United States District Court, D. Maryland
DEBORAH K. CHASANOW, UNITED STATES DISTRICT JUDGE
proceeding with this action, the precise nature of the
claims, and the basis for this court's jurisdiction, must
be clarified. Plaintiff's four count complaint does not
recite a basis for jurisdiction, in violation of Fed.R.Civ.P.
8 (a)(1). The Civil Cover Sheet reflects that a United States
government defendant is the “Basis of
Jurisdiction” and, where the form calls for a citation
to the civil statute under which suit is filed, the words
“quiet title, ” with no code section, are written
in. (ECF No. 1-1). The complaint contains claims for (I)
declaratory judgment, (II) equitable subrogation, (III) quiet
title, and (IV) breach of contract. No. count refers to any
years of litigation, and seeming resolution of most, if not
all, of the issues generated by the property records and
various liens, the case appeared to be ready for final
judgment. In trying to prepare that judgment, the court
raised the issue of subject matter jurisdiction sua
sponte and issued an order directing Plaintiff Bank of
New York Mellon (“Plaintiff”) to file a
memorandum supporting the court's exercise of
jurisdiction. (ECF No. 82). Plaintiff filed a memorandum,
Defendant the United States Department of the Treasury and
Internal Revenue Services (collectively, the “United
States”) responded, and Plaintiff replied. (ECF Nos.
83, 88, 93). The issue has been briefed, and the court now
rules, no hearing being deemed necessary. Local Rule 105.6.
For the following reasons, the case will be dismissed.
case was brought to determine the priority of liens on the
real property known as 2902 Matapeake Drive, Upper Marlboro,
Maryland (the “Property”). Pursuant to a deed
dated October 5, 1999, the Property was conveyed by recorded
deed to Defendant Holly G. Smith, n/k/a Holly G. Ashley. (ECF
No. 57-3). Pursuant to a recorded deed dated November 24,
2003, Mrs. Ashley conveyed the Property to herself and
Defendant Michael Ashley, her husband, as tenants by the
entirety. (ECF No. 57-4).
December 22, 2004, Mr. and Mrs. Ashley refinanced their
mortgage on the Property using proceeds obtained from a loan
granted by WMC Mortgage in the amount of $400, 000 (the
“Prior Loan”) in exchange for a deed of trust to
the Property (the “Prior DOT”). (See ECF
No. 63-2). Both Mr. and Mrs. Ashley were signatories to the
Prior Loan, which paid off an existing $337, 500.00 mortgage
lien; both Mr. and Mrs. Ashley were identified as grantors on
the Prior DOT; and both Mr. and Mrs. Ashley executed the
Prior DOT. The Prior DOT was recorded in the land records of
Prince George's County on July 7, 2005. (Id.).
On July 5, 2005, Mr. Ashley applied for and was granted a
refinance loan from WMC Mortgage in the amount of $475, 000
(the “Subject Loan”). (ECF No. 63-4). The Subject
Loan was funded and a closing was conducted in the ordinary
course of the loan. Disbursement of the proceeds went to pay
off the Prior DOT, in the amount of $405, 450.06. (ECF No.
57-6). Mr. Ashley - but not Mrs. Ashley - was identified as a
grantor on the corresponding deed of trust (the
“Subject DOT”), which Mr. Ashley executed on July
14. (ECF No. 63-3). The Subject DOT was recorded on December
21. (Id. at 1). BONY is the successor in interest to
WMC Mortgage and, accordingly, the current holder of the
Subject Loan and beneficiary of the Subject
(ECF No. 43 ¶ 21).
5, 2007, Mr. and Mrs. Ashley together conveyed the Property
to the Ashley Family Trust by recorded deed (the “Trust
DOT”). (ECF No. 57-10). Under the terms of the Ashley
Family Trust, both Mr. Ashley and Mrs. Ashley held an
undivided 50% interest in the Property. (ECF No. 57-11, at
8-9). On November 5, 2012, the United States filed Notices of
Federal Tax Liens in the amount of $428, 227.50, noticed on
October 11, 2012 and assessed on December 12, 2011, as to Mr.
and Mrs. Ashley. (ECF No. 54-5). Finally, on December 21,
2012, the Ashley Family Trust conveyed the Property to Mr.
Ashley by recorded quitclaim deed. (ECF No. 57-12).
filed this action requesting that the court determine the
priority of liens against the Property on September 12, 2014.
(ECF No. 1). The operative amended complaint was filed on
October 29, 2015. (ECF No. 43). The six-count amended
complaint asserts claims against four groups of interested
parties: (1) Mr. and Mrs. Ashley; (2) CitiFinancial, Trustee
Nancy J. Liberto, and Trustee Betty Lou Crumrine (concerning
a now-discharged CitiFinancial deed of trust dated December
18, 2000 (the “CitiFinancial DOT”)); (3) the
United States; and (4) the State of Maryland, Comptroller of
Maryland (“Maryland Comptroller”). BONY seeks:
declaratory relief determining that it holds a first-priority
lien on the Property (Count I); a determination that it holds
a first-priority lien by reason of equitable subrogation
(Count II); to use quiet title to determine the owner of the
Property and hold that the Subject DOT constitutes a valid
first-priority lien (Count III); to obtain a decree reforming
the Subject DOT to include the signature of Mrs. Ashley
(Count IV); to obtain a constructive trust in its favor
(Count V); and to obtain an equitable mortgage against the
Property as of July 13, 2005 (Count VI). (ECF No. 43).
Clerk of Court entered default against Defendants
CitiFinancial, Trustee Nancy J. Liberto, and Trustee Betty
Lou Crumrine for their failure to plead or otherwise defend
as directed in the summonses and as provided by the Federal
Rules of Civil Procedure. (ECF Nos. 12; 14; 16). Accordingly,
CitiFinancial and its trustees do not contest that the
CitiFinancial DOT has been paid and satisfied and that any
error in its release does not affect BONY's interest.
(See ECF Nos. 43 ¶ 4; 53, at 6). The court also
previously granted a joint motion establishing the priority
of liens as to the Maryland Comptroller, but ordered that the
order of judgment would not be entered until the entire case
was resolved. (ECF No. 53).
previously filed a motion for consent judgment as to Mr. and
Mrs. Ashley (ECF No. 28), which the United States opposed
(ECF No. 31). The consent motion, inter alia, would
have provided that the Subject DOT is equitably subrogated to
the position and priority of the Prior DOT and the
CitiFinancial DOT, and that Mr. and Mrs. Ashley intended for
the Subject DOT to be a first-priority deed of trust against
the Property. (ECF No. 28-1, at 2). On March 14, 2016, the
court denied the consent motion without prejudice to its
renewal because its resolution would have affected the
priority of the United States' tax liens. Mr. and Mrs.
Ashley answered the amended complaint on June 23. (ECF No.
72). In their answer, they request that the court enter
judgment in favor of BONY establishing that the Subject DOT
is the first-priority lien on the property. (Id.).
The United States answered the amended complaint on December
21, 2015 (ECF No. 47). In a later opinion, the court
purported to resolve some of the additional discrete issues.
(ECF No. 73). In its motion for entry of final judgment, BONY
recites that the Ashleys and the Comptroller of Maryland
consent to the requested relief. (ECF No. 79).
Standard of Review
Federal courts are courts of limited jurisdiction. They
possess only that power authorized by Constitution and
statute, which is not to be expanded by judicial decree. It
is to be presumed that a cause lies outside this limited
jurisdiction, and the burden of establishing the contrary
rests upon the party asserting jurisdiction.
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994) (internal citations omitted). Subject matter
jurisdiction can be challenged for the reason that “a
complaint simply fails to allege facts upon which subject
matter jurisdiction can be based. In that event, all the
facts alleged in the complaint are assumed to be true and the
plaintiff, in effect, is afforded the same procedural
protection as he would receive under a Rule 12(b)(6)
consideration.” Adams v. Bain, 697 F.2d 1213,
1219 (4th Cir. 1982). In such a situation, the
complaint should be dismissed if it does not allege
sufficient facts to invoke subject matter jurisdiction.
Kerns v. United States, 585 F.3d 187, 193
(4th Cir. 2009).