McClain v. Wells Fargo & Co.
| Decision Date | 30 January 2023 |
| Docket Number | GJH-17-1094 |
| Court | U.S. District Court — District of Maryland |
| Parties | IRIS MCCLAIN, Plaintiff, v. WELLS FARGO & COMPANY, et al., Defendants. |
Plaintiff Iris McClain brings this pro se civil action against 16 individual and corporate defendants for alleged fraudulent actions related to her mortgage on a property on Herrington Drive in Upper Marlboro, Maryland, foreclosure actions on the property, and related bankruptcy actions.[1] ECF No. 45. McClain moves to vacate or reverse a previous Order granting Defendants' Motions to Dismiss. See ECF No. 99. A hearing on the Motion is not necessary. See Loc. R. 105.6 (D. Md. 2021). For the following reasons, Plaintiff's Motion is denied.
In 1997, McClain purchased the property at Herrington Drive through a mortgage loan. ECF No. 45-1 ¶ 8. The loan was subsequently securitized and held by J.P. Morgan Chase Bank followed by Bank of New York Mellon (“BNYM”). Wells Fargo Bank, N.A. (“Wells Fargo”) has acted as the mortgage servicer on the loan. Id. ¶ 7. In 2006, McClain fell behind on her mortgage and, in 2007 she signed a loan modification agreement that converted her adjustable-rate mortgage to a 7.000% fixed-rate mortgage. Id. ¶¶ 9-14. In the Amended Complaint, McClain alleges that the modification agreement amounts to a fraudulent scheme by Wells Fargo and Goldman Sachs to profit off of delinquent borrowers. Id. ¶ 38. She asserts that Defendants have repeatedly misapplied her payments and failed to correctly calculate her balance due and that she was unwittingly locked into a higher interest rate as a result of the modification. Id. ¶¶ 61-78. McClain further alleges that in late 2012 the law firm employing Defendants Brown, Britto, McQuillen, Savage, and Stitely (“Attorney Defendants”), on behalf of Wells Fargo, began engaging in improper debt collection practices relating to her mortgage loan, including efforts to collect on bills reflecting the 7% interest rate. Id. ¶¶ 207-210.
McClain has been party to a considerable amount of litigation in the years since the 2007 loan modification. In 2008, McClain faced a foreclosure action in the Circuit Court for Prince George's County, Maryland, which was later terminated. See Buonassissi v. McClain, No. CAE08-09913.[3] Pertinent to this case, Attorney Defendants, on behalf of Wells Fargo, initiated a second foreclosure proceeding in the Prince George's County Circuit Court on the Herrington Drive property in November 2013, which remains pending. See BSBSC vs. McClain, No. CAEF13-33714. McClain has also been involved in a half dozen bankruptcy proceedings before the United States Bankruptcy Court for the District of Maryland. See In re Iris McClain, No. 0817049; No. 09-22554; No. 15-13657; No. 16-22179; No. 20-12335; No. 21-17990.[4] In the present matter, McClain filed an initial Complaint in February 2017 in the Prince George's County Circuit Court, which Defendants removed to this Court. ECF No. 1. On June 5, 2017, McClain filed an Amended Complaint. ECF No. 45-1. Among other things, McClain seeks money damages, an injunction on the pending foreclosure and any debt collection actions, a declaration that the 2007 loan modification is void, and cancellation of the debt on the mortgage loan other than the principal balance. Id. at 63-64.[5] On July 5, 2017, Defendants moved to dismiss. See ECF No. 48; ECF No. 49; ECF No. 50; ECF No. 76. McClain responded and Defendants replied.
On March 8, 2018, Judge Chuang of this Court granted Defendants' Motion to Dismiss. See ECF No. 83; ECF No. 84. McClain appealed, ECF No. 85, and on October 4, 2018, the Fourth Circuit affirmed the dismissal and its reasoning, ECF No. 89. McClain also filed a Motion to Vacate, ECF No. 93, which Judge Chuang dismissed on March 22, 2021, ECF No. 96.
On December 6, 2021, the Clerk of the Court filed correspondence disclosing a conflict in the case. ECF No. 98. The Clerk noted that Judge Chuang became aware that a member of his family owned stock in Wells Fargo & Company at some point during the pendency of the action. Id. at 1. Though the ownership did not affect the decision in the case, “such stock ownership would have required recusal.” Id. The parties were directed to respond to the conflict disclosure and instructed that any response would be considered by another judge on this Court. Id.
On December 27, 2021, McClain submitted correspondence that the Court construes as a request for vacatur or reversal of the Order pursuant to Federal Rule of Civil Procedure 60(b)(4) or (6), because “the judgment is void” or for “any other reason that justifies relief.” ECF No. 99.
The case was re-opened by the Clerk of the Court and assigned to the undersigned judge. On January 10, 2022, Defendants opposed Plaintiff's Motion, ECF No. 100, and on January 11, 2022, McClain replied, ECF No. 101.[6]
Federal Rule of Civil Procedure 8(a)(2) provides that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed R. Civ. P. 8(a)(2). Rule 12(b)(6) permits a defendant to present a motion to dismiss for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A complaint will survive a motion to dismiss if it contains “sufficient factual matter, accepted as true, ‘to state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id. (citing Twombly, 550 U.S. at 556). The complaint must still include a “‘showing,' rather than a blanket assertion, of entitlement to relief.” Twombly, 550 U.S. at 555 n.3.
Additionally, because McClain's allegations sound in fraud, the Court will apply heightened pleading standards under Rule 9(b). Rule 9(b) provides that in “alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). To satisfy this standard, plaintiffs “must, at a minimum, describe the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 379 (4th Cir. 2008) (citation and internal quotation marks omitted).
As noted previously, Judge Chuang granted Defendants' Motion to Dismiss in March 2018, and the decision was affirmed by the Fourth Circuit in October 2018. See ECF No. 89. However, given Judge Chuang's subsequent determination that recusal was appropriate, this Court will directly address Defendants' Motions to Dismiss as if they had been originally before it.
Plaintiff McClain brings eleven causes of action in her Amended Complaint against some or all of the named Defendants.[7] See ECF No. 45-1. Defendants argue in their respective Motions to Dismiss that many of McClain's state and federal claims are time-barred. See, e.g., ECF No. 50-1 at 20-22. A statute of limitations may be employed as an affirmative defense “when it is clear from the face of the complaint that the claims are time barred.” Long v. Welch & Rushe, Inc., 28 F.Supp.3d 446, 456 (D. Md. 2014). Thus, the Court will begin by considering whether McClain's claims are timely.
In Maryland, civil actions are generally subject to a three-year statute of limitations. Md. Code Ann., Cts. & Jud. Proc. § 5-101. Maryland courts have adopted the “discovery rule,” which provides that time does not begin accruing until “the potential plaintiff either discovers his or her injury, or should have discovered it through the exercise of due diligence.” Green v. Pro Football, Inc., 31 F.Supp.3d 714, 722 (D. Md. 2014) (quoting Poole v. Coakley & Williams Const., Inc., 423 Md. 91, 130 (2011)).
Here, McClain raises numerous claims that are subject to Maryland's three-year statute of limitations, including those for fraud, conspiracy to commit fraud, and unjust enrichment. ECF No. 45-1 ¶¶ 37-107; 119-129; see Windesheim v. Larocca, 443 Md. 312, 326-28 (2015) (); Jason v. Nat'l Loan Recoveries, LLC, 227 Md.App. 516, 527 (2016) ().
Next, McClain alleges violations under two Maryland laws and a federal regulation: the Protection for Homeowners in Foreclosure Act (“PHIFA”), Md. Code Ann., Real Prop. § 7-301 et seq., the Maryland Mortgage Fraud Protection Act (“MMFPA”), Md. Code Ann., Real Prop. § 7-401 et seq., and 12 C.F.R. § 1015.4(c) (“Regulation O”), which governs disclosures in commercial communications by mortgage assistance relief service providers. ECF No. 45-1 ¶¶ 162-180. Neither statute contains its own statute of limitations, and as such, the Court finds Maryland's three-year statute of limitations is applicable to each. Further, Regulation O does not contain a statute of limitations, and thus the Court must import one from the most analogous state law cause of action, which here is the PHIFA. Rutherford v. BMW of N. Am., LLC, 579 F.Supp.3d 737, 746 (D. Md. 2022) ().
Finally McClain alleges violations under three federal statutes: the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq.; the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.; and...
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