Baxter v. AmeriHome Mortg. Co.

Decision Date29 July 2022
Docket NumberCIVIL 22-cv-1098-SAG
PartiesTONDA BAXTER, On her behalf and on behalf of others similarly situated, Plaintiffs, v. AMERIHOME MORTGAGE COMPANY, LLC, and CENLAR FSB, Defendants.
CourtU.S. District Court — District of Maryland
MEMORANDUM OPINION

STEPHANIE A. GALLAGHER UNITED STATES DISTRICT JUDGE

Plaintiff Tonda Baxter, individually, and on behalf of a putative class of similarly situated individuals, sued Defendants AmeriHome Mortgage Company, LLC (AmeriHome) and Cenlar FSB (Cenlar), alleging violations of Maryland's Consumer Debt Collection Act (“MCDCA”), the Maryland Consumer Protection Act (“MCPA”), Maryland's Credit Grantor Closed End Credit Provisions (“CLEC”), and the federal Real Estate Procedures Act (“RESPA”). ECF 2. Plaintiff's initial complaint was filed against AmeriHome on September 1, 2020 in the Circuit Court for Baltimore County. ECF 1-1 at 1. On April 4, 2022, Plaintiff filed an Amended Complaint that added Cenlar as a Defendant and added a cause of action under RESPA. Id. On May 5, 2022 Defendants filed a notice of removal to this Court. ECF 1. Defendants have now moved to dismiss, ECF 22, and to strike certain portions of the Amended Complaint, ECF 23. This Court has considered both motions, Plaintiff's oppositions to them, ECF 26, 27, Defendants' replies, ECF 30, 31, and the parties' supplements, ECF 28, 31. No hearing is necessary. Local Rule 105.6 (D. Md. 2021). For the following reasons, both motions will be denied.

I. FACTUAL BACKGROUND

Plaintiff obtained a Federal Housing Administration (“FHA”) loan, secured by a deed of trust recorded against real property, on June 26, 2018 in the amount of $284,747. ECF 2 ¶ 25. The loan was arranged by NFM, Inc., id., but it was immediately transferred to AmeriHome. Id. ¶ 26. Cenlar acted as AmeriHome's sub-servicer. Id. ¶ 13. Along with her home purchase, Plaintiff acquired a homeowners' insurance policy with State Farm Insurance that met the coverage requirements under the applicable FHA guidelines. Id. ¶ 31. Plaintiff made all required payments under the loan. Id.

According to Plaintiff, the terms of her loan required AmeriHome to pay the annual insurance premium to State Farm using money that Plaintiff had paid as a portion of each monthly mortgage payment, and that had been set aside in an escrow account for that purpose. Id. Despite that obligation, AmeriHome never paid the annual insurance payment to State Farm, and the policy was cancelled. Id. ¶¶ 32, 35. AmeriHome then force-placed an insurance policy on Plaintiff's property, through an affiliate, “from its unlicensed business location in the State of South Carolina[.] Id. ¶ 36.

Separately, on several occasions between July 15, 2019 and January 15, 2020, Defendants accepted Plaintiff's mortgage payments over the phone but allegedly told Plaintiff that she was required to pay Defendants a convenience fee for the telephone transaction. Id. ¶ 33. The loan documents do not expressly permit Defendants to charge convenience fees. Id. ¶ 49.

On several occasions, Defendants also misrepresented to Plaintiff the amount paid and owed on her loan. Id. ¶ 38-40. On February 5, 2020, Plaintiff wrote to AmeriHome disputing “the servicing of her loan, misapplication of her escrow payments, fees imposed and collected from her for [m]aking her payments over the telephone, imposition of late fees, and other related issues.” Id. ¶¶ 42-44. On February 22, 2020, Defendants' response “repeated its pattern of misrepresentations by continuing to improperly account for her payments; admitting to being aware of her homeowner's insurance but providing no explanation why it had improperly force-placed insurance from its affiliate instead of honoring Baxter's insurance policy; and failing to explain why it believed it was authorized to impose[] convenience fees.” ECF 26 at 11.

Count I alleges, on behalf of Plaintiff individually and two putative subclasses of similarly situated Plaintiffs, that Defendants' collections practices-namely, their charging of convenience fees and their other deceptive efforts to collect sums not contractually owed-violate the MCDCA and the MCPA. ECF 2 ¶¶ 70-86. Count II alleges, on behalf of Plaintiff individually, that Defendants imposed and collected fees in violation of CLEC. Id. ¶¶ 87-92. Count III alleges, on behalf of Plaintiff individually, that Defendants committed servicing errors in violation of RESPA and its implementing regulations by failing to pay Plaintiff's insurance, force-placing an insurance policy on Plaintiff, failing to correct errors in the allocation of Plaintiff's payments, and failing to timely acknowledge, investigate, and respond to Plaintiff's written request and notice of error. Id. ¶¶ 93-104.

II. MOTION TO STRIKE

Defendants have moved to strike paragraphs 1(a), 5(a), 5(b), 5(c), 12, 17, 32, 35-38, 53(b), 53(c), and 53(d). ECF 23. Defendants first claim that the Amended Complaint violates Federal Rule of Civil Procedure 8(a)(2), which requires a “short and plain statement of the claim showing that [Plaintiff] is entitled to relief.” Defendants also claim that the Amended Complaint is an impermissible “shotgun pleading” that fails to provide enough clarity to allow the Defendants to fashion a responsive pleading. At times, too, Defendants' briefing argues that the listed paragraphs are simply irrelevant to Plaintiff's claims. See ECF 30 at 4-8.

a. Legal Standard

Federal Rule of Civil Procedure 12(f) allows the Court to strike from a pleading any “redundant, immaterial, impertinent or scandalous matter.” Motions to strike are disfavored and “usually should be denied unless the allegations ‘have no possible relation to the controversy and may cause prejudice to one of the parties.' Graff v. Prime Retail, Inc., 172 F.Supp.2d 721, 731 (D. Md. 2001) (quoting 5A Wright & Miller, Federal Practice and Procedure § 1382 (2d ed. 1990)). [M]otions to strike should be denied if there is any doubt as to whether the material in question raises an issue of fact or law.” Id.

b. Analysis

Defendants do not come close to meeting their burden to show that any paragraphs in the Amended Complaint should be stricken. First, Defendants argue the Amended Complaint violates Rule 8(a)(2) because “Baxter has pleaded 69 paragraphs of unconnected allegations” that do not allow Defendants to “frame a responsive pleading[.] ECF 23-1 at 2-3. While the Amended Complaint is certainly not a model of clarity, concision, or organization, it alleges facts-and connects those facts to coherent legal theories-that are more than sufficient to allow Defendants to understand the claims at issue and respond to them. The best evidence of that, of course, is that Defendants did, in fact, respond to the Amended Complaint with a detailed motion to dismiss that contests almost all of Plaintiff's factual and legal allegations. See ECF 22. Defendants' motion to dismiss reflects no serious confusion about Plaintiff's allegations.

Second, the Amended Complaint is not a “shotgun pleading.” A “shotgun pleading” is one that “fails to articulate claims with sufficient clarity to allow the defendant to frame a responsive pleading . . . or [one in which] it is virtually impossible to know which allegations of fact are intended to support which claims for relief[.] Lee v. Meyers, No. ELH-21-1589, 2022 WL 252960, at *11 (D. Md. Jan. 27, 2022) (quoting Jackson v. Warning, PJM-15-1233, 2016 WL 7228866, at *4 (D. Md. Dec. 13, 2016)). Again, the Amended Complaint is clear enough to allow Defendants to respond, because they did meaningfully respond.[1] The Amended Complaint also makes clear “which allegations of fact are intended to support which claims for relief[.] Lee, 2022 WL 252960, at *11. Here, Defendants take issue with the Amended Complaint's inclusion of boilerplate language under each count that incorporates all preceding paragraphs. Nearly every complaint filed in this Court (and others, in this Court's experience) contains similar language. That boilerplate is, therefore, more the hallmark of habitually cautious lawyering than “the hallmark of a shotgun pleading” as Defendants argue. ECF 23-1 at 3. The Amended Complaint alleges the discrete legal basis for each cause of action, specifies the cause of action that is asserted on a class-wide basis, and those that are asserted by Plaintiff individually, and references the specific misconduct that allegedly violated each statute. It is true that each factual allegation is not specifically realleged under each relevant cause(s) of action, but nothing requires that, and it would create a much more cumbersome complaint. Rather, as is customary, the Amended Complaint contains a fact-based recitation, followed by the causes of action it alleges, with enough explanation within each cause of action to tie the factual allegations to the alleged violations of law. That is all that is required, and nothing demonstrates the adequacy of the Amended Complaint's general coherence better than Defendants' substantive responses to it. Finally, it cannot be said at this point that the specific paragraphs Defendants ask this Court to strike “have no possible relation to the controversy[,] and Defendants have not shown that their inclusion in the Amended Complaint has caused, or will cause, any prejudice to the Defendants. Graff, 172 F.Supp.2d at 731 (quoting 5A Wright & Miller, Federal Practice and Procedure § 1382 (2d ed. 1990)). Accordingly, Defendants' motion to strike will be denied.

III. MOTION TO DISMISS[2]
a. Legal Standard

Under Rule 12(b)(6), a defendant may test the legal sufficiency of a complaint by way of a motion to dismiss. See In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); ...

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