Okon v. American Servicing Company et al

Filing 16

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 5/19/2016. (c/m 5/19/2016 aos, Deputy Clerk)

FILED
U S. DIS TRICT COURT
IN THE UNITED STATES DISTRICT coBlHRICT
OF Ht.HYLAND
FOR THE DISTRICT OF MARYLAND

lOlb IIAY I q P 12: II q

SO/lt"l'm Dil'i"io/l
IMEH RENEE OKON,

Plaintiff,

CLERK'S OFFICE
Ai Gr::E[N~::U

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v.
SERVICING

COMPANY,

._~:('~llr'.l

Casc Nu.: G.III-1S-2.t81

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AMERICAN
I't

BY

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al.,

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Dcfcnlhrn ts.

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MEMORANDUM
PlaintifTlmch

as Trustee

Group. PA ("Alba").
alleging violations

Servicing

Company

for SG Mortgage

("Wells

Sccurities

Fargo .. ).l IISBC Bank USA. National

Trust 2006-FRE I ("IISBC").

Alba Law

Melissa L Cassell. Amy II Hill. and See Chang (collectively.
of the Maryland

Complaint

Mortgage

Fraud Protcction

12. No hearing is necessary
that follow.

Motions

"Defendants")

Aci ("MMFPA").

Md. Code

on any Defcndant.

on August 31. 2015. ECF NO.2. Presently

two Motions to Dismiss or. in the Altcrnative.

For the reasons

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OPINION

Ann .. Real Prop. ~ 7-40 I. 1'1 seq. Before service was effcctuatcd
an Amended

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Renee Okon initiated this action on August 21. 2015 against Wells Fargo

Bank. N.A .. tl/b/a America's
Association.

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Ill!' Summary

Plaintiff tiled

pcnding bC!llrc the Coul1 are
Judgment.

ECF Nos. 4 &

to resolve these Motions. ,<,'el' Local Rule 105.6 (D. Md. 2014).
the Motions

will he granted.2

I The Complaint
incorrectly idcntilies Wells Fargo as '-American Servicing Company d/bla \Vells Fargo Bank.
N.A:' The Clerk of the COlll1 will be directed 10 amend the docket to reflecl the true name oflhe Defendant.

On September
17, 2015. Alba filed u Suggestion of Bankruptcy.
indicating that Plaintiff had filed fur protection
under Chapter 13 of the United States Bankruptcy Code. ECF No. J. Even assuming the automatic stay provision
under 11 U.S.c. ~ 362 applied to an action \\,here the bankruptcy debtor initiated the action. set! 11 U.S.c. ~ 362(a)
(referring to commencement
or enforcement
oran action ""against the debtor"). tllere would be no need to elller a

2

I.

BACKGROUND
In the Amended Complaint. PlaintiiTehallenges

proceeding

respecting

certain aspects ofa foreclosure

her residence located in Silver Spring. Maryland. See ECF NO.2 at

3;3 see also Devan v. Ohm. No. 388371 V (Montgomery
Action"). Specifically.
in the [Foreclosure

she alleges that Defendants

fraudulent documents

foreclosure

action. and an anidavit

documents

filed "a series of li'audulent documents

Action) in order to foreclose on [her] property:'

purportedly

I05.I(e)(2)(ii)

were lraudulent

ECF NO.2 at 4. Those

include a linal loss mitigation anidavit.

a notice of

submitted pursuant to Md. Code Ann .. Real Prop. ~ 7-

and Md. Rule. Prop. Sales 14-207(b)(2).

owner occupied:'

Cnty. Cir. Cl.) (the "Foreclosure

ILl. PlaintilTcontends

that these

insofar as they described the property to be foreclosed as "non-

notwithstanding

Plaintifr s representation

to the trustee that she did in

fact occupy the property. ILl. at 6.
In the Foreclosure
Foreclosure

Proceedings

Action. Plaintiff filed a document titled "Motion to Stop
due to Fraudulent Anidavits

Substitute Trustees; Counterclaims

Filed by Wells Fargo and its

Against Wclls Fargo ... and SG Mortgage Securities

Trust 2006-FRE I...• See ECF No. 4-2. In that motion. she alleged that the anidavits
accompanying

the order to docket suit were li'audulent because they Slated that the

property was non-owner

occupied. See iLl. at 3. PlaintilTasserted

stay at thisjullcture because the docket for the bankruptcy proceedings
III re Okoll. No. 15-2t893 (flankr. D. Md. Apr. 7.2(16).
3

All pin cites to documents

generated

by

claims of wrongful

indicates that the case has been closed.

,)'1.'1.'

tiled on the Court"s electronic filing system (CM/ECF) rcl~rto the page numhers

that system.

Although the Court relics on documents outside of the Complaint. these Motions Illay properly be considered
under the motion to dismiss standard because. in reviewing such a motion. the court may consider. ill addition to the
allegations in the Complaint, matters of public record and documents attached to the motion to dismiss that me
integral to the complaint ami authentic. Sce Philips \'. Pilt emy. ,\I1!111 'j limp .. 51'2 F.Jd 176. 180 Htll Cir. 2009).
-l

2

foreclosure
U.S.C.

S

and injurious falsehood and violation of the Equal Credit Opportunity

1691a et self.. seeking damages and a declaratory judgment.

The Circuit Court for Montgomery
the Foreclosure

Act. 15

See ill. at 9-14.

County. Maryland dcnied Plaintiffs

motion in

Action. treating it as a motion to stay the sale of the property and dismiss

the action. Plaintiff appealed to the Court of Special Appeals of Maryland. which aflirmed
the denial of her motion on the ground that Plaintiff failed to comply with Md. Rule 14211(a)(3), which sets forth the requirements
Maryland. See ECF No. 4-4. Plaintirfs
separate action. See Ohm

1'.

ofa motion to dismiss a foreclosure

counterclaims.

however. were docketed as a

We//s Fargo Home Mortgage.

Cnty. Cir. Ct.) (the ''Counterclaim

action in

No. 389299V (Montgomery

Action"). In that case. on May 23. 2014, the court

granted a motion to dismiss and dismissed the counterclaims

without le<l\'e to amend. ECl'

No. 4-6. Plaintirf did not appeal that dismissal.
II.

DISCUSSION
A. Subjcct M:lttcr .Judsdiction
Defendants

seek dismissal on the ground that PlaintitThas

for this Court's exercise of subject matter jurisdiction.

ECl' No. 4-1 at 7: ECF No. 12-1 at

6. A motion to dismiss for lack or subject matter jurisdiction
Civil Procedure
jurisdiction

lililed to allege a basis

arises under Federal Rule or

12(b)( I). The plaintiff bears the burden of proving that subject matter

properly exists in federal court. See Demetres

1'.

E. W. COllst..

/IIC.,

776 F.3d

271, 272 (4th Cir. 20 15). In a 12(b)( I ) motion, the court "may consider evidence outside
the pleadings"

to help determine

Tail Park.

\'.

/IIC.

whether it has jurisdiction

over the case before it. While

Strollhe, 413 F.3d 451. 459 (4th Cir. 2005). The court should grant the

12(b)(I) motion "'only if the material jurisdictional

,

.'

facts arc not in dispute and the moving

party is entitled to prevail as a matter of law .... Quigley
213.217

(D. Md. 2012) (quoting Richmond,

Slales. 945 F.2d 765. 768 (4th Cir. 1991
The Complaint

Uniled Slales. 927 F. Supp. 2d

1'.

rrederickshurg

& I'olomac

R. Co.

1'.

United

».

does not allege any federal cause of action. citing only to a

Maryland state statute as the basis for Plaintitrs
may only exercise jurisdiction

recovery. See ECF NO.2. Thus. this Court

over this matter if there is complete diversity of citizenship.

See 28 U.S.C. 1332(a). Diversity jurisdiction

under ~ 1332 only exists if there is complete

diversity between all parties. See Banca Del Seml'ione

1'.

F.3d 615 (4th Cir. 1996) (per curiam) ("Since Stra\l'brh(!;e
267 (1806). courts have interpreted

!'nJl'idel1l Bank o(Mw:\'land.
1'.

85

Curtiss. 7 U.S. (3 Cranch)

section 1332 to require complete diversity bet\\'een all

parties.").
Complete diversity is lacking in this case. In the Amended Complaint.
alleges that she resides in Silver Spring. Maryland.
Defendants

Alba and Cassell are domiciled

Thus. this Court lacks jurisdiction

but she also acknowledges

Plaintiff
that

in Maryland. See ECF NO.2; ECF NO.8 at 2.

over this matter.

B. Failure to State a Claim
Dismissing

the non-diverse

parties from this matter. however. would not save the

case from dismissal because the Complaint

fails to state a plausible claim fiJr relief.

A motion to dismiss for failure to state a claim upon which relief may be granted is
made pursuant to Federal Rule ofCivill'rocedure

12(b)(6}. Eel" No. 4-1 at8-10.

When

deciding a motion to dismiss under Rule 12(b)(6}. a court "IllUst accept as true all of the factual
allegations contained in the cOlllplaint:' and Illust "draw all reasonable inlerences Ili'olll those
facts] in favor of the plaintifC

EI. du Ponl de Nemours & Co. \'. Ko!<m/ndu.l'.. Inc.. 637 F.3d

435.440 (4th Cir. 2011) (citations and internal quotation marks omitted). To sllI'\'ive a motion to
dismiss invoking Rule 12(b)(6). "a complaint must contain suflicient i"actualmattcr. accepted as
true. 'to state a claim to relief that is plausible on its i"ace:" Ashcro/i \'. Iqhal. 556 U,S. 662. 678
(2009) (quoting Bell Allaillic Corp.

1".

TlI'(lIlIhly. 550 U.S, 544. 570 (2007)). Although pleadings

of self-representcd litigants must be accorded liberal construction. see Gordoll \', Leeke. 574 F.2d
1147, 1151 (4th Cir.1978). liberal construction does not mcan a court can ignorc a clear t~lilure to
allege facts that set forth a cognizable claim. see Weller

I'.

Dep'l oj'Soc, Sen's .. 901 F.2d 387

(4th Cir. 1990).
In reviewing a motion to dismiss. the Court may consider allegations in the complaint.
matters of public record. and documents attached to the motion to dismiss that are integral to the
complaint and authentic. See I'hi/ips

I'.

I'il/ CIIIY. Mem 'I IImjJ .. 572 F.3d 176. 180 (4th Cir.

2009). While aflirmative de lenses may be reached by a motion to dismiss tiled under Rule
12(b)(6). such a motion should be granted only in the "rare circumstances where i"actssuflicient
to rule on an aflimmtive detense arc alleged in the complain!." Goodmall \'. I'ra.\'11ir. IIIL'..494
F.3d 458. 464 (4th Cir.2(07) (en banc). Moreover. a mo\'ant cannot merely show that the
elements ofthc defense appear on the t~lceoi"the complaint or in properly considcrcd documcnts.
but must also "show that the plaintiffs potential rcjoinder to the aflirmati\'e defense was
i"oreclosed by the allegations in the complaint:' Id. at 466,
Plaintiffs

claims against the non-diverse

they are barred by the doctrinc of res judicata.

Defendants

must be dismissed becausc

"It is well established that the doctrine of res

judicata bars the rclitigation of matters prcviously litigatcd between parties and their privies. as
well as those claims that collld hm'e heellasserled

and litigatcd in thc original suit:'

Allyallll'lIlakll1". Fleel Morlgage Glf} .. IlIc.. 85 F. Supp. 2d 566. 570 (D. Md.). atfd. 229 F.3d

5

1141 (4th Cir. 2000) (emphasis in original) (citations omitted). "Resjudicata.

which is

sometimes referred to as claim preclusion. helps to avoid .the expense and vexation attending
multiple lawsuits. conserves judicial resources. and t()sters rcliance on judicial action by
minimizing the possibilities of inconsistent decisions .... !d. (quoting Murray 111/'1FreiRiu Corp.
I'.

Graham,

555 A.2d 502. 503-04 (Md. 1(89)). "The traditional principle of res judicata has

three elements: (1) the parties in the present litigation should be the same or in privity with the
parties to the earlier case: (2) the second suit must present the same cause of action or claim as
the first; and (3) in the tirst suit. there must have been a valid tin'll judgment on the merits by a
court of competent jurisdiction." deLeol7 \'. Slear, 616 A.2d 380. 385 (Md. 1(92).
All three elemcnts of res judicata arc met in this case. First. two of the diversc
Defendants,

Wells Fargo and HSBC. were parties to the Counterclaim

court. Although the other two diverse Defendants-Hill

Action in state

and Chang-were

that action, they were, according to the Amended Complaint.

employees

not parties to
of Wells l'argo

and/or I-lSBC when they engaged in the allegedly li'audulent acts and arc therefore in
privity with Wells Fargo and/or HSBC and arc theret()re in privity with them. See ECF
NO.2 at 2-3, 6-7; see also deLeol7, 616 A.2d at 389 (concluding
privity with employer

that employees

were in

for res judicata purposes where prior action against employer was

based on its vicarious liability 1()r the conduct of those employees).
With regard to the second clement. namely. whether this action presents ..the same
cause of action or claim" as the previous suit. "federal courts and i\laryland state courts have
adopted the 'transaction test' to determine the identity of the causes of action:' Al7yal7ll'lI/akll. 85
F. Supp. 2d at 571 (citing Adkil7s

I'.

Ails/ale

1m. Co .. 729 F.2d 974. 976 (4th Cir.1(84): dr/.eol7.

616 A.2d at 3(0). That is to say that. "as long as the second suit arises out of the same

6

transaction or series of transactions as the claim resolved by the prior judgment. the lirst suit will
have preclusive eflecl." Ohio Valley Em'/I, Coal,

1',

AracoII/a Coal Co.. 556 F.3d 177.210 (4th

Cir. 2009). Plaintiffs allegations in this case regarding the allegedly li'audulent documents tilcd
in the Foreclosure Action arise out of the same transaction as the claims involved in that action
and in the Counterclaim Action. Notably. there. as she does here. Plaintiff challenged the
description of her property as one that was "non-owner occupied." See. e.g.. Eel' No. 4-2 at 3. 9.
Finally. Plaintilf does not dispute that the Counterclaim Action resulted in a linaljudgment

on

the meri ts. 5
III. CONCLUSION
In sum. this Court lacks jurisdiction

over the present suit because there is not

complete diversity between the parties. Moreover. even if the jurisdictional
cured, dismissal would be warranted because PlaintilTs
Defendants

are barred by res judicata.

Accordingly.

GRANTED

and this action is DISMISSED

Dated: Mav

!9

S

delCct could be

claims against the non-diverse

Defendants'

Motions to Dismiss are

with prejudice."

,/?A--

.2016

GEORGE J. IIi\ZEL
United States District Judge

Because the Court concludes that dismissal is warranted for nlilure to state a claim. it need not address the
Hill and Chang regarding service of process. SI!f! ECF NO.4-I at 10-11.

argument raised by Wells Fargo. HSBC.
6

Although the first dismissal of an action is ordinarily without prejudice. see ()slr:enski \'. S'eige/. 177 F.3d 245.
Court has discretion to dismiss an action with prejudice where "it is clear that
in light orthe {complaint's] fundamental dcficiencies(.r
Co::arelli \'. Impire Pharm.

252-53 (4th Cir. 1999). the
amendment would be futile
Inc., 549 F.3d 618, 630 (4th
this action are barred b:y res

Cir. 2008).

Because Plaintiffs

state law claims against the only diverse Defendants
would be futile.

judicata. amendment of the Complaint

7

in