Jones v. Rosenberg

940 A.2d 1109

178 Md. App. 54

Tanya JONES v. Diane ROSENBERG.

No. 124 Sept.Term, 2007.

Court of Special Appeals of Maryland.

January 31, 2008.

C. William Michaels, Baltimore, MD, for Appellant.

Mark D. Meyer (Diane S. Rosenberg, John A. Ansell, III, on the brief), Bethesda, MD, for Appellee.

JAMES R. EYLER, BARBERA, JJ., and JOSEPH F. MURPHY, JR. (Associate Judge of the, Court of Appeals, specially assigned).

JAMES R. EYLER, Judge.

This case raises several issues stemming from a real estate foreclosure action initiated in the Circuit Court for Charles County by substitute trustees Diane S. Rosenberg and Mark Meyer, appellees, against mortgagors Donna P. Jones and Tanya L. Jones, appellants. Appellants unsuccessfully sought to stay foreclosure prior to the sale. Following the foreclosure sale, appellants filed exceptions to the sale and sought discovery. The circuit court denied discovery, overruled appellants' exceptions, and ratified the foreclosure sale.

On appeal, appellants raise several issues: (1) whether the circuit court erred in denying appellants' requests for injunctive relief to stop the foreclosure sale, under Maryland Rule 14-209(b); (2) whether the circuit court erred in quashing appellants' notices of deposition and subpoenas duces tecum served on appellees shortly before the hearing on appellants' second request for injunctive relief;¹ (3) whether the circuit court erred in ratifying the foreclosure sale; (4) whether the circuit court erred in denying appellants' motion to stay enforcement of the judgment ratifying the sale, pending appeal to this Court; arid (5) whether the circuit court erred in denying appellants' motion to alter or amend the judgment ratifying the sale.

Perceiving no error, we shall affirm.

Factual Background

On August 31, 2005, appellants executed a deed of trust for property located at 10693 Jacksonhole Place in Charles County, Maryland, to secure a loan in the amount of $224,800. The lender was GreenPoint Mortgage Funding, Inc. of Santa Rosa, California. The deed of trust included a provision that the borrower, after default, had a right to have enforcement of the deed of trust suspended upon compliance with certain conditions, including the payment of all amounts due, plus expenses. The deed also contained an adjustable rate rider, with an initial interest rate of 1 percent. The deed provided the interest rate would change on November 1, 2005, by a rate calculated by adding 3.375 percent to the current rate index, but not exceeding 12 percent. The initial monthly payment was $723.05. The monthly payments were subject to change each year, and were to increase substantially after November 1, 2005.

As time progressed, the interest rate on the loan increased, and the amount of the periodic payments owed by appellants increased. By October, 2006, the loan was in default, triggering acceleration of the loan balance. Appellants were notified that the matter would proceed to foreclosure. Upon receiving notice, appellants, in a letter dated October 30, 2006, requested validation of the debt. On October 30, 2006, the foreclosure action was docketed in circuit court, and appellees were appointed as substitute trustees that same day. Appellees' statement of debt showed a balance due in the amount of $238,568.16, which consisted of $225,273.78 principal, accrued interest and other charges in the amount of $12,780.18, computed at an interest rate of 6.875 percent. Appellees filed a petition for a nominal bond on October 30, 2006, which was approved on November 20, 2006. The bond was filed on November 29, 2006, and the foreclosure sale was scheduled for November 29, 2006.

On November 10, 2006, appellees sent a letter to appellants, by certified mail and first class mail, notifying them that the foreclosure" action had been filed and that an auction sale of the property would occur on November 29, 2006. On November 20, 2006, appellants, pro se, filed in circuit court a motion for an emergency injunction, to stop the foreclosure sale and to quash service. The motion did not contain a supporting affidavit. On December 8, 2006, appellees responded to the motion.

The circuit court did not rule on appellants' motion for an emergency injunction to stop the foreclosure sale and to quash service prior to the foreclosure sale, and the sale occurred on November 29, 2006. On December 6, 2006, the report of sale and affidavit of notice were filed. The property was sold to Craig Heurich and Alison. Mason for $262,000, which was in excess of the amount owed by appellants, according to the statement of debt. The circuit court issued a notice that the would be ratified on January 5, 2007.

On December 21, 2006, appellants, pro se, filed a second motion for an emergency injunction to stop the foreclosure sale or, in the alternative, to stop the ratification of the sale. The objections stated in the motion included lack of an opportunity to cure the default; lack of notice of the foreclosure sale by registered mail; that appellants had filed suit against appellees in the United States District Court for the District of Maryland on November 17, 2006, alleging that the deed of trust violated federal mortgage laws;² that appellants submitted a surety bond on November 20, 2006, to the clerk of the circuit court and the bond covered any debt owed;³ that appellants were denied due process; and certain other objections relating to the form of the foreclosure documents. Appellants also alleged that they paid the debt through an "international bill of exchange,"⁴ although appellants now concede such documents are not recognized by Maryland courts as valid legal documents.

On December 27, 2006, appellees responded to appellants' motion, asserting that appellants' request for an injunction did not comply with the affidavit requirements of Maryland Rule 14-209(b); the international bill of exchange was a fraudulent document and frivolous; the purported bond filed by appellants was not a proper bond; the stated grounds of appellants' motion were without merit and did not state a basis for granting an injunction; to the extent the court viewed appellants' motion as constituting exceptions to the foreclosure sale, all of the exceptions had to be overruled; upon default, appellants had no right to cure, only a right to redemption; on November 10, 2006, appellants were mailed a reinstate quote and payoff quote, and appellants had an opportunity to reinstate their loan but failed, to do so; appellees were in full compliance with notice requirements; and appellants had not set forth any procedural irregularities with particularity. Appellees requested that the court deny appellants' request for an emergency injunction to stop foreclosure, deny appellants' exceptions to the foreclosure sale, and grant further relief as the court deemed appropriate.

The court scheduled a hearing on appellants' motion for an injunction against foreclosure and exceptions to the sale and appellees' response, to be held on February 27, 2006. On February 12, 2006, counsel entered an appearance on behalf of appellants.⁵ On February 21, 2007, appellants moved for a continuance of the hearing, which was denied on February 23, 2007. On February 26, 2007, appellants moved for a statement of payout and arrearage owed. Prior to the hearing, appellants served notices of deposition and subpoenas duces tecum on appellees, to occur on March 6, 2007. On February 27, 2007, the same day as the motions hearing, appellees moved to quash the notices of deposition and subpoenas duces tecum.

At the hearing, on February 27, 2006, appellants requested discovery of the original loan documents, including the original deed of trust, in order to determine whether the mortgage was usurious and improper, as well as discovery of whether appellants received actual notice of the foreclosure sale. By order entered on March 2, 2007, the circuit court granted appellees' motion to quash appellants' requested discovery, overruled appellants' exceptions to the foreclosure sale, ratified the sale, and ordered that the matter be referred to the court auditor for an accounting.

On March 9, 2007, appellants noted an appeal from the ratification of the foreclosure sale, and moved to stay enforcement of the ratification of sale pending appeal. Appellants did not file a supersedeas bond with the motion. Appellees filed an opposition to a stay of ratification pending appeal, and on March 15, 2007, the circuit court denied appellants' motion.

On March 20, 2007, appellants, pursuant to Maryland Rule 2-535, filed a motion to alter or amend the judgment of ratification of sale, based upon the court's revisory power under subsection (a); fraud under subsection (b); and newly discovered evidence under subsection (c). In that motion, appellants alleged that the foreclosure action was improper because appellees had violated the Truth In Lending Act (TILA), 15 U.S.C. § 1601, et seq., and the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601, et seq., and that, with additional discovery, appellants could prove the violations. Appellants attached to the motion a packet of materials purportedly prepared by Linda J. Rougeux, an "auditor" with "Advocates for Justice" based in Abilene, Texas. The packet purports to represent the audit of a loan involving appellants and "IndyMac Bank," but the terms are very different from the terms of the loan that is the subject of this case. Moreover, while the audit purports to conclude that there are possible violations of federal law with respect to the audited loan, the papers do not indicate the source of the information and do not provide a conclusion under oath. Some of the papers appear to be form documents which the organization presumably makes available to members of the public. Appellants also attached to the motion an article promulgated by the "Center for Responsible Lending," dated December, 2006, containing data...