
basis.
Conclusion
In sum, Moss’s claims against Defendants for breach of contract and violations of the
MMFPA, MCDCA, and MCPA, as well as Moss’s FDCPA claim against Ditech and her claim
for declaratory judgment and injunctive relief will proceed.

Defendants must answer the

Amended Complaint, and I will schedule a Rule 16 scheduling conference to discuss discovery
and related matters. But, because Moss has failed to state a claim against Fannie Mae under the
FDCPA or against either Defendant in negligence or under RESPA, those claims will be
dismissed. Moss’s FDCPA claim against Fannie Mae and negligence claim did not appear in her
original pleading. See Compl. Dismissal of the negligence claim will be without prejudice as she
has not had the opportunity to amend it. See Weigel v. Maryland, 950 F. Supp. 2d 811, 825–26
(D. Md. 2013) (“When a plaintiff fails to state a claim, he ‘should generally be given a chance to
amend the complaint . . . before the action is dismissed with prejudice.’” (citation omitted)).
Even though she also has not had the opportunity to amend her FDCPA claim against Fannie
Mae, given that “there is no set of facts the plaintiff could present to support [her] claim,” that
claim will be dismissed with prejudice. See id. (citing Cozzarelli v. Inspire Pharm., Inc., 549
F.3d 618, 630 (4th Cir. 2008)).
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Her RESPA claim appeared in her original complaint, and Defendants filed a letter
request to file a motion to dismiss, identifying the deficiencies they perceived in her pleading.
ECF No. 15. I denied their request and afforded Moss the opportunity to amend to address the
deficiencies that Defendants identified, and I cautioned that any subsequent dismissal of her
original claims would be with prejudice. ECF No. 17. Her failure to correct the deficiencies in
her RESPA claim suggests that further amendment would be futile. Therefore, this claim will be
dismissed with prejudice. See id.; McLean v. United States, 566 F.3d 391, 400–01 (4th Cir. 2009)
(“Once a court has determined that the complaint is truly unamendable, a dismissal without
prejudice is of little benefit to the litigant, as the claim cannot be made viable through
reformulation.” (internal citation omitted)).
ORDER
Accordingly, for the reasons stated in this Memorandum Opinion and Order, it is,
this 1st day of August , 2016, hereby ORDERED that
1. Defendants’ Motion to Dismiss, ECF No. 22, IS GRANTED IN PART AND
DENIED IN PART as follows:
a. Defendants’ Motion IS GRANTED as to Counts I and VIII, and as to the claim
against Fannie Mae in Count II;
b. Defendants’ Motion IS DENIED as to Counts III–VII and IX, and as to the claim
against Ditech in Count II;
c. The RESPA claim against both Defendants in Count I and the FDCPA claim
against Fannie Mae in Count II ARE DISMISSED WITH PREJUDICE; and
d. The negligence claim against both Defendants in Count VIII IS DISMISSED
WITHOUT PREJUDICE;
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2. Defendants’ Answers ARE DUE on or before August 22, 2016; and
3. A Rule 16 scheduling conference will be scheduled promptly.
/S/
Paul W. Grimm
United States District Judge
lyb

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