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Li v. Federal National Mortgage Association

United States District Court, Fourth Circuit

January 13, 2014

JIMMY DANH LOUNG THY LI, Plaintiffs/Counterclaim Defendants
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION, Defendant/Counterclaim Plaintiff.

MEMORANDUM

James K. Bredar United States District Judge

Jimmy Danh and Loung Thi Ly (“Plaintiffs”) brought this suit against the Federal National Mortgage Association (“Defendant”) alleging a violation of the Maryland Consumer Debt Collection Act (“MCDCA”) and the Maryland Consumer Protection Act (“MCPA”) and seeking declaratory judgment. Defendant brought a counter-claim alleging breach of contract and seeking money damages and a declaratory judgment. On September 19, 2013, this Court denied Plaintiffs’ motion to dismiss Defendant’s counter-claims and granted Defendant’s motion for partial summary judgment. (ECF No. 26.) Now pending before the Court are (1) Defendant’s motion for attorneys’ fees and expenses (ECF No. 29) and (2) Defendant’s motion for summary judgment. (ECF No. 32.) The issues have been briefed and no hearing is required. Local Rule 105.6. For the reasons set forth below, Defendant’s motion for attorney’s fees will be GRANTED and Defendant’s motion for summary judgment will be GRANTED.

I. BACKGROUND

Plaintiffs are owners of real property located at 7518 Gilley Terrace, Rosedale, MD. (ECF No. 2 ¶ 1.) On April 2, 2008, Plaintiffs obtained a loan (the “Loan”) for $390, 150 from CitiMortgage, Inc. (“CitiMortgage”). (ECF No. 2 ¶ 1; ECF No. 8 ¶ 10.) The Loan is evidenced by a note (the “Note”) and secured by a deed of trust (the “Deed of Trust”), both executed on April 2. (ECF No. 8 ¶¶ 10, 11.) Shortly after execution of the Note, Defendant acquired CitiMortgage’s interest in the Loan, although CitiMortgage continued to service it for Defendant. (ECF No. 8 ¶ 10.)

Plaintiffs entered into a Loan Modification Agreement (“LMA”) with CitiMortgage on August 8, 2010. (Id. ¶12.) The LMA states that as of September 1, 2010, the unpaid principle of the Loan, including capitalized interest, was $401, 691.78 and calls for sixty monthly payments at an interest rate of 4.25%, commencing on October 1, 2010, and three hundred monthly payments at an interest rate of 4.5%, commencing on October 1, 2015. (ECF No. 13-3.)

On May 23, 2011, Plaintiffs filed an action (the “Prior Action”) against Defendant in the Circuit Court for Baltimore County, Maryland (“Circuit Court”), alleging that Defendant had breached the LMA by “refusing to accept payments due under it and alleging additional amounts are owed it.” (ECF No. 8 ¶ 17; No. 2 ¶ 2; No. 13-4 ¶ 19.) Defendant filed a counterclaim alleging that Plaintiffs’ loan had not been modified pursuant to the LMA because Plaintiffs had failed to return the LMA duly signed and notarized to CitiMortgage within the allotted time. (ECF No. 2-2 ¶¶ 16-17.) Defendant further alleged that Plaintiffs had failed to make their required payments under the Note. (Id. ¶ 21.) Defendant therefore sought judgment for the full amount due under the note, namely “$470, 112.24 plus interest at 7.375% from November 26, 2012.” (Id. at 5.) In the alternative, Defendant alleged that Plaintiffs had failed to make payments due under the LMA and sought judgment for the full amount due under the LMA, namely $401, 691.78 plus interest at 4.25% from September 1, 2010.” (Id. at 7.)

The case was tried before a jury. (ECF No. 2 ¶ 5.) On November 30, 2012, the jury found that (1) Plaintiffs entered into the LMA with CitiMortgage, (2) Defendant breached the LMA, (3) Plaintiffs did not breach the LMA or the Note, and (4) Defendant did not violate the MCDA or the Maryland Mortgage Fraud Protection Act. (ECF No. 14-8; ECF No. 8 ¶ 21; ECF No. 2 ¶ 5.) The jury also awarded Plaintiffs $150, 000 for Defendant’s breach of contract. (ECF No. 14-8 ¶ 3.) The judgment against Defendant was subsequently reduced to $10, 000 by the Circuit Court. (ECF No. 15-8.) No timely appeal of this judgment was filed by either party. (ECF No. 2 ¶ 7.)

With regard to the present action, Plaintiffs filed their complaint in the Circuit Court on May 3, 2013. (ECF Nos. 2, 2-2.) Plaintiffs seek declaratory judgment that the Deed of Trust “is of no further force or effect, ” as well as monetary damages in excess of $75, 000 for Defendant’s violation of the MCDCA. (ECF No. 2 at 4.)

On June 5, Defendant filed a notice of removal to this Court. (ECF No. 1.) Defendant alleges that this Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332. ((d. ¶ 8.) In support of its claim of federal jurisdiction, Defendant further alleges that the amount in controversy exceeds $75, 000 and that there is complete diversity of citizenship among the parties, as the Plaintiffs are citizens of Maryland and the Defendant is a District of Columbia corporation, pursuant to 12 U.S.C. § 1717(a)(2)(B). (Id. ¶¶ 5-8.)

Defendant alleges that Plaintiffs have made no payments on the Loan since judgment was entered in the Prior Action on November 30, 2012. (ECF No. 8 ¶ 22.) Defendant filed counterclaims on June 7 seeking a declaratory judgment that the Note, as modified by the LMA, is a valid and binding contract, of which Plaintiffs are in default. (ECF No. 8 at 6.) Defendant also seeks damages for breach of contract based on the monthly payments due under the LMA that Plaintiffs have failed to pay since November 30, 2012. (Id. at 7.)

On September 18, 2013, this Court found that (1) the Note, as modified by the LMA, is a valid and binding contract, (2) the Deed of Trust is a valid and binding security instrument securing repayment of the Note, as modified by the LMA, and (3) Plaintiffs are liable to Defendant for breach of contract for failing to make the required payments under the Note, as modified by the LMA, accruing subsequent to November 30, 2012. (ECF No. 27.) Further, the Court granted summary judgment in favor of Defendant on all counts of Plaintiffs’ complaint. (Id.)

Defendant now asks the Court to grant its motion for summary judgment (ECF No. 32) and enter judgment in its favor against Plaintiffs, jointly and severally, in the amount of $33, 726.12, plus court costs, post judgment interest, and attorneys’ fees and expenses. Defendant has also filed a motion for attorney’s fees and expenses. (ECF No. 29.) On December 20, 2013, pursuant to the Court’s scheduling order (ECF No. 30), Defendant filed its memorandum in support of its motion for attorneys’ fees (ECF No. 41).[1] Although Plaintiffs filed a response to Defendant’s motion for attorney’s fees and expenses on November 20 (ECF No. 33), they have filed no response to Defendant’s memorandum in support of the motion (ECF No. 41), in which Defendant justifies its request for $27, 402.20 in attorneys’ fees and expenses.

II. LEGAL STANDARD

A party seeking summary judgment must show “that there is no genuine dispute as to any material fact” and that he is “entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). If a party carries this burden, then the court will award summary judgment unless the opposing party can identify specific facts, beyond the allegations or denials in the pleadings that show a genuine issue for trial. Fed.R.Civ.P. 56(e)(2). To carry these respective burdens, each party must support its assertions by citing specific evidence from the record. Fed.R.Civ.P. 56(c)(1)(A). The court will assess the merits of the motion, and any responses, viewing all ...


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