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Johnson v. New York Community Bank

United States District Court, D. Maryland

May 2, 2018

TYNETTA D. JOHNSON, et al., Plaintiffs,
v.
NEW YORK COMMUNITY BANK, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          DATE PAULA XINIS UNITED STATES DISTRICT JUDGE

         Pending before the Court in this consumer protection action are two motions to dismiss pro se Plaintiffs Tynetta D. Johnson and Malik Bey's Amended Complaint filed by Defendant New York Community Bank (“NYCB”) (ECF No. 11) and Defendants Kristine Brown and Shapiro Brown & Alt, LLP (“S&B”) (ECF No. 16). The motions are fully briefed and no hearing is necessary. See D. Md. Loc. R. 105.6. For the reasons below, the Court GRANTS Defendants' motions and dismisses Plaintiffs' Amended Complaint.[1]

         I. Background

         Johnson and Bey initiated this case against Defendants on the basis of certain actions taken during the course of, or shortly after, the renegotiation of Bey's mortgage with NYCB. This very mortgage has been challenged before. In 2014, the Honorable Paul W. Grimm dismissed Bey's claims for violations of the Fair Debt Collection Practices Act (“FDCPA”), the Maryland Consumer Debt Collection Act (“MCDCA”), and the Maryland Consumer Protection Act (“MCPA”). See Bey v. Shapiro Brown & Alt, LLP, 997 F.Supp.2d 310 (D. Md. 2014) (Civil Case No. PWG-13-1562). That dismissal was upheld by the United States Court of Appeals for the Fourth Circuit. Bey v. Shapiro Brown & Alt, LLP, 584 Fed.Appx. 135 (4th Cir. 2014).

         The facts as detailed in Judge Grimm's opinion need not be repeated here. Relevant to this case, Plaintiffs now claim that after the previous case was decided in 2014, NYCB and Bey agreed to a Loan Modification Agreement (“LMA”), and that S&B then sent notices of a foreclosure sale with knowledge of the LMA, misrepresenting that Bey's mortgage was in default, in violation of the MCDCA (Count I) and the MCPA (Count II). See ECF No. 8 at ¶¶ 26-28. Plaintiffs allege violations of the Maryland Mortgage Fraud Protection Act (“MMFPA”) premised on the same misstatement (Count III). See ECF No. 8 at ¶¶ 44-49. Plaintiffs also allege that NYCB violated the Real Estate Settlement Procedures Act (“RESPA”) in failing to respond adequately to Bey's written inquiry, and in continuing to report erroneous information to credit agencies after that inquiry (Count IV). Finally, Plaintiffs allege that NYCB violated the Fair Credit Reporting Act (“FCRA”) by continuing to report Bey's mortgage as in default after he disputed the same to Experian (Count V). See ECF No. 8 ¶¶ 58, 64, 67, 77. Defendants moved to dismiss all counts under Federal Rule of Civil Procedure 12(b)(6).

         II. Standard of Review

         Because Plaintiffs are self-represented, [2] the Court construes the Amended Complaint liberally to ensure that potentially meritorious claims proceed. See Hughes v. Rowe, 449 U.S. 5, 9 (1980). That said, the Court cannot ignore a pro se plaintiff's clear failure to allege facts setting forth a cognizable claim. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990) (“The ‘special judicial solicitude' with which a district court should view such pro se complaints does not transform the court into an advocate. Only those questions which are squarely presented to a court may properly be addressed.”). When reviewing pro se complaints, a court must not abdicate its “legitimate advisory role” to become an “advocate seeking out the strongest arguments and most successful strategies for a party.” Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985).

         A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is properly granted when the complaint does not include sufficient factual allegations to render the plaintiff's claims facially plausible or permit reasonable inference that the defendant is liable for the alleged misconduct. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). In assessing the motion, the Court takes as true all well-pleaded factual allegations and makes all reasonable inferences in the favor of the plaintiff. Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). The Court does not credit conclusory statements or legal conclusions, even when the plaintiff purports them to be allegations of fact. See Iqbal, 556 U.S. at 678-79; Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). From the facts averred, the Court must be able to infer “more than the mere possibility of misconduct”; the complaint must include factual allegations that show the plaintiff is entitled to relief. See Ruffin v. Lockheed Martin Corp., 126 F.Supp.3d 521, 526 (D. Md. 2015) (quoting Iqbal, 556 U.S. at 678). The Court may consider materials attached to the complaint without transforming the motion to dismiss into one for summary judgment. See Fed. R. Civ. P. 10(c). The Court may also consider materials attached to a motion to dismiss, so long as such materials are integral to the complaint and authentic. Philips, 572 F.3d at 180.

         Whether a claim should be dismissed with or without prejudice is in the discretion of the Court. Weigel v. Maryland, 950 F.Supp.2d 811, 826 (D. Md. 2013). “While a potentially meritorious claim . . . should not be unqualifiedly dismissed for failure to state a claim unless its deficiencies are truly incurable, such an unqualified dismissal is entirely proper when the court has reviewed the claim and found it to be substantively meritless.” McLean v. United States, 566 F.3d 391, 400-01 (4th Cir. 2009) (internal citations omitted). Therefore, the Court must evaluate the facts pleaded in the complaint, the contents of any attachments that are integral to the complaint and authentic, and the elements of the claims a plaintiff puts forward to determine whether any given claim should be dismissed with or without prejudice.

         III. Discussion

         a. Counts I, II, and III: MCDCA, MCPA, and MMFPA

         Counts I, II, and III of Plaintiffs' Amended Complaint all rely upon the same purported misstatement, i.e., that S&B sent notices of foreclosure to Plaintiffs with the knowledge that S&B lacked authority to foreclose because the loan had been modified. See ECF No. 8 at ¶¶ 27- 28, 31, 40, 44-46. Because the claims sound in fraud, each is subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). See Lewis v. Maryland, Civil No. PWG-17-1636, 2018 WL 1425977, at *3 (D. Md. March 22, 2018); Currie v. Wells Fargo Bank, N.A., 950 F.Supp.2d 788, 799, 800 (D. Md. 2013).

         To state a claim under the MCDCA, Plaintiffs must plausibly aver facts that show that S&B sent the foreclosure notice with actual knowledge that it could not foreclose on the property because the debt was invalid. See Meaney v. Nationstar Mortg., No. CV TDC-16-2959, 2018 WL 1014927, at *12-13 (D. Md. Feb. 21, 2018); Barr v. Flagstar Bank, FSB, ___ F.Supp.3d ___, Civil Action No. GLR-16-3556, 2018 WL 1521870, at *13 (D. Md. Mar. 27, 2018). Plaintiffs' MCPA claim is premised on the alleged MCDCA violation. See ECF No. 8 at ¶ 40. In relevant part, the MMFPA claim requires Plaintiffs to aver facts which show Defendants made a knowing and deliberate misstatement, misrepresentation, or omission during the mortgage lending process with the intent that the Plaintiffs rely on the statement. See Currie, 950 F.Supp.2d at 799.

         Fatal to Plaintiffs' claims, however, is the failure to aver factual content to support an inference that S&B knew that the LMA had taken effect prior to issuing the foreclosure notices. Although Defendants and Plaintiffs dispute when the LMA became legally operative, the answer is immaterial. This is because the pertinent question is whether the Plaintiffs marshalled sufficient facts in the Complaint to demonstrate that S&B sent the foreclosure notices with knowledge that it lacked the authority to foreclose on Bey's property. Given the exceedingly brief window between Bey's execution and mailing of the LMA to NYCB for countersignature, and S&B's issuing the foreclosure notices, no reasonable inference can be drawn that S&B knew of the LMA in advance of sending the notices.[3] Indeed, S&B's prompt voluntary dismissal of the foreclosure action on October ...


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