Wheeling v. Selene Fin. LP
| Decision Date | 29 May 2020 |
| Docket Number | No. 2128,2128 |
| Parties | WHITNEY WHEELING, ET AL. v. SELENE FINANCE LP, ET AL. |
| Court | Court of Special Appeals of Maryland |
WHITNEY WHEELING, ET AL.
v.
SELENE FINANCE LP, ET AL.
No. 2128
COURT OF SPECIAL APPEALS OF MARYLAND
September Term, 2017
May 29, 2020
REAL PROPERTY - SELF HELP - THREATENING TO TAKE POSSESSION OF PROPERTY
Real Property § 7-113(b)(2)(ii) permits a party to use non-judicial self-help to gain possession of residential real property if, and only if, the party is (1) a party claiming the right possession, as that term is defined in the statute; (2) reasonably believes the resident has abandoned or surrendered possession of the property; (3) has a basis for that reasonable belief based on a reasonable inquiry into the occupancy status of the property; (4) provides notice to the resident(s) of the property as provided in subsection (c) of the statute; and (5) receives no responsive communication to that notice within 15 days after the later of posting or mailing the notice as required by subsection (c) of the statute.
Subsection (d) of Real Prop. § 7-113 provides a cause of action for violations of subsection (b), and allows a resident to recover (i) possession of the property, if no other person then resides in the property; (ii) actual damages; and (iii) reasonable attorney's fees and costs.
The remedies of subsection (d) are available to a resident only when the party seeking possession locks a protected person out of the property, intentionally terminates or diminishes utility, water and sewer and similar services to the property, or takes any other action which deprives a protected resident of actual possession of the property. "Any other action" could include posting an abandonment notice without first conducting the "reasonable inquiry" required by subsections (b) and (c) of § 7-113 if, as a result of abandonment notice, a protected person vacates the property.
The operative complaint in this case alleged that defendants Selene Finance and Gina Gargeu did not conduct a reasonable inquiry into the occupancy status of the properties of the plaintiffs, Eric and Whitney Wheeling, and Joanne Rodriguez, before posting an abandonment notice. Further, Selene Finance was not a "party claiming the right of possession" as to the Wheelings because it had not initiated foreclosure proceedings against the Wheelings' property. However, neither the Wheelings nor Rodriguez were actually deprived of their property nor did the complaint allege that Selene Finance and Gargeu locked them out, terminated or diminished utility, water and sewer and similar services, or took any other action which deprived them of actual possession. The statutory cause of action of § 7-113(d) does not extend to them.
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MARYLAND CONSUMER PROTECTION ACT - PLEADING DAMAGES
The Maryland Consumer Protection Act ("MCPA") (codified in Commercial Law § 13-101 et seq.) prohibits unfair, abusive, and deceptive trade practices in the collection of consumer debts. Com. Law § 13-303. The general rule for pleading damages, pursuant to Md. Rule 2-203(b) provides that "[e]ach averment of a pleading shall be simple, concise, and direct. No technical forms of pleadings are required. A pleading shall contain only such statements of fact as may be necessary to show the pleader's entitlement to relief or ground of defense." However, the MCPA contains a heightened pleading requirement for claims made under that statute, in that damages for emotional distress must be accompanied by observable physical manifestations. See Sager v. Housing Commission of Anne Arundel County, 855 F. Supp. 2d 524, 548-49 (D. Md. 2012).
In their amended complaint, appellants alleged that they suffered "emotional damages and losses with physical manifestations such as fear (of losing their home), anxiety (with the threat of eviction through no fault of their own), [and] anger." Additionally, appellants alleged that they "incurred legal fees to know her rights as a former owner of the property based on Selene's and Gargeu's deceptive eviction threats[.]"
While these allegations may have satisfied the general pleading requirement of Md. Rule 2-203(b), they did sufficiently plead any observable physical manifestations of their emotional distress. The operative complaint did not allege that appellants manifested any observable physical manifestations of the emotional distress caused by Selene. Rather, the allegations regarding emotional distress amount to nothing more than assertions that Selene's actions upset them. The MPCA requires more in order for a complaint to survive a motion to dismiss for failure to state a cause of action.
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Circuit Court for Baltimore City
Case No. 24-C-17-000996
REPORTED
Kehoe, Berger, Reed, JJ.
Opinion by Kehoe, J.
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In 2013, the General Assembly enacted Md. Code, § 7-113 of the Real Property Article to restrict the use of self-help in certain kinds of residential evictions. Eric Wheeling, Whitney Wheeling, and Joanne Rodriguez filed suit in the Circuit Court for Baltimore City against Selene Finance LP and Gina Gargeu (doing business as Century 21 Downtown), alleging that they had violated § 7-113 in their efforts to obtain possession of two residential properties. The Wheelings and Rodriguez also asserted that Selene's actions violated the Maryland Consumer Protection Act (the "MCPA"), codified at Md. Code, § 13-101, et seq., of the Commercial Law Article. Selene and Gargeu filed motions to dismiss appellants' amended complaint on the basis that it failed to state a cause of action. The circuit court granted both motions. Appellants noted this timely appeal and raise three issues, which we have rephrased:
1. Did the circuit court err in ruling that appellants failed to plead a claim pursuant to the statutory cause of action established by Real Prop. § 7-113?
2. Did the circuit court err in ruling that appellants failed to plead a claim under the MCPA?
3. Did the circuit court err in ruling that appellants failed to adequately plead that they suffered actual injuries as a result of Selene's and Gargeu's actions?
Although we see things a bit differently than did the circuit court, we will affirm its judgment. The amended complaint alleges facts which, if proven, establish that Selene and Gargeu violated § 7-113. However, the cause of action established by the statute extends only to cases in which a defendant has locked the plaintiff out of the property, intentionally
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terminates or diminishes utility, water and sewer and similar services to the property, or takes any other action which deprives a resident of actual possession of the property. The amended complaint does not assert that any of these things happened in this case. Assuming for purposes of analysis that Selene's actions violated the MCPA, the amended complaint fails to allege damages with the specificity required for private causes of action under that statute.
Donna Poole owns a residential property in Anne Arundel County. At the time the events discussed herein took place, Eric and Whitney Wheeling, along with their children, were tenants on the property. We will refer to this property as the "Wheeling property." Prior to the Wheelings' tenancy, Poole purchased the property through a mortgage loan with CitiMortgage, Inc. When Poole defaulted on that loan in 2013, the loan was acquired by Christiana Trust, as trustee for Normandy Mortgage Loan Trust Series 2013-9.
Selene Finance LP is a mortgage lender and servicer licensed to operate in Maryland. Selene acted as Normandy Mortgage's servicer for Poole's mortgage. On May 15, 2015, Selene posted a notice on the Wheeling property in accordance with Real Prop. § 7-113(c). The notice stated:
IMPORTANT NOTICE ABOUT EVICTION
A PERSON WHO CLAIMS THE RIGHT TO POSSESS THIS PROPERTY BELIEVES THAT THIS PROPERTY IS ABANDONED. IF YOU ARE CURRENTLY RESIDING IN THE PROPERTY, YOU MUST IMMEDIATELY CONTACT:
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Selene Finance
NAME
9990 Richmond Avenue, Suite 400 S.
Houston, TX 77042
ADDRESS
(877) 768-3759
TELEPHONE
5/15/15
DATE OF THIS NOTICE
IF YOU DO NOT CONTACT THE PERSON LISTED ABOVE WITHIN 15 DAYS AFTER THE DATE OF THIS NOTICE, THE PERSON CLAIMING POSSESSION MAY CONSIDER THE PROPERTY ABANDONED AND SEEK TO SECURE THE PROEPRTY, INCLUDING CHANGING THE LOCKS WITHOUT A COURT ORDER.
We will refer to this document as an "abandonment notice."
The amended complaint alleged that, after Mr. Wheeling read the abandonment notice, he telephoned Selene on May 19, 2015. A representative of Selene told him that foreclosure proceedings had been initiated against the property, that Selene understood the property was abandoned because it was not owner-occupied, and that the Wheelings had to vacate the property by June 1, 2015, or else Selene would change the locks. However, the representative refused to provide any details of the alleged foreclosure proceedings to Mr. Wheeling because he was not the owner of the property. Additionally, the amended complaint alleged that neither Selene nor Normandy Mortgage had initiated foreclosure proceedings against Poole when the abandonment notice was posted and, indeed, never did so. According to the amended complaint, at the time that the abandonment notice was posted, Poole was negotiating with Selene for a short sale of the property and had been informed by Selene that her property was not subject to a foreclosure.
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The amended complaint also alleged that, as a result of both the abandonment notice and the statements made by Selene's representative, the Wheelings suffered emotional distress and incurred attorney's fees by contacting an attorney to seek legal advice about their rights as tenants.
The amended complaint did not allege that the Wheelings vacated the home as a result of Selene's actions, nor did it allege that Selene took any steps other than posting the abandonment notice to force or induce them to move.
The second property at issue in this appeal is located in Baltimore City and was owned by Joanne Rodriguez during the relevant period (the "Rodriguez property"). Rodriguez purchased...
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