JAY P. BAER, et al., Plaintiffs,
GMAC MORTGAGE, LLC, et al., Defendants.
GEORGE L. RUSSELL, III, District Judge.
THIS MATTER arises under common law negligence and fraud principles for an alleged unlawful removal of two homeowners from their residence and the alleged diminution of the value of their home that occurred while it was vacant. Pending before the Court is Defendants', GMAC Mortgage, LLC and Ocwen Loan Servicing, LLC (collectively, "Defendants"),  Motion to Dismiss Counts II and III and to Strike Plaintiffs' Demands for Attorneys' Fees. (ECF No. 9). The Court, having reviewed the pleadings and supporting documents, finds no hearing necessary. See Local Rule 105.9 (D.Md. 2011). For the reasons outlined below, Defendants' Motion will be granted in part and denied in part.
Plaintiffs Jay P. Baer and Karen L. Baer (the "Baers") own a home located in Westminster, Maryland that is subject to a mortgage serviced by Defendants. In 2008, the Baers defaulted on their mortgage and, in April 2009, Defendants allegedly instructed the Baers to vacate the premises and proceeded to change the locks on their home. According to the Baers, Defendants informed them that they could not remain in the home "despite the fact that [the Baers] still owned the home, and foreclosure or other legal proceedings had not been initiated." (Compl. ¶ 9, ECF No. 2). At the time of departure, the Baers' home was allegedly in near perfect condition and in a state of good repair. The Baers had to lease another residence due to Defendants' actions.
Over three years later, in October 2012, Defendants permitted the Baers to re-enter their home after informing them that they may be eligible, and/or apply, for a loan modification. Upon re-entry, the Baers discovered the home suffered severe damage due to the Defendants' alleged neglect, which included negligently allowing "squatters" to occupy the home and contribute to the damage. As a result of Defendants' actions, the Baers have incurred, and will continue to incur, costly repairs and renovations to remedy the damage.
On July 1, 2013, the Baers filed suit against the Defendants in the Circuit Court for Carroll County, Maryland. The three-count Complaint alleges negligence, fraudulent misrepresentation, and negligent misrepresentation. In addition to compensatory damages, the Baers seek reasonable attorneys' fees and punitive damages in the amount of $250, 000 for Count II. On August 14, 2013, Defendants removed the case to this Court. (ECF No. 1). Defendants filed the pending Motion to Dismiss on August 21, 2013.
A. Motion to Dismiss
1. Standard of Review
Defendants move to dismiss Counts II and III of the Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead plausible, not merely conceivable, facts in support of his claim. Hall v. St. Mary's Seminary & Univ. , 608 F.Supp.2d 679, 684 (D.Md. 2009); see also Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007). The complaint must include "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (citations omitted). When considering a motion to dismiss pursuant to Rule 12(b)(6), the Court must "accept the well-pled allegations of the complaint as true" and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States , 120 F.3d 472, 474 (4th Cir. 1997). In reviewing a Rule 12(b)(6) motion, the court may take judicial notice of matters of public record. Hall v. Virginia , 385 F.3d 421, 424 n.3 (4th Cir. 2004).
The Court will grant Defendants' Motion to Dismiss Count II because the Baers fail to plead an element of their fraudulent misrepresentation claim, but will deny the Motion as to Count III because the Baers have pled a plausible claim for negligent misrepresentation.
As a preliminary matter, the two counts at issue in this Motion involve an alleged misrepresentation, be it fraudulent or negligent, regarding the Baers' need to vacate their home in April 2009. Defendants primarily focus on the question of whether foreclosure proceedings were actually pending at the time they were required to vacate. In support of their argument, Defendants provided a state court docket sheet indicating that the substitute trustees instituted foreclosure proceedings against the Baers on July 15, 2008. (See Defs.' Mot. to Dismiss Ex. 1, Tab C, at 49, 51,  ECF No. 9-2). Although this document belies the Baers' allegations regarding the lack of foreclosure proceedings at the time they vacated their home, it does not automatically warrant dismissal. The pivotal inquiry is whether the alleged misrepresentation regarding the need for the Baers to vacate their home is inextricably linked to the existence of the foreclosure proceedings. The Court finds that it is not.
In their Complaint, the Baers allege that when the Defendants informed them that they had to vacate the premises, they "were told by the Defendants that they did not have the option of remaining in the home, despite the fact that the Plaintiffs still owned the home, and foreclosure or other legal proceedings had not been initiated." (Compl. ¶ 9). In Counts II and III, the Baers make it clear that the alleged misrepresentation was that they had to vacate the home, not that foreclosure proceedings had been initiated. (Compl. ¶¶ 18, 25). Furthermore, the question of whether Defendants' instruction to vacate was a misrepresentation still remains regardless of whether foreclosure proceedings were indeed initiated as it is not axiomatic that the initiation of a foreclosure ...