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Wiseman v. First Mariner Bank

United States District Court, Fourth Circuit

September 23, 2013

RUTH WISEMAN, Plaintiff,
FIRST MARINER BANK, et al., Defendants.



This case arises from a reverse mortgage transaction. Ruth Wiseman, plaintiff, and her late husband, John H. Wiseman, Sr., entered into a reverse mortgage for their home in Severna Park, Maryland (the "Residence") in 2009.[1] At that time, the Wisemans were both elderly and living on a fixed income, and Mr. Wiseman was in declining health. See Amended Complaint Id. ¶¶ 22-23, 28. Defendant First Mariner Bank ("First Mariner") was the lender for the reverse mortgage, and defendant Charles J. Pastore, a loan originator and broker, acted as First Mariner's agent; he recommended the reverse mortgage transaction to the Wisemans and arranged for it. Id. ¶¶ 26-27 (ECF 33). The reverse mortgage was serviced by defendant MetLife Home Loans, LLC ("MetLife").

Before the Wisemans entered into the reverse mortgage, they owned the Residence jointly, as tenants by the entireties. Id. ¶ 21. On the basis of Mr. Pastore's alleged advice and recommendation, Ms. Wiseman conveyed her interest in the Residence to Mr. Wiseman in conjunction with the reverse mortgage transaction, reserving to herself "a remainder interest to title by means of a life estate deed." Id. ¶ 32.

Mr. Wiseman passed away on or about December 13, 2011. Id. ¶ 39. Within one month, MetLife began contacting Ms. Wiseman, stating that the loan secured by the reverse mortgage was in default and that Ms. Wiseman was required to satisfy immediately the full balance due on the loan or be dispossessed of her home. Id. ¶ 40. MetLife sent notices of default and other communications to Ms. Wiseman asserting this position, and sent agents to "photograph, trespass upon, and attempt to gain access to, the Wiseman Residence." Id. ¶ 41. Despite Ms. Wiseman's attempts to "inform" MetLife that, under the terms of the reverse mortgage transaction, the loan was not in default so long as she was alive, id. ¶ 42, MetLife persisted in its "efforts to declare default and remove Ruth Wiseman from her home." Id. ¶ 43.

Accordingly, Ms. Wiseman initiated suit, asserting causes of action under federal and Maryland state law. In addition to First Mariner, Mr. Pastore, and MetLife, she has sued Resource Real Estate Services, LLC ("Resource"), the company that conducted the settlement of the reverse mortgage transaction, and has named as "interested parties" the Estate of John H. Wiseman (the "Estate") and Shaun Donovan, in his capacity as Secretary of Housing and Urban Development ("HUD").[2]

Ms. Wiseman's complaint includes eleven counts. Count 1 asserts a cause of action for "Predatory Lending" against First Mariner, Pastore, and Resource. Count 2 charges negligent misrepresentation, also against First Mariner, Pastore, and Resource. Count 3 alleges that First Mariner and Pastore violated the Maryland Consumer Protection Act ("CPA"), Md. Code (2005 Repl. Vol., 2012 Supp.), §§ 13-101 et seq. of the Commercial Law Article ("C.L.").

Count 4 is captioned "Breach of Contract - Reformation" and names First Mariner, Pastore, and Resource as defendants; it seeks rescission or reformation of the life estate deed and reformation of the note and deed of trust securing the reverse mortgage, on the basis of "mutual mistake, " because the parties allegedly intended that the Wisemans would both be able to reside in the Residence until death. Count 5, captioned "Intentional Misrepresentation - Rescission, " also seeks rescission or reformation of the life estate deed and reformation of the note and deed of trust, on the basis of intentional misrepresentation by First Mariner, Pastore, and Resource. Count 6 asserts the tort of intentional misrepresentation by concealment (also known as fraudulent concealment) against First Mariner, Pastore, and Resource. Count 7 is captioned "Breach of Contract - Reformation, " the same caption as Count 4; unlike Count 4, however, Count 7 is asserted against all defendants, and seeks rescission or reformation of the life estate deed and reformation of the note and deed of trust, on the basis that the documents do not comply with the federal Home Equity Conversion Mortgage statute ("HECM"), 12 U.S.C. to federal court on the basis of federal question jurisdiction, with supplemental jurisdiction over plaintiff's state law claims. See 28 U.S.C. §§ 1331, 1367, 1441, 1446. Plaintiff subsequently filed her Amended Complaint, which is the operative pleading. In her original Complaint, Ms. Wiseman had named a fifth defendant, the Federal National Mortgage Association ("Fannie Mae"). However, she filed a notice of voluntary dismissal as to Fannie Mae, see ECF 15, and did not name Fannie Mae as a defendant in her Amended Complaint. Hereafter, references to plaintiff's "complaint" refer to the Amended Complaint, unless otherwise noted. § 1715z-20, a provision of the National Housing Act ("NHA"), codified as amended at 12 U.S.C. §§ 1701 et seq. Count 8 asserts negligence against First Mariner, Pastore, and Resource.

Count 9 asserts claims against MetLife and Resource under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., and the Maryland Consumer Debt Collection Act ("MCDCA"), C.L. §§ 14-201 et seq. Count 10, captioned "Statutory Violations Generally, " asserts against all defendants violations of the HECM statute and its implementing regulations, see 24 C.F.R. part 206; the Maryland Reverse Mortgage Loans Act ("Reverse Mortgage Act"), C.L. §§ 12-1201 et seq.; and 15 U.S.C. § 1648, which is a provision of the federal Truth In Lending Act ("TILA"), codified as amended at 15 U.S.C. §§ 1601 et seq., governing reverse mortgages. Finally, Count 11 asserts that Resource is liable as an aider and abettor of First Mariner and Pastore.

To summarize with respect to each defendant: Resource is named as defendant in all counts except Count 3, which asserts claims under the CPA; First Mariner and Pastore are named as defendants in all counts except Count 9, which asserts claims under the FDCPA and MCDCA, and Count 11, which asserts an aiding and abetting theory of liability against Resource; and MetLife is a defendant only as to Count 7 (breach of contract), Count 9 (FDCPA & MCDCA), and Count 10 ("Statutory Violations Generally").

Two motions are now pending for decision. Resource has filed a motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6) ("Resource Motion") (ECF 36). After filing an answer to the complaint, see ECF 35, First Mariner and Pastore (collectively, "Mariner Defendants") filed a motion for judgment on the pleadings, pursuant to Fed.R.Civ.P. 12(c) ("Mariner Motion") (ECF 40).[3] Both motions have been fully briefed, [4] and no hearing is necessary to resolve them. See Local Rule 105.6. For the reasons that follow, both motions will be granted in part and denied in part.

Factual Background[5]

As noted, the Wisemans owned the Residence as tenants by the entireties, a form of joint ownership under Maryland law that is available only to married couples, by which a couple holds title to real estate as a couple, rather than as individuals. See generally Bruce v. Dyer, 309 Md. 421, 426-31, 524 A.2d 777, 780-82 (1987). One feature of a tenancy by the entireties is that both spouses have the right of survivorship: when one spouse dies, the surviving spouse becomes vested with sole title to the property by operation of law. See, e.g., Hutson v. Hutson, 168 Md. 182, 188, 177 A.2d 177, 179 (1935) (describing right of survivorship as "[t]he most important incident of tenancy by the entireties'") (quoting TIFFANY ON REAL PROPERTY).

In June 2009, when the reverse mortgage transaction took place, Mr. Wiseman was 78 years of age and Ms. Wiseman was 75. Amended Complaint ¶ 22. Mr. Wiseman was suffering from lung cancer and kidney failure; as a consequence of these ailments, he used a walker or other device for mobility. Id. ¶ 28. The Wisemans were retired and living on a fixed income. Id. ¶ 23. They desired to find a financially feasible way to live in their Residence "for the remainder of their days." Id. ¶ 24.

At some point in 2009, the Wisemans contacted First Mariner and Mr. Pastore. Id. ¶ 26. According to plaintiff, Pastore "was acting as a mortgage broker and originating loans for and otherwise promoting and selling... reverse mortgage[s] for First Mariner... as [First Mariner's] agent." Id. Mr. Pastore met with the Wisemans in their home to discuss the prospect of a reverse mortgage and to obtain an application from the Wisemans. Id. ¶ 27. When Pastore met with the Wisemans he learned their ages and that Mr. Wiseman was in poor health. Id. ¶ 28. Plaintiff also alleged that Mr. Wiseman's poor health would have been "readily apparent" to Mr. Pastore. Id.

Pastore advised the Wisemans that "reverse mortgages were part of a program initiated by Congress and regulated by HUD designed particularly with the needs and circumstances of senior citizens in mind, " and that they were "good candidates for the program." Id. ¶ 29. He also represented to the Wisemans that, by obtaining a reverse mortgage, they "could pay-off their exiting deed of trust note/mortgage with the proceeds of the new loan, but would not have to make any future payments of mortgage installments, " because the reverse mortgage loan "would be repaid by sale of the property after they had both passed away or decided to sell or not to reside in their home any longer." Id. And, Pastore advised the Wisemans that, if they participated in First Mariner's reverse mortgage program, "then as long as they lived they would each be able to stay in their home." Id. ¶ 30. The Wisemans submitted an application to Pastore. Id. ¶ 31.

Subsequently, Mr. Pastore "recommended a [reverse mortgage] to the Wisemans that would accomplish not only the payoff of their existing deed of trust, but also allow for a lump sum payment of... $31, 610.00." Id. ¶ 32. However, the reverse mortgage that "he advised them to obtain required Ruth Wiseman to convey her interest in their home to Mr. Wiseman granting unto herself a remainder interest to title by means of a life estate deed." Id. Pastore advised the Wisemans to execute a life estate deed based on the "misrepresentation" that doing so would allow Ms. Wiseman to become the sole owner of the Residence after Mr. Wiseman's death (in fact, she already enjoyed that right as a tenant by the entireties), and that doing so would allow Ms. Wiseman to "remain entitled to reside in the Wiseman Residence for the duration of her life without consequence" to the reverse mortgage. Id. ¶ 33. Based on Mr. Pastore's representations, the Wisemans agreed to enter into the reverse mortgage with the understanding that doing so would free them from "the burden of making a monthly installment payment on a note or mortgage, " and that "they would each be able to reside in the property for the rest of their lives." Id. ¶ 34.

The settlement for the reverse mortgage took place on June 17, 2009, conducted by a representative of Resource at the Residence, due to the Wisemans' limited mobility. Id. ¶¶ 34-35. Plaintiff alleges that "Resource authored and/or prepared all documentation necessary to complete the transaction, " including a "Life Estate Deed, " a "Fixed Rate Home Equity Conversion Deed of Trust" ("Deed of Trust"), and a Note, id. ¶¶ 35, 38, [6] and its agent presented these documents to the Wisemans. Id. ¶ 35. Plaintiff alleges that the Life Estate Deed was "prepared by Resource at the request or instruction of Pastore and/or First Mariner." Id. ¶ 36. The Wisemans both executed the Life Estate Deed, under which the Wisemans, as tenants by the entireties, granted a life estate to Mr. Wiseman, as grantee, with a remainder interest to Ms. Wiseman. See Life Estate Deed at 1-2. Only Mr. Wiseman signed the Note and the Deed of Trust.[7] See Note at 3; Deed of Trust at 6. Resource caused the documents to be recorded in the Land Records of Anne Arundel County. Amended Complaint ¶ 36.

According to plaintiff, the "counseling received by Ruth Wiseman" prior to entering into the transaction "did not include an explanation or assessment of the risk inherent in participating in the reverse mortgage" or of "the legal impact or consequences of the requirement that she convey her interest in her home to her husband." Id. ¶ 37. And, she "did not understand the consequences of doing so" or the "terms of the promissory note or deed of trust." Id.

As noted, Mr. Wiseman died on or about December 13, 2011. Id. ¶ 39. Thereafter, MetLife, the servicer of the reverse mortgage, asserted that the Note was in default, and began "frequently calling the Wiseman Residence at all hours of the day and evening, sending numerous notices of default and other demands, and even sent individuals to photograph, trespass upon, and attempt to gain access to, the Wiseman Residence." Id. ¶ 41. Despite several attempts by Ms. Wiseman and her adult son to convince MetLife that it was mistaken, see id. ¶ 42, MetLife persisted in its "efforts to declare default and remove Ruth Wiseman from her home." Id. ¶ 43. Plaintiff alleges that the "actions of MetLife caused Ruth Wiseman, now a woman of seventy-eight (78) years to suffer severe emotional distress and mental anguish, to such an extent that she became fearful of answering her phone or opening the front door of her own home without family present." Id. ¶ 44.

Additional facts will be included in the Discussion.


A. Standard of Review

Resource has moved to dismiss, pursuant to Fed.R.Civ.P. 12(b)(6), and the Mariner Defendants have moved for judgment on the pleadings, pursuant to Fed.R.Civ.P. 12(c). A motion pursuant to Rule 12(b)(6) constitutes an assertion by the defendant that, even if the facts alleged by the plaintiff are true, the complaint fails as a matter of law "to state a claim upon which relief can be granted." A Rule 12(b)(6) motion must be filed "before pleading if responsive pleading is allowed." However, pursuant to Fed.R.Civ.P. 12(h)(2)(B), which governs the time when defenses may be raised, a defendant may also assert "[f]ailure to state a claim upon which relief can be granted" in "a motion under Rule 12(c)." A Rule 12(c) motion for "judgment on the pleadings" may be filed "[a]fter the pleadings are closed, " so long as it is "early enough not to delay trial." Regardless of whether failure to state a claim for relief is asserted in a Rule 12(b)(6) motion or a Rule 12(c) motion, the standard of review is the same: courts apply "the same standard for Rule 12(c) motions as for motions made pursuant to Rule 12(b)(6)." Burbach Broadcasting Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir. 2002).

Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). It provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendant with "fair notice" of the claim and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 n.3 (2007).

A plaintiff need not include "detailed factual allegations" in order to satisfy Rule 8(a)(2). Id. at 555. But, the rule demands more than bald accusations or mere speculation. Id.; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). To satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth "enough factual matter (taken as true) to suggest" a cognizable cause of action, "even if... [the] actual proof of those facts is improbable and... recovery is very remote and unlikely." Twombly, 550 U.S. at 556. A complaint that provides no more than "labels and conclusions, " or "a formulaic recitation of the elements of a cause of action, " is insufficient. Id. at 555.

Both Twombly, 550 U.S. 544, and Ashcroft v. Iqbal, 556 U.S. 662 (2009), make clear that, in order to survive a motion under Rule 12(b)(6) (or Rule 12(c)), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; see Iqbal, 556 U.S. at 684 ("Our decision in Twombly expounded the pleading standard for all civil actions'...."); see also Simmons v. United Mortg. & Loan Inv., 634 F.3d 754, 768 (4th Cir. 2011); Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). Thus, the defendant's motion will be granted if the "well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct." Iqbal, 556 U.S. at 679 (citation omitted).

In reviewing such a motion, a court "must accept as true all of the factual allegations contained in the complaint, '" and must "draw all reasonable inferences [from those facts] in favor of the plaintiff.'" E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted). However, the court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986); Monroe v. City of Charlottesville, 579 F.3d 380, 385-86 (4th Cir. 2009), cert. denied, 130 S.Ct. 1740 (2010).

"A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to the legal remedy he or she seeks. A Society Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011), cert. denied, ___ U.S. ___ , 132 S.Ct. 1960 (2012). "Dismissal under Rule 12(b)(6) [or judgment for the defendant under Rule 12(c)] is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.'" Hartmann v. Calif. Dept. of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013) (citation omitted); accord Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Reg. Sys., Inc., 680 F.3d 1194, 1201-02 (10th Cir. 2011) ("When reviewing a 12(b)(6) dismissal, we must determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.' Dismissal is appropriate if the law simply affords no relief.") (internal citation omitted).

A motion asserting failure of the complaint to state a claim typically "does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses, " Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999) (internal quotation marks omitted), unless such a defense can be resolved on the basis of the facts alleged in the complaint. In addition, a court "[o]rdinarily... may not consider any documents that are outside of the complaint, or not expressly incorporated therein...." Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013). In considering a challenge to the adequacy of plaintiff's pleading, however, the court may properly consider documents "attached or incorporated into the complaint, " as well as documents attached to the defendant's motion, "so long as they are integral to the complaint and authentic." Philips v. Pitt County Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009); see also E.I. du Pont de Nemours & Co., 637 F.3d at 448. To be "integral, " a document must be one "that by its very existence, and not the mere information it contains, gives rise to the legal rights asserted.'" Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis in original).

The Life Estate Deed, the Note, and the Deed of Trust are explicitly discussed in the complaint and are integral to plaintiff's claims. They are legal instruments whose "very existence'" has an operative effect on the rights at issue in the suit. Id. (citation omitted). Accordingly, they are proper subjects of consideration under Rule 12(b)(6) and Rule 12(c), and there is no dispute as to the authenticity of the copies submitted by the Mariner Defendants.

The Mariner Defendants have also submitted another document, a "Certificate of HECM Counseling" ("Counseling Certificate"), as Exhibit A to the Mariner Motion (ECF 40-3). The Counseling Certificate was prepared and signed by Pamela Bilal, a Housing Counselor with the Howard County Office on Aging, a "HUD-Approved Counseling Agency, " and was also signed by Mr. and Ms. Wiseman in May 2009. Although the complaint refers ambiguously to "counseling" that plaintiff received, the Counseling Certificate is not expressly mentioned in the complaint and does not appear to be integral to plaintiff's claim. Plaintiff has submitted a "Representation of Total Annual Loan Cost Rate" ("Loan Terms") Ex.1 to Mariner Opp. (ECF 43-1), which she contends was prepared by Ms. Bilal as part of the counseling program that produced the Counseling Certificate. Plaintiff asserts that, if the Court considers the Counseling Certificate, it should also consider the Loan Terms under the "rule of completeness." Mariner Opp. at 2 n.1.

Although documents that are not integral to the complaint ordinarily may not be considered in a challenge to the pleading, Fed.R.Civ.P. 12(d) grants a court discretion to consider "matters outside the pleadings" on "a motion under Rule 12(b)(6) or 12(c)." However, if the court does so, it must treat the motion "as one for summary judgment under Rule 56, " Fed.R.Civ.P. 12(d), must give all parties "a reasonable opportunity to present all the material that is pertinent to the motion, " id., and must give the parties notice of its intent to consider the motion under a summary judgment standard. See Finley Lines Joint Protective Bd. Unit 200 v. Norfolk So. Corp., 109 F.3d 993, 997 (4th Cir. 1997) ("[A] Rule 12(b)(6) motion to dismiss supported by extraneous materials cannot be regarded as one for summary judgment until the district court acts to convert the motion by indicating that it will not exclude from its consideration of the motion the supporting extraneous materials."); accord Laughlin v. Metro. Wash. Airports Auth., 149 F.3d 253, 261 (4th Cir. 1998).

For reasons explained infra, I have not considered the Counseling Certificate or the Loan Terms in my ruling on the Mariner Motion. Accordingly, the Mariner Motion need not be considered as one for summary judgment pursuant to Rule 12(d).

B. Predatory Lending

Resource and the Mariner Defendants both argue for dismissal of Count 1 on the ground that "predatory lending, " as such, is not a recognized cause of action in Maryland.[8] They correctly observe that no reported Maryland appellate decision has recognized such a cause of action in tort.

Defendants also rely on several cases in which judges in this district have dismissed claims alleging "predatory lending" where the plaintiffs failed to "cite any law that [the defendants] violated by engaging in... allegedly predatory behavior" or otherwise "provide a plausible legal basis for [their] predatory lending claim[s]." Willis v. Countrywide Home Loans Serv'g, Civ. No. CCB-09-1455, 2009 WL 5206475, at *8 (D. Md. Dec. 23, 2009); see id., 2010 WL 2857801, at *3 (D. Md. July 19, 2010) (dismissing subsequent amended complaint because limitations had expired as to statutes asserted as basis for "predatory lending" claim). See also Smart v. Decision One Mortg. Co., LLC, Civ. No. AW-10-320, 2011 WL 829212, at *2 (D. Md. Mar. 7, 2011) (dismissing count of "Predatory Lending Practices" where "[p]laintiffs never specif[ied]... what they mean[t] by Predatory Lending Practices, ' despite [defendant's] repeated contention that no such cause of action exists under Maryland law"); Davis v. Wilmington Fin., Inc., Civ. No. PJM-09-1505, 2010 WL 1375363, at *7 (D. Md. Mar. 26, 2010) (dismissing claim that consisted of "vague allegations and labels of predatory lending'" in "violation of the local Civil Code'" because complaint "fail[ed] to articulate any purported act of predatory lending by any Defendant, and fail[ed] to cite the local Civil Code' upon which Plaintiffs [sought] to base their claim") (quoting complaint).

In particular, defendants rely on the decision of Judge Quarles in Sucklal v. MTGLQ Investors LP, Civ. No. WDQ-10-1536, 2011 WL 663754 (D. Md. Feb. 14, 2011). In that case, Judge Quarles observed that "predatory lending" is simply "a term that describes abusive practices in home mortgage lending.'" Id. at *4 (citation omitted). He opined that, "[t]o state a predatory lending claim, " a plaintiff must plead "facts that would support a reasonable inference' that the defendants engaged in abusive lending practices, " and "must allege the specific law violated by the defendant's predatory behavior." Id. (citation omitted).

In opposition to both motions, plaintiff accepts the pleading standard articulated by Judge Quarles in Sucklal, requiring the plaintiff to specify a statutory cause of action as the basis for such a claim, and asserts that Count 1 states a claim for violation of the Maryland Mortgage Fraud Protection Act ("MMFPA"), Md. Code (2010 Repl. Vol., 2012 Supp.), §§ 7-401 et seq. of the Real Property Article ("R.P.").[9] The MMFPA prohibits the commission of "mortgage fraud, " R.P. § 7-402, which is defined in R.P. § 7-402(d) as:

[A]ny action by a person made with the intent to defraud that involves:
(1) Knowingly making any deliberate misstatement, misrepresentation, or omission during the mortgage lending process with the intent that the misstatement, misrepresentation, or omission be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process;
(2) Knowingly creating or producing a document for use during the mortgage lending process that contains a deliberate misstatement, misrepresentation, or omission with the intent that the document containing the misstatement, misrepresentation, or omission be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process;
(3) Knowingly using or facilitating the use of any deliberate misstatement, misrepresentation, or omission during the mortgage lending process with the intent that the misstatement, misrepresentation, or omission be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process;
(4) Receiving any proceeds or any other funds in connection with a mortgage closing that the person knows resulted from a violation of item (1), (2), or (3) of this subsection;
(5) Conspiring to violate any of the provisions of item (1), (2), (3), or (4) of this subsection; or
(6) Filing or causing to be filed in the land records in the county where a residential real property is located, any document relating to a mortgage loan that the person knows to contain a deliberate misstatement, misrepresentation, or omission.

In turn, the "mortgage lending process" encompasses the entire "process by which a person seeks or obtains a mortgage loan, " R.P. § 7-401(e)(1), including the "solicitation, application, origination, negotiation, servicing, underwriting, signing, closing, and funding of a mortgage loan, " id. § 7-401(e)(2)(i), and the "notarizing of any document in connection with a mortgage loan." Id. § 7-401(e)(2)(ii). Among other enforcement mechanisms, the MMFPA authorizes a private right of action for damages, attorneys' fees, and treble damages. Id. § 7-406.

In response to plaintiff's invocation of the MMFPA, defendants correctly observe that the MMFPA was never mentioned in plaintiff's complaint, and protest that "[i]t is axiomatic that a ("[T]he federal courts sitting in diversity rule upon state law as it exists and do not surmise or suggest its expansion.") (citing cases declining to create novel state law causes of action). complaint may not be amended by the briefs in opposition to a motion to dismiss.'" Sager v. Hous. Comm'n of Anne Arundel County, 855 F.Supp.2d 524, 557 (D. Md. 2012) (quoting Arbitraje Casa de Cambio, S.A. v. U.S. Postal Serv., 297 F.Supp.2d 165, 170 (D.D.C. 2003)).

I agree with defendants that the complaint does not expressly allege a violation of the MMFPA. Accordingly, I will dismiss Count 1, without prejudice, and with leave to amend the suit to assert a claim under the MMFPA.[10]

C. Fraud

Several counts of plaintiff's complaint sound in fraud. Count 5 seeks rescission of the Life Estate Deed on the basis of fraudulent inducement. Count 6 asserts the tort of fraudulent concealment. And, Count 3 alleges violation of the CPA, an anti-fraud statute. Defendants argue that plaintiff has not satisfied the elements of a claim of fraud.

1. Rule 9(b) Pleading Standard

Claims that sound in fraud, regardless of whether they are claims at common law or arise under an anti-fraud statute, implicate the heightened pleading standard of Fed.R.Civ.P. 9(b). See, e.g., E-Shops Corp. v. U.S. Bank N.A., 678 F.3d 659, 665 (8th Cir. 2012) ("Rule 9(b)'s heightened pleading requirement also applies to statutory fraud claims."); see also Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4th Cir. 2013) (stating that a Maryland CPA claim that "sounds in fraud, is subject to the heightened pleading standards of Federal Rule of Civil Procedure 9(b)").

Rule 9(b) states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Under the rule, a plaintiff alleging claims that sound in fraud "must, at a minimum, describe the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.'" United States ex rel. Owens v. First Kuwaiti Gen'l Trading & Contracting Co., 612 F.3d 724, 731 (4th Cir. 2010) (citation omitted). In other words, "Rule 9(b) requires plaintiffs to plead the who, what, when, where, and how: the first paragraph of any newspaper story.'" Crest Construction II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011) (citation omitted).

Rule 9(b) serves several salutary purposes:

"First, the rule ensures that the defendant has sufficient information to formulate a defense by putting it on notice of the conduct complained of.... Second, Rule 9(b) exists to protect defendants from frivolous suits. A third reason for the rule is to eliminate fraud actions in which all the facts are learned after discovery. Finally, Rule 9(b) protects defendants from harm to their goodwill and reputation.

Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999).

Notably, however, Rule 9(b) by its plain text permits general averment of aspects of fraud that relate to a defendant's state of mind. And, a "court should hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that the defendant has been made aware of the particular circumstances for which she will have to prepare a defense at trial, and (2) that plaintiff has substantial prediscovery evidence of those facts." Id. Moreover, Rule 9(b) is "less strictly applied with respect to claims of fraud by concealment" or omission of material facts, as opposed to affirmative misrepresentations, because "an omission cannot be described in terms of the time, place, and contents of the misrepresentation or the identity of the person making the misrepresentation.'" Shaw v. Brown & Williamson Tobacco Corp., 973 F.Supp. 539, 552 (D. Md. 1997) (quoting Flynn v. Everything Yogurt, Civ. No. HAR-92-3421, 1993 WL 454355, at *9 (D. Md. Sept. 14, 1993)); accord Gadson v. Supershuttle International, Civ. No. AW-10-1057, 2011 WL 1231311, at * 9 (D. Md. Mar. 30, 2011).

2. Maryland Law of Fraud

Under Maryland law, "[f]raud encompasses, among other things, theories of fraudulent misrepresentation, fraudulent concealment, and fraudulent inducement.'" Sass v. Andrew, 152 Md.App. 406, 432, 832 A.2d 247, 261 (2003) (citation omitted). Regardless of the particular theory, the plaintiff must establish the elements of fraud "by clear and convincing evidence." Md. Envir. Trust v. Gaynor, 370 Md. 89, 97, 803 A.2d 512, 516 (2002).

In an action for fraudulent misrepresentation (which is the garden variety of fraud and often is described simply as "fraud"), ...

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