United States District Court, D. Maryland
CHINEME C. AGHAZU, Plaintiff,
SEVERN SAVINGS BANK, FSB, et al., Defendants.
J. MESSITTE UNITED STATES DISTRICT JUDGE.
se Plaintiff Chineme Aghazu (Aghazu) has sued Severn
Savings Bank, FSB (Severn), FCI Lender Services, Inc. (FCI),
and Pontus SB Trust (Pontus). In her original Complaint (ECF
No. 1), Aghazu alleged violations of the Truth-in-Lending Act
(TILA), 15 U.S.C. § 1601, et seq., the Fair
Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692,
et seq., the Maryland Consumer Debt Collections Act
(MCDCA), Md. Code Ann., Com. Law, § 14-201, et
seq., and the Real Estate Settlement Procedures Act
(RESPA), 12 U.S.C. § 2601, et seq.
an initial round of Motions to Dismiss (ECF Nos. 5, 10, 18),
followed by a hearing in open court, the Court issued a
Memorandum Opinion and Order dated March 1, 2016 (ECF Nos.
24, 25), granting Severn's Motion to Dismiss and
Supplemental Motion to Dismiss (ECF Nos. 5, 18) and granting
in part and denying in part FCI and Pontus' Motion to
Dismiss (ECF No. 10). In so doing, the Court dismissed with
prejudice Aghazu's TILA and FDCPA claims (Counts I, II,
and III) and dismissed without prejudice her MCDCA and RESPA
claims (Counts IV and V),  granting her leave to amend those
counts. Aghazu did file an Amended Complaint (ECF No. 29),
and thereafter FCI and Pontus (collectively,
“Defendants”) filed a joint Motion to Dismiss
(ECF No. 35).
September 6, 2016, the Court held a one-day Bench Trial to
address a limited set of issues that it believed it needed to
resolve before it could rule on Defendants' Motion to
Dismiss. The next day the Court ruled, as a matter
of law, that Aghazu was not liable for the approximately $14,
000 in attorneys' fees and costs claimed by Severn or
Defendants that had been discharged in the Consent Order
following Aghazu's bankruptcy proceedings or for fees and
costs purportedly incurred in connection with a foreclosure
proceeding that was never filed. ECF No. 56. The Court
further determined that Aghazu was not personally
liable to Severn or Defendants in the amount of $12, 572.97
for the Fiscal Year 2010 property taxes paid to Prince
George's County by Severn on her behalf, such that she
should not have been assessed the amount of the unpaid taxes
in her current mortgage account.
filed an Opposition to Defendants' Motion to Dismiss
Amended Complaint (ECF No. 60) to which Defendants did not
following reasons, Defendants' Motion to Dismiss Amended
Complaint (ECF No. 35) is GRANTED IN PART and DENIED IN PART.
FACTS AND PROCEDURAL HISTORY
The Mortgage Loan from Severn
October 2003, Aghazu obtained a mortgage Loan
(“Loan”) from Severn in the amount of $265,
000.00. Compl. ¶ 8, ECF No. 1. The Loan was evidenced by
a Note (“Note 1”) secured by a Deed of Trust
encumbering Aghazu's home at 7704 Northern Avenue, Glenn
Dale, MD 20769 (the “Property”). Compl., Exs. 1,
2, ECF No. 1-1. Aghazu and Severn subsequently agreed to
modify the Loan on two occasions: first, on February 11, 2008
(increasing the Loan amount to $340, 000.00); later, on
August 28, 2008 (increasing the Loan amount to $380, 000.00).
Compl. ¶¶ 11-12; Compl. Exs. 3, 4, ECF No. 1-1. In
addition to increasing the amount of the Loan in August 2008,
the parties executed a second Note (“Note 2”),
which was a modified version of Note 1. Compl. Exs. 4, 5,
ECF No. 1-1. Under the terms of Note 2, Aghazu was obligated
to amortize the $380, 000.00 mortgage loan at 7.0% interest
per annum, with monthly payments in the amount of $2, 528.15.
Compl. Ex. 5.
Fiscal Year 2010 Taxes and Insurance
from the foregoing, in 2009, Severn paid $12, 572.97 to
Prince George's County to cover the yearly property taxes
on Aghazu's Property. Severn also paid $1, 075.23 for
insurance. Both of these charges were debited against
Aghazu's current mortgage account which, at the time had
a positive balance of $2, 122.29, leaving a balance
purportedly owed by her of $11, 525.91.
The Bankruptcy Proceedings
August 21, 2009, Aghazu filed for Chapter 7 bankruptcy in
this Court. Ch. 7 Case No. 09-25607 (D. Md. Aug. 21, 2009).
On October 14, 2009, during the course of the Chapter 7
proceeding, with leave of the Court, she filed an adversary
proceeding against Severn, alleging violations of the TILA
and wrongful foreclosure. Ch. 7 Case No. 09-25607, Adv. No.
09-719 (D. Md. Oct. 14, 2009). In response, Severn contended
that Aghazu was in default under the Loan and that the
balance she owed thereunder was $439, 935.00, which included
outstanding principal, accrued interest, unpaid escrow
amounts, late fees, attorney's fees, and costs. Ch. 7
Case No. 09-25607, Adv. No. 09-719, ECF No. 11.
January 2010, in order to resolve their dispute, the parties
executed a Mutual Release and Settlement Agreement and
entered a Consent Order Resolving [the] Motion to Dismiss
[the] Complaint and Dismissing [the] Adversary Proceeding
(“Consent Order”). Id.; Compl. Ex. 8,
ECF No. 1-1. Pursuant to the Consent Order, Aghazu was
permitted to remain in the Property until January 1, 2011
without having to make any mortgage payments. Compl. Ex. 8
¶ 2. After that time, she was allowed to remain in the
Property, provided that she make interest-only payments at
the reduced rate of $1, 583.33 per month, and provided
further that she aggressively market the Property for sale by
December 31, 2011. Id. If Aghazu failed to close
under a contract of sale before December 31, 2011, the
Consent Order entitled Severn to exercise all the rights it
had under the original Loan documents, including Note 2.
Id. At the same time, under the terms of the Consent
Order, each party was absolved of all “claims arising
from the Lawsuit or the Borrower's procurement of the
Loan.” Id. ¶ 5. The Consent Order stated
that “[t]his Release shall unconditionally remain in
effect even if Borrower fails to close under a contract of
sale for the purchase of the Property on or before December
31, 2011, and alternatively, this release shall not bar
Lender from exercising all of its rights afforded to it under
the Loan Documents should Borrower fail to comply with the
terms of this Agreement or should closing under a contract
not be consummated on or before December 31, 2011, for the
purchase of the Property.” Id. Pursuant to the
Consent Order, both Aghazu and Severn were deemed responsible
for and left to pay their own legal fees, expenses, and
costs. Id. ¶ 7.
Aghazu's Post-Bankruptcy Occupancy of the Property and
never did sell the Property following the bankruptcy
proceeding. See Compl. ¶ 19; Pl.'s
Line to File Exhibits, Aff. Chineme Aghazu (“Aghazu
Aff.”) ¶ 1, ECF No. 20-1. Beginning January 1,
2011, however, she duly paid and has continued to pay $1,
583.33 each month toward her mortgage. She characterizes
these payments as “new principal and interest
payment[s].” See Compl. ¶ 18. It is
clear, however, that the $1, 583.33 Aghazu has been paying
corresponds to the reduced rate interest-only
payment she was obliged to pay after January 1, 2011 under
the terms of the Consent Order. Compl. Ex. 8 ¶ 5. While
the extent to which Severn may have attempted to enforce its
full rights under Note 2 after December 31, 2011 is unclear,
on at least one occasion, in August 2013, Severn did send
Aghazu a Notice of Intent to Foreclose, informing her that
she was in default under the Consent Order. Pl.'s Line to
File Exhibits, Ex. D, ECF No. 20-5.
Severn's Sale of the Loan to Pontus SB Trust and Transfer
of Servicing to FCI
December 31, 2013, Severn sold Aghazu's Loan to Pontus.
Compl. Ex. 10; see also Severn's Reply, Ex. 1,
ECF No. 7-1. On that same day, Severn notified Aghazu that it
had sold her Loan to Pontus and further advised that,
effective February 1, 2014, servicing of the Loan would be
transferred to FCI. Compl. Ex. 10, ECF No. 1-1. Aghazu avers
that she sent Severn a letter on January 6, 2014, asking for
the payoff amount of her loan “as of January
2013” (presumably she intended January 2014) Compl. Ex.
9, ECF No. 1-1, but that Severn never responded to this
request. Compl. ¶ 23.
Loan's new servicer, FCI, claims that on February 3, 2014
it sent Aghazu a Borrower Welcome Letter, advising her that
the amount due under the Loan was $394, 996.20. Compl. Ex. 15
at 0058, ECF No. 1-1. Aghazu alleges that she did not receive
this letter in February 2014, asserting that she only
obtained a copy of it in response to a November 7, 2014
Qualified Written Request (QWR) she sent to FCI. See
Aghazu Aff. ¶ 15.
Fees Charged to Aghazu and Her Attempt to Refinance
February 19, 2014, Aghazu sent a payoff request to FCI.
Compl. Ex. 11, ECF No. 1-1. On that same day, FCI sent her a
payoff statement containing the word “DRAFT” in
large letters across the paper, indicating that the amount
due under the Loan was $394, 669.00. Compl. Ex. 12 at 0188, ECF
No. 1-1. The statement included $11, 571.70 in “unpaid
charges” itemized as “negative escrow
balance” and interest. Id. On February 25,
2014, FCI sent another payoff statement to Aghazu, this time
without the word “DRAFT, ” and this time
informing Aghazu that the total amount due under the Loan was
$407, 513.49. Compl. Ex. 13, ECF No. 1-1. The February 25,
2014 payoff statement included a line item for “Unpaid
Charges” in the amount of $25, 988.36. Id. A
subsequent payment statement sent to Aghazu in October 2014
included a roughly similar figure - $26, 860.64 - designated
as “Fees” due. Compl. Ex. 15 at 0026. Aghazu
asserts that these “Unpaid Charges” or
“Fees” represented attorney's fees, property
taxes, and other items that had been waived under the terms
of the Consent Order. And, indeed, on March 24, 2014,
Aghazu received a letter from Severn stating that
“[f]rom October 2008 through December 2009, Severn had
incurred attorney fees associated with foreclosure filings,
bankruptcy filings, and negotiation, drafting and execution
of the December 15, 2009 Mutual Release and Settlement
Agreement.” Id. The letter also stated that
the amount Aghazu owed for the “negative escrow of $11,
525.91 [was] a result of [her] failure to pay real estate
taxes on the property securing the loan for [2009 to 2010],
totaling $12, 572.97.” Plf.s' Ex. 6 at Bench
this time, which is to say beginning in December 2013 and
continuing until March 2014, Aghazu says she was attempting
to refinance her mortgage with an entity known as Mortgage
One Solutions (“Mortgage One”). Aghazu Aff.
¶¶ 4, 14, 16, 17. In the process, she says, she
requested payoff figures first from Severn and then from FCI
in order to facilitate the transaction. See Id.
Aghazu claims, however, that due to the fact that the payoff
figures she eventually received from FCI erroneously showed
that she owed approximately $25, 000 in unpaid fees and
costs, Mortgage One declined to refinance her Loan. Pl.'s
Line to File Exhibits, Ex. J, ECF No. 20-11. In other words,
these additional “fees” and “costs”
which Aghazu claims were improper, caused her to lose her
opportunity to refinance. Compl. Exs. 12, 13; Pl.'s Line
to File Exhibits, Ex. J. In fact, at the September 6, 2016
Bench Trial, Aghazu called former Mortgage One Loan Officer
Harold White as a witness, who testified that Aghazu's
loan had been approved pending receipt of payoff figures from
Defendants, but that after Mortgage One received the payoff
figures including the allegedly unpaid fees and costs, her
loan was denied because the loan-to-value ratio had changed.
White's testimony to this effect is further recounted in
the text accompanying Note 18, infra.
asserts that she attempted to correct Defendants' alleged
error regarding the fees and costs in February and March
2014, after having been informed by Mortgage One that the
additional “fees” might in fact be an error
stemming from the transfer of the Loan from Severn to Pontus,
with FCI as servicer, but she was unable to convince
Defendants that they were indeed mistaken. See
Pl.'s Line to File Exhibits, Ex. J.
September 29, 2014, Pontus sent Aghazu a Notice of Intent to
Foreclose her Property. Pl.'s Line to File Exhibits, Ex.
I, ECF No. 20-10. The Notice yet again cited the unpaid fees
and costs, this time totaling $26, 697.53, payment of which
Pontus indicated would be required in order to cure
Aghazu's supposed default. Id.
Aghazu's Original Complaint, Defendants' Motions to
Dismiss, and the Court's March 1, 2016, Memorandum
Opinion and Order
27, 2015, Aghazu filed her original Complaint in this Court,
alleging that Severn and FCI had failed to provide her with
accurate payoff information, in violation of Regulation Z of
the TILA, 12 C.F.R. § 1026.36(c)(3) (Count
I); that FCI had made a false
representation in connection with the collection of her
mortgage debt in violation of the FDCPA, 15 U.S.C. §
1692e(2)(A) (Count II); that FCI had engaged in unfair debt
collection practices in violation of the FDCPA, 15 U.S.C.
1692f(1) (Count III); that both FCI and Pontus had engaged in
unlawful debt collection in violation of the MCDCA (Count
IV); and that FCI and Severn had failed to give her adequate
notice of a loan servicing transfer in violation of RESPA, 12
U.S.C. § 2605(c) (Count V).
FCI, and Pontus moved to dismiss all counts of the original
Complaint, arguing pursuant to Federal Rule of Civil
Procedure 12(b)(6) that Aghazu had failed to state a claim
upon which relief might be granted.
March 1, 2016, the Court issued a Memorandum Opinion and
Order dismissing with prejudice Aghazu's TILA and FDCPA
claims (Counts I, II, and III) because they were barred by
applicable statutes of limitations but dismissing without
prejudice her MCDCA and RESPA claims (Counts IV and V) for
failure to state a claim. As to the dismissals without
prejudice, the Court granted Aghazu leave to re-plead her