Brown v. Wilmington Fin.
| Decision Date | 21 March 2012 |
| Docket Number | Civil No. CCB-11-699 |
| Parties | SONJA BROWN v. WILMINGTON FINANCE, ET AL. |
| Court | U.S. District Court — District of Maryland |
Plaintiff Sonja Brown brings this action for violations of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"), to quiet title to her property, and to attempt to clarify who owns the mortgage on her house. Defendants Wilmington Finance Inc. ("WFI"), U.S. Bank National Association ("U.S. Bank"), and Ocwen Loan Servicing ("Ocwen") have filed motions to dismiss for failure to state a claim. Ms. Brown has filed a response brief in opposition, and the defendants have filed reply briefs. No hearing is necessary. See Local Rule 105.6. For the following reasons, the defendants' motions to dismiss will be granted.
Taken in the light most favorable to the plaintiff, the facts of this case are the following. Ms. Brown purchased a property in Baltimore, Maryland, on June 30, 2004 for $138,000. (ECF No. 30 Ex. 3, at 7.) In April of 2006, she secured two loans from WFI for a total of $200,000, using the property as collateral. The larger loan, for $160,000, was structured so that she would make interest-only payments for the first five years. (ECF No. 1 Ex. C, at 5.) The $40,000 loanappears to have been structured so that payments covered both interest and principal. (ECF No. 1 Ex. B, at 10.) The closing on the loan was conducted by a company called Express Financial Services ("Express Financial").1
Ms. Brown was laid off from her job in July 2007 and then developed "an incurable Pulmonary Disease" in November 2007. After exhausting her 401(k) and pension funds, she began falling behind on her loan payments in September of 2009. (Am. Compl. 13, ECF No. 11; HomEq Payment History, ECF No. 1 Ex. B, at 13-15.) In December 2009, Ms. Brown contacted the two entities servicing her loans at the time, HomEq and U.S. Bank, and requested a loan modification. HomEq denied her request, and U.S. Bank offered her "only . . . a Balloon Mortgage." (Am. Compl. 13.)
In a letter dated May 26, 2010, HomEq and U.S. Bank notified Ms. Brown of their intent to foreclose. (Id.) Subsequent to receiving the notice of intent to foreclose, Ms. Brown contacted HomEq and alleged "deceptive practices believed to have occurred in the origination and/or servicing" of her loan(s), and she asked for the contact information for the current owner of her loan. (ECF No. 1 Ex. B, at 3.) Thereafter ensued a series of communications between Ms. Brown, HomEq, Ocwen, U.S. Bank, and WFI, in which Ms. Brown alleged a misrepresentation of the APR on her loan documents (ECF No. 1 Ex. A, at 2); attempted to get information about her loans and procure evidence of her original promissory note (id. at 33.); and attempted to unilaterally rescind her loans, citing provisions of TILA, and declared that the banks had "defaulted on their claim on" her mortgage for failing to adequately respond to her requests.(ECF No. 1 Ex. B, at 33.)
In response to Ms. Brown's communications, HomEq sent her "copies of the disclosures taken from [her] loan file" and a copy of her payment history on the $160,000 loan. (Id. at 6, 8, 13-15.) Ms. Brown appears to have attached some of these documents to her pleadings, though many if not all of the attached documents are incomplete, and neither Ms. Brown nor any of the defendants have clarified whether the documents attached to the complaint were all given to her in response to her requests in 2010, whether these are all of the documents associated with Ms. Brown's loans in defendants' files, or whether Ms. Brown was given all of the relevant documents at her loan closing. None of the various disclosure statements attached to the complaint, including a copy of her "Notice of Right to Cancel," appear to have been signed by Ms. Brown. (Id. at 6-9, 15). The only attached document initialed by Ms. Brown is the recorded Deed of Trust securing the $40,000 loan. (Id. at 2.)
WFI also sent Ms. Brown an explanation of the history of her loans' ownership and servicing. In short, after the loans were made, WFI sold the $160,000 loan to Lehman Brothers and the $40,000 loan to U.S. Bank, and the servicing of the two loans was transferred to HomEq and to U.S. Bank, respectively. (Id. at 10-11.) It appears that the $160,000 loan, at least, was thereafter securitized and Wells Fargo became a trustee. (July 6, 2010, Letter from HomeEq to Ms. Brown, ECF No. 1 Ex. B, at 3.) On August 31, 2010, HomEq—and possibly also U.S. Bank, it is unclear from the record—transferred the servicing of Ms. Brown's account to Ocwen. (Id. at 7; Am. Compl. 13.)
Undoubtedly, the situation was frustrating for Ms. Brown. To give an example, Ms. Brown wrote to both WFI and HomEq in late August 2010 requesting production of her originalpromissory note. (ECF No. 1 Ex. A, at 7.) The companies responded simultaneously. WFI responded that it had sold her loans and did not retain her original Promissory Note and stated that she would have to contact HomEq to arrange to inspect it. (ECF No. 1 Ex. B, at 11.) HomeEq responded that she needed to address issues about loan origination with WFI. (Id. at 12.)
On March 15, 2011, Ms. Brown filed a pro se complaint in this court against the defendants, and subsequently filed an amended complaint on April 29, 2011. In the amended complaint, she alleges "far reaching fraudulent schemes" by the defendants, including "negligent or intentional misrepresentation of appraised fair market value [of the property] upon which Plaintiff was contractually bound to rely." (Am. Compl. 2.) Ms. Brown also alleges that she was originally promised a 6 percent interest rate on the loan, and that the person who came to her home for the closing reiterated that the interest rate was 6 percent, possibly pointing to some document, but that the actual interest rate on the $160,000 loan ended up being 7.55 percent. (Id. at 13.)2 She alleges that in 2010 she "discovered" two sets of loan origination documents mirroring this discrepancy, and she attached the documents to the original complaint. (Id.; see ECF No.1 Ex. C, at 5, 9.) Ms. Brown does not clarify whether she received these documents from HomEq pursuant to her request in 2010, or whether she already had been in possession of one or more of the documents.
Ms. Brown seeks compensatory and punitive damages, and she seeks injunctive relief in the form of 1) a declaratory judgment ratifying a rescission under TILA, or otherwise declaring any claims or security interest held by Defendants to be void due to TILA violations, and 2) anorder to quiet title to the property in her favor due to defendants' failure to produce her original promissory note or to comply with TILA, the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601-2617 ("RESPA"), the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p ("FDCPA"), or Regulation Z, 12 C.F.R. §§ 226.1-.48, the regulation promulgated under the statutory authority afforded by TILA. In the alternative, she seeks to stay any collection activities against her until the defendants have produced documents proving their claim. Ms. Brown also alleges violation of "Maryland unfair and deceptive trade practices," though she does not cite any specific provision of Maryland state law. (Id. at 2.)
In response to the suit, defendants WFI, U.S. Bank, and Ocwen have filed motions to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). Defendant HomEq has not responded, though there is no evidence in the record that the company was served with either the original or the amended complaint.
A Rule 12(b)(6) motion tests the sufficiency of a complaint and does not "resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (internal quotation marks and alterations omitted) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). When ruling on such a motion, the court must "accept the well-pled allegations of the complaint as true" and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). While the court "need not accept the legal conclusions drawn from the facts, and [] need not accept as trueunwarranted inferences, unreasonable conclusions or arguments," Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009), a pro se complaint must be liberally construed in favor of the plaintiff. Haines v. Kerner, 404 U.S. 519, 520 (1972).
To survive a motion to dismiss, the factual allegations of a complaint, assumed to be true, "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The plaintiff's obligation is to show sufficiently the "grounds of his entitlement to relief," offering "more than labels and conclusions." Id. It is not sufficient that the well-pleaded facts suggest "the mere possibility of misconduct." Ashcroft v. Iqbal, --- U.S. ---, 129 S. Ct. 1937, 1950 (2009). Rather, to withstand a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face," meaning the court could draw "the reasonable inference that the defendant is liable for the conduct alleged." Id. at 1949 (internal quotations and citation omitted).
Having carefully considering Ms. Brown's amended complaint and attached documentation, as well as the arguments raised in the parties' motions, the court must conclude that Ms. Brown has failed to state a claim upon which relief can be granted. Even construing Ms. Brown's pro se complaint liberally, it fails to meet the requirements set forth by the Supreme Court in Iqbal and Twombly. Below, the court addresses each of Ms. Brown's claims in...
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