Iglesias v. Pentagon Title & Escrow, LLC

• Decision Date: 30 August 2012
• Docket Number: 1563,Sept. Term, 2010.,Nos. 1562,s. 1562
• Parties: Maria IGLESIAS v. PENTAGON TITLE AND ESCROW, LLC, et al.
• Court: Court of Special Appeals of Maryland

206 Md.App. 624

51 A.3d 51

Maria IGLESIAS

v.PENTAGON TITLE AND ESCROW, LLC, et al.

Nos. 1562, 1563, Sept. Term, 2010.

Court of Special Appeals of Maryland.

Aug. 30, 2012.

D. Scott Messersmith (Montero Law Group, LLC, on the brief), Silver Spring, MD, for Appellant.

Robert M. Gittins, Rockville, MD, and Chad King, Annapolis, MD (William J. Hickey, Law of William J. Hickey, Rockville, MD, John S. Simcox, Simcox and Barclay, LLP, Annapolis, MD), on the briefs, for Appellee.

Panel: DEBORAH S. EYLER, GRAEFF, JAMES A. KENNEY, III, (Retired, Specially Assigned), JJ.

EYLER, DEBORAH S., J.

We have before us two related appeals arising from an incident of identity fraud. In July of 2006, Maria Iglesias, the appellant, a first-time home buyer, engaged the services of a loan officer, Jose Ramirez, in an effort to purchase a condominium. The deal ultimately fell through. Shortly thereafter, Iglesias began working with another loan officer to obtain financing to purchase a different condominium. She did not qualify for financing, however, because a credit search revealed she recently had purchased a house in Montgomery County encumbered by two mortgage loans in her name. This came as a complete shock to her, as she had no knowledge of such a purchase.

A criminal investigation ensued. It revealed that Ramirez and others associated with him had perpetrated a fraud by which two properties were purchased in Iglesias's name. In each transaction, without Iglesias's knowledge, a sales contract was signed; financing was obtained; and a real estate settlement was consummated under the strength of a forged power of attorney (“POA”).

In July of 2009, in the Circuit Court for Montgomery County, Iglesias filed two separate actions for negligence and for declaratory judgment against various parties involved in each real estate transaction (“First Action” and “Second Action” respectively). All of the issues in these appeals arise out of Iglesias's second amended complaint (“SAC”) in each action. In the SAC in her First Action, Iglesias set forth one count of negligence against Pentagon Title & Escrow, LLC (“Pentagon”), the company that conducted the real estate settlements; one count of negligence against Christina Shin, an attorney and Pentagon member who acted as the settlement agent in both transactions; and one count of negligence against JP Morgan Chase Bank, N.A. (“Chase”), the lender. Iglesias's SAC in the Second Action was identical, except that the lender was WMC Mortgage Company (“WMC”). Iglesias subsequently dismissed her claim against WMC.¹ Pentagon and Shin are appellees in both appeals. Chase is an appellee in only one appeal.

By order dated February 1, 2010, the First Action, the Second Action, and a third case against Pentagon involving a different plaintiff and lender were consolidated. Pursuant to the consolidation order, filings still were to be made in each individual case. The third case subsequently was severed from Iglesias's cases and is not before us in the instant appeals.

In the First Action, Chase moved to dismiss the SAC for failure to state a claim for which relief could be granted, arguing that it did not owe a duty of care to Iglesias and that she had failed to allege facts that could support findings of proximate causation and damages. After a hearing, Chase's motion was granted with prejudice.

In the First and Second Actions, Iglesias moved for entry of an order of default against Shin, which Shin opposed. Iglesias also moved for partial summary judgment against Pentagon and Shin on the issue of liability. Pentagon and Shin moved to dismiss the SAC for failure to state a claim for which relief could be granted or, alternatively, for summary judgment. Like Chase, they argued that they did not owe a duty of care to Iglesias. Shin also maintained that the action against her was time-barred.

After hearing argument of counsel, the circuit court granted summary judgment in favor of Shin on limitations and further granted summary judgment in favor of Pentagon and Shin on the issue of duty. The court denied Iglesias's motions for partial summary judgment and her motion for default.

Iglesias appeals the judgments in favor of Pentagon, Chase, and Shin, posing four questions for review, which we have combined and restated as follows:

I. Did the circuit court err in ruling in the First Action that, under the well-pleaded facts alleged in her SAC, Chase did not owe Iglesias a legal duty to verify that she was a party to the transaction?

II. Did the circuit court err in granting summary judgment in the First and Second Actions in favor of Pentagon and Shin based on the ground that they did not owe Iglesias a legal duty to look behind a facially valid POA?

III. In the First and Second Actions, did the circuit court abuse its discretion by denying Iglesias's motion for order of default against Shin and by ruling that Iglesias's action against Shin was barred by limitations?

For the reasons to follow, we shall affirm the judgments of the circuit court.

FACTS AND PROCEEDINGS ²

In July of 2006, Iglesias was renting an apartment in Washington, D.C., and was in the market to purchase her first home. She responded to an advertisement for a condominium for sale in Hyattsville. The owner, identified to Iglesias as “Oscar,” referred her inquiry to his agent, Albert Gomez. Gomez in turn referred Iglesias to Ramirez, who, as already discussed, purported to be a loan officer.

Upon Ramirez's request, Iglesias provided him with a number of personal financial records. Supposedly, with that information in hand, he pursued financing on her behalf. Iglesias subsequently made an offer to purchase Oscar's condominium, which he accepted. Settlement was scheduled for September 12, 2006. At some point, however, Ramirez advised Iglesias that there was a problem with the financing and settlement was postponed to a later date. In the interim between September 12, 2006, and the postponed settlement date, Oscar told Iglesias that he “no longer wished to sell” the condominium she had contracted to purchase, but that he had another condominium for sale if she was interested. At that point, Iglesias became “uneasy about the transaction” and ended negotiations.

Sometime later that month, Iglesias used the services of a new loan officer to assist in obtaining financing with which to purchase a different condominium. It was then that she discovered that she was a record owner of a house located at [206 Md.App. 631]13114 English Turn Drive in Silver Spring (“English Turn Property”). Later, Iglesias learned that she also was a record owner of a house located at 19067 Sawyer Terrace in Germantown (“Sawyer Terrace Property”). Both properties were encumbered by deeds of trust (“DOT”) supported by loans solely in Iglesias's name.

Six months later, in March of 2007, Iglesias reported to the police that she believed she had been the victim of identity theft. In the course of the ensuing police investigation, the settlement files from each transaction were seized from Pentagon's offices in Rockville. These documents revealed that the central players in both transactions were the same. Gomez, a real estate agent with Remax Home Centre, acted as the buyer's agent and prepared the residential contract of sale; Kenneth C. Sanchez, of First Advantage Mortgage Company (“First Advantage”), acted as the loan officer ³; and settlement occurred at Pentagon's office. In addition, at each settlement, the subject property was conveyed to Iglesias and another individual as joint tenants, but only Iglesias was obligated on the loans associated with the DOTs. Thus, Iglesias shared ownership of both properties but did not share liability for the loans for the properties. Finally, in each case, settlement proceeded on the strength of a POA notarized by Myriam Rodriguez purporting to authorize an individual to act on Iglesias's behalf to consummate the real estate transaction.⁴

The sales contract for the English Turn Property was executed on July 27, 2006. It reflected that one Raymond Ekpedeme was the seller and that Iglesias was the buyer. The contract price was $897,500 and settlement was scheduled for August 4, 2006.

On July 31, 2006, Jennifer Lee, a Pentagon employee, received an email from Sanchez, who, as mentioned above, was the loan officer. He stated that “[t]here is a new buyer on this property because the last buyer fell through at the last minute.” He asked Lee to “change the buyer and the loan amounts on the title as well as the mortgagee info.” He identified Iglesias as the new buyer and said she would be financing the $897,500 purchase price with two mortgage loans, one for $650,000 and one for $247,500. His email ended by stating, “there is still going to be a power of attorney Jose Ramirez and he will be going on title.... I also am looking to close this deal on [W]ednesday late afternoon.”

Three days later, on August 3, 2006, settlement went forward in Pentagon's office with Shin acting as the settlement agent. Ekpedeme and Ramirez were present. Iglesias was not. Ramirez gave Shin a “Special Power of Attorney” (“Ramirez POA”). It stated in pertinent part:

KNOW ALL MEN BY THESE PRESENTS, that I, MARIA IGLESIAS, of Montgomery County, Maryland do hereby appoint JOSE R. RAMIREZ, as my true and lawful attorney-in-fact for me and in my name, place, and stead to secure, acknowledge, sign, seal, and deliver, and cause to be recorded any and all contracts, checks, deeds, deeds of trust, notes, mortgages, and other writing which may be necessary or desirable for me to execute for the PURCHASE of the following described property, located in PRINCE GEORGE'S County,[ ⁵] Maryland and more particularly described as:

Address: 13114 English Turn Drive, Silver Spring, MD 20904

(Emphasis in original.) The Ramirez POA further provided that it would terminate automatically on August 31, 2006. It was dated by hand August 3, 2006 (the same day as settlement)and was...