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White v. Bank of America, N.A.

United States District Court, Fourth Circuit

July 30, 2013



Catherine C. Blake United States District Judge

Plaintiff, Marceline White (“White”), filed suit on her own behalf and on behalf of a class and subclass of Maryland residents who obtained home loans from Countrywide Home Loans. White and the putative class members allege that the defendants, Countrywide and Bank of America, N.A. (collectively, “BANA”), [1] violated Maryland’s Creditor Grantor Closed End Credit Provisions (“CLEC”), Md. Code Ann. Com Law. § 12-1001 et seq., and the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., in connection with loan disclosures and associated taxes and fees. The parties have cross moved for summary judgment. For the reasons stated below, BANA’s motion will be granted and White’s will be denied.


In November 2001, Plaintiff, Marceline White, purchased a house with her then-husband at 1531 Park Avenue, Baltimore, Maryland. (Def.’s Mot, Ex. A (“White Dep.”), ECF No. 91-5, at 7). In January 2006, White and her husband obtained a refinance loan in White’s name from Mortgage Now, Inc., secured by the property. (Id. at 123). White and her husband divorced in February 2007. As part of the property settlement, White received sole title to the property and assumed all other marital debts. (Id. at 8–9). To pay off the marital debt, on March 21, 2007, White executed a Deed of Trust with Countrywide Home Loans, Inc. (Def.’s Mot., Ex. C9, ECF No. 91-16). National Real Estate Information Services (“NREIS”) conducted the closing of White’s loan at Countrywide’s request as its independent contractor. (Def.’s Mot., Ex. C6, ECF No. 91-13; Ex. D9, ECF No. 91-30, at 12) (“[NREIS] is an independent contractor and is not . . . an employee, agent, affiliate, or partner of [Countrywide].”). NREIS calculated and collected all fees and expenses in connection with the loan transaction. (Def.’s Mot., Ex. D4, ECF No. 91-25, at 3).

Countrywide was eventually acquired by BANA, which currently services White’s mortgage. White is current on her loan, which is neither delinquent nor in default, and no power of sale has ever been exercised against White. (Def.’s Mot, Ex. C (“Lash Decl.”), ECF no. 91-7, ¶¶ 16-17). On March 19, 2010, White attempted to rescind her loan under TILA. (Pl.’s Opp., Ex. 14, ECF No. 96-15). She commenced this action in state court on March 22, 2010.

As recounted more fully in the court’s memorandum opinion on the parties’ previous motions to dismiss and for summary judgment, see White v. Bank of Am., N.A., 2012 WL 1067657, at *1-3 (D. Md. 2012), White is suing on her own behalf and on behalf of a purported class and subclass of Maryland residents who obtained loans from Countrywide. White's Second Amended Complaint alleges that in closing the original loan with Countrywide, she did not receive disclosures required by CLEC and TILA, that she did not receive a timely and complete finance agreement or a non-contingent commitment as CLEC requires, and that she paid taxes and recordation fees in excess of those required by law. (Second Am. Compl., ECF No. 36, ¶¶ 6– 7, 9.) White previously sought a declaration that the power of sale provision in her deed of trust was void because the named trustee, ReconTrust, is a corporation rather than an individual, in violation of Maryland law, (Id. ¶ 130), but the court dismissed this claim without prejudice, upon her request, on March 18, 2013. (See Paperless Order, ECF No. 92).


I. Standard of Review

Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The Supreme Court has clarified that this does not mean that any factual dispute will defeat the motion. “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). Whether a fact is material depends upon the substantive law. See id.

“A party opposing a properly supported motion for summary judgment ‘may not rest upon the mere allegations or denials of [his] pleadings, ’ but rather must ‘set forth specific facts showing that there is a genuine issue for trial.’” Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (alteration in original) (quoting Fed.R.Civ.P. 56(e)). The court must “view the facts and draw reasonable inferences ‘in the light most favorable to the party opposing the [summary judgment] motion, ’” Scott v. Harris, 550 U.S. 372, 378 (2007) (alteration in original) (quoting United States v. Diebold, 369 U.S. 654, 655 (1962)), but the court also must abide by the “affirmative obligation of the trial judge to prevent factually unsupported claims and defenses from proceeding to trial.” Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993) (internal quotation marks omitted).

II. Overpayment of Recordation Taxes

White’s central allegation in this suit is that she was overcharged for the $3, 095 in the recordation taxes she paid (via NREIS directly to the government) at closing. According to White, BANA breached its duty by failing to obtain on her behalf a statutory exemption for taxes related to refinancing loans that secure an amount included in a pre-existing mortgage. Maryland law provides for an exemption from recordation taxes “to the extent that [the refinancing loan] secures the refinancing of an amount not greater than the unpaid principal amount secured by an existing mortgage or deed of trust, ” if the refinancing is of real property and is refinanced by the original mortgagor. Md. Code Ann., Tax-Prop. § 12-108(g)(2). In other words, the exemption only applies when the original mortgagor, the person who purchased the property, bought the property and paid the recordation tax on the property. § 12-108(g)(1). To qualify for the exemption, the original mortgagor or her agent must provide notice of qualification for the exemption at the time of recordation by either a “statement in the recitals or in the acknowledgment of the mortgage deed of trust, ” or she “must submit with the mortgage or deed of trust, [a signed] affidavit under oath” stating that she is the original mortgagor and she must provide the amount of the unpaid principal of the original mortgage or deed of trust. § 12-108(g)(3).

In her summary judgment memoranda, White also appears to argue, for the first time, that a recordation tax exemption for “supplemental instrument[s] of writing” under § 12-108(e) applied to her 2007 loan. But her Second Amended Complaint only references the “original mortgagor” refinancing exemption of 12-108(g), (see ECF No. 36, ¶ 39), and her eleventh hour attempt to recast her allegations is unconvincing. Section 12-108(e) applies only to a “[s]upplemental instrument of writing” which is defined by statute to include “an instrument of writing that confirms, corrects, modifies, supplements, or amends and restates a previously recorded instrument of writing” or an instrument that “secures a debt and grants a security interest in property in addition to or in substitution for property described in the previously recorded instrument of writing.” § 12-101(l). The 2007 mortgage did not amend, restate, or supplement the Mortgage Now writing, nor did it add to or substitute the property described in White’s previous mortgage: the deed secured a new amount of money against the same property with a new lender. Section 12-108(g)’s original mortgagor refinancing exemption would be extraneous under White’s definition of “supplemental instrument of writing” if all refinancing transactions, where a prior mortgage is replaced by an entirely new one, were merely “supplements” to prior instruments. As explained in Prince George’s County v. Brown, the supplemental instrument exemption was enacted so that the Maryland recordation tax was not imposed “twice upon the same debt.” 640 A.2d 1142, 1147 (Md. 1994). White’s 2007 mortgage and prior loans were not the “same debt”; the Countrywide loan was new debt she secured to pay off her prior Mortgage Now loan. (Def.’s Mot., Ex. C6, ECF No. 91-13). Accordingly, § 12-108(e) does not apply here, and the exemption of § 12-108(g) is the only plausible exemption White could have obtained.

BANA contends that White did not qualify for the § 12-108(g) exemption because she alone was not the “original mortgagor.” White signed the original mortgage on her house with her then husband as tenants by the entirety. On their 2006 Mortgage Now deed, White and her then husband were similarly listed as “Tenants by the Entireties, ” (Def.’s Mot., Ex. D6, ECF No. 91-27), although only White was listed as the borrower on the loan note, (Pl.’s Opp., Ex. 2, ECF No. 96-3). BANA cites Beall v. Beall for the proposition that tenants by the entirety are to be treated as a single, distinct individual under Maryland law. See 434 A.2d 1015, 1021(Md. 1981) (“[A] conveyance to husband and wife does not make them joint tenants . . . they are in the contemplation of the law but one person[.]”) Thus, according to BANA, White is not the original mortgagor who purchased the property and cannot qualify for the exemption. White only tangentially responds to this argument by pressing the fact that she was the “only borrower” on the 2006 Mortgage Now loan, and that BANA knew this. The exemption provision itself appears to support BANA’s view because it expressly provides that “if applicable, the spouse of the original mortgagor” can obtain the exemption when refinancing, but it does not contemplate the reverse; it does not provide that when both spouses obtained the original mortgage together as tenants by the entirety, only one is entitled to the exemption later in a separate transaction. Of course, the ...

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