Chalk v. Lender Processing Services, Inc.
1:13-cv-01593
D. MarylandDec 31, 2013Background
- Chalk counter-claims LPS for alleged FDCPA, MMFPA, and licensing violations related to mortgage foreclosures in Maryland.
- LPS served as a service provider for PNC and allegedly instructed Rosenberg & Associates to pursue foreclosure actions.
- NOITFs issued by Rosenberg & Associates allegedly deficient for not listing Freddie Mac as secured party.
- Foreclosure activities were initiated in 2010–2013, with notices in 2011 and 2012, before a voluntary dismissal allowed re-noticing.
- Rosenberg & Associates eventually dismissed the foreclosure, and Chalk filed a class-action counter-complaint in 2013 against LPS.
- Court grants LPS’s motion to dismiss Counts II–IV; Count I (declaratory/injunctive relief) deemed moot; LPS’s motion to strike denied as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA viability against LPS | Chalk asserts LPS’s role in foreclosure makes it a debt collector. | LPS did not act as a debt collector regarding Chalk’s loan; no direct collection activity by LPS. | FDCPA claim dismissed; insufficient facts tying LPS to Chalk’s debt collection. |
| MMFPA applicability to LPS | LPS’s alleged misstatements and NOITF omissions violated MMFPA. | Chalk failed to show LPS needed licensing or any improper NOITF action tied to Chalk’s loan. | MMFPA claim dismissed. |
| Unjust enrichment against LPS | Chalk conferred a benefit by LPS’s collection actions; LPS retained it. | No evidence Chalk paid fees or conferred a benefit to LPS. | Unjust enrichment claim dismissed. |
| Declaratory and injunctive relief adequacy | Relief requested to stop LPS from acting as a licensee and disgorge funds. | No actionable conduct established; no injury in fact tied to LPS license status. | Count I moot; injunctive relief denied. |
| Class certification posture | Class-wide relief warranted based on common misrepresentations. | Individual claims must first be viable before class certification. | Class claims not reached due to dismissal of core counts. |
Key Cases Cited
- Bell Atl. Corp. v.Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility pleading standard)
- Shepherd v. Burson, 427 Md. 541 (Md. 2012) (failure to disclose Freddie Mac ownership did not render NOITF deceptive)
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA applies to debt collectors; scope includes litigation activities)