Ayres et al v. PHH MC et al

Filing 43

MEMORANDUM OPINION. Signed by Magistrate Judge Gina L Simms on 9/29/2022. (c/m 9/19/2022 - dg3s, Deputy Clerk)

Case 8:21-cv-00934-GLS Document 43 Filed 09/19/22 Page 1 of 29

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
(SOUTHERN DIVISION)
STEPHAN M. AYRES, et al.,
Plaintiffs,
v.
PHH MORTGAGE CORPORATION, Successor
to Ocwen Loan Servicing, LLC, et al.,
Defendants.

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Civil Case No. GLS-21-0934

MEMORANDUM OPINION
Pending before this Court is a “Motion to Dismiss the Amended Complaint with Prejudice”
(“Motion to Dismiss”) filed by Defendants PHH Mortgage Corporation, (“Defendant PHH”),
Ocwen Loan Servicing, LLC (“Defendant Ocwen”), and Bank of New York Mellon, as Trustee
for the Registered Holders of Salomon Brothers Mortgage Securities VII, Inc., Mortgage PassThrough Certificates, Series 2001-2 1 (“Defendant Trustee,” and collectively, “Defendants”). (See
ECF No. 39). Plaintiffs Stephan M. Ayres and Angela R. Ayres, pro se, filed a “Reply to
Defendants’ Motion to Dismiss,” (“Opposition”) (ECF No. 41), and Defendants filed their “Reply
in Further Support of Defendants’ Motion to Dismiss the Amended Complaint with Prejudice,”
(“Reply”) (ECF No. 42). The issues have been fully briefed, and no hearing is necessary. Local
Rule 105.6 (D. Md. 2021).

The docket sheet erroneously lists Defendant Trustee as two separate defendants: (i) “Bank of New York Mellon,
as Trustee for the Registered Holders of Salomon Brothers Mortgage Securities VII, Inc.” and (ii) “Mortgage PassThrough Certificates, Series 2001-2.”
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For the reasons set forth below, Defendants’ motion to dismiss is GRANTED IN PART
AND DENIED IN PART.
I.

BACKGROUND 2
A. Factual and Procedural Background – Prior Lawsuits
On March 18, 1991, Plaintiff Stephan Ayres financed the purchase of a property located at

6600 Street, District Heights, Maryland, 20747 (“the Halleck property”) by borrowing $72, 660.00
from Market Street Mortgage Corporation. (ECF No. 34, “Amended Complaint” ¶¶ 13, 23; ECF
No. 1-1, pp. 14-17, “Deed of Trust”). The owner of the loan is Defendant Trustee. (Amended
Complaint, ¶ 27). Defendant Ocwen became the mortgage servicer for the Ayres Note on
November 1, 2011. (Id., ¶ 26). Defendant PHH started servicing the Ayres loan on June 21, 2019.
(Id., ¶ 25).
On June 3, 2013, Plaintiffs filed a complaint against Defendant Ocwen and several other
defendants in federal court, 3 alleging fifteen claims related to mortgage fraud. See Ayres v. Ocwen
Loan Servicing, LLC, Civ. No. CCB-13-1597, ECF No. 1 (D. Md.) (“Ayres I”). On August 27,
2014, the court granted the defendants’ motion to dismiss without prejudice and gave Plaintiffs an
opportunity to amend their complaint in light of their pro se status. See Ayres I, ECF Nos. 55, 56.
On October 24, 2014, Plaintiffs filed an amended complaint against Defendant Ocwen and
Salomon Brothers Mortgage Securities VII, Inc., alleging: (1) violations of the Maryland

Unless otherwise stated, these facts are drawn from the Amended Complaint (ECF No. 34), any documents subject
to judicial notice, and any exhibits to the parties’ pleadings that the Court has determined are integral to Plaintiffs’
Amended Complaint. See infra Part III. A court may take judicial notice of public records. See Phillips v. Pitt
County Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009). The Court also incorporates by reference the thorough
background related to Plaintiffs’ allegations in Ayres v. PHH Mortgage Corp., Civ. No. GJH-20-275, ECF No. 19
(D. Md. June 29, 2020) (“Ayres II”).
3
Plaintiffs filed their first complaint against: (1) Defendant Ocwen; (2) Litton Loan Servicing, LP; (3) Salomon
Brothers Mortgage Securities VII, Inc.; (4) Salomon Smith Barney, Inc.; (5) Salomon Smith Barney Holding; (6)
Citigroup Global Markets, Inc., formerly Salomon Brothers Realty Corp.; (7) J.P. Morgan Chase Bank; and (8)
Citibank, NA. Ayres I, ECF No. 1, pp. 1-2.
2

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Consumer Protection Act (“MCPA”); (2) violations of the Maryland Consumer Debt Collection
Act (“MCDCA”); (3) violations of the Maryland Mortgage Fraud Presentation Act (“MMFPA”);
(4) negligence; (5) violations of the Real Estate Settlement Procedures Act (“RESPA”); (6)
tortious interference with economic relationship; (7) defamation; (8) violations of the Fair Debt
and Collection Practices Act (“FDCPA”). See Ayres I, ECF No. 61, pp. 28-46. Plaintiffs also
sought declaratory and injunctive relief. Id., pp. 41-42. On September 8, 2015, the court dismissed
the MMFPA claim and the negligence claim with prejudice for failure to state a claim. See Ayres
I, ECF No. 89 at 46–51. Plaintiffs filed a Second Amended Complaint in Ayres I on October 19,
2015 against Defendant Ocwen and Defendant Trustee, correcting a prior error related to the
identification of Defenadnt Trustee pursuant to the court’s memorandum opinion. Ayres I, ECF
No. 100.
On November 9, 2016, the district court granted summary judgment in favor of defendants
as to Plaintiff’s claims under RESPA, FDCPA, MCPA, and Plaintiffs’ claim for defamation. The
court also denied Plaintiffs’ motion for partial summary judgment. Ayres I, ECF Nos. 158, 159.
Plaintiffs appealed the order, and the Fourth Circuit held that because the lower court had not
explicitly ruled on Plaintiffs’ claim under the MCDCA or their request for declaratory and
injunctive relief, there was no final order creating appellate jurisdiction. Ayres, ECF No. 163, pp.
5-6. On remand, the district judge entered an additional memorandum and order entering judgment
on all claims in favor of defendants. Ayres I, ECF Nos. 171, 172. On appeal, the Fourth Circuit
affirmed this decision. Ayres I, ECF No. 179.
On January 7, 2020, Plaintiffs filed a complaint in Prince George’s Circuit Court against
Defendant Ocwen and Defendant Trustee, alleging: (1) violations of MCPA and MCDCA; (2)
violations of MMFPA; (3) negligence violating Maryland law; as well as seeking Declaratory and

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Injunctive relief. After removing the matter to this court, the defendants filed a motion to dismiss,
asserting res judicata and failure to state a claim. Ayres v. PHH Mortgage Corp., Civ. No. GJH20-275, ECF Nos. 2, 10-1, pp. 6-14 (D. Md.) (“Ayres II”). On June 29, 2020, the district court
issued a memorandum opinion and an order granting the defendants’ motion to dismiss. Ayres II,
ECF Nos. 19, 20. The court first held that any claims “based on attempts to collect payments under
the terms of the original Loan” were barred by res judicata due to the holding in Ayres I. Ayres
II, ECF No. 19, p. 14. The court also held that any claims based on the Loan Modification
Agreement, which was signed after the final judgment was affirmed in Ayres I, would not be barred
by res judicata and would be evaluated for whether Plaintiffs failed to state a claim as required by
Fed. R. Civ. P. 12(b)(6). (Id.). Regarding Plaintiffs’ claims arising under the MCPA, MCDCA,
and MMFPA, the court found that Plaintiffs had failed to state a claim. (Id., pp. 15-19). Regarding
the claim for negligence, the judge found that collateral estoppel barred the relitigation of whether
Plaintiffs were owed a duty by defendants because Ayres I had determined that Plaintiffs were not
owed a duty by “defendants and their privies.” (Id., pp. 19-20). Finally, the court found that
Plaintiffs’ claim for injunctive relief could not stand alone because each of Plaintiffs’ substantive
claims for relief had been dismissed. (Id., p. 20). The court dismissed Plaintiffs’ complaint with
prejudice. Ayres II, ECF No. 20. On appeal, the Fourth Circuit affirmed the court’s decision on
May 27, 2021, modifying the order to dismiss the complaint without prejudice because the court
did not give Plaintiffs the opportunity to amend or state why amendment would be futile. Ayres II,
ECF No. 25-2, p. 2.

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B. Procedural Background
On June 14, 2021, Plaintiffs filed this action against Defendants PHH, Ocwen, Trustees,
and Mr. Hubert Paul. 4 (ECF No. 1). Plaintiffs alleged: (1) violations of MCPA and MCDCA; (2)
violations of MMFPA; (3) Negligent Misrepresentation; (4) violations of HOEPA, Regulation Z
and request for Injunctive Relief and Recission; and (5) violations of the Clayton Act. (Id.).
Defendants filed a Motion to Dismiss, the Plaintiffs filed a response in opposition, and the
Defendants filed a reply. (ECF Nos. 24, 26, 29). Plaintiffs then filed a Motion for Leave to Amend
the Complaint. (ECF No. 30). The court granted Plaintiffs’ Motion to Amend and set a briefing
schedule for Defendants’ Motion to dismiss. (ECF No. 35). On February 8, 2022, Plaintiffs filed
their Amended Complaint, adding additional claims and allegations. (ECF No. 34). Specifically,
Plaintiff’s Amended Complaint advances the following federal and state law claims:
I

COUNT

II
III
IV
V
VI
VII
VIII
IX

CLAIM ASSERTED
“Violation Maryland’s Consumer Protection Act
(“MCPA”), Md. Code Ann., Com. Law 13-101 et
seq. & Maryland’s Consumer Debt Collection Act
(“MCDCA”) Md. Code Ann., Com. Law 14-201”
“Violation of the Maryland Mortgage Fraud
Protection Act, Md. Code Ann., Real Prop. 7-401,
et seq.”
“Negligent Misrepresentation”
“Violation of Home Ownership and Equity
Protection Act (HOEPA), Regulation Z and
Request for Injunctive Relief and Recission”
“The Clayton Act”
“Violation of the Real Estate Settlement
Procedures Act 12 U.S.C.A 2605”
“Violation of Fair Debt Collections Practices Act
(FDCPA)”
Breach of Contract
Unjust Enrichment

Plaintiff describes Mr. Hubert Paul as the “authori[z]ed officer” of Ocwen Loan Servicing, LLC. From a review of
the docket, it appears that Plaintiffs attempted to serve Mr. Paul with the same form as for Defendant Ocwen, and
never served Mr. Paul individually. (ECF No. 16, pp. 5-6). Accordingly, Mr. Paul is not properly before this Court
as a defendant.
4

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On February 10, 2022, this case was referred to the undersigned by all further proceedings,
to which the parties consented. (ECF No. 37). On April 1, 2022, Defendants filed their Motion to
Dismiss, advancing challenges pursuant to Fed. R. Civ. P 12(b)(6). On April 19, 2022, Plaintiffs
filed their Opposition. On May 12, 2022, Defendants filed their Reply.
C. Facts Alleged in Plaintiff’s Amended Complaint 5
Although sometimes hard to decipher from the Amended Complaint, Plaintiffs appear to
allege violations of federal and state law arising out of two sets of actions taken by Defendants:
(1) actions taken by Defendant Ocwen related to the Loan Modification Agreement (“LMA”); and
(2) the actions taken by PHH related to the management of Plaintiffs’ escrow account.
As set forth above, the judgment in Ayres I was affirmed by the Fourth Circuit on May 7,
2018. Sometime after this final judgment, Defendant Ocwen sent to Plaintiffs a “default letter”
and a notice of intent to foreclose. (Amended Complaint, ¶ 29). Thereafter, Defendant Ocwen also
sent a “Mortgage Account Statement” dated June 25, 2018, to Plaintiff Angela Ayres (“Mrs.
Ayres”) stating that $51,072.31 was due. (Id., ¶ 43; ECF No. 1-1, p. 38 “Mortgage Account
Statement”). Plaintiffs applied for a loan modification and entered into a three month trial period
beginning in August 2018. (Id. ¶ 30). Defendant Ocwen approved the LMA by letter dated
November 19, 2018, Plaintiffs signed the LMA on November 27, 2018, and Plaintiffs received a
Lender Acknowledgment Letter from Defendant Ocwen. (Id.; ECF No. 39-2 “LMA”). 6
On June 21, 2019, Defendant PHH, a subsidiary of Defendant Ocwen, started servicing the
Plaintiffs’ loan. (Amended Complaint ¶ 25).

5
This Court assumes Plaintiff's version of facts to be true and construes the facts in the light most favorable to the
non-moving party, Plaintiff. Baltimore Scrap Corp. v. Exec. Risk Specialty Ins. Co., 388 F. Supp. 3d 574, 584 (D. Md.
2019).
6
Both Plaintiffs and Defendants append the LMA to respective pleadings. Because the version appended to the
Motion to Dismiss is clearer in quality and easier to read, the Court refers to that version.

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On January 4, 2020, Plaintiffs received an audit report of their mortgage loan from a third
party auditor, Loantech. (Amended Complaint ¶ 31). This audit report stated that the amount owed
pursuant to the LMA was inflated by $59,921.23, and the amount the LMA stated as the principal
was also inflated. (Id.). 7
In March 2020, Plaintiffs’ monthly mortgage payment increased from $789.53 to $887.16.
(Amended Complaint, ¶ 51). Plaintiffs contacted Defendant PHH to understand why the increase
occurred. Plaintiffs received a response from Defendant PHH that the escrow account was
projected to be underfunded by $439.56, so the monthly payment had been increased. (Id. ¶ 51,
111; ECF No. 34-2 pp. 10-11 “March/April 2020 Correspondence”). Plaintiffs informed
Defendant PHH that this was in error. (Amended Complaint, ¶ 52).
In September 2020, Plaintiffs received an “Off-Scheduled Escrow Statement,” estimating
that the anticipated amount to be paid out of the escrow account would be $4,094.32. Plaintiffs
also allege that the Escrow Account was also charged by that sum. (Amended Complaint, ¶ 50;
ECF No. 34-2 pp. 4-6 “September 2020 Escrow Statement”). Plaintiffs allege that Defendant PHH
charged the escrow account $4,143.44 in the year 2020 wrongfully obtained this money by
charging monthly payments of $280.20, amounting to an overcharge by a sum of $2455.33.
(Amended Complaint, ¶¶ 117, 118).
In July 2021, Plaintiffs received an annual escrow statement and an escrow refund check
of $1664.98 related to their 2020 property taxes. (Amended Complaint, ¶ 32; ECF No. 43-2, pp.
7-9 “July 2021 Escrow Statement”). Plaintiffs paid $1688.14 in taxes for the year 2020. (Amended
Complaint, ¶ 49). 8 According to the “Property Tax Inquiry” Forms, Plaintiffs paid $1688.14 in

Plaintiffs also allege that the audit reveals that Plaintiffs were overcharged by $59,211.60. (Amended Complaint,
¶¶ 69, 70).
8
Plaintiffs refer to a “property tax statement” for fiscal year 2020, but the parties did not attach statements of the
amount that Plaintiffs paid for fiscal year 2020, and whether they paid this sum in escrow or directly to the Maryland
7

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taxes for fiscal year 2021, and they paid $1165.86 in property taxes for fiscal year 2022. (ECF No.
34-2, pp. 3-4 “Property Tax 2021, Property Tax 2022”). However, Defendant PHH charged the
escrow account $3,362.00 for the year 2021 and failed to refund the overcharge or correct the
account. (Amended Complaint, ¶ 119).
In September 2021, Plaintiffs directly paid their property taxes for the tax year 2021,
despite the LMA provision that provides that property taxes were to be held in escrow and paid by
the lender. (Amended Complaint, ¶ 33, 112; LMA, pp. 5-6). Plaintiffs seem to have sent four
emails related to the escrow account to Defendant PHH: (1) an email sent in September 2021, to
which Defendant PHH sent a confirmation of receipt on September 6, 2021; (2) an email sent in
October 2021, to which Defendant PHH sent a confirmation of receipt on October 1, 2021; (3) an
email sent by Mrs. Ayres on November 12, 2021, responding to a mass email sent by Defendant
PHH regarding property tax payments, to which Defendant PHH sent a confirmation of receipt on
November 12, 2021; and (4) an email sent by Mr. Ayres on November 29, 2021. (Amended
Complaint ¶ 112; ECF No. 34-2, pp. 12-18).
On November 30, 2021, Defendant PHH responded to Mr. Ayres’ November 29, 2021
email, stating that insurance would be removed from escrow per his request, and his request to
remove taxes from escrow was “currently under review.” (ECF No. 41-2, p. 103).
On December 7, 2021, counsel for Defendants responded to Mrs. Ayres’ November 12,
2021 email, stating that the Plaintiffs’ account would remain escrowed as set forth in the LMA.
(ECF No. 41-2, p. 110). Counsel also stated that based on the servicing records, it appeared that
Plaintiffs pre-paid their real property taxes directly in 2020, then Defendant PHH also paid the
taxes. (Id.). Counsel stated that Defendant PHH eventually received a credit back to balance
Department of Assessments and Taxation. Ultimately, Defendants do not contest that Plaintiffs “pre-paid” property
taxes in 2020.

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Plaintiffs’ account but advised that this would “continue to happen” if Plaintiffs continued to pay
their taxes directly. (Id.). Mrs. Ayres responded, asserting that there is “nothing for them to
escrow,” since Plaintiffs had already paid their taxes. (Id.).
On January 11, 2022, counsel for Defendants sent Mrs. Ayres a letter following up on her
emails regarding the escrow account. (Amended Complaint, ¶ 133; ECF No. 34-2, pp. 20-21
“Defendants’ January 2022 Letter). In that letter, counsel stated that: (1) Plaintiffs’ loan was no
longer escrowed for homeowners insurance but would still be escrowed for real property taxes, as
Defendant PHH did not waive the escrow requirement as outlined in the LMA; and (2) based on a
review of public records, it appeared that Plaintiffs received a tax credit reducing the actual amount
of real property taxes paid in “the last year or two,” and if Plaintiffs were to provide documentation
regarding the tax credits, then Defendant PHH would run a new escrow analysis to adjust the
monthly payment going forward. (Id.). On January 13, 2022, Mrs. Ayres responded, attaching the
documentation of Plaintiffs’ taxes. (ECF No. 41-2, p. 105). Counsel for Defendants confirmed
receipt on January 18, 2022, stating that she would submit the attachment for review and would
let Mrs. Ayres know if more documentation was needed to run a new escrow analysis taking the
tax credits into account. (Id.).
Finally, the Amended Complaint also generally reflects that Defendant Ocwen and
Defendant PHH have been subject to other lawsuits surrounding their mortgage servicing
practices. (Amended Complaint, ¶ 73, 83, 94).
In sum, the Amended Complaint alleges that Defendants: (a) engaged in misconduct related
to the LMA; and (b) overcharged Plaintiffs’ escrow account. As a result, Plaintiffs have suffered
economic and non-economic damages, including overpaying on their mortgage and paying double
the amount owed for property taxes for two years. (Amended Complaint, ¶¶ 58, 59).

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II.

STANDARDS OF REVIEW
A. Rule 12(b)(6) Motion to Dismiss
A defendant who files a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) is asserting

that, even if a court construes the facts advanced in the Plaintiff’s complaint as true, that complaint
fails to state a claim upon which relief can be granted. To survive a motion to dismiss, a complaint
must provide a defendant with “fair notice of what the claim is and the grounds upon which it
rests.” Ray v. Roane, 948 F.3d 222, 226 (4th Cir. 2020) (citing Tobey v. Jones, 706 F.3d 379, 387
(4th Cir. 2013)). In other words, a complaint must contain sufficient facts and must state a
“plausible claim for relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Fed. R. Civ. P.
8(a); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007) (complaint must set forth enough facts
as to suggest a “cognizable cause of action”). 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.
When resolving a 12(b)(6) motion, a court accepts as true the well-pleaded allegations in a
complaint. Lokhova v. Halper, 995 F.3d 134, 141 (4th Cir. 2021). Furthermore, a court “does not
resolve contests surrounding the facts [or] the merits of a claim.” Ray, 948 F.3d at 226 (citation
omitted).
Where a plaintiff states a claim sounding in fraud, the plaintiff must also “state with
particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). A plaintiff
alleging fraud must allege with particularity the “time, place, speaker, and contents of the false
representations.” Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4th Cir. 2013) (citation
omitted).

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Finally, this Court must liberally construe a pro se plaintiff’s claims to ensure that a
potentially meritorious claim survives challenge. Hughes v. Rowe, 449 U.S. 5, 9 (1980). In that
regard, this Court measures an “inartfully pleaded” pro se pleading by “less stringent standards”
than pleadings drafted by attorneys. Erickson v. Pardus, 551 U.S. 89, 94 (2007). It is equally true,
however, that a court cannot turn a blind eye to a plaintiff’s failure to allege facts that establish a
cause of action. Nor can the Court act as an advocate for a pro se plaintiff and infer the existence
of facts not clearly pleaded. See Weller v. Dep’t of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990).
III.

Materials Considered
In general, a Rule 12(b)(6) motion tests the sufficiency of a complaint, and a court’s

evaluation is “limited to a review of the allegations of the complaint itself.” Goines v. Valley Cmty.
Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016) (quoting Occupy Columbia v. Haley, 738 F.3d 107,
116 (4th Cir. 2013)). However, a court may consider other documents submitted by the parties
“not attached to or expressly incorporated in a complaint, so long as [any such] document was
integral to the complaint and there is no dispute about the document’s authenticity.” Staggers v.
Becerra, Civ. No. ELH-21-231, 2021 WL 5989212, at *11 (D. Md. Dec 17, 2021) (quoting Goines,
822 F.3d at 166); see Jeffrey M. Brown Assocs., Inc. v. Rockville Ctr. Inc., 7 F. App'x 197, 202
(4th Cir. 2001) (considering exhibits of the original complaint if integral to and relied on in the
amended complaint). To be “integral,” a document must “by its ‘very existence, and not the mere
information it contains, give[] rise to the legal rights asserted.’” Parker v. Children's Nat'l Med.
Ctr., Inc., Civ. No. ELH-20-3523, 2021 WL 5840949, at *5 (D. Md. Dec. 9, 2021) (quoting
Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F. Supp. 2d 602, 611 (D. Md.
2011)).

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In addition, a court may properly take judicial notice of “matters of public record,”
continuing to construe all facts in the light most favorable to the plaintiff “along with the wellpleaded allegations of the complaint.” Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d
500, 508-09 (4th Cir. 2015).
In this case, the parties have appended numerous exhibits, several of which are explicitly
relied upon by the Plaintiffs in drafting the Amended Complaint. The Court will analyze only the
exhibits that it finds integral or subject to judicial notice as follows.
First, the Plaintiffs’ MCPA, MCDCA, and MMFPA claims are based on allegedly
fraudulent statements in: (1) the Mortgage Account Statement; (2) the LMA; 9 (3) Plaintiffs’
escrow statements from September 2020 and July 2021; and (4) Plaintiffs’ monthly mortgage
statements. (ECF No. 1-1, p. 38; ECF No. 39-2; ECF No. 34-2, pp. 4-9; ECF No. 39-4). The
Amended Complaint specifically references these documents and the statements contained therein
to allege misrepresentation. Therefore, these documents are integral to the Amended Complaint,
and the Court may consider them. See Barr v. Flagstar Bank, FSB, 303 F. Supp. 3d 400, 411 (D.
Md. 2018) (considering documents forming the basis for MCPA and MMFPA claims).
Second, Plaintiffs allege in their RESPA claim that they sent multiple qualified written
requests (“QWRs”) without receiving the proper response required by law. Plaintiffs cite to several
emails and Defendant PHH’s responses to those emails, some of which are attached to the
Amended Complaint and some of which are attached to the Opposition. (Amended Complaint ¶¶
112, 114; ECF No. 34-2, pp. 12-17; ECF No. 41-2, pp. 103-110). Because Plaintiff’s emails and
Defendant PHH’s responses form the basis for the RESPA claim, these documents are integral to

9

The LMA is also integral to Plaintiffs’ Breach of Contract claim.

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the Amended Complaint and the Court may consider them. See Barr, 303 F. Supp. 3d at 411
(considering plaintiffs’ letters and defendants’ responses as integral to resolve RESPA claim).
Finally, the Court considered the following public records, about which it takes judicial
notice: (1) the Deed of Trust; and (2) Plaintiffs’ publicly available tax information. (ECF No. 1-1,
p. 14-17; ECF No. 34-2 pp. 2-3; ECF No. 42-1; ECF No. 42-2).
IV.

DISCUSSION
In support of their Motion to Dismiss, Defendants advance several arguments. First, that

Plaintiffs’ claims arising from the LMA should be dismissed pursuant to Rule 12(b)6) because
Plaintiffs failed to state claims for: (1) violations of MCPA and MCDCA; (2) violations of
MMFPA; (3) Negligent Misrepresentation; (4) violations of HOEPA and Regulation Z; (5)
violations of the Clayton Act; and (6) Unjust Enrichment. Second, regarding Plaintiff’s claims
arising from Defendant PHH’s management of the escrow account, because Defendant PHH did
not collect excessive escrow payments, Plaintiffs have not and cannot state claims for: (1)
violations of MCPA and MCDCA; (2) violations of MMFPA; (3) Negligent Misrepresentation;
(4) violations of FDCPA; and (5) Breach of Contract. Finally, Plaintiffs failed to state claims
related to Defendant PHH’s management of the escrow account for: (1) violations of RESPA; and
(2) Unjust Enrichment. (Motion to Dismiss, pp. 16-24, 36-40)
Plaintiffs counter that they have adequately pleaded all claims. In the alternative, Plaintiffs
ask the Court for leave to amend the Amended Complaint to remedy any defects. (Opposition, p.
32). 10

To the extent that Plaintiffs request that this Court grant summary judgment in their favor in their Opposition, the
Court denies this request as premature. (Opposition, pp. 1, 32). See E.I. du Pont de Nemours & Co. v. Kolon Indus.,
Inc., 637 F.3d 435, 448 (4th Cir. 2011) (summary judgment usually inappropriate when parties have not had an
opportunity for “reasonable discovery”).
10

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A. Claims arising from LMA (Counts I, II, III, IV, V, IX)
1. Count One: MCPA and MCDCA
(a) MCPA
Defendants argue that Plaintiffs have not alleged a violation of the MCPA because: (1) the
loan balance for the LMA is accurate; (2) Plaintiffs have not alleged reliance on particular false
statements; and (3) because Plaintiffs do not allege reliance, Plaintiffs do not allege injury as a
result of reliance. Plaintiffs counter that they relied on the LMA in general because of other
lawsuits to which Defendant Ocwen was subject.
To establish a violation of the MCPA, a plaintiff must plead that:
(1) the defendant engaged in an unfair or deceptive practice or misrepresentation;
(2) the plaintiff “relied upon the misrepresentation; and
(3) doing so caused the plaintiff actual injury.
Barr, 303 F. Supp. 3d at 416.
The MCPA is subject to the heightened pleading standard of Fed. R. Civ. P. 9(b) because
it “sounds in fraud.” Johnson v. Nationstar Mortg., LLC, Civ. No. GJH-14-2536, 2014 WL
5377636, at *3 (D. Md. Oct. 21, 2014). To plead reliance, a plaintiff must plead facts from which
a court may plausibly infer that the false or misleading statement “substantially induced” his or
her choice. Currie v. Wells Fargo Bank, N.A., 950 F. Supp. 2d 788, 798 (D. Md. 2013).
Regarding Defendant Ocwen’s actions concerning the LMA, Plaintiffs allege that
Defendant Ocwen made false statements in a Mortgage Account Statement and in the LMA itself
because: (1) Mrs. Ayres is not on the Deed of Trust or the Note; and (2) the Mortgage Account
Statement dated June 25, 2018 contained an incorrectly stated that Mrs. Ayres owed $51,072.31;
and (2) the LMA contained misrepresentations regarding the loan balance, principal, interest, and
balloon payment. (Amended Complaint, ¶¶ 37, 39, 40, 41, 43, 44, 45, 56). Plaintiffs appear to

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allege generally that they “reasonably relied” on the “misrepresentations as described in the
LMA.” (Id. ¶ 41). Plaintiffs also allege that they have paid “inflated payments,” and allege
economic and non-economic damages “caused by” the misrepresentations in the LMA. (Id. ¶¶ 57,
58).
However, the Plaintiffs have not cured the defects highlighted by the court in Ayres II. First
to the extent that Plaintiffs are alleging that they relied on the LMA itself, Plaintiffs do not allege
any specific communications related to the LMA that contain information about the “time, place,
and contents of the false representations,” as required by Fed. R. Civ. P. 9(b). Spaulding, 714 F.3d
at 781. Second, to the extent that Plaintiffs are attempting to allege that Mortgage Account
Statement from June 25, 2018, contained fraudulent statements, they fail to allege that, e.g., they
relied on assertions in this statement to sign the LMA or make payments or allege facts to support
an inference that this Mortgage Account Statement “substantially induced” their decisions.
(Amended Complaint, ¶ 43). See Currie, 950 F. Supp. 2d at 798. Nor do the Plaintiffs allege
damages stemming specifically from any reliance on the Mortgage Account Statement. Plaintiffs
argue in their Opposition that they believed that the LMA would be “fair and honest” based on
consent decrees from other cases involving Defendant Ocwen, and further assert that they make
payments pursuant to the LMA, establishing reliance. (Opposition, pp. 6-7). However, even if the
Court considered these belated assertions, Plaintiffs have not plausibly pleaded that they
reasonably relied on specific false or misleading statements made by Defendant Ocwen to make
any particular decision to their detriment. See Ayres II, ECF No. 19, p. 16. 11 Accordingly,
Defendants’ Motion to Dismiss Plaintiffs’ claim under the MCPA related to the LMA is granted.

As Judge Hazel wrote in Ayres II regarding Plaintiffs’ lack of reliance, “Plaintiffs had known since they filed
Ayres I that Defendants and their privies allegedly had incorrect records of the amount owed on the Loan and,
according to the Complaint, Plaintiffs continued to challenge, and never accepted, the amounts demanded by
Defendants.” Id. (citing, inter alia, Green v. Wells Fargo Bank, N.A., 927 F. Supp. 2d 244, 253 (D. Md. 2013)).
11

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(b) MCDCA
Defendants argue that Plaintiffs have not alleged any facts following the judgment in Ayres
I that demonstrate that Defendants had knowledge that the amounts owed in the LMA were false.
(Motion to Dismiss, pp. 18-19). Plaintiffs counter that the letter sent to Mrs. Ayres in June 2018
violates MDCDA because: (1) Mrs. Ayres is not a party to the Deed of Trust or Note; and (2) the
2020 Audit and other lawsuits show that Defendant Ocwen knew it was overcharging Plaintiffs.
(Opposition, pp. 9-11).
The MCDCA provides that a debt collector may not “[c]laim, attempt, or threaten to
enforce a right with knowledge that the right does not exist.” Md. Code Ann., Com. Law § 14202(8). To state a claim under the MCDCA, a plaintiff must establish that:
(1) the defendant did not possess[] the right to collect the amount of debt sought; and
(2) the defendant attempted to collect the debt with the knowledge that [it] lacked
the right to do so.
Barr, 303 F. Supp. 3d at 420 (citing Lewis v. McCabe, Weisberg & Conway, LLC, 2014 WL
3845833, at *6 (D. Md. Aug. 4, 2014)). In addition, a plaintiff must show the defendant had “actual
knowledge” or “reckless disregard” that it is trying to enforce a right that does not exist. Kouabo
v. Chevy Chase Bank, F.S.B., 336 F. Supp. 2d 471, 475 (D. Md. 2004).
In this case, Plaintiffs have alleged only that Defendant Ocwen made false statements in
the LMA regarding loan balance, principal, interest, and in the balloon payment. (Amended
Complaint, ¶ 56). As in Ayres II, Plaintiffs have failed to allege any facts from which this Court
could draw the reasonable inference that Defendant Ocwen was operating “in bad faith such that
it knew the amounts it was attempting to collect were incorrect.” Ayres II, ECF No. 19, p. 17.
Because Plaintiffs have not alleged facts to support actual knowledge or reckless disregard of any

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alleged issues with the amounts in the LMA or surrounding documentation, Defendants’ Motion
to Dismiss Plaintiffs’ claim under the MDCDA arising from the LMA is granted.
2. Count Two: MMFPA
Defendants argue that Plaintiffs have failed to plead with the particularity required by Fed.
R. Civ. P. 9(b) that Defendant Ocwen knowingly made misrepresentations upon which Plaintiffs.
(Motion to Dismiss, pp. 19-20). Plaintiffs counter that Defendants had knowledge that the LMA
contained inaccurate information because: (1) the Independent Audit in 2020 reached a conclusion
that the amount owed in the LMA was inflated; and (2) Defendants were involved in other court
cases. (Opposition, pp. 12-13).
In order to state an MMFPA claim, a plaintiff must plead the elements of a common law
fraud claim with particularity. Galante v. Ocwen Loan Servicing LLC, Civ. No. ELH-13-1939,
2014 WL 3616354, at *28 (D. Md. July 18, 2014). Under Maryland law, a plaintiff must allege
that:
(1) that the defendant made a false representation to the plaintiff; (2) that its falsity
was either known to the defendant or that the representation was made with reckless
indifference as to its truth; (3) that the misrepresentation was made for the purpose
of defrauding the plaintiff; (4) that the plaintiff relied on the misrepresentation and
had the right to rely on it; and (5) that the plaintiff suffered compensable injury
resulting from the misrepresentation.
SpinCycle, Inc. v. Kalender, 186 F. Supp. 2d 585, 590 (D. Md. 2002) (quoting Alleco Inc. v. Harry
& Jeanette Weinberg Found., Inc., 340 Md. 176, 195, 665 A.2d 1038, 1047 (1995)).
In this case, Plaintiff alleges that: (1) the LMA contained inaccurate information; and (2)
because Defendant Ocwen has a history of “fraud and deception” in mortgage lending resulting in
other lawsuits and “consent decrees,” Defendant Ocwen “knew [its] records contained inaccurate
information.” (Amended Complaint, ¶¶ 69, 70, 71 73). As in Ayres II, this allegation is not
sufficient to state a claim because Plaintiffs did not meet Rule 9(b)’s requirements for particularity
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in pleading false representations. See Ayres II, ECF No. 19, p. 18. In addition, Plaintiffs failed to
allege any facts from which the Court can reasonably infer knowledge of falsity, or reliance on
any fraudulent statements. See Ayres I, ECF No. 89, pp. 43-49 (dismissing Plaintiffs’ MMFPA
claim where Plaintiffs failed to allege reliance on misrepresentations). Accordingly, Defendants’
Motion to Dismiss Plaintiffs’ claim for a violation of the MMFPA arising from the LMA is
granted.
3. Count Three: Negligent Misrepresentation
Defendants argue that Plaintiffs fail to allege a duty of care for any of the Defendants
because: (1) a consent order in another case does not create a duty on the part of Defendant Ocwen
to Plaintiffs; and (2) to the extent Plaintiffs try to allege a negligence duty under Maryland common
law, such a claim is precluded by collateral estoppel. (Motion to Dismiss, pp. 21-22). Plaintiffs
counter that consent decrees issued in other cases create a duty of reasonable care between
Defendants and Plaintiffs. (Opposition, pp. 13-15).
To state a claim for negligent misrepresentation, a plaintiff must allege the following:
(1) the defendant, owing a duty of care to the plaintiff, negligently assert[ed] a false
statement; (2) the defendant intend[ed] that his statement [would] be acted upon by
the plaintiff; (3) the defendant ha[d] knowledge that the plaintiff [would] probably
rely on the statement, which, if erroneous, [would] cause loss or injury; (4) the
plaintiff, justifiably, [took] action in reliance on the statement; and (5) the plaintiff
suffer[ed] damage proximately caused by the defendant's negligence.
Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4th Cir. 2013) (quoting Goldstein v.
Miles, 159 Md. App. 403, 859 A.2d 313, 332 (2004)).
In this case, Plaintiffs allege that Defendant Ocwen owed the Plaintiffs “multiple duties of
care” and negligently misrepresented: (1) amounts due in the LMA; and (2) amounts due in escrow.
(Amended Complaint, ¶¶ 80, 81). Plaintiffs appear to allege that Defendant Ocwen also owed a

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duty to Plaintiffs based on a settlement agreement between the Maryland Office of the
Commissioner of Financial Regulation and Defendant Ocwen, “CFR FY 2017-13.” (Id. ¶ 83).
In Ayres II, the court held that the issue of whether Plaintiffs “were owed a duty by
Defendants and their privies” had been actually litigated in Ayres I such that collateral estoppel
barred Plaintiffs’ negligence claim, even though Plaintiffs had added claims regarding the LMA.
Ayres II, ECF No. 19, p. 20.
Collateral estoppel bars the relitigation of an issue of fact or law “identical to issues which
have been actually determined and necessarily decided in prior litigation in which the party against
whom [collateral estoppel] is asserted had a full and fair opportunity to litigate.” In re Microsoft
Corp. Antitrust Litig., 355 F.3d 322, 326 (4th Cir. 2004) (citation omitted).
In this case, although Plaintiffs have recast their negligence claim as a negligent
misrepresentation claim, the issue of whether Defendants and their privies owe a duty to Plaintiffs
has been litigated fully and actually determined. See Ayres II, ECF No. 19, p. 20 (issue of duty had
been fully litigated and was precluded by collateral estoppel); Ayres I, ECF No. 89, pp. 46-41
(defendants did not owe duty as a mortgage servicer, fiduciary duty, a duty as a real estate
professional, or a duty pursuant to Maryland regulations concerning good faith and fair dealing).
In addition, the existence of a consent order in a case between the Maryland Office of the
Commissioner of Financial Regulation and Defendant Ocwen does not create a duty to Plaintiffs.
Ensor v. Wells Fargo Bank Nat'l Ass'n, Civ. No. CCB-21-324, 2022 WL 345513, at *4 (D. Md.
Feb. 4, 2022) (no duty to homeowner arising from consent order between mortgage servicer and
government). Accordingly, Defendant’s Motion to Dismiss Plaintiffs’ negligent misrepresentation
claim based on the LMA is granted.

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4. Count Four: HOEPA, Regulation Z, Request for Injunctive Relief and
Recission
Defendants argue that Plaintiffs have not stated a claim under HOEPA because: (1)
Defendants are not “creditors” under the Truth in Lending Act, 15 U.S.C. § 1602(f) (TILA); (2)
TILA, HOEPA, and Regulation Z do not apply to loan modifications; (3) the LMA is not a highcost mortgage under 15 U.S.C. § 1602(bb)(1)(A)(i); (4) Plaintiffs’ loan is not negatively
amortized; and (5) nothing in the Consent Order prohibited Defendant Ocwen from executing the
LMA. (Motion to Dismiss, pp. 23-24). Plaintiffs counter that: (1) Defendants are creditors; (2)
HOEPA applies to loan modifications; (3) the mortgage under the LMA is a high-cost mortgage;
(4) the loan is negatively amortized; and (5) Defendant Ocwen was not licensed under the
Maryland Consumer Loan Law and therefore could not enter into the LMA. 12 (Opposition, pp. 1517).
The Truth in Lending Act (TILA), as amended by HOEPA, defines a “creditor” as a person
“who both (1) regularly extends . . . consumer credit[;]” and (2) “is the person to whom the debt
arising from the consumer credit transaction is initially payable on the face of the evidence of
indebtedness.” Cetto v. LaSalle Bank Nat. Ass'n, 518 F.3d 263, 269 (4th Cir. 2008); see 15 U.S.C.
§ 1602(g). 13 Put another way, to be liable under the TILA as a “creditor,” the person or entity must
both regularly extend consumer credit and be the original lender or otherwise have an ownership
interest in the loan. See Davis v. Wilmington Fin., Inc., Civ. No. PJM 09-1505, 2010 WL 1375363,
at *4 (D. Md. Mar. 26, 2010). A servicer of a mortgage loan is not liable for alleged violations of

12
A brief review suggests that the MCLL applies only to loans under $25,000. CL § 12-303(a); see
Nagle & Zaller, P.C. v. Delegall, 2022 WL 3272458, at *9 (Md. 2022). Accordingly, Plaintiffs’ argument lacks
merit.
13
Regulation Z was promulgated by the Federal Reserve Board to implement TILA and HOEPA and defines
“creditor” consistently with TILA and HOEPA. See Cetto v. LaSalle Bank Nat. Ass'n, 518 F.3d 263, 269 (4th Cir.
2008) (providing explanation of TILA and Regulation Z definitions of “creditor”).

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TILA or HOEPA. See, e.g., Mbongo v. Specialized Loan Servicing, LLC, Civ. No. PJM 15-2941,
2016 WL 8671841, at *6 (D. Md. June 24, 2016); Davis, 2010 WL 1375363, at *4.
In the Amended Complaint, Plaintiffs allege that Defendant Trustee is the owner of the
loan and do not allege that Defendant Ocwen was involved with the original loan or was the party
to whom the loan was “initially payable.” (Amended Complaint, ¶ 15). Nor do Plaintiffs allege
that Defendant Ocwen has any ownership interest in the loan. (Id.). Instead, because Plaintiffs
consistently allege that Defendant Ocwen is the servicer of the mortgage loan and not the owner
or assignee, Plaintiffs have not stated a claim against Defendant Ocwen for a violation of HOEPA.
(Id.). See Mbongo, 2016 WL 86671841, at *6.
Accordingly, the Court need not reach the remainder of the parties’ arguments concerning
this claim, and Defendants’ Motion to Dismiss Plaintiffs’ claim arising under HOEPA and
Regulation Z is granted.
5. Count Five: Clayton Act
Defendants argue that Plaintiffs have not stated a claim under the Clayton Act because
Plaintiffs have not alleged any conduct that could support a plausible claim that the LMA is a
“violation of antitrust laws” or the Clayton Act. (Motion to Dismiss, p. 24). Plaintiffs counter that
they have adequately pleaded violations of 15 U.S.C. § 15(a) and Section 5 of the Federal Trade
Commission Act because Defendant Ocwen was “fraudulent.” (Opposition, pp. 17-18).
The Clayton Act is a piece of antitrust legislation designed to protect competition by, e.g.,
prohibiting the acquisition of one corporation by another when such an acquisition would lessen
completion or create a monopoly. See, e.g., Brown Shoe Co. v. United States, 370 U.S. 294, 312,
313 (1962). The Amended Complaint is absent any facts to support a reasonable inference that

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Defendant Ocwen violated any antitrust laws, including the Clayton Act. Accordingly,
Defendants’ Motion to Dismiss Plaintiffs’ claim arising under the Clayton Act is granted. 14
6. Count Nine: Unjust Enrichment
Defendants argue that Plaintiffs have failed to state a claim for unjust enrichment because
Plaintiffs have not alleged any facts to support the assertion that Defendant Ocwen received a
benefit. (Motion to Dismiss, pp. 36-37). Plaintiffs do not address or clarify this count as it relates
to Defendant Ocwen or the LMA in their Opposition. (Opposition, pp. 30-31).
To establish a claim for unjust enrichment under Maryland law, a plaintiff must plead that:
(1) the plaintiff confer[red] a benefit upon the defendant; (2) the defendant knows
or appreciates the benefit; and (3) the defendant’s acceptance or retention of the
benefit under the circumstances is such that it would be inequitable to allow the
defendant to retain the benefit without the paying of value in return.
Willis v. Bank of Am. Corp., Civ. No. ELH-13-02615, 2014 WL 3829520, at *27 (D. Md. Aug. 1,
2014) (citing Benson v. State, 389 Md. 615, 651-52, 887 A.2d 525, 546 (2005)).
A claim for unjust enrichment may not be brought “where the subject matter of the claim
is covered by an express contract between the parties.” All Weather, Inc. v. Optical Sci., Inc., 443
F. Supp. 3d 656, 667 (D. Md. 2020) (citation omitted). However, a plaintiff may “plead in the
alternative” by bringing claims for both unjust enrichment and breach of contract. Id. When a
plaintiff does so, the plaintiff’s claim for unjust enrichment “must include an allegation of fraud
or bad faith in the formation of the contract.” Id. (citing Jones v. Pohanka Auto N., Inc., 43 F.
Supp. 3d 554, 573 (D. Md. 2014)).

To the extent Plaintiffs appear to allege that Defendants violated the Federal Trade Commission Act, 15 U.S.C.
§ 45, (Amended Complaint ¶¶ 101, 102, 103), the Court finds that this section of this statute does not provide a
private right of action for an individual plaintiff. See, e.g., McGagh v. Cooper, Civ. No. PX-19-1184, 2019 WL
5538055, at *2 (D. Md. Oct. 25, 2019) (dismissing FTCA claim with prejudice).

14

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Plaintiffs alleged that Defendant Ocwen “unjustly enriched” itself by receiving “inaccurate
outstanding loan amounts in the LMA.” (Amended Complaint, ¶ 151). Plaintiffs’ only allegation
with regard to Defendant Ocwen refers explicitly to the contract governing the relationship
between Plaintiffs and Defendant Ocwen. In addition, the Court cannot decipher from this
conclusory allegation whether Plaintiffs are alleging that the LMA is inaccurate or the monthly
statements following the LMA are inaccurate. In either case, the LMA governs the relationship
between the parties, and Plaintiffs have not pleaded fraud or bad faith in the formation of the LMA
in this claim, so Plaintiffs may not recover under a theory of unjust enrichment. See Cnty. Comm'rs
of Caroline Cnty. v. J. Roland Dashiell & Sons, Inc., 358 Md. 83, 95, 101, 747 A.2d 600, 607-08,
610 (2000).
Moreover, Plaintiffs have failed to plead any facts occurring after the final judgment in
Ayres I from which this Court can reasonably infer that Defendant Ocwen unjustly enriched itself.
Accordingly, Defendants’ Motion to Dismiss Plaintiffs’ claim for unjust enrichment against
Defendant Ocwen related to the LMA is granted.
B. Plaintiff’s MCPA, MCDCA, MMFPA, FDCPA, and Breach of Contract
claims arising from Defendant PHH’s Management of their Escrow
Account (Counts I, II, VII, VIII)
Defendants seek dismissal of Counts I, II, VII, and VIII, related to Defendant PHH’s
management of Plaintiffs’ escrow account. They argue that: (1) Defendant PHH lawfully collected
one-twelfth of the estimated taxes; (2) Plaintiffs are not entitled under any law to an escrow
payment one-twelfth of the actual tax liability; and (3) Plaintiffs are not entitled to stop paying
monthly payments after directly paying their real property taxes, when the LMA required that
property taxes be held in escrow. (Motion to Dismiss, pp. 24-36). Put another way, Defendants
argue that because Defendant PHH has not actually overcharged the Plaintiffs’ escrow account,
Plaintiffs cannot state claims for Counts I, II, VII, and VIII because Plaintiff has not adequately
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pleaded facts to support the conclusions that Defendant PHH made any false statements or took
any actions that violated the FDCPA or breached the LMA. 15
In support of these assertions, Defendants point to the relevant provisions in the Deed of
Trust, the LMA, and RESPA, arguing that Defendant PHH was required to collect monthly escrow
payments based on “current data and reasonable estimates of expenditures.” (Motion to Dismiss,
p. 28). Defendants also highlight Plaintiffs’ tax information for Fiscal Years 2021 and 2022, 16
arguing that the documents show that Defendants’ estimates were reasonable because: (1)
Plaintiffs applied for and received a yearly Homeowners’ Tax Credit, which is the reason that the
anticipated expenditures diverged from the actual expenditures; and (2) Plaintiffs prepaid their
property taxes in violation of the LMA. (Id., p. 30; Reply, pp 10-17). Plaintiffs counter that these
same tax reports demonstrate that the estimates were not reasonable in light of Plaintiffs’ actual
tax obligations. (Opposition, pp. 18-19).
Construing liberally the allegations in the Amended Complaint and the documents properly
before the Court in the light most favorable to the Plaintiffs, Plaintiffs have alleged that Defendant
PHH has wrongly charged escrow payments in excess of a reasonable estimate of their real
property tax liability. (Amended Complaint, ¶ 3, 34, 37, 49, 52, 53, 54, 56, 57, 59, 74, 75, 76, 77,
81, 116, 117, 118, 119, 121, 125, 129, 132, 133, 135, 144, 145). Because Defendants’ arguments
are predicated on a dispute of fact not suitable for resolution at this procedural stage, Defendants’
Motion to Dismiss Counts I, II, VII, and VIII related to Defendant PHH’s management of the
Plaintiffs’ escrow account is denied.

15
To the extent that Plaintiff alleges that Defendant PHH breached the Deed of Trust, this Court agrees with
Defendants that Defendant PHH is not a signatory or assignee of the Deed of Trust and therefore does not owe a
contractual duty to Plaintiffs based on the Deed of Trust. See Ayres I, ECF No. 55, pp. 9-10 (dismissing breach of
contract claim against loan servicer based on Deed of Trust).
16
Defendants include information about Plaintiffs’ real property taxes for fiscal year 2020, but upon review of the
record, no party appended any document regarding fiscal year 2020 to substantiate Defendants’ figures.

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C. Plaintiff’s remaining claims arising from Defendant PHH’s Management
of their Escrow Account (Counts III, VI, IX)
1. Count Three: Negligent Misrepresentation
As set forth more fully in Section IV.B.3., supra, Plaintiffs’ Negligent Misrepresentation
claim against their loan servicer(s) is barred by collateral estoppel. Accordingly, Defendants’
Motion to Dismiss Count III related to Defendant PHH’s management of Plaintiffs’ escrow
account is granted.
2. Count Six: RESPA
Defendants argue that Plaintiffs have not stated a plausible violation of RESPA because:
(1) Plaintiffs’ emails to Defendant PHH do not qualify as QWRs creating a duty under RESPA;
and (2) Plaintiffs have not alleged actual damages. (Motion to Dismiss, p. 37). Plaintiffs counter
that although their requests were sent via email, RESPA only requires that a QWR be in writing.
(Opposition, p. 23).
In order to state a claim for a violation of RESPA's QWR provisions, a plaintiff must allege:
(1) “a written request that meets RESPA's definition of a QWR;” (2) that the “servicer failed to
perform its duties;” and (3) actual damages. McCray v. Bank of Am., Corp., Civ. No. ELH-1402446, 2015 WL 3487750, at *8 (D. Md. June 1, 2015) (citation omitted). RESPA's implementing
regulation, Regulation X, permits a loan servicer to “establish a separate and exclusive office and
address for the receipt and handling of qualified written requests.” Id. (quoting 24 C.F.R. §
3500.21(e)(1)). Establishing this separate address helps loan servicers to meet RESPA's
requirements, and if a servicer designates a QWR address, then a borrower must send any inquiry
to that address in order for it to be considered a QWR. Bird v. Bank of New York Mellon Tr. Co.,
N.A., Civ. No. GLR-19-464, 2019 WL 4750289, at *7 (D. Md. Sept. 30, 2019).

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In this case, Plaintiffs concede that they sent emails to what appears to be Defendant PHH’s
customer portal, not to the address listed as the designated address for QWRs stated on each of
Plaintiffs’ monthly mortgage statements. (Amended Complaint ¶ 112, ECF No. 34-2, pp. 12-16,
18; ECF No. 39-4, p. 2). Accordingly, Plaintiffs’ emails do not count as QWRs and do not trigger
a duty under RESPA. McClain v. Wells Fargo Bank, N.A., No. 20-CV-2035, 2021 WL 3852322,
at *2 (D. Md. Aug. 27, 2021) (granting motion to dismiss RESPA claim where plaintiff conceded
that certain alleged QWRs were not sent to designated address). Accordingly, Defendants’ Motion
to Dismiss Plaintiffs’ RESPA claim is granted. 17
3. Count Nine: Unjust Enrichment
Defendants argue that Plaintiffs have failed to state a claim for unjust enrichment because:
(1) a written contract, the LMA governs the relationship between Defendant PHH and Plaintiffs;
and (2) Plaintiffs have not alleged any facts that Defendant PHH received a benefit. (Motion to
Dismiss, p. 36). Plaintiffs counter that Defendant PHH has retained “excess escrow fees,” and have
refused to refund such fees. (Opposition, p. 30).
As set forth above, where a contract defines the relationship between the parties, a plaintiff
may not assert a claim for unjust enrichment unless the plaintiff also alleges fraud or bad faith in
the formation of the contract. See All Weather, 443 F. Supp. 3d at 667; Cnty Comm’rs, 358 Md.
at 96, 747 A.2d at 607. Plaintiffs allege that they have paid excessive escrow fees. (Amended
Complaint, ¶¶ 150, 151). However, the LMA governs the relationship between the parties on this
specific subject of how Defendant PHH is to calculate and collect payments to be held in escrow,

17
To the extent that Plaintiffs allege that Defendant PHH collected escrow payments in excess of what was actually
required for the payment of taxes and retained such excess in violation of 12 U.S.C. § 2605(g), Plaintiffs have not
alleged an actionable violation of RESPA. Richards v. Servis One, Inc., Civ. No. PX-20-3683, 2021 WL 3930130, at
*5 (D. Md. Sept. 2, 2021) (granting motion to dismiss RESPA claim where plaintiff alleged that escrow payments
exceeded actual tax obligation and lender kept those payments instead of refunding them to borrowers).

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and Plaintiffs do not allege fraud or bad faith in the formation of the LMA relevant to this claim.
(LMA, pp. 3-4). Accordingly, Plaintiffs may not recover under a theory of unjust enrichment, and
Defendants’ Motion to Dismiss Plaintiffs’ unjust enrichment claim against Defendant PHH is
granted.
V.

MANNER OF DISMISSAL
Plaintiffs request that the Court grant leave to amend their Amended Complaint if the Court

finds that they have failed to state claims upon which relief can be granted. (Opposition, pp. 3132). 18 Where a court does not give leave to amend or engage in discussion as to why amendment
would be futile, the dismissal should be without prejudice. King v. Rubenstein, 825 F.3d 206, 225
(4th Cir. 2016).
A court may properly deny leave to amend where amending a claim would be futile. United
States ex rel. Carson v. Manor Care, Inc., 851 F.3d 293, 305 n.6 (4th Cir. 2017); see also Adkins
v. Bank of New York Mellon, Civ. No. PWG-15-3886, 2017 WL 2215131, at *1 n.2 (D. Md. May
19, 2017) (dismissing claims with prejudice where plaintiff had already unsuccessfully attempted
to amend the complaint to remedy deficiencies); Sharma v. Rushmore Loan Mgmt. Servs., LLC,
Civ. No. GJH-18-656, 2020 WL 1323007, at *17 (D. Md. Mar. 20, 2020) (dismissing claims with
prejudice where there are no facts plaintiffs could allege to plausibly state their claims).
A.

Loan Modification Agreement

As set forth in Section IV.A., this Court dismisses Counts I, II, III, IV, V, IX as they relate
to the LMA with prejudice for the reasons articulated herein. Regarding Counts I, II, and III,
Plaintiffs have already had the opportunity to amend these claims to remedy any deficiencies.

As a preliminary matter, the Fourth Circuit has held that a court does not abuse its discretion by declining to grant
a “bare request in an opposition to a motion to dismiss” that lacks “any indication of the particular grounds on which
amendment is sought.” United States ex rel. Carson v. Manor Care, Inc., 851 F.3d 293, 305 n.6 (4th Cir. 2017)
(citation omitted).
18

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Because further amendment would be futile, Counts I, II, III, will be dismissed with prejudice. See
Adkins, 2017 WL 2215131, at *1 n.2. Regarding Count IV, the Court finds that there are no facts
that Plaintiffs could allege to render Defendants liable as creditors under the TILA as amended by
HOEPA. Regarding Count V, the Court finds that there are no facts that Plaintiffs could allege to
state an antitrust claim against Defendants. Regarding Count IX, the Court finds that: (1) Plaintiffs
have already had an opportunity to amend their complaint regarding the legal significance of the
facts surrounding the LMA; and (2) there are no facts that Plaintiffs could allege to state this claim,
where Plaintiffs have also alleged the existence of a contract governing this subject. Accordingly,
Counts IV, V, and IX will be dismissed with prejudice, as amendment would be futile. See Sharma,
2020 WL 1323007, at *17.
B. Escrow Account
Regarding Plaintiffs’ claims arising from Defendant PHH’s management of their escrow
account, as set forth in Section IV.C., this Court dismisses Counts III, VI, IX. Regarding Count
III, no amendment could change the preclusive effect of Ayres I on Plaintiffs’ negligent
misrepresentation claim. Accordingly, Count III is dismissed with prejudice. Graves v. OneWest
Bank, FSB, Civ. No. PWG-14-1995, 2015 WL 2452418, at *7 (D. Md. May 20, 2015) (dismissing
with prejudice on basis of collateral estoppel). Regarding Count VI, the Court finds that there are
no facts that Plaintiffs could allege to state this claim under RESPA where Plaintiffs have conceded
that their communications were not sent to the designated QWR address. Regarding Count IX, the
Court finds that there are no facts that Plaintiffs could allege to state a claim where the subject of
Plaintiffs’ unjust enrichment claim, the amount to be held in escrow, is governed by a written
contract. Accordingly, Counts VI, IX, are dismissed with prejudice. See Sharma, 2020 WL
1323007, at *1.

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VI.

CONCLUSION
For the foregoing reasons, Defendant’s Motion to Dismiss based on Rule 12(b)(6) is

granted in part and denied in part. Regarding the LMA, Counts I, II, III, IV, V, and IX are dismissed
with prejudice. Regarding the escrow account, Counts III, VI, and IX are dismissed with prejudice,
and Counts I, II, VII, and VIII remain.
A separate Order will follow.

Date: September 19, 2022

____________/s/___________
The Honorable Gina L. Simms
United States Magistrate Judge

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