Julian v. Buonassissi
| Decision Date | 16 June 2010 |
| Docket Number | 2009.,No. 37,37 |
| Citation | 997 A.2d 104,414 Md. 641 |
| Parties | Harriette JULIANv.Joseph BUONASSISSI, et al. |
| Court | Maryland Court of Appeals |
COPYRIGHT MATERIAL OMITTED
Phillip Robinson (Civil Justice, Inc., Baltimore), on brief, for petitioner/cross-respondent.
C. Matthew Hill (Public Justice Center, Baltimore; Stephen D. Ball, Mitchellville), on brief, for petitioner/cross-respondent.
Kathleen S. Skullney, Foreclosure Legal Assistance Project Attorney, Legal Aid Bureau, Inc., brief and appendix as Amicus Curiae, for petitioner/cross-respondent.
Scott C. Borison, Legg Law Firm, LLC, Frederick, Michael Gregg Morin, The Holland Law Firm, PC, Annapolis, Amici Curiae Brief of Community Law Center, Maryland Cash Campaign, Maryland Consumer Rights Coalition, and St. Ambrose Housing Aid Center, for petitioner/cross-respondent.
Douglas F. Gansler, Atty. Gen. of Maryland, William D. Gruhn, Jonathan R. Krasnoff, Christopher J. Young, Asst. Attys. Gen., Brief of Amici Curiae the Consumer Protection Division of the Office of the Attorney General and the Commissioner of Financial Regulation, for petitioner/cross-respondent.
F. Robert Troll, Jr., Susan Zuhowski, O'Malley, Miles, Nylen & Gilmore, P.A., brief of Amicus Curiae The Maryland Land Title Association, for respondents/cross-petitioners.
Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS and BARBERA, JJ.
In this case we have been asked to determine whether a real estate conveyance was void ab initio or voidable under the Protection of Homeowners in Foreclosure Act, Sections 7-301 to 7-321 of the Real Property Article, Maryland Code (1974, 2003 Repl. Vol., 2006 Supp.). Although Harriette Julian, the Petitioner and alleged foreclosure rescue scam victim, failed to file a supersedeas bond 1 to stay the ratification by the Circuit Court for Charles County of a foreclosure sale of a property in which she had been in the chain of title, her appeal is not moot. In reaching the merits of her appeal, we hold that her conveyance in that chain of title would be voidable if the proof adduced during a hearing on her exceptions warranted that action, and that the Circuit Court erred in overruling her exceptions to the foreclosure sale during an earlier hearing.
When facing foreclosure of her Waldorf, Charles County, Maryland, home as a result of her delinquency on a mortgage with AMC Mortgage Services, Inc., Harriette Julian became embroiled in an alleged foreclosure rescue scam perpetrated by Metropolitan Money Store, whereby she conveyed the property in fee simple to a LaShawn Wilson, who procured from Wells Fargo Bank, N.A., an Adjustable Rate Mortgage in the amount of $482,000, which was secured by a Purchase Money Deed of Trust on the home.
At settlement, Ms. Julian signed numerous documents, including a HUD-1 listing her as the Seller and Ms. Wilson as the Buyer, a “Fee Sheet” outlining the disbursements under the “Foreclosure Reversal Program,” as well as a document granting a Power of Attorney to Fordham & Fordham Investment Group in order to complete the sale, but also to allegedly open a mortgage escrow account in her name. According to the Power of Attorney and the Fee Sheet, Fordham & Fordham was to place the equity from the sale of the property into a mortgage account from which Wells Fargo would be paid monthly for the mortgage in the amount of $4,201.66 per month for twelve months. At the bottom of the “Fee Sheet” signed by Ms. Julian, the document did not provide notice of Ms. Julian's right to rescind, and in fact, provided notice that she could not rescind the transaction:
BY SIGNING THIS STATEMENT YOU ARE STATEING [sic] YOU UNDERSTAND THE ABOVE STATEMENT AS IT READS AND YOU ALSO UNDERSTAND THAT YOU CAN NOT RESEND [sic] THIS LOAN AFTER TODAY DECEMBER 18 2006[.]
According to the HUD-1, Ms. Julian not only received $81,650.87 at the settlement table, but she was relieved of her obligation under her original mortgage with AMC in the amount of $379,948.92; the Fee Sheet contradicted the HUD-1, and listed a $95,628.87 disbursement to Ms. Julian, with $50,419.92 being placed in escrow, $20,134.17 being applied to closing costs, $10,000 being paid to Fordham & Fordham, $10,000 being paid to an “ Investor,” and $5,074.78 being paid to Ms. Julian. Ms. Julian believed the “ Investor” was Ms. Wilson, the putative purchaser of the property.
Approximately one month after settlement, Wells Fargo assigned the loan to U.S. Bank, as trustee for Citigroup Trust, but Wells Fargo continued to service the loan. Approximately six months after settlement, in June of 2007, the Deed of Trust was recorded among the land records of Charles County.
No payments were ever made on the Note, and Wells Fargo, as servicer of the loan, directed the substitute trustees, Joseph V. Buonassissi, II, Richard E. Henning, Jr., Richard A. Lash, Keith M. Yacko, and Brian S. McNair, to pursue a foreclosure action against the Waldorf property and Ms. Wilson under the name of the current note holder, U.S. Bank, which was done on August 27, 2007, in the Circuit Court for Charles County, as Joseph Buonassissi, et al. v. LaShawn Wilson.2 On the same day, Ms. Julian filed with the Clerk of the Circuit Court for recording among the land records of Charles County a “Notice of Revocation of Power of Attorney and Rescission and Cancellation of Foreclosure Consultant Contract and Foreclosure Reconveyance Deed” (“Notice of Rescission”), putatively under the Protection of Homeowners in Foreclosure Act, Sections 7-301 to 7-321 of the Real Property Article, Maryland Code (1974, 2003 Repl. Vol., 2006 Supp.) (PHIFA).3 Ms. Julian's Notice of Rescission recited that Ms. Wilson was a “foreclosure consultant” and/or “ foreclosure purchaser,” the property was a “residence in foreclosure,” the Deed of Trust was a “foreclosure reconveyance,” and because Ms. Wilson failed to provide the disclosures and notices required by PHIFA, Ms. Julian had the absolute right to rescind or cancel any foreclosure reconveyance for a period of three business days after Ms. Wilson had complied with the disclosure notices required by PHIFA. Ms. Julian alleged that because of the failure of notice required by PHIFA, she had the right to revoke, rescind, and cancel all documents she had signed, including any powers of attorney, all foreclosure consulting contracts, and the Deed of Trust or any reconveyance by Ms. Julian to Ms. Wilson or her agents, successors, or assigns.
The substitute trustees, however, did not discover, and could not have discovered, the Notice of Rescission when they performed a title search at the beginning of August. They did, however, publish notice of the public sale, and mail a letter to Ms. Julian's home, addressed to “Tenant(s)” which stated:
It is my understanding that you may have an interest in the Trustee's sale of the above-referenced property. I enclose herewith a copy of the notice of a Trustee's sale concerning the property.
Thereafter, the Trustees did discover Ms. Julian's Notice of Rescission during a final title search, days before the public sale to be held on September 20, 2007. At the sale, the substitute trustees, on behalf of U.S. Bank, purchased the property for $480,000.4
A notice that the sale of the property would be ratified and confirmed, unless cause to the contrary was shown, was issued by the Circuit Court, and Ms. Julian filed a Motion to Intervene, which was granted by a Circuit Court judge. Ms. Julian then filed Exceptions to the Sale in which she alleged that because the “agents” of Wells Fargo and U.S. Bank perpetrated the scheme to illegally acquire Ms. Julian's property, the sale must be set aside based upon the following:
Because of the scheme perpetrated by the agents of the Plaintiffs ( i.e., Tomlin, Regional Title and Escrow, and the Metropolitan Money Store) in helping Defendant Wilson to illegally acquire the Property from Ms. Julian's equity and interests in the Property, the Plaintiff banks cannot now come before this Court seeking its aid. The Court of Appeals has said unequivocally that this Court cannot help lenders with unclean hands and in this case, because of the acts of its agents in the transactions, the Plaintiffs cannot claim clean hands.
Ms. Julian then claimed that the Deed of Trust was void ab initio because it was obtained in violation of PHIFA:
(Alterations added and citations omitted). She further alleged that Wells Fargo and U.S. Bank had been on “inquiry notice” that a foreclosure scam was being effectuated so that the sale to Ms. Wilson was not bona fide:
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