United States District Court, D. Maryland
J. MESSITTE UNITED STATES DISTRICT JUDGE.
Se Plaintiffs Michael and Melanie Smallwood (“the
Smallwoods”) have sued NationStar Mortgage, LLC
(“Nationstar”), Wilmington Trust, National
Association (“Wilmington Trust”), Bank of America
N.A. and LaSalle Bank, N.A. (collectively the “Bank
Defendants”), Diane Rosenberg and her firm Rosenberg
& Associates, L.L.C. (collectively the “Rosenberg
Defendants”). The Smallwoods allege various wrongs,
including fraud and misrepresentation, relating to a
foreclosure proceeding in the Circuit Court for Prince
George's County with respect to their residence located
in Brandywine, Maryland (“Brandywine Property”).
have filed Motions to Dismiss, (ECF Nos. 22, 24, 29). The
matter has been fully briefed, and no hearing is necessary.
See D. Md. Loc. R. 105(6). For the reasons that
follow, Defendants' Motions to Dismiss (ECF Nos. 22, 24,
29) are GRANTED.
FACTUAL AND PROCEDURAL BACKGROUND
September 2005, the Smallwoods took out a mortgage loan from
First Franklin Bank in connection with the purchase of the
Brandywine Property. ECF No. 1 ¶ 16. A Promissory Note
(“the Note”) executed by the Smallwoods was
transferred a number of times to multiple entities, in the
last instance to Wilmington Trust. ECF No. 24-4; ECF No. 1
¶ 16. Nationstar was Wilmington Trust's loan
servicer. ECF No. 24-1 at p. 5. In 2012, the Smallwoods
defaulted on their repayment obligations, as a result of
which Nationstar initiated foreclosure proceedings against
the Brandywine Property in the Circuit for Prince
George's County, Maryland. See BSBSC v.
Smallwood, No. CAEF15-25056 (Prince George's County
Cir. Ct.). Between 2012 and 2016 (before the present suit was
filed), the Smallwoods filed multiple counter-claims and
motions in the Circuit Court for Prince George's County
in attempts to block the foreclosure. They also filed an
appeal to the Maryland Court of Special Appeals, with the
effect of further delaying the foreclosure. On January 2,
2019, the Court of Special Appeals affirmed the Circuit Court
in an unpublished opinion.
public records search of Prince George's County Mapping
reveals that Wilmington Trust is now the owner of the
property. See www.pgatlas.com (search for: 8113
Elora Lane). Even so, as a result of their persistent
litigation, it may be that the Smallwoods remain occupants of
the property. It is unknown whether they have been making any
rental or other payments on the property.
another attempt to invalidate or forestall the foreclosure
proceeding, the Smallwoods filed a lawsuit against the Bank
Defendants on January 15, 2016 in the United States District
Court for the District of Columbia, most of whom they had
sued in the Prince George's County foreclosure
proceedings. That case was transferred to this Court on June
19, 2018 and docketed as Smallwood, et al. v. NationStar
Mortgage, et al., and is the case presently before the
Court. ECF Nos. 1, 18, 19. The Complaint asserts four causes
of action: (1) Injunctive Relief and Cancellation of
Instruments, (2) Violation of the Truth in Lending Act
(“TILA”), (3) Breach of Fiduciary Duty, and (4)
Common Law Fraud. Id. at 34-58. In support of those
claims, the Complaint, which fails to distinguish which
Defendants supposedly have done what, states in general that
the Defendants falsely claimed to have powers of attorney,
conspired to fraudulently assign the deed to the Brandywine
Property, and failed to prove ownership of the Note.
Id. at 34-40. Further, Defendants allegedly violated
15 U.S.C. § 1641 because Nationstar assigned the deed
without a valid power of attorney and failed to give the
Smallwoods notice of the assignment via mail. Id. at
40-47. Moreover, Defendants allegedly breached fiduciary
duties owed the Smallwoods because First Franklin Bank did
not thoroughly advise them about the possible repercussions
of entering into the loan agreement. Id. at 48-50.
Defendants supposedly further misrepresented themselves as
lenders as opposed to loan servicers, as a result of which,
the Smallwoods argued, the foreclosure proceeding is invalid.
Id. at 50-58. The Smallwoods' core argument is
that Defendants did not have the legal authority to assign
the interest in the Brandywine Property, citing the alleged
deficiencies with the chain of title and securitization of
the mortgage. Id. at 34-58.
responded to the Complaint by filing motions to dismiss, one
of which argued that venue in the federal court in the
District of Columbia was improper. ECF Nos. 5, 6, 7. On
August 22, 2016, Judge Emmet G. Sullivan stayed the case to
resolve the issue of venue, see ECF No. 17 at 4,
then on May 29, 2018, issued an order transferring the case
to this Court. ECF No. 18. The case was transferred on June
19, 2018 and, as indicated, is the case presently before the
undersigned. Id.; ECF No. 19.
Judge Sullivan's stay and independently of this action,
the Smallwoods filed a separate Complaint in this Court on
December 28, 2016 against the same group of Defendants plus
others, which was assigned to Judge Xinis. See Smallwood
v. NationStar Mortgage, LLC, No. PX-16-4008 2018 U.S.
Dist. LEXIS 209854 *1 (D. Md. May 1, 2018). In the case
before Judge Xinis, the Smallwoods raised issues of fact and
law indistinguishable from those alleged in the case that
would later be transferred to the undersigned. Id.
In her case, Judge Xinis dismissed all claims with prejudice
and closed the case on May 1, 2018. Id.
Judge Xinis decided her case, by August 1, 2018, Defendants
in the case presently at hand renewed their motions asking
this Court to dismiss the present case on the basis of
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6),
“a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“A claim has facial plausibility 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. “Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Id. (citing Twombly, 550 U.S. at 555).
the facts alleged in the Complaint as true, when reviewing a
motion to dismiss a court “may consider documents
attached to the complaint, as well as documents attached to
the motion to dismiss, if they are integral to the complaint
and their authenticity is not disputed.” Sposato v.
First Mariner Bank, No. CCB-12-1569, 2013 WL 1308582, at
*2 (D. Md. Mar. 28, 2013). Courts may take judicial notice of
state court documents pursuant to Fed.R.Evid. 201. When a
defendant asserts that facts outside of the complaint deprive
a court of jurisdiction, the court “may consider
evidence outside the pleadings without converting the
proceeding to one for summary judgment.” Velasco v.
Gov't of Indonesia, 370 F.3d 392, 398 (4th Cir.
2004). Specifically, in considering a res judicata
defense at the motion to dismiss stage, a court may take
judicial notice of prior judicial proceedings when the
res judicata defense raises no disputed issues of
fact. See Andrews v. Daw, 201 F.3d 521, 524 n.1 (4th