Green et al v. Wells Fargo Bank, N.A., No. 8:2012cv01040 - Document 38 (D. Md. 2014)
Court Description: MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 1/31/14. (sat, Chambers)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : SHIRLEY M. GREEN, et al. : v. : Civil Action No. DKC 12-1040 : WELLS FARGO BANK, N.A. : MEMORANDUM OPINION Presently pending and ready for resolution in this consumer lending action is the motion to dismiss filed by Defendant Wells Fargo Bank, N.A. ( Wells Fargo or Defendant ). (ECF No. 36). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion to dismiss will be granted. I. Background The facts of this case as alleged in the first amended complaint were described in full in a prior opinion, thus only a brief background of the underlying factual and procedural issues in the case is necessary. See Green v. Wells Fargo Bank, N.A., 927 F.Supp.2d 244 (D.Md. 2013). Plaintiffs Shirley M. Green, Ralph E. Green, and Antoinette Green took out a mortgage of just under $1 million from Southern Trust Mortgage, LLC on May 31, 2006 to finance their purchase of home.1 a Defendant subsequently acquired servicing rights to the loan. fell behind contacted inquire on their mortgage payments in Wells Fargo in March early about a loan late or modification. Plaintiffs October (ECF 2010 April No. and 2011 24 ¶ to 18). Plaintiffs assert that Wells Fargo represented that it would process their loan modification request and perform a loss mitigation analysis, provided Plaintiffs submitted documentation in connection with their request letter, dated April 8, 2011.2 within ten days (ECF No. 24-1 ¶ 20.1). from the Plaintiffs concede that they did not timely submit all of the required documentation; instead, they submitted the documentation on May 24, 2011, over a month late. 24, 2011 purposely Greens. Fargo forward, Wells disregarded, Plaintiffs assert that from May Fargo the lost or documentation lost track submitted of, by or the Indeed, in its June 20, 2011 correspondence, Wells falsely required suggested documentation, documentation they had the when Greens it already told had not the Greens submitted. submitted to (Id. the resubmit ¶ 23). 1 Antoinette Green is a co-borrower under the deed of trust and was added as a necessary party to the instant litigation when Plaintiffs filed an amended complaint after the case was removed from the Circuit Court for Prince George s County. 2 The April 8, 2011 letter from Wells Fargo to Plaintiffs identified the specific documents Plaintiffs had to submit for consideration. 2 Plaintiffs then submitted the same and additional documents on June 29, 2011. Plaintiffs contend that Wells Fargo responded with a letter, dated November 4, 2011, which stated that the Greens had not provided any input and were nonresponsive to Wells Fargo s attempts to contact them. (Id. ¶ 25). The letter further advised Plaintiffs that Wells Fargo would continue to work with them to help avoid a foreclosure sale, but if [Plaintiffs ] mortgage has been referred to foreclosure, that process moves forward at the same time. Also, as part of the foreclosure process, [Plaintiffs] may . . . see steps being taken to proceed with a foreclosure sale of [Plaintiffs ] home. (ECF No. 24-7, at 3). Plaintiffs responded to this letter on December 1, 2011, and Wells Fargo sent another letter to the Greens on December 14, 2011, requesting that the Greens call them immediately to determine available options. (See ECF No. 24-9). Plaintiffs filed an initial complaint in the Circuit Court for Prince George s County on February 1, 2012. removed the action to this court on April 4, 2012. Defendant (ECF No. 1). Plaintiffs later amended the complaint on May 7, 2012, alleging violations of the Maryland Consumer Protection Act ( MPCA ), Md. Code Ann., promissory Com. Law § estoppel, misrepresentation. 13-101 et seq., negligence, (ECF No. 24). 3 common and law fraud, negligent Defendant moved to dismiss on May 21, 2012 (ECF No. 25), and the undersigned issued a memorandum opinion and order on February 27, 2013 (ECF Nos. 33 & 34) dismissing Plaintiffs promissory estoppel, negligence, and negligent misrepresentation claims, and dismissing the MCPA and common law fraud claims without prejudice to Plaintiffs right to file a second amended complaint within fourteen (14) days. Plaintiffs subsequently March 13, 2014. filed (ECF No. 35). a second amended complaint on Wells Fargo moved to dismiss the second amended complaint on March 27, 2013 (ECF No. 36), and Plaintiffs opposed the motion on April 24, 2013 (ECF No. 37). II. Standard of Review The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Charlottesville, 464 F.3d 480, 483 (4th Presley v. City of Cir. 2006). A plaintiff s complaint need only satisfy the standard of Rule 8(a), which requires a short and plain statement of the claim showing that the pleader is entitled to relief. 8(a)(2). Fed.R.Civ.P. Rule 8(a)(2) still requires a showing, rather than a blanket assertion, of entitlement to relief. v. Twombly, 550 U.S. 554, 556 n.3 (2007). Bell Atl. Corp. That showing must consist of more than a formulaic recitation of the elements of a cause of action or naked assertion[s] devoid of further factual enhancement. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted). 4 At this stage, all well-pleaded allegations in a complaint must be considered as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and all factual allegations must be construed in the light most favorable to the plaintiff, see Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). In evaluating the complaint, unsupported legal allegations not need be accepted. Revene Com rs, 882 F.2d 870, 873 (4th Cir. 1989). v. Charles Cnty. Legal conclusions couched as factual allegations are insufficient, Iqbal, 556 U.S. at 678, as are conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009). Francis v. [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged, but it has not show[n] . . . that the pleader is entitled to relief. 8(a)(2)). Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. Thus, [d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing experience and common sense. Plaintiffs claims court to draw on its judicial Id. alleging fraud and violations of the MCPA are subject to the heightened pleading standard of Rule 5 9(b). See Harrison, 176 F.3d at 783-84; Dwoskin v. Bank of Am., N.A., 850 F.Supp.2d 557, 569 (D.Md. 2012). Rule 9(b) provides that, in alleging a fraud or mistake, a party must state with particularity mistake. the circumstances constituting the fraud or Malice, intent, knowledge, and other conditions of a person s mind may be alleged generally. Such allegations typically include the time, place and contents of the false representation, as well as the identity of the person making the misrepresentation and what [was] obtained thereby. Superior Bank, F.S.B. v. Tandem Nat l Mortg., Inc., 197 F.Supp.2d 298, 313-14 (D.Md. 2000) (quoting Windsor Assocs., Inc. v. Greenfeld, 564 F.Supp. 273, 280 (D.Md. 1983)). In cases involving concealment or omission of material facts, however, meeting Rule 9(b) s particularity requirement will likely take a different form. 539, See Shaw v. Brown & Williamson Tobacco Corp., 973 F.Supp. 552 (D.Md. 1997) (recognizing that an omission likely cannot be described in terms of the time, place, and contents of the misrepresentation or the identity of the person making the misrepresentation purposes of Rule 9(b) (internal are to quotations provide the omitted)). defendant The with sufficient notice of the basis for the plaintiff s claim; to protect the defendant against frivolous suits; to eliminate fraud actions where all of the facts are learned only after 6 discovery; and to safeguard the defendant s reputation. See Harrison, 176 F.3d at 784. III. MCPA (Count I) and Common Law Fraud (Count II) The MCPA prohibits unfair or deceptive trade practices. Md. Code Ann., Com. Law, § 13-301. The MCPA proscribes fourteen categories of unfair or deceptive practices, including any . . . [f]alse . . . or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers and any . . . [f]ailure to state a material fact if the failure deceives or tends to deceive. 3 Similarly, to bring a common law fraud claim in Maryland, the plaintiff must show: (1) that the defendant made a false representation; (2) that its falsity was either known to the defendant, or the misrepresentation was made with such reckless indifference to the truth as to be equivalent to actual knowledge; (3) that it was made for the purpose of defrauding the person claiming to be injured thereby; (4) that such person not only relied upon the misrepresentation, but had a right to rely upon it in the full belief of its truth, and would not have done the thing from which the 3 As mentioned in the prior memorandum opinion, private parties who bring a suit must establish that they suffered an identifiable loss, measured by the amount the consumer spent or lost as a result of his or her reliance on the sellers misrepresentation. (ECF No. 33, at 22 n.8). Even when a consumer decides to pursue public enforcement, the Division must determine that the consumer relied upon the misrepresentation before it can order a violator to pay restitution to that particular consumer. Consumer Prot. Div. v. Morgan, 387 Md. 125, 164 (2005). 7 injury had resulted had not such misrepresentation been made; and (5) that such person actually suffered damage directly resulting from such fraudulent misrepresentation. Parker v. Columbia Bank, 91 Md.App. 346, 359 (1992); Gourdine v. Crews, 405 Md. 722 (2008). The second amended complaint alleges that Wells Fargo deceptively misled Plaintiffs by making the following false or misleading statements: (1) the statement in an April 8, 2011 letter from Wells Fargo that our goal is to ensure you have every opportunity to retain your home and promise to process the Greens loan modification request if they submitted the required documentation; (2) Wells Fargo s statements after May 24, 2011 that it had not received documentation from Plaintiffs, when in fact the Greens had submitted the requested documentation; (3) Wells Fargo s statement in the November 4, 2011 correspondence that Plaintiffs had not provided any input and that Defendant made unsuccessful attempts to contact the Greens; and (4) Wells Fargo s misrepresentation in a Final Loss Mitigation Affidavit filed in the foreclosure proceeding in the Circuit Court for Prince George s County that the Greens omitted the signed second page from their 2009 tax returns. (ECF No. 35-1, at 14-15). that Plaintiffs The second amended complaint states detrimentally relied on these alleged misrepresentations by taking time out of their lives to complete 8 the applications attending and resubmit court-ordered paperwork; mediation in the requesting state and foreclosure action to explain that the full tax returns were signed and submitted; experiencing mental anguish as a result of supplying the applications and paperwork and by knowing that Defendant made false disrespect, or and misleading wasted statements, time devoted and to thus futile insult and and tedious applications and paperwork ; generally taking time to work with Defendant. (Id. at 15-18). Plaintiffs assert that they reasonably relied on the alleged false or misleading statements because Plaintiffs had no cause to distrust Defendant until the November 4, 2011 letter [], which blatantly falsely stated the Greens had supplied no input, despite voluminous faxes and other acts of working closely with Defendant, and it was reasonable to request foreclosure mediation . . . because the Greens felt the court system could be of assistance. The allegations in Plaintiffs (Id. at 18-19). second amended complaint still do not support claims for MCPA violations and common law fraud. In the February 27, 2013 opinion, the undersigned concluded that Plaintiffs have not made a sufficient showing of damages resulting from their reliance on Defendant s promises or misrepresentations. (See ECF No. 33, at 24). in the second amended complaint fare no better. The allegations The undersigned held that if Plaintiffs can show that they suffered damages as 9 a result of their reasonable reliance misrepresentations, they could assert relief. 30). The Maryland (Id. at on the plausible Court of alleged claims for Appeals has established that, in order to articulate a cognizable injury under the Consumer Protection objectively identifiable. Act, the injury must be In other words, the consumer must have suffered an identifiable loss, measured by the amount the consumer spent or lost as a result of his or her reliance on the sellers misrepresentation. Md. 108, 143 (2007). Lloyd v. Gen. Motors Corp., 397 Actual injury or loss under the MCPA includes emotional distress and mental anguish provided there was at least consequential physical injury in the sense that the injury for which recovery is sought is capable of objective determination. See Hoffman v. Stamper, 385 Md. 1, 32 (2005). Thus, a complaint will adequately plead damages under the MCPA when it contains plausible allegations that the plaintiff relied upon the defendant s false or misleading statements and suffered actual loss or injury as a result of that reliance. Butler v. Wells Fargo Bank, N.A., Civil Action No. MJG-12-2705, 2013 WL 3816973, at *3 (D.Md. July 22, 2013) (emphasis in original). Here, Plaintiffs assert that they suffered mental anguish which also manifested itself in physical symptoms because they expended time resubmitting documents which were allegedly already provided to Wells Fargo, albeit over a month past the 10 ten-day deadline letter. indicated in Wells Fargo s April 8, 2011 But Plaintiffs acknowledge that they would have done this even if Defendant had the intent to properly process the loan. (ECF contention No. that 35-1, they at knew 16). and Furthermore, accepted that Plaintiffs they were in default . . . for Plaintiffs, it was the principle of the matter that caused the stress to culminate in physical symptoms also undermines that they suffered damages as a result of reasonable reliance on the alleged false representations. (emphasis added). damages caused plausible to (Id. at 18) Such allegations that Defendant is liable for to Plaintiffs support MCPA out of violations principle or common are law not fraud. Nevertheless, Plaintiffs urge that the controlling fact of the matter is that Defendant did not have [] an intent [to process their loan modification], and had Plaintiffs known the truth of the matter . . . Plaintiffs would not have devoted said time to said activities. second amended (Id.). complaint But Plaintiffs allegations in the again do not show that Defendants alleged misrepresentations caused them to miss work, lose wages, or to forego any actions in connection with their foreclosure proceedings. As Defendant points out [i]t is equally true that any alternative efforts to avoid foreclosure would have required some time and effort. (ECF No. 36-1, at 4). See, e.g., Butler, 2013 WL 3816973, at *6 (distinguishing cases involving 11 actionable MCPA claims; [i]n each of those cases, the plaintiff had made payments under a TPP agreement or other modified plan, received inconsistent communication from the mortgage services regarding a permanent modification or loan reinstatement, and claimed to have suffered resulting injury in the form of lower credit scores, lost time at work, and emotional distress. ). The allegations in the second amended complaint contain the same deficiencies as the amended complaint, as Plaintiffs also cannot show that they reasonably relied to their detriment on any of the alleged misrepresentations. First, Plaintiffs still do not allege that Defendant specifically directed them to do, or to refrain from doing, anything that adversely affected the state of affairs misrepresentations. that To existed the prior extent to the Plaintiffs alleged maintain that Wells Fargo s communications gave them a false sense of comfort that their loan would be modified and foreclosure proceedings would be point. avoided, Defendant s correspondence undercuts this Indeed, in the December 14, 2011 correspondence, Wells Fargo advised Plaintiffs that [e]ven though [it would] continue to work with [Plaintiffs] to help [] avoid a foreclosure sale, it s important to understand that [Plaintiffs ] already been referred to foreclosure. mortgage has (ECF No. 24-9, at 2). The letter further stated that Plaintiffs may see steps being taken to proceed with a foreclosure 12 sale of [their] home. (Id.). The November 4, 2011 letter from Wells Fargo included a similar warning that if a mortgage has been referred foreclosure, the process moves forward at the same time. to (ECF No. 24-7). Furthermore, the court in Butler rejected the very same allegations premised on the MCPA as Plaintiffs offer here. 2013 WL 3816973, at *4. See Specifically, the plaintiff in that case alleged the following facts in support of the MCPA claim: Ms. Butler did rely to her detriment on the false or misleading statements by being lulled into a false state of comfort, taking time out of her life to submit paperwork to Wells Fargo and otherwise work closely with Wells Fargo in pursuit of the promised loan modification, and by giving up her rights to raise objections in the foreclosure action. As a direct and proximate cause of Wells Fargo s conduct, Ms. Butler suffered severe mental anguish, which manifested physically through vomiting, headaches, sleep loss, and other physical symptoms. Id. The court concluded Butler s false resulting therefrom claim. Id. state are that of these comfort inadequate allegations and to relating emotional present a Judge Garbis reasoned that: [w]hile Wells Fargo can be faulted for erroneous and inconsistent statements, it is hardly plausible to contend that Butler faced with conflicting statements could rely upon some and ignore contrary ones. . . . [a]lthough the Court must draw all 13 to distress plausible reasonable inferences in favor of Butler, it is not rational to conclude that she would, or could, draw any reasonable inference other than that Wells Fargo s statements could not be relied upon to tell definitely what the status of her loan modification was. Id. at *5. The same logic applies to these facts. Notably, in Butler, Wells Fargo made inconsistent statements to plaintiff, representing that she qualified for the loan modification, later stating that it was still working in good faith towards a loan workout, and then stating that Wells Fargo would respond to her loan modification request. In contrast, Plaintiffs here do not allege that Wells Fargo ever indicated that it would approve the Greens request for a loan modification. as Defendant points out, the foreclosure Moreover, docket reflects clearly that the foreclosure sale had not been scheduled as of the date they filed the lawsuit and the Plaintiffs had not lost any ability to assert defenses and challenges, to the extent they believed there were any, to the foreclosure. (ECF No. 36- 1, at 3); Goss v. Bank of America, N.A., 917 F.Supp.2d 445, 450 (D.Md. 2013) ( because they Gosses cannot show they reasonably and detrimentally relied on any of BANA s statements, the Gosses have not stated a valid MCPA or fraud claim. ). The allegations in Plaintiffs second amended complaint fail to show that they took any action to their detriment in reasonable reliance on Wells Fargo s statements or representations. 14 Plaintiffs principal contention is that they wasted their time resubmitting paperwork and performed tedious tasks, (ECF No. 37-1, at 4), but this does not rise to the level of damages in reasonable and detrimental reliance to be actionable under the MCPA or as common law fraud. Butler, 2013 WL 3816973, at *4 n.9 ( Even if Butler were still seeking damages for filling out paperwork or foregoing action in the foreclosure proceedings, the Court would dismiss these claims. . . . The Amended Complaint contains no allegations as to what action Butler would or could have taken in the foreclosure action absent the Representations and/or whether any such action could have been timely under particular applicable state Representation law and based upon date of in occurrence the a the state foreclosure proceedings. ). Plaintiffs attempt to show detrimental reliance by having to participate in mediation in connection with the foreclosure proceedings [t]he is defect similarly in this unavailing. theory is As obvious Defendant there argues, was no misrepresentation made to the Plaintiffs which they justifiably relied upon to their detriment. To the contrary, Plaintiffs are alleging that they believed the representation made to the Court [in the Final Loss Mitigation Affidavit ] was incorrect and that they knew it was incorrect at the time it was made. (ECF No. 36-1, at 6); see Coulibaly v. J.P. Morgan Chase Bank, Civil 15 Action No. DKC 10-3517, 2011 WL 3476994, at *19 (D.Md. Aug. 8, 2011) (dismissing fraud claims arising out of HAMP process for lack of reliance, where the complaint indicates that Plaintiff protested many of [Defendant] s actions at every opportunity ). Furthermore, Plaintiffs have not alleged that they suffered damages as a result of having participated in mediation. fact, Plaintiffs acknowledge that they decided to In pursue mediation because they recognized the potential value in that process. Based on the foregoing, Plaintiffs MCPA and common law fraud claims will be dismissed. IV. Conclusion For the foregoing reasons, the motion to dismiss filed by Defendant will be granted. A separate order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 16
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