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Letren v. Arch Bay Holdings, LLC

United States District Court, D. Maryland

March 28, 2016

NEIL F. LETREN, Plaintiff,
ARCH BAY HOLDINGS, LLC, et al., Defendants.



In this putative class action, which was removed to this Court from the Circuit Court for Prince George's County, Maryland ("Prince George's County Circuit Court"), pro se Plaintiff. Neil F. Letren. alleges that Defendants. Arch Bay Holdings. LLC ("Arch"), Deutsche Bank Trust Corporation ("Deutsche Bank"). Specialized Loan Servicing. LLC ("SLS"). Mortgage Electronic Registration Systems. Inc. ("MERS"). and Stephen N. Goldberg (collectively. "Defendants") violated provisions of the Fair Debt Collection Practices Act ("FDCPA"). 15 U.S.C. §1601 et seq., the Maryland Consumer Debt Collection Act ("MCDCA"). Md. Code Ann.. Com. Law § 14-101 et seq., and the Maryland Consumer Protection Act ("MCPA"). Md. Code Ann.. Com. Law § 13-101 et seq. See ECF Nos. 1 & 40. He also alleges various state law claims including breach of contract, unjust enrichment, and fraud. Id. Presently pending before the Court are two motions to dismiss: one filed by Arch and SLS, ECF No. 43, and another filed by Mr. Goldberg. ECF No. 52. Plaintiff opposes both motions. ECF Nos. 47 & 54. No hearing is necessary. See Loc. R. 105.6 (D. Md.). For the reasons that follow, both motions to dismiss are granted and this action is dismissed with respect to Arch. SLS. and Mr. Goldberg.[1]


On May 2, 2007. Mr. Letren obtained a loan against his property located in Capitol Heights, Maryland (the "Property") in the amount of $252, 000. for which he signed a promissory note (the "Note") payable to the lender. Mortgagelt. Inc. ECF No. 40 at ¶ 10: ECF No. 44-1. He also executed a Deed of Trust as a lien against the property, which named Mr. Letren as the Borrower, Mortgagelt as the Lender, the Chicago Title Insurance Company as Trustee, and MERS as "nominee for Lender" and beneficiary under the security instrument. ECF No. 40 at ¶ 10; ECF No. 44-2 at 2-3.[2] Among the many obligations set forth in the Deed of Trust was a provision that required that, upon complete payment of the sums secured by the Deed of Trust, the Lender or Trustee "shall release [the Deed of Trust] and mark the Note 'paid" and return the Note to Borrower." ECF No. 44-2 at 14. At some point. Arch represented that it had become the owner of the loan and the Note holder, while SLS serviced the loan. See ECF No. 40 at P 6-7. Mr. Goldberg and other attorneys of the law firm Cohn. Goldberg, and Deutsche, LLC were appointed as Substitute Trustees to the Deed of Trust by Arch on May 17. 2011 ("Substitute Trustees"). Id. at 9.

In May 2011. a foreclosure action was initiated against the property in the Prince George's County Circuit Court based on Mr. Letren's alleged default on the loan. See Colin, et al. v. Letren, No. CAE11-13229 (Prince George's Cnty. Cir. Ct.) (the "Foreclosure Action"). The Foreclosure Action was dismissed without prejudice in April 2012 following a denial of Mr. Letren's Motion to Stay and/or Dismiss. See id: see also ECF No. 40 at ¶ 79. The following month. Mr. Letren filed an action against the Substitute Trustees alleging, inter alia, violations of the FDCPA, the MCDCA. and the MCPA in the Prince George's County Circuit Court. See Letren v. Colm, Goldberg & Deulsch. LLC. No. CAL12-15920 (Prince George's County Cir. Ct.) (the "FDCPA Action"). That action was removed to federal court in July 2012. See Letren v. Cohn, Goldberg & Deutsch, LLC. No. 8:12-cv-01982-JFM {D. Md.). In an Amended Complaint filed in federal court, Mr. Letren alleged, among other things, that the Substitute Trustees improperly filed the Foreclosure Action. In particular, he alleged that the Note on which the Substitute Trustees relied in initiating the Foreclosure Action was "not a true and accurate copy" of the Note and that his signature had been forged on the document that the Substitute Trustees had sought to enforce. See id., ECF No. 27-1 at 23. 1 He further alleged that Arch was not the owner of the Note. Id. at ¶ 24.

On June 11, 2012, Mr. Letren, by counsel, filed another Complaint in the Prince George's County Circuit Court against Arch. SLS. MERS. Mr. Goldberg, and several other defendants. asserting a claim to quiet title. See Letren v. Mortgage It. Inc., et al.. No. CAE 12-1 7709 (Prince George's Cnty. Cir. Ct.) (the "Quiet Title Action"): see also ECF No. 40 at ¶ 83. In that action. Plaintiff alleged that he had "personally examined what was represented to him by a member of the [f]irm in which the . .. [Substitute] Trustees operate, to be the original Note" but that when he saw it, he "immediately concluded that the Note was a fake, forgery, alteration or mutilation . .., " ECF No. 44-3 at 5. He further alleged that "[b]ecause no Defendants [in that action] have produced a complete, true and accurate debt instrument evidencing the debt secured by [Plaintiff s] Property, no Defendants have any interest in the Mortgagelt Deed of Trust." and that "the Mortgagelt Deed of Trust should be stricken from the chain of title." Id.

While the FDCPA and Quiet Title Actions were pending, in November 2012. Plaintiff filed yet another action in Prince George's County Circuit Court alleging violations of the MCPA against SLS. See Letren v. Specialized Loan Servicing LLC, CAL12-36628 (Prince George's Cnty. Cir. Ct.) (the '"MCPA Action").

To resolve these lawsuits. Mr. Letren. Arch. SLS. and the Substitute Trustees entered into a Release and Settlement Agreement (the "Settlement Agreement") dated September 20. 2013. in order to effectuate their "desire to settle, discharge and terminate all claims, controversies, and potential claims and controversies which may now exist, whether known or unknown, between them without resort to further litigation . . .." ECF No. 44-4 at 3; see also ECF No. 40 at ¶¶ 36- 37. Under the Settlement Agreement, the Parties recognized that Arch was the holder of Plaintiffs May 2, 2007 Note, which had a principal amount owed at that time of $281, 674.44. ECF No. 44-4 at 2. The Settlement Agreement also acknowledged that SLS was the servicer of the Note. Id. The Settlement Agreement provided that Plaintiff would pay the sum of $90, 000 to Arch as a payoff amount "in full accord and satisfaction of the debt evidenced by the said Note. . . ." Id. at 3. Upon receipt of the payoff. Arch was required to release the Deed of Trust encumbering the property as security for the Note. Id. And. in addition to requiring that Plaintiff release the three then-pending lawsuits, the Settlement Agreement also included the following general release:

Mr. Letren hereby releases, acquits and forever discharges [Arch. SLS. and the Substitute Trustees], their agents, principals, heirs, executors, administrators, personal representatives, [etc.] . . . which are or might be claimed to be liable to Mr. Letren as a result of the Note, the Quiet Title Action, the MCPA Action, and/or the FDCPA Action, from any and all claims and demands of whatsoever nature ... on account of or in any way growing out of personal injuries and/or property damage having already resulted or to result at any time in the future, or in any way related to the Note, the Released Lawsuits, and/or alleged negligent acts or omissions set forth in any of the Released Lawsuits.

Id. at 5 (emphasis added); see also Id. at 4 (providing that the Settlement Agreement constitutes "settlement in full for any and all claims or potential claims [Plaintiff] has. had or may have in the future against the Released Parties . . . arising out of the Note . ..).

Plaintiff alleges that, in accordance with the Settlement Agreement, he did in fact pay $90, 000 to Arch. See ECF No. 40 at ¶¶ 31, 37. A Certificate of Satisfaction was executed on March 24, 2014. and recorded on the land records in Prince George's County. Maryland, indicating that the Deed of Trust "has been fully paid and discharged" and that the lien held against the Property was released. ECF No. 52-9; see also ECF No. 40 at ¶ 51. The Quiet Title Action, the MCPA Action, and the FDCPA Action were all then voluntarily dismissed with prejudice. See Letren v. Martgagelt, Inc., et al. No. CAE 12-17709 (Prince George's Cnty. Cir. Ct. Sept. 20, 2013): Letren v. Specialized Loan Servicing LLC. CAL12-36628 (Prince George's Cnty. Cir. Ct. Sept. 20, 2013); Letren v. Colm. Goldberg A Deutsch, LLC. No. 8:12-cv-01982-JFM (D. Md. Oct. 4. 2013); see also ECF No. 44-5.

The present lawsuit arises out of Mr. Letren's allegation that, despite his payment of $90, 000 in full accord and satisfaction of the remaining principal balance on the Note, that the Note has not been marked as "paid" and has not been returned to him, which violates the terms of the Deed of Trust. ECF No. 40 at ¶ 18. Mr. Letren alleges that "[u]pon information and belief the Defendants did not return the Note because the Defendants were not in possession of the original Note." Id. at 19. Thus, because Arch and/or SLS were not in possession of the Note, neither Defendant was a "holder" of the Note, they could not seek payment pursuant to it. and they were not entitled to receive the $90, 000 Mr. Letren paid to them pursuant to the Settlement Agreement. Id. at ¶¶ 20-21. Based on these facts. Mr. Letren alleges violations of the FDCPA. the MCDCA, and the MCPA. as well as breach of contract, unjust enrichment, and common law fraud. Id. at ¶¶ 22-94. Arch, SLS. and Mr. Goldberg now move to dismiss all claims against them. ECFNos. 43 & 52.


Defendants have moved to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6). which permits a defendant to present a motion to dismiss for failure to state a claim upon which relief can be granted. When deciding a motion to dismiss under Rule 12(b)(6). a court "must accept as true all of the factual allegations contained in the complaint." and must "draw all reasonable inferences [from those facts] in favor of the plaintiff." E.I. du Pont de Nemours & Co. v. Kolon Indus.. Inc., 637 F.3d 435. 440 (4th Cir. 2011) (citations and internal quotation marks omitted). To survive a motion to dismiss invoking Rule 12(b)(6). "a complaint must contain sufficient factual matter, accepted as true, "to state a claim to relief that is plausible on its face."" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The factual allegations must be more than "labels and conclusions .... Factual allegations must be enough to raise a right to relief above the speculative level. ..." Twombly, 550 U.S. at 555; see also Id. ("[T|he pleading must contain something more . . . than ... a statement of facts that merely creates a suspicion [ot] a legally cognizable right of action" (quoting 5 C. Wright & A. Miller. Federal Practice and Procedure ยง 1216. 235-36 (3d ed. 2004)). ...

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