Wheeling v. Selene Fin. LP

Decision Date29 May 2020
Docket NumberNo. 2128, Sept. Term, 2017,2128, Sept. Term, 2017
Citation246 Md.App. 255,228 A.3d 791
Parties Whitney WHEELING, et al. v. SELENE FINANCE LP, et al.
CourtCourt of Special Appeals of Maryland

Argued by: K'Shaani Smith (Public Justice Center of Baltimore, MD, Philip Robinson, Consumer Law Center, LLC of Silver Spring, MD) all on the brief for Appellant.

Argued by: Thomas F. Lucchesi (Andrew K. Stutzman, Stradley, Ronon, Stevens & Young, LLP of Washington, D.C.) Gerard G. Magrogan (Monshower, Miller & Magrogan, LLP of Ellicott City, MD) all on the briefs for Appellee.

Kehoe, Berger, Reed, JJ.

Kehoe, J.

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 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.

Background
The Wheeling Claim

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:
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 PROPERTY, 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.

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 Rodriguez Claim

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 the property in 2008 through a mortgage backed by a federal housing program. After she was unable to make timely payments, the loan went into default and was eventually transferred to Sunset Mortgage Loan Trust, Series 2014-1.

Selene, acting on behalf of Sunset Mortgage, filed a foreclosure action against the Rodriguez property. Sunset Mortgage was the successful bidder at the foreclosure auction and acquired the property for $42,000. The sale was ratified in September 2016.

In February 2017, Selene contracted with Century 21 Downtown, a real estate brokerage company operated by Gina Gargeu. Acting as Selene's agent, Gargeu scheduled a sheriff's eviction for the Rodriguez property on March 28, 2017. On February 10, the sheriff posted a notice on the property informing the occupants that they would be evicted pursuant to a court order on March 28, 2017.

A little less than two weeks later, on February 22, Gargeu posted an abandonment notice on the Rodriguez property that was identical to the notice posted on the Wheeling property, but for differences in names, addresses, and other incidental information. The amended complaint alleged that Rodriguez learned about the abandonment notice through her neighbor, Dermot Delude-Dix. After seeing the abandonment notice, Delude-Dix called Gargeu and told her that Rodriguez still occupied the property. Rodriguez also alleged that she consulted an attorney to learn about her rights. Despite the scheduled eviction date and the abandonment notice, Rodriguez was never evicted from the property. The amended complaint did not allege that Rodriguez vacated the home as a result of Selene's and Gargeu's actions, or that Selene or Gargeu took any steps other than posting the abandonment notice to force or induce them to move. The amended complaint alleged that Rodriguez, like the Wheelings, suffered emotional distress and incurred legal fees as a result of the posting of the abandonment notice.

The Current Action

On March 1, 2017, appellants filed a joint complaint in the Circuit Court for Baltimore City on behalf of themselves and a proposed class of persons similarly situated. On May 30, 2017, they filed an amended complaint. The amended complaint asserted two claims against Selene and Gargeu. First, the complaint alleged that Selene and Gargeu violated Real Prop. § 7-113(b) by making threats of eviction without first making a reasonable inquiry as to whether the properties were, in fact, abandoned. Second, the complaint alleged that Selene and Gargeu violated the MCPA by threatening to take possession of their properties by way of the abandonment notices. Appellants asked the court to certify their claims as a class action, to grant declaratory and injunctive relief, and to award them monetary damages and attorneys’ fees.1

Gargeu and Selene filed motions to dismiss the amended complaint for failure to state a cause of action.

On August 8, 2017, the circuit court held a hearing on the motions to dismiss. Selene and Gargeu argued that: (1) they were not liable under Real Prop. § 7-113 because the abandonment notices did not constitute a "threat" as defined in that statute; (2) the MCPA did not apply in this case because (a) the appellants are not "consumers" as defined in the MCPA, and (b) posting an abandonment notice on a residence is not a collection activity within the provisions of the MCPA; (3) Selene, as a licensed mortgage lender, was exempt from the provisions of the MCPA; and (4) appellants did not sufficiently plead damages in their complaint and could not show any accompanying physical manifestations of that distress.

Appellants responded that § 7-113 requires a party who posts an abandonment notice to first make a reasonable inquiry as to the occupancy status of the property, and that Selene and Gargeu failed to do this before posting the abandonment notices. Appellants pointed out that the amended complaint alleged that both properties were inhabited at the time the abandonment notices were posted. For example, Rodriguez appeared at the foreclosure proceedings concerning her...

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3 cases
  • Wheeling v. Selene Fin. LP
    • United States
    • Court of Special Appeals of Maryland
    • 30 Abril 2021
    ...appeal. In a reported opinion, the Court of Special Appeals affirmed the judgment of the circuit court. Wheeling v. Selene Finance LP , 246 Md. App. 255, 228 A.3d 791 (2020).The intermediate appellate court determined that the amended complaint alleges facts that, if proven, establish that ......
  • Donegal Assocs., LLC v. Christie-Scott, LLC
    • United States
    • Court of Special Appeals of Maryland
    • 19 Noviembre 2020
    ...This statute "significantly limited the scope of self-help in situations involving residential properties." Wheeling v. Selene Finance LP , 246 Md. App. 255, 271, 228 A.3d 791 (2020), cert. granted , 2020 WL 6059796 (Sept. 14, 2020). This statute does not apply to this case because we are d......
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    • United States
    • Court of Special Appeals of Maryland
    • 16 Febrero 2021
    ...of its intent and purpose is well settled." MTA v. Balto. Co. Revenue Auth., 267 Md. 687, 695-95 (1973); Wheeling v. Selene Finance, 246 Md. App. 255, 270, n. 4 (2020). As noted, the title to that Act said that it was for the purpose of creating a new class of bingo license in Calvert Count......

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