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Neto v. Rushmore Loan Management Services, Inc.

United States District Court, D. Maryland

March 7, 2017




         Presently pending and ready for resolution in this consumer lending case are motions to dismiss filed by Defendant Alba Law Group, P.A. (“Alba”) (ECF No. 5) and Defendant Rushmore Loan Management Services, Inc. (“Rushmore”) (ECF No. 9). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motions to dismiss will be granted.

         I. Background [1]

         To purchase his home in 2004, Plaintiff Joaquim Neto (“Plaintiff”) agreed to a note and deed of trust with Wells Fargo Bank, N.A. (“Wells Fargo”). (ECF No. 1 ¶ 2). Plaintiff eventually defaulted on his loan, and in 2012 Wells Fargo or its agents initiated foreclosure proceedings in the Circuit Court for Prince George's County, Maryland. (ECF Nos. 1 ¶ 2; 5-3, at 1). During the foreclosure proceedings, Wells Fargo assigned the deed of trust to U.S. Bank National Association (“US Bank”). (Id. ¶ 3). According to the complaint, Rushmore became Plaintiff's mortgage servicer as a result of this assignment. (Id. ¶ 4). The complaint is not clear as to when Alba, a law group that specializes in debt collection and litigation, became involved, but, at some point, Alba began working with Rushmore to litigate the foreclosure and debt collection. (Id. ¶¶ 66, 78).

         After Rushmore became the servicer of his mortgage loan, Plaintiff requested an application for loan modification. (Id. ¶ 19). Plaintiff's agent then submitted Plaintiff's application and began negotiating for a loan modification with Rushmore. (Id. ¶¶ 20-22). On April 8, 2015, a Rushmore representative called Plaintiff and notified him that his loan modification request had been denied. (Id. ¶ 25). Plaintiff's agent contacted Rushmore seeking an explanation for the denial of the loan modification application. (Id. ¶¶ 19, 27). Although Plaintiff had never submitted any bank statements to Rushmore, a Rushmore representative initially told Plaintiff's agent that the loan modification had been denied because of information in his bank statements. (Id. ¶ 29). The following day, however, Rushmore emailed Plaintiff a copy of a letter denying his request and indicating that his application had been denied because the amount of Plaintiff's “good faith down payment” was insufficient to offer a loan modification. (ECF Nos. 1 ¶ 31; 1-1, at 2).

         To prevent a foreclosure sale while he sought loan modification, Plaintiff had filed bankruptcy proceedings in 2013 in the U.S. Bankruptcy Court for the District of Maryland, which led to an automatic stay in the foreclosure proceedings. (ECF No. 1 ¶¶ 20, 39). On June 5, 2015, the bankruptcy court removed the stay in the foreclosure proceedings and allowed Rushmore to move forward toward foreclosure. (Id. ¶ 39). On September 15, Rushmore completed the foreclosure sale. (Id. ¶ 40).

         On October 14, 2015, Plaintiff filed a motion in the foreclosure proceeding to (1) excuse noncompliance with the filing deadline, (2) vacate the sale, and (3) stay or dismiss the foreclosure proceedings (the “Motion to Vacate Sale”). (ECF No. 5-5). In it he raised several purported violations of the Real Estate Settlement and Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq., including failure to provide accurate information under 12 C.F.R. § 1024.40(b)(1), failure to implement proper loss mitigation evaluation policies under section 1024.38(b)(2)(v), violations of the “dual tracking” prohibition in section 1024.41(g), and inadequate denial disclosure under section 1024.41(d). (ECF No. 5-5, at 17, 19, 20, 22). On March 31, 2016, the circuit court denied Plaintiff's motion, finding that Plaintiff had “fail[ed] to identify any legitimate procedural irregularities” in the foreclosure sale and that there was “no good cause to excuse the untimeliness [because his] motion does not state a valid defense or present meritorious argument.” (ECF No. 5-6).

         On April 8, 2016, Plaintiff filed the instant action. (ECF No. 1). In his nine claims, he raises the same four violations of RESPA (Counts I-IV); claims for negligence (Count V) and civil conspiracy (Count VI); and violations of the Maryland Consumer Debt Collection Act (Count VII), the Maryland Consumer Protection Act (Count VIII), and the Fair Debt Collection Practices Act (Count IX). (Id.). Plaintiff alleges violations by Rushmore in all nine counts, and Alba's participation in, and liability for, Counts VI, VII, and IX. (Id.). Alba filed its pending motion to dismiss on May 3. (ECF No. 5). Plaintiff responded May 19 (ECF No. 7), and Alba replied June 3 (ECF No. 8). Rushmore filed its motion to dismiss on July 7. (ECF No. 9). Plaintiff responded to that motion on July 25 (ECF No. 10), and Rushmore replied on August 11 (ECF No. 13).

         II. Standard of Review

         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). A complaint need only satisfy the standard of Rule 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “Rule 8(a)(2) still requires a ‘showing, ' rather than a blanket assertion, of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n.3 (2007). That showing must consist of more than “a formulaic recitation of the elements of a cause of action” or “naked assertion[s] devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

         At this stage, all well-pleaded allegations in the complaint must be considered as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and all factual allegations must be construed in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). In evaluating the complaint, unsupported legal allegations need not be accepted. Revene v. Charles Cty. Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989). Legal conclusions couched as factual allegations are insufficient, Iqbal, 556 U.S. at 678, as are conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged, but it has not ‘show[n] that the pleader is entitled to relief.'” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). Thus, “[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

         Generally, pro se pleadings are liberally construed and held to a less stringent standard than pleadings drafted by lawyers. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)); Haines v. Kerner, 404 U.S. 519, 520 (1972). Liberal construction means that the court will read the pleadings to state a valid claim to the extent that it is possible to do so from the facts available; it does not mean that the court should rewrite the complaint to include claims never presented. Barnett v. Hargett, 174 F.3d 1128, 1132 (10th Cir. 1999). That is, even when pro se litigants are involved, the court cannot ignore a clear failure to allege facts that support a viable claim. Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990); Forquer v. Schlee, No. RDB-12-969, 2012 WL 6087491, at *3 (D.Md. Dec. 4, 2012) (citation and internal quotation marks omitted) (“[E]ven a pro se complaint must be dismissed if it does not allege a plausible claim for relief.”).

         III. Analysis

         A. ...

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