DEBORAH K. CHASANOW, District Judge.
Presently pending and ready for resolution in this consumer case are: (1) a motion to dismiss filed by Defendants US Bank National Association ("US Bank") and Wells Fargo Bank, N.A. ("Wells Fargo") (ECF No. 8); (2) a motion to dismiss filed by Defendant The Alba Law Group, P.A. ("Alba") (ECF No. 11); and (3) a motion to dismiss filed by Defendant JP Morgan Chase Bank, N.A. ("JP Morgan") (ECF No. 25). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motions will be granted.
The following facts are alleged in the amended complaint. On March 7, 2005, Wells Fargo provided a mortgage loan to Plaintiff Sandra Pruitt ("Plaintiff" or "Ms. Pruitt") that was evidenced by a promissory note (the "Note") and secured by a deed of trust (the "Deed of Trust") on certain real property located at 1501 Deer Run Court, Mitchellville, Maryland ("the Property"). (ECF No. 7 ¶ 7). Ms. Pruitt defaulted on her loan, and foreclosure proceedings were initiated on November 8, 2011 in the Circuit Court for Prince George's County. (ECF No. 7 ¶ 9); see also Geesing v. Sandra Pruitt, Case No. CAE 11-31154. In about April 2012, before the Property was foreclosed on, Ms. Pruitt filed for bankruptcy. (ECF No. 7 ¶ 11). The attorneys from Alba were appointed as Substitute Trustees to foreclose on the Deed of Trust. (Id. ¶ 8).
Ms. Pruitt asserts that she made monthly mortgage payments to Wells Fargo and the bankruptcy trustee since the filing of her bankruptcy, but then, "[a]t the beckoning of Wells Fargo, [she] applied on numerous occasions for a loan modification." (ECF No. 7 ¶¶ 12-13). Wells Fargo denied Ms. Pruitt's request for a loan modification by letter dated September 12, 2014, a decision which she appealed. (Id. ¶¶ 14-15). By letter dated October 16, 2014, Wells Fargo informed Ms. Pruitt that her appeal would not be granted. (Id. ¶ 16). Although Ms. Pruitt does not attach the letter as an exhibit to her amended complaint, she states that it "apprised [her] of the short sale option and that Ms. Pruitt should call [Marsha Short, a Wells Fargo employee,] right away if she was interested in such an option." (Id.). Ms. Pruitt contends that she called Ms. Short to request information on the option to sell her home to avoid foreclosure, but the calls went unanswered. (Id. ¶¶ 17-18). Plaintiff alleges that:
(Id. ¶ 19).
Plaintiff contends that three days before the scheduled foreclosure sale, Marsha Short answered her phone and "coldly advised Ms. Pruitt that she can submit documents for a short sale[,] but at this point there is no guarantee that the sale would be postponed for her to do a short-sale." (Id. ¶ 20). According to Plaintiff, "Marsha Short claimed the foreclosure sale could not be postponed without the authorization of the investor, who Marsha identified as EMC." (Id.). Subsequently, Plaintiff allegedly represented to Ms. Short that "she could cure the default to stop the foreclosure," but requested that Wells Fargo "certify that it was the `holder' and possessor of the original promissory note." (Id. ¶ 21). Marsha Short then apparently informed Plaintiff that Wells Fargo did not have the original note, but held a copy. Ms. Pruitt contends that subsequently she called Alba and spoke with an attorney, who told her that Alba also was not in possession of the original promissory note. (Id. ¶ 22).
Plaintiff, proceeding pro se, filed this case in the Circuit Court for Prince George's County, but, when she filed an amended complaint, adding a federal claim and an additional defendant, the case was removed to this court. (ECF No. 1). The first amended complaint asserts the following claims: (1) violations of the Truth in Lending Act ("TILA") by JP Morgan (count I); (2) violations of the Fair Debt Collection Practices Act ("FDCPA") by Alba (count II); (3) violations of the Maryland Consumer Debt Collection Act ("MCDCA") by all Defendants (count III); and (4) violations of the Maryland Consumer Protection Act ("MCPA") by Wells Fargo (count IV). Plaintiff also requests a declaratory judgment (count V).
Defendants Wells Fargo and US Bank filed a motion to dismiss the amended complaint, and Alba filed a separate motion to dismiss. (ECF Nos. 8 and 11). Plaintiff was provided with a Roseboro notice (ECF No. 19), which advised her of the pendency of the motions to dismiss and her entitlement to respond within seventeen (17) days from the date of the letter. Roseboro v. Garrison, 528 F.2d 309, 310 (4
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
In addition, while courts generally should hold pro se pleadings "to less stringent standards than formal pleadings drafted by lawyers," they may nevertheless dismiss complaints that lack a cognizable legal theory or fail to allege sufficient facts under a cognizable legal theory. Haines v. Kerner, 404 U.S. 519, 520 (1972); Turner v. Kight, 192 F.Supp.2d 391, 398 (D.Md. 2002).
Plaintiff asserts an MCDCA claim against all Defendants. The amended complaint asserts that Defendants violated Section 14-202(8) of the MCDCA by (1) "[c]laiming and/or attempting to collect an inflated amount of the debt" and (2) "[a]ttempting to take and/or claiming a right to take plaintiff's property when the Defendants knew neither Wells Fargo nor Alba was entitled to enforce the Note or Deed of Trust." (ECF No. 7 ¶ 32(a)-(b)).
The MCDCA "prohibits debt collectors from utilizing threatening or underhanded methods in collecting or attempting to collect a delinquent debt." Stovall v. SunTrust Mortgage, Inc., No. RDB-10-2836, 2011 WL 4402680, at *9 (D.Md. Sept. 20, 2011). Pertinently, the statute provides that, in collecting or attempting to collect an alleged debt, a collector may not engage in various activities, including "claim[ing], attempt[ing], or threaten[ing] to enforce a right with knowledge that the right does not exist. Md. Code Ann., Com. Law § 14-202(8). To plead a claim under the MCDCA, Plaintiff must set forth factual allegations tending to establish two elements: (1) that Defendants did not possess the right to collect the amount of debt sought; and (2) that Defendants attempted to collect the debt knowing that they lacked the right to do so. See Lewis v. McCabe, Weisberg, & Conway, LLC, No. DKC 13-1561, 2014 WL 3845833, at *6 (D.Md. Aug. 4, 2014). The key to prevailing on a claim of MCDCA is to demonstrate that the defendant "acted with knowledge as to the invalidity of the debt." Pugh v. Corelogic Credco, LLC, No. DKC 13-1602, 2013 WL 5655705, at *4 (D.Md. Oct. 16, 2013) (citing Stewart v. Bierman, 859 F.Supp.2d 754, 769 (D.Md. 2012) (emphasis in original) (citations omitted) (dismissing plaintiff's MCDCA claim for failure to demonstrate defendant's knowledge).
Plaintiff's assertion that Defendants attempted to collect an "inflated amount of the debt" apparently concerns her challenge to the amount of attorney's fees identified in a payoff quote and reinstatement quote from Alba. (ECF No. 7 ¶ 32(a)). She appears to argue that attorney's fees included within the quoted subtotal labeled "Corporate Advance" "are unjust and represent costs not actually incurred or excessive of the true costs." (Id. ¶ 19). Plaintiff alleges that, although both the payoff quote and reinstatement quote expressly attribute $585 to attorney's fees, "the actual amount of the quoted amount that represent[s] attorney['s] fees and costs [is] at least $7,870.16 as of November 25, 2014." (Id.).
Defendants misapprehend the nature of Plaintiff's argument. According to Defendants Wells Fargo and US Bank, "Plaintiff challenges that the amount identified in the quotes [is] less than what she perceived to be the actual amount of fees and thus cannot be actionable here." (ECF No. 8-1, at 7). Defendants' reasoning proceeds thusly: Plaintiff's own allegations belie her assertion that Defendants attempted to collect more than what was owed because she contends that the actual amount of attorney's fees was more than what purportedly was represented in the payoff quote and reinstatement quote. This overly simplistic recital of Plaintiff's argument evidences a cursory review of her claim, as does Defendants' description of Plaintiff's allegations as "vague and self-contradictory."
Grasping Plaintiff's argument does not, however, reveal why she finds the fees to be objectionable, unjust, or excessive of true costs. She simply alleges in her amended complaint that, "[u]pon information and belief, the $7,870.16 or more in attorney['s] fees are unjust and represent costs not actually incurred or excessive of the true costs." (ECF No. 7 ¶ 19). Critically, she provides no basis and pleads no facts supporting her information and belief. Plaintiff advances no argument as to why this practice is actionable aside from suggesting that attorney's fees and costs billed to the Corporate Advance balance and separate from Attorney Fees and Costs are, in a sense, per se illegitimate. To the extent Plaintiff argues that legal fees and costs included within the Corporate Advance balance of her payoff quote and reinstatement quote are unjust, unearned, or excessive of true costs, she has not stated a claim. Therefore, unless and until Plaintiff can make out a claim and satisfy the pleading standard, her claim must be dismissed.
To the extent that the allegations and facts of Plaintiff's opposition differ from those in her amended complaint, the court must look to the sufficiency of her amended complaint. Plaintiff may not amend her complaint again through her opposition. It is well settled law that a Rule 12(b)(6) motion tests the sufficiency of the complaint. Bey v. Shapiro Brown & Alt, LLP, 997 F.Supp.2d 310, 318 (D.Md.) aff'd, 584 F. App'x 135 (4
Any attempt by Plaintiff to assert an MCDCA claim is unavailing for the additional reason that, even assuming she adequately raised a claim under § 14-202(8) challenging the validity of the underlying debt, such a claim is not viable. Judge Williams' analysis is instructive:
This interpretation is strengthened when considering that the other eight practices proscribed by the statute refer to specific coercive or abusive methods of enforcing a debt. Examples include using obscene or grossly abusive language in communicating with the debtor or a relative, § 14-202(7), using or threatening to use force or violence, § 14-202(1), or otherwise communicating with the debtor in a harassing or abusive manner, § 14-202(6). Section 14-202(8) makes sense within the context of the other proscribed practices only if it is also read to proscribe certain methods of debt collection, "such as enforcing a right collateral to the debt in order to pressure the debtor to pay the debt," rather than collection of the debt itself. See Porter v. Hill, 314 Or. 86, 838 P.2d 45, 48-49 (1992) (analyzing a similar statute). Accordingly, because the MCDCA provides no basis for liability in contesting the underlying debt, Plaintiff's argument must fail.
Fontell v. Hassett, 870 F.Supp.2d 395, 405-06 (D.Md. 2012). An MCDCA claim properly challenges certain proscribed conduct, but it is not a mechanism for attacking the validity of the debt itself. Here, insofar as Plaintiff contests the legitimacy of the fees and costs assessed in her Corporate Advance balance, her MCDCA claim must fail.
Plaintiff also bases her MCDCA claim on the argument that Defendants did not possess the original Note and thus were not "holders" and authorized to enforce the lien on the Property through foreclosure. Plaintiff asserts in her opposition that "Alba and Wells Fargo did not have a right to take [her] property because neither could enforce the Note. . . . Similarly, Plaintiff[] [alleges] . . . that Wells Fargo could not declare the Note in default because it is not the `holder' of the Note and without standing to enforce the Note." (ECF No. 22, at 3-4). Plaintiff's arguments misconstrue the law. "Maryland courts have consistently interpreted the MCDCA to require plaintiffs to allege that defendants acted with knowledge that the `debt was invalid, or acted with reckless disregard as to its invalidity." Lembach v. Bierman, 528 F.App'x 297, 304 (4
(emphasis added).
Crediting Plaintiff's allegations that Defendants were not in actual possession of the original Note does not plead an MCDCA violation. Md. Code Ann., Com. Law § 3-301 provides avenues for holders, non-holders, persons not in possession, and those in wrongful possession to enforce otherwise valid instruments. Specifically, § 3-301 states:
Even assuming the amended complaint sufficiently alleges that Defendants were not holders, it does not allege plausibly that Defendants knew, or were deliberately indifferent to, the fact that they did not possess the right to enforce the Note. Nowhere in her amended complaint or opposition to Defendants' motions does Plaintiff dispute that she owed the debt after she defaulted on her mortgage. See, e.g., Bey, 997 F.Supp.2d at 318-19 ("Plaintiff's MCDCA claim must be dismissed because his allegations attack only the endorsements to the Note and do not challenge Defendants' underlying right to collect the debt."). Indeed, Plaintiff asserts that she attempted to obtain a loan modification from Wells Fargo after she defaulted. (ECF No. 7 ¶ 13). The analysis from Marchese v. JP Morgan Chase Bank, N.A., 917 F.Supp.2d 452, 464 (D.Md. 2013), regarding an MCDCA claim applies here:
(emphases added). Plaintiff has not alleged any facts supporting a determination that Defendants lacked the right to collect on her debt. That is, nowhere in her amended complaint or opposition does Plaintiff contend that she did not owe the debt upon her default.
In this case, it is undisputed that Plaintiff defaulted on her mortgage loan before Defendants initiated foreclosure proceedings. Accordingly, Defendants enforced a valid right and there is no basis for liability under Section 14-202(8). Based on the foregoing, Plaintiff's MCDCA claims will be dismissed.
Plaintiff's amended complaint includes a claim for a declaratory judgment based on her contention that Defendants must be in possession of the original promissory note in order to enforce it. She requests that the court "find that the Defendants must be a `holder' of the original promissory note in order to enforce the power of sale provision in the Deed of Trust." (ECF No. 7 ¶ 45). For the reasons explained above, see supra Part III.A.2, the specific declaration sought by Plaintiff contravenes applicable law and will not be entered.
Although Defendants seek dismissal of Plaintiff's claims under Rule 12(b)(6), resolution of her claim for declaratory relief is not properly decided pursuant to Rule 12(b)(6) review. As is evident from the amended complaint and the parties' briefs, there is an actual, ongoing controversy between them as to whether Defendants must be in possession of the original promissory note in order to enforce the Deed of Trust. The parties disagree as to how this controversy should be resolved and, in such circumstances, a motion to dismiss for failure to state a claim is not the appropriate means of resolving a claim for declaratory relief:
Charter Oak Fire Ins. Co. v. Am. Capital, Ltd., No. DKC 09-0100, 2011 WL 856374, at *18 (D.Md. Mar. 9, 2011) (quoting 120 W. Fayette St., LLLP v. Mayor & City Council of Baltimore City, 413 Md. 309, 355-56 (2010)); see also, e.g., 22A Am.Jur.2d Declaratory Judgments § 228 (2015 supp.) ("A motion to dismiss is seldom an appropriate pleading in actions for declaratory judgments, and such motions will not be allowed simply because the plaintiff may not be able to prevail.").
Therefore, with respect to Plaintiff's claim for declaratory relief, the parties' motions will be construed as competing cross-motions for a declaration in their favor as to whether Defendants must be in possession of the Note in order to enforce the Deed of Trust. See McKinsey & Co., Inc. v. Olympia & York 245 Park Ave. Co., 433 N.Y.S.2d 802, 802 (N.Y.App.Div. 1980) ("In the absence of a holding that a dispute is not ripe for adjudication, a court should not dismiss the complaint in a declaratory judgment action, but should declare the parties' rights."); Diamond v. Chase Bank, No. DKC-11-0907, 2011 WL 3667282, at *5 (D.Md. Aug. 19, 2011) (construing a defendant's Rule 12(b)(6) motion to dismiss the plaintiff's declaratory judgment claim as a motion for a declaration in its favor).
For the reasons above and because the declaration sought by Plaintiff contravenes applicable law, see supra Part III.A.2, the declaratory relief claimed by Plaintiff will not be issued. Instead, a declaration that Defendants need not be a "holder" of the original promissory note in order to enforce the power of sale provision in the Deed of Trust will be entered.
Plaintiff also asserts an MCPA claim. Although she references "Defendants" in her amended complaint, the allegations as to the MCPA claim appear to relate only to Wells Fargo. The MCPA prohibits "unfair or deceptive trade practices" in the "extension of consumer credit" or "[t]he collection of consumer debts." Md. Code Ann., Com. Law § 13-303(4)-(5). To state a claim under the MCPA, Plaintiff must allege: "(1) an unfair or deceptive practice or misrepresentation that (2) is relied upon, and (3) causes [her] actual injury." Stewart, 859 F.Supp.2d at 768 (citing Lloyd v. Gen. Motors Corp., 397 Md. 108, 143 (2007)). Under the MCPA, an "unfair or deceptive" trade practice includes "false . . . or misleading oral or written statement[s] . . . or other representations . . . [that have] the capacity, tendency, or effect of deceiving or misleading consumers."
Plaintiff alleges in her amended complaint that Wells Fargo misled her into believing that "if she contacted Wells Fargo she would have the opportunity to sell her home or enter into a deed-in-lieu of foreclosure prior to a foreclosure sale." (ECF No. 7 ¶ 35). According to her amended complaint:
Accepting Plaintiff's allegation as true, she does not state an MCPA claim. As is evident by Plaintiff's own allegations, she received a letter from Wells Fargo on September 12, 2014 informing her that: (1) "there may be other options available to help [Ms. Pruitt] avoid a foreclosure sale" (Id. ¶ 14) (emphasis added); and (2) Plaintiff may contact Ms. Short so that she could "help explain the short sale process, guidelines and [Ms. Pruitt's] eligibility." (Id.) (emphases added). After Plaintiff appealed the denial, she allegedly received another letter from Wells Fargo on October 16, 2014, again informing her of the short sale option and encouraging her to contact Ms. Short promptly. (Id. ¶ 16). None of Plaintiff's allegations suggests that anyone from Wells Fargo made any statements that she would be eligible for any of these options. Moreover, none of the allegations plausibly suggests that Wells Fargo's statements had the capacity, tendency, or effect of misleading her.
Furthermore, Plaintiff has not sufficiently pled that she detrimentally relied on any statement by Wells Fargo. At most, Plaintiff's allegations suggest that she was lulled into a false state of comfort by Wells Fargo's correspondence, but, much like the plaintiffs in Green v. Wells Fargo Bank, N.A., 927 F.Supp.2d 244, 256 (D.Md. 2013), she does not allege that Wells Fargo "specifically directed [her] to do, or to refrain from doing, anything that adversely affected the state of affairs that existed prior to the alleged misrepresentations." Any reliance by Plaintiff on Wells Fargo's letters, which she concedes in her amended complaint did not represent her eligibility for other options to avoid foreclosure, was not reasonable.
As Wells Fargo argues, Plaintiff's allegations regarding damages also are problematic. (ECF No. 8-1, at 9-10). The Maryland Court of Appeals has:
Lloyd, 397 Md. at 143. Actual injury or loss under the MCPA includes "emotional distress and mental anguish" provided "there was at least consequential physical injury" in the sense that "the injury for which recovery is sought is capable of objective determination." Hoffman v. Stamper, 385 Md. 1, 32 (2005). "Thus, a complaint will adequately plead damages under the MCPA when it contains plausible allegations that the plaintiff relied upon the defendant's false or misleading statements and suffered actual loss or injury as a result of that reliance." Butler v. Wells Fargo Bank, N.A., No. MJG-12-2705, 2013 WL 3816973, at *3 (D.Md. July 22, 2013) (emphasis in original). Plaintiff broadly states that the alleged MCPA violation caused her to suffer pecuniary loss, but it cannot reasonably be inferred from the allegations in the amended complaint that any damages resulted from any deception by Wells Fargo on which she reasonably could have relied. Plaintiff has not pleaded that Wells Fargo's alleged misrepresentations caused her to miss work, lose wages, or forego any actions in connection with her foreclosure proceeding. Cf. Butler, 2013 WL 3816973, at *6 (distinguishing cases involving actionable MCPA claims and noting that, in those cases, "the plaintiff had made payments under a TPP agreement or other modified plan, received inconsistent communication from the mortgage services regarding a permanent modification or loan reinstatement, and claimed to have suffered resulting injury in the form of lower credit scores, lost time at work, and emotional distress").
Any attempt by Plaintiff to assert an MCPA claim against Alba is unavailing for the additional reason that Section 13-104 exempts certain professionals and their services from liability under the MCPA, including lawyers, even when they are not acting in their specific professional capacity. Md. Code Ann., Com. Law § 13-104(1); see Robinson v. Fountainhead Title Group Corp., 447 F.Supp.2d 478, 490 (D.Md. 2006); Lewis, 2014 WL 3845833, at *7; Butler v. Wells Fargo Bank, N.A., No. MJG-12-2705, 2013 WL 145886, at *3 (D.Md. Jan. 11, 2013). Alba, a law firm, is therefore exempt from liability under the MCPA.
Plaintiff asserts an FDCPA claim against Alba only. The FDCPA, 15 U.S.C. § 1692e, "forbids the use of any false, deceptive, or misleading representation or means in debt collection and provides a non-exhaustive list of prohibited conduct." United States v. Nat'l Fin. Servs., Inc., 98 F.3d 131, 135 (4
In her amended complaint, Plaintiff avers that Alba violated the FDCPA by "[m]isrepresting and/or hiding the amount of the attorney fees and costs that it was attempting to collect regarding the mortgage debt" and "[a]ssesing and/or charging attorney['s] fees and costs for work not performed and costs not incurred or excessive for the work performed and incurred." (ECF No. 7 ¶ 27(a)-(b)). She alleges that the payoff quote and reinstatement quote include attorney's fees and costs that "are unjust and represent costs not actually incurred or excessive of the true costs." (Id. ¶ 19). As discussed in relation to Plaintiff's MCDCA claim, see supra Part III.A.1, she fails to provide factual support bearing on Defendants' purported misconduct under the statute. Likewise, Plaintiff's naked allegations simply do not plead a cognizable claim under the FDCPA.
Plaintiff also contends that Alba violated the FDCPA by "[a]ttempting and/or threatening to sell [P]laintiff's property at a foreclosure sale knowing that neither it nor its principals were in possession of the original promissory note and thus not legally entitled to enforce the note." (Id. ¶ 27(c)). Plaintiff further alleges Defendant's liability under the FDCPA by "[m]isrepresenting that the `holder' of the Note appointed Alba as substitute trustee when Defendants knew they were not in possession of the Note and therefore Alba was not properly appointed trustee and has no legal right to enforce the Deed of Trust." (Id. ¶ 27(d)). These arguments are unavailing for the reasons explained above, see supra Part III.A.2, as Defendants need not be in possession of the Note to enforce it.
Plaintiff asserts in her amended complaint that JP Morgan violated TILA, 15 U.S.C. § 1641(g)(1), by "failing to notify [] Plaintiff that the ownership of the loan had been transferred to it." (ECF No. 7 ¶ 24).
JP Morgan moved to dismiss on April 14, 2015. (ECF No. 25). Because Plaintiff failed to file any opposition to the motion, the undersigned has the discretion to dismiss the claim without reaching the merits. Judge Hollander dismissed the complaint in White v. Wal-Mart Stores, Inc., No. ELH-13-00031, 2014 WL 1369609, at *2 (D.Md. Apr. 4, 2014), where the pro se plaintiff failed to oppose the defendant's motion to dismiss. Judge Hollander stated that "[w]hen a plaintiff fails to oppose a motion to dismiss, a district court is `entitled, as authorized, to rule on the . . . motion and dismiss [the] suit on the uncontroverted bases asserted' in the motion." Id. (quoting Pueschel v. United States, 369 F.3d 345, 354 (4
Accordingly, JP Morgan's motion to dismiss will be granted.
For the foregoing reasons, the three motions to dismiss will be granted and a declaratory judgment will be entered in favor of Defendants. A separate order will follow.
