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Kane v. Bayview Loan Servicing, LLC

United States District Court, D. Maryland, Southern Division

September 10, 2018

MICHELLE R. KANE, Plaintiff,
v.
BAYVIEW LOAN SERVICING, LLC., et al. Defendants.

          MEMORANDUM OPINION

          GEORGE J. HAZEL UNITED STATES DISTRICT JUDGE.

         Plaintiff Michelle R. Kane brings this pro se action against Defendants Bayview Loan Servicing, LLC (“Bayview”), U.S. Bank National Association, as Trustee for Bayview Opportunity Master Fund IIIA REMIC Trust 2014-21NPL1 (“U.S. Bank”), and BWW Law Group, LLC (“BWW”) (collectively, “Defendants”)[1] under various federal and state consumer protection laws following Defendants' attempt to collect a mortgage loan debt and foreclose upon Plaintiff's residence. Now pending before the Court are Defendants' Motions to Dismiss. ECF Nos. 5 (BWW); 6 (Bayview/U.S. Bank). No. hearing is necessary. Loc. R. 105.6 (D. Md. 2016). For the following reasons, Defendants' Motions are granted.

         I. BACKGROUND[2]

         On January 17, 2008, Plaintiff executed a refinance mortgage loan with M-Point Mortgage Services, LLC, with an original principal amount due of $239, 540 (the “Loan”). The Loan and associated promissory note (the “Note”), were secured by a Refinance Deed of Trust (“Deed of Trust”) against Plaintiff's real property located at 1009 Carrington Avenue, Capitol Heights, Maryland 20743 (the “Property”). ECF No. 6-3; 6-4. Thereafter, the Note and Deed of Trust were transferred and assigned to BAC Home Loans Servicing LP and then Bank of America, N.A., ECF Nos. 6-5; 6-6. On March 24, 2014, the Note and Deed of Trust were assigned to the Secretary of Housing and Urban Development (“HUD”), with Bayview designated as the Loan servicer. ECF No. 6-7; ECF No. 1-2 (notice to Plaintiff stating that Bank of America is transferring the servicing of the Loan to Bayview). On July 1, 2014, the Note and Deed of Trust were assigned to Bayview. ECF Nos. 6-8; 6-3. It appears that the Note was “securitized” pursuant to a pooling and servicing agreement between HUD and Bayview, though Plaintiff disputes the validity of this agreement. See ECF No. 1 ¶ 34; see also ECF No. 1-6 (Plaintiff indicating that Bayview purchased pools of mortgages in default from HUD for “pennies on the dollar”). Thereafter, Bayview, as servicer of the Loan, informed Plaintiff that U.S. Bank was the associated creditor. See, e.g., ECF No. 1-4 (Bayview informing Plaintiff that the Loan was transferred to a new creditor, U.S. Bank); see also ECF No. 6-9 (Appointment of Substitute Trustees listing U.S. Bank as the holder of the Note and Deed of Trust).

         On June 25, 2014, Bayview sent Plaintiff a Notice of Default and Intent to Accelerate, asserting that Plaintiff defaulted on her loan on August 1, 2011. ECF No. 1-10. On July 26, 2016, Plaintiff received a letter from BWW, informing her that BWW had been retained to provide legal services in connection with enforcement of the Deed of Trust. ECF No. 1-19. On November 1, 2016, Substitute Trustees assigned by U.S. Bank filed an Order to Docket a Foreclosure in the Circuit Court for Prince George's County, Maryland, No. CAEF16-40119 (“Foreclosure Action”).[3] On March 9, 2017, the circuit court denied Plaintiff's motion to stay and dismiss the Foreclosure Action. ECF No. 6-13. Plaintiff then attempted to remove the Foreclosure Action to this Court, but the action was remanded back to the circuit court. See Ward v. Kane, No. GJH-17-0553, 2017 WL 1483343 (D. Md. Apr. 21, 2017). Thereafter, Plaintiff filed Exceptions to Sale pursuant to Maryland Rule 14-305 challenging U.S. Bank's standing to foreclose and sought to have the March 7, 2017 foreclosure sale declared void. ECF No. 6-14. On November 22, 2017, the circuit court ordered the Foreclosure Action to continue in due course, finding that Plaintiff's Exceptions did not “identify any legitimate procedural irregularity regarding the [prior] foreclosure sale.” ECF No. 6-16. Plaintiff then filed the instant suit against Defendants, asking the Court to “void the illegal foreclosure, sale, ratification, and eviction” and award damages in the amount of $20 million pursuant to the following federal and state consumer protection laws: Count I - Fair Debt Collection Practices Act (“FDCPA”); Count II - Maryland Consumer Debt Collection Act (“MCDCA”); and Count III - Real Estate Settlement Procedures Act (“RESPA”). See ECF No. 1 ¶¶ 10, 115.

         II. STANDARD OF REVIEW

         A “document filed pro se is to be liberally construed, and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.” See Linlor v. Polson, 263 F.Supp.3d 613, 618-19 (E.D. Va. 2017) (citing Erickson v. Pardus, 551 U.S. 89, 94 (2007)) (internal quotations omitted). However, the Court may not ignore a clear failure in the pleading to allege facts that set forth a cognizable claim. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 390-91 (4th Cir. 1990). The Court may not act as the pro se plaintiff's advocate and develop claims that she failed to clearly raise. Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978). Therefore, to overcome a Rule 12(b)(6) motion, a pro se complaint must still 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 plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. In evaluating the sufficiency of the complaint, the Court accepts factual allegations in the complaint as true and construes the factual allegations in the light most favorable to the plaintiff. See 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). However, the complaint must contain more than “legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement.” Nemet Chevrolet, Ltd v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009).

         III. DISCUSSION

         Plaintiff's thirty-six page Complaint contains a litany of convoluted allegations and legal conclusions related to Defendants' attempts to service and collect Plaintiff's debt. It appears that the gravamen of Plaintiff's Complaint is that the securitization of her loan and transfer of the Title and Deed of Trust from HUD to Bayview was somehow invalid, and the recorded documents pertaining to the transfer provide insufficient proof of Bayview's legal interest. Therefore, Defendants allegedly do not have a legal interest in the underlying mortgage and have attempted to collect a “non-existing” debt. See ECF Nos. 1 at 8; 1 ¶ 45 (noting that Plaintiff's credit history reflecting a debt to Bayview “is not factual data because the debt is not owed to Bayview or U.S. Bank”).[4] Notably, Plaintiff points to a HUD training presentation, ECF No. 1-21, and alleges that because her loan did not qualify for “the Preferred Pooling Eligibility, ” U.S. Bank cannot be the owner of the loan. ECF No. 1 ¶ 65.

         A. Collateral Attack on the Foreclosure Action

         Defendants argue that Plaintiff's suit is an impermissible collateral attack on the Foreclosure Action. ECF No. 6-1 at 12. While Plaintiff asserts that she “is not attacking the foreclosure, she is attacking the fraud, ” ECF No. 10 at 2, Plaintiff's principal allegation is that Defendants do not have a legal interest in the Note and Deed and, therefore, the Court should “void the illegal foreclosure, sale, ratification, and eviction” of the Property. See ECF No. 1 ¶ 25 (alleging that Bayview “lack standing to foreclose on said property” because it claims to be the servicer for a non-existent trust). This is, in essence, an attack on the validity of the underlying Foreclosure Action.

         In Maryland, a plaintiff may challenge a foreclosure sale by 1) filing a motion to stay or dismiss a pending foreclosure sale to challenge the right of the lender to foreclose pursuant to Md. Rule 14-211; 2) raising post-sale procedural irregularities pursuant to Md. Rule 14-305(d) (i.e., Exceptions to the Sale); or 3) challenging the post-sale audit. See Thomas v. Nadel, 48 A.3d 276, 277-78 (Md. 2012). The circuit court has twice considered and rejected the same arguments that Plaintiff puts forth in this action. On November 29, 2016, Plaintiff moved to dismiss the Foreclosure Action pursuant to Md. Rule 14-211, challenging the successive assignments of the Deed, chain of title, and alleging that Defendants did not have a legal interest in the Property. ECF No. 6-11. On March 7, 2017, the circuit court denied Plaintiff's motion on the merits. ECF No. 6-13. Thereafter, on July 19, 2017, Plaintiff filed Exceptions to the Sale pursuant to Rule 14-305, again challenging Defendants' standing to pursue the Foreclosure Action. ECF No. 6-14. On November 22, 2017, the Circuit Court overruled Plaintiff's Exceptions, finding that Plaintiff did not identify any legitimate procedural irregularity regarding the foreclosure sale that occurred on March 7, 2017, and ordered the Foreclosure Action to continue in due course. ECF No. 6-16.

         “The Maryland courts and this Court, applying Maryland law, have consistently held that res judicata bars collateral attacks on foreclosure judgments entered in the Circuit Courts.” See Jones v. HSBC Bank USA, N.A., No. RWT 09CV2904, 2011 WL 382371, at *5 (D. Md. Feb. 3, 2011) (holding that plaintiff could not re-litigate claims to title over a property that were resolved in a state court foreclosure proceeding) (citations omitted). While the circuit court did not consider Plaintiff's claims under FDCPA, MCDCA, and RESPA filed herein, Plaintiff is attempting to re-litigate whether Defendants' had a legal interest in the underlying loan. See, e.g. ECF No. 6-11 ¶ 23 (Plaintiff arguing that Bayview Opportunity Master Fund IIIA REMIC Trust 2014-21NPL1 “is not a valid Trust and does not exist”). As these issues have been resolved by the circuit court, Plaintiff's claims related to whether Defendants may collect upon Plaintiff's debts through the Note and Deed of Trust are barred by res judicata.[5] Additionally, because Plaintiff was not a party or an intended third-party beneficiary to the pooling and servicing agreement underlying the securitization of her loan, Plaintiff is unable to challenge whether Bayview or U.S. Bank has a legal interest in the Property. See Bell v. Clarke, No. TDC-15-1621, 2016 WL 1045959, at *3 (D. Md. Mar. 16, 2016) (holding that plaintiff did not have standing to amount a direct attack on the transfer of his note and deed of trust under a pooling and servicing agreement even if the alleged fraud or errors in assignment rendered the ...


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