United States District Court, D. Maryland
MEMORANDUM OPINION AND ORDER
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 Second Amended
Complaint, submitted January 18, 2018, Plaintiffs allege a
common law claim of unjust enrichment. ECF No. 29. Plaintiffs
request injunctive relief against Defendants, restitution,
and “punitive damages in an amount of three times our
actual damages.” Id. at ¶ 21. 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, 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 two motions to dismiss. For the
foregoing reasons, the motions 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 provides 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 provides 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 amended their complaint on January 3, 2017, in it
asserting 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 requested damages and equitable relief, to which
Defendants asserted an array of challenges.
December 21, 2017, the Court issued a Memorandum Opinion and
Order dismissing all but one of Plaintiffs' claims with
prejudice. ECF Nos. 27 & 28. The remaining claim for
unjust enrichment was dismissed without prejudice and with
leave to amend the complaint as to this count. ECF No. 28.
January 18, 2018, Plaintiffs timely submitted a Second
Amended Complaint, alleging unjust enrichment against all
Defendants. ECF No. 29. Defendants Nationstar and Wilmington
Trust moved to dismiss Plaintiffs' Second Amended
Complaint, arguing that it fails to state a claim upon which
relief can be granted pursuant to Federal Rule of Civil
Procedure 12(b)(6). Each motion is addressed below.
common law claim of unjust enrichment, Plaintiffs must
plausibly allege that (1) a benefit was conferred on the
Defendants; (2) Defendants knew of or appreciated the
benefit; and (3) Defendants' acceptance or retention of
the benefit under the circumstances was inequitable absent
payment of for the value of the benefit. See, e.g., Hill
v. Cross Country Settlements, LLC, 402 Md. 281, 295
(2007). Unjust enrichment claims are subject to a three year
statute of limitations. See, e.g., Jason v. Nat'l
Loan Recoveries, LLC, 227 Md.App. 516, 527-29 (2016).
The Court will address the sufficiency of the claims as to
Deed of Trust submitted and signed by Plaintiffs, ECF No.
9-2, allows the “Lender” or loan servicer to
charge Borrower “default-related fees, ” such as
hazard insurance costs and various expenses associated with
Plaintiffs' default, including repairs, changing locks,
inspecting the property, and eliminating code violations,
id. at ¶¶ 5, 9. Plaintiffs allege that
from June 2014 to 2016, Nationstar exceeded these terms and
charged unnecessary or excessive fees that were fraudulently
concealed on Plaintiffs' account by labeling them “
‘ Other Charges, ' ‘Other fees, '
‘Miscellaneous Fees, ' and ‘Corporate
Advances.' ” ECF No. 29 at ¶¶ 17, 19.
Nationstar argues that Plaintiffs' claims must be
dismissed because, among other reasons, the Second Amended
Complaint does not plausibly allege facts to support their
claim, and instead proffers conclusory and unsupported
allegations. The Court agrees.
Plaintiffs' Second Amended Complaint appears to assert
more particularized facts, it still does not allege the
foundational element of an unjust enrichment claim: that
Plaintiffs actually conferred a benefit on Nationstar.
Indeed, while the Second Amended Complaint repeatedly notes
that Nationstar charged Plaintiffs fees, Plaintiffs
do not allege, or put forth any facts suggesting, that they
actually paid Nationstar these fees. See generally
ECF No. 29. Because it is necessary that a benefit actually
be conferred which, in essence, enriched the Defendants, and
because that critical averment is absent here,
Nationstar's motion to dismiss, ECF No. 30, is GRANTED.
See Sensormatic Sec. Corp. v. Sensormatic Elecs.
Corp., 249 F.Supp.2d 703, 708-09 (D. Md. 2003)
(dismissing unjust enrichment claim, holding that