United States District Court, D. Maryland
Xinis United States District Judge.
December 28, 2016, pro se Plaintiffs Michael and Melinda
Smallwood asserted a variety of statutory and common law
claims against the Defendants, Nationstar Mortgage, LLC
(“Nationstar”), Bank of America, NA (“Bank
of America”), Thomas Montag (“Montag”),
LaSalle Bank, NA (“LaSalle Bank”), Rosenberg
& Associates, LLC (“Rosenberg LLC”), Diane
Rosenberg (“Rosenberg”), and Wilmington Trust,
National Association, as Successor Trustee to Citibank, N.A.,
as Trustee for First Franklin Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-FF12
(“Wilmington Trust”),  in connection with a pending
foreclosure on Plaintiffs' home. In their Amended
Complaint, submitted January 3, 2017, Plaintiffs allege
violations of the Racketeer Influenced and Corrupt
Organizations Act (“Civil RICO”), the Fair Debt
Collection Practices Act (“FDCPA”), and common
law claims of unjust enrichment, insurance fraud, breach of
contract and bad faith. Plaintiffs request declaratory and
injunctive relief against Defendants' foreclosure on
their home and damages “in the amount of $80, 000.00
Silver one ounce coins” from each Defendant. ECF No. 2
at ¶ 168. Plaintiffs are also currently appealing the
ratification of foreclosure rendered in the Circuit Court for
Prince George's County, Maryland,  BSBSC v.
Smallwood, et al, Case No. CAEF15-25056 (Prince George
Country Cir. Ct.), and have filed a civil suit against all
defendants in the United States District Court for the
District of Columbia on similar, but not identical, grounds.
See ECF No. 21-6.
before the court are three motions. On March 8, 2017,
Defendants Nationstar and Wilmington Trust moved to dismiss
all claims against them pursuant to Federal Rule of Civil
Procedure 12(b)(6). See ECF No. 9-1. Defendant
Rosenberg joined this motion and adopted its arguments on
March 15, 2017. See ECF No. 13. Defendants Bank of
America, LaSalle Bank, and Montag filed a Motion to Dismiss
and Motion to Quash Service on May 12, 2017, pursuant to
Federal Rules of Civil Procedure 8(a), 12(b)(4), 12(b)(5),
and 12(b)(6). See ECF No. 21-1. For the following
reasons, all motions to dismiss are GRANTED.
September 2005, Plaintiffs purchased a home located at 8113
Elora Lane, Brandywine, Maryland, with a mortgage loan of
$379, 550.00 (“the Loan”) from First Franklin, a
Division of National City Bank of Indiana. See ECF
No. 9-2. A Deed of Trust secured the obligations on the Loan.
ECF No. 9-2. The Deed of Trust includes a power of sale
provision, which states that in the event of Plaintiffs'
default, the lender is entitled to institute foreclosure
proceedings against the Property and collect all costs
incurred to foreclosure. Id. The Deed of Trust also
includes a provision that the “Note or partial interest
in the Note (together with this Security Instrument) can be
sold one or more times without prior notice to Borrower,
” id. at ¶ 20, and that “Lender, at
its option, may from time to time remove Trustee and appoint
a successor trustee” who “shall succeed to all
title, power and duties conferred upon Trustee herein any by
Applicable Law.” Id. at ¶ 24.
April 4, 2006, First Franklin assigned its interest in the
Deed of Trust to First Franklin Financial Corporation
(“FFFC”). ECF No. 21-3. On February 19, 2009,
FFFC assigned its rights in the Deed of Trust to Citibank,
acting as Trustee for First Franklin Mortgage Loan Trust,
Mortgage Loan Asset-backed Certificates, Series 2005-FF12
(“Citibank”). See ECF No. 21-4. On June
14, 2014, Nationstar was appointed as attorney-in-fact for
the current Trustee, Citibank, by Citibank's successor
trustee, Wilmington Trust. See ECF No.
Citibank then assigned its interest to in the Deed of Trust
to Wilmington Trust on January 13, 2015. ECF No. 21-5.
Wilmington Trust is the current holder of the beneficial
interest under the Deed of Trust. Id. Nationstar is
Wilmington Trust's servicer for the Loan.
2012, the Plaintiffs fell behind on their loan payments.
Nationstar initiated foreclosure proceedings in the Circuit
Court for Prince George's County, Maryland. ECF Nos. 9-7
& 9-8. Plaintiffs' various legal challenges to the
foreclosure in Circuit Court were unsuccessful, ECF No. 9-9,
and the Property was sold at auction on January 19, 2017.
Plaintiffs have filed two federal actions against Defendants;
this case was filed on December 26, 2016, ECF No. 1, and a
separate case was filed against all of the present Defendants
in the United States District Court for the District of
Columbia in January 2016, Smallwood v. Wilmington Trust,
Nat'l Assoc'n, et al, No. 16-00080-EGS-RMM.
Plaintiffs submitted an Amended Complaint in this action on
January 3, 2017. Plaintiffs assert seven claims, arising
under the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), the Fair Debt Collection Practices Act
(“FDCPA”), and common law claims of negligent
misrepresentation, unjust enrichment, insurance fraud, breach
of contract, and bad faith. Plaintiffs request damages and
equitable relief. Defendants assert an array of challenges.
Each is addressed below.
Bank of America and LaSalle (“Bank Defendants”)
move to quash service under Federal Rule of Civil Procedure
12(b)(4) because service did not satisfy the requirements of
Rule 4(h). ECF No. 21. Plaintiff “bears the burden of
establishing its validity” under Rule 4 of the Federal
Rules of Civil Procedure.
4(h) requires that service on a corporate entity occur:
(A) in the manner prescribed by Rule 4(e)(1) for serving an
(B) by delivering a copy of the summons and of the complaint
to an officer, a managing or general agent, or any other
agent authorized by appointment or by law to receive service
of process and - if the agent is one authorized by statute
and the statute so requires-by also mailing a copy of each to
Fed. R. Civ. P. 4(h); ECF No. 21-1 at 7-9. Rule 4(e)(1)
provides for service by any means allowed by the state where
the district court is located or the state where service is
to be effected. See Fed. R. Civ. P. 4(e). Thus,
Plaintiffs could execute service either through
compliance with Rule 4(h)(1)(A) through the law of North
Carolina or Maryland or under the terms of
4(h)(1)(B). Courts generally “construe Rule 4 liberally
to effect service of process and uphold the jurisdiction of
the court, ” so long as service sufficiently gave the
defendant(s) actual notice of the pending action. Archie
v. Lavonne Elenora Ager Booker, No. DKC-14-0330, 2015 WL
9268572 at *2 (D. Md. Dec. 21, 2015) (citing Karlsson v.
Rabinowitz, 318 F.2d 666, 668 (4th Cir. 1963).
delivered the summons for Bank Defendants to T.J. Bishop, an
“Operations Manager” in Charlotte, North
Carolina. ECF No. 17 at 6; see also ECF No. 24 at
6-7. Plaintiffs' summons states that TJ Bishop was
“designated by law to accept service of process”
on behalf of Bank of America and LaSalle. ECF No. 17 at 6,
10. Bank Defendants do not allege that TJ Bishop is not an
“officer, managing or general agent, or any other agent
authorized by appointment or by law to receive service”
on behalf of Bank Defendants. See ECF No. 21-1 at
8-9. Bank Defendants only allege that service of process did
not comply with the requirements of North Carolina law.
Accordingly, service of process complies with Rule 4(h)(B).
Defendant Montag, Defendants request dismissal under 12(b)(5)
on the grounds that Montag “has never been personally
served.” ECF No. 21-1 at 7. However, Rule 4 allows
summons to be delivered to an individual personally or
“to an agent authorized by appointment or by law to
receive service of process.” Fed.R.Civ.P. 4(e)(2). Bank
Defendants do not allege that TJ Bishop was not authorized by
appointment or by law to receive service on behalf of Montag.
See ECF No. 21-1 at 7-8. Plaintiffs' summons
states that Bishop “is designated by law to accept
service of process on behalf of Thomas Montag.” ECF No.
17 at 8. In light of Defendants' failure to challenge
Bishop's authorization, the Court finds service of
process on Montag complied with Rule 4(e)(2)C).
next argue that because Plaintiffs' appeal is still
pending in the underlying state foreclosure proceedings,
BSBSC v. Smallwood, CAEF15-25056 (Cir. Ct. of Prince
George's Cty Apr. 5, 2017), the Court abstain from
hearing this case under Younger abstention doctrine.
ECF No. 21-1 at 14. Younger abstention is a “mandatory
rule of equitable restraint, requiring the dismissal of a
federal action”, Nivens v. Gilchrist, 444 F.3d
237, 247 (4th Cir. 2006) (citation omitted), when four
elements are satisfied: “1) an ongoing state judicial
proceeding, instituted prior to any substantial progress in
the federal proceeding; that (2) implicates important,
substantial, or vital state interests; and (3) provides an
adequate opportunity for the plaintiff to raise the
lawsuit.” Laurel Sand & Gravel, Inc. v.
Wilson, 519 F.3d 156, 165 (4th Cir. 2008).
“Circumstances fitting within the Younger
doctrine . . . are exceptional, ” and as a general rule
“[t]he pendency of an action in [a] state ...