United States District Court, D. Maryland
SHEKU M. KALLON, JR., Plaintiff,
M&T BANK, BAYVIEW LOAN MORTGAGE SERVICING and SUNTRUST BANK, Defendants.
THEODORE D. CHUANG, UNITED STATES DISTRICT JUDGE
Sheku M. Kallon, Jr. has filed a Complaint against Defendants
M&T Bank Corporation ("M&T"), Bayview Loan
Servicing, LLC ("Bayview",, and SunTrust Bank
("SunTrust") alleging fraud in violation of the
"Mortgage Modification Fraud Enforcement and Recovery
Act." Compl. at 4, 6, ECF No.
1. Specifically, Kallon alleges that
Defendants violated "Public [Law] 111-21" when
M&T "processed a loan modification that was
fraudulently] processed since it was never reported to
Freddie Mac, " Bayview "processed the illegal and
fraudulent modifications, " and SunTrust "illegally
sold the mortgage note" for a residence located at 3324
Whitmore Court in Acworth, Georgia ("the
Property".. Id. at 6. On February 26, 208,,
Kallon filed a "Motion for an Emergency Restraining
Order to Stay the Sale of Real Property and Temporary
Injunctive Relief Barring the Sale of the Real Property by
Defendants, " seeking an injunction preventing the sale
of the Property.
Court construed Kallon's Motion as a Motion for a
Preliminary Injunction and ordered Defendants to respond.
SunTrust filed a Motion to Dismiss on March 23, 208,, arguing
that Kallon's claim is barred by the applicable statute
of limitations and otherwise fails to state a plausible claim
for relief. On March 27, 2018, M&T and Bayview ("the
M&T Defendants") jointly filed a Motion to Dismiss
and an Opposition to the Motion for a Preliminary Injunction,
arguing that (1) Kallon has failed to state a plausible claim
for relief and that his claims are time-barred; (2)
Kallon's proposed injunction is barred by the
Anti-Injunction Act, 28 U.S.C. S 2283 (2012); and (3) Kallon
does not satisfy any of the required elements for a
preliminary injunction. Kallon has not filed an Opposition to
facts of this case are straightforward and
undisputed] Kallon and his then-wife, Hassanatou S.
Kallon ("Ms. Kallon"), received a mortgage loan
from SunTrust on May 16, 2007 secured by a Security Deed on
the Property. On December 4, 2013, SunTrust assigned the
Security Deed to Bayview. Subsequently, Ms. Kallon filed for
divorce, and a hearing was held in the Superior Court of Cobb
County, Georgia on January 4, 2018. On January 22, 2018, that
court entered a Final Judgment and Decree of Divorce, in
which it ordered Kallon to convey his interest in the
Property to Ms. Kallon and directed that the Property be sold
as quickly as possible, with the proceeds to be split equally
between them. The M&T Defendants have informed the Court
that the loan is in default and that the Property will be
sold in a foreclosure auction on May 1, 2018.
Court first considers Defendants' Motions to Dismiss. To
defeat a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), the complaint must allege enough facts to
state a plausible claim for relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). A claim is plausible
when the facts pleaded allow "the Court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." !d. Although courts should
construe pleadings of self-represented litigants liberally,
Erickson v. Pardus, 551 U.S. 89, 94 (2007), legal
conclusions or conclusory statements do not suffice,
Iqbal, 556 U.S. at 678. The Court must examine the
complaint as a whole, consider the factual allegations in the
complaint as true, and construe the factual allegations in
the light most favorable to the plaintiff. Albright v.
Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of
Comm'rs of Davidson Cty., 407 F.3d
266, 268 (4th Cir. 2005).
addition, because Kallon's allegations sound in fraud, he
is subject to the heightened pleading standards of Rule 9(b).
See Fed. R. Civ. P. 9(b) ("In alleging fraud or
mistake, a party must state with particularity the
circumstances constituting fraud or mistake."). Under
this heightened pleading standard, Kallon must allege
"the time, place, and contents" of the fraudulent
representation, the identity of the person who made the
misrepresentation, and "what he obtained thereby."
See Harrison v. Westinghouse Savannah River Co., 176
F.3d 776, 784 (4th Cir. 1999).
Court finds that Kallon's claims must be dismissed for
failure to state a claim. Kallon alleges that the processing
of a loan modification in January 2013 by M&T and
Bayview, and later loan modifications by the same entities
between January 2013 and June 2015, were fraudulent because
they were not reported to or recorded with Freddie Mac and
resulted in additional payments and excessive fees. Kallon
further alleges that SunTrust's transfer of the Note to
M&T, which occurred in December 2013, was illegal and
fraudulent. The only identified statutory basis for these
claims, the Fraud Enforcement and Recovery Act of 2009
("FERA"), Pub. L. No. 111-21, 123 Stat. 1617, does
not provide a viable cause of action based on these facts.
FERA amended certain criminal statutes relating to false
statements in mortgage applications that are inapplicable to
this civil case, and it authorized funding to the U.S.
Department of Justice to combat mortgage fraud, but it
otherwise does not relate to mortgages, loan modification,,
or transfers of notes and security deeds. Thus, Kallon has
not stated a plausible statutory claim.
construed as common law fraud claims, the Complaint fails to
state a plausible claim for relief. First, such claims are
subject to Maryland's three-year statute of limitations
for civil claims. Md. Code Ann., Cts. & Jud. Proc. §
5-101 (2011). Kallon's claim against SunTrust, which
arose in December 2013, had to have been filed by December
2016. The claim against the M&T Defendants relating to
the January 2013 loan modification had to have been filed by
January 2016. Where the Complaint was filed on September 15,
2017, these claims are time-barred, as are any claims arising
from loan modifications occurring before September 15, 2014.
even if the claim against SunTrust was not time-barred, the
Court finds that Kallon has failed to state a plausible claim
for relief because the Note associated with Kallon's loan
unequivocally states that SunTrust "may transfer this
Note." SunTrust Mot. Dismiss Ex. A at1, ECF No.23-2.
to the extent that the Complaint can be construed to assert
fraud arising from a loan modification within the limitations
period, such as one occurring in June 2015, Kallon's
generalized references to loan modifications that are
"fraudulent(ly] processed, " without identifying a
particular loan modification, date, or fraudulent statement,
do not plead fraud with sufficient particularity to put the
M&T Defendants on notice of what the alleged fraud was,
when it occurred, or who committed it. See Fed. R.
Civ. P. 9(b); Harrison, 176 F.3d at 784. Even if
Kallon were allowed to amend the Complaint, the Court
concludes that he could not assert a valid claim.
Kallon's legal theory is that the alleged loan
modifications were fraudulent because they were "never
reported to Freddie Mac, " Compl. at 6, yet FERA does
not provide that a failure to report loan modifications to
Freddie Mac constitutes fraud, and the Court has not
identified any other federal or state law that does so. Thus,
any amendment by Kallon based on his asserted facts and legal
theory would be futile. Johnson v. Oroweat Foods
Co., 785 F.2d 503, 509 (4th Cir. 1986) (stating that
leave to amend should be denied if "the amendment would
be futile"). Accordingly, the Court will grant both
Motions to Dismiss.
result, Kallon's Motion for a Preliminary Injunction
necessarily fails. To obtain a preliminary injunction, a
moving party must establish (1) a likelihood of success on
the merits, (2) a likelihood of irreparable harm in the
absence of preliminary relief, (3) that the balance of
equities tips in the moving party's favor, and (4) that
an injunction is in the public interest. Winter v. Nat.
Res. Def. Council, Inc., 555 U.S. 7, 20 (2008);
Dewhurst v. Century Aluminum Co., 649 F.3d 287, 290
(4th Cir. 2011). Where the Court has found that Kallon's
claims must be dismissed, Kallon cannot meet the first
requirement of likelihood of success on the merits.
Accordingly, the Motion for a Preliminary Injunction will be
denied. Real Truth About Obama, Inc. v. Fed. Election
Comm'n, 575 F.3d 342, 347 (4th Cir. 2009) (holding
that a moving party must satisfy each requirement in order to
obtain a preliminary injunction), vacated on other
grounds, 559 U.S. 1089 (2010). The Court also notes that
the Anti-Injunction Act, which bars a federal court from
granting "an injunction to stay proceedings in a State
court, " would bar the issuance of Kallon's
requested injunction. 28 U.S.C. S 2283. Since the sale of the
Property has been ordered by a court of the State of Georgia,
the Anti-Injunction Act is an "absolute
prohibition" against interference in those proceedings
except under specific circumstances not at issue in this
case. Denny's, Inc. v. Cake, 364 F.3d 521, 528
(4th Cir. 2004).
it is hereby ORDERED that:
1. Kallon's Motion for an Emergency Restraining Order to
Stay the Sale of Real Property and Temporary Injunctive
Relief Barring the Sale of the Real Property by Defendants,
ECF No. 17, construed as a ...