950 F. Supp. 2d 788
D. Maryland2013Background
- Plaintiffs Currie and Currie own real property in Upper Marlboro, Maryland, which was foreclosed and purchased at a January 20, 2012 sale by the Trust, HSBC as Trustee for Wells Fargo’s mortgage assets.
- Defendants include Wells Fargo entities (Wells Fargo, Wells Fargo Home, America Servicing, Premier Asset) and HSBC, with Wells Fargo as servicer and the Trust as actual secured party.
- Plaintiffs refinanced in 2007 for $270,000 and faced hardship in 2008, reportedly seeking loan modification; Wells Fargo allegedly conditioned modification on default of 90 days.
- Plaintiffs allege a pattern of false or misleading communications and misidentification of the secured party in foreclosure notices, including allonges falsely suggesting HSBC’s ownership.
- Plaintiffs repeatedly requested modifications (including HAFA/short sale efforts) and signed multiple forbearance/modification agreements, but Wells Fargo allegedly delayed or denied relief.
- Plaintiffs filed an eight-count complaint on August 17, 2012 seeking relief under Maryland consumer protection statutes, contract, tort, and related remedies; Defendants moved to dismiss on October 1, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| MCPA misrepresentation elements and reliance | MCPA misrepresentations (2)–(3) and others caused injury | Plaintiffs failed to plead reliance and injury or pleaded only conclusory facts | MCPA claims viable for statements (2)–(3); other statements dismissed or treatment narrowed. |
| MMFPA viability post-foreclosure and pleading | MMFPA applies to post-closing servicing; claims pleaded with particularity | MMFPA claims lack facial plausibility and pleading sufficiency | MMFPA claim survives; issues of res judicata may be addressed later. |
| MCDCA viability regarding foreclosure actions | Defendants’ actions in foreclosure violated 14-202(8) | Right to foreclose existed; paperwork defects did not prove liability | MCDCA claim dismissed. |
| Breach of contract theories and recoverable theories | The Third Agreement created a binding modification; other theories viable | Many theories fail to show offer/acceptance or consideration; some are duplicative | Count VI survives for theory (2); Count VII and implied covenant theories largely dismissed. |
| Promissory estoppel validity and theories | Promises to evaluate for modification induced actions and damages | Promissory estoppel not warranted for several theories | Count VIII viable for theory (1) and (3); theories (4)-(5) dismissed. |
Key Cases Cited
- Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir. 1999) (Rule 12(b)(6) and plausibility standard from Iqbal/Twombly)
- Twombly, Bell Atl. Corp. v., 550 U.S. 544 (2007) (Pleading requires plausibility, not mere accusation)
- Iqbal v. Ashcroft, 556 U.S. 662 (2009) (Twombly/Iqbal pleading standard for plausibility)
- Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769 (4th Cir. 2013) (Fraud-based MCPA pleading with particularity)
- Rowland v. Harrison, 320 Md. 223, 577 A.2d 51 (1990) (Transaction/identity test for preclusion; mortgage context)
- Fairfax Sav. v. Kris Jen Ltd P’ship, 338 Md. 1, 655 A.2d 1265 (1995) (Res judicata in foreclosure context; distinction defense vs. counterclaim)
- Cheek v. United Healthcare of Mid-Atl., Inc., 378 Md. 139, 835 A.2d 656 (2003) (Contractual consideration and detriment standard for contract claims)
- Philip Morris Inc. v. Angeletti, 358 Md. 689, 752 A.2d 200 (2000) (Reliance standards under Md. law for misrepresentation)
- Hoffman v. Stamper, 385 Md. 1, 867 A.2d 276 (2005) (MCPA reliance considerations and damages under Maryland law)