Markey v. Wells Fargo Bank, N.A.
| Decision Date | 20 March 2019 |
| Docket Number | Case No.: PWG-18-1867 |
| Parties | MARY MARKEY, Plaintiff, v. WELLS FARGO BANK, N.A., et al., Defendant. |
| Court | U.S. District Court — District of Maryland |
Mary Markey, a Maryland resident, lost her Florida rental property (the "Property") in a foreclosure action to which she was not a party. Am. Compl., ECF No. 1-3. U.S. Bank, National Association, as Trustee for Citigroup Mortgage Loan Trust Mortgage Pass-Through Certificates, Series 2005-3 ("U.S. Bank"), which held the Note and Deed of Trust that Ms. Markey had executed in conjunction with the mortgage loan she had obtained for the Property, had initiated the foreclosure action; Wells Fargo Bank, N.A. ("Wells Fargo") had serviced the mortgage. More than three years later, Ms. Markey filed suit against U.S. Bank and Wells Fargo in Maryland state court, alleging violations of Maryland and federal statutes and the common law, based on the statements and representations Wells Fargo made while she attempted to pay her arrears, obtain a loan modification, appeal the denial of that modification, and otherwise avoid foreclosure. Compl., ECF No. 1-2.
Defendants removed the lawsuit to this Court based on diversity jurisdiction. Notice of Removal, ECF No. 1; Civil Cover Sheet, ECF No. 1-1. Pending is their Motion to Dismiss, based on res judicata or Rooker- Feldman1 abstention grounds or, alternatively, for failure to state a claim. ECF No. 19.2 Because Ms. Markey was not a party to the foreclosure action, res judicata does not bar her claims. The Rooker-Feldman doctrine also is not a bar. But, the statutes of limitations ran on all but her breach of contract/covenant of good faith and fair dealing claim before she filed suit, and Ms. Markey fails to state a claim for breach of contract. Therefore, I will grant Defendants' motion. I will, however, allow Plaintiff to amend her pleadings with regard to her one timely claim for breach of contract.
Ms. Markey obtained the mortgage from U.S. Bank, secured by a rental property she purchased in Florida (the "Property"), and she executed a Note and Deed of Trust of the Property in favor of the note holder on May 4, 2005. Am. Compl. ¶¶ 5, 9. Wells Fargo serviced the loan. Id. ¶ 4. While Ms. Markey was preoccupied with "serious health and mental health issues" in late 2012, "the auto-debits for her mortgage on the Subject Property apparently [did] not go[] through," and Ms. Markey defaulted on her loan. Id. ¶¶ 11-14. Then, in early January 2013, she learned from Wells Fargo that "her loan had been referred to foreclosure." Id. ¶¶ 14-16. She attemptedto negotiate a loan modification, but she claims that the modification was "wrongfully denied" after "a 26-month torturous process . . . that . . . put her payments in huge arrears . . . ." Id. ¶ 19.
On June 28, 2013, U.S. Bank instituted foreclosure proceedings in Florida state court. See State Ct. Docket, ECF No. 19-2; see also State Ct. Docket, https://ccmspa.pinellascounty.org/PublicAccess/CaseDetail.aspx?CaseID=1734782. The summons for Ms. Markey was "returned not served," after which U.S. Bank sought and was granted permission to effect service by publication; notice was posted in a local newspaper in Florida once a week for two consecutive weeks. State Ct. Docket.
Ms. Markey alleges that, while the foreclosure action was pending, she was informed "of multiple foreclosure sales dates scheduled, then lifted, then rescheduled." Pl.'s Opp'n 6-7 (citing Am. Compl. ¶¶ 22-26).4 She submitted "more and more repetitive documents" that defendants requested as part of the loan modification process; appealed the denial of the loan modification; and was told "not to worry about a foreclosure sale, that [Defendants' representative] would seek a postponement of the sale date just like she had done before." Id. After U.S. Bank postponed the sale various times, the Property was sold through a foreclosure sale on March 5, 2015. State Ct. Docket; Am. Compl. ¶ 27. Meanwhile, Ms. Markey had gone to the hospital on January 20, 2015 and from there to a rehabilitation facility, where she remained until "mid to late March," when she returned home and read through "her back pile of mail" that had accumulated and learned of the foreclosure sale. Am. Compl. ¶ 27. She claims that she continued to receive correspondence from Defendants about avoiding foreclosure, even after the Property sold. Id. ¶ 28.
Ms. Markey filed suit in Maryland state court on May 1, 2018, challenging how Defendants handled her loan after she missed payments. Compl. Specifically, she claims that Defendants "engag[ed] in unfair acts and practices in their servicing of Plaintiff's Loan," making representations that were "deceptive" and "purposefully and/or negligently misleading and confusing" and caused her to fall farther into arrears and ultimately default on her loan, without having the opportunity to modify it. Am. Compl. ¶¶ 19, 57-60. She lists various specific actions, such as "failure to perform its loan servicing function consistent with its responsibilities under [federal law] and its contracts with the loan holder"; "refusal to accept Plaintiff's proffered payment on the loan"; and "failure to advise Plaintiff of her right to appeal the initial denial of her modification application." Id. ¶ 61; see also id. ¶¶ 73, 112, 124, 135 (incorporating actions identified in ¶ 61). She claims damages including a lowered credit score, costs and fees, the loss of her property, and "extreme anxiety and emotional distress contributing to the transient ischemic attack ('TIA') (mini-stroke) she suffered in 2013 and her weakened immune system that [is] exacerbating her battle with cancer." Id. ¶¶ 67, 84, 98, 105, 113, 130; see also id. ¶ 135 ().
Pursuant to Rule 12(b)(6), Markey's Amended Complaint is subject to dismissal if it "fail[s] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), and must state "a plausible claim for relief," Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. Rule 12(b)(6)'s purpose "'is to test the sufficiency of a complaintand not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.'" Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012) (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)).
Defendants assert res judicata as an affirmative defense. The Court may consider affirmative defenses such as res judicata on motions to dismiss only when they "clearly appear[] on the face of the complaint." Kalos v. Centennial Sur. Assocs., No. CCB-12-1532, 2012 WL 6210117, at *2 (D. Md. Dec. 12, 2012) (quoting Andrews v. Daw, 201 F.3d 521, 524 n.1 (4th Cir. 2000) (citation and quotation marks omitted)). That is the case here, as the suit concerns the propriety of foreclosure proceedings in a Florida state court. Therefore, I will consider res judicata as a basis for dismissal. See id.
The Rooker-Feldman doctrine "holds that 'lower federal courts are precluded from exercising appellate jurisdiction over final state-court judgments.'" Thana v. Bd. of License Comm'rs for Charles Cty., Md., 827 F.3d 314, 319 (4th Cir. 2016) (quoting Lance v. Dennis, 546 U.S. 459, 463 (2006) (per curiam)). It "assesses only whether the process for appealing a state court judgment to the Supreme Court under 28 U.S.C. § 1257(a) has been sidetracked by an action filed in a district court specifically to review that state court judgment." Id. at 320. Thus, the doctrine "is to play" a "narrow role" and is "confined to 'cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.'" Id. at 319, 320 (quoting Lance, 546 U.S. at 464 (quoting Exxon Mobil Corp. v. Saudi Basic Indus.Corp., 544 U.S. 280, 284 (2005))). Indeed, "the Supreme Court has noted repeatedly that, since the decisions in Rooker and Feldman, it has never applied the doctrine to deprive a district court of subject matter jurisdiction," and, "since Exxon, [the Fourth Circuit has] never, in a published opinion, held that a district court lacked subject matter jurisdiction under the Rooker-Feldman doctrine." Id. at 320.
Notably, "federal courts may still entertain claims the state court examined, so long as those claims do not challenge the state-court decision itself." Lane v. Anderson, 660 F. App'x 185, 189 (4th Cir. 2016). Defendants argue that "Plaintiff was required to defend the Florida action in Florida and assert all her claims and defenses there and may not appeal the decision or seek to vacate the judgment by filing in another court." Defs.' Reply 3. Perhaps so. But, Ms. Markey's claims allege damages based on how Defendants handled her loan and specifically her application for a mortgage loan modification. In all but Count VII (negligent infliction of emotional distress), Ms. Markey claims damages including a lowered credit score and costs and fees, Am. Compl. ¶¶ 67, 84, 98, 105, 113, 130, and for all counts she claims "extreme anxiety and emotional distress contributing to the transient ischemic attack ('TIA') (mini-stroke) she suffered in 2013 and her weakened immune system that [is] exacerbating her battle with cancer," id. ¶ 67; see also id. ¶¶ 84, 98, 105, 113, 130, 135. "While success on these claims could call into question the validity of the state court's . . . order...
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