United States District Court, D. Maryland, Northern Division
June 6, 2014
DAWUD J. BEST, Plaintiff,
SAMUEL I. WHITE, P.C., et al., Defendants.
WILLIAM D. QUARLES, Jr., District Judge.
Dawud J. Best, pro se, sued Samuel I. White, P.C. ("SIWPC") and Capital One, N.A. ("Capital One") for violating the Real Estate Settlement Procedures Act ("RESPA") and the Maryland Consumer Debt Collection Act ("MCDCA"). ECF No. 1. Pending is the defendants' motion to dismiss. ECF No. 8. No hearing is necessary. Local Rule 105.6 (D. Md. 2011). For the following reasons, the motion will be granted.
On October 31, 2007, Best obtained a mortgage loan from Chevy Chase Bank, FSB ("Chevy Chase") and executed a promissory note (the "Note") for Chevy Chase's benefit. See ECF No. 1 ¶ 6. Capital One subsequently acquired Chevy Chase. Id. ¶ 7. Beginning in April 2010, Best sent letters to Capital One requesting that it send him a certified copy of the Note and allow him to inspect the original Note. Id. ¶¶ 8-9. Best allegedly sought to establish that Capital One was the holder or owner of the Note. Id. ¶ 8. Capital One responded to the letters by sending Best a non-certified copy of the Note; it ignored his request to inspect the original Note. Id. ¶ 10. Best then "ceased sending mortgage payments to Capital One." Id. ¶ 11.
On September 12, 2011, Capital One sent Best a "Notice of Intent to Foreclose" which stated that Best had to "pay $63, 853.93 within 45 days or a foreclosure action may be filed." Id. ¶ 15. In October 2011, SIWPC sent Best a letter which threatened to "initiate foreclosure proceedings to foreclose on the mortgage on [his] property.'" See id. ¶ 16. However, in October 2011, Capital One had not yet appointed SIWPC as substitute trustee, and SIWPC knew that it was not the substitute trustee. See id. ¶¶ 17-18.
On September 24, 2012, SIWPC attorneys were appointed substitute trustees. Id. ¶ 19. On October 23, 2012, SIWPC "filed a foreclosure Order to Docket in the Prince George's County land records against the property." Id. ¶ 20.
On January 7, 2013, Best again wrote to Capital One requesting a certified copy of the Note and an opportunity to inspect the original. Id. ¶ 21. He also said that he had entered a contract to sell the property and wanted to determine if Capital One was "the proper party to pay and could return the original Note upon satisfaction of the debt." Id. ¶ 21. On January 14, 2013, Capital One sent Best another non-certified copy of the Note and told him that the original Note was in a "secure location and would be mailed to [Best] when the account was paid in full." Id. ¶ 22. On February 3, 2013, Best again wrote to Capital One to repeat his earlier requests and to state that Capital One's "possession of the Note pertains to its ability to service the Note." Id. ¶ 23. Capital One did not respond. Id. ¶ 24.
On August 12, 2013, Best filed suit alleging violations of the MCDCA (Count One) and RESPA (Count Two). ECF No. 1. Count One alleged that SIWPC violated § 14-202(8) of the MCDCA "by threatening to foreclose when it knew it had not been appointed substitute trustee and was without any legal right to foreclose." Id. ¶ 27. Count Two asserted that Best's letters were "qualified written requests" ("QWR") under 12 U.S.C. § 2605(e)(1)(B). Id. ¶ 32. Best claimed that the defendants violated § 2605(e) of RESPA because - after receiving the QWRs - they: (1) "fail[ed] to make appropriate corrections" to his account; (2) "fail[ed] to take appropriate action within 30 days;" (3) "fail[ed] to conduct a reasonable investigation;" and (4) "provid[ed] information to" credit reporting agencies "regarding delinquent payments owed by Plaintiff." See id. ¶¶ 33-36. He also asserted that their repeated failures to provide a certified copy of the Note - and to provide the same to other borrowers - was a "pattern or practice" of noncompliance. Id. ¶¶ 37-38.
On October 17, 2013, the defendants moved to dismiss the complaint. ECF No. 8. On November 4, 2013, Best opposed the motion. ECF No. 10. On November 21, 2013, the defendants replied. ECF No. 11.
A. Legal Standard for Motion to Dismiss
Under Federal Rule of Civil Procedure 12(b)(6), an action may be dismissed for failure to state a claim upon which relief can be granted. Rule 12(b)(6) tests the legal sufficiency of a complaint, but does not "resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).
The Court bears in mind that Rule 8(a)(2) requires only a "short and plain statement of the claim showing that the pleader is entitled to relief." Migdal v. Rowe Price-Fleming Int'l, Inc., 248 F.3d 321, 325-26 (4th Cir. 2001). Although Rule 8's notice-pleading requirements are "not onerous, " the plaintiff must allege facts that support each element of the claim advanced. Bass v. E.I. Dupont de Nemours & Co., 324 F.3d 761, 764-65 (4th Cir. 2003). These facts must be sufficient to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
This requires that the plaintiff do more than "plead facts that are merely consistent with a defendant's liability;'" the facts pled must "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ( quoting Twombly, 550 U.S. at 557). The complaint must not only allege but also "show" that the plaintiff is entitled to relief. Id. at 679 (internal quotation marks omitted). "Whe[n] 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 shown - that the pleader is entitled to relief." Id. (internal quotation marks and alteration omitted).
B. RESPA Claim
Capital One argues that Best's RESPA claim fails, because Best's letters did not qualify as QWRs. See ECF No. 8-1 at 8. In response, Best contends that his "letters were related to Defendant Capital One's entitlement to collect payments, " and thus were QWRs. ECF No. 10 at 3 (emphasis in original).
Section 2605(e) of RESPA requires a loan servicer to provide a written response acknowledging receipt within five days if the servicer receives a QWR from the borrower "for information relating to the servicing " of a loan. § 2605(e)(1)(A) (emphasis added). Under RESPA, "servicing" means:
[R]eceiving any scheduled periodic payments from a borrower pursuant to the terms of any loan... and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the loan.
Id. § 2605(i)(3). Communications challenging the validity - not the servicing - of the loan, are not QWRs under RESPA. See, e.g., Minson v. CitiMortgage, Inc., No. DKC-12-2233, 2013 WL 2383658, at *4 (D. Md. May 29, 2013); Reed v. PNC Mortg., No. AW-13-1536, 2013 WL 3364372, at *4 (D. Md. July 2, 2013).
Best alleges that his letters requested a certified copy of the Note and an opportunity to inspect the original note, so he could determine if Capital One "was entitled to collect his payment" and could return the Note at the end of the loan. See ECF No. 10 at 3-4. He does not allege that the letters requested information related to loan servicing, such as information about the receipt of periodic payments or the amounts of such payments. See Minson, 2013 WL 2383658, at *5. Best argues that his letters were QWRs because Capital One's possession of the Note relates to its entitlement to service the Note, as only a holder or owner can enforce the Note. See ECF No. 10 at 3. However, communications that seek to obtain proof of the servicer's authority to service the loan are not QWRs under RESPA. See, e.g., Minson, 2013 WL 2383658, at *5 (communication that requested, inter alia, a certified copy of the promissory note for the mortgage loan was not a QWR) ( citing Bravo v. MERSCORP, Inc., No. 12-CV-884 ENV LB, 2013 WL 1652325, at *3 (E.D.N.Y. Apr. 16, 2013)). Accordingly, Best's letters are not valid QWRs, and Best has failed to state a violation of RESPA.
C. MCDCA Claim
Under 28 U.S.C. § 1367, the Court has discretion to "decline to exercise supplemental jurisdiction over a claim" when it "has dismissed all claims over which it has original jurisdiction." § 1367(c)(3); see also Shanaghan v. Cahill, 58 F.3d 106, 110 (4th Cir. 1995) ("[T]rial courts enjoy wide latitude in determining whether or not to retain jurisdiction over state claims when all federal claims have been extinguished."). The Supreme Court has cautioned that district courts should avoid "[n]eedless decisions of state law... as a matter of comity and to promote justice between the parties, by procuring them a surer-footed reading of applicable law." United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). Thus, district courts should not exercise supplemental jurisdiction when the federal claims are dismissed before trial, and the state claims are not closely tied to federal policy. Ramsay v. Sawyer Prop. Mgmt. of Maryland, LLC, 948 F.Supp.2d 525, 536-37 (D. Md. 2013) ( citing id. at 726-27).
The Court will dismiss Best's only federal claim. See supra Section II.B. Although Best's RESPA and MCDCA claims are based on the same facts, the Court's resolution of the RESPA claim would not dictate its resolution of the MCDCA claim. See ECF No. 1 at 4-6. Best's MCDCA claim involves construction of a Maryland statute and application of Maryland law, and should be resolved by a Maryland court. See, e.g., Ramsay, 948 F.Supp.2d at 536-37 (declining to exercise supplemental jurisdiction over MCDCA claim after dismissing plaintiff's claim under the federal Fair Debt Collection Practices Act); Johnson v. BAC Home Loans Servicing, LP, 867 F.Supp.2d 766, 784 (E.D. N.C. 2011). Accordingly, the Court will decline to exercise supplemental jurisdiction over Best's MCDCA claim, and it will be dismissed without prejudice.
For the reasons stated above, the defendants' motion to dismiss will be granted.