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Green v. Wells Fargo Bank, N.A.

United States District Court, D. Maryland

January 31, 2014



DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for resolution in this consumer lending action is the motion to dismiss filed by Defendant Wells Fargo Bank, N.A. ("Wells Fargo" or "Defendant"). (ECF No. 36). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion to dismiss will be granted.

I. Background

The facts of this case as alleged in the first amended complaint were described in full in a prior opinion, thus only a brief background of the underlying factual and procedural issues in the case is necessary. See Green v. Wells Fargo Bank, N.A. , 927 F.Supp.2d 244 (D.Md. 2013). Plaintiffs Shirley M. Green, Ralph E. Green, and Antoinette Green took out a mortgage of just under $1 million from Southern Trust Mortgage, LLC on May 31, 2006 to finance their purchase of a home.[1] Defendant subsequently acquired servicing rights to the loan. Plaintiffs fell behind on their mortgage payments in October 2010 and contacted Wells Fargo in late March or early April 2011 to inquire about a loan modification. (ECF No. 24 ¶ 18). Plaintiffs assert that Wells Fargo represented that it would process their loan modification request and perform a loss mitigation analysis, provided Plaintiffs submitted documentation in connection with their request within ten days from the letter, dated April 8, 2011.[2] (ECF No. 24-1 ¶ 20.1). Plaintiffs concede that they did not timely submit all of the required documentation; instead, they submitted the documentation on May 24, 2011, over a month late. Plaintiffs assert that "from May 24, 2011 forward, Wells Fargo lost or lost track of, or purposely disregarded, the documentation submitted by the Greens. Indeed, in its June 20, 2011 correspondence, Wells Fargo falsely suggested the Greens had not submitted the required documentation, when it told the Greens to resubmit documentation they had already submitted." ( Id. ¶ 23). Plaintiffs then submitted the same and additional documents on June 29, 2011. Plaintiffs contend that Wells Fargo responded with a letter, dated November 4, 2011, which stated that the Greens had not provided any input and were nonresponsive to Wells Fargo's attempts to contact them. ( Id. ¶ 25). The letter further advised Plaintiffs that Wells Fargo would continue to work with them to help avoid a foreclosure sale, but "if [Plaintiffs'] mortgage has been referred to foreclosure, that process moves forward at the same time. Also, as part of the foreclosure process, [Plaintiffs] may... see steps being taken to proceed with a foreclosure sale of [Plaintiffs'] home." (ECF No. 24-7, at 3). Plaintiffs responded to this letter on December 1, 2011, and Wells Fargo sent another letter to the Greens on December 14, 2011, requesting that the Greens call them immediately to determine available options. ( See ECF No. 24-9).

Plaintiffs filed an initial complaint in the Circuit Court for Prince George's County on February 1, 2012. Defendant removed the action to this court on April 4, 2012. (ECF No. 1). Plaintiffs later amended the complaint on May 7, 2012, alleging violations of the Maryland Consumer Protection Act ("MPCA"), Md. Code Ann., Com. Law § 13-101 et seq. , common law fraud, promissory estoppel, negligence, and negligent misrepresentation. (ECF No. 24). Defendant moved to dismiss on May 21, 2012 (ECF No. 25), and the undersigned issued a memorandum opinion and order on February 27, 2013 (ECF Nos. 33 & 34) dismissing Plaintiffs' promissory estoppel, negligence, and negligent misrepresentation claims, and dismissing the MCPA and common law fraud claims without prejudice to Plaintiffs' right to file a second amended complaint within fourteen (14) days. Plaintiffs subsequently filed a second amended complaint on March 13, 2014. (ECF No. 35). Wells Fargo moved to dismiss the second amended complaint on March 27, 2013 (ECF No. 36), and Plaintiffs opposed the motion on April 24, 2013 (ECF No. 37).

II. Standard of Review

The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville , 464 F.3d 480, 483 (4th Cir. 2006). A plaintiff's complaint need only satisfy the standard of Rule 8(a), 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). "Rule 8(a)(2) still requires a showing, ' rather than a blanket assertion, of entitlement to relief." Bell Atl. Corp. v. Twombly , 550 U.S. 554, 556 n.3 (2007). That showing must consist of more than "a formulaic recitation of the elements of a cause of action" or "naked assertion[s] devoid of further factual enhancement." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (internal citations omitted).

At this stage, all well-pleaded allegations in a complaint must be considered as true, Albright v. Oliver , 510 U.S. 266, 268 (1994), and all factual allegations must be construed in the light most favorable to the plaintiff, see Harrison v. Westinghouse Savannah River Co. , 176 F.3d 776, 783 (4th Cir. 1999) ( citing Mylan Labs., Inc. v. Matkari , 7 F.3d 1130, 1134 (4th Cir. 1993)). In evaluating the complaint, unsupported legal allegations need not be accepted. Revene v. Charles Cnty. Com'rs , 882 F.2d 870, 873 (4th Cir. 1989). Legal conclusions couched as factual allegations are insufficient, Iqbal , 556 U.S. at 678, as are conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst , 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli , 588 F.3d 186, 193 (4th Cir. 2009). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged, but it has not show[n]... that the pleader is entitled to relief.'" Iqbal , 556 U.S. at 679 ( quoting Fed.R.Civ.P. 8(a)(2)). Thus, "[d]etermining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

Plaintiffs' claims alleging fraud and violations of the MCPA are subject to the heightened pleading standard of Rule 9(b). See Harrison , 176 F.3d at 783-84; Dwoskin v. Bank of Am., N.A. , 850 F.Supp.2d 557, 569 (D.Md. 2012). Rule 9(b) provides that, "in alleging a fraud or mistake, a party must state with particularity the circumstances constituting the fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Such allegations typically "include the time, place and contents of the false representation, as well as the identity of the person making the misrepresentation and what [was] obtained thereby.'" Superior Bank, F.S.B. v. Tandem Nat'l Mortg., Inc. , 197 F.Supp.2d 298, 313-14 (D.Md. 2000) ( quoting Windsor Assocs., Inc. v. Greenfeld , 564 F.Supp. 273, 280 (D.Md. 1983)). In cases involving concealment or omission of material facts, however, meeting Rule 9(b)'s particularity requirement will likely take a different form. See Shaw v. Brown & Williamson Tobacco Corp. , 973 F.Supp. 539, 552 (D.Md. 1997) (recognizing that an omission likely "cannot be described in terms of the time, place, and contents of the misrepresentation or the identity of the person making the misrepresentation" (internal quotations omitted)). The purposes of Rule 9(b) are to provide the defendant with sufficient notice of the basis for the plaintiff's claim; to protect the defendant against frivolous suits; to eliminate fraud actions where all of the facts are learned only after discovery; and to safeguard the defendant's reputation. See Harrison , 176 F.3d at 784.

III. MCPA (Count I) and Common Law Fraud (Count II)

The MCPA prohibits "unfair or deceptive trade practices." Md. Code Ann., Com. Law, § 13-301. The MCPA proscribes fourteen categories of unfair or deceptive practices, including "any... [f]alse... or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers" and "any... [f]ailure to state a material fact if the failure deceives or tends to deceive."[3] Similarly, to bring a common law fraud claim in Maryland, the plaintiff must show:

(1) that the defendant made a false representation; (2) that its falsity was either known to the defendant, or the misrepresentation was made with such reckless indifference to the truth as to be equivalent to actual knowledge; (3) that it was made for the purpose of defrauding the person claiming to be injured thereby; (4) that such person not only relied upon the misrepresentation, but had a right to rely upon it in the full belief of its truth, and would not have done the thing from which the injury had resulted had not such misrepresentation been made; and (5) that such person actually suffered damage directly resulting from such fraudulent misrepresentation.

Parker v. Columbia Bank , 91 Md.App. 346, 359 (1992); Gourdine v. Crews , 405 Md. 722 (2008).

The second amended complaint alleges that Wells Fargo deceptively misled Plaintiffs by making the following false or misleading statements: (1) the statement in an April 8, 2011 letter from Wells Fargo that "our goal is to ensure you have every opportunity to retain your home" and promise to process the Greens' loan modification request if they submitted the required documentation; (2) Wells Fargo's statements after May 24, 2011 that it had not received documentation from Plaintiffs, when in fact the Greens had submitted the requested documentation; (3) Wells Fargo's statement in the November 4, 2011 correspondence that Plaintiffs had not provided any input and that Defendant made unsuccessful attempts to contact the Greens; and (4) Wells Fargo's misrepresentation in a "Final Loss Mitigation Affidavit" filed in the foreclosure proceeding in the Circuit Court for Prince George's County that the Greens omitted the signed second page from their 2009 tax returns. (ECF No. 35-1, at 14-15). The second amended complaint states that Plaintiffs detrimentally relied on these alleged misrepresentations by taking time out of their lives to complete the applications and resubmit paperwork; requesting and attending court-ordered mediation in the state foreclosure action to explain that the full tax returns were signed and submitted; experiencing mental anguish as a result of supplying the applications and paperwork and by knowing that Defendant made false or misleading statements, "and thus insult and disrespect, and wasted time devoted to futile and tedious applications and paperwork"; generally taking time to work with Defendant. ( Id. at 15-18). Plaintiffs assert that they reasonably ...

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