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Estate of Morgan v. Bww Law Group, LLC

United States District Court, D. Maryland, Southern Division

July 2, 2019

ESTATE OF RUSSELL MORGAN, et al., Plaintiffs,
BWW LAW GROUP, LLC, et al., Defendants.



         Before the Court is Defendant Nationstar Mortgage, LLC and Federal Home Loan Mortgage Company's Rule 12(b)(6) Motion to Dismiss (“Defendants' Motion”) (ECF No. 37).[1]The Court has reviewed Defendants' Motion and the memoranda related thereto. No. hearing is deemed necessary. Local Rule 105.6 (D. Md.). For the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART Defendants' Motion.

         I. Standard of Review

         Federal Rule of Civil Procedure 12(b)(6) provides for “the dismissal of a complaint if it fails to state a claim upon which relief can be granted.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule's purpose “is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4thCir. 2006)). In doing so, the Court must keep in mind the requirements of Fed.R.Civ.P. 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), and must state “a plausible claim for relief, ” as “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice, ” Iqbal, 556 U.S. at 678-79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly).

         “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.” Iqbal, 556 U.S. at 678. At this stage of the proceedings, the Court must accept the well pled facts alleged in complaint as true. See Aziz v. Alcolac, 658 F.3d 388, 390 (4th Cir. 2011). With these principles in mind, the Court now turns to the specific allegations set forth in the SAC.[2]

         II. Plaintiffs' Factual Allegations Against Federal Home Loan Mortgage Company are Sufficient.

         Plaintiffs state that Nationstar is the agent of the Federal Home Loan Mortgage Company (“FHLMC” or “Freddie Mac”), and therefore Freddie Mac is liable under the theory of respondeat superior. SAC ¶74. Plaintiffs' rely upon Proctor v. Wells Fargo Bank, N.A., 289 F.Supp.3d 676 (D. Md. 2018) and Cezair v. JP Morgan Chase Bank, N.A., Civ. A. No. DKC-13-2928, 2014 WL 4295048 (D. Md. Aug. 29, 2014). Clearly, Plaintiffs are of the view that Freddie Mac bears vicarious responsibility for the actions of Nationstar.

         Defendants make no further challenge to Plaintiffs' theory in their reply memorandum. Accordingly, the Court will give no consideration of Defendants' contention here. The Court DENIES Defendants' Motion based solely on the challenge that Plaintiffs did not allege misconduct attributable to Freddie Mac.

         III. Plaintiffs Have Sufficiently Presented a Claim Under the Maryland Consumer Debt Collection Act.

         Plaintiffs' state in the SAC that Defendants violated the Maryland Consumer Debt Collection Act (“MCDCA”) found at Md. Code Ann., Com. Law, Sec. 14-202(8) (Lexis/Nexis 2013 Replacement Volume). Specifically, Plaintiffs allege that Defendants violated the act by “collecting and/or claiming a right and/or attempting to collect on a debt that Defendants had no right to collect when Defendants knew they were not holders of the Note and had no right to collect payment under the Note.” SAC ¶68.

         The statute states that a debt collector may not “claim, attempt, or threaten to enforce a right with knowledge that the right does not exist.” Remedies for a violation include “damages proximately caused . . . including damages for emotional distress or mental anguish suffered with or without physical injury.” Md. Code Ann., Com. Law, Sec. 14-203 (Lexis/Nexis 2013 Replacement Volume). Furthermore, the MCDCA prohibits a party from “attempting to enforce a right with actual knowledge or with reckless disregard as to the falsity of the existence of the right.” Kouabo v. Chevy Chase Bank, F.S.B., 336 F.Supp.2d 471, 476 (D. Md. 2004).

         The parties agree that Nationstar sent correspondence, dated March 18, 2016, which indicated that “a foreclosure action may be filed in court as early as 45 days from the post mark date of this notice.” Plaintiffs allege, and Defendants did not dispute, that there was no actual “filing” for the foreclosure action until nearly a year later, on March 19, 2017. These facts are nearly identical to the circumstances set forth in the Cezair decision.

         In Cezair, this Court denied the defendant's motion to dismiss. The underlying notice to the mortgagor in Cezair also indicated the that foreclosure sale “may” occur at any time after 45 days from the date of the notice. However, the law prohibits such a sale, unless the 45 days are preceded by the “service of process” of the foreclosure order to docket (or complaint to foreclose) on residential property and all other papers filed with the court. Md. Code Ann., Real Prop. Sec. 7-105.1(n) (Lexis/Nexis 2013 Replacement Volume). As more plainly stated, “when service of the foreclosure order to docket is made, the notice to occupants should be made simultaneously, and not when the foreclosure order to docket is filed in the Circuit Court, which would occur before service.” Cezair, at *10. Here, there is no indication that a filing of the foreclosure order occurred before the service of the notice. Accordingly, “if such a statement is made before the legal right to do so exists, it can constitute a threat to act that is made with knowledge of the threat's illegality.” Id.

         In order to overcome a motion to dismiss regarding a MCDCA claim, Plaintiffs must also satisfy the burdens imposed by Federal Rule of Civil Procedure 9(b) which states that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” The guiding principles for illuminating the sufficiency of allegations that satisfy this heightened standard, are adequately stated in Harrison v. Westinghouse Savannah River Co., 176 F.3d 776 (4th Cir. 1999). There, the court pointed out that the circumstances required to be pled are, “the time, place, and contents of the false representations, as well as the identity of the person making the ...

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