Marchese v. JPMorgan Chase Bank, N.A.

• Decision Date: 08 January 2013
• Docket Number: Civil Action No. GLR–12–1480.
• Parties: Dean C. MARCHESE, Plaintiff, v. JPMORGAN CHASE BANK, N.A., Defendant.
• Court: U.S. District Court — District of Maryland

917 F.Supp.2d 452

Dean C. MARCHESE, Plaintiff,

v.JPMORGAN CHASE BANK, N.A., Defendant.

Civil Action No. GLR–12–1480.

United States District Court, D. Maryland.

Jan. 8, 2013.

Phillip R. Robinson, Legg Law Firm, LLC, Frederick, MD, for Plaintiff.

Chad King, John S. Simcox, Simcox and Barclay, LLP, Annapolis, MD, for Defendant.

MEMORANDUM OPINION

GEORGE L. RUSSELL, III, District Judge.

THIS MATTER is before the Court on three pending motions, including Defendant JPMorgan Chase Bank, N.A.'s (“Chase”) Motion to Dismiss Plaintiff Dean C. Marchese's four-count Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) (ECF No. 11); Mr. Marchese's Motion to Remand (ECF No. 13); and Chase's Motion for Leave to File Surreply to Motion to Remand (ECF No. 24).

This is a home mortgage lending case in which Mr. Marchese alleges that Chase violated Maryland state consumer protection laws by committing mortgage fraud during the foreclosure, modification, and reinstatement of his home mortgage loan. Mr. Marchese also contends that the curative Maryland statute, that retroactively corrects the otherwise void power of sale clause in his deed of trust (“DOT”), is unconstitutional.

All told, the Complaint implicates the following four provisions of Maryland state law: (1) Maryland Consumer Debt Collection Act (“MCDCA”), Md.Code Ann., Com. Law §§ 14–201 et seq. (West 2012); (2) Maryland Consumer Protection Act (“MCPA”), Md.Code Ann., Com. Law §§ 13–101 et seq. (West 2012); (3) Maryland Mortgage Fraud Protection Act (“MMFPA”), Md.Code Ann., Real Prop. §§ 7–401 et seq. (West 2012); and (4) Md.Code Ann., Real Prop. § 4–109 (West 2012).

The six issues before the Court are (1) whether the amount in controversy is sufficient to establish federal diversity jurisdiction over this action; (2) whether Chase's surreply is necessary to the Court's decision regarding Mr. Marchese's Motion to Remand; (3) whether Mr. Marchese set forth a plausible claim that Chase acted improperly as a debt collector in the foreclosure action under the MCDCA; (4) whether Mr. Marchese set forth a plausible claim that Chase (a) engaged in unfair or deceptive practices in the extension of credit or the collection of consumer debts under the MCPA, and (b) sufficiently pled damages related to this claim; (5) whether loan servicing, particularly loan collection, is regulated by the MMFPA, and whether Mr. Marchese sufficiently pled damages related to this claim; and (6) whether Mr. Marchese has standing to seek declaratory and injunctive relief regarding the constitutionalityof amendments to Md.Code Ann., Real Prop. § 4–109 (West 2012); The issues have been fully briefed and no hearing is necessary. See Local Rule 105.6 (D.Md. 2011). For the reasons that follow, Chase's Motion to Dismiss will be granted as to Count I, granted as to the foreclosure action referenced in Counts II and III, but denied with respect to the loan modification and reinstatement referenced in Counts II and III. Additionally, Chase's request for declaratory judgment will be denied, but Count IV will be dismissed sua sponte for lack of standing. Finally, Mr. Marchese's Motion to Remand will be denied, and Chase's Motion for Leave to File a Surreply will be denied.

I. BACKGROUND¹

On July 23, 1999, Mr. Marchese purchased real property at 10017 Prestwich Terrace in Ijamsville, Maryland (the “Property”) for $359,091. ( See Def.'s Mem. Supp. Mot. to Dismiss [“Def.'s Mot.”] at 2, ECF No. 11). Mr. Marchese subsequently refinanced the Property on six occasions, which resulted in two deeds of trust in the aggregate principal amount of $729,100.

In March 2006, Mr. Marchese refinanced his existing home mortgage with a new lender, Steward Financial, Inc. Steward Financial's trustee named on the contract was a corporate entity, not a natural person. The mortgage loan on the Property is serviced by Chase. This most recent loan reflects the first and only relevant DOT for purposes of these motions, totaling $634,000. ² After Mr. Marchese fell behind on his mortgage payments, Chase, by and through the law firm of Bierman, Geesing, Ward, and Wood, LLC (“Substitute Trustees”), initiated foreclosure on the Property on June 5, 2009 (the “Foreclosure Action”).³ (Def.'s Mot. at 3). Consequently, Mr. Marchese sought a modification of his mortgage under the Home Affordable Modification Program (“HAMP”).⁴ ( See Def.'s Mot. Ex. E, at 2).

On July 11, 2009, Chase and Mr. Marchese entered into a trial period loan modification plan (“Trial Period Plan”). The Trial Period Plan indicated that Mr. Marchese was expected to make reduced mortgage payments from July 1, 2009, through September 1, 2009. (Def.'s Mot. Ex. E, at 2). If he complied with the terms of the Trial Period Plan and his representations made therein remained true in all material aspects, Chase would provide him with a Home Affordable Modification Agreement (“Modification Agreement”) for his signature. ( Id.)

Mr. Marchese made all three trial payments required by the Trial Period Plan from July 13, 2009, through September 1, 2009; ⁵ however, for unknown reasons, Chase did not provided him with a Modification Agreement for his signature, and he continued making modified payments, accepted by Chase, under the terms of the Trial Period Plan through April 1, 2010. On March 10, 2010, the Foreclosure Action was dismissed without prejudice. (Def.'s Mot. Ex. D, at 2, 4). On April 29, 2010, Chase informed Mr. Marchese that he needed more income to qualify for a permanent loan modification. Accordingly, on May 5, 2010, Chase notified Mr. Marchese that it would no longer honor his Trial Period Plan and that he would need to reapply for a loan modification.

On May 12, 2010, Mr. Marchese reapplied for a loan modification and provided the requested information. He alleges that the Substitute Trustees ignored his application and, instead, “proceeded to institute bogus foreclosure proceedings.” (Compl. ¶ 32). The state docket does not, however, reflect the initiation of any formal foreclosure actions against Mr. Marchese after March 10, 2010.

Thereafter, on October 1, 2010, Mr. Marchese made two good faith payments in the amounts of $3,608.39 and $4,078.75, but Chase refused to accept those payments.⁶ In October 2010, Mr. Marchese requested a reinstatement amount from the Substitute Trustees, and they provided him with a written reinstatement quote on October 27, 2010. The reinstatement quote provided that the loan could be reinstated until November 11, 2010, for a payment of $65,466.64.

On November 9, 2010, pursuant to the reinstatement quote, Mr. Marchese sent a cashier's check of certified funds in the amount of $65,466.64, via USPS certified mail, payable to JPMorgan Chase Bank, N.A. The Substitute Trustees accepted the funds. Nevertheless, on November 22, 2010, Chase returned the certified funds to Mr. Marchese, indicating that the funds were insufficient to cure the default. Mr. Marchese subsequently contacted Chase who confirmed that the reinstatement sum was correct. Additionally, during a phone conversation on November 23, 2010, the Substitute Trustees told Mr. Marchese that Chase verified the reinstatement quote.

Later, at an undetermined date, Mr. Marchese contacted the Substitute Trustees who promised to contact Chase and email the correct reinstatement figure to Mr. Marchese within one week.⁷ Mr. Marchese alleges that, as a result of Chase's actions, he has “been living in fear each day that he will lose [his] home to foreclosure.” (Compl. ¶ 40). Mr. Marchese contends that he has “experienced severe anxiety, insomnia, stomach pains, and [has] become depressed ....” (Compl. ¶ 41). Mr. Marchese also avers that he has “incurred bogus late fees, attorney fees, foreclosure fees, and damage to his credit as further economic damages ....” ( Id.)

On March 20, 2012, Mr. Marchese filed a four-count Complaint in the Circuit Court of Maryland for Baltimore City, seeking damages for Chase's alleged failure to comply with Maryland law in the handling of his home mortgage loan. After the Complaint was filed, Chase removed the case to this Court on May 16, 2012. (ECF No. 1). On June 1, 2012, Chase moved the Court to dismiss Counts I–III of the Complaint, and sought a declaratory judgment regarding Count IV, stating that the power of sale in the DOT remains in full force and effect. (ECF No. 11). On June 13, 2012, Mr. Marchese moved this Court to remand the case back to state court (ECF No. 13), and Chase moved for leave to file a surreply as part of its opposition to Mr. Marchese's Motion to Remand. (ECF No. 24).

II. DISCUSSION PART I

A. Standard of Review for a Motion to Remand

Federal courts have removal jurisdiction over state court actions “of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a) (2012). A district court has original jurisdiction over civil claims arising under federal law, 28 U.S.C. § 1331 (2012); over civil actions where the amount in controversy exceeds $75,000, exclusive of interests and costs, and there is complete diversity of citizenship, 28 U.S.C. § 1332(a) (2012); and over actions where the “putative state law claim has been totally subsumed by federal law,” Barbour v. Int'l Union, 594 F.3d 315, 326 (4th Cir.2010), abrogated on other grounds by28 U.S.C. § 1446(b)(2)(B) (2012). The removing party has the burden of proving the existence of federal jurisdiction. Id.;Strawn v. AT & T Mobility LLC, 530 F.3d 293, 296 (4th Cir.2008).

When the plaintiff challenges the propriety of removal, the defendant bears the burden of proving that removal was proper. See Greer v. Crown Title Corp., 216 F.Supp.2d 519, 521 (D.Md.2002) (citing Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994)). On a motion to remand, the court must “strictly construe the removal statute and resolve all doubts in favor of remanding the case to state court.” Richardson v. Phillip...