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Hughes v. J.P. Morgan Chase Bank, N.A.

United States District Court, D. Maryland

November 29, 2016

PATRICK J. HUGHES Plaintiff,
v.
J.P. MORGAN CHASE BANK, N.A., et al. Defendants.

          MEMORANDUM OPINION

          Richard D. Bennett United States District Judge.

         Pro se Plaintiff Patrick J. Hughes (“Hughes” or “Plaintiff”) brings this action against J.P. Morgan Chase Bank (“Chase”), Wells Fargo Bank, N.A., and DOES I through X[1]alleging a breach of the parties' Settlement Agreement (“Agreement”) and, relatedly, asserting a series of contract-based defenses to avoid enforcement of the Agreement. (Complaint, ECF No. 2.) Originally filed as two separate actions (RDB-16-806 and RDB-16-2311), the cases were consolidated and the RDB-16-806 case was dismissed by Memorandum Order dated November 2, 2016.[2] (ECF No. 13.)

         Currently pending before this Court are two Motions to Dismiss. (ECF Nos. 5, 11).[3]The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons that follow, defendants' Motions to Dismiss are GRANTED, and this case is DISMISSED WITH PREJUDICE.

         BACKGROUND

         The parties' dealings may be traced to a mortgage for an investment property located in Baltimore between plaintiff and defendants' predecessor-in-interest, Washington Mutual Bank, F.A. (ECF No. 11-1 at 2.) After plaintiff defaulted on the loan, Chase began foreclosure proceedings. (Id.) During the course of these proceedings, plaintiff filed several lawsuits against defendants, including in this Court, in the United States District Court for the Eastern District of Virginia, in the Circuit Court of Fairfax County, Virginia, and in the Circuit Court for Baltimore City. (Id.)

         The parties subsequently entered into a Settlement Agreement which was intended to serve as a full and final settlement of all claims between the parties.[4] (ECF No. 20.)[5]Pursuant to this Agreement, Chase would provide monetary consideration to Mr. Hughes in exchange for his release of all claims against them in the several lawsuits he had filed. (Id. at ¶ 5.) Mr. Hughes also agreed to permit the Substitute Trustee in the foreclosure action to file all pleadings necessary to complete the foreclosure sale of the property subject to the mortgage. (Id. at ¶ 4.2.) To that end, Mr. Hughes agreed that he “will not move to cancel, postpone or otherwise object to the judicial foreclosure sale.” (Id.) The Settlement Agreement further provides that Chase “may be required to issue a Form 1099 or other tax form reporting the consideration flowing to [Mr. Hughes] under this [agreement] to the Internal Revenue Service and/or other taxing authority.” (Id. at ¶ 17.)

         Notwithstanding the plain language of the Settlement Agreement, [6] Mr. Hughes alleges in the RDB-16-806 case that Chase breached that contract by notifying him that they would be issuing him an Internal Revenue Service Form 1099-C (“Form 1099-C”).[7] (RDB-16-806, ECF No. 1 at ¶ 6.) In the RDB-16-2311 case, by contrast, Mr. Hughes asserts several contract-based defenses in order to prevent defendants from issuing him a Form 1099-C pursuant to the Settlement Agreement. (RDB-16-2311, ECF No. 2.)

         Defendants filed Motions to Dismiss in both cases prior to this Court's Order consolidating cases. (ECF Nos. 5, 14.) These matters are ripe for the Court's resolution.[8]

         STANDARD OF REVIEW

         Under Federal Rule of Civil Procedure 8(a)(2), a plaintiff is required to plead “a short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of this requirement is to “to give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation and internal quotations omitted). Consequently, “a formulaic recitation of the elements of a cause of action will not do.” Id. (citation omitted). Similarly, “an unadorned, the-defendant-unlawfully-harmed-me accusation” is insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009). Rather, to withstand a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face, ” meaning the court could draw “the reasonable inference that the defendant is liable for the conduct alleged.” Id. (internal quotations and citation omitted).

         While federal courts are obliged to liberally construe a pro se litigant's claims in applying the above analysis, this requirement “does not transform the court into an advocate.” United States v. Wilson, 699 F.3d 789, 797 (4th Cir. 2012) (internal quotations and citations omitted). The Fourth Circuit has noted that “[w]hile pro se complaints may ‘represent the work of an untutored hand requiring special judicial solicitude, ' a district court is not required to recognize ‘obscure or extravagant claims defying the most concerted efforts to unravel them.'” Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990) (quoting Beaudett v. City of Hampton, 775 F.2d 1274, 1277 (4th Cir. 1985), cert. denied, 475 U.S. 1088 (1986)).

         ANALYSIS

         I. Plaintiff's Complaint in the RDB-16-806 Case

         Plaintiff's Complaint in the RDB-16-806 case alleges that Chase breached the parties' Settlement Agreement when it notified Mr. Hughes that Chase would be issuing him an IRS Form 1099. (RDB-16-806, ECF No. 1 at ¶¶ 6-7.) Plaintiff seeks a preliminary injunction to bar the issuance of the Form 1099. (Id. at ¶¶ 9-10.)

         Chase raises two primary arguments in support of its Motion to Dismiss. (ECF No. 14). First, Chase argues that plaintiff seeks only an advisory opinion, in violation of Article III of the U.S. Constitution.[9] (Id. at 1). Second, Chase argues that the Complaint fails to state a plausible claim for relief in light of the plain language of the Settlement Agreement.[10](Id.).

         A. Failure to State a Claim

         Chase argues that the Complaint fails to state a plausible claim for breach of contract based on the plain language of the Settlement Agreement, which expressly authorizes Chase to issue tax reporting forms to the Internal Revenue Service (“IRS”). (ECF No. 14 at 7-9.)

         In opposition, plaintiff argues that Chase has no right to file a Form 1099-C because the Settlement Agreement relieved plaintiff of all claims made by Chase. (ECF No. 15 at 3.)

         The Settlement Agreement provides in pertinent part:

“17. Tax Consequences. Borrower acknowledges and agrees that he is solely responsible for the payment of any and all federal, state, city or local taxes which might be due and owing as a result of any term contained in this Agreement. The Parties acknowledge that no tax advice has been offered or given by either party, their attorneys, agents, or any other representatives, in the course of these negotiations, and each party is relying upon the advice of its own tax consultant with regard to any tax consequences that may arise as a result of the execution of this Agreement. Borrower acknowledges that Borrower may be required by Chase to submit a Form W-9 and that Chase may be required to issue a Form 1099 or other tax form reporting the consideration flowing to the Borrower under this to the Internal Revenue Service and/or other taxing authority.”

(ECF No. 20 at ¶ 17) (emphasis added).

         The Settlement Agreement plainly and unambiguously authorizes Chase to issue a Form 1099-C and any other tax reporting documents required by law. “[F]iling a Form 1099-C is a creditor's required means of satisfying a reporting obligation to the IRS.” F.D.I.C. v. Cashion, 720 F.3d 169, 179 (4th Cir. 2013). Thus, plaintiff's allegation that Chase's intended reporting breaches their Settlement Agreement is without merit. Accordingly, plaintiff's Complaint in the RDB-16-806 case fails to state a plausible claim for relief and must be DISMISSED.

         II. Plaintiff's Complaint in ...


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