United States District Court, D. Maryland, Southern Division
ERNESTO MCKENZIE, et al. Plaintiffs,
M&T BANK, Defendant.
J. HAZEL UNITED STATES DISTRICT JUDGE.
Ernesto and Alvia McKenzie bring this pro se action
against Defendant M&T Bank claiming wrongful foreclosure.
Specifically, Plaintiffs' Amended Complaint alleges: (1)
violations of the Maryland Mortgage Fraud Protection Act
(“MMFPA”), Md. Code Ann., Real Prop. § 7-401
et seq; (2) violations of the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692
et seq; (3) violations of the Maryland Consumer Debt
Collection Act (“MDCPA”), Md. Code Ann., Com. Law
§ 14-201 et seq.; (4) Intentional Infliction of
Emotional Distress; and (5) a claim for a declaratory
judgment, 28 U.S.C. § 2201 et seq. ECF No.
34-1. Plaintiffs' general allegation that M&T Bank
did not have standing to initiate the prior foreclosure suit
underlies each of Plaintiffs' other claims. Id.
Now pending before the Court is Defendant's Motion to
Dismiss Amended Complaint. ECF No. 37. A hearing is
unnecessary. See Local Rule 105.6 (D. Md.). For the
following reasons, the Motion to Dismiss is granted.
Court derives the following facts from Plaintiffs'
Amended Complaint, ECF No. 34-1, and public land records and
court records of which the Court takes judicial
notice. Plaintiffs are the owners of real property
located in Laurel, Maryland (the Property). ECF No. 34-1 at
2-3.On August 9, 2007, Plaintiffs borrowed a
$324, 000 loan from Countrywide Bank. ECF No. 34-3. They
executed a promissory note in favor of Countrywide and the
note was secured by the Property through a deed of trust.
Id. The Deed of Trust named Countrywide as Lender
and Mortgage Electronic Recording System, Inc. (MERS) as
“nominee for Lender and Lender's successors and
assigns” and the beneficiary under the Deed of Trust.
ECF No. 34-3 at 5, 7.
Plaintiff closed on the Property, Countrywide allegedly sold
the loan to a securitized pool of mortgages described in the
Amended Complaint as the Federal Home Loan Mortgage
Corporation Multiclass Certificates Series 3371 Trust. ECF
No. 34-1 ¶ 27. In route to securitization, the note was
transferred but not correspondingly indorsed. ECF No. 34-1
¶ 29.On March 14, 2014, MERS sought to assign
its interest in the Deed of Trust to the Defendant M&T
Trust. ECF No. 34-3 at 17. On July 25, 2015, after Plaintiffs
defaulted on the loan, substitute trustees initiated a
foreclosure action against Plaintiffs in the Circuit Court of
Prince George's County, Maryland. ECF No. 37-2 at 26. The
Circuit Court denied Plaintiffs' Motion to Stay
Foreclosure Sale on June 29, 2016. Id. at 28. The
property was then sold at a foreclosure sale. Id. at
30. The Circuit Court ratified the sale on August 16, 2017.
Id. at 30, 32. In the order ratifying the sale, the
Circuit Court explained that it was “satisfied that the
sale made and reported by the Substitute Trustees . . . was
fairly and properly made in accordance with applicable
law.” Id. at 32.
the foreclosure suit came to a close, Plaintiffs filed a
separate complaint in the Circuit Court on September 5, 2017
against the substitute trustees, Defendant M&T Bank, and
other defendants, alleging state and federal claims related
to their mortgage loan and the foreclosure. McKenzie v vs
Atlantic Law Group LLC, CAL17-22391 (Cir. Ct. Prince
George's Cty, September 5, 2017). Defendants in that case
removed the action to this Court on November 1, 2017. ECF No.
1. With the Court's leave, ECF No. 35, Plaintiffs filed
an Amended Complaint, which named M&T Bank as the only
Defendant, ECF No. 34-1. Defendant filed a Motion to Dismiss the
Amended Complaint, ECF No. 37, and Plaintiffs filed an
untimely Opposition, ECF No. 40. Defendant did not file a
may “test the adequacy of a complaint by way of a
motion to dismiss under Rule 12(b)(6).” Prelich v.
Med. Res., Inc., 813 F.Supp.2d 654, 660 (D. Md. 2011)
(citing German v. Fox, 267 Fed.Appx. 231, 233 (4th
Cir. 2008)). Motions to dismiss for failure to state a claim
do “not resolve contests surrounding the facts, the
merits of a claim, or the applicability of defenses.”
Prelich, 813 F.Supp.2d at 660 (citing Edwards v.
City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1990)).
The court should not grant a motion to dismiss for failure to
state a claim for relief unless “it is clear that no
relief could be granted under any set of facts that could be
proved consistent with the allegations.” GE Inv.
Private Placement Partners II v. Parker, 247 F.3d 543,
548 (4th Cir. 2001) (citing H.J. Inc. v. Northwestern
Bell Tel. Co., 492 U.S. 229, 249- 50 (1989)). In
evaluating the sufficiency of the Plaintiff's claims, 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). 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.
doctrine of res judicata, or claim preclusion,
“bars a party from suing on a claim that has already
been ‘litigated to a final judgment by that party or
such party's privies and precludes the assertion by such
parties of any legal theory, cause of action, or defense
which could have been asserted in that action.'”
Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556
F.3d 177, 210 (4th Cir. 2009). Res judicata
constitutes a ground for dismissal under Rule 12(b)(6).
Davani v. Va. Dep't of Transp., 434 F.3d 712,
720 (4th Cir. 2006) (citing Andrews v. Daw, 201 F.3d
521, 524 (4th Cir. 2000). A Rule 12(b)(6) dismissal based on
an affirmative defense like res judicata is only
appropriate, however, when the basis for res judicata
“clearly appears on the face of the complaint.”
Richmond, Fredericksburg & Potomac R.R. Co. v.
Forst, 4 F.3d 244, 250 (4th Cir. 1993).
res judicata to bar a claim, three elements must be
satisfied: (1) the present parties are the same or in privity
with the parties in the earlier dispute; (2) the earlier
dispute was based upon the same cause of action, and (3)
there has been a valid final judgment on the merits. See
Ohio Valley Envtl., 556 F.3d at 210 (internal citations
omitted). The applicable res judicata law is the law
of the tribunal in which the prior judgment was entered.
Kremer v. Chem. Const. Corp., 456 U.S. 461, 482
(1982). Thus, because Defendant asserts res judicata
based on a Maryland state-court judgment, Maryland res
judicata law applies.
only element in dispute here is the third-whether the
Maryland Circuit Court's decision ratifying the
foreclosure sale constituted a valid final judgment on the
merits. ECF No. 40-1 at 4. However, “[t]he law is
firmly established in Maryland that the final ratification of
the sale of property in foreclosure is res judicata
as to the validity of such sale, except in case of fraud or
illegality, and hence its regularity cannot be attacked in
collateral proceedings.” Manigan v. Burson,
862 A.2d 1037, 1041 (Md. Ct. Spec. App. 2004) (citation
omitted). Thus, when the Circuit Court ratified the
foreclosure sale, issuing an order proclaiming its
satisfaction that the substitute trustees made the sale
“fairly and properly” “in accordance with
applicable law, ” it rendered a valid final judgment on
the merits, which cannot be collaterally attacked before this
argument that res judicata is inapplicable because
Defendant lacked standing before the Circuit Court, rendering
the foreclosure judgment void, is without merit. Although a
lack of article III constitutional standing may be
collaterally attacked because a judgment issued by a court
lacking jurisdiction is void, see 50 C.J.S.
Judgments § 724, Plaintiffs here do not challenge the
Defendant's constitutional standing. After all, such
standing is not a prerequisite to state court adjudication.
See U.S. Const. art. III. Instead, Plaintiffs simply
challenge the validity of the foreclosure sale. Specifically,
they claim that the prior foreclosure suit was wrongfully
brought because the Note was transferred but never properly
indorsed in accordance with applicable law. ECF No. 34-1 at
4-5; ECF No. 40-1 at 2. Yet, the Maryland Circuit Court
decided in a final judgment that it was “satisfied that
the sale made and reported by the Substitute Trustees . . .
was fairly and properly made in accordance with applicable
law.” ECF No. 37-2 at 32.
Plaintiff's federal suit is an attempt to re-litigate or
collaterally attack a final order ratifying the foreclosure
sale in a state court foreclosure proceeding. Because the
validity of the foreclosure was finally adjudicated on the
merits when the Circuit Court ratified the sale,
Plaintiff's action is barred by res judicata.
foregoing reasons, Defendant's Motion to Dismiss, ECF No.
37, is ...