Grant v. Shapiro & Burson, LLP

• Decision Date: 08 May 2012
• Docket Number: Civil Action No. DKC 11–1724.
• Citation: 871 F.Supp.2d 462
• Court: U.S. District Court — District of Maryland
• Parties: Jennifer L. GRANT v. SHAPIRO & BURSON, LLP, et al.

871 F.Supp.2d 462

Jennifer L. GRANT

v.SHAPIRO & BURSON, LLP, et al.

Civil Action No. DKC 11–1724.

United States District Court, D. Maryland.

May 8, 2012.

Donata L. Edwards, The Foreclosure Defense Law Firm, Washington, DC, for Jennifer L. Grant.

Russell J. Pope, Treanor Pope and Hughes PA, Towson, MD, for Shapiro & Burson, LLP, et al.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for resolution in this case is a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) filed by Defendants Shapiro & Burson, LLP, Wells Fargo Bank, N.A. (“Wells Fargo”), and Mortgage Electronic Registration Systems, Inc. (“MERS”) (collectively, “Defendants”). (ECF No. 6).¹The relevant issues have been briefed, and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, the motion to dismiss will be granted as to Plaintiff's federal claims. Plaintiff will be permitted an opportunity to amend her complaint to state a cognizable claim under § 2605(b)(1) of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601 et seq. The court will defer consideration of Plaintiff's state law claims until a determination is made regarding the propriety of any amended RESPA claim.

I. BackgroundA. Factual Background

This case arises from two separate, but related, events: the refinancing of Plaintiff's home in 2007, and the subsequent foreclosure of that home in 2010. The following limited facts regarding these events are largely taken from the complaint, but some of them have been supplemented with information contained in exhibits to Defendants' motion to dismiss.²

At some time prior to September 2007, Plaintiff purchased a home in Bladensburg, Maryland, using a loan financed by Wells Fargo. On September 7, 2007, Plaintiff refinanced the original loan with a $342,000 loan secured by a deed of trust that she also obtained through Wells Fargo.³ The trustee listed on the deed was John Burson, an attorney at Shapiro & Burson. When finalizing the refinancing, Plaintiff alleges that she did not receive 1) an accurate disclosure of the itemized finance charges, 2) a “Good Faith Estimate Disclosure,” 3) a disclosure about the “kickback, hidden referral fee and or the yield spread premium charged to Plaintiff,” 4) a disclosure about “the affiliated business arrangements of the Lender, the Settlement Company and the Broker,” 5) a notice regarding potential transfer of the servicing of Plaintiff's refinanced loan, or (6) a “Special Information Booklet.” (ECF No. 1 ¶¶ 16, 26, 27). Additionally, the deed of trust was notarized by a notary in Maryland, although the settlement occurred in Alexandria, Virginia. Defendants also subsequently transferred the servicing of the refinanced loan without informing Plaintiff within fifteen days.

By 2009, Plaintiff had defaulted on the refinanced loan, and foreclosure proceedings ensued in the Circuit Court for Prince George's County. On June 1, 2009, Plaintiffreceived notice from the court that her home was in foreclosure. A foreclosure sale of Plaintiff's home was subsequently scheduled for August 24, 2010. Plaintiff planned to attend this sale, but it was cancelled at the last minute by a trustee at Shapiro & Burson. When Plaintiff asked the trustee when the sale would be rescheduled, an attorney from Shapiro & Burson instructed the trustee not to inform her of the next sale date. Plaintiff did not receive any other notice about the rescheduled sale date and was not aware when it would occur. On October 18, 2010, Plaintiff was notified that the sale had taken place.⁴ She filed for chapter 13 bankruptcy protection on November 11, 2010, in the United States Bankruptcy Court for the District of Maryland.⁵ The circuit court ratified the foreclosure sale on March 29, 2011.

B. Procedural Background

On June 23, 2011, Plaintiff, proceeding pro se, commenced the present action by filing a complaint in this court against Shapiro & Burson, Wells Fargo, MERS, and Abba Title. The complaint sets forth the following eleven counts, apparently as to all defendants: (1) “injunction and restraining order,” (2) “mortgage fraud predatory lending,” (3) “defective foreclosure failure to give proper notice of pending foreclosure sale,” (4) unjust enrichment, (5) gross negligence, (6) violation of the duty of good faith, (7) “defective deed of trust,” (8) “set aside or vacate foreclosure,” (9) violations of RESPA, (10) fraud, and (11) violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., and “civil conspiracy to commit mail fraud, and civil conspiracy to commit wire fraud.” (ECF No. 1).

After waiving service, Defendants Shapiro & Burson, Wells Fargo, and MERS moved to dismiss all of Plaintiff's claims pursuant to Rule 12(b)(6). (ECF No. 6). Plaintiff obtained counsel and filed an opposition in which she only opposed one of the arguments raised within Defendants' motion.⁶ Defendants timely replied.

II. Standard of Review

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th 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.” Fed.R.Civ.P. 8(a)(2). “Rule 8(a)(2) still requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted).

At this stage, the court must consider all well-pleaded allegations in a complaint as true, Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994), and must construe all factual allegations 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)). Additionally, complaints filed by pro se plaintiffs are “to be liberally construed ... and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (internal quotation marks and citations omitted).

In evaluating the complaint, regardless of whether it was filed pro se, the court need not accept unsupported legal allegations. Revene v. Charles Cnty. Comm'rs, 882 F.2d 870, 873 (4th Cir.1989). Nor must it agree with legal conclusions couched as factual allegations, Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009), or 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 Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir.2009). “[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.’ ” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 (quoting Fed.R.Civ.P. 8(a)(2)). Thus, “[d]etermining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

Moreover, allegations of fraud—which Plaintiff raises in both her RICO and state law claims—are subject to a heightened pleading standard under Rule 9(b). Harrison, 176 F.3d at 783–84.Rule 9(b) states that “in alleging a fraud or mistake, a party must state with particularity the circumstances constituting the fraud or mistake. 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 omissions of material facts, however, meeting Rule 9(b)'s particularity requirement will likely take a different form. See Shaw v. Brown & Williamson Tobacco Corp., 973 F.Supp. 539, 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” (internal quotations omitted)). The purposes of Rule 9(b) are to provide the defendant 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 discovery, and to safeguard the defendant's reputation. See Harrison, 176 F.3d at 784. In keeping with these objectives, “[a] court should hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that the defendant[s were] made aware of the particular circumstances for which [they] will have to prepare a defense at trial and (2) that [the] plaintiff has substantialprediscovery evidence of those facts.” Id.

Additionally, one of the grounds on which Defendants seek dismissal is the statute of limitations. The statute of limitations is an affirmative defense that a party typically must raise in a pleading under Fed.R.Civ.P. 8(c) and is not usually an appropriate ground for dismissal. See Eniola v. Leasecomm Corp., 214 F.Supp.2d 520, 525 (D.Md.2002); Gray v. Metts, 203...