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KCS Lending, LLC v. Garrison

United States District Court, D. Maryland

April 2, 2019

KCS LENDING, LLC, Plaintiff,
v.
WENDELL GARRISON, et al., Defendants.

          MEMORANDUM OPINION

          Paula Xinis United States District Judge

         Plaintiff KCS Lending LLC (“KCS”) seeks to quiet title and reform a deed conveying real property on grounds of mutual mistake. See ECF Nos. 2, 43. Pursuant to Local Rule 105.6, a hearing is not necessary. For the following reasons, Plaintiff's motions for default judgment and summary judgment (ECF No. 43) are GRANTED.

         I. Background

         At an auction for the sale of real property known as 6413 Kilmer Street, Cheverly, Maryland 20785 (the “Property”), Solar Plus Energy, Inc. (“Solar Plus”) was the highest bidder. ECF No. 2 ¶ 15. As a result, Nationstar Mortgage, LLC (“Nationstar”), the owner of the Property, executed a Purchase Agreement with Wendell Garrison, who was acting “on behalf of Solar Plus.” Id. ¶ 16. Once the parties proceeded to settlement on November 15, 2016, Nationstar conveyed the Property pursuant to a Special Warranty Deed (the “Property Deed”)[1]that, according to Plaintiff, mistakenly identified Garrison as the grantee rather than Solar Plus. Id. ¶ 17.

         On the same day as settlement, Solar Plus obtained a $250, 000 loan from KCS (“KCS Loan”), the proceeds of which were used in part to purchase the Property. Id. ¶¶ 19, 20. As security, “Solar Plus, through its agent Defendant Garrison, conveyed a lien against the Property to KCS” (the “Deed of Trust”). Id. ¶ 19. Both the Property Deed and Deed of Trust were recorded in the land records on January 11, 2017. Id. ¶¶ 17, 19.

         Plaintiff avers that all parties intended the Property Deed to convey the Property to Solar Plus, not Garrison, and further, that Plaintiff would not have extended the KSC Loan if Solar Plus was not the intended owner of the Property. Id. ¶ 18; ECF No. 43 at 4. Based on this error, Plaintiff filed suit in the Circuit Court for Prince George's County against various defendants, including Garrison, Solar Plus, and Nationstar, seeking (1) a declaration that Solar Plus is the owner of the Property; and (2) reformation of the Property Deed to reflect Solar Plus as the grantee. ECF No. 2 ¶¶ 23-32. Plaintiff also named as defendants a number of individuals and entities who have tax and judgment liens against Garrison personally that may have sought to attach to the Property, including the Internal Revenue Service (“IRS”), Prince George's County, Capital One Bank USA (“Capital One”), Community First Bank, Ronald Edlavitch, and Evergreen Title and Escrow Corporation (“Evergreen Title”). Id. ¶ 22.

         The United States, on behalf of the IRS, subsequently removed this action to federal court. ECF No. 1; see also 28 U.S.C. § 1444. Thereafter, Plaintiff also served by publication “all persons unknown claiming any legal or equitable right, title, estate, lien or interest” in the Property. ECF No. 26.

         Only Defendants Nationstar, IRS, and Prince George's County[2] responded to Plaintiff's Complaint. See ECF Nos. 22, 25, 38. On March 14, 2018, Plaintiff moved for the Clerk's entry of default against the remaining Defendants (ECF No. 37 at 1) which was granted on April 16, 2018. See ECF No. 39. Plaintiff now moves for default judgment against Garrison, Solar Plus, Evergreen Title, Ronald Edlavitch, Community First Bank, Capital One and “all persons unknown, claiming any legal or equitable right, title, estate, lien or interest” in the Property. ECF No. 43 at 1. Plaintiff also moves for summary judgment against Nationstar and the IRS. Id. The IRS, the sole defendant to respond to Plaintiff's motion, has “take[n] no position” on Plaintiff's request to reform the Property Deed. ECF No. 51 at 1.

         II. Summary Judgment

         A. Standard of Review

         When reviewing a motion for summary judgment, the Court construes the evidence in the light most favorable to the non-moving party to determine whether any disputed issue of material fact precludes entering judgment in the movant's favor as a matter of law. See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). “A party opposing a properly supported motion for summary judgment ‘may not rest upon the mere allegations or denials of [his] pleadings,' but rather must ‘set forth specific facts showing that there is a genuine issue for trial.'” Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (quoting former Fed.R.Civ.P. 56(e)).

         Summary judgment is appropriate when the Court finds the evidence “is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). A court must grant summary judgment where “no genuine dispute as to any material fact” exists as to the pending complaint allegations. Woollard v. Gallagher, 712 F.3d 865, 873 (4th Cir. 2013). Importantly, a party opposing summary judgment “cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.” Othentec Ltd. v. Phelan, 526 F.3d 135, 140 (4th Cir. 2008) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)); see also Anderson, 477 U.S. at 252 (“The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.”).

         B. Analysis

         Plaintiff asks the Court to declare Solar Plus the sole owner of the Property and order the Property Deed reformed to name Solar Plus as the grantee.[3] ECF No. 2 ¶¶ 23-32. “It is a settled principle that a court of equity will reform a written instrument to make it conform to the real intention of the parties, when the evidence is so clear, strong and convincing as to leave no reasonable doubt that a mutual mistake was made in the instrument contrary to their agreement.” In re Madeoy, 551 B.R. 172, 176 (D. Md. 2016) (quoting Hoffman v. Chapman, 182 Md. 208, 210 (1943)); see also In re Wilkinson, 186 B.R. 186, 190 (Bankr. D. Md. 1995) (“The plaintiff must show that ‘there has been a mutual mistake-that is, where there ...


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