Coulibaly v. JP Morgan Chase Bank, NA
| Decision Date | 08 August 2011 |
| Docket Number | Civil Action No. DKC 10-3517 |
| Parties | TIEMOKO COULIBALY, et al. v. J.P. MORGAN CHASE BANK, N.A., et al. |
| Court | U.S. District Court — District of Maryland |
In 2007, Plaintiffs Tiemoko Coulibaly and Fatou Gaye-Coulibaly bought a house. According to Plaintiffs, they and their house then became embroiled in a vast conspiracy spanning several years and implicating virtually every party involved in the purchase and financing of their home. Plaintiffs contend that Defendants' actions caused them to lose the house, burdened them with thousands of dollars in debt, spurred an audit from the Internal Revenue Service, and cost them the chance to become the President and First Lady of Côte D'Ivoire.
Now pending are several motions to dismiss filed by Defendants. (ECF Nos. 8, 12, 13, 14, 18, 20, 28). Plaintiffs have also filed a motion for sanctions against three of the defendants (ECF No. 47) and a motion that will be construed as a motion for leave to amend (ECF No. 53). The issues are fully briefed and the court now rules, no hearing being deemed necessary. See Local Rule 105.6. For the reasons that follow,the motion to dismiss filed by J.P. Morgan Chase Bank, N.A. will be granted in part and denied in part. All other motions to dismiss will be granted. Plaintiffs' motion for sanctions and motion for leave to amend will both be denied.
Plaintiffs allege the following facts.
On October 16, 2007, Plaintiffs signed a contract of sale with Chase Home Finance on a house at 2013 Grace Church Road, Silver Spring, Maryland. Under the original terms of the contract, Plaintiffs were to pay $444,000 for the property. Plaintiffs agreed to buy the property "as is." (ECF No. 1-8, at 11, 13, 31, 36).1
Things did not go as planned. "[S]oon after the contract was signed" (ECF No. 1 ¶ 25), the seller purportedly refused to ratify the agreement because Plaintiffs could not secure financing.2 The home, which lacked flooring, was deemeduninhabitable and therefore ineligible for a mortgage. Plaintiffs insist that they never would have started negotiations on the house had they understood that it "was not eligible for any loan." (Id. ¶ 159).
The parties negotiated and eventually resolved the flooring issue by agreeing that Chase Home Finance would install flooring in the house. In return, they also agreed that Plaintiffs would pay $10,000 in earnest money, $9,500 of which would be transferred to Chase Home Finance and $500 of which would be credited back to Plaintiffs at closing. (ECF No. 1-8, at 4). Lastly, the seller lowered the sale price of the Grace Church Road property to $416,000. The parties formally amended the sale contract to reflect these terms on December 7, 2007.
On December 18, 2007, the parties closed on the sale. (See ECF No. 1-4 (HUD-1 Settlement Statement)). Defendant J.P. Morgan Chase Bank, N.A. ("Chase") loaned Plaintiffs the purchase price of $416,500. According to Plaintiffs, several problems became evident before and during closing.
First, Chase allegedly "charged additional illegal fees" because of a "discriminatory policy against minorities andHispanics." (ECF No. 1 ¶ 18).3 The HUD-1 statement supposedly reflects improper fees, including a referral fee paid to Defendant Integrated Asset Services ("IAS"), a yield spread premium paid to Defendant Guardian Funding ("Guardian"), and a bonus processing free paid to Guardian.4 Chase also allegedly misrepresented the loan's financing charge because it "was in fact based on discrimination and illegal fees to make profit and and [sic] was consequently illegal and wrong." (Id. ¶ 60).
Second, Plaintiffs say they were improperly forced to pay certain transfer taxes at closing despite their status as first-time homebuyers. Plaintiffs did not receive a Maryland First Time Home Buyer Tax Credit and were forced to pay certain recordation and local taxes that they say Chase was meant to pay.5
Third, Plaintiffs claim that they were forced to pay money to Chase for certain county property taxes that Chase had paid in advance for the period of December 18, 2007 through July 1,2008. According to Plaintiffs, Chase should have asked the county for a refund, rather than charging them.
Fourth, the settlement costs left Plaintiffs with substantial credit card debt. A Guardian loan officer assured them that they could use credit cards to pay the costs at closing, with the understanding that they could later refinance their mortgage and obtain enough money to pay off the credit card bills. When Plaintiffs attempted to refinance, however, they were denied; their debt was too high. As a result, they accrued credit card debt of roughly $50,000.
Fifth, Plaintiffs believe that they were entitled to a refund of the entire $10,000 earnest money at the time of settlement. They allege that they did not receive any such refund. Plaintiffs characterize the earnest money as "blackmail." (Id. ¶ 167).
Sixth, Plaintiffs say that they learned at closing that the property taxes were much more than they expected. The property listing provided that property taxes for the 2006 tax year were $3,180. (ECF No. 1-20, at 2). But when they arrived at settlement, "they were surprised to learn on the HUD statement that the real property tax was '$5,529.65.'" (ECF No. 1 ¶ 181).
Plaintiffs allege that Chase's misconduct at closing was aided by "several other companies listed in the HUD1 [sic] statement, all of which [sic] benefited from [the] mortgagetransaction." (Id. ¶ 27). Among others, the settlement agent -Defendant NRT Mid-Atlantic Title Services, LLC ("NRT Mid-Atlantic") - allegedly "worked hand in hand with Chase." (Id. ¶ 27). The loan was sold to Defendant Federal National Mortgage Association at some point ("Fannie Mae") (see, e.g., ECF No. ¶ 66), who also allegedly did nothing to stop Chase's misconduct. Another defendant, First American Title Insurance Company ("First American"), issued the title insurance.
Plaintiffs maintain that more problems arose after closing.
In May 2008, Plaintiffs contacted Chase and requested a cancellation of their private mortgage insurance ("PMI"). According to them, the PMI contract signed at settlement entitled them to cancel the insurance and obtain a refund of all PMI premium payments (a) "when equity reach [sic] 20%" or (b) the loan-to-value ratio ("LTV")6 on their loan fell below 80%. (Id. ¶¶ 87-88). When Chase ordered an appraisal in May, it determined that the house was worth $532,000. When that number is compared with the value of the loan at the time of closing,the resulting LTV would be less than 80% (i.e. roughly 78%). Nevertheless, Chase refused to cancel the PMI and refund all PMI payments.7
Plaintiffs applied for PMI cancellation again in November 2009. Rather than ordering an appraisal, Chase mistakenly ordered a broker's price opinion, which valued the home at $475,000. Although the home's value was enough to merit PMI cancellation, Chase initially refused to cancel the PMI because the broker's price opinion was used rather than a valid appraisal. In light of the mistake, Chase eventually agreed to cancel the PMI but still did not refund any premium payments.
Plaintiffs also allege that, at some unspecified time, Chase deemed Plaintiffs' loan delinquent and reported it to the credit reporting agencies, even though Plaintiffs' payments were in fact current. In a letter dated August 27, 2010, Chad King, an attorney with Defendant Simcox and Barclay, LLP ("Simcox & Barclay"), informed Plaintiffs that Chase determined the reportwas an error. (ECF No. 1-19). The letter indicated that Chase would contact the credit reporting agencies to correct the mistake.
At some other unspecified time in 2008, Plaintiffs attempted to refinance with another lender. Plaintiffs received instructions from the new proposed lender on "how to do [their] tax return 2008 in order to refinance [the loan]." (ECF No. 1 ¶ 49). Despite following the lender's instructions, the lender declined to refinance the loan. The 2008 tax return, however, "raised some red flags" with the IRS, which led the Service to audit Plaintiffs' accounts. (Id. ). Plaintiffs attribute this audit to Chase.
On March 16, 2009, Plaintiffs applied to Chase for a modification of their loan, apparently under the Home Affordable Modification Program ("HAMP").8 Chase did not respond until September 15, 2009, when it denied their modification request in a one-sentence letter. When Plaintiffs contacted Chase aboutthe denial, company representatives told them that the denial was a mistake that Chase would correct. Chase did not correct the error.
Over the next two months, Plaintiffs continued to press Chase further for explanation of their HAMP denial. Indeed, Plaintiffs reapplied for a HAMP modification twice, in December 2009 and January 2010. In two subsequent letters, dated November 5, 2009 and March 2, 2010, Chase provided two primary explanations. First, Chase indicated that Plaintiffs were ineligible because there were too many deductions on their income tax returns in prior years. Second, Chase determined that Plaintiffs had insufficient income to qualify for a modification.
On May 25, 2010, Chase approved Plaintiffs' request for a loan modification. Nevertheless, Plaintiffs insist that the modification "was approved with very bad terms" and that they were entitled to a greater reduction in payments. (Id. ¶ 143). Moreover, throughout the loan modification process, several Chase employees called Mr. Coulibaly "to try to deceive him with false statement [sic] on loan modification guidelines or on law." (Id. ¶ 44).
On October 25, 2010, Plaintiffs received a letter from King concerning their loan modification. The letter contained a...
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