Allen v. Bank of America, N.A.
933 F. Supp. 2d 716
D. Maryland2013Background
- Allens sued Western Union (and affiliates), Fannie Mae, and Bank of America, N.A. for alleged state and federal law violations in mortgage servicing and payments.
- Mortgage originated with GreenPoint, later acquired by Fannie Mae in 2002; GreenPoint continued servicing before transfer to BANA in 2008.
- Equity Accelerator Program, run by GreenPoint and Western Union, withdrew half payments twice monthly, with GreenPoint receiving a commission; program terms disclaimed broad liability and limited direct damages to $500.
- October 2007 and December 2008 payment issues arose under the program; GreenPoint reported multiple delinquencies to credit agencies and refinancing was denied in March 2008 due to score drops.
- Servicing transferred to BANA in October 2008; disputes over whether November 2008 and subsequent payments were properly processed or credited, contributing to foreclosure filing in September 2009 (foreclosure later dismissed).
- Litigation includes claims under MCDCA, MCPA, FDCPA, RESPA, breach of contract, and negligence; Western Union moved for summary judgment and to exclude the Allen’s damages expert, with cross-motions from Allens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contract waiver validity for damages cap | Allens argue waiver of consequential damages is unenforceable and damages should not be capped. | Paragraph 28 validly waives and caps damages, including limiting direct damages to $500; not unconscionable. | Waiver and $500 cap enforceable; contract limits damages for Western Union. |
| MCPA claim against Western Union viability | Western Union misrepresented or omitted defects in Equity Accelerator; deceptive practices alleged. | No evidence of unfair or deceptive acts; program malfunctions were isolated and promptly addressed. | MCPA claim against Western Union not supported; granted summary judgment for Western Union on MCPA; Allens’ cross-motion denied. |
| FDCPA liability of BANA | BANA violated FDCPA by attempting collection after foreclosure and status of account. | BANA is not a “debt collector” under FDCPA; argues status as creditor/assignee. | BANA entitled to summary judgment on FDCPA claim. |
| MCDCA claim against BANA | BANA improperly attempted to collect disputed payments; wrongfully pursued right under MCDCA. | Disputed whether right to collect existed; knowledge and recklessness questions for trial. | No summary judgment for either; material facts unresolved; MCDCA claim to proceed to trial. |
| RESPA claim against BANA | Notice to accelerate during transfer violated RESPA; QWR responses allegedly deficient. | 1) 60-day transfer rule not violated for November 2008; 2) QWR response insufficiently investigated. | Partial summary judgment for BANA on 60-day rule; genuine issues remain on QWR response; RESPA claim unresolved for trial. |
Key Cases Cited
- Blondell v. Littlepage, 413 Md. 96, 991 A.2d 80 (Md. 2010) (duty limits and contract-based damages considerations)
- Winterstein v. Wilcom, 293 A.2d 821 (Md.App. 1972) (contractual liability limits and public policy in damages)
- Golt v. Phillips, 308 Md. 1, 517 A.2d 328 (Md. 1986) (test for misrepresentation and MCPA applicability)
- Willard Packaging Co., Inc. v. Javier, 899 A.2d 940 (Md. App. 2006) (liquidated damages and penalty doctrine)