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Walton v. Wells Fargo Bank, N.A.

United States District Court, Fourth Circuit

June 21, 2013

FITZGERALD WALTON, et al., Plaintiffs,
WELLS FARGO BANK, N.A., et al. Defendants.



Pending before the Court are Defendants' Motion to Dismiss for failure to state a claim, Doc. No. 10, and Plaintiffs' Motion for Leave to Amend, Doc. No. 13. The Court has reviewed the motion papers and concludes that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2011). For the reasons discussed below, Defendants' Motion to Dismiss will be GRANTED-IN-PART and Plaintiffs' Motion for Leave to Amend will be GRANTED-IN-PART.


Plaintiffs Fitzgerald and Annie Walton filed this action against Defendants Wells Fargo Bank, N.A. and Wells Fargo Financial Leasing, Inc. (hereinafter, "Defendants" or "Wells Fargo") on February 7, 2013. Generally, Plaintiffs "seek redress for the predatory lending practices of Wells Fargo and various mortgage companies that have consistently taken advantage of their status as African Americans in Prince George's County and have specifically given them subprime loans knowing that the loans would default and that the Waltons could qualify for more traditional rates." Doc. No. 1 at 1. For example, Plaintiffs claim that they are victims of Defendants' reverse redlining strategy, that they were steered into loan products that Defendants knew would result in default, and that they were targeted as African-Americans and because they lived in an African-American neighborhood, where the rate of default has been disproportionately high and the defaults have occurred faster than in other neighborhoods.

Plaintiffs also make the following specific allegations with respect to the loan underlying their causes of action. Plaintiffs obtained the loan for their Fort Washington, Maryland property from World Savings Bank on or about May 4, 2005. Id. ¶¶ 8, 48. According to the Waltons, the loan had a "teaser rate" of 5.73% which was changed in June 2005 to a rate of 11.95%. Id. ¶¶ 16, 48. The Waltons' mortgage payment initially was $2, 403.12, but with the higher rate their payment is $3, 722.86. Id. ¶ 48. In obtaining the loan, Plaintiffs were responding to a radio campaign advertising a 1% loan product. Id. ¶ 29. Plaintiffs were targeted for and given the subprime loan despite the fact that they had a strong credit score of 700. Id. ¶ 46. Defendant Wells Fargo Bank acquired this subprime loan from World Savings Bank on or around 2008 when it acquired Wachovia Corporation, which was the parent company of World Savings Bank. Id. at 2.

The Waltons have attempted to contact Wells Fargo to modify their loan, but "with no reasonable outcome." Id. at 2. The Waltons submitted necessary documents on or about February 12, 2012, but to date, Wells Fargo has either not responded or has consistently informed the Waltons that their application for modification is under review or missing certain documents. Id. In other words, Defendants have "refused to professionally communicate with the Waltons with respect to their mortgage loan." Id. ¶ 42. Plaintiffs now seek injunctive relief and damages from Defendants based on the allegedly discriminatory conduct and the pending foreclosures on their loan.

Defendants move to dismiss on the grounds that all claims are barred by statutes of limitations. Defendants also move to dismiss Plaintiffs' state law claim on the grounds that Plaintiffs have failed to plead a plausible claim for relief. Plaintiffs oppose Defendants' Motion, and request leave to amend in the event the Court finds deficiencies in the Complaint.


The purpose of a motion to dismiss under Rule 12(b)(6) is "to test the sufficiency of [the] complaint." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). Except in certain specified cases, the complaint need only satisfy Rule 8(a) of the Federal Rules of Civil Procedure, which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). A plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In resolving a motion to dismiss, the Court should proceed in two steps. First, the Court should determine which allegations in the Complaint are factual allegations entitled to deference, and which are mere legal conclusions that receive no deference. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 678. Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 679.

In its determination, the Court must "accept the well-pleaded allegations of the complaint as true, " Albright v. Oliver, 510 U.S. 266, 268 (1994), and "must construe factual allegations in the light most favorable to the plaintiff, " Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999). The Court should not, however, accept unsupported legal allegations, Revene v. Charles Cnty. Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989), "legal conclusion[s] couched as... factual allegation[s], " Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). "Factual allegations must be enough to raise a right to relief above the speculative level... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 550 U.S. at 555.


Plaintiffs allege three causes of action against Defendants: (1) violations of the federal Fair Housing Act (FHA), 42 U.S.C. §§ 3604, 3605; (2) violations of the Maryland Consumer Protection Act (MCPA), MD. CODE, COM. LAW §§ 13-301 et seq., for unfair or deceptive trade practices; and (3) violations of the federal Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691 et seq. The Court will first address Plaintiffs' federal causes of action, and then proceed to their claims under the MCPA.

A. Fair Housing Act

Plaintiffs cite two sections of the FHA in their Complaint: § 3604, which applies to discrimination in the sale or rental of housing, and § 3605, which applies to discrimination in residential real-estate transactions. See 42 ...

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