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Okoro v. Wells Fargo Bank, N.A.

United States District Court, D. Maryland

October 6, 2016

WELLS FARGO BANK, N.A., et al., Defendants.


          Paula Xinis United States District Judge

         Henrietta and Cyriacus Okoro (collectively, “Plaintiffs” or the “Okoros”), proceeding pro se, filed a Complaint against the Federal National Mortgage Association, Hudson City Savings Bank, FSB, M&T Bank, M&T Corporation, The Alba Law Group, P.A., Wells Fargo Bank, N.A., and Wells Fargo Home Mortgage Inc. (collectively, “Defendants”). Plaintiffs bring this action against Defendants for violations of the Real Estate Settlement and Procedures Act (“RESPA”) and Fair Debt Collection Practices Act (“FDCPA”) in connection with the Defendants' acceleration of their Promissory Note and an attempt to enforce their security interest. Plaintiffs also allege state law claims based upon the same course of conduct.

         Currently pending before the Court are Defendants' Motions to Dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) (ECF Nos. 20, 23, and 24). The relevant issues have been fully briefed and the court now rules pursuant to Local Rule 105.6 because no hearing is necessary. For the reasons set forth below, the Court will GRANT Defendants' Motion to Dismiss.

         I. BACKGROUND[1]

         This matter arises out of foreclosure proceedings filed with respect to Plaintiffs' property located at 7211 Oakley Road, Glenn Dale, Maryland 20769 (the “Property”). See ECF No. 1-1.

         On October 31, 2006, the Plaintiffs executed a promissory note (the “Note”) in the original principal amount of $681, 200 payable to Hovnanian American Mortgage, LLC (“Hovnanian”), secured by a deed of trust executed by Plaintiffs on the Property (the “Deed of Trust”). ECF Nos. 1-1, 1-2. Hovnanian subsequently executed and attached an allonge to the Note bearing a special indorsement, thereby making the Note payable to Wells Fargo Bank, N.A. (“Wells Fargo”).[2] ECF No. 1-1 at 5. Wells Fargo then added a blank indorsement on the allonge, making the Note payable to the holder of the Note.[3] ECF Nos. 1 at 7, 1-1. Wells Fargo remained the Loan Servicer throughout the life of the loan. See ECF No. 1 at 3-4, 36-37.

         Plaintiffs allege that after Hovnanian sold their loan to Wells Fargo, the loan was securitized in a pool to Federal National Mortgage Association (“Fannie Mae”) “sometime in 2009.” (ECF No. 1 at 3 n.3). Plaintiffs further allege that Fannie Mae owns the loan and the servicing of the loan was governed by the Fannie Mae Single Family Servicing Guide. ECF No. 1 at 5. But despite Plaintiffs' bald assertion, the loan documentation attached to and incorporated in the Complaint nowhere mentions Fannie Mae as an involved lender or servicer. ECF No. 1 at 3 n.3.

         Rather, those loan documents that Plaintiffs chose to provide the Court, as incorporated in their Complaint, reflect that Hovnanian executed a Corporate Assignment of Deed of Trust (the “Assignment”) to Bank of America on October 14, 2011; and then Bank of America Assigned the Deed of Trust to Hudson City Savings Bank FSB (“Hudson City”)[4] on May 25, 2012. ECF Nos. 1-3, 1-7. The Deed of Trust states that “[t]he Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.” Id. at 12. The Deed of Trust also clearly states that Plaintiffs' obligations remain the same, regardless of whether the Note is sold: “If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser.” Id.

         In 2009, Plaintiffs defaulted on the Note. ECF Nos. 1 at 9, 11; see also ECF No. 1-5. To forestall the expected foreclosure, they asked for and allegedly received a trial modification agreement from Wells Fargo also known as a Trial Period Plan (“TPP”) under the Home Affordable Modification Program (“HAMP”). ECF No. 1 at 10; see also ECF No. 1-4. However, the documents that Plaintiffs chose to attach to their Complaint and incorporate by reference belie that any agreement was ever reached. Rather, Plaintiffs provide only a completed application that was not signed by any lender. ECF No. 1-4. Indeed, Plaintiffs even aver elsewhere in their Complaint that they never received approval for a final loan modification, ECF No. 1 at 12, yet also claim that they made monthly payments under the trial modification, and later, forbearance. ECF No. 1 at 11, n.10; see also ECF No. 1-5.

         Plaintiffs' also claim that they complained in writing to the Office of Thrift Supervision (“OTS”) in early 2011 based on their rejection from the HAMP program in 2009. OTS responded and attached direct correspondence from Hudson City verifying that Hudson City does not participate in HAMP but would be willing to discuss a possible forbearance agreement with Plaintiffs. ECF No. 1-6; ECF No. 1 at 12-13, 18-19. Plaintiffs aver that Hudson City's representations in March of 2011 as the owner of the note were false because it was not until May 25, 2012 that Hudson City was assigned the Deed of Trust. ECF No. 1 at 13. Plaintiffs claim that Hudson City was merely a servicer of the Note. ECF No. 1 at 15-16.

         On May 22, 2013, Defendants initiated foreclosure proceedings. See Dore v. Okoro, Case No. CAE 13-08379 (the “Foreclosure Action”); ECF No. 1 at 18; see also ECF No. 1-8. Five attorneys employed by The Alba Law Group, P.A. (“Alba”) were appointed as substitute trustees in connection with those proceedings. ECF No. 1 at 13-14; ECF No. 1-8 (a copy of the Declaration of Substitution of Trustees).

         On June 14, 2014, Plaintiffs sent Wells Fargo a letter that they characterize as a Qualified Written Request (“QWR”), pursuant to § 2605(e) of RESPA, requesting information regarding the historic transfer of the Note and Deed of Trust. ECF No. 1 at 15; ECF No. 1-9. Plaintiffs then filed for bankruptcy relief on February 16, 2016.[5] In re: Henrietta Okoro and Cyriacus Okoro, Bankr. D. Md., Case No.: 16-11751 (Chapter 7) [hereinafter “Bankruptcy Proceeding”]. The Foreclosure Action remains pending and is currently stayed in light of Plaintiffs' bankruptcy. See ECF No. 20-3 at 2. Plaintiffs allege that in the Bankruptcy Proceeding, Hudson City and Wells Fargo filed a fraudulent proof of claim which included a forged version of the Note, fraudulently produced by placing the indorsement on a scanned image in accordance with Wells Fargo policies to create forgeries. ECF No. 12 at 3.

         On March 3, 2016, Plaintiffs filed the instant Complaint (ECF No. 1) and later, on April 9, 2016, an Amended Complaint (ECF No. 12), cumulatively asserting fourteen claims, including fraud (Counts I, II, III, XIV), [6] negligence (Counts II, X), civil conspiracy (Count IV, XIII), tortious interference with contract (Count VII), and violations of the Maryland Consumer Debt Collection Act (“MCDCA”) (Count V), Maryland Consumer Protection Act (“MCPA”) (Count VI), Fair Debt Collection Practices Act (“FDCPA”) (Count VIII), and Real Estate Settlement and Procedures Act (“RESPA”) (Count IX, XI, XII).

         Bringing claims under common law, the MCDCA, and MCPA against Wells Fargo, Hudson City, and Alba, Plaintiffs principally allege that Wells Fargo and Hudson City falsely held out Hudson City as the lender and holder of the Note.[7] Without ownership, Plaintiffs claim, Hudson City never had authority to deny Plaintiffs a HAMP-based loan modification. ECF No. 1 at 22. Plaintiffs contend that Hudson City and Wells Fargo conspired to present Hudson City as the owner of Plaintiffs' loan so as to have a justifiable excuse for denying Plaintiffs' loan modification in 2009. ECF No. 1 at 16. Additionally, because Hudson City deceitfully represented itself to be the investor or owner, Plaintiffs were “fraudulently deprived” of their opportunity for a loan modification in February 2011. ECF No. 1 at 14. They also allege that, when Hudson City did not own the loan, Wells Fargo converted their mortgage payments and “may not have credited some or all of such payments to Plaintiffs' account.” ECF No. 1 at 14- 15. Wells Fargo then sought to conceal its alleged fraud and misapplication of Plaintiffs' interest payments. ECF No. 1 at 15. Asserting that, in 2009, they should have received a final loan modification, Plaintiffs allege that, over the next seven years, they lost time and money, incurred myriad fees, and suffered physical and mental pain and anguish attempting to obtain a loan modification. ECF No. 1 at 17-18. Plaintiffs also claim that Wells Fargo violated RESPA by not responding to Plaintiffs' 2014 written request for information disclosing the identity of the Note holder, ECF No. 1 at 15, and Wells Fargo's proof of claim filed in Bankruptcy Court attaches a forged note, thus breaching the “duty of care . . . imposed to protect the debtor from fraud and abuse by creditors . . . in filing a proof of claim.” ECF No. 12 at 12. With regards to Fannie Mae, Plaintiffs allege that the application of the Fannie Mae servicing guidelines deceives homeowners, and Fannie Mae conspired against the Plaintiffs. ECF No. 1 at 38.

         On April 8, 2016, Plaintiffs filed an adversary proceeding in the Bankruptcy Court alleging similar facts and circumstances and seeking declaratory relief from the Bankruptcy Court. See Okoro v. Wells Fargo, Adversary No.: 16-00185, ECF No. 1. Defendants contended that Plaintiffs lacked standing in the adversary proceeding. On June 6, 2016, the Plaintiffs filed a motion for an order of abandonment of the present action with the Bankruptcy Court, and the Trustee did not object. See Bankruptcy Proceedings, ECF 50. On June 28, 2016, the Bankruptcy Court entered an order determining that the present action is abandoned property pursuant to 11 U.S.C. §554 and Fed.R.Bankr.P. 6007. See Bankruptcy Proceedings, ECF 51; ECF No. 34-1 (June 28, 2016, Order of Abandonment). Then, on August 8, 2016, the Bankruptcy Court dismissed the adversary proceeding for lack of jurisdiction after finding that the Order of Abandonment removed the cause of action from the jurisdiction of the bankruptcy case. Okoro v. Wells Fargo, Adversary No.: 16-00185, ECF No. 32 at 4-5.

         On May 20, 2016, Alba filed a Motion to Dismiss. ECF No. 20. On May 31, 2016, Fannie Mae filed a Motion to Dismiss, ECF No. 23, and Hudson City and Wells Fargo filed their Joint Motion to Dismiss. ECF No. 24. For the reasons that follow, all three motions to dismiss will be GRANTED.


         Due to the contemporaneous bankruptcy proceedings, Defendants challenge Plaintiffs' standing to bring the instant action before this Court. Standing is an element of subject matter jurisdiction, thus Defendants' Motions to Dismiss for lack of standing should be treated under Fed.R.Civ.P. 12(b)(1). See White Tail Park, Inc. v. Stroube, 413 F.3d 451, 459 (4th Cir. 2005); Axel Johnson, Inc. v. Carroll Carolina Oil Co., Inc., 145 F.3d 660, 661-62 (4th Cir. 1998) (affirming the district court's dismissal of the complaint for lack of standing pursuant to Rule 12(b)(1)). The existence of subject matter jurisdiction is a threshold issue the court must address before considering the merits of the case. Jones v. Am. Postal Workers Union, 192 F.3d 417, 422 (4th Cir. 1999).

         Defendants also move to dismiss under Fed.R.Civ.P. 12(b)(6), arguing that Plaintiffs' Complaint and Amended Complaint fail to state a claim. 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) (citation and internal quotation marks omitted). Plaintiffs are proceeding pro se, and their Complaint and Amended Complaint are to be construed liberally. See Haines v. Kerner, 404 U.S. 519, 520 (1972). However, liberal construction does not absolve Plaintiffs from pleading plausible claims. See Holsey v. Collins, 90 F.R.D. 122, 128 (D. Md. 1981) (citing Inmates v. Owens, 561 F.2d 560, 562-63 (4th Cir. 1977)). As the Fourth Circuit made clear:

It is neither unfair nor unreasonable to require a pleader to put his complaint in an intelligible, coherent, and manageable form, and his failure to do so may warrant dismissal. Corcoran v. Yorty, 347 F.2d 222, 223 (9th Cir.), cert. denied, 382 U.S. 966 (1965); Holsey v. Collins, 90 F.R.D. 122, 128 (D.Md.1981). District courts are not required to be mind readers, or to conjure questions not squarely presented to them. Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir.1985), cert. denied, 475 U.S. 1088 (1986).

Harris v. Angliker, 955 F.2d 41, 1992 WL 21375, at *1 (4th Cir.1992) (per curiam).

         When ruling on a motion under Rule 12(b)(6), the court must “accept the well-pled allegations of the complaint as true, ” and “construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff.” Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). “The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6).” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, a complaint's factual allegations “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “To satisfy this standard, a plaintiff need not ‘forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements.” Walters, 684 F.3d at 439 (citation omitted). “Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable, ' the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.'” Id. (quoting Twombly, 550 U.S. at 570).

         When reviewing a motion to dismiss, “[t]he court may consider documents attached to the complaint, as well as documents attached to the motion to dismiss, if they are integral to the complaint and their authenticity is not disputed.” Sposato v. First Mariner Bank, No. CCB-12- 1569, 2013 WL 1308582, at *2 (D. Md. Mar. 28, 2013); see also CACI Int'l v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 154 (4th Cir. 2009); Fed.R.Civ.P. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”). To be “integral, ” a document must be one “that by its ‘very existence, and not the mere information it contains, gives rise to the legal rights asserted.'” Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 611 (D.Md.2011) (citation and emphasis omitted). Here, the Note, the Deed of Trust, the Declaration of Substitution of ...

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