United States District Court, D. Maryland
JEFFREY A. ALTENBURG, et al., Plaintiffs,
CALIBER HOME LOANS, INC., et al., Defendants.
RICHARD D. BENNETT, UNITED STATES DISTRICT JUDGE
Jeffrey Altenburg (“Altenburg”) and Judy Wood
(“Wood”) (collectively, “plaintiffs”)
have filed this putative class action against defendants
Caliber Home Loans, Inc. (“Caliber”) and U.S.
Bank, N.A., solely in its capacity as Trustee for LSF9 Master
Participation Trust (“LSF9”) (collectively,
“defendants”), alleging violations of the Fair
Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692, et seq., the Maryland Consumer
Debt Collection Act (“MCDCA”), Md. Code Ann.,
Com. Law § 14-201, et seq., and the Maryland
Consumer Protection Act (“MCPA”), Md. Code Ann.,
Com. Law § 13-101, et seq., based on
Caliber's filing of foreclosure actions against
plaintiffs' properties on behalf of LSF9, which was not
licensed as a consumer debt collector under the Maryland
Collection Agency Licensing Act (“MCALA”), Md.
Code Ann., Bus. Reg. § 7-301. (ECF No. 8 at ¶¶
pending before this Court is defendants' Motion to
Dismiss or, in the Alternative, to Stay Proceedings and
Certify Questions to the Maryland Court of Appeals
(“Defendants' Motion”) (ECF No. 18). 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
(ECF No. 18) is GRANTED IN PART and DENIED IN PART.
Specifically, Defendants' Motion is GRANTED as to
plaintiff Wood, whose claims are time barred. Defendants'
Motion is also GRANTED as to Count I of plaintiffs'
Amended Complaint (Declaratory Relief), which is DISMISSED.
Defendants' Motion is DENIED as to plaintiff
Altenburg's FDCPA claim against Caliber (Count II) and
state law claims against LSF9 and Caliber (Count III). It is
also DENIED as to the certification of questions to the
Maryland Court of Appeals.
Jeffrey A. Altenburg is a resident of the State of Maryland
and an owner of the real property commonly known as 11810
Triadelphia Rd., Ellicott City, MD 21042 (“the
Altenburg Property”). (ECF No. 8 at ¶ 6.)
Plaintiff Judy Wood, f/k/a Judy Blachowicz, formerly owned
the real property known as 20 Talister Court in Baltimore
County, Maryland (the “Wood Property”), which was
previously her home and property before a foreclosure sale
which occurred on December 31, 2014. (Id. at ¶
LSF9 is a Delaware statutory trust owned by Loan Star Funds,
a global private equity firm, and managed by Hudson Advisors,
L.P., an asset management firm headquartered in Dallas,
Texas. (ECF No. 8 at ¶ 8.) U.S. Bank, N.A., serves as
trustee for the LSF9 trust. (Id.) Plaintiffs allege
that “[a]s a regular part of its business, LSF9
acquires defaulted debts, ” including the debts of
plaintiffs Altenburg and Wood, and is, thus, a
“consumer debt purchaser.” (Id.)
Plaintiffs further allege that “LSF9 has delegated and
assigned all duties related to [plaintiffs' loans] to
Caliber, ” including “the retention of
attorneys/substitute trustees and other collection agencies
to initiate foreclosures and assert proceedings against
Maryland residents.” (Id. at ¶ 9.)
Through these activities, plaintiffs assert, LSF9 and Caliber
extract interest payments from consumers through short-term
forbearance loans and, when debtors are unable to make
payments on these loans, take title to the collateral
properties through foreclosure actions. (Id. at
about March 30, 2007, plaintiff Altenburg refinanced the
Altenburg Property with Bank of America, N.A. (the
“Altenburg Loan”). (ECF No. 8 at ¶ 18.)
Altenburg subsequently defaulted on that loan on October 2,
2011. (Id. at ¶ 20.) While the Altenburg Loan
was in default, LSF9 took ownership and Caliber acquired all
servicing rights to the loan. (Id. at ¶¶
21-22.) Through their agent, the law firm of McCabe,
Weisberg, and Conway, LLC, LSF9 and Caliber began foreclosure
proceedings against the Altenburg Property in the Circuit
Court for Howard County, Maryland on March 9, 2016.
(Id. at ¶ 25.) Altenburg then moved to dismiss
the foreclosure action on the basis that LSF9 was not
licensed as a Maryland collection agency and, thus, had no
right to attempt to collect on the underlying debt.
(Id. at ¶ 26.) The Circuit Court conducted two
hearings and then granted Altenburg's motion to dismiss
on August 30, 2016. (Id. at ¶ 27.)
about December 23, 2005, plaintiff Wood refinanced the Wood
Property, her home and property, with National City Bank of
Indiana's AccuBanc Mortgage (the “Wood
Loan”). (ECF No. 8 at ¶ 29.) Before January 1,
2014, Wood defaulted on that loan. (Id. at ¶
30.) While the Wood Loan was in default, LSF9 took ownership
and Caliber acquired all servicing rights to the loan.
(Id. at ¶¶ 32, 34.) Through their agent,
Alba Law Group, P.A., LSF9 and Caliber began foreclosure
proceedings against the Altenburg Property in the Circuit
Court for Baltimore County, Maryland and conducted a
foreclosure sale of the Wood Property on December 31, 2014.
(Id. at ¶ 36.) Subsequently, on September 14,
2015, SIMM Associates, Inc., a collection agency retained by
defendant Caliber, demanded payment of $13, 620.21 based on
the Wood Loan. (Id. at ¶ 37.) Wood disputed
SIMM's demand. (Id.) On or about January 28,
2016, Caliber sent an IRS Form 1099 related to the Wood Loan
to Wood and to the Internal Revenue Service. (Id. at
allege that defendants violated the FDCPA, MCDCA, and MCPA by
filing the respective foreclosure actions without LSF9 being
properly licensed under Maryland law. Plaintiffs' claims
thus rest on the licensing requirements of the Maryland
Collection Agency Licensing Act, Md. Code Ann., Bus. Reg.
§ 7-301, which requires a collection agency to be
licensed in order to collect or attempt to collect on
consumer debts in Maryland. (Id.)
Defendants' Motion was pending, plaintiffs filed several
motions calling this Court's attention to a series of
cases pending and/or recently decided in Maryland state
courts. (ECF Nos. 21, 28, and 29.) Furthermore, in response
to this Court's inquiry regarding several authorities
cited in their briefs, the parties filed a Joint Notice
Concerning the Appellate Status of Cases Cited in the
Parties' Motions and Papers (the “Appellate
Notice”). (ECF No. 32.) On April 17, 2017, plaintiffs
provided an appropriate update to the Appellate Notice (ECF
No. 35), notifying this Court that the Maryland Court of
Special Appeals had issued its opinion in the consolidated
appeals of Blackstone,, v. Sharma, and
Shanahan,, v. Marvastian, Blackstone v. Sharma, Nos.
1524, 1525, Sept. Term 2015, 2017 WL 2438485 (Md. Ct. Spec.
App. June 6, 2017).
on April 26, 2017, this Court corresponded with the parties
regarding the pendency of Henson, v. Santander Consumer
USA, Inc., No. 16-349, before the United States Supreme
Court. This case, the parties agreed, was pertinent to the
pending matter; accordingly, the parties agreed that this
Court should await the Supreme Court's resolution of that
appeal before ruling on Defendants' Motion. The Supreme
Court issued its unanimous opinion on June 12, 2017,
affirming the decision of the United States Court of Appeals
for the Fourth Circuit, 817 F.3d 131 (4th Cir. Mar. 23,
2016), which, in turn, affirmed the decision of this Court,
No. RDB-12-3519, 2014 WL 1806915 (D. Md. May 6, 2014).
Henson v. Santander Consumer USA Inc., __S.Ct.___,
2017 WL 2507342 (U.S. June 12, 2017). The parties requested
an opportunity to submit additional briefing based on the
Supreme Court's decision in Henson. (ECF No.
36.) This request was granted, and the parties submitted
their supplemental briefs on June 23, 2017. (ECF Nos. 37,
Motion to Dismiss Pursuant to Rule 12(b)(6)
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
Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794
F.Supp.2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis
Motion to Certify Questions to the Maryland Court of Appeals
decision whether to certify a question of state law to that
state's highest court ‘rests in the sound
discretion of the federal court.'” Marshall v.
Selective Way Ins. Co., RDB-13-1101, 2015 WL 1186442, at
*2 (D. Md. Mar. 13, 2015) (quoting Marshall v. James B.
Nutter & Co., RDB-10-3596, 2013 WL 3353475, at *7
(D. Md. July 2, 2013) aff'd, 758 F.3d 537 (4th
Cir. 2014)). See also Lehman Bros. v. Schein, 416
U.S. 386, 391, 94 S.Ct. 1741, 40 L.Ed.2d 215 (1974);
Boyster v. Comm'r of Internal Revenue Serv., 668
F.2d 1382 (4th Cir. 1981)); Hafford v. Equity One,
Inc., 2008 WL 906015, at *4 (D. Md. Mar. 31, 2008). In
exercising this discretion, federal courts may decline to
certify a question where the federal court can reach a
“reasoned and principled conclusion.”
Hafford, 2008 WL 906015, at *4. When a federal court
can reach a reasoned and principled conclusion, the
“federal court should decide the case before it rather
than staying and prolonging the proceedings.”
Arrington v. Coleen, Inc., 2001 WL 34117735, at *5
(D. Md. Mar. 29, 2001).
Plaintiffs' Affirmative Arguments in Opposition to
Collateral Estoppel Does Not Bar Defendants' Arguments
assert that defendants are collaterally estopped from raising
in this case arguments previously raised in Altenburg's
foreclosure case in the Circuit Court ...