Best v. Federal National Mortgage Association et al
Filing
31
MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 12/21/2017. (c/m 12/21/2017 - jf3s, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division 2011 DEC 2 I
3: 02
DAWUD J. BEST,
Plaintiff,
Case No.: GJH-17-314
.
V
FEDERAL NATIONAL MORTGAGE
ASSOCATION, et al.
Defendants.
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MEMORANDUM OPINION
Pro Se Plaintiff Dawud J. Best brings this action against Defendants Federal National
Mortgage Association ("Fannie Mae"), Capital One, Nat'l Assoc. ("Capital One"), and Brock &
Scott, PLLC ("B&S" and, collectively, "Defendants") related to Defendants' attempt to collect a
debt and foreclose upon Plaintiffs property in Cheverly, Maryland. A number of dispositive
motions are currently pending before the Court: Defendants' Motion to Dismiss, ECF No. 14;
Plaintiff's Motion to File First Amended Complaint Without Leave, ECF No. 16; Defendants'
Motion to Strike and Stay, ECF No. 18; Plaintiffs Cross Motion for Summary Judgment, ECF
No. 19; and Plaintiffs Motion for Leave to File Second Amended Complaint, ECF No. 24. A
motions hearing was held on December 4, 2017. Loc. R. 105.6 (D. Md. 2016).
For the following reasons, Plaintiffs Motion for Leave to File Second Amended Complaint is
granted, Defendants' Motion to Strike and Stay is denied, and the remaining motions are denied
as moot.
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I.
BACKGROUND'
Plaintiff filed his initial Complaint on February 2, 2017, bringing claims under the Fair
Debt Collection Practices Act (Count One), Maryland Consumer Debt Collection and Maryland
Consumer Protection Acts (Count Two), and the Truth in Lending Act (Count Three) on behalf
of himself and a class. ECF No. 1. Defendants moved to dismiss Plaintiff's Complaint for lack of
subject matter jurisdiction and failure to state a claim pursuant to Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6). ECF No. 14. On May 10, 2017, Plaintiff filed a Motion to File
First Amended Complaint Without Leave in accordance with Rule 15(a)(1)(B) whereby he
removed his class action and added claims under the Fair Credit Reporting Act (Count Four),
Equal Credit Opportunity Act (Count Five), and Real Estate Settlement Procedures Act (Count
Six). ECF No. 16-2. Five days later, Plaintiff filed a Corrected First Amended Complaint
whereby he revised the allegations made in his First Amended Complaint and increased his
demand for compensatory and punitive damages. ECF No. 17-1.
Defendants move to strike Plaintiff's Corrected First Amended Complaint and move to
stay the action until the Court resolves concerns that non-attorney Thomas Alston drafted
Plaintiff's filings with the Court and engaged in the unauthorized practice of law. ECF No. 18.
Plaintiff responded to this motion and filed a Cross Motion for Summary Judgment. ECF No. 19.
Finally, on October 13, 2017, Plaintiff filed a motion for leave to file a Second Amended
Complaint seeking to add facts describing his related Chapter 7 bankruptcy action. ECF No. 24;
see also In re Dawud J. Best, Case No. 16-25664 (Bankr. D. Md.), filed Nov. 29, 2016.
Plaintiff's Complaint raises a number of allegations implicating violations of statutory protections that shield
debtors and consumers from abusive debt collection and credit reporting practices. However, because the Court will
not address the merits of Plaintiff's underlying claims at this time, Plaintiff's allegations are not repeated herein.
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DISCUSSION
A. Unauthorized Practice of Law
Defendants contend that Thomas Alston, a non-attorney, was the true author of Plaintiff's
filings and point to a number of facts highly suggestive of Alston's involvement in this matter.
ECF No. 18-2 at 5. For example, Plaintiff was previously a pro se plaintiff in a lawsuit filed by
Kimberly Alston, Thomas Alston's sister, Bey, et al. v. Midland Credit Management, Inc., et al.,
8:15-cv-1329-GJH (D. Md.), and his Complaint herein has many of the hallmarks of prior
complaints filed by Alston, including the threat of a class action brought by a pro se plaintiff,
which is impermissible. See ECF No. 18-2 at 6 (citing Alston v. Trans Union, No. GJH-16-491,
2017 U.S. Dist. LEXIS 17031, at 2 (D. Md. Feb. 1, 2017)). Defendants also point to a
residential contract of sale that Plaintiff submitted to Capital One, purported to be an offer from
TAJ Properties LLC to purchase Plaintiff's property as a short sale. See ECF No. 26 at 7.
Thomas Alston signed the contract on behalf of TAJ Properties. ECF No. 26-1. According to
Defendants, the residential contract of sale is further proof of Thomas Alston's involvement in
this matter and indicates that Plaintiffs claims relating to any obligations owed to him by Capital
One in considering this sale for purposes of loss mitigation are brought in bad faith. ECF No. 26
at 6.
The Court is mindful of the multitude of lawsuits filed in this District by Thomas Alston,
members of his family, and other pro se plaintiffs that have raised concerns about Thomas
Alston's alleged unauthorized practice of law. See, e.g., Letren v. Trans Union, LLC, No. PX 153361, 2017 U.S. Dist. LEXIS 150056, at *17 n.7 (D. Md. Sept. 15, 2017); Alston v. Orion
Portfolio Servs., LLC, No. PJM 16-3697, 2017 U.S. Dist. LEXIS 28767 (D. Md. Mar. 1, 2017).
The Court granted Defendants' request for hearing for precisely this reason.
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Plaintiff maintains that while he did review a number of publicly-available complaints
filed by Thomas Alston before judges in this District, Plaintiff affirmatively stated to the Court
that Thomas Alston neither advised nor assisted him at any time. Plaintiff further maintains that
the residential sale contract signed by Thomas Alston was the product of an arms-length
transaction. ECF No. 29 at 5. Based on the facts presented to the Court at this time, the Court,
while concerned, cannot conclude that Thomas Alston engaged in the unauthorized practice of
law, and Defendants' motion to strike and stay is therefore denied.2
B. Lack of Subject-Matter Jurisdiction
Defendants argue that Plaintiff lacks standing to bring this action because the claims are
part of Plaintiffs bankruptcy estate and can only be raised by the bankruptcy trustee. ECF No.
14-2 at 8.3 Under federal law, a bankruptcy estate is generally comprised of "all legal or
equitable interests of the debtor in property as of the commencement of the case," including prepetition causes of action, i.e., those that accrued before debtors filing for bankruptcy. See 11
U.S.C. § 541(a)(1); Nat'l American Ins. Co. v. Ruppert Landscaping Co., 187 F.3d 439, 441 (4th
Cir. 1999). However, a plaintiff regains standing to bring pre-petition claims if those claims are
abandoned or exempt from the estate. Nat '1 American Ins. Co., 187 F.3d at 441; see also Musari
v. Loans, No. PWG-15-3028, 2016 WL 4124227, at *4 (D. Md. Aug. 3, 2016) (citing
Schlotzhauer v. Morton, 119 A.3d 121, 123 (Md. Ct. Spec. App. 2015) (only bankruptcy trustee
may bring claims within estate unless (i) "the trustee abandons the [claims]" or (ii) "the
The denial of the motion is without prejudice to Defendants raising the issue again should more information about
Mr. Alston's involvement arise. At the hearing, Defendants indicated that Thomas Alston has avoided their attempts
to personally serve him with a subpoena in order to allow the Court to question him directly. If appropriate,
discovery and an evidentiary hearing involving Mr. Alston may be permitted.
The existence of subject matter jurisdiction must be addressed as a threshold issue before reaching the merits of a
case. Jones v. Am. Postal Workers Union, 192 F.3d 417,422 (4th Cir. 1999). In considering a motion to dismiss for
lack of subject matter jurisdiction, the Court is not limited to the pleadings, and may consider other relevant
evidence without converting it to a motion for summary judgment. Khoury v. Meserve, 268 F. Supp. 2d 600, 606 (D.
Md. 2003).
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bankruptcy court declares them to be exempt from creditor claims.")). Such claims are
abandoned if they are listed on debtor's schedule of property and have not been administered
when the bankruptcy case closes. See 11 U.S.C. § 554(c); see also Ahteshamuddin v. Residential
Credit Solutions, No. WMN-11-854, 2011 U.S. Dist. LEXIS 103578 (D. Md. Sept. 14, 2011)
(dismissing foreclosure challenge for lack of subject matter jurisdiction because plaintiff lacked
standing to bring a claim that was not scheduled during a Chapter 7 bankruptcy and was never
abandoned by the trustee).
In listing these claims on the debtor's schedule of property, a debtor must "do enough
itemizing to enable the trustee to determine whether to investigate" the claims and pursue them
on behalf of the estate. See Nicholas v. Green Tree Servicing, No. TDC-15-1297, 2016 U.S. Dist.
LEXIS 39162, at *8 (D. Md. Mar. 25, 2016) (citing Donarumo v. Furlong, 660 F.3d 81, 87 (1st
Cir. 2011)). Defendants argue that Plaintiff's claims were not properly abandoned because they
accrued prior to filing for bankruptcy and were not scheduled before Plaintiffs bankruptcy was
discharged. ECF No. 14-2 at 9-10. However, Plaintiff moved to re-open his bankruptcy action
after filing his Complaint in this Court, see Bankruptcy Case ECF No. 63, and the Bankruptcy
Court granted Plaintiffs motion "for the limited purpose of permitting Debtor(s) to ADD
PERSONAL PROPERTY AND PRE-PETITION CREDITORS." See Bankruptcy Case ECF No.
64. Thereafter, Plaintiff filed amended schedules disclosing, as an exempt asset, claims in the
amount of $340,000 for "FDCPA, MDCA, MCPA & TILA violations." See Bankruptcy Case
ECF No. 66 at 10,14.
Defendants do not suggest that Plaintiffs disclosure of his pre-petition claims lacked the
requisite detail necessary to enable the bankruptcy trustee to bring the claims on behalf of the
estate if it chose to do so. See Bankruptcy Case ECF No. 60 (U.S. Trustee acknowledging
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Plaintiff's claims as described in the amended schedule and requesting the bankruptcy court to
reappoint trustee to "review and investigate the Claim and Debtor's claimed exemptions;
determine the estate's interest; and, take necessary steps to administer property"). Nor do
Defendants argue that Plaintiff may not re-open his bankruptcy action to amend his schedule of
property for the express purpose of retaining standing to bring these pre-petition claims on his
own. Cf. Musari, 2016 WL 4124227, at *8 (dismissing pre-petition claims subject to plaintiff
being "permitted to file a motion in bankruptcy court to reopen her bankruptcy case and amend
her schedule of exemptions"). Therefore, because the amended schedule included the prepetition claims, and the bankruptcy case was closed without any objection or action by the
trustee, the claims were both exempt and properly abandoned, and the Court has subject matter
jurisdiction to hear them now. See Wissman v. Pittsburgh Nat. Bank, 942 F.2d 867, 870 (4th Cir.
1991) (citing 11 U.S.C. § 522(1) ("[u]nless a party in interest objects, the property claimed as
exempt. . . is exempt")).4
C. Amended Complaint
Pursuant to Federal Rule of Civil Procedure 15(a)(1)(B), a plaintiff may amend his
complaint once as a matter of course within 21 days after service of a motion under Rule 12(b).
Thereafter, a plaintiff may amend his Complaint with consent from the opposing party or the
court's leave. Fed. R. Civ. P. 15(a)(2). "The court should freely give leave when justice so
requires," id., but such a motion can be denied if it has been unduly delayed or where allowing
the amendment would unduly prejudice the non-movant. See Deasy v. Hill, 833 F.2d 38, 40 (4th
Cir. 1987).
Because the Court finds that the claims were properly abandoned, the Court will not consider Plaintiff's arguments
that it should either substitute the bankruptcy trustee as the plaintiff in this action or separate Plaintiff's Complaint
into pre-petition and post-petition claims. SeCF No. 19 at 2-3.
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While Defendants concede that Plaintiff's First Amended Complaint was timely filed,
they argue that Plaintiff's Corrected First Amended Complaint did not "correct" a technical error
but is in fact an entirely new complaint. ECF No. 18-2 at 3. In response, Plaintiff maintains that
he inadvertently filed an incorrect draft of his complaint as his First Amended Complaint and
filed the Corrected First Amended Complaint, just five days later, after discovering his error.
ECF No. 19 at 1.
Alpo•
As an initial matter, because Plaintiff's First Amended Complaint was timely filed,
Defendants' Motion to Dismiss is denied as moot. The Corrected First Amended Complaint did
not raise additional causes of action or legal theories not otherwise presented in the First
Amended Complaint and the fact that it was filed five days after the First Amended Complaint
suggests Plaintiff's representation regarding an inadvertent filing is credible. More importantly,
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however, concerns regarding the First Amended Complaint, corrected or not, are mooted by
Plaintiff's Motion for Leave to file a Second Amended Complaint. ECF No. 24. Defendants"
Opposition to that motion focuses entirely on claims that the Court lacks subject matter
jurisdiction and that Plaintiff is operating in bad faith due to Thomas Alston's alleged
involvement. As the Court has already addressed these issues, Plaintiff's Motion for Leave to
File a Second Amended Complaint is Granted. The Second Amended Complaint is now the
operative complaint.5
III. CONCLUSION
For the foregoing reasons, Defendants' Motion for Leave to File an Amended Complaint,
ECF No. 24, shall be granted. Defendants' Motion to Strike and Stay, ECF No. 18 shall be
denied. The remaining motions shall be denied as moot. See ECF Nos. 14, 16, 19.
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Plaintiff's Motion for Summary Judgment is denied as moot based on the filing of an Amended Complaint.
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A separate Order follows.
Dated: December7j(, 2017
A,
GEORGE J. HAZEL
United States District Judge
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