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Green-Wright v. JPMorgan Chase Bank, N.A.

United States District Court, D. Maryland

August 7, 2018

JPMORGAN CHASE BANK, N.A. et al., Defendants.



         Plaintiff Tanya L. Green-Wright has sued her mortgage servicers, JPMorgan Chase Bank, N.A. (“Chase”) and Rushmore Loan Management Services LLC (“Rushmore”). ECF 18. She alleges, inter alia, breach of contract, fraud, and violations of state and federal laws in connection with a foreclosure proceeding on her home. ECF 18 (Amended Complaint).[1]

         The Amended Complaint asserts five separate counts against defendants: Violations of the Maryland Consumer Protection Act (“MCPA”), Md. Code (2013 Repl. Vol., 2017 Supp.), §§ 13-101 et seq. of the Commercial Law Article (“C.L.”) (Count I); Detrimenal [sic] Reliance (Count II); Violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601 et seq. (Count III); Fraud (Count IV); and Breach of Contract (Count V). See ECF 18. Along with the Amended Complaint, plaintiff submitted a letter dated November 26, 2014, from Chase to plaintiff, regarding a loan modification. ECF 18-2 (Loan Modification Letter).

         Both defendants have moved to dismiss the Amended Complaint, pursuant to Fed.R.Civ.P. 12(b)(6). ECF 19 (Chase); ECF 21 (Rushmore). The motions are supported by memoranda of law. ECF 19-1 (collectively with ECF 19, “Chase Motion”); ECF 21-1 (collectively with ECF 21, “Rushmore Motion”) (together, the “Motions”). Defendants submitted several exhibits with the Motions. Plaintiff opposes the Motions. ECF 23 (“Opposition to Chase Motion”); ECF 25 (“Opposition to Rushmore Motion”). Defendants replied. ECF 29 (“Chase Reply”); ECF 28 (“Rushmore Reply”).

         No hearing is necessary to resolve the Motions. See Local Rule 105.6. For the reasons that follow, I shall grant the Motions in part and deny them in part.

         I. Factual and Procedural Background[2]

         Plaintiff alleges that she obtained a mortgage loan in 2008, and that Chase was the servicer of this loan from April 9, 2013, until February 1, 2016. ECF 18, ¶¶ 6-7. On February 1, 2016, Rushmore took over service of the loan. Id. ¶ 7.

         According to the Amended Complaint, Chase, through its substitute trustees, filed a foreclosure action against plaintiff on January 14, 2014. Id. ¶ 8. Throughout the foreclosure process, plaintiff alleges that Chase “misled [her] to believe the home was not in jeopardy” in order to “ensure the homeowner would fail to defend herself in the foreclosure action.” Id. ¶ 9.

         In particular, plaintiff alleges that on an unspecified date she submitted a completed loan modification application. Id. ¶ 10. Thereafter, on November 26, 2014, Chase sent plaintiff the Loan Modification Letter. ECF 18-2. The Loan Modification Letter outlined the terms of a proposed loan modification, and represented that Chase would modify plaintiff's loan if she made three monthly trial payments of $1, 510.25 on January 1, 2015, February 1, 2015, and March 1, 2015. ECF 18, ¶ 10; see also ECF 18-2.

         The Loan Modification Letter states, ECF 18-2 at 2: “If you make all of your payments during the trial period, we'll be able to permanently lower your payments.” Further, the Loan Modification Letter advises, id.: “To accept this offer, you'll need to make your first monthly ‘trial period payment' under your Trial Period Plan . . . . After you make all trial period payments on time, we will permanently modify your mortgage.”

         Plaintiff maintains that she “accepted the offer . . . by timely making all three payments.” According to plaintiff, after she made the three trial payments, “Chase repeatedly assured [her] verbally that the home was no longer in jeopardy.” ECF 18, ¶ 12. And, plaintiff contends that, as a result of the offer, she declined to pursue “other efforts to save the home, such as by filing defensive papers in the foreclosure action or attempting to restructure the loan in a bankruptcy action.” Id. ¶ 11.

         However, plaintiff insists that her loan was never modified, and instead Chase proceeded with the foreclosure action. Id. ¶¶ 13, 15. According to plaintiff, Chase filed a “Certification of Publication of Sale” on the foreclosure case's docket on August 5, 2015. Id. ¶ 13. When plaintiff contacted Chase about this notice, Chase allegedly “assured her that the home was not in jeopardy, and that the sale notice was a mere error.” Id. ¶ 14.

         Several months later, on February 1, 2016, Chase assigned the servicing rights to Rushmore. Id. ¶ 15. Plaintiff maintains that at this time she was “still in the midst of being considered for a loan modification.” Id. However, plaintiff contends that Rushmore never made a final decision on plaintiff's loan modification application. Id. ¶ 15.4.

         Instead, Rushmore scheduled a foreclosure sale for July 15, 2016. ECF 18, ¶ 16. Plaintiff moved to cancel the sale on July 14, 2016, but the motion was denied and the sale was ratified on September 23, 2016. Id.

         According to plaintiff, throughout this process, “Chase and Rushmore acted with actual malice” “in furtherance of their profit motive.” Id. ¶ 23. As a result, plaintiff suffered damages, which she alleges include the trial period payments she made, damage to her credit rating, and “other expenses associated with the loan modification application and foreclosure action, ” as well as noneconomic damages. Id. ¶ 24.

         II. Legal Standards

         A. Choice of Law

         Although this case involves principles of both state and federal law, no party has addressed the matter of choice of law. The law of the forum state, Maryland, guides the Court's choice-of-law analysis. See Baker v. Antwerpen Motorcars Ltd., 807 F.Supp.2d 386, 389 n.13 (D. Md. 2011) (“In a federal question [claim] that incorporates a state law issue, . . . a district court applies the choice-of-law rules of the state in which it sits unless a compelling federal interest directs otherwise.”).

         In a contract claim, Maryland courts follow the rule of lex loci contractus, applying the substantive law of the state where the contract was formed, unless there is a choice-of-law provision in the contract. Am. Motorists Ins. Co. v. ARTRA Group, Inc., 338 Md. 560, 573, 659 A.2d 1295, 1301 (1995). The Loan Modification Letter, which plaintiff alleges to be a contract, does not state a choice-of-law provision, but it appears to have been executed in Maryland. See ECF 18, ¶ 1. And, the Property is located in Maryland. Id. Accordingly, I will apply Maryland law in addressing plaintiff's contract claims.

         For tort claims, Maryland applies the principle of lex loci delicti, i.e., the law of the “place of the alleged harm.” Proctor v. Washington Metropolitan Area Transit Auth., 412 Md. 691, 726, 990 A.2d 1048, 1068 (2010). Given the Property's location, the alleged harm would have occurred in Maryland. Accordingly, I will look to Maryland law with respect to the analysis of plaintiff s claims sounding in tort.

         In sum, except with respect to the issues of federal law that control plaintiffs RESPA claim, I will apply Maryland law.

         B. Rule 12(b)(6)

         A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd, 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law “to state a claim upon which relief can be granted.”

         Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). That rule provides that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to provide the defendant with “fair notice” of the claims and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' . . . .” (citation omitted)); see also Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). But, a plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of Shelby, Miss., ___U.S.___, 135 S.Ct. 346, 346 (2014) (per curiam).

         Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action, ” it is insufficient. Twombly, 550 U.S. at 555. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely.” Twombly, 550 U.S. at 556 (internal quotations omitted).

         In reviewing a Rule 12(b)(6) motion, a court “must accept as true all of the factual allegations contained in the complaint” and must “draw all reasonable inferences [from those facts] in favor of the plaintiff.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. Maryland Transit Admin., 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). “A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to the legal remedy sought. A Society Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937 (2012).

         Courts generally do not “‘resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses'” through a Rule 12(b)(6) motion. Edwards, 178 F.3d at 243 (citation omitted). But, “in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed under Rule 12(b)(6).” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); accord Pressley v. Tupperware Long Term Disability Plan, 533 F.3d 334, 336 (4th Cir. 2009); see also U.S. ex rel. Oberg v. Penn. Higher Educ. Assistance Agency, 745 F.3d 131, 148 (4th Cir. 2014). However, because Rule 12(b)(6) “is intended [only] to test the legal adequacy of the complaint, ” Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), “[t]his principle only applies . . . if all facts necessary to the affirmative defense ‘clearly appear[ ] on the face of the complaint.'” Goodman, 494 F.3d at 464 (quoting Forst, 4 F.3d at 250) (emphasis added in Goodman).

         In evaluating the sufficiency of a complaint in connection with a Rule 12(b)(6) motion, a court ordinarily “may not consider any documents that are outside of the complaint, or not expressly incorporated therein . . . .” Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013); see Bosiger, 510 F.3d 442, 450 (4th Cir. 2007). However, without converting a motion to dismiss to a motion for summary judgment, a court may properly consider documents expressly incorporated into the complaint or attached to the motion to dismiss, “‘so long as they are integral to the complaint by reference and authentic.'” U.S. ex rel. Oberg, 745 F.3d at 136 (quoting Philips v. Pitt Cty. Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009)); see Six v. Generations Federal Credit Union, 891 F.3d 508, 512-13 (4th Cir. 2018); Goldfarb v. Mayor & City Council of Balt, 791 F.3d 500, 508 (4th Cir. 2015); Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004).

         To be “integral” a document must be one “that by its ‘very existence, and not the mere information it contains, gives rise to the legal rights asserted.'” Chesapeake Bay Found, Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis in original). See also Fed. R. Civ. P. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”).

         However, “before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it.” Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S Bend, 163 F.3d 449, 455 (7th Cir. 1998)). Of import here, “[w]hen the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper.” Goines, 822 F.3d at 167. “Accordingly, if a breach-of-contract plaintiff alleges a failure to perform an act required by the contract, the contract's description of the defendant's duties will prevail over the plaintiffs contrary characterization.” Id. at 166. Conversely, “where the plaintiff attaches or incorporates a document for purposes other than the truthfulness of the document, it is inappropriate to treat the contents of that document as true.” Id. at 167.

         A court may also “consider a document submitted by the movant that was not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document's authenticity.” Goines, 822 F.3d at 166 (citations omitted); see also Woods v. City of Greensboro, 855 F.3d 639, 642 (4th Cir. 2017), cert. denied, ____U.S.____, 138 S.Ct. 558 (2017); Kensington Volunteer Fire Dep't. v. Montgomery Cty., 684 F.3d 462, 467 (4th Cir. 2012).

         As noted, plaintiff attached the Loan Modification Letter to her Amended Complaint. See ECF 19 to ECF 19-8. And, defendants submitted several documents related to plaintiffs mortgage and the foreclosure on her home. See ECF 19-2; ECF 21-2 to 21-5. To the extent these exhibits are integral to the Amended Complaint, I may consider them without converting the Motions to ones for summary judgment. See, e.g., Goines, 822 F.3d at 166.

         C. Rule 9(b)

         Plaintiff alleges two claims against defendants that sound in fraud: Count I, for Violations ...

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