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McCray v. Samuel I. White, P.C.

United States District Court, D. Maryland

March 31, 2017

RENEE L. MCCRAY, Plaintiff,
v.
SAMUEL I. WHITE, P.C., et al., Defendants.

          MEMORANDUM OPINION

          George L. Russell, III United States District Judge.

         THIS MATTER is before the Court on Defendants'[1] Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, for Summary Judgment under Rule 56. (ECF No. 7). The Motion is ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2016). For the reasons outlined below, the Court will grant in part and deny without prejudice in part the Motion.

         I. BACKGROUND [2]

         This is the third action Plaintiff Renee L. McCray has filed in this Court to challenge the attempted foreclosure of her home at 109 North Edgewood Street, Baltimore, Maryland (the “Property”).[3] Subject to one exception that the Court will outline below, in this action, McCray focuses on the conduct of Defendants after the United States Bankruptcy Court for the District of Maryland (the “Bankruptcy Court”) granted her a discharge in 2014.[4] Though McCray alleged in previous actions that Defendants violated the Fair Debt Collection Practices Act (“FDCPA”)[5] in attempting to foreclose on the Property, she asserts that this action arises out of “new and continuous violations of the FDCPA.” (Compl. ¶¶ 3, 16, ECF No. 1). McCray maintains that Defendants “continue to foreclose on [the Property] without providing verified evidence [that] they have a legal right to do so.” (Id. ¶ 16).

         In September 2013, while a foreclosure was pending on the Property, McCray filed for Chapter 13 bankruptcy in the Bankruptcy Court. (Id. ¶ 24). The Bankruptcy Court later converted McCray's bankruptcy petition into one under Chapter 7. (Id. ¶ 26). In July 2014, the Bankruptcy Court ordered that McCray's debts be discharged. (Id. ¶ 27). In December 2015, the Bankruptcy Court issued a final decree and closed McCray's bankruptcy case. (Id. ¶ 28).

         On January 11, 2016, Defendants filed in McCray's state foreclosure case a “Notice of Termination of Automatic Stay of 11 U.S.C. Section 362.” (Id. ¶ 29). Defendants attached the final decree from McCray's bankruptcy case and asserted that they intended to resume foreclosure proceedings. (Id.). McCray received Defendants' January 11 notice on January 13, 2016. (Id. ¶ 30). That same day, McCray sent Defendants a “Notice to Debt Collector” in which she afforded Defendants ten days to (1) “provide verified evidence that they had a right to continue the foreclosure action after the bankruptcy discharge, ” (id. ¶ 31); (2) rebut her notice “line by line, ” (id.); (3) “cease and desist any and all foreclosure actions that have not been rendered by a judgment issued through a court of record, ” (id. ¶ 32); and (4) “provide a verified proof of claim that indicates that you are the holder in due course, ” (ECF No. 1-2 at 4). Defendants failed to respond to McCray's January 13, 2016 notice. (Compl. ¶ 34).

         On February 25, 2016, McCray received from Defendants a notice dated February 22, 2016 that her home would be sold in a foreclosure sale. (Id. ¶ 35). The notice provided the following: “Pursuant to Maryland Rule 14-210 and pursuant to Section 7-105.2 of the Real Property Article of the Maryland Code, we are hereby notifying you that the foreclosure sale of [the Property] has been scheduled.” (ECF No. 1-4 at 3). Defendants attached a copy of the newspaper advertisement that they intended to run to set forth the time, place, and terms of the foreclosure sale (the “Advertisement”). (Compl. ¶ 35). The Advertisement states that “the holder of the indebtedness secured by this Deed of Trust [has] appointed [Defendants]” to carry out the foreclosure sale. (ECF No. 1-4 at 4). McCray alleges that Defendants ran the Advertisement in The Daily Record on March 4, 11, and 18, 2016 in the “Public Notice” section. (Compl. ¶ 45). She further alleges that between March 4 and March 21, 2016, Defendants advertised the foreclosure sale of the Property on the website of Harvey West Auctioneers, LLC. (Id. ¶ 44).

         On March 2, 2016, McCray sent Defendants a “Demand Notice to Cease and Desist Foreclosure Sale.” (Id. ¶ 38). In addition to ceasing and desisting from selling her home, McCray's notice contained two demands. First, Defendants must “provide within 72 hours verification of the debt they were collecting, since the alleged debt was discharged on July 14, 2014 in [the Bankruptcy Court].” (Id. ¶ 39). Second, Defendants must “provide within 72 hours, verification that [the] SIWPC Defendants had an enforceable security interest to take any non-judicial action to effect dispossession or disablement of [the Property].” (Id. ¶ 40).

         When Defendants did not respond to McCray's March 2, 2016 notice, on March 14, 2016, she sent them a “Notice of Fault and Opportunity to Cure - Demand Notice to Cease and Desist and Violations of the [FDCPA].” (Id. ¶ 41). McCray again requested that Defendants validate the debt. (ECF No. 1-5 at 3). When Defendants failed to respond, on March 21, 2016, McCray sent them a “Notice of Default in Dishonor and Consent to Judgment and Notice of Pending Lawsuit to Enforce Violations of the [FDCPA].” (ECF No. 1-6). In her March 21, 2016 notice, McCray appears to assert that she is entitled to a default judgment that Defendants violated multiple sections of the FDCPA. (Id.).

         Near the end of her Complaint, McCray abruptly returns to events that occurred in 2013. She alleges that in February 2013, Defendants filed “an illegal substitution of trustee document” in her state foreclosure case. (Compl. ¶ 48). McCray does not, however, elaborate on why the substitution was illegal.

         McCray sued Defendants in this Court on April 4, 2016. (ECF No. 1). She alleges that Defendants violated seven subsections of Section 1692 of the FDCPA: (1) c(a); (2) c(b); (3) c(c); (4) e(2)(A); (5) f(6)(A); (6) g(b); and (7) j(a). Defendants filed their Motion on May 27, 2016. (ECF No. 7). McCray filed an opposition on July 1, 2016. (ECF No. 11). To date, the Court has no record that Defendants replied.

         II. DISCUSSION

         A. Standard of Review 1. Rule 12(d)

         Defendants style their Motion as a motion to dismiss under Rule 12(b)(6) or, in the alternative, for summary judgment under Rule 56. A motion styled in this manner implicates the Court's discretion under Rule 12(d). See Kensington Vol. Fire Dept., Inc. v. Montgomery Cty., 788 F.Supp.2d 431, 436-37 (D.Md. 2011), aff'd sub nom., Kensington Volunteer Fire Dep't, Inc. v. Montgomery Cty., 684 F.3d 462 (4th Cir. 2012). This Rule provides that when “matters outside the pleadings are presented to and not excluded by the court, the [Rule 12(b)(6)] motion must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d). The Court “has ‘complete discretion to determine whether or not to accept the submission of any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion and rely on it, thereby converting the motion, or to reject it or simply not consider it.'” Wells-Bey v. Kopp, No. ELH-12-2319, 2013 WL 1700927, at *5 (D.Md. Apr. 16, 2013) (quoting 5C Wright & Miller, Federal Practice & Procedure § 1366, at 159 (3d ed. 2004, 2012 Supp.)).

         The United States Court of Appeals for the Fourth Circuit has articulated two requirements for proper conversion of a Rule 12(b)(6) motion to a Rule 56 motion: notice and a reasonable opportunity for discovery. See Greater Balt. Ctr. for Pregnancy Concerns, Inc. v. Mayor of Balt., 721 F.3d 264, 281 (4th Cir. 2013). When the movant expressly captions its motion “in the alternative” as one for summary judgment and submits matters outside the pleadings for the court's consideration, the parties are deemed to be on notice that conversion under Rule 12(d) may occur. See Moret v. Harvey, 381 F.Supp.2d 458, 464 (D.Md. 2005). The Court “does not have an obligation to notify parties of the obvious.” Laughlin v. Metro. Wash. Airports Auth., 149 F.3d 253, 261 (4th Cir. 1998).

         Ordinarily, summary judgment is inappropriate when “the parties have not had an opportunity for reasonable discovery.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011). Yet, “the party opposing summary judgment ‘cannot complain that summary judgment was granted without discovery unless that party had made an attempt to oppose the motion on the grounds that more time was needed for discovery.'” Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 244 (4th Cir. 2002) (quoting Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 961 (4th Cir. 1996)). To raise sufficiently the issue that more discovery is needed, the non-movant must typically file an affidavit or declaration under Rule 56(d), explaining the “specified reasons” why “it cannot present facts essential to justify its opposition.” Fed.R.Civ.P. 56(d).

         The Fourth Circuit has warned that it “‘place[s] great weight on the Rule 56[d] affidavit' and that ‘a reference to Rule 56[d] and the need for additional discovery in a memorandum of law in opposition to a motion for summary judgment is not an adequate substitute for a Rule 56[d] affidavit.'” Harrods, 302 F.3d at 244 (quoting Evans, 80 F.3d at 961). Failing to file a Rule 56(d) affidavit “is itself sufficient grounds to reject a claim that the opportunity for discovery was inadequate.” Id. (quoting Evans, 80 F.3d at 961). Nevertheless, the Fourth Circuit has indicated that there are some limited instances in which summary judgment may be premature notwithstanding the non-movants' failure to file a Rule 56(d) affidavit. See Id. A court may excuse the failure to file a Rule 56(d) affidavit when “fact-intensive issues, such as intent, are involved” and the nonmovant's objections to deciding summary judgment without discovery “serve[] as the functional equivalent of an affidavit.” Id. at 245 (quoting First Chicago Int'l v. United Exch. Co., 836 F.2d 1375, 1380-81 (D.C.Cir. 1988)).

         Here, the Court concludes that both requirements for conversion are satisfied. The parties were on notice that the Court might resolve Defendants' Motions under Rule 56 because Defendants style their Motions in the alternative for summary judgment and present extensive extra-pleading material for the Court's consideration. See Moret, 381 F.Supp.2d at 464. McCray neither objects to converting Defendants' Motion nor presents a Rule 56(d) affidavit, or a functional equivalent, expressing a need for discovery. Instead, she attaches her own extra-pleading material for the Court's consideration. Accordingly, the Court will construe Defendants' Motion as one for summary judgment.

         2. Rule 56

         In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the nonmovant, drawing all justifiable inferences in that party's favor. Ricci v. DeStefano, 557 U.S. 557, 586 (2009); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)). Summary judgment is proper when the movant demonstrates, through “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . admissions, interrogatory answers, or other materials, ” that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A).

         Once a motion for summary judgment is properly made and supported, the burden shifts to the nonmovant to identify evidence showing there is genuine dispute of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). The nonmovant cannot create a genuine dispute of material fact “through mere speculation or the building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985) (citation omitted).

         A “material fact” is one that might affect the outcome of a party's case. Anderson, 477 U.S. at 248; see also JKC HoldingCo. v. Wash. Sports Ventures, Inc.,264 F.3d 459, 465 (4th Cir. 2001) (citing Hooven-Lewis v. Caldera,249 F.3d 259, 265 (4th Cir. 2001)). Whether a fact is considered to be “material” is determined by the substantive law, and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248; accord Hooven-Lewis, 249 F.3d at 265. A “genuine” dispute concerning a “material” fact arises when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. Anderson, 477 U.S. at 248. If the nonmovant has failed to make a sufficient showing on an essential element of her case where she has the burden of proof, “there can be ‘no genuine ...


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