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Maduke v. Capital One Financial Corp.

United States District Court, D. Maryland

March 24, 2017



          GEORGE J. HAZEL United States District Judge

         Plaintiff Ngozi Madukwc brings this case against Defendants Capital One Financial Corporation ("Capital One"). Federal Home Loan Mortgage Corporation ("Freddie Mac"'), and Cohn. Goldberg and Deutsch. LLC ("CGI)"*}, in connection with the foreclosure and sale of her home. ECF No. 12. Pending before the Court are two Motions to Dismiss, the first tiled by Defendants Capital One and Freddie Mac. ECF No. 13. and the second filed by Defendant C'GD. ECF No. 16. These issues have been fully briefed and a hearing is unnecessary. Loc. R. 105.6 (D. Md. 2016). For the reasons slated below, the Court will grant Defendants' motions and dismiss the case.

         I. BACKGROUND [1]

         On June 27. 2007, Plaintiff executed an adjustable rate note and deed of trust with BF Saul Mortgage Company ("BF Saul"), in order to purchase a home located at 53.1 Cedar Spring Street. Gaithersburg. Maryland 20877. ECF No. 12 ¶ 2: see also ECF No. 12-1 at 2. [2] BF Saul was subsequently acquired by Capita! One in 2008. when Capital One merged with BF SauFs parent company. ECF No. 12 ¶ 9.

         At some point during the intervening years. Plaintiff defaulted on her loan. Id. ¶ 11. On July 8. 2013. Capital One appointed CGD as substitute trustee for Plaintiffs loan. Id. ¶ 12: see also ECF No. 12-3. On July 12. 2013. CGD initiated foreclosure proceedings against Plaintiff in Montgomery County Circuit Court, filing copies of the note and deed of trust for the 533 Cedar Spring Street property in support of their claim. ECF No. 12 ¶ 13: see also C 'GD v. MaDukwe, 379030V (Mont. Cty. Cir. Ct. 2017). Dkt. No. 1[3] Plaintiff alleges that this note is a forgery and that Capital One "never owned and held Plaintiffs note." ECF No. 12 ¶¶ 33-34. Thus. Plaintiff claims that Capital One lacked the authority to appoint CGD as trustee, and CGD consequently lacked the authority to commence foreclosure proceedings. Id. ¶41.

         During the foreclosure proceedings. Plaintiff sought a loan modification from Capital One. Id. ¶ 11. On September 15, 2015. Plaintiffs request for a loan modification was denied, hi: see also ECF No. 12-2. In the letter. Capital One explained that Plaintiff had already received a loan modification under the Home Affordable Modification Program ("HAMP"") in 2010. ECF No. 12-2 at 2. She was informed that her subsequent attempts at loan modifications in 2013 and 2014 were denied because of her 2010 loan modification, and the fact that subsequent modifications would not have reduced her monthly mortgage payment. Id. The letter also explained that Freddie Mac was the investor in her loan and that Capital One was her loan servicer, Id. Thus. Capital One was required to "service [Plaintiff si home loan per the guidelines of [Plaintiffs] home loan's investor FHLMC ("Freddie Mac'").'" Id.

         Upon learning that Freddie Mac. rather than Capital One. was the investor of her loan. Plaintiff sent a letter to Capital One on October 1 0. 2015. requesting more information ''regarding Freddie Mac's involvement." and raising concerns "regarding the validity...of the note." ECF No. 12 ¶¶ 42-43. Plaintiff alleges that Capital One refused to acknowledge acceptance of her letter or respond to her requests. Id. * 44. Plaintiff claims that a response to her request "would have shown that Capital One had no authority to foreclose or take any other action in connection [with the property!.""Id. ¶ 78.

         On December 29. 2015. the Montgomery County Circuit Court issued an order ratifying the foreclosure sale, and altera hearing on March 8. 2016 in which Plaintiff was present, granted possession of the property to the foreclosure purchaser. See COD. 379030V at Dkt. Nos. 41. 48. Plaintiff subsequently tiled a motion to reconsider the court's ruling, and in a separation motion. moved "to stay proceedings pending determination of whether Capital One currently owns the notes and loan." Id. at Dkt. Nos. 51. 56. Plaintiff also submitted supplemental points and authorities "demanding dismissal and/or stay for failure to disclose secured party Freddie Mac." Id. at Dkt. 59. In response to these motions, the court issued orders denying Plaintiffs request for reconsideration and denying Plaintiff "all relief requested by [ Plaintiff s] Motion to Stay Proceedings pending determination of whether Capital One currently owns the note and loan." Id. at Dkt. Nos. 72. 104. A final order ratifying the foreclosure sale was issued shortly thereafter. Id. at Dkt. No. 106. Plaintiff continued to vigorously contest the foreclosure, filing several motions for reconsideration and interlocutory appeals to the Maryland Court of Special Appeals. See id at Dkt. Nos. 99. 111, 114, and 116.

         Plaintiff initiated this case on March 16. 2016. ECF No. 1. and subsequently amended her complaint on April 20. 2016. ECF No. 12. In her Amended Complaint, she alleges that Capital One, and thus COD. did not have the right to foreclose on her property because the note they submitted to the Montgomery County Circuit Court was fraudulent. Id. ¶ c 33-34; 41. She also alleges that Capital One hid Freddie Mac*s involvement in the loan by failing to respond to her request for information, which caused her to lose her home to "an entity that had no true interest[] in her loan." Id. * ¶¶49-53. Plaintiff claims that Defendants' actions constitute fraud. civil conspiracy and tortious interference with a contract, and also alleges violations of the Maryland Consumer Debt Collection Act ("MCDCA"), the Maryland Consumer Protection Act ("MCPA"). the Real Estate Settlement Procedures Act ("RBSPA"), and the Fair Debt Collection Practices Act ("FDCPA"). Id. ¶¶ 54-86. In addition. Plaintiff requests that the Court issue two declaratory judgments, the first stating that Maryland's foreclosure system is inadequate to litigate counterclaims and violates the Due Process Clause of the Fourteenth Amendment, and the second that "no Defendant named in this action has any right, title or interest in her Note." Id. at 28-36. On May 4. 2016. Defendants Capital One and Freddie Mac filed a Motion to Dismiss for lack of subject matter jurisdiction, and for failure to state a claim. ECF No. 1 3. On May 9. 2016. Defendant COD filed a Motion to Dismiss reiterating the arguments made by the other Defendants. ECF No. 16. Plaintiff filed her responses. ECF Nos. 18 and 22. and Defendants Capitol One and Freddie Mac filed a reply, ECF No. 20.


         "It is well established that before a federal court can decide the merits of a claim, the claim must invoke the jurisdiction of the court." Miller v. Brown, 462 F.3d 312. 316 (4th Cir. 2006) (citation omitted). Once a challenge is made to subject matter jurisdiction, the plaintiff bears the burden of proving that the Court has subject matter jurisdiction. See Evans v. B.F. Perkins Co., a Div. of Standex Int'l Corp.. 166 F.3d 642. 647 (4th Cir. 1999) (citation omitted): see also Ferdinand Darenpon v. Children's Guild 742 F.Supp.2d 772. 777 (D, Md. 2010). However, the court should grant a Rule 12(b)(1) motion "only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Evans. 166 F.3d at 647.

         To survive a motion to dismiss invoking Fed. R. Civ. Pro. 12(b)(6). "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face." Ashcroft v. h/hal. 556 U.S. 662. 678 (2009) (citing Bell Atlantic C'orp. v. Twombty, 550 U.S. 544. 570 (2007)). "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. "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) ("a plaintiffs obligation to provide the "grounds" of his 'entitle|ment] to relief requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do.").

         Fed. R. Civ. P. 12(b)(6)"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." Presley v. City of Charlottesville. 464 F.3d 480. 483 (4th Cir. 2006) (citation and internal quotation marks omitted). When deciding a motion to dismiss under Rule 12(b)(6). a court "must accept as true all of the factual allegations contained in the complaint." and must "draw all reasonable inferences [from those lactsj in favor of the plaintiff." F..I. du Pant de Nemours & Co. v. Kolon Indus.. Inc.. 637 F.3d 435. 440 (4th Cir. 2011) (citations and internal quotation marks omitted). Complaints filed by pro se plaintiffs, as here, are "to be liberally construed" and "must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus. 551 U.S. 89. 94 (2007). I however. the Complaint must contain more than "legal conclusions. elements of a cause of action, and bare assertions devoid of further factual enhancement." Nemet Chevrolet. Ltd v. Inc.. 591 F.3d 250. 255 (4th Cir. 2009).

         Pursuant to Federal Rule of Kvidencc 201. a court, at any stage of the proceedings, may "judicially notice a fact that is not subject to reasonable dispute." provided that the fact "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b)(2). These facts may be properly considered by the court without converting a motion to dismiss into a motion for summary judgment, as long as the facts are construed in the light most favorable to the plaintiff. Zak v. Chelsea Therapeutics bit 7. Ltd..780 F.3d 597. 607 (4th Cir. 2015). Specifically, when, as here, Defendants have raised the defense of res judicata, "a court may judicially notice facts from a prior judicial proceeding." Ashe v. PNC Fin. Sens. Grp.. Inc..165 F.Supp.3d 357. 360 (D. Md. 2015) (quoting Brooks v. Arthur.626 F.3d 194. 199 n.6 (4th Cir. 2010)). The consideration of the affirmative defense of res judicata is appropriate at ...

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