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Wheatley v. Cohn

United States District Court, D. Maryland

May 30, 2014

ELMIRA WHEATLEY, et al., Plaintiffs,
v.
EDWARD S. COHN, et al., Defendants.

MEMORANDUM OPINION

GEORGE L. RUSSELL, III, District Judge.

Pending before the Court are Defendants Edward S. Cohn, Stephen N. Goldberg, Richard E. Solomon, Richard J. Rogers and Randall J. Rolls's ("Substitute Trustees") Motion to Dismiss (ECF No. 11); Defendant St. Fin CORP's ("Star Financial") Motion to Dismiss (ECF No. 14); Defendants Flagstar Bank, FSB ("Flagstar"), and Mortgage Electronic Registration Systems, Inc.'s ("MERS") Motion to Dismiss (ECF No. 20); and Plaintiffs Brett and Elmira Wheatley's (the "Wheatleys) Motion for Leave to File Belated Objection (ECF No. 24). The Motions are ripe for disposition. The Court has reviewed the motion papers submitted by the parties and finds no hearing is necessary. See Local Rule 105.6 (D.Md. 2011). For the reasons outlined below, the Wheatleys' Motion for Leave to File Belated Objection will be denied and the Defendants' Motions to Dismiss will be granted.

The Wheatleys allege seven causes of action against Defendants. Five counts, Wrongful Foreclosure (Count I), Unjust Enrichment (Count II), Fraudulent Misrepresentation (Count III), untitled Count IV (collectively "Fraud Counts"), and Negligent Supervision (Count VII) allege fraud on the basis of forged documents allegedly used by the Substitute Trustees to establish standing in the Foreclosure Proceeding. Count V alleges Violations of the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. § 1692 (2012), on the basis of the Defendants alleged misrepresentation of the character and legal status of the debt and unfair and deceptive means and attempts to collect the debt. Count VI alleges violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq. (2012), alleging that the Defendants failed to timely inform them of any assignments or transfers of the mortgage. The Wheatleys also seek an Order enjoining, or, in the alternative, setting aside any foreclosure sale of the Property, granting declaratory relief finding the Deed of Trust null and void, and awarding actual, statutory, and punitive damages because "the documents that were used in the foreclosure proceedings by the Defendants were invalid [and] fraudulent...." (Compl. at 4, ECF No. 2).

The Substitute Trustees filed their Motion to Dismiss on December 27, 2013, Star Financial filed its Motion to Dismiss on January 21, 2014, and Flagstar and MERS collectively filed their Motion to Dismiss on January 27, 2014. As a courtesy to the Wheatleys, the Clerk's office issued a Rule 12/56 Letter after each Motion to Dismiss was filed, advising them of their duty to respond. Nevertheless, the Wheatleys failed to respond. On February 21, 2014, Flagstar and MERS collectively filed a Reply in support of their Motion to Dismiss noting the Wheatleys failure to respond and requesting an order granting their Motion. (ECF No. 23). Fourteen days later, on March 7, 2014, the Wheatleys filed a Motion for Leave to File Belated Objection together with an Objection to Flagstar and MERS's Motions to Dismiss.

I. BACKGROUND

The Wheatleys executed a Promissory Note and Deed of Trust with Star Financial on December 22, 2011, to purchase real property at 2810 Seasons Way, Annapolis, Maryland 20783("the Property"). The Note provided that Star Financial could transfer the Note, and that anyone who obtained the Note by transfer was entitled to receive payments under the Note as the Note Holder. (Flagstar and MERS's Mot. to Dismiss Ex. A ["Promissory Note"], ECF No. 20-2). A copy of the Note evidences endorsements by Star Financial and Flagstar, making the Note payable to Flagstar as the Note Holder. (Id.). The Deed of Trust recognizes Star Financial as the original lender but also identifies MERS "as nominee for Lender and Lender's successors and assigns." (Compl. Ex. A, at 1, ECF No. 2-2).

On October 3, 2012, the Substitute Trustees initiated state foreclosure proceedings against the Property in the Circuit Court for Anne Arundel County, Maryland. As reflected in the state foreclosure docket attached to the Substitute Trustees' Motion, a foreclosure sale took place on May 28, 2013, and the state issued a final order ratifying the sale on October 10, 2013 ("Ratification Order"). On September 12, 2013, the Wheatleys filed the instant Complaint, in the Circuit Court for Anne Arundel County, Maryland. On December 20, 2013, Flagstar and MERS removed the action to this Court on the basis of federal question jurisdiction, 28 U.S.C. § 1331 (2012), because the Complaint alleges violations the FDCPA and RESPA. By the instant motions, Defendants seek dismissal of all claims against them pursuant to Federal Rule of Civil Procedure 12(b)(6).

II. DISCUSSION

A. Motion for Leave to File Belated Objection

As a preliminary matter, the Wheatleys failed to file a timely response to the instant motions and seek leave to file a belated opposition only to Flagstar and MERS's Motion to Dismiss. The Wheatleys assert that they did not receive notice of the Motion to Dismiss or the Court's Rule 12/56 letters, and only became aware of their duty to reply upon receipt of Flagstar and MERS's Reply. Notably, Flagstar and MERS's Motion to Dismiss was served on the Wheatleys by mail at a mailing address in Florida, while the Court's Rule 12/56 Letter was mailed to a mailing address in Maryland. In any event, the Wheatleys ultimately received a copy of Flagstar and MERS's Reply which was served on them by mail at the same Florida address at which the Motion to Dismiss was served. Further, the docket does not reflect that the Wheatleys ever filed a notice of change of address, as required by the Local Rules of this Court. See Local Rule 102.1(b)(iii) (D.Md. 2011) ("Self-represented litigants must file with the Clerk in every case which they have pending a statement of their current address where caserelated papers may be served. This obligation is continuing....").

While Federal Rule of Civil Procedure 6(b)(1)(B) gives the Court discretion to grant a reprieve to out-of-time filings that were delayed by "excusable neglect, " the circumstances here do not warrant an extension. Any delay in the Wheatleys receipt of the Motion to Dismiss was due to their failure to comply with the requirement to keep the Court apprised of their current address. The fact that the Wheatleys are self-represented does not excuse their non-compliance because the rule is specifically directed to self-represented litigants. See Dancy v. Univ. of N. Carolina at Charlotte, No. 3:08-CV-166-RJC-DCK , 2009 WL 2424039, at *2 (W.D. N.C. Aug. 3, 2009) ("Although pro se litigants are given liberal treatment by courts, even pro se litigants are expected to comply with time requirements and other procedural rules without which effective judicial administration would be impossible.'" (quoting Ballard v. Carlson , 882 F.2d 93, 96 (4th Cir. 1989))). Accordingly, the Wheatleys Motion for Leave to File Belated Objection will be denied, and the Defendants' Motions to Dismiss will be considered unopposed. Even though the Defendants' Motions to Dismiss are unopposed, the Court must review the motion papers to ensure that dismissal is proper. Stevenson v. City of Seat Pleasant, Md. , 743 F.3d 411, 416 n.3 (4th Cir. 2014).

B. Motions to Dismiss

1. Standard of Review

To survive a Rule 12(b)(6) motion, the complaint must allege facts that, when accepted as true, "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)) (internal quotation marks omitted). A claim is plausible on its face when "the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . (citing Twombly , 550 U.S. at 556). Legal conclusions or conclusory statements do not suffice and are not entitled to the assumption of truth. Id . (citing Twombly , 550 U.S. at 555). Thus, the Court "must determine whether it is plausible that the factual allegations in the complaint are enough to raise a right to ...


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