Fowler v. Wells Fargo Home Mortg., Inc.
| Decision Date | 13 May 2015 |
| Docket Number | Case No.: GJH-15-1084 |
| Parties | SANDRA FOWLER Plaintiff, v. WELLS FARGO HOME MORTGAGE, INC., et al. Defendants. |
| Court | U.S. District Court — District of Maryland |
Plaintiff Sandra Fowler purchased a home in Prince George's County, Maryland on March 30, 2006. See ECF No. 2 at ¶¶ 1, 20. According to Plaintiff, Defendant Mid-Atlantic Builders of Beechtree, Inc. ("Mid-Atlantic") was the homebuilder, Defendants Southern Trust Mortgage Company, Inc. ("Southern Trust") and Dennis Sullivan were the lenders, Defendant Wells Fargo Home Mortgage, Inc. ("Wells Fargo") was the escrow agent, and Defendant Village Settlements, Inc. ("Village Settlements") conducted the closing. See id. at ¶¶ 12- 20. Plaintiff filed for bankruptcy in October 2013 and March 2014 and both cases were dismissed. See id. at ¶¶ 34-35. Wells Fargo later initialed a foreclosure proceeding in the Circuit Court for Prince George's County, Maryland. See id. at ¶ 40. The home was scheduled to be sold on March 20, 2015; however, the circuit court has stayed the foreclosure sale while it considers Plaintiff's motions for temporary restraining order ("TRO"), preliminary injunction, and permanent injunction. See ECF No. 16-1.
In the meantime, Plaintiff filed a complaint against Defendants in the Circuit Court for Prince George's County, which was removed to this Court. See ECF No. 1. Plaintiff alleges thatDefendants engaged in "predatory lending and targeting minorities in a pattern and scheme that would eventually strip minority buyers of their down payments, mortgage payments and ultimately their home." ECF No. 2 at ¶ 17. Currently pending before this Court is Plaintiff's Motion for TRO and preliminary injunction to prevent Defendant Wells Fargo from selling Plaintiff's home in the foreclosure sale.1 See ECF No. 3 at 21. A hearing is unnecessary. See Local Rule 105.6. For the reasons explained below, Plaintiff's motion is DENIED.
Plaintiff alleges that in 2006 she became interested in purchasing a home that was built by Defendant Mid-Atlantic and located at 2410 Moores Plains Boulevard, Upper Marlboro, Maryland. See ECF No. 2 at ¶¶ 1, 12. Defendant Mid-Atlantic "steered the Plaintiff to Defendants [lenders] Sullivan and Southern Trust." Id. at ¶ 14. On or about March 30, 2006, Defendant Village Settlement conducted the closing with Sullivan and Southern Trust as the lender and Defendant Wells Fargo as the escrow agent. See id. ¶ 20. The mortgage amount was $952,130.32. See id. at ¶ 22. At the time of the closing, Plaintiff's monthly income was $12,283 and her expenses were $1,455. See id. at ¶ 23 & p. 23. Defendants offered Plaintiff a five-year interest only payment and an adjustable rate mortgage. See id. at ¶ 24.
At the closing, Defendants failed to provide Plaintiff with certain loan documents as required by several federal laws. See id. Specifically, Defendants did not provide Plaintiff with the handbook on adjustable rate mortgages, a good faith estimate, a booklet on closing costs, an initial servicing transfer disclosure, notice of the right to receive copy of the appraisal, an Equal Credit Opportunity Act notice of home application, or the "Consumer Information and PrivacyPolicy." See id. at ¶ 25. Further, Plaintiff alleges, the loan was an "improvident extension of credit" in violation of federal and state unfair or deceptive practices laws. See id. Immediately after the closing, Southern Trust transferred the mortgage to Defendant Wells Fargo. See id. at ¶ 28. Wells Fargo then sold the loan to a "Mortgage Backed Securities ("MBS")," which, Wells Fargo told Plaintiff, "does not give the borrowers any flexibility to change or qualify for government modification programs." Id. at ¶ 29. Plaintiff additionally claims that Defendants provided a cash incentive for loan officers to "aggressively market subprime mortgages in minority neighborhoods." Id. at ¶ 27. Defendants are alleged to have referred to those in minority neighborhoods as "mud people" and referred to subprime loans as "ghetto loans." See id.
Plaintiff lost her job on September 28, 2007, when the company where she had been employed ceased operations. See id. at ¶ 30. After exhausting over $300,000 in savings, Plaintiff fell behind in her mortgage payments. See id. at ¶ 31. Plaintiff asserts that Wells Fargo offered a modification that was an unfair "ruse." See id. at ¶ 33. Plaintiff alleges that she should have been eligible for the United States Treasury Department's reduction program, but that she learned for the first time on December 18, 2014, that Defendant Wells Fargo provided her with a loan that did not qualify her for any government modification. See id. at ¶¶ 36-38.
Plaintiff filed for bankruptcy twice, once in October 2013 and once in March 2014. See id. at ¶¶ 34-35. On both occasions, the bankruptcy was dismissed because Plaintiff was not able to make the required payments to the bankruptcy trustee. See id. Plaintiff's home went into foreclosure and Wells Fargo scheduled the sale of the property for March 20, 2015. See id. at ¶ 40. Plaintiff filed a motion to stay the foreclosure in the Circuit Court for Prince George's County and the motion was granted. See ECF No. 16-1.
In this case, Plaintiff alleges six counts—a request for injunctive relief, violation of the Racketeering Influenced and Corrupt Organization ("RICO") Act, Fraud, Violation of the Real Estate Settlement Procedure Act ("RESPA"), Violation of the Truth in Lending Act ("TILA"), and unfair and deceptive trade practices under the Federal Trade Commission Act ("FTCA"). See ECF No. 2 at ¶¶ 42-74. Currently pending before this Court is Plaintiff's Motion for TRO and preliminary injunction against Wells Fargo. See ECF No. 3. Wells Fargo opposes the motion. See ECF No. 29.
The purpose of a temporary restraining order ("TRO") or a preliminary injunction is to "protect the status quo and to prevent irreparable harm during the pendency of a lawsuit, ultimately to preserve the court's ability to render a meaningful judgment on the merits." In re Microsoft Corp. Antitrust Litig., 333 F.3d 517, 525 (4th Cir. 2003). The grant of a TRO or a preliminary injunction is an "extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Dewhurst v. Cnty. Aluminum Co., 649 F.3d 287, 290 (4th Cir. 2011) (quoting Winter v. Natural Resources Defense Council, 555 U.S. 7, 22 (2008)) (internal quotation marks omitted). Thus, the burden placed upon Plaintiff to state a claim for a TRO is high. The Supreme Court and the Fourth Circuit recognize four requirements that a party must show to be granted a TRO or preliminary injunction:
(1) there is a likelihood of success on the merits: (2) there is a likelihood the movant will suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in movant's favor; and (4) the injunction is in the public interest.
The Real Truth About Ohama, Inc. v. Fed Election Comm'n, 575 F.3d 342, 347 (4th Cir. 2009) (citing Winter, 555 U.S. at 20); see also Dewhurst, 649 F.3d at 290 (reaffirming the fourrequirements). All four of these requirements must be met in order for a TRO or preliminary injunction to be granted. See Dewhurst, 649 F.3d at 290.
Plaintiff asserts that she has a "high probability of success." See ECF No. 3 at 14. In support, she makes several conclusory statements. She states that "Defendants are barred by law not to make predatory loans, violate laws in making such loans[,] and are barred from unilaterally placing a mortgage in a non-modifiable security backed instrument." Id. Plaintiff claims that "[v]irtually all the Defendants' actions in formulating the Plaintiff's mortgage and in further prohibiting the Plaintiff from qualifying for a government backed mortgage relief program are illegal and deceptive trade practices." Id. Importantly, however, Plaintiff does not address how success on the merits of her claims would entitle her to a permanent injunction preventing foreclosure.
Plaintiff also fails to address the timing of her claims. All of Plaintiff's allegations stem from Defendants' actions in 2006, and, thus, appear to be barred by the relevant statute of limitations periods. First, Plaintiff alleges that Defendants violated the RICO Act. There is a four-year statute of limitations period for civil RICO actions. See Klehr v. A.O. Smith Corp., 521 U.S. 179, 188-89(1997) (citing Agency Holding v. Malley Duff and Assocs., Inc., 483 U.S. 143, 156 (1987)). Here, Plaintiff alleges that the action giving rise to her RICO claim occurred in 2006, when she obtained the relevant mortgage. See ECF No. 2 at ¶¶ 12-41. Plaintiff has given no indication as to why the statute of limitations should be tolled in this case. To the extent Plaintiff suggests that she was unaware that Defendants' actions violated laws until recently, the Court notes that, in a civil RICO case, "a plaintiff who is not reasonably diligent may not assert 'fraudulent concealment.'" Klehr, 521 U.S. at 194. Further, it is the Plaintiff's knowledge of herown injury that controls the running of the statute of limitations, and not Plaintiff's knowledge of the underlying RICO pattern. See Rotella v. Wood, 529 U.S. 549, 556-57 (2000).2 Plaintiff has provided no rationale for why she was unable to discover her injury through due diligence, and the Court will not read a rationale into Plaintiff's motion. Thus, on these facts, the Court cannot find that Plaintiff is likely to succeed on her RICO claim.
Plaintiff also alleges that Defendants committed fraud in 2006 when they violated numerous laws in not providing plaintiff with several documents and not explaining certain details of Plaintiff's mortgage. See ECF No. 2 at ¶¶ 62-69. The statute of limitations for a civil action under Maryland law is three years from the date it accrues. See Maryland Code,...
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