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Peden v. BWW Law Group

United States District Court, D. Maryland, Southern Division

February 1, 2018

Ywuana Peden, Plaintiff,
BWW Law Group, et al., Defendants.


          Paul W. Grimm United States District Judge.

         Plaintiff Ywuana Peden obtained a mortgage secured by her principal residence, 219 Dateleaf Avenue, Capitol Heights, Maryland 20743 (the “Property”), and executed a Deed of Trust on the Property in favor of a lender, M-Point Mortgage Services. Order to Docket 5, ECF No. 13-1.[1] PennyMac Corporation (“PennyMac”) acquired title to the Property and in July 2014 appointed Substitute Trustees for the purposes of bringing a foreclosure action (“Foreclosure Action”). While the Foreclosure Action was pending against her in the Circuit Court for Prince George's County, [2] based on a default on the loan that Peden contests, see Compl. ¶ 47, ECF No. 1, Peden filed for bankruptcy. Following the termination of the bankruptcy proceeding, the Property was sold, and the state court ratified the sale and entered an order of judgment awarding possession of the Property. State Ct. Docket 16, 24, 38. Peden now brings this litigation, pro se, against Defendants PennyMac; BWW Law Group, LLC (“BWW”); Carrie Ward and Howard Bierman, two of the Substitute Trustees in the Foreclosure Action; and Brian Puchalski, as well as Claudia Menjivar and Joseph Delozier for their alleged involvement in Peden's eviction from the Property and as “instrumentalit[ies]” of BWW. Compl. 1, ¶¶ 39-42. She alleges that Defendants committed fraud on the court by using forged documents in the Foreclosure Action, fraudulently created the Deed of Trust, and violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, and that Defendants lacked a promissory note and were not the real party in interest during the Foreclosure Action. Id. ¶¶ 65-82. Lastly, Plaintiff requests that this Court void the cognovit note.[3] Id. ¶¶ 83-86.

         BWW has moved to dismiss Peden's claims, ECF No. 13, and the motion has been fully briefed, ECF Nos. 20, 28.[4] PennyMac also has moved to dismiss her claims, ECF No. 11, and the parties have fully briefed the motion, ECF Nos. 11-2, 21, 29. Lastly, Brian Puchalski has moved to dismiss her claims, ECF No. 27, and the motion has been fully briefed, ECF Nos. 33, 34.[5] Collectively, Defendants argue that Peden's claims are barred by res judicata, collateral estoppel, the Rooker-Feldman doctrine, and the bankruptcy code. See PennyMac Mem. 8-14; BWW Mot. 10-15; Puchalski Mot. 1-2. Defendants also argue that Peden fails to allege adequate facts to support the claims brought against them. PennyMac Mem. 14-18; BWW Mot. 15-21; Puchalski Mot. 1-2. Because I find that res judicata precludes this litigation, I will grant Defendants' motion and dismiss this case without reaching Defendants' alternative grounds for dismissal.

         Standard of Review

         Defendants move to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). Under this Rule, Peden's Complaint is subject to dismissal if it “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). 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), and must state “a plausible claim for relief, ” Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. Rule 12(b)(6)'s purpose “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.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012) (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). If an affirmative defense “clearly appears on the face of the complaint, ” however, the Court may rule on that defense when considering a motion to dismiss. Kalos v. Centennial Sur. Assocs., No. CCB-12-1532, 2012 WL 6210117, at *2 (D. Md. Dec. 12, 2012) (quoting Andrews v. Daw, 201 F.3d 521, 524 n. 1 (4th Cir. 2000) (citation and quotation marks omitted)). One such affirmative defense is res judicata.

         Plaintiff is proceeding pro se, and her Complaint is to be construed liberally. See Haines v. Kerner, 404 U.S. 519, 520 (1972). However, liberal construction does not absolve Plaintiff from pleading plausible claims. See Holsey v. Collins, 90 F.R.D. 122, 128 (D. Md. 1981) (citing Inmates v. Owens, 561 F.2d 560, 562-63 (4th Cir. 1977)).


         Res judicata “bars a party from suing on a claim that has already been litigated to a final judgment by that party or such party's privies and precludes the assertion by such parties of any legal theory, cause of action, or defense which could have been asserted in that action.” Reid v. New Century Mortg. Corp., No. AW-12-2083, 2012 WL 6562887, at *3 (D. Md. Dec. 13, 2012) (quoting Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177, 210 (4th Cir. 2009)) (citation and internal quotation marks omitted). When considering this defense, “a court may take judicial notice of facts from a prior judicial proceeding when the res judicata defense raises no disputed issue of fact.” Kalos, 2012 WL 6210117, at *2 (quoting Andrews, 201 F.3d at 524 n.1). And, when a federal court litigant asserts res judicata based on a state court judgment, “[the] federal court must give to [the] state court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). Under Maryland law, res judicata, or claim preclusion, provides grounds for dismissal if a defendant establishes that “(1) the present parties are the same or in privity with the parties to the earlier dispute, (2) the claim presented is identical to the one determined in the prior adjudication, and (3) there has been a final judgment on the merits.” Capel v. Countrywide Home Loans, Inc., No. WDQ-09-2374, 2010 WL 457534, at *3 (D. Md. Feb. 3, 2010) (citing Anne Arundel County Bd. of Educ. v. Norville, 887 A.2d 1029, 1037 (Md. 2005)).

         1. Same parties

         In the Foreclosure Action, Peden was the defendant and the Substitute Trustees were the plaintiffs. Here, Peden sues Substitute Trustees Ward and Bierman, as well as BWW (the Substitute Trustee's employer), PennyMac, Delozier, Menjivar and Puchalski.[6] Compl. 1. According to PennyMac, it was “the holder of a note secured by a deed of trust from Plaintiff, ” which was a “derivative of a deed dated January 30, 2007 and was recorded among the Land Records of Prince George's County.” PennyMac Mem. 3. Then, PennyMac appointed Ward, Bierman, and four other members of BWW as the Substitute Trustees to initiate the Foreclosure Action on September 2, 2014. Id. On this basis, PennyMac insists that it is in “privity with the Substitute Trustees.” Id. at 11. Peden does not dispute these assertions in her Oppositions, only addressing whether she believes Defendants are debt collectors. See Pl.'s Opp'ns. And, Peden acknowledges that PennyMac “purchased or obtained the alleged debt” from her. Compl. ¶ 37. Also, Peden contends that Menjivar, Ward, Bierman, Delozier, and Puchalik “were mere instrumentalit[ies] of BWW.” See Id. ¶¶ 35-36, 39-43, 48. I am satisfied that the litigation was between the same parties or their privies.

         2. Identical claims

         Under Maryland law, courts apply the transaction test to determine whether claims are identical. See Kent Cnty. Bd. of Educ. v. Bilbrough, 525 A.2d 232, 238 (Md. 1987). “Under the transaction test, a ‘claim' includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the claim arose.” Boyd v. Bowen, 806 A.2d 314, 325 (Md. Ct. Spec. App. 2002) (citing FWB Bank v. Richman, 731 A.2d 916, 928 (Md. 1999)). Notably, res judicata bars not only claims from the original litigation, but also other claims that could have been brought in the original litigation. Boyd, 806 A.2d at 325 (citing Gertz v. Anne Arundel Cnty., 661 A.2d 1157, 1161 (Md. 1995)). This Court consistently has held that res judicata bars collateral attack on foreclosure judgments. See Prudencio v. Capital One, N.A., No. PWG-16-2693, 2016 WL 6947016, at *3 (D. Md. Nov. 28, 2016) (concluding that the second element was satisfied because “all of Plaintiffs' present claims” of violations of the FDCPA, the RESPA, and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq.; negligence; breach of fiduciary duties; fraud and misrepresentation; civil conspiracy; and intentional infliction of emotional distress “could have been raised in the foreclosure action”); Jones v. HSBC Bank USA, N.A., No. RWT 09CV2904, 2011 WL 382371, at *5 (D. Md. Feb. 3, 2011) (holding that claims for violations of the Fair Debt Collection Practices Act, breach of fiduciary duty, and fraud could not be brought in this Court, as the claims could have been raised in the foreclosure proceeding); Anyanwutaku v. Fleet Mortg. Group, Inc., 85 F.Supp.2d 566, 571 (D. Md. 2000) (concluding that plaintiff's claims for, inter alia, illegal foreclosure, fraud and misrepresentation, and conspiracy were barred by res judicata as the claims concern the same transaction).

         The crux of Peden's suit in this Court, which underlies each of her five claims, is that Defendants “filed falsified documents with the courts in an attempt to illegally use this Court as an indirect debt collector, ” Compl. ¶ 72, and that Defendants were not the real party in interest with the right to bring a foreclosure action. Id. ¶¶ 77; see also Id. ¶¶ 73-74, 80-82, 98-99. In the introductory paragraph of her Complaint, she also asserts that she seeks damages for “intentional inflection of emotional distress, negligent infliction of mental distress and for the creation of forged and fraudulent Promissory and Deed of Trust Notes”; but she fails to plead any counts setting forth those claims. See Id. ¶ 2. Peden contends that the Foreclosure Action was fraudulent and a violation of the FDCPA. Id. ¶¶ 65-105.

         The state court Foreclosure Action and the present case clearly relate to the same transaction or occurrence: the Note and Deed of Trust on the Property and the Foreclosure Action that resulted when Peden failed to make payments. Therefore, all of Peden's present claims could have been raised in the Foreclosure Action. See Prudencio, 2016 WL 6947016, at *3; Bullock v. Ocwen Loan Servicing, LLC, No. PJM-14-3836, 2015 WL 5008773, at *5 (D. Md. Aug. 20, 2015) (finding that plaintiff's FDCPA and RESPA “statutory claims [we]re premised on [plaintiff's] contention that the Defendants lacked the legal authority to enforce the note and deed of trust” and therefore “the statutory claims ar[o]se out of the same series of transactions” as the state foreclosure action and were barred under res judicata); McCreary v. Benificial Mortg. Co. of Maryland, No. AW-11-CV-01674, 2011 WL 4985437, at *4 (D. Md. Oct. 18, 2011) (dismissing on res judicata grounds plaintiff's claims, inter alia, for fraud, fraudulent misrepresentation, and intentional infliction of ...

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