United States District Court, D. Maryland
Richard D. Bennett United States District Judge.
Stedfield Thomas (“plaintiff” or
“Thomas”) has filed this action seeking a
declaratory judgment and claiming breach of contract,
asserting that he is entitled to property insurance proceeds
jointly issued to him and defendant PHH Mortgage Services
(“PHH”), plaintiff's former mortgage
servicer, following a fire which destroyed the subject
secured property, a residence located on West Franklin Street
in Baltimore, Maryland. (ECF Nos. 2, 11.)
pending before this Court is defendants' Motion to
Dismiss (“Defendants' Motion”) (ECF No.
The parties' submissions have been reviewed, and no
hearing is necessary. See Local Rule 105.6 (D. Md.
2016). For the reasons stated below, Defendants' Motion
to Dismiss (ECF No. 10) is GRANTED, and this case is
DISMISSED WITH PREJUDICE.
was the owner of a residential property located at 934 West
Franklin Street in Baltimore, Maryland. (ECF No. 11 at ¶
8.) Plaintiff acquired the property through a mortgage loan
in the amount of $63, 900.00 provided by defendant PHH.
(Id.) The property was secured by a Deed of Trust
dated May 19, 2005. (ECF No. 10-3.) Under the terms of the
Deed of Trust, plaintiff agreed that the trustee would have
the power to sell the property upon default. (Id. at
¶ 22.) The Deed of Trust also required plaintiff to
insure the property against loss by fire and other hazards.
(Id. at ¶ 5.) The mortgage loan was later
transferred from PHH to defendant Bank of New York Mellon
Trust (“BNYM”), with PHH remaining the servicer
of the loan. (ECF No. 10-4.)
Thomas defaulted on the mortgage loan, BNYM appointed
substitute trustees who initiated foreclosure proceedings in
the Circuit Court for Baltimore City, Maryland on January 16,
2014. (ECF No. 10-6.) While the foreclosure action was
pending, the property was extensively damaged by fire on
October 9, 2014. (ECF No. 11 at ¶ 10.) On December 1,
2014, Standard Guaranty Insurance Company sent Thomas a check
in the amount of $20, 591.84 to cover the damage to the
property. (ECF No. 11 at ¶ 11.) Thomas endorsed the
check and forwarded the funds to PHH. (Id. at ¶
12.) Thomas also engaged an independent claims adjuster to
revisit the insurer's award. (Id. at ¶ 13.)
Following further investigation, plaintiff alleges that the
adjuster persuaded the insurer to award $88, 000.00 to cover
the damages in full. (Id.)
property was sold at a foreclosure sale on June 11, 2015.
(ECF No. 11 at ¶ 18.) The property was purchased by the
BNYM Trust for $45, 000.00. (ECF No. 10-7.) On August 4,
2015, Standard Guaranty Insurance Company issued to Thomas
and PHH an additional check in the amount of $44, 508.16.
(ECF No. 11 at ¶ 14; ECF No. 2-3 at 2.) The sale was
ratified by the Circuit Court for Baltimore City on August 6,
2015. (ECF No. 11 at ¶ 18; ECF Nos. 10-6, 10-7.)
Recognizing the mortgage to be in default, plaintiff alleges
that he attempted to resolve his delinquency with PHH by
tendering the insurance proceeds; PHH rejected Thomas'
overtures. (ECF No. 11 at ¶¶ 16-17.)
the completion of the foreclosure proceedings, PHH notified
Thomas that there was a deficiency of $43, 648.26. (ECF No.
11 at ¶ 24.) PHH elected not to pursue the deficiency,
however, and issued to plaintiff an IRS Form 1099-C
reflecting the cancellation of the debt in January 2016.
(Id. at ¶ 25.) During this time, plaintiff
remained in possession of the insurance proceeds and
requested that PHH endorse the check to plaintiff only.
(Id. at ¶ 28.) These funds, initially issued to
plaintiff and later reissued to PHH in August 2016, are at
the heart of plaintiff's claims in the instant suit.
(Id. at ¶ 14.) Defendants have refused to
release the insurance proceeds to plaintiff, as they maintain
that any insurance proceeds were assigned to them under the
Deed of Trust and, moreover, that their losses exceed the
amount of the insurance proceeds. (Id. at ¶ 29.)
originally filed his Complaint in the Circuit Court for
Baltimore City, Maryland on September 23, 2016. (Notice of
Removal, ECF No. 1 at ¶ 1.) Defendants timely removed
the case to this Court on November 14, 2016 pursuant to 28
U.S.C. §§ 1332 and 1441, invoking this Court's
diversity jurisdiction. Defendants subsequently moved to
dismiss this case on November 28, 2016. (ECF No. 10.)
Plaintiff then filed an Amended Complaint on January 3, 2017.
(ECF No. 11.)
12(b)(6) of the Federal Rules of Civil Procedure authorizes
the dismissal of a complaint if it fails to state a claim
upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The
purpose of Rule 12(b)(6) 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); see also Goines v.
Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir.
2016). The sufficiency of a complaint is assessed by
reference to the pleading requirements of Rule 8(a)(2), which
provides that 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).
survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint
must contain facts sufficient to “state a claim to
relief that is plausible on its face.” Bell Atl.,
Corp. v. Twombly, 550 U.S. 544, 570 (2007); Ashcroft
v. Iqbal, 556 U.S. 662, 684 (2009). Under the
plausibility standard, a complaint must contain “more
than labels and conclusions” or a “formulaic
recitation of the elements of a cause of action.”
Twombly, 550 U.S. at 555; see Painter's Mill
Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013).
reviewing a Rule 12(b)(6) motion, a court “‘must
accept as true all of the factual allegations contained in
the complaint'” and must “‘draw all
reasonable inferences [from those facts] in favor of the
plaintiff.'” E.I. du Pont de Nemours & Co.
v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011)
(citations omitted); see Houck v. Substitute Tr. Servs.,
Inc., 791 F.3d 473, 484 (4th Cir. 2015); Semenova v.
Maryland Transit Admin., 845 F.3d 564, 567 (4th Cir.
2017). While a court must accept as true all the factual
allegations contained in the complaint, legal conclusions
drawn from those facts are not afforded such deference.
Iqbal, 556 U.S. at 678 (“[t]hreadbare recitals
of the elements of a cause of action, supported by mere
conclusory statements, do not suffice” to plead a
claim); see A Society Without a Name v. Virginia,
655 F.3d 342, 346 (4th. Cir. 2011).
limited exceptions, a court may consider documents beyond the
complaint without converting the motion to dismiss to one for
summary judgment. Goldfarb v. Mayor & City Council of
Baltimore, 791 F.3d 500, 508 (4th Cir. 2015). A court
may properly consider documents that are “explicitly
incorporated into the complaint by reference and those
attached to the complaint as exhibits . . . .”
Goines, 822 F.3d at 166 (citations omitted); see
U.S. ex rel. Oberg, 745 F.3d at 136 (quoting Philips
v. Pitt Cty Memorial Hosp., 572 F.3d 176, 180 (4th Cir.
2009)); Anand v. Ocwen Loan Servicing, LLC, 754 F.3d
195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v.
Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir.
2004), cert. denied, 543 U.S. 979 (2004);
Phillips v. LCI Int'l Inc., 190 F.3d 609, 618
(4th Cir. 1999).
may also “consider a document submitted by the movant
that was not attached to or expressly incorporated in a
complaint, so long as the document was integral to the
complaint and there is no dispute about the document's
authenticity.” Goines, 822 F.3d at 166
(citations omitted). To be “integral, ” a
document must be one “that by its ‘very
existence, and not the mere information it contains, gives
rise to the legal rights asserted.'” Chesapeake ...