DEBORAH K. CHASANOW, District Judge.
Presently pending and ready for resolution is the motion to dismiss filed by Defendants U.S. Bank NA (Defendant U.S. Bank) and JPMorgan Chase Bank, N.A. (Defendant Chase) (collectively, "Defendants"). (ECF No. 8). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion to dismiss will be granted.
The following facts are either alleged in the complaint or taken from matters of public record of which the court may take judicial notice.
On June 12, 2008, Plaintiff filed a Chapter 11 Petition in Bankruptcy in the United States Bankruptcy Court of the District of Maryland (the "Bankruptcy Court").
"On September 25, 2008, the Office of Thrift Supervision ("OTS") closed WaMu, and the [Federal Deposit Insurance Corporation ("FDIC")] was named as receiver." (ECF No. 8-1, at 2; see also ECF No. 14, at 3). "[Defendant] Chase acquired substantially all of WaMu's assets[,] while the FDIC retained its liabilities and gave notice that December 30, 2008 was the last date to file a claim with the FDIC concerning WaMu." (Id.)
"On June 3, 2013, [Defendant] Chase, as attorney-in-fact for the FDIC, as Receiver of WaMu, assigned the Deed of Trust to [Defendant] U.S. Bank (the "Assignment")." (ECF No. 8-1, at 3; see also ECF No. 14, at 3). "[Defendant] Chase recorded the Assignment in the Land Records of Montgomery County, Maryland[.]" (Id.) "On or about November 16, 2013, a notice providing for the transfer of the secured claim under the loan from WaMu to [Defendant] U.S. Bank was filed with the Bankruptcy Court, along with a notation that Select Portfolio Servicing, Inc. ("SPS") was the servicer of the loan." (Id.)
"On May 6, 2016, [Defendant] U.S. Bank filed a Motion for Authorization to Proceed with Enforcement of Security Interest Based on Post Confirmation Default, or in the alternative, for Order Granting Relief from Automatic Stay." (Id.) "By order dated October 7, 2016, the Bankruptcy Court held that Plaintiff had defaulted on his payment plans to [Defendant] U.S. Bank under his Fourth Amended Plan of Reorganization and granted [Defendant] U.S. Bank relief from the automatic stay to foreclose on the Property." (Id.)
Under the Fourth Amended Plan of Reorganization, "Plaintiff agreed to a monthly payment arrangement of $3,701.00 to Wells Fargo and [to] continue the process of loan modification with the lender."
"On July 7, 2017, James Clarke, as substitute trustee for [Defendant] U.S. Bank, filed a foreclosure action in the Circuit Court for Montgomery County, Maryland against Plaintiff and his wife, Case No. 434197V ("Foreclosure Action")."
On June 15, 2018, Plaintiff filed a complaint setting forth ten causes of action: lack of standing/wrongful foreclosure (Claim 1); violation of the Maryland Consumer Protection Act ("MCPA") (Claim 2); violation of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") (Claim 3); Violation of the Fair Debt Collection Practices Act ("FDCPA") (Claim 4); fraudulent misrepresentation and failure to disclose (Claim 5); breach of contract (Claim 6); unjust enrichment (Claim 7); negligence (Claim 8); rescission (Claim 9); and civil conspiracy (Claim 10). (ECF No. 1). Plaintiff's complaint also sought declaratory and injunctive relief. On September 5, 2018, Defendants filed a motion to dismiss. (ECF No. 8). On October 09, 2018, Plaintiff filed a motion for leave to file his response late, (ECF No. 13), and filed his response, (ECF No. 14). On October 23, 2018, Defendants replied, (ECF No. 15), and did not oppose Plaintiff's motion for leave to file his untimely response. The motion will be granted and the response was considered.
The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4
At this stage, all well-pleaded allegations in a complaint must be considered as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and all factual allegations must be construed in the light most favorable to the plaintiff, see Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4
A plaintiff asserting fraud must also satisfy "the heightened pleading standards of Federal Rule of Civil Procedure 9(b), which requires a plaintiff to plead `with particularity the circumstances constituting fraud.'" Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4
As a threshold issue, Defendants contend that the doctrine of claim splitting bars all of Plaintiff's claims. Like res judicata, "claim splitting `prohibits a plaintiff from prosecuting its case piecemeal[ ] and requires that all claims arising out of a single wrong be presented in one action.'" Sensormatic Sec. Corp. v. Sensormatic Elec. Corp. (Sensormatic I), 329 F.Supp.2d 574, 579 (D.Md. 2004) (quoting Myers v. Colgate-Palomolive Co., 102 F.Supp.2d 1208, 1224 (D.Kan. 2000)). Unlike res judicata, however, a final judgement in the first suit is not required to bar the second suit. See Sensormatic Sec. Corp. v. Sensormatic Elec Corp. (Sensormatic II), 452 F.Supp.2d 621, 626 n.2 (D.Md. 2006); see also 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4406 (3d ed. 2019) ("In dealing with simultaneous actions on related theories, courts at times express principles of "claim splitting" that are similar to claim preclusion, but that do not require a prior judgment."). Instead, the court is only required to "assess whether the second suit raises issues that should have been brought in the first." Curtis v. Citibank, N.A., 226 F.3d 133, 140 (2d Cir. 2000). Defendants contend that Plaintiff filed a motion to dismiss in the pending Foreclosure Action that "raised the same allegations and arguments that Plaintiff makes in this case." (ECF No. 8-1, at 7). Defendants note that the state court "rejected all of Plaintiff's arguments and denied his motion to dismiss[]" and concludes that "the doctrine of claim splitting bars Plaintiff's claims in this action because they arise from the same transaction as the Foreclosure Action." (Id.) Plaintiff, misunderstanding the distinctions between claim splitting and res judicata, responds that claim splitting does not apply because the Foreclosure Action "is still pending[.]" (ECF No. 14, at 5-6). The court need not conclude whether the doctrine of claim splitting precludes Plaintiff's claims because, even if it did not, Plaintiff fails to plead facts showing that he is entitled to relief.
Plaintiff challenges Defendants' ability to foreclose on the Property. (ECF No. 1, at 11-15 ¶¶ 56-74). The complaint does not clearly outline the bases of Plaintiff's challenges. The gravamen of Plaintiff's claim appears to be that Defendants improperly securitized the Note and the Deed of Trust, rendering them unenforceable. (Id.) This challenge is unavailing because Maryland courts have recognized continually the propriety of securitization of mortgage loans. Harris v. Household Fin. Corp., 14-cv-0606-RWT, 2014 WL 3571981, at *2 (D.Md. July 18, 2014) ("This [c]ourt and others in the Fourth Circuit have consistently. . . held[]" "that the securitization process does not make negotiable instruments and deeds of trust unenforceable[.]"); Suss v. JPMorgan Chase Bank, N.A., 09-cv-1627-WMN, 2010 WL 2733097, at *5 (D. Md. July 9, 2010) ("The various arguments that Plaintiff advances to support his theory that the securitization rendered the Note unenforceable are also without legal support."). Moreover, Plaintiff cannot assert a claim for "wrongful foreclosure" because no such cause of action exists under Maryland law. See Davis v. Wilmington Fin., Inc., 09-cv-1505-PJM, 2010 WL 1375363, at *7 (D.Md. Mar. 26, 2010) ("Plaintiffs cite no authority, and the [c]ourt can find none, that `Wrongful Foreclosure' is a separate cause of action in Maryland.").
Plaintiff argues that Defendants violated the Maryland Consumer Protection Act ("MCPA"), (ECF No. 1, at 15-16 ¶¶ 75-77), the Fair Debt Collection Practices Act ("FDCPA"), (Id. at 17-18 ¶¶ 84-89), and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), (Id., at 16-17 ¶¶ 78-83).
Plaintiff claims that Defendants failed to provide notice required under the MCPA. (ECF No. 1, at 15-16). Defendants respond that this claim is time barred. (ECF No. 8-1, at 12). In his opposition, Plaintiff argues that he filed his complaint "within three years of his learning of the MCPA violation[.]" (ECF No. 14, at 6-7).
The statute of limitations is an affirmative defense. See Fed.R.Civ.P. 8(c). A motion to dismiss filed under Rule 12(b)(6) may only reach the merits of an affirmative defense when "all facts necessary to the affirmative defense clearly appear on the face of the complaint." Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4
Under MCPA § 13-316(b), "[w]ithin 7 days of acquiring mortgaging servicing, a servicer shall send to the mortgagor a written notice containing [certain information] regarding the mortgage on the date of transfer[.]" The MCPA's statute of limitations is three years. Master Fin. Inc. v. Crowder, 409 Md. 51, 65 (2009).
The parties agree that "[o]n or about November 16, 2013, a notice providing for the transfer of the secured claim under the loan from WaMu to [Defendant] U.S. Bank was filed with the Bankruptcy Court, along with a notation that [SPS] was the servicer of the loan." (ECF No. 8-1, at 3; ECF No. 14, at 3). Therefore, the statute of limitations ran on Plaintiff's MCPA claim on November 23, 2016 and bars his claim now. Plaintiff's argument that he "filed within three years of his learning of the MCPA violation" is unavailing because Plaintiff had knowledge of the facts giving rise to the alleged violation in 2013. See Brown v. Neuberger, Quinn, Gielen, Rubin, & Gibber, P.A., 731 F.Supp.2d 443, 449 (D.Md. 2010) ("Under the discovery rule in Maryland, a plaintiff's cause of action accrues when the plaintiff knows or reasonably should have known of the wrong."); see also Moreland v. Aetna U.S. Healthcare, Inc., 152 Md.App. 288, 297 (Md.Ct.Spec.App.) ("Knowledge of facts. . . not actual knowledge of their legal significance, starts the statute of limitations running.") (citations and quotation marks omitted).
Plaintiff claims that Defendants failed to provide written verification of his mortgage debts in violation of the FDCPA. (ECF No. 1, at 17-18). Defendants contend that the statute of limitations bars this claim, and that Plaintiff failed to allege that Defendants are "debt collectors" under the FDCPA. (ECF No. 8-1, at 11-12).
Section 1692g of the FDCPA provides:
Here, there is no allegation identifying a communication — let alone an initial communication in connection with the debt collection — that fails to provide notice as set forth in the statute. The complaint contains no allegations that Plaintiff submitted a timely request for validation of his debt. Plaintiff appears to misread the statute; it does not require that a debt collector validate a debt within five days of contacting a consumer to collect that debt. Rather, the statute requires the debt collector to notify the consumer within five days of initial contact of his or her right to seek validation within 30 days. Plaintiff's conclusory allegations regarding Defendant's alleged failure to verify and validate the debt are insufficient to state a claim under the FDCPA.
Finally, Plaintiff alleges that Defendants violated FIRREA by "fail[ing] to apply his mortgage payments" under the Fourth Amended Plan of Reorganization. (ECF No. 1, at 16-17 ¶¶ 78-83). Plaintiff notes that he "filed an administrative claim with the FDIC due to the lack of credit for his payments to Wells Fargo." (Id. at 17 ¶ 82). Defendants contend that "[t]he [c]ourt lacks subject matter jurisdiction over" this claim because "Plaintiff was required to submit his FIRREA claim, and any other claim based on WaMu's actions, to the FDIC before the December 30, 2008 bar date." (ECF No. 8-1, at 13-14). Plaintiff responds that he did not receive proper notice of the December 30, 2008 bar date and was "not in a position to investigate and assert [his] rights in a timely manner[.]" (ECF No. 14, at 8). Defendants counter that Plaintiff was not entitled to actual notice and his late-filed claims were properly disallowed by the FDIC. (ECF No. 15, at 6-8).
The Fourth Circuit recently outlined FIRREA's relevant provisions:
Willner v. Dimon, 849 F.3d 93, 102-103 (4
Plaintiff's fraudulent misrepresentation claim contends that "Defendants securitized the [N]ote and breached a loan modification by mishandling his payments." (ECF No. 14, at 8-9; see also ECF No. 1, at 18-19 ¶¶ 90-103). Defendants contend that Plaintiff failed to plead his fraud claim with particularity and that "a fraud claim cannot arise from a breach of contract." (ECF No. 8-1, at 15-16). Plaintiff's opposition to Defendants' motion to dismiss contends that "[f]urther discovery will enable. . . Plaintiff to provide additional details to support the claim[.]" (ECF No. 14, at 9).
Plaintiff fails to state a claim for fraudulent misrepresentation and to plead his claim with the requisite particularity. Fraudulent misrepresentation is simply a means of committing fraud. See Sass v. Andrew, 152 Md.App. 406, 432 (2003). To make out a claim of fraud, a plaintiff must show "(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." Id. at 429. Plaintiff did not identify any specific false statement and his challenges to the Defendants' securitization of the Note are unavailing. See Harris, 2014 WL 3571981, at *2. Plaintiff failed to provide any facts to support the existence of a loan modification agreement, let alone its breach. In fact, it is unclear that either of the Defendants even executed a loan modification agreement with Plaintiff. Assuming an agreement existed, Plaintiff failed to describe how Defendants breached the purported loan modification and simply concludes that they mishandled payments under it. Plaintiff's contention that discovery will provide him additional details to support his claim ignores that one of Rule 9(b)'s purposes is to "discourage[e] fishing expeditions brought in the dim hope of discovering a fraud[.]" Pub. Employees' Ret. Ass'n of Colo v. Deloitte & Touche LLP, 551 F.3d 305, 311 (4
Plaintiff raises breach of contract, unjust enrichment, and rescission claims. Plaintiff's breach of contract claim focuses on the purported modification agreement. (ECF No. 1, at 19-20, ¶¶ 104-10). Plaintiff alleges that "[t]he [m]odification agreement was an offer by Defendant Chase to forebear on foreclosing[,]" that "Defendant Chase knew or should have known that confession or judgment provisions. . . are not favored" in Maryland, and that Defendant Chase "effectively and unilaterally breached the modification agreement[.]" (Id.) As discussed above, there is no evidence that either Defendant entered into a loan modification agreement with Plaintiff. Plaintiff inconsistently describes both Defendant U.S. Bank and Defendant Chase as parties to the modification agreement. Compare (ECF No. 1, at 19 ¶ 98) ("[Defendant] U.S. Bank entered a modification agreement. . .) with (ECF No. 1, at 20 ¶ 105) ("The [m]odification agreement was an offer by [Defendant] Chase. . .).
"It is well-established in Maryland that a complaint alleging a breach of contract `must of necessity allege with certainty and definiteness' facts showing a contractual obligation owed by the defendant to the plaintiff and a breach of that obligation by defendant." RRC Northeast, LLC v. BAA Maryland, Inc., 412 Md. 638, 655 (2010) (emphasis in original) (quoting Cont'l Masonry Co. v. Verdel Constr. Co., 279 Md. 476, 480 (1977). Plaintiff provides inconsistent details about the modification agreement and fails to allege with certainty and definiteness facts showing a contractual obligation owed by either Defendant. Plaintiff fails to state a claim for breach of contract.
Plaintiff's unjust enrichment claim contends that Defendants "were the beneficiar[ies] of financial gain conferred. . . by the Plaintiff[,]" that "Defendants conspired and. . . possessed appreciation and knowledge of the benefit[,]" and that "Defendants accepted and retained the benefit under such circumstances as to make it inequitable for the Defendant[s] to retain the benefit without payment of its value or the return of money." (ECF No. 1, at 20-21).
Plaintiff also seeks rescission, although the complaint is unclear about whether he seeks rescission of the Note and the Deed of Trust or rescission of the alleged modification agreement. (ECF No. 1, at 22-23 ¶¶ 123-129). Defendants contend that "Plaintiff's rescission claim fails as a matter of law because he has not alleged its prima facie elements." (ECF No. 8, at 16-17). Defendants emphasize that "Plaintiff has failed to allege facts showing that he was induced by any wrongful action by Defendants to enter into the loan contract[]" and "has not allege[d] that he has tendered, or is willing and able to tender, the loan proceeds to Defendants." (Id. at 17). Plaintiff responds that he "alleged that the Defendant[s] engaged in fraudulent activity[]" and "[t]he fraudulent activity forms the basis for [his] rescission claim." (ECF No. 14, at 10). Plaintiff failed to state a claim for fraud and his rescission claim will be dismissed.
Plaintiff's negligence claim appears to involve his payments under the bankruptcy plan. He contends that Defendant U.S. Bank "failed to account to Plaintiff" "for the income and expenses associated with [his] commitment to the modification agreement[]" and alleges that this failure "allow[ed] him to default in the eyes of the Bankruptcy Court." (ECF No. 1, at 21-22 ¶¶ 111-122; see also ECF No. 14, at 9-10). Defendants argue that "Plaintiff's negligence claim fails as a matter of law because it arises from an alleged breach of contract." (ECF No. 8-1, at 16). Defendants are correct. "It is well established in Maryland that the relationship between the bank and borrower is contractual, not fiduciary, in nature." Spaulding v. Wells Fargo Bank, N.A., 920 F.Supp.2d. 614, 620 (D.Md. 2012). "Moreover, the mere negligent breach of a contract, absent a duty or obligation imposed by law independent of that arising out of the contract itself, is not enough to sustain an action sounding in tort." Id.; see also Green, 927 F.Supp.2d at 250-51.
Plaintiff's civil conspiracy claim alleges that "Defendant[s] joined together for their mutual gain and benefit." (ECF No. 1, at 23 ¶¶ 130-31). Defendants argue that "Plaintiff did not plead the prima facie elements of his civil conspiracy claim." (ECF No. 8
A claim of civil conspiracy requires Plaintiff to allege: "(1) [a] confederation of two or more persons by agreement or understanding; (2) [s]ome unlawful or tortious act done in furtherance of the conspiracy or use of unlawful or tortious means to accomplish an act not in itself illegal; and (3) [a]ctual legal damage resulting to the plaintiff." Windesheim v. Larocca, 443 Md. 312, 347 (2015). "Conspiracy is not a separate tort capable of independently sustaining an award of damages in the absence of other tortious injury to the plaintiff." Haley, 659 F.Supp. 2d at 726 (quoting Alleco Inc. v. The Harry & Jeanette Weinberg Foundation, Inc., 340 Md. 176, 189 (1995)). Plaintiff failed to allege any facts that Defendants agreed to commit an unlawful or tortious act. Moreover, because Plaintiff failed to state a claim for his other tort claims, there is no foundational tort to support his allegation of civil conspiracy. See e.g. Neto v. Rushmore Loan Mgmt. Servs., Inc., No. 16-cv-1056-DKC, 2017 WL 896890, at *6 (D.Md. Mar. 7, 2017).
Plaintiff requested leave to amend the complaint. (ECF No. 14, at 9-10). Defendants requested dismissal with prejudice. (ECF No. 8, at 1-2; ECF No. 8-1, at 18; ECF No. 15 at 1, 10). Fed.R.Civ.P. 15(a)(2) provides that courts should "freely give leave [to amend] when justice so requires," and commits the matter to the discretion of the district court. See Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 769 (4
This is the third court in which Plaintiff has challenged the foreclosure of the Property. At no point, in any of the courts, has Plaintiff suggested that he has anything more to add to support his claims. Moreover, Plaintiff failed to move to amend formally and also failed to provide a proposed amended complaint or to indicate his desired amendments. Plaintiff's request for leave to amend the complaint will be denied. See Willner, 849 F.3d at 114 ("Where, as here, the plaintiff fails to . . . move to amend and fails to provide the district court with any proposed amended complaint or other indication of the amendments he wishes to make, the district court does not abuse its discretion in denying leave to amend.") (citations and quotation marks omitted); Cozzarelli v. Inspire Pharms. Inc., 549 F.3d 618, 630-31 (4
For the foregoing reasons, the motion to dismiss filed by Defendants will be granted. A separate order will follow.
