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Pulliam v. Dyck-O'Neal, Inc.

Court of Special Appeals of Maryland

November 1, 2019


          Circuit Court for Prince George's County No. CAEF13-27154

          Nazarian, Arthur, Wells, JJ.


          Nazarian, J.

         This case involves the usually untold last chapter of a familiar story. On September 29, 2006, Ryan Pulliam and Bree-Ann White obtained a loan from Pinnacle Financial Corporation ("Pinnacle") to buy a home in Bowie and executed a note (the "Note") promising to repay the loan. They defaulted on the loan in March 2009, and the lender eventually initiated foreclosure proceedings in the Circuit Court for Prince George's County. The home was sold to Federal Home Loan Mortgage Corporation ("Freddie Mac") for less than the amount owed on the Note. The sale was ratified and audited, and neither Mr. Pulliam nor Ms. White filed exceptions to the sale or the resulting deficiency.

         After the foreclosure proceeding concluded, the Note was transferred twice, and landed in the hands of Dyck-O'Neal, Inc. ("DONI"), a debt collector. DONI filed a motion for deficiency decree on the debt owed, which the court granted. Mr. Pulliam appeals, arguing that the court erred first, by failing to construe DONI's motion strictly, in accordance with Maryland Rule 14-216(b); second, by entering a judgment that wasn't supported by admissible evidence; and third, by relying on an interest worksheet attached to DONI's motion in calculating damages. We agree with the circuit court's handling and analysis of the case, and vacate the judgment and remand with directions to correct one arithmetic error.

         I. BACKGROUND

         At the time they purchased their home, Mr. Pulliam and Ms. White executed the Note and promised to repay Pinnacle $390, 000 at an annual interest rate of 7.125%, which yielded a monthly payment of $2, 627.50. They fell behind in March 2009 and, so far as the record reflects, made no further payments after that. Four years later, in February 2013, Nationstar Mortgage, LLC ("Nationstar"), the loan servicer, sent Mr. Pulliam and Ms. White a Notice of Intent to Foreclose indicating that they were 1, 459 days past due on their payments. They would have to pay $175, 879.49 to cure the default.

         Nationstar appointed Substitute Trustees on June 7, 2013, authorizing them "to hold, collect and enforce the note." On September 12, 2013, the Substitute Trustees initiated foreclosure proceedings by filing an Order to Docket under Rule 14-204.[1] The Order to Docket included the following documents:

1. Notice of Foreclosure Action (Preliminary Loss Mitigation Affidavit)
2. Preliminary Loss Mitigation Affidavit, Loss Mitigation Application
3. Statement of Debt and plaintiffs have the right to foreclose
4. Military Affidavit and DOD printout(s)
5. Affidavit of Certifying Ownership of Note and that it is a true and accurate copy and Copy of Note
6. Affidavit Pursuant to Real Property Code 7-105.1(d)(ii) and [R]ule 14-207 and copy of Deed of Trust, copy of Appointment of Substitute Trustees and Copy of Notice of Intent to Foreclose.

         The Statement of Debt outlined the balance owed as follows:

Remaining Balance Due $380, 530.14
Interest from 2/1/2009 to 11/15/2012 $102, 712.94
Late Charges $__
Corporate Advances $__
Escrow (credit)/debit $42, 761.66
Balance due as of November 15, 2012 $526, 004.74
Per Diem Interest: $74.28
Interest Rate: 7.125%

         Neither Ms. White nor Mr. Pulliam sought to dismiss or stay the foreclosure, and the Substitute Trustees arranged for a sale of the Property on September 3, 2014. They provided notice of the "time, place, manner and terms of sale by advertisement in The Washington Post, a newspaper published in Prince George's County, Maryland, once a week for at least three successive weeks before the day of sale . . . ." Freddie Mac was the successful buyer with a bid of $187, 000. The Substitute Trustees then filed a Report of Sale with the court on September 25, 2014. Neither Mr. Pulliam nor Ms. White filed any exceptions to the Report of Sale; the court ratified the sale on March 3, 2015, and neither party filed exceptions to the ratification. Finally, an auditor filed a report detailing that Mr. Pulliam and Ms. White owed $405, 918.53 after the sale proceeds were deducted from their balance. Again, neither party filed exceptions and the court ratified the auditor's report on June 22, 2015.

         In the time after ratification, the Note was transferred twice. Nationstar, the original loan servicer, assigned "all of its rights, title, and interest in and to any cause of action against [Mr. Pulliam and Ms. White] for a deficiency claim" to Freddie Mac on December 30, 2015. Freddie Mac then assigned the Note to DONI on January 7, 2016.

         DONI filed a motion for deficiency decree on November 1, 2017, seeking judgment against Mr. Pulliam and Ms. White in the amount of the deficiency plus interest. Both opposed the motion by arguing that DONI failed to serve them, that DONI lacked authority to seek a deficiency judgment, that DONI failed to submit admissible evidence in support of its motion, and that the amount of the deficiency was incorrect. The court agreed initially that Mr. Pulliam had not been served, and authorized alternative service on him, which, at this point, everyone agrees was effective.

         The court held a hearing on February 22, 2018, heard arguments both as to service and on the merits and, in an order entered on May 1, 2018, entered judgment against Ms. White (who then filed a petition seeking protection under federal bankruptcy law and has been discharged). On June 19, 2018, without holding an additional hearing, the court entered judgment against Mr. Pulliam in the amount of $405, 918.53, plus prejudgment interest of ...

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