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Carlsen v. NVR Mortgage Finance, Inc.

United States District Court, D. Maryland, Northern Division

October 30, 2014

SOREN CARLSEN, Plaintiff,
v.
NVR MORTGAGE FINANCE, INC., et al., Defendant.

MEMORANDUM OPINION

WILLIAM D. QUARLES, Jr., District Judge.

Soren Carlsen sued NVR Mortgage Finance, Inc. ("NVR Mortgage") and NVR, Inc. (together, "NVR")[1] in the Circuit Court for Baltimore County, Maryland under § 12-805(d)[2] of the Maryland Finder's Fee Act ("FFA"), §§ 12-801 et seq., [3] alleging that NVR failed to make required disclosures to him, and a class of similarly situated Maryland homebuyers, before collecting finder's fees for brokering mortgage loans.[4] See ECF Nos. 1 at 1, 33-5 at 5-8. NVR removed to this Court under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d).[5] Pending are NVR's motion to dismiss, or in the alternative, for summary judgment, ECF No. 43, and Carlsen's cross-motion for partial summary judgment, ECF No. 50.[6] No hearing is necessary. Local Rule 105.6 (D. Md. 2014). For the following reasons, NVR's motion, construed as a motion for summary judgment, will be granted, and Carlsen's cross-motion for partial summary judgment will be denied.[7]

I. Background

A. Facts[8]

On October 12, 2004, Carlsen contracted with NVR, Inc. to build him a home in Owings Mills, Maryland. ECF Nos. 43-3 at 2, 50-1 at 1-2. The Purchase Agreement between Carlsen and NVR, Inc. required Carlsen to apply for a loan from a mortgage lender, but did not require Carlsen to use any particular lender. ECF No. 43-3 at 2. However, in the Purchase Agreement, NVR, Inc. agreed to reduce the purchase price of the home by $12, 000 in exchange for Carlsen's agreement to use NVR Mortgage to obtain financing for his new home. ECF Nos. 43-3 at 3, 50-1 at 2.

On October 28, 2004, NVR Mortgage accepted Carlsen's application for a 30-year adjustable-rate mortgage ("ARM"). ECF No. 43-3 at 4. On that date, Carlsen apparently[9] signed a form entitled, "Notice to Borrower of Possible Assignment of Mortgage Loan Application." ECF No. 43-3 at 5. This form discloses that, if NVR Mortgage assigned Carlsen's loan, "NVR will collect a minimum of a 2% fee of the loan amount and a $250 processing fee...." ECF No. 50-8 at 2. The form does not specify the amount of the fee that will apply. See id. Carlsen's signature appears under a line on the form which states "[t]he undersigned acknowledge receipt of this Broker Agreement." Id. On December 9, 2004, NVR Mortgage approved Carlsen's ARM. ECF No. 43-3 at 6. However, Carlsen did not close on the ARM loan. See id. at 6-11.

On February 22, 2005, Carlsen used NVR Mortgage to submit an application to another mortgage lender, C&F, for a 30-year fixed-rate mortgage. Id. at 7. On that same date, he received and signed a document that estimated his closing costs and included the following line item: "Broker Fee to NVR Mortgage 2%... $6, 038." Id. Before closing, Carlsen signed three additional forms that disclosed he would owe a two percent broker fee to NVR Mortgage, at a higher amount of $6, 323. Id. at 9-10. Carlsen, a loan officer, acknowledged that he knew he could have pursued alternative financing for the transaction, and avoided paying the broker fee, but he was reluctant to lose the $12, 000 purchase credit. See id. at 10-11. In July 2005, Carlsen and C&F closed on the mortgage, and Carlsen paid the broker fee.[10] See ECF No. 50-1 at 6.

B. Procedural History

On January 11, 2012, Carlsen sued NVR in the Circuit Court for Baltimore County alleging violation of the FFA, §§ 12-801 et seq. ECF No. 2-1.[11] On May 21, 2012, NVR removed to this Court. ECF No. 1. On December 20, 2012, NVR moved to dismiss for failure to state a claim, or for summary judgment. ECF No. 43. On February 5, 2013, Carlsen opposed NVR's motion and cross-moved for partial summary judgment. ECF No. 50. On March 29, 2013, NVR opposed Carlsen's cross-motion for summary judgment and replied to Carlsen's opposition. ECF No. 53. On April 25, 2013, Carlsen replied to NVR's opposition to his cross-motion. ECF No. 58.

On September 17, 2013, pursuant to the Maryland Uniform Certification of Questions of Law Act, Md. Code Ann., Cts. & Jud. Proc. §§ 12-601 through 12-613, and Maryland Rule 8-305, this Court certified the following question of Maryland law to the Court of Appeals of Maryland:

Is the Maryland Finder's Fee Act a statutory "specialty" law with a statute of limitations of twelve years under Maryland Courts and Judicial Proceedings § 5-102(a)(6)?

ECF No. 61.[12] The Court stayed the case pending receipt of the Court of Appeals' answer. Id. at 12.

On July 21, 2014, the Court of Appeals issued its decision. ECF No. 67.[13] The Court of Appeals reformulated the question as, "Is an alleged violation of Md. Code Ann., Com. Law (1975, 2013 Repl. Vol.) § 12-805(d) an other specialty' under Md. Code Ann., Cts. & Jud. Proc. (1973, 2013 Repl. Vol.) § 5-102(a)(6), which is a twelve-year statute of limitations?" Id. at 4. The Court of Appeals concluded that the answer to the reformulated certified question was "no." Id. It held that an alleged violation of § 12-805(d) of the Maryland Finder's Fee Act ("FFA") was not an "other ...


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