Eburuoh v. Ward

POLYCARP EBURUOH, et al., Plaintiffs, v. CARRIE M. WARD, et al., Defendants.

Case No.: GJH-20-3525

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Southern Division

July 21, 2021

MEMORANDUM OPINION

Plaintiffs Polycarp and Bernadine Eburuoh bring this civil action against Defendants Carrie M. Ward, Howard N. Bierman, Jacob Geesing, Pratima Lele, Joshua Coleman, Richard R. Goldsmith, Jr., Elizabeth C. Jones, Nicholas Derdock, Angela M. Dawkins, Wayne Anthony Holman, Megh Milan Mittra, Michael Leeb, Christopher Robert Selig, Philip Shriver, and BWW Law Group, LLC, alleging violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2605 et seq. (Count I), the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq. (Count II), and the Fourteenth Amendment (Count III). ECF Nos. 1 & 2. Pending before the Court are Defendants' Motion to Dismiss, ECF No. 8, Plaintiffs' Motion to Amend, ECF No. 10, and Defendants' Motion to Strike Amended Complaint, ECF No. 12. No hearing is necessary. See Loc. R. 105.6 (D. Md. 2021). For the following reasons, Plaintiffs' Motion to Amend is denied, Defendants' Motion to Dismiss is granted, and Defendants' Motion to Strike is denied as moot.

I. BACKGROUND¹

A. State Foreclosure Action

On February 9, 2007, Plaintiffs Polycarp and Bernadine Eburuoh executed a promissory note secured by a Deed of Trust placed on Plaintiffs' property, located at 11001 Enoch Court, Upper Marlboro, Maryland 20774, to Aegis Wholesale Corporation. ECF No. 11 ¶¶ 12-13. Plaintiffs subsequently became unable to fulfill their obligations under the Note. Id. ¶ 15. The Second Amended Complaint details the events following this initial default, which, based on an attached exhibit,² appears to have taken place in 2013. See generally id. ¶¶ 15-23. However, the allegations relevant to the three claims at issue here begin several years later, in 2019, when Defendants initiated a foreclosure action on Plaintiffs' property. See id. ¶¶ 24, 26.

On October 10, 2019, Defendants—appointed as substitute trustees by the secured party—filed an Order to Docket Foreclosure against Plaintiffs' property in the Circuit Court for Prince George's County. See ECF No. 9-4 at 2 (state court docket);³ see also Maryland Judiciary Case Search, Case No. CAEF19-31925. Plaintiffs allege that, in response, they "expeditiously filed a Loss Mitigation Application." ECF No. 11 ¶ 25. They also filed a Request for Mediation on November 4, 2019, and a Final Loss Mitigation Affidavit on November 26, 2019. Id. ¶¶ 29-30; ECF No. 9-4 at 3. Plaintiffs then received a letter dated November 27, 2019, from Fay Servicing, Inc., their current loan servicer, stating that the documentation Plaintiffs submitted forthe loss mitigation application was incomplete and requesting that they supplement their application by December 27, 2019. ECF No. 9-3 at 35. The parties likewise agreed to extend the deadline for submission of documents in support of Plaintiffs' application for a loan modification to December 27, 2019, during a December 17, 2019 Foreclosure Mediation. ECF No. 11 ¶ 31.⁴ The same day as the Foreclosure Mediation, Defendants filed a No Agreement statement with the Circuit Court. Id. ¶ 32; see also ECF No. 9-4 at 3.

In an affidavit attached to the Second Amended Complaint, Plaintiffs state that they provided the additional documentation on December 24, 2019. ECF No. 9-4 at 11. The court-appointed mediator filed a Mediation Report on December 26, 2019. See id. at 3; ECF No. 11 ¶ 33. On January 10, 2020, while Plaintiffs were still waiting for Fay Servicing, Inc. to evaluate their application, the Circuit Court ordered that the foreclosure sale could be scheduled. ECF No. 9-4 at 3; ECF No. 11 ¶ 35. Defendants subsequently arranged for a foreclosure sale to be held on February 4, 2020, ECF No. 11 ¶ 39, although the sale was later postponed to March 17, 2020, id. ¶ 59. Plaintiffs then resubmitted the loan mitigation application materials to Fay Servicing, Inc. on January 16, 2020, and January 26, 2020. ECF No. 9-4 at 12. According to the affidavit attached to the Second Amended Complaint, a representative from Fay Servicing, Inc. confirmed that all documents had been received and that the sale scheduled for February 4, 2020, would be suspended. Id. However, on March 11, 2020, Plaintiffs received a letter from Fay Servicing, Inc. explaining that their mortgage had been reassigned to a new servicer, SN Servicing, and that their loss mitigation application had been summarily denied. ECF No. 11 ¶ 61; see also ECF No. 9-4 at 11.

On March 16, 2020, Plaintiffs filed an Emergency Motion for Pre-Sale Injunctive Relief. ECF No. 11 ¶ 45; ECF No. 9-4 at 3. Attached to the motion were documents showing that Plaintiffs had made payments that the loan servicers had not recorded as well as "copies of emails reflecting misleading and evasive action taken by the Servicer in processing the loss mitigation application[.]" ECF No. 11 ¶ 45. Plaintiffs also filed a hearing request. Id.; ECF No. 9-4 at 3.

The sale took place on March 17, 2020, and on March 23, 2020, a Report of Sale and Affidavit of Fairness of Sale and Truth of Report were docketed. ECF No. 11 ¶ 46.⁵ On March 25, 2020, the Circuit Court denied Plaintiffs' Emergency Motion without a hearing. Id. ¶ 48; ECF No. 9-4 at 4. On April 6, 2020, Plaintiffs filed a Motion to Set Aside the Circuit Court's March 25 Order as well as a Motion for Partial Summary Judgment regarding their loss mitigation application. ECF No. 11 ¶ 49; ECF No. 9-4 at 4. Plaintiffs again filed a hearing request with those motions. ECF No. 11 ¶ 49; ECF No. 9-4 at 4. On April 20, 2020, Plaintiffs filed a Motion to Vacate the March 17, 2020 sale and a third hearing request. ECF No. 11 ¶ 50; ECF No. 9-4 at 4. Plaintiffs' three motions were denied without a hearing on August 10, 2020. ECF No. 11 ¶ 54; ECF No. 9-4 at 5.

Plaintiffs filed a Motion for Reconsideration, which was denied without a hearing on November 19, 2020. ECF No. 9-4 at 5-6. The sale was then ratified on December 10, 2020. Id. at 6. Plaintiffs also appealed the Circuit Court's decision, but the appeal was dismissed on April 7, 2021. Id. at 5; Maryland Judiciary Case Search, Case No. CAEF19-31925.

B. Procedural History

Plaintiffs filed suit against Defendants on September 24, 2020, in the Circuit Court for Prince George's County, asserting violations of RESPA (Count I) and the FDCPA (Count II). ECF No. 1 at 1. Plaintiffs then filed an Amended Complaint on November 20, 2020. ECF No. 1-5.

Defendants removed the case to this Court on December 16, 2020. ECF No. 1. On December 31, 2020, Defendants filed a Motion to Dismiss. ECF No. 8. Plaintiffs filed a Second Amended Complaint on January 27, 2021, adding a Fourteenth Amendment procedural due process claim (Count III) and naming four loan servicers, including Fay Servicing, Inc., as well as Mahasin El Amin, Clerk for the Circuit Court for Prince George's County, as defendants. ECF No. 9. However, presumably because Plaintiffs had missed the 21-day deadline to amend as a matter of course, Plaintiffs filed a Motion for Leave to Amend Complaint later that day. ECF No. 10. Plaintiffs further filed a Corrected Amended Complaint, ECF No. 11, as well as a Supplement Redlined Version of Amended Complaint, albeit one comparing the earlier two versions of the Complaint, rather than the Amended Complaint to the Second Amended Complaint, ECF No. 11-1. On February 5, 2021, Defendants moved to strike the Second Amended Complaint, ECF No. 12, and opposed Plaintiffs' Motion for Leave, ECF No. 13.⁶

Plaintiffs did not file a response to Defendants' Motion to Dismiss, a response to Defendants' Motion to Strike, or a reply in support of Plaintiffs' Motion for Leave.

II. STANDARD OF REVIEW

A. Motion for Leave to Amend

Federal Rule of Civil Procedure 15(a)(2) provides that courts "should freely give leave" to parties to amend pleadings "when justice so requires." Fed. R. Civ. P. 15(a)(2). "This liberal rule gives effect to the federal policy in favor of resolving cases on their merits instead of disposing of them on technicalities." Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006). The Fourth Circuit has "interpreted Rule 15(a) to provide that 'leave to amend a pleading should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would have been futile.'" Id. (quoting Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986)); see also Mayfield v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 674 F.3d 369, 379 (4th Cir. 2012). "Futility is apparent if the proposed amended complaint fails to state a claim under the applicable rules and accompanying standards," and would therefore not survive a motion to dismiss pursuant to Rule 12(b)(6). Davison v. Randall, 912 F.3d 666, 690 (4th Cir. 2019) (quoting Katyle v. Penn Nat'l Gaming, Inc., 637 F.3d 462, 471 (4th Cir. 2011)).

B. Motion to Dismiss

"A motion to dismiss pursuant to Rule 12(b)(6) tests the sufficiency of the claims pled in a complaint." Paradise Wire & Cable Defined Benefit Pension Plan v. Weil, 918 F.3d 312, 317 (4th Cir. 2019). To overcome a Rule 12(b)(6) motion, a complaint must allege sufficient facts to state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is plausible 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.

In evaluating the sufficiency of the plaintiff's claims, "a court 'must accept as true all of the factual allegations contained in the complaint,' and must 'draw all reasonable inferences [from those facts] in favor of the plaintiff.'" Retfalvi v. United States, 930 F.3d 600, 605 (4th Cir. 2019) (alteration in Retfalvi) (quoting E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th...