United States District Court, D. Maryland
CHINEME C. AGHAZU, Plaintiff,
SEVERN SAVINGS BANK, FSB, et al., Defendants.
J. MESSITTE UNITED STATES DISTRICT JUDGE
2015, Chineme Aghazu (Aghazu) sued Severn Savings Bank, FSB
(Severn), FCI Lender Services, Inc. (FCI), and Pontus SB
Trust (Pontus), alleging violations of the
Truth-in-Lending Act (TILA), 15 U.S.C. § 1601, et
seq., the Fair Debt Collection Practices Act (FDCPA), 15
U.S.C. § 1692, et seq., the Maryland Consumer
Debt Collections Act (MCDCA), Md. Code Ann., Com. Law, §
14-201, et seq., and the Real Estate Settlement
Procedures Act (RESPA), 12 U.S.C. § 2601, et
October 31, 2017, following a lengthy and convoluted
litigation path, Aghazu filed the present Motion for Partial
Summary Judgment as to Liability Only and for Summary
Judgment on Defendants' Counterclaim. ECF No. 73.
Defendants FCI and Pontus responded by filing a joint Motion
for Summary Judgment on liability. ECF No. 74. For the
following reasons, Aghazu's Motion (ECF No. 73) is
GRANTED IN PART and DENIED IN
PART, and Defendants' Motion (ECF No. 74) is
facts are more fully set out in the Court's March 2, 2016
Opinion. For purposes of the pending Motions, the relevant
facts are as follows.
October 2003, Aghazu obtained a mortgage Loan
(“Loan”) from Severn in the amount of $265,
000.00. Compl. ¶ 8, ECF No. 1. The Loan was evidenced by
a Note (“Note 1”) secured by a Deed of Trust
encumbering Aghazu's home at 7704 Northern Avenue, Glenn
Dale, MD 20769 (the “Property”). Compl., Exs. 1,
2, ECF No. 1-1. Aghazu and Severn subsequently agreed to
modify the Loan on two occasions: first, on February 11, 2008
(increasing the Loan amount to $340, 000.00); later, on
August 28, 2008 (increasing the Loan amount to $380, 000.00).
Compl. ¶¶ 11-12; Compl. Exs. 3, 4, ECF No. 1-1. In
addition to increasing the amount of the Loan in August 2008,
the parties executed a second Note (“Note 2”),
which was a modified version of Note 1. Compl. Exs. 4, 5, ECF
August 21, 2009, Aghazu filed for Chapter 7 bankruptcy in
this Court. Ch. 7 No. 09-25607 (D. Md. Aug. 21, 2009). On
October 14, 2009, during the course of the Chapter 7
proceeding, with leave of the Court, she filed an adversary
proceeding against Severn, alleging violations of the TILA
and wrongful foreclosure. Ch. 7 No. 09-25607, Adv. No. 09-719
(D. Md. Oct. 14, 2009). In January 2010, in order to resolve
their dispute, the parties executed a Mutual Release and
Settlement Agreement and agreed to a Consent Order Resolving
[the] Motion to Dismiss [the] Complaint and Dismissing [the]
Adversary Proceeding (“Consent Order”).
Id.; Compl. Ex. 8, ECF No. 1-1.
to the Consent Order, Aghazu was permitted to remain in the
Property until January 1, 2011 without having to make any
mortgage payments. Compl. Ex. 8 ¶ 2. After that time,
she was allowed to remain in the Property, provided that she
make interest-only payments at the rate of $1, 583.33 per
month, and provided further that she aggressively market the
Property for sale by December 31, 2011. Id. If
Aghazu failed to close under a contract of sale before
December 31, 2011, the Consent Order entitled Severn to
exercise all the rights it possessed under the original Loan
documents, including Note 2. Id. At the same time,
under the terms of the Consent Order, each party was absolved
of all “claims arising from the Lawsuit or the
Borrower's procurement of the Loan.” Id.
¶ 5. The Consent Order stated that “[t]his Release
shall unconditionally remain in effect even if Borrower fails
to close under a contract of sale for the purchase of the
Property on or before December 31, 2011, and alternatively,
this release shall not bar Lender from exercising all of its
rights afforded to it under the Loan Documents should
Borrower fail to comply with the terms of this Agreement or
should closing under a contract not be consummated on or
before December 31, 2011, for the purchase of the
Property.” Id. Pursuant to the Consent Order,
both Aghazu and Severn were deemed responsible for and left
to pay their own legal fees, expenses, and costs.
Id. ¶ 7.
never did sell the Property following the bankruptcy
proceeding, and she apparently continues to occupy the
Property as of the present date. See Compl. ¶
19; Pl.'s Line to File Exhibits, Aff. Chineme Aghazu
(“Aghazu Aff.”) ¶ 1, ECF No. 20-1. Beginning
January 1, 2011, however, she duly paid and has continued to
pay $1, 583.33 each month toward her mortgage. These payments
correspond to the reduced rate interest-only payment she was
obliged to pay after January 1, 2011 under the terms of the
Consent Order. Compl. Ex. 8 ¶ 5.
December 31, 2013, Severn sold Aghazu's Loan to Pontus.
Compl. Ex. 10; see also Severn's Reply, Ex. 1,
ECF No. 7-1. That same day, Severn notified Aghazu that it
had sold her Loan to Pontus and further advised that,
effective February 1, 2014, servicing of the Loan would be
transferred to FCI. Compl. Ex. 10, ECF No. 1-1.
February 19, 2014, Aghazu sent a payoff request to FCI.
Compl. Ex. 11, ECF No. 1-1. On that same day, FCI sent her a
payoff statement containing the word “DRAFT” in
large letters across the paper, indicating that the amount
due under the Loan was $394, 669.00. Compl. Ex. 12 at 0188,
ECF No. 1-1. The statement included $11, 571.70 in
“unpaid charges” itemized as “negative
escrow balance” and interest. Id. On February
25, 2014, FCI sent another payoff statement to Aghazu, this
time without the word “DRAFT, ” and this time
informing Aghazu that the total amount due under the Loan was
$407, 513.49. Compl. Ex. 13, ECF No. 1-1. The February 25,
2014 payoff statement included a line item for “Unpaid
Charges” in the amount of $25, 988.36. Id. A
subsequent payment statement sent to Aghazu in October 2014
included a roughly similar figure - $26, 860.64 - designated
as “Fees” due. Compl. Ex. 15 at 0026.
September 29, 2014, Pontus sent Aghazu a Notice of Intent to
Foreclose her Property. Pl.'s Motion for Summary Judgment
(“Pl.'s MSJ”), Ex. 9, ECF 73-10. The Notice
yet again cited unpaid fees and costs, this time totaling
$26, 697.53, payment of which, per Pontus, would be required
in order to cure Aghazu's supposed default. Id.
Similarly, a November 2014 “Demand Loan Payoff”
statement from FCI provided that Aghazu owed “Unpaid
Charges”, this time totaling $26, 988.30-consisting of
$12, 016.93 due for a negative escrow balance, and $14,
971.37 due for attorney fees. Pl.'s MSJ, Ex. 6, ECF 73-7.
this time, which is to say beginning in December 2013 and
continuing until March 2014, Aghazu says she was attempting
to refinance her mortgage with an entity known as Mortgage
One Solutions (“Mortgage One”). Aghazu Aff.
¶¶ 4, 14, 16, 17. In the process, she says, she
requested payoff figures first from Severn and then from FCI
in order to facilitate the transaction. See Id.
Aghazu claims, however, that due to the fact that the payoff
figures she eventually received from FCI erroneously showed
that she owed approximately $25, 000 in unpaid fees and
costs, Mortgage One declined to refinance her Loan. Pl.'s
Line to File Exhibits, Ex. J, ECF No. 20-11. In other words,
these additional “fees” and “costs”
which Aghazu claims were improper, caused her to lose an
opportunity to refinance. Compl. Exs. 12, 13; Pl.'s Line
to File Exhibits, Ex. J.
27, 2015, Aghazu filed her original Complaint in this Court,
alleging that Severn and FCI had failed to provide her with
accurate payoff information, in violation of Regulation Z of
the TILA, 12 C.F.R. § 1026.36(c)(3) (Count I); that FCI
had made a false representation in connection with the
collection of her mortgage debt in violation of the FDCPA, 15
U.S.C. § 1692e(2)(A) (Count II); that FCI had engaged in
unfair debt collection practices in violation of the FDCPA,
15 U.S.C. 1692f(1) (Count III); that both FCI and Pontus had
engaged in unlawful debt collection in violation of the MCDCA
(Count IV); and that FCI and Severn had failed to give her
adequate notice of a loan servicing transfer in violation of
RESPA, 12 U.S.C. § 2605(c) (Count V).
FCI, and Pontus moved to dismiss all counts of the original
Complaint, arguing pursuant to Federal Rule of Civil
Procedure 12(b)(6) that Aghazu had failed to state a claim
upon which relief might be granted.
March 1, 2016, the Court issued a Memorandum Opinion and
Order dismissing with prejudice Aghazu's TILA and FDCPA
claims (Counts I, II, and III) as barred by applicable
statutes of limitations, but dismissing without prejudice her
MCDCA and RESPA claims (Counts IV and V) for failure to state
a claim. On April 1, 2016, Aghazu filed an Amended
Complaint, this time alleging violation of the
MCDCA by both FCI and Pontus and violation of
RESPA against FCI.
20, 2016, the remaining Defendants, FCI and Pontus, filed a
Motion to Dismiss the Amended Complaint for failure to state
a claim. The Court, however, felt it was appropriate to
consider certain legal issues before it could evaluate the
Motion to Dismiss. Accordingly, on September 6, 2016, the
Court held a one-day Bench Trial to address the limited issue
of where the approximately $25, 000 in fees and costs
allegedly owed by Aghazu came from, and the effect, if any,
that this claimed amount might have had on Aghazu's
efforts to refinance with Mortgage One.
Bench Trial, and in its September 7, 2016 Order issued the
next day, the Court made two key findings. First, it
determined, as a matter of law, that the attorneys' fees
and costs Defendants claimed Aghazu owed in fact represented
either attorneys' fees and costs incurred by Severn
during Aghazu's bankruptcy proceedings and that other
fees and costs had been incurred in preparation for a
threatened foreclosure in 2011 that had never actually been
initiated. The Court held that, in light of the provision of
the Consent Order following the bankruptcy proceeding that
made each party responsible for their own legal fees,
expenses, and costs, any attorneys' fees or costs
Defendants or their predecessor in interest (i.e. Severn) may
have incurred during the bankruptcy proceedings were fully
disposed of by the Consent Order and were not properly
collectible by Defendants. The Court also determined that
Aghazu could not be held responsible for fees and costs
associated with a foreclosure that was never initiated. In
sum, the Court held as a matter of law that Aghazu was liable
for none of ...