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Galvagna v. Bank of America, NA

United States District Court, D. Maryland

December 29, 2016

Stephen Galvagna
Bank of America, NA, et al.

         Dear Parties:

         Pending before the Court are Defendants', Bank of America, NA and Nationstar Mortgage, [1] Motion to Dismiss (ECF No. 5) and pro se Plaintiff Stephen Galvagna's Motion for Summary Judgment (ECF No. 13). The Motions are fully briefed and ripe for disposition. No hearing is necessary. See Local Rule 105.6 (D.Md. 2016). For the reasons that follow, the Court will grant Defendants' Motion and deny Galvagna's Motion as moot.

         In early 2007, Galvagna borrowed $424, 000 from Countrywide Bank, N.A. to purchase a second home at 3950 Coulbourn Mill Road, Salisbury, Maryland (the “Property”). (ECF No. 5-2). Galvagna executed a promissory note in favor of Countrywide that was secured by a deed of trust on the Property. (ECF Nos. 5-2, 5-3). In September 2009, Galvagna signed a Loan Modification Agreement with Bank of America.[2] (ECF No. 1-1). Nevertheless, in November 2009-just two months later-Bank of America, through substitute trustees, executed a foreclosure sale of the Property. (ECF No. 1-2). In March 2010, however, the substitute trustees worked to vacate the foreclosure, moving the Circuit Court for Wicomico County, Maryland to strike the Final Order of Ratification of Sale that the court had entered. (ECF No. 1-3). That same month, the court struck the Final Order of Ratification of Sale and dismissed the foreclosure proceeding against Galvagna. (Id.).

         In September 2012, Bank of America approved Galvagna for a Trial Period Plan (“TPP”) under which Galvagna was required to make reduced mortgage payments in November and December 2012 and January 2013. (ECF No. 1-4). In October 2012, Galvagna wrote a letter to Bank of America, refusing the TPP and requesting a “better modification plan” and a 2% interest rate. (Id. at 5). Galvagna does not allege whether he made the TPP payments or whether Bank of America responded to his letter with a counteroffer. In June 2013, Bank of America advised Galvagna that it would transfer the servicing of his loan to Nationstar, effective July 2013. (ECF No. 1-5). Although Galvagna does not specify when, it appears that sometime in 2014, Bank of America or Nationstar attempted to execute another foreclosure against the Property.[3] (See ECF No. 1-6).

         Galvagna sued the Defendants in this Court on May 27, 2016. (ECF No. 1). He seeks $489, 000 in compensatory damages and $2 million in punitive damages.[4] (Id.). On July 29, 2016, Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). (ECF No. 5). Galvagna responded in opposition on August 24, 2016 (ECF No. 11), and Defendants replied on September 12, 2016 (ECF No. 12). While Defendants' Motion to Dismiss was still pending, Galvagna filed a two-page Motion for Summary Judgment (ECF No. 13); it was fully briefed as of October 21, 2016 (ECF Nos. 14, 15).

         Defendants' Motion to Dismiss

         “The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint, ” not to “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999) (quoting Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)). A complaint fails to state a claim if it does not contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), or does not “state a claim to relief that is plausible on its face, ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Though the plaintiff is not required to forecast evidence to prove the elements of the claim, the complaint must allege sufficient facts to establish each element. Goss v. Bank of Am., N.A., 917 F.Supp.2d 445, 449 (D.Md. 2013) (quoting Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012)), aff'd sub nom., Goss v. Bank of Am., NA, 546 F.App'x 165 (4th Cir. 2013).

         In considering a Rule 12(b)(6) motion, a court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm'rs of Davidson Cty., 407 F.3d 266, 268 (4th Cir. 2005) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). But, the court need not accept unsupported or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979), or legal conclusions couched as factual allegations, Iqbal, 556 U.S. at 678.

         Because Galvagna's Complaint includes allegations of fraud, the complaint is also subject to Rule 9(b), which requires that “the circumstances constituting fraud” be stated “with particularity.” The “circumstances constituting fraud” include the “time, place and contents of the false representation, as well as the identity of the person making the misrepresentation and what was obtained thereby.” Superior Bank, F.S.B. v. Tandem Nat. Mortgage, Inc., 197 F.Supp.2d 298, 313-14 (D.Md. 2000) (quoting Windsor Assocs. v. Greenfeld, 564 F.Supp. 273, 280 (D.Md. 1983)). The particularity requirements of Rule 9(b) apply to pro se complaints. Coulibaly v. J.P. Morgan Chase Bank, N.A., No. DKC-10-3517, 2011 WL 3476994, at *19 n.23 (D.Md. Aug. 8, 2011)

         Since Galvagna is acting pro se, the Court will construe his Complaint liberally. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)); accord Brown v. N.C. Dep't of Corr., 612 F.3d 720, 722 (4th Cir. 2010). Indeed, pro se complaints are entitled to special care to determine whether any possible set of facts would entitle the plaintiff to relief. Hughes v. Rowe, 449 U.S. 5, 9-10 (1980). But even a pro se complaint must be dismissed if it does not allege “a plausible claim for relief.” Forquer v. Schlee, No. RDB-12-969, 2012 WL 6087491, at *3 (D.Md. Dec.4, 2012) (citation omitted). Furthermore, “[t]he Court cannot act as a pro se litigant's ‘advocate and develop, sua sponte, statutory and constitutional claims' that the litigant failed to raise on the face of the complaint.” Branch v. Machen, No. 3:14CV708, 2014 WL 6685497, at *2 (E.D.Va. Nov. 25, 2014) (quoting Newkirk v. Circuit Ct. of Hampton, No. 3:14cv372-HEH, 2014 WL 4072212, at *1 (E.D.Va. Aug. 14, 2014)).

         As an initial matter, the Court observes that Galvagna's Complaint is not a model of clarity and the vast majority of his allegations epitomize the vague, conclusory allegations that do not pass muster under the plausibility standard set forth in Iqbal and Twombly. Nonetheless, after affording Galvagna's Complaint the most generous construction, the Court discerns that Galvagna attempts to raise several common law claims.[5]Galvagna first avers that Bank of America entered into a settlement agreement (the “Agreement”) with the United States Department of Justice (“DOJ”) that “clearly states that mortgage servicing can not [sic] be sold [or] transferred unless the new service company is willing to accept the pending modification, and [the pending modification] is within 60 days of completion.” (Compl. ¶ 1). Galvagna maintains Bank of America breached this agreement when it transferred the servicing of his loan to Nationstar, who “refused to hon[o]r or acknowledge the pending modification” between Bank of America and Galvagna. (Id. ¶¶ 1, 4). The Court will dismiss Galvagna's breach-of-contract claim for two reasons.

         First, Galvagna fails to allege facts from which the Court can reasonably infer that Galvagna was an intended beneficiary of the Agreement. Galvagna does not allege that he is a party to the Agreement. Nevertheless, under Maryland law, he would be permitted to sue to enforce the terms of the Agreement if he were an intended-not an incidental-beneficiary. See CR-RSC Tower I, LLC v. RSC Tower I, LLC, 56 A.3d 170, 212 (Md. 2012). A third party is an intended beneficiary of an agreement when the pertinent provisions in the agreement were inserted to benefit the third party or the third party is named in the operative agreement. Id. Because Galvagna does not allege that he was personally named in the Agreement, he must plausibly allege that the Agreement's provision preventing the transfer of mortgage loans when a modification is pending was included to benefit mortgagors like him. Galvagna does not attach the Agreement to the Complaint and his allegations regarding its terms are entirely conclusory and bereft of detail. Without further factual enhancement, the Court cannot reasonably infer that the DOJ intended the Agreement to benefit borrowers like Galvagna whose loans were transferred nearly a year after the loans' originators offered loan modifications that the borrowers refused. Because Galvagna does not sufficiently allege that he is an intended beneficiary of the Agreement, the Court finds that he is not entitled to sue to enforce its terms. See CR-RSC Tower I, 56 A.3d at 212.

         Second, Galvagna fails to plausibly allege that a loan modification was “pending” when Bank of America transferred the servicing of his loan to Nationstar. Bank of America offered Galvagna a TPP in September 2012. (ECF No. 1-4). The offer letter plainly states that Galvagna's failure to make the TPP payments might render him ineligible for a loan modification. (Id. at 4). Galvagna does not allege that he made the TPP payments. Instead, he asserts that in October 2012, he refused the TPP because he desired a “better” plan. (Id. at 5). Galvagna never alleges that after October 2012, Bank of America considered him for another TPP or an alternate loan modification plan. So the Court cannot reasonably infer a loan modification was “pending” when Bank of America transferred Galvagna's loan to Nationstar. Thus, even under the terms of the Agreement as alleged by Galvagna, the Court finds that Galvagna falls outside their scope.

         Galvagna also alleges that Bank of America breached the Loan Modification Agreement it executed with Galvagna in September 2009 when notwithstanding the agreement, it foreclosed on the Property in November 2009. Galvagna asserts that he and Bank of America “came to the agreement that the foreclosure breached [the Loan Modification Agreement].” (Compl. ¶ 3). That allegation, however, is riddled with legal conclusions that the Court need not, and will not, accept. Iqbal, 556 U.S. at 678. Defendants contend that this breach-of-contract claim is barred by the statute of limitations. Generally, when resolving a Rule 12(b)(6) motion, the Court “cannot reach the merits of an affirmative defense, such as the defense that the plaintiff's claim is time-barred.” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). But the Court may grant a Rule 12(b)(6) motion based on an affirmative defense when that defense clearly appears on the face of the complaint. See id. Here, Galvagna's Complaint is clear ...

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