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Hebbeler v. First Mariner Bank

United States District Court, D. Maryland

May 17, 2019

ARTHUR F. HEBBELER, et en Plaintiffs,



         Plaintiffs Arthur and Deborah Hebbeler (together, the "Hebbelers") have sued their mortgage lender, First Mariner Bank ("FMB" or the "Bank"), alleging breach of contract, fraud, and violations of state and federal laws in connection with a foreclosure proceeding on their home. ECF 2 (the "Complaint").[1] The Complaint initially contained nine counts against FMB: Violations of the Maryland Consumer Protection Act ("MCPA"), Md. Code (2013 Repl. Vol., 2018 Supp.), §§ 13-101 et seq. of the Commercial Law Article ("C.L.") (Count I); Detrimenal [sic] Reliance (Count II); Breach of Contract (Count III); Negligence (Count IV); Unjust Enrichment (Count V); Violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et seq. (Count VI); Fraud (Count VII); Declaratory Judgment (Count VIII); and Injunctive Relief (Count IX). See. ECF 2.

         In a Memorandum Opinion (ECF 20) and Order (ECF 21) of August 10, 2015, the Court granted in part and denied in part the Bank's motion to dismiss. See ECF 13 (Motion). In particular, the Court dismissed Counts I, VII, VIII, and IX.

         Thereafter, the Bank filed an Answer (ECF 22) to the Complaint. The Answer contains several "negative defenses" and numerous "affirmative defenses." Id. at 11-13.

         Pending before the Court is FMB's "Motion to Amend Answer and to Assert Counterclaims and Cross Claim" (ECF 27, the "Motion"), filed on January 10, 2019. FMB moves for leave to amend its Answer ("Amended Answer") and to assert five counterclaims against the Hebbelers, as well as a cross claim against the United States Small Business Administration ("SBA"), for declaratory relief (collectively, the "Counterclaim"). ECF 27-1.

         The Amended Answer proposes two new affirmative defenses: fraud ("SEVENTEENTH AFFIRMATIVE DEFENSE") and unclean hands ("EIGHTEENTH AFFIRMATIVE DEFENSE"). ECF 27-1 at 13. The Counterclaim asserts four counts against the Hebbelers: fraud (Count I); tortious interference with economic relationships (Count II); breach of contract (Count III); and unjust enrichment (Count IV). And, in Count V, FMB seeks declaratory relief against the Hebbelers and the SBA.[2]

         Plaintiffs oppose the Motion (ECF 28), contending that the proposed amendments are "futile." ECF 28-1 at 3-4. The Bank has replied (ECF 29) and has provided six exhibits. ECF 29-1 -ECF 29-6.

         No hearing is necessary to resolve the Motion. Local Rule 105.6. For the reasons that follow, I shall grant the Motion (ECF 27).

         I. Factual and Procedural Background

         As noted, plaintiffs filed the instant suit in the Circuit Court for Baltimore City on November 1, 2017. ECF 2. On December 7, 2017, FMB removed the case to this Court, pursuant to 28 U.S.C. §§ 1331, 1441, and 1446. ECF 1.

         Plaintiffs allege that they obtained a mortgage from defendant in July 2002, secured by their home on Hilton Avenue in Catonsville, Maryland (the "Property")- ECF 2, ¶¶ 6-7; see ECF 19. In May 2015, plaintiffs and defendant entered into a Forbearance Agreement. ECF 2, ¶ 9; see ECF 19 ("Forbearance Agreement" or "Agreement"). According to the Forbearance Agreement, plaintiffs defaulted on their mortgage in 2012 and, as of April 23, 2015, they were in arrears of $101, 931.66. ECF 2, ¶ 9; ECF 19 at 2-3.

         The Forbearance Agreement provided that FMB would forbear from foreclosing on the Property so long as plaintiffs complied with the terms of the Agreement. ECF 19 at 9, Among those terms was a payment schedule, which stated that plaintiffs were to pay $68, 000 immediately; an additional $20, 284.78 by May 29, 2015; and a further sum of $13, 646.88 by August 1, 2015. ECF 2, ¶ 10; ECF 19 at 4. The Complaint alleges that these payment deadlines were merely "guidelines, and not material terms of the Agreement." ECF 2, ¶ 10. However, the Forbearance Agreement itself states that the "breach" of "any of the provisions of th[e] Agreement" shall be considered an "Event of Default," allowing FMB to "exercise any and all of its default rights and remedies . . . including . . . foreclosing on the Property." ECF 19 at 5-6. The Agreement also specifies that the "failure of [plaintiffs] to comply with . . . any of the provisions of the Loan Documents" would constitute another "Event of Default." Id. at 5. The plaintiffs were required to make monthly payments of $2, 936.71 on their mortgage. See ECF 13-8 ("Note") at \;see also ECF2, ¶ 23.

         According to plaintiffs, "FMB's records suggest that from May 7, 2015 through August 15, 2015, [plaintiffs] paid a total of $97, 984.78 under the Forbearance Agreement." ECF 2, ¶ 11. This would imply that plaintiffs were $3, 946.88 short of the amount due under the Agreement. But, plaintiffs contend that "FMB failed to apply two crucial payments," totaling $4, 300.00, which plaintiffs "hand delivered" to the Bank on May 8, 2015, and June 22, 2015. Id. ¶¶ 11-12. Plaintiffs maintain that the Bank failed to deposit their checks, and thus the payments were not applied under the Agreement. Id. ¶ 12. According to plaintiffs, had these payments been applied, they would have exceeded the payment amount due under the Forbearance Agreement. Id. ¶¶ 12-13, 18.

         In the ensuing year, plaintiffs allege that they repeatedly contacted FMB to ask that the payments be applied to their account, and consistently maintained that defendant's accounting was incorrect. Id. ΒΆ 15. Plaintiffs further allege that ...

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