United States District Court, D. Maryland, Southern Division
PATRICK HEALY and ELLEN C. HEALY Plaintiffs,
BWW LAW GROUP, LLC and SUNTRUST MORTGAGE, INC., Defendants.
W. Grimm United States District Judge
separate occasions over the past decade, Plaintiffs Patrick
and Ellen Healy (“the Healys”) fell behind on
mortgage payments for their property at 7552 Pepperell Drive,
Bethesda, Maryland (“the Property”). Each time,
the Healys' lender, Defendant SunTrust Mortgage, Inc.
(“SunTrust”) initiated foreclosure proceedings,
which the Healys halted by making payments to bring their
loan current. The Healys filed suit against SunTrust and its
law firm, Defendant BWW Law Group, LLC (“BWW”)
alleging violations of the Maryland Consumer Protection Act
(“MCPA”), Md. Code Ann. Com. Law §§
13-101 to -501; Maryland Consumer Debt Collection Act
(“MCDCA”), Md. Code Ann. Com. Law §§
14-201 to -204; and the Federal Racketeer Influence Corrupt
Organizations Act (“RICO”), 18 U.S.C.
§§ 1961-68. ECF No. 1. Specifically, the Healys
claim they are entitled to damages because Defendants
initiated two of the four foreclosure proceedings by filing
robo-signed documents (i.e. foreclosure documents signed
without personal knowledge of the contents) and because BWW
misquoted the amount necessary for the Healys to bring their
loan current in 2014. Am. Compl., ECF No. 18. Defendants have
moved to dismiss, ECF Nos. 19, 20, and the parties have fully
briefed the motions, BWW Mem., ECF No. 19-1; SunTrust Mem.,
ECF No. 20; Pls.' Opp'n, ECF No. 23; BWW Reply, ECF
No. 25; SunTrust Reply, ECF No. 26. No hearing is necessary.
Loc. R. 105.6 (D. Md.). Fourth Circuit authority bars
recovery under the MCPA and MCDCA for
robo-signature-initiated foreclosure proceedings on valid,
collectible debt, and the Healys' Amended Complaint fails
to state a RICO claim, but they have stated a MCPA claim
related to the 2014 overcharge. Accordingly, I will grant
BWW's Motion to Dismiss, and I will grant SunTrust's
Motion in part and deny it in part.
December 2006, the Healys obtained an $842, 000 promissory
note from SunTrust secured by a Deed of Trust on their
Property. Am. Compl. ¶ 7. In 2008, the Healys began
falling behind on their mortgage payments. Id.
¶ 9. That year, SunTrust's counsel, BWW, initiated a
foreclosure suit against the Healys, which SunTrust dismissed
in May 2009 after the Healys remitted $66, 000 to bring the
loan current. Id. ¶¶ 10-12. Shortly
thereafter, the Healys became delinquent on their loan again,
and BWW filed a second foreclosure suit against the borrowers
on SunTrust's behalf in December 2009. Id.
¶ 14. The Healys once again remitted a payment to bring
the loan current, prompting SunTrust to dismiss the case.
Id. ¶¶ 35-36. The cost of bringing the
loan current a second time caused the Healys to file for
bankruptcy in the U.S. Bankruptcy Court for the District of
Maryland during the pendency of the foreclosure suit.
Id. ¶¶ 15, 37-38.
2012, the Maryland Attorney Grievance Commission suspended
BWW attorney Jacob Geesing for instructing non-attorneys to
sign his name to foreclosure documents and notaries to
notarize them, conduct known colloquially as robo-signing.
Id. ¶¶ 16-20. The Maryland Secretary of
State also removed BWW notaries for following Geesing's
directives. Id. ¶ 21. On December 30, 2012, the
Healys applied to and participated in the federal
government's Independent Foreclosure Review program,
id. ¶ 27, which among other things,
“sought relief for victims of robo-signing” and
culminated in a commitment from lenders under investigation,
including SunTrust, to discontinue robo-signing practices and
to compensate injured borrowers, ” id. ¶
29. Based on their participation in the program, the Healys
received a small payment from SunTrust. Id. at 32.
December 2013, the Healys again fell behind on mortgage
payments, prompting BWW to file a third foreclosure suit on
SunTrust's behalf in the following year. Id.
¶¶ 41-42. This time, the Healys questioned the
validity of signatures on the 2014 foreclosure filings and
retained a handwriting expert, who allegedly concluded that
both the second and third foreclosure filings contained
signature discrepancies. Id. ¶¶ 43-45.
Notwithstanding their concerns, the Healys inquired how much
they would need to pay in order to bring the loan current
again. Id. ¶ 49. BWW initially quoted an amount
of $246, 733.25, but when the Healys attempted to pay
SunTrust, BWW in informed the borrowers that the actual
payoff amount was $248, 833.25. Id. ¶¶
50-52. After the Healys paid the requested amount, thereby
avoiding the foreclosure sale, BWW informed them that its
revised estimate had in fact been too high and that SunTrust
owed them a refund of an unspecified amount, which they
allegedly never received. Id. ¶¶ 53-55.
2015, after the Healys again fell behind in their mortgage
payments, a different law firm initiated a fourth foreclosure
suit on SunTrust's behalf against the Healys, which the
lender dismissed after the borrowers brought the mortgage
current once again. Id. ¶¶ 63-64, 67-68;
Ltr. from Brock & Scott, PLLC to Residents at 7552
Pepperell Drive, Bethesda, MD 20817, Am. Compl. Ex. 19, ECF
Rule of Civil Procedure 12(b)(6) provides for “the
dismissal of a complaint if it fails to state a claim upon
which relief can be granted.” Velencia v.
Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md.
Dec. 13, 2012). This rule's purpose “is to test the
sufficiency of a complaint and not to resolve contests
surrounding the facts, the merits of a claim, or the
applicability of defenses.” Id. (quoting
Presley v. City of Charlottesville, 464 F.3d 480,
483 (4th Cir. 2006)). To that end, the Court bears in mind
the requirements of Fed.R.Civ.P. 8, Bell Atlantic Corp.
v. Twombly, 550 U.S. 544 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662 (2009), when considering a motion to
dismiss pursuant to Rule 12(b)(6). Specifically, a complaint
must contain “a short and plain statement of the claim
showing that the pleader is entitled to relief, ”
Fed.R.Civ.P. 8(a)(2), and must state “a plausible claim
for relief, ” as “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice, ” Iqbal, 556 U.S.
at 678-79. See Velencia, 2012 WL 6562764, at *4
(discussing standard from Iqbal and
Twombly). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556
U.S. at 678.
9(b) states that “in alleging a fraud or mistake, a
party must state with particularity the circumstances
constituting the fraud or mistake.” Fed.R.Civ.P. 9(b).
Such allegations [of fraud] typically “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.'
” Piotrowski v. Wells Fargo Bank, N.A., No.
DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan. 22, 2013)
(quoting Superior Bank, F.S.B. v. Tandem Nat'l
Mortg., Inc., 197 F.Supp.2d 298, 313-14 (D. Md. 2000)).
All of the Healys' claims are rooted in fraud
allegations, so heightened pleading standards apply. See
Haley v. Corcoran, 659 F.Supp.2d 714, 724 & n.10 (D.
Md. 2009) (applying Fed.R.Civ.P. 9(b) to MCPA claim);
Murray v. Bierman, Geesing, Ward & Wood, LLC,
No. RWT-11-1623, 2012 WL 4480679, at *4 (D. Md. Sept. 27,
2012) (noting applicability of Fed.R.Civ.P. 9(b) to MCDCA
claim); Kimberlin v. Hunton & Williams LLP, No.
GJH-15-723, 2016 WL 1270982, at *7 (D. Md. Mar. 29, 2016)
(applying Fed.R.Civ.P. 9(b) to RICO claim based on mail or
and MCDCA Claims
Statute of Limitations
initial matter, SunTrust and BWW argue that the Healys'
MCDCA and MCPA claims (Counts I and II) relating to the 2009
foreclosure suit are time-barred. SunTrust Mem. 6-8; BWW Mem.
9-10. “Claims under the MCPA and MCDCA are subject to a
three-year statute of limitations.” Ayres v. Ocwen
Loan Servicing LLC, 129 F.Supp.3d 249, 272 (D. Md. 2015)
(citing Md. Code Ann. Cts. & Jud. Proc. 5-101). And
claims under each statute accrue “when the claimant in
fact knew or reasonably should have known of the
wrong.” Id. (quoting Walton v. Wells Fargo
Bank, N.A., No. AW13-428, 2013 WL 3177888, at *6 (D. Md.
June 21, 3013)). As the Healys filed their Complaint on
December 1, 2015, any facts that they knew or reasonably
should have known prior to December 1, 2012 cannot form the
foundation of their allegations. The Healys claim they did
not know about the alleged robo-signing until 2014, when
their retained handwriting expert noted signature
discrepancies in the filings for the second and third
foreclosure suits. Pls.' Opp'n 9. Plainly, this
cannot be. As both Defendants ...