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Reynolds v. Ward

United States District Court, D. Maryland

August 12, 2019




         Samuel C. Reynolds, who is self-represented, has filed this civil action against the individuals and entities involved in originating, servicing, and foreclosing on the mortgage he executed to finance the purchase of his home in Greenbelt, Maryland. Reynolds alleges violations of certain provisions of the Fair Debt Collection Practices Act ("FDCPA",, 15 U.S.C. §§ 1692e and 1692f (2012); the Truth in Lending Act ("TILA"), 15 U.S.C. § 1641(g); the implementing regulations of the Real Estate Settlement Procedures Act ("RESPA",, 12 C.F.R. § 1024.41(b) (2018); and 10 state law claims. Pending before the Court are four Motions to Dismiss, with overlapping arguments, filed on behalf of all Defendants.. Having reviewed the submitted materials, the Court finds that no hearing is necessary. See D. Md. Local R. 105.6. For the reasons set forth below, the Motions will be granted.


         The following facts are presented in the light most favorable to Reynolds, the non-moving party. On June 16, 2006, Reynolds executed a note ("the Note") and security interest in the form of a Deed of Trust ("the Deed") (collectively, the "Mortgage Loan") to finance the purchase of his home located on Ridge Road in Greenbelt, Maryland. Reynolds alleges that the Mortgage Loan has been predatory from its inception and that Defendants have repeatedly misled him regarding the amounts of his payments, the validity of assignments of the Deed, and the roles of the various entities involved in servicing, holding, and investing in the Mortgage Loan. The Mortgage Loan originated with Network Funding, L.P. ("Network Funding"), was first assigned to Long Beach Mortgage Corporation, and was then assigned to Deutsche Bank, which currently holds the Note and the Deed. J.P. Morgan Chase Bank, N.A. ("Chase",, or one of its subsidiaries or predecessors in interest, was the prior servicer of the Mortgage Loan, and Select Portfolio Servicing, Inc. ("SPS") is the current servicer.

         Reynolds received numerous Notices of Intent to Foreclose throughout the history of the Mortgage Loan, which caused constant stress for him as a homeowne.. He generally alleges that the repayment plans he received from Chase and SPS all had high initial payments that forced him to sell cars at less than their retail value to avoid foreclosure. Specifically, in April 2010, Chase granted Reynolds a loan modification to cure a default, which Reynolds accepted under threat of foreclosure. In October 2012, Chase also gave Reynolds a repayment plan to cure his default. In February 2015, after SPS had taken over as servicer and threatened foreclosure, Reynolds and SPS executed a second loan modification to cure Reynolds's default.

         In September 2016, after Reynolds's father passed away, he began to struggle financially due to the funeral expenses and had to rent out the first floor of his home. By August 2017, Reynolds was behind on his payments again, and on August 30, 2017 Deutsche Bank and SPS appointed BWW Law Group, Carrie Ward, and several other individuals not named as defendants here as substitute trustees to begin foreclosure proceedings against Reynolds. Around that time, Reynolds was granted another repayment plan by SPS. Reynolds attempted to comply with the repayment plan in August and September 2017, but because he was unable to make a complete payment, SPS sent back his partial payment, stating that it was insufficient to prevent foreclosure.

         In September 2017, after his partial payment had been returned, Reynolds submitted a complete loss mitigation application to SPS. SPS sent Reynolds a letter dated September 27, 2017 stating that, based on its review of his application, Reynolds did not qualify for any home retention loss mitigation options, but he qualified for a short sale or deed in lieu of foreclosure. Meanwhile, Reynolds requested a certified property sensitization analysis report ("the Audit Report") of the entire Mortgage Loan from an independent,, non-attorney auditor, which he received in October 2017. The Audit Report suggested that the two assignments of the Deed, first to Long Beach Mortgage Company and then to Deutsche Bank, were fraudulent or invalid based on the separation of the Deed from the Note, such that Deutsche Bank and its substitute trustees did not have standing to foreclose. These alleged fraudulent assignments are at the heart of Reynolds's Complaint: he asserts that at least Deutsche Bank, SPS, and BWW Law Group knew these assignments were fraudulent and that the trust is void but pursued foreclosure anyway, without standing to do so.

         On July 13, 2018, BWW Law Group and Ward, among other appointed substitute trustees, filed an action for foreclosure against Reynolds in the Circuit Court for Prince George's County, Maryland. After the parties were unable to reach a resolution through foreclosure mediation, on December 3, 2018, Reynolds filed a "Motion to Show Cause, Motion to Dismiss with Prejudice" pursuant to Maryland Rule 14-211(a) in the pending foreclosure action. In seeking dismissal of the foreclosure action, Reynolds's Motion made substantially the same argument raised in the instant Complaint, that the two assignments of the Deed were fraudulent or invalid, such that Deutsche Bank, SPS, and BWW Law Group do not have standing to foreclose. Two weeks later, on December 19, 2018, while Reynolds's motion to dismiss the foreclosure action was still pending, he filed this lawsuit. On February 26, 2019, the Circuit Court for Prince George's County issued an order denying Reynolds's motion to dismiss the foreclosure action, holding that his motion did not, on its face, state a valid defense to the validity of the lien or the lien instrument, or to the right to foreclose. In turn, Deutsche Bank and SPS supplemented their Motion to Dismiss pending in this Court to advise the Court of the denial of Reynolds's motion by the state court and its purported preclusive effects.


         Defendants seek dismissal of the Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Although Defendants have filed four separate Motions to Dismiss, they treat the first-filed Motion by Deutsche Bank and SPS as the lead Motion, joining a variety of the arguments for dismissal asserted in that Motion, including that: (1) any effort to enjoin the state foreclosure action is barred by the Anti-Injunction Act, 28 U.S.C. S 2283 (2012); (2) the entire Complaint is barred by collateral estoppel based on the Circuit Court for Prince George's County's denial of Reynolds's motion to dismiss the foreclosure action; (3) Reynolds fails to plausibly allege a violation of the FDCPA; (4) Reynolds's TILA claim is inapplicable and untimely; and (5) Reynolds fails to plausibly allege a violation of RESPA. Upon review of these arguments, the Court finds that all of Reynolds's federal claims must be dismissed. Because the Court lacks an independent source of subject matter jurisdiction over Reynolds's state law claims, the Court declines to exercise supplemental jurisdiction over them and will dismiss them without prejudice. Accordingly, the Court need not reach Defendants' remaining arguments that Reynolds's state law claims should be dismissed on the merits.

         I. Legal Standard

         To defeat a motion to dismiss under Rule 12(b)(6), the complaint must allege enough facts to state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is plausible when the facts pleaded allow "the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Although courts should construe pleadings of self-represented litigants liberally, Erickson v. Pardus, 551 U.S. 89, 94 (2007), legal conclusions or conclusory statements do not suffice, Iqbal, 556 U.S. at 678. The Court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm'rs of Davidson Cty., 407 F.3d 266, 288 (4th Cir. 2005). Documents attached to the complaint or motion may be considered if "they are integral to the complaint and authentic." Sec'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007). The court may also take judicial notice of matters of public record. Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). When considering a Rule 12(b)(6) motion based on res judicata or collateral estoppel, the courts may "take judicial notice of facts from a prior judicial proceeding" when the assertion of preclusion as a defense "raises no disputed issue of fact." Andrews v. Daw, 201 F.3d 521, 524 n.l (4th Cir. 2000). Accordingly, in resolving the Motions, the Court will consider the record of the foreclosure action, of which it takes judicial notice. The Court will not consider any of the other documents attached to the Motions, unless they were also attached to the Complaint.

         II. Anti-Injunction Act

         Defendants first argue that the entire Complaint must be dismissed pursuant to the Anti-Injunction Act ("AIA") as an impermissible collateral attack on the foreclosure action pending in the Circuit Court for Prince George's County. Under the AIA, a federal district court may not grant "an injunction to stay the proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. S 2283. This bar extends to injunctions to prevent enforcement of state court orders relating to the right to possess real property. See Tucker v. Specialized Loan Servicing, LLC, 83 F.Supp.3d 635, 641 (D. Md. 2015); Williams v. Cohn, No. PX-16-2886, 2016 WL 4415058, at *2 (D. Md. Aug. 19, 2016). It also applies to requests for ...

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