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Gibbs v. Bank of America, N.A.

United States District Court, D. Maryland, Southern Division

November 13, 2017

BARBARA A. GIBBS, et al., Plaintiffs,
BANK OF AMERICA, N.A., et al, Defendants.


          GEORGE J. HAZEL United States District Judge

         This action consists of a counterclaim that Plaintiffs filed in response to Defendants' state foreclosure action, in which Plaintiffs allege that Defendants are liable for unjust enrichment, breach of contract, violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) ("RICO"), civil conspiracy, and violations of the Maryland Consumer Protection Act. ECF No. 2. Presently pending before the Court is Plaintiffs' Motion to Reconsider the Court's March 31, 2017 opinion, ECF No. 75, which granted Defendants' Motions to Dismiss, ECF No. 77, and Plaintiffs'[1] Motion to Reopen Case and Remand to State Court, ECF No. 80. No hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the following reasons, Plaintiffs' motions are granted.

          I. BACKGROUND

         Between 2005 and 2006, Plaintiffs purchased two homes, one in Florence, South Carolina and one in Gaithersburg, Maryland. ECF No. 2 ¶ 50. Plaintiffs state that they "financed the building of their South Carolina home with a one year construction loan[, ] purchased with a 30-year fixed rate mortgage from [Bank of America.]." Id. Although not alleged by the Plaintiffs, the judge in a prior, almost identical case that Plaintiffs brought in the District of Colorado stated that "it is clear that both of the Plaintiffs' mortgages were with [Bank of America]." See Gibbs-Squires v. Urban Settlement Servs., No. 14-CV-00488-MSK-CBS, 2015 WL 196217, at *9 n.12 (D. Colo. Jan. 14, 2015), aff'd, 623 Fed.Appx. 917 (10th Cir. 2015) (emphasis in original) (hereinafter, "the Colorado Action").[2]

         Beginning in May of 2008, Plaintiffs sought loan modifications from Bank of America. ECF No. 2 ¶ 53. Bank of America initially approved Plaintiffs' request for loan modifications, conditioned upon their payment of $30, 000 in closing costs. Id. Plaintiffs declined the loan modifications because any savings from a reduction in their monthly mortgage payments would be erased by the new requirement to pay closing costs. Id. Plaintiffs continued, unsuccessfully, to request alternative loan modifications from Bank of America until 2012. Id. ¶¶ 55-70. At that point, they were informed by Bank of America that their mortgages had been sold to Nationstar. Id. ¶ 70.

         Plaintiffs complain about their treatment by Bank of America employees while they sought loan modifications, stating that they were repeatedly misled about their qualifications for a federal program known as the Home Affordable Modification Program ("HAMP"), which aims to provide mortgage modifications to eligible borrowers facing foreclosure, and were often told to resubmit documents that they had already submitted. Id. ¶¶ 5-6, 50-73. These allegations serve as the basis for what Plaintiffs describe as a violation of the Racketeer Influenced and Corrupt Organizations ("RICO") Act, 18 U.S.C. § 1962(c), in which Bank of America, Nationstar, and other defendants, conspired to defeat the purpose of the HAMP program by misleading and deceiving borrowers. ECF No. 2 ¶¶ 2, 5-6, 9-13; see also Id. ¶¶ 77-98.

         Plaintiffs also allege that Bank of America directed Defendants Nadel, Atlantic Law Group and Montgomery Village Foundation, to file frivolous lawsuits against them, with the goal of "stealing" their homes. Id. ¶ 24.[3] They further allege that the Maryland Attorney General entered into a consent agreement with Bank of America, agreeing to turn a "Blind Eye to [Bank of America's] continued conspiracy and racketeering in defrauding HAMP" in return for receiving money from the bank. Id. ¶ 24. Finally, Plaintiffs claim that Defendants have "paid bribes to South Carolina government employees to institute and maintain their illegal foreclosure practices." Id. ¶ 107.

         Together with their RICO claim, Plaintiffs bring seven additional claims against the Defendants, who they often refer to generally as "Defendants" or the "HAMP-less gang." Id. ¶ 23. First, they allege state law claims of breach of contract, unjust enrichment, conspiracy and violations of the Maryland Consumer Protection Act ("MCPA"), Md. Code Ann., Com. Law § 13-101, et seq. Id. ¶¶ 49-73, 99-109. Plaintiffs also allege violations of three federal civil rights statutes, 42 U.S.C. §§ 1983, 1985 and 1986, claiming that Defendants' "illegal actions were instituted against Plaintiffs based on their RACE: BLACK." Id. ¶ 108.

         On March 26, 2015, Nadel, on behalf of Nationstar, instituted foreclosure proceedings against Plaintiffs regarding the Maryland property in Maryland state court. See Nadel Action, Case No. 402900V, at Dkt. No. 1. On June 2, 2015, Plaintiffs filed a counter-claim in that case asserting the claims discussed above, id., at Dkt. No. 12, which was separated from the foreclosure case and became the initial complaint in a new case. See Gibbs v. Bank of America, N.A., Case No. 405624V (Mont. Co. Cir. Ct. 2015), Dkt. No 1 (hereinafter, the "Gibbs Action").[4]On August 12, 2016, Defendants Bank of America and Nationstar removed the Gibbs Action to this Court. ECF No. 1.

         After removal, each of the named Defendants filed a motion to dismiss, arguing that Plaintiffs' claims were barred on multiple grounds including res judicata, lack of subject matter jurisdiction, improper venue, lack of personal jurisdiction, and failure to state a claim upon which relief may be granted. See ECF Nos. 10, 13, 17, 25, 31, 57, and 66. Plaintiffs also filed their own motions, including a Motion for Summary Judgment on all claims, ECF No. 39.

         On March 31, 2017, the Court granted Defendants' Motions to Dismiss, and denied Plaintiffs' motions. ECF No. 75. In a footnote, the Court acknowledged that the parties disagreed over whether the removal of this case from state court was proper, but concluded that the case was "properly removed to this Court." Id. at 8 n.11. On April 10, 2017, Plaintiffs filed a Motion for Reconsideration, ECF No. 77, which Defendants Opposed, ECF No. 78, and to which Plaintiffs subsequently replied, ECF No. 79. On October 20, 2017, Plaintiffs filed a Motion to Reopen the Case and Remand it to state court, ECF No. 80.


          A motion for reconsideration filed within 28 days of the underlying order is governed by Federal Rule of Civil Procedure 59(e). Courts have recognized three limited grounds for granting a motion for reconsideration pursuant to Rule 59(e): (1) to accommodate an intervening change in controlling law; (2) to account for new evidence; or (3) to correct clear error of law or prevent manifest injustice. See United States ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002) (citing Pacific Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)), cert, denied, 538 U.S. 1012 (2003). A Rule 59(e) motion "may not be used to re-litigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment." Pacific Ins. Co., 148 F.3d at 403 (quoting 11 Wright, et al, Federal Practice and Procedure § 2810.1, at 127-28 (2d ed. 1995)). See also Sanders v. Prince George's Public School System, No. RWT 08-cv-501, 2011 WL 4443441, at * 1 (D. Md. Sept. 21, 2011) (a motion for reconsideration is "not the proper place to relitigate a case after the court has ruled against a party, as mere disagreement with a court's rulings will not support granting such a request"). "In general, 'reconsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly.'" Id. (quoting Wright, et al, supra, § 2810.1, at 124).

         This Court has noted that "[n]either Rule 59(e), nor Local Rule 105.10 (providing the deadline for a motion for reconsideration), contains a standard for the application of Rule 59(e) and the Fourth Circuit has not identified such a standard." Bey v. Shapiro Brown & Alt, LLP,997 F.Supp.2d 310, 320 (D. Md.), affd, 584 Fed.Appx. 135 (4th Cir. 2014). Thus, this Court has previously looked to the "widely cited case" of Above the Belt, Inc. v. Bohannan Roofing, Inc.,99 F.R.D. 99 (E.D.Va.1983), for its reasoning that a "motion to reconsider would be appropriate where, for example, the Court has patently misunderstood a party, or has made a decision outside the ...

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