Healy et al v. BWW Law Group, LLC et al
MEMORANDUM OPINION. Signed by Judge Paul W. Grimm on 1/23/2017. (aos, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
PATRICK HEALY and
ELLEN C. HEALY
BWW LAW GROUP, LLC and
SUNTRUST MORTGAGE, INC.,
Case No.: PWG-15-3688
On four separate occasions over the past decade, Plaintiffs Patrick and Ellen Healy (“the
Healys”) fell behind on mortgage payments for their property at 7552 Pepperell Drive, Bethesda,
Maryland (“the Property”). Each time, the Healys’ lender, Defendant SunTrust Mortgage, Inc.
(“SunTrust”) initiated foreclosure proceedings, which the Healys halted by making payments to
bring their loan current. The Healys filed suit against SunTrust and its law firm, Defendant
BWW Law Group, LLC (“BWW”) alleging violations of the Maryland Consumer Protection Act
(“MCPA”), Md. Code Ann. Com. Law §§ 13-101 to -501; Maryland Consumer Debt Collection
Act (“MCDCA”), Md. Code Ann. Com. Law §§ 14-201 to -204; and the Federal Racketeer
Influence Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961–68.
ECF No. 1.
Specifically, the Healys claim they are entitled to damages because Defendants initiated two of
the four foreclosure proceedings by filing robo-signed documents (i.e. foreclosure documents
signed without personal knowledge of the contents) and because BWW misquoted the amount
necessary for the Healys to bring their loan current in 2014.
Am. Compl., ECF No. 18.
Defendants have moved to dismiss, ECF Nos. 19, 20, and the parties have fully briefed the
motions, BWW Mem., ECF No. 19-1; SunTrust Mem., ECF No. 20; Pls.’ Opp’n, ECF No. 23;
BWW Reply, ECF No. 25; SunTrust Reply, ECF No. 26. No hearing is necessary. Loc. R. 105.6
(D. Md.). Fourth Circuit authority bars recovery under the MCPA and MCDCA for robosignature-initiated foreclosure proceedings on valid, collectible debt, and the Healys’ Amended
Complaint fails to state a RICO claim, but they have stated a MCPA claim related to the 2014
overcharge. Accordingly, I will grant BWW’s Motion to Dismiss, and I will grant SunTrust’s
Motion in part and deny it in part.
In December 2006, the Healys obtained an $842,000 promissory note from SunTrust
secured by a Deed of Trust on their Property. Am. Compl. ¶ 7. In 2008, the Healys began
falling behind on their mortgage payments. Id. ¶ 9. That year, SunTrust’s counsel, BWW,
initiated a foreclosure suit against the Healys, which SunTrust dismissed in May 2009 after the
Healys remitted $66,000 to bring the loan current. Id. ¶¶ 10–12. Shortly thereafter, the Healys
became delinquent on their loan again, and BWW filed a second foreclosure suit against the
borrowers on SunTrust’s behalf in December 2009. Id. ¶ 14. The Healys once again remitted a
payment to bring the loan current, prompting SunTrust to dismiss the case. Id. ¶¶ 35–36. The
cost of bringing the loan current a second time caused the Healys to file for bankruptcy in the
U.S. Bankruptcy Court for the District of Maryland during the pendency of the foreclosure suit.
Id. ¶¶ 15, 37–38.
In 2012, the Maryland Attorney Grievance Commission suspended BWW attorney Jacob
Geesing for instructing non-attorneys to sign his name to foreclosure documents and notaries to
notarize them, conduct known colloquially as robo-signing.
Id. ¶¶ 16–20. The Maryland
Secretary of State also removed BWW notaries for following Geesing’s directives. Id. ¶ 21. On
December 30, 2012, the Healys applied to and participated in the federal government’s
Independent Foreclosure Review program, id. ¶ 27, which among other things, “sought relief for
victims of robo-signing” and culminated in a commitment from lenders under investigation,
including SunTrust, to discontinue robo-signing practices and to compensate injured borrowers,”
id. ¶ 29. Based on their participation in the program, the Healys received a small payment from
SunTrust. Id. at 32.
By December 2013, the Healys again fell behind on mortgage payments, prompting
BWW to file a third foreclosure suit on SunTrust’s behalf in the following year. Id. ¶¶ 41–42.
This time, the Healys questioned the validity of signatures on the 2014 foreclosure filings and
retained a handwriting expert, who allegedly concluded that both the second and third
foreclosure filings contained signature discrepancies.
Id. ¶¶ 43–45.
concerns, the Healys inquired how much they would need to pay in order to bring the loan
current again. Id. ¶ 49. BWW initially quoted an amount of $246,733.25, but when the Healys
attempted to pay SunTrust, BWW in informed the borrowers that the actual payoff amount was
$248,833.25. Id. ¶¶ 50–52. After the Healys paid the requested amount, thereby avoiding the
foreclosure sale, BWW informed them that its revised estimate had in fact been too high and that
SunTrust owed them a refund of an unspecified amount, which they allegedly never received.
Id. ¶¶ 53–55.
In 2015, after the Healys again fell behind in their mortgage payments, a different law
firm initiated a fourth foreclosure suit on SunTrust’s behalf against the Healys, which the lender
dismissed after the borrowers brought the mortgage current once again. Id. ¶¶ 63–64, 67–68;
Ltr. from Brock & Scott, PLLC to Residents at 7552 Pepperell Drive, Bethesda, MD 20817, Am.
Compl. Ex. 19, ECF No. 18-19.
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.
Rule 9(b) states that “in alleging a fraud or mistake, a party must state with particularity
the circumstances constituting the fraud or mistake.” Fed. R. Civ. P. 9(b). 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.’ ”
Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan.
22, 2013) (quoting Superior Bank, F.S.B. v. Tandem Nat’l Mortg., Inc., 197 F. Supp. 2d 298,
313–14 (D. Md. 2000)). All of the Healys’ claims are rooted in fraud allegations, so heightened
pleading standards apply. See Haley v. Corcoran, 659 F. Supp. 2d 714, 724 & n.10 (D. Md.
2009) (applying Fed. R. Civ. P. 9(b) to MCPA claim); Murray v. Bierman, Geesing, Ward &
Wood, LLC, No. RWT-11-1623, 2012 WL 4480679, at *4 (D. Md. Sept. 27, 2012) (noting
applicability of Fed. R. Civ. P. 9(b) to MCDCA claim); Kimberlin v. Hunton & Williams LLP,
No. GJH-15-723, 2016 WL 1270982, at *7 (D. Md. Mar. 29, 2016) (applying Fed. R. Civ. P.
9(b) to RICO claim based on mail or wire fraud).
MCPA and MCDCA Claims
1. Statute of Limitations
As an initial matter, SunTrust and BWW argue that the Healys’ MCDCA and MCPA
claims (Counts I and II) relating to the 2009 foreclosure suit are time-barred. SunTrust Mem.
6-8; BWW Mem. 9–10. “Claims under the MCPA and MCDCA are subject to a three-year
statute of limitations.” Ayres v. Ocwen Loan Servicing LLC, 129 F. Supp. 3d 249, 272 (D. Md.
2015) (citing Md. Code Ann. Cts. & Jud. Proc. 5-101). And claims under each statute accrue
“when the claimant in fact knew or reasonably should have known of the wrong.” Id. (quoting
Walton v. Wells Fargo Bank, N.A., No. AW13-428, 2013 WL 3177888, at *6 (D. Md. June 21,
3013)). As the Healys filed their Complaint on December 1, 2015, any facts that they knew or
reasonably should have known prior to December 1, 2012 cannot form the foundation of their
allegations. The Healys claim they did not know about the alleged robo-signing until 2014,
when their retained handwriting expert noted signature discrepancies in the filings for the second
and third foreclosure suits. Pls.’ Opp’n 9. Plainly, this cannot be. As both Defendants observe,
BWW Reply 2; SunTrust Reply 2, the Plaintiffs’ contention is belied by their 2012 participation
in the federal government’s Independent Foreclosure Review program, which specifically
addressed robo-signing issues in the mortgage industry, Am. Compl. ¶¶ 25–32.
But the Healys did not apply to participate in the program until December 30, 2012. Id.
¶ 27. While it is reasonable to assume that the Healys knew sometime before they applied to
participate in the program that the foreclosures documents might have contained robo-signatures,
it is not clear when they did know or should have. BWW argues that they should have known
when the program began in August 2012. BWW Mem. 10. But at the motion-to-dismiss stage,
it would be improper to infer from the fact that a federal program to address robo-signing existed
that the Healys knew or should have known that robo-signing might have been used to initiate
foreclosure proceedings against them. BWW and SunTrust similarly argue that the Healys knew
or should have known about the alleged robo-signing when the Baltimore Sun reported on the
investigation of BWW attorney Jacob Geesing in an October 2010 article that the Healys cited in
their Complaint. BWW Mem. 10; SunTrust Mem. 7–8; Am. Compl. ¶ 6. It would also be
improper to infer from a news article about a single attorney at the law firm retained by SunTrust
that the Healys had constructive knowledge of robo-signatures on their foreclosure documents.
Without making factual inferences, the earliest date I can conclude that the Healys had actual or
constructive knowledge of BWW’s use of robo-signatures is December, 30, 2012, just barely
within the statute of limitations. I cannot determine, based on the Amended Complaint, that the
Healys’ MCPA and MCDCA claims relating to the 2009 foreclosure suit are time-barred.
2. MCPA Claim
To counteract “deceptive practices in connection with . . . the extension of credit,” the
MCPA provides a cause of action for financial consumers to obtain money damages for injuries
caused by “unfair or deceptive trade practices . . . in . . . the collection of consumer debts.” Md.
Code Ann. Com. Law §§ 13-102, -303, -408. The statutory definition of “unfair or deceptive
trade practices” covers a wide range of conduct in multiple industries. See id. § 13-301. Among
other forbidden conduct, the term encompasses any “[f]alse . . . or misleading oral or written
statements, visual description, or other representation of any kind which has the capacity,
tendency, or effect of deceiving or misleading consumers.” Id. § 13-301(1). No scienter
requirement applies to this category of deceptive trade practices. Myles v. Rent-a-Center, Inc.,
No. JKB-14-300, 2016 WL 3917212, at *8 n.9 (D. Md. July 19, 2016), meaning defendants can
violate the statute without knowing the falsity of their representations. Id. To establish a MCPA
claim, plaintiffs must allege “(1) an unfair or deceptive practice or misrepresentation that (2) is
relied upon, and (3) causes them actual injury.” Stewart v. Bierman, 859 F. Supp. 2d. 754, 768
(D. Md. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257 (Md. 2007)).
The Healys allege two deceptive trade practices committed by SunTrust: (1) the use of
robo-signatures to initiate foreclosure suits in 2009 and 2014; and (2) an overcharge in 2014
when the Healys sought to bring their loan current. Am. Compl. ¶¶ 88–89, 91.1 They contend
that the robo-signatures “accelerated the foreclosure process[,] necessitating [the Healys’]
bankruptcy filing,” id. ¶ 38, which they appear to blame for their inability to obtain a loan
modification, see ¶ 90 (alleging that accelerated foreclosures forced them to “accept a loan at
higher than market rate”). The Healys also contend that the overcharge in 2014 harmed them by
The Healys amended their initial Complaint to remove allegations that BWW violated the
MCPA, compare Compl. ¶¶ 104–11, with Am. Compl. ¶¶ 87–93, but the heading for the MCPA
count still parenthetically names BWW, Am. Compl. 14. As BWW correctly notes, BWW Mem.
23–24, the MCPA exempts attorneys from liability under the statute, Md. Code Ann. Com. Law
§ 13-104(1). Accordingly, the Healys cannot state a MCPA claim against BWW if it is still their
intention to allege MCPA violations against the firm. To the extent that the Healys do allege
MCPA violations against BWW, their claims are dismissed with prejudice.
forcing them to pay more than necessary to prevent a foreclosure sale. Id. ¶ 92. Although the
first allegation fails to state a MCPA claim, the second does.
As to the robo-signatures, the Healys unsatisfactorily explain how they detrimentally
relied on them. As SunTrust correctly notes, SunTrust Mem. 11–12, this Court has concluded as
a matter of law that robo-signatures on otherwise valid foreclosure documents cannot be a source
of detrimental reliance. In Stewart v. Bierman, 859 F. Supp. 2d 754, Judge Roger Titus held that
borrowers did not adequately plead the reliance element of an MCPA claim where a complaint
“fail[ed] to indicate how . . . alleged forgeries of . . . foreclosure documents materially impacted
the debtors’ conduct” because “[t]he actual process and method of affixing signatures to court
documents is immaterial to a debtor where the existence of the debt and a default are not
disputed,” id. at 769. As in Stewart, the Healys do not dispute that they defaulted on valid debt.
See Am. Compl. ¶ 9 (“In 2008, due to issues in the securities market, [the] Healy[s] fell behind
[in their] mortgage payments.”); id. ¶ 40 (“In 2013, [the] Healy[s] again became delinquent in
payments to Suntrust.”). Accordingly, they cannot argue that they detrimentally relied on the
robo-signatures, which did not alter the validity of the underlying debt. See Stewart, 859 F.
Supp. 2d at 769. The Healys’ MCPA claim (Count II) as it pertains to the alleged robosignatures will be dismissed with prejudice.2
With respect to the 2014 overcharge, the Healys also allege that an unspecified BWW
employee, acting as SunTrust’s agent, falsely stated the amount required to prevent the
At a January 5, 2016 status conference, I afforded the Healys the opportunity to amend their
complaint to address the deficiencies outlined by SunTrust and BWW in their letters setting forth
the factual and legal bases for their proposed motions to dismiss, but cautioned them that failure
to address the deficiencies in their amended complaint would result in dismissal with prejudice.
See ECF No. 15. SunTrust raised this argument in its letter requesting permission to file a
motion to dismiss. SunTrust Ltr. 4 (“The Healys do not establish any reasonable or detrimental
reliance on the alleged misrepresentations.”). Accordingly, the claim is dismissed with
impending foreclosure sale. Id. ¶¶ 52, 54. In reliance on that false representation, the Healys
paid more than was necessary. Am. Compl. ¶ 53. The Healys also allege that an unidentified
BBW employee falsely stated that they would receive a refund for the excess payment. Id. ¶¶
54–55. SunTrust argues that these allegations fail to state an injury because “had Plaintiffs’ [sic]
paid an extra $2,100 as the Amended Complaint alleges, the overpayment would have reduced
the overall loan obligation to the Plaintiff’s benefit.” SunTrust Mem. 14. But the Amended
Complaint provides no indication that the excess amount was in fact applied to the borrowers’
principal but rather alleges that BWW promised the Healys a refund that they never received.
Am. Compl. ¶¶ 54–55. I cannot accept SunTrust’s invitation to speculate as to how the bank
spent any excess funds received from the Healys.
SunTrust also argues that the Healys’ failure to identify the individual who notified them
that the reinstatement figure was false runs afoul of Fed. R. Civ. P. 9(b)’s heightened pleading
SunTrust Mem. 13.
But the allegedly false communication was an email
providing the $248,833.25 reinstatement figure. And although the Amended Complaint fails to
identify the individual responsible for the false statements, emails attached to the Amended
Complaint identify BWW Attorney Chris Haresign as the source of the inaccurate reinstatement
figure. Email from Christ Haresign, BWW Law Group, LLC, to Shawn Whittaker (Oct. 28,
2014, 6:31 P.M.), Am. Compl. Ex. 17. Although the Court ordinarily “may not consider any
documents that are outside of the complaint” in reviewing a motion to dismiss,” it may do so
where the documents are “incorporated” into the complaint.
Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013).
Clatterbuck v. City of
The Plaintiffs specifically reference
Haresign’s email in the Amended Complaint. Am. Compl. ¶ 52. The Healys have therefore
pleaded with sufficient specificity the identity of the individual who allegedly communicated
false information on which they relied when they paid more than necessary to reinstate their
Accordingly, the have stated a MCPA claim against SunTrust regarding the 2014
3. MCDCA Claim
The Healys allege that BWW violated the MCDCA by robo-signing foreclosure
documents. Am. Compl. ¶¶ 82–85.
The MCDCA bars debt collectors from “claim[ing],
attempt[ing], or threaten[ing] to enforce a right with knowledge that the right does not exist.”
Md. Code Ann., Com. Law. § 14-202(8). “To plead a claim under the MCDCA, Plaintiff must
set forth factual allegations tending to establish two elements: (1) that Defendants did not possess
the right to collect the amount of debt sought; and (2) that Defendants attempted to collect the
debt knowing that they lacked the right to do so.” Lewis v. McCabe Weisberg & Conway, No.
DKC 13-1561, 2014 WL 3845833, at *6 (D. Md. Aug. 4, 2014).
BWW persuasively argues that Fourth Circuit case law bars this claim. BWW Mem. 10–
13. In Lembach v. Bierman, 528 F. App’x 297 (4th Cir. 2013), borrowers brought a claim nearly
identical to the Healys’ against BWW.3 The plaintiffs in that case argued that BWW “violated
the MCDCA when it sought to foreclose on their property knowing that ‘the right did not exist’ ”
by initiating foreclosure proceedings using robo-signed documents. Id. at 300. Noting that the
MCDCA permits recovery only where “the debt collector seeks to collect on debt when he or she
knows (or should know) that he or she does not have the right to do so,” the Fourth Circuit held
that “the MCDCA does not allow for recovery for an error in the process of collecting . . .
legitimate and undisputed debt.” Id. at 304–05. As the plaintiffs “fail[ed] to show any evidence
that [BWW] had any reason to doubt the validity of the debt and its right to foreclose upon it”
At the time, BWW went by the moniker Bierman, Geesing, Ward & Wood LLC.
the Court concluded that the borrowers’ robo-signature allegations “simply [do] not [fall] within
the ambit of the MCDCA.” Id. at 304.
Like the Lembach plaintiffs, the Healys do not dispute the validity of debt BWW sought
to recover or firm’s right to collect it. The Healys admit that they “executed a Deed of Trust . . .
agreeing to pay Suntrust $842,000.00 in periodic payments with the full balance to be paid no
later than January 1, 2037,” Am. Compl. ¶ 7, and that they “became delinquent on payments”
prior to the 2009 and 2014 foreclosure suits, id. ¶¶ 13, 40. The Healys attempt to distinguish
their claim from Lembach by arguing that the plaintiffs in that case “conceded that the right to
foreclose on their properties existed, and only challenged the legitimacy of the filings which used
robo-signatures.” Pls.’ Opp’n 12. By contrast, the Healys maintain that they do not “concede
that BWW could initiate the foreclosure proceedings through the use of improper robo-signed
documents.” Id. But, as BWW notes, the Healys’ characterization of Lembach is simply false.
BWW Reply 4–5. The Lembach plaintiffs claimed BWW “violated the MCDCA when it sought
to foreclose on their property knowing that ‘that right did not exist,’ ” and they asserted that
BWW lacked the right to foreclose because it filed “court documents with false signatures.” 528
F. App’x at 300.
The Healys also cite Fontell v. Hassett, 870 F. Supp. 2d 395 (D. Md. 2016) and
Bradshaw v. Hilco Recoverables, LLC, 765 F. Supp. 2d 719 (D. Md. 2011) as authority for the
proposition that MCDCA claims encompass procedurally defective attempts to collect debt.
But, as BWW notes, BWW Reply 5, both of those cases involve efforts by unlicensed debt
collection agencies, Fontell, 870 F. Supp. 2d at 411 (“Here, liability under the MCDCA . . . is
predicated on the unlicensed attempts of the management agent, through its employees . . . to
collect Plaintiff’s debt . . . .”); Bradshaw, 765 F. Supp. 2d at 732 (“Plaintiffs allege that Hilco’s
unlicensed filing of lawsuits against the class members violates the MCDCA’s prohibition on
attempting, or threatening to enforce a right with knowledge that the right does not exist . . . .”).
While some debt collector possessed the right to collect the valid debt in those cases, the
unlicensed defendants did not. By contrast, the Healys, like the Lembach plaintiffs, do not
dispute that BWW had the right to collect the SunTrust’s debt; rather, they dispute BWW’s right
to collect the debt in the manner that they did.
The Healys fail to distinguish their claim from Lembach. Accordingly, their MCDCA
claim against BWW (Count I) fails as a matter of law and will be dismissed with prejudice.4
The Healys also claim that BWW and SunTrust committed RICO violations by
“falsifying foreclosure documents,” “threatening to sell [their] home if [they] did not pay
incorrect amounts,” and “attempting to collect unlawful debts,” for which they claim treble
damages. Am. Compl. ¶ 95. “In order for a RICO claim to survive a Rule 12(b)(6) motion to
dismiss, Plaintiffs must allege ‘(1) conduct; (2) of an enterprise; (3) through a pattern; (4) of
racketeering.’ ” Davis v. Wilmington Fin. Inc., No. PJM-09-1505, 2010 WL 1375363, at *3 (D.
Md. Mar. 26, 2010) (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985)). The
Healys fail to allege either a pattern of racketeering activity or the existence of an enterprise.
1. Pattern of Racketeering Activity
The RICO statute defines “racketeering activity” by reference to a long list of predicate
criminal offenses. 18 U.S.C. § 1961(1). To establish a “pattern of racketeering activity” a
defendant must commit a predicate offense at least twice within a ten-year period. Id. § 1961(5).
BWW raised the same argument in its letter setting forth the legal and factual basis for its
motion to dismiss. BWW Ltr. 3, ECF No. 15 (“[T]he Healys do not allege that BWW ever
initiated a foreclosure action with the knowledge that the debt did not exist.”).
The Healys name no predicate offense in the Amended Complaint.
foreclosure documents” and “threat[s] to sell [the] Healy[s’] home if Healy did not pay incorrect
amounts to Suntrust and BWW” are not enumerated at 18 U.S.C. § 1961(1) as types of
racketeering activity. Am. Compl. ¶ 95. And an “unlawful debt” is “debt . . . incurred or
contracted in gambling activity which was in violation of the law,” which is plainly not relevant
to the Healys’ claims. 18 U.S.C. § 1961(6). The Healys now argue that the Amended Complaint
sufficiently pleads the “racketeering activity” element by claiming that BWW and SunTrust
“engag[ed] in mail fraud, criminalized in 18 U.S.C. § 1341, and included in RICO’s definition of
‘racketeering activity’ contained in 18 U.S.C. § 1961.” Pls.’ Mem. 19. But the words “mail
fraud” appear nowhere in the Amended Complaint. And “it is axiomatic that a complaint may
not be amended by the briefs in opposition to a motion to dismiss.” Nicholson v. Fitzgerald Auto
Mall, No. RDB–13–3711, 2014 WL 2124654, at *4 (D. Md. May 20, 2014) (quoting Frederico
v. Home Depot, 507 F.3d 188, 201–02 (3d Cir. 2007)).
The Healys also argue that they lacked notice that the Defendants would seek dismissal
on the grounds that they failed to plead an offense that constituted “racketeering activity” and
seek permission to further amend their complaint. Pls.’ Mem. 18–19. In its letter setting forth
the basis for its Motion, BWW averred that “[n]owhere in the Healy’s [sic] pleading do they
allege . . . ‘a pattern of racketeering activity.’ ” BWW Ltr. 3. SunTrust indicated in its letter that
“the Healys entirely fail to allege any facts tending to show a pattern of racketeering activity.”
SunTrust Ltr. 4. The Healys cannot seriously claim that the Defendants’ conflation of the
“racketeering activity” and “pattern” elements of the RICO claim failed to apprise them of their
Complaint’s deficiencies. For one thing, as a pure matter of arithmetic, one act of “racketeering
activity” is a prerequisite for a pattern of it.
For another, it is not atypical for courts to
characterize a “pattern of racketeering activity” as a single element of a RICO claim rather than
two separate ones.
See Salinas v. United States, 552 U.S. 52, 62 (1997) (“The elements
predominant in a [RICO] violation are: (1) the conduct (2) of an enterprise (3) through a pattern
of racketeering activity.”); United States v. Mouzone, 687 F.3d 207, 217 (4th Cir. 2012); United
States v. Wilcock, No. WDQ-08-86, 2010 WL 2640107, at *3 n.6 (D. Md. June 28, 2010). The
Plaintiffs had sufficient notice of their Complaint’s shortcomings. Because they have failed to
allege any “racketeering activity” in their Amended Complaint, let alone a pattern of it, their
RICO claim (Count III) will be dismissed with prejudice.5
The Healys also fail to plead the “enterprise” element of their RICO claim, which
requires “(1) an ongoing organization; (2) associates functioning as a continuing unit (even if
some leave as long as the organization remains the same); and (3) the enterprise is an entity
separate and apart from the pattern of activity in which it engages.” Proctor v. Metro. Money
Store Corp., 645 F. Supp. 2d 464, 477–78 (4th Cir. 2009) (citing United States v. Tillett, 763
F.2d 628, 631 (4th Cir. 1985). The Healys allege that the “multiple enforcement actions and
suits against BWW and Suntrust for their improper use of robo-signatures and other wrongful
practices in foreclosure proceedings” establish the existence of an enterprise. Am. Compl. ¶ 97.
This conclusory statement alleges none of the three elements required to prove a RICO
enterprise. The Plaintiffs attempt to rectify their failure to address the elements of a RICO
enterprise in their Opposition. Pls.’ Opp’n 22 (arguing BWW and SunTrust “functioned as a
See Rubino v. New Action Mobile Indus., LLC, 44 F. Supp. 3d 616, 625 (D. Md. 2014)
(refusing to grant Plaintiff’s request for leave to file a second amended complaint after his first
amended complaint failed to address deficiencies highlighted by a motion to dismiss because “it
would be unfair to allow the Plaintiff to again correct his pleading deficiencies only after the
Defendants have expended more time, energy, and money in pointing them out for him”).
‘continuing unit’ for at least five years, wherein SunTrust would refer mortgages to BWW and
BWW would use false documents to initiate foreclosure proceedings” and that the alleged
“enterprise is distinct from the otherwise lawful activities of SunTrust, a lender, and BWW, a
law firm”). As with the “racketeering” element of the claim, the Plaintiffs cannot further amend
their Complaint via Opposition. Nicholson, 2014 WL 2124654, at *4. Thus, the Healys’ failure
to plead the “enterprise” element of its RICO claim is a second, independent basis for dismissal.
In Count IV of their Amended Complaint, the Healys claim that SunTrust is liable “for all
of the false, misleading and deceptive actions of BWW committed within BWW’s scope of
employment as Suntrust’s agent.” Am. Compl. ¶ 107. As the Healys have not successfully
stated any claim against BWW, Count IV is dismissed with prejudice.
In sum, BWW’s Motion to Dismiss is GRANTED, while SunTrust’s is GRANTED IN
PART AND DENIED IN PART. The Healys’ MCPA claim against SunTrust pertaining to the
2014 overcharge (Count II), can proceed, but not as to the robo-signed foreclosure documents.
Their MCDCA claim pertaining BWW’s use of robo-signatures (Counts I) is likewise not
cognizable. Additionally, the Healys fail to state a RICO claim (Count III). And because none
of the Healys’ claims against BWW can proceed, SunTrust cannot be held liable for any
wrongdoing on BWW’s part on a theory of respondeat superior (Count IV). All claims besides
the MCPA claim addressing the 2014 overcharge will be dismissed with prejudice, as Plaintiffs’
inability to cure deficiencies of which they were notified indicates that further attempts to amend
would be futile.
A separate Order follows.
Date: January 23, 2017
Paul W. Grimm
United States District Judge
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