United States District Court, D. Maryland
K. BREDAR, CHIEF JUDGE.
Michael and Karen Blum filed this lawsuit against Ocwen Loan
Servicing, LLC (“Ocwen”), Saxon Mortgage
Services, Inc. (“Saxon”), and Does 1 through 100.
(ECF No. 1.) The complaint is short on illuminative factual
content, long on conclusional and vague allegations-at times,
incomprehensible-and seems to be based upon events in 2012
and earlier. The Blums have also filed a motion for
preliminary injunction against an anticipated foreclosure
action by Ocwen based upon their current state of default.
(Compl. ¶ 28; Mot. Prelim. Inj., ECF No. 2.) The Blums
complain that Saxon did not properly handle their home
mortgage loan modification agreement, did not properly credit
several payments, and did not give them requested
information. (Compl. ¶¶ 3, 25, 26, 27.) They allege
that their mortgage originated on October 1, 2004, that Saxon
became the loan servicer for the Blums' mortgage in
January 2005, and that Ocwen assumed that role on April 1,
2012. (Id. ¶¶ 9, 10, 20.)
indicate they have been in related litigation in both the
Circuit Court for Harford County, Maryland, and this Court;
while they provide no specifics on the state court case, they
provide the case number in this Court for Blum et al. v.
Fremont Inv. & Loan et al., Civ. No. WMN-12-57 (D.
Md.). One of the defendants in the earlier case was Saxon
Mortgage Services, Inc., who, as earlier noted, is also a
defendant in this case. That case, filed on January 5, 2012,
dealt with the same mortgage on the same property as in the
instant case, complained about how the Blums' mortgage
loan transaction occurred, alleged Saxon was a debt collector
and not entitled to enforce the promissory note on the loan,
alleged Saxon, among other defendants, did not have standing
to foreclose on the Blums' property (based on a June 24,
2008, notice of default), and accused the defendants of
fraud. (Id. Compl., ECF No. 1.) The Court granted
Saxon's motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim for relief on
June 12, 2012. (Order, ECF No. 17.)
Saxon and Ocwen contend the present suit is barred by res
judicata and, if not entirely barred by that doctrine,
subject to dismissal for failure to bring timely suit under
the governing three-year statute of limitations. (Saxon's
Mot. Dismiss Supp. Mem. 2, ECF No. 5-2; Ocwen's Mot.
Dismiss Supp. Mem. 2-3, ECF No. 12.) The Court agrees.
the prior suit at issue was a federal case, federal rules of
res judicata apply. See Andrews v.
Daw, 201 F.3d 521, 524 (4th Cir. 2000). See also
Taylor v. Sturgell, 553 U.S. 880, 891 (2008) (“The
preclusive effect of a federal-court judgment is determined
by federal common law.”) A claim subsequent to a
preexisting judgment is precluded when three circumstances
1) the prior judgment was final and on the merits, and
rendered by a court of competent jurisdiction in accordance
with the requirements of due process; 2) the parties are
identical, or in privity, in the two actions; and 3) the
claim in the second matter is based upon the same cause of
action involved in the earlier proceeding.
Grausz v. Englander, 321 F.3d 467, 472 (4th Cir.
2003) (alterations omitted).
the Blums argue the prior judgment was not a dismissal with
prejudice and, therefore, not a judgment on the merits, they
are wrong. “[U]nless otherwise specified, a dismissal
for failure to state a claim under Rule 12(b)(6) is presumed
to be both a judgment on the merits and to be rendered with
prejudice.” McLean v. United States, 566 F.3d
391, 396 (4th Cir. 2009). Thus, this Court's prior
judgment was final and on the merits, and it satisfies the
first element of res judicata.
plaintiffs in both cases are identical. Saxon was a party to
the first case and is a party to the second case. Plus, Ocwen
is the successor in interest to Saxon and is deemed in
privity with Saxon. Martin v. Am. Bancorporation
Retirement Plan, 407 F.3d 643, 651 (4th Cir. 2005)
(“To be in privity with a party to a former litigation,
the non-party must be ‘so identified in interest with a
party to former litigation that he represents precisely the
same legal right in respect to the subject matter
involved.'”). The second element of the doctrine is
the causes of action in the two cases are considered the same
because they arose “out of the same transaction or
series of transactions or the same core of operative
facts.” Pueschel v. United States, 369 F.3d
345, 355 (4th Cir. 2004) (internal quotation marks omitted).
In both cases, the Blums have complained about the handling
of their mortgage loan, i.e., “the same core
of operative facts.” Res judicata,
consequently, bars their suit against the mortgage servicers
insofar as the Blums could have asserted claims against them
at the time of filing the prior suit on January 5, 2012.
See Aliff v. Joy Mfg. Co., 914 F.2d 39, 43-44 (4th
Cir. 1990) (res judicata applicable to those claims
existing and that might have been brought at time of first
to the extent the Blums now complain about events in 2012
that occurred subsequent to January 5, 2012, those are
time-barred. The Maryland statute of limitations for the
state law claims advanced in the instant suit requires that
suits be brought within three years of the time the claim
arose. See Md. Code Ann., Cts. & Jud. Proc.
§ 5-101 (LexisNexis 2013). The claims made under the
federal Real Estate Settlement Procedures Act are also
subject to a three-year statute of limitations. 12 U.S.C.
§ 2614 (2017). This case, filed June 9, 2017, comes too
motions to dismiss for failure to state a claim for relief