264 A.3d 283
Md. Ct. Spec. App.2021Background
- Mary Newsom and her husband held their home as tenants by the entireties; the husband obtained a $50,000 HELOC in 2011, signing the promissory note alone; a Deed of Trust purporting to encumber the property bears Mary Newsom’s signature, which she denies.
- After the husband died in 2015, Capital One sought payment; Newsom notified Capital One and Brock & Scott (the law firm acting as substitute trustees) that she never signed the loan or Deed of Trust and denied liability.
- Brock & Scott proceeded to initiate foreclosure by order to docket, sending debt-collection notices listing both spouses as borrowers, even though the Deed of Trust was unrecorded until 2017 and Capital One later settled with Newsom and was dismissed.
- Newsom sued Brock & Scott and an individual attorney under the Maryland Consumer Debt Collection Act (MCDCA) and the Maryland Mortgage Fraud Protection Act (MMFPA); claims for injurious falsehood and malicious use of process were also pled but not contested on appeal.
- At the close of plaintiff’s case the trial court granted the defendants’ motion for judgment on Counts I (MCDCA) and II (MMFPA); the Court of Special Appeals vacated those rulings and remanded for a new trial on Counts I and II, while affirming the disposition of the other counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Denial of Newsom’s pretrial motion for partial summary judgment | Newsom: undisputed facts (no timely claim against estate; mortgage unenforceable) entitle her to liability as a matter of law under MCDCA | Brock & Scott: factual disputes exist (forgery, knowledge); mortgages may be enforceable without filing estate claim; summary judgment premature | Denial affirmed — trial judge did not abuse discretion because factual disputes (forgery, recordation, applicability of ET §8‑103(d)) justified a full hearing |
| Grant of judgment to defendants on MCDCA claim (CL §14‑202(8)) | Newsom: defendants pursued collection knowing they lacked the right to foreclose (void lien if forgery or tenancy by entireties) and ignored her notices | Brock & Scott: they merely acted as substitute trustees for Capital One and did not create the deed; no evidence they knew of invalidity or forged signature; vicarious liability improper | Reversed as to Count I — evidence (tenancy by entireties, Newsom’s denials, unrecorded/forged deed, notice to counsel) was sufficient to send knowledge and recklessness questions to a jury |
| Grant of judgment to defendants on MMFPA claim (RP §7‑401) | Newsom: using false affidavits and foreclosure filings after notice of invalidity constitutes mortgage-fraud conduct in the mortgage-lending/servicing process | Brock & Scott: no evidence they originated fraudulent documents; liability would improperly extend Capital One’s actions to substitute trustees | Reversed as to Count II — post‑default servicing and use of affidavits/foreclosure instruments after notice can support MMFPA claims; jury question exists |
| Evidentiary rulings and recusal request | Newsom: several evidentiary exclusions and alleged judicial partiality deprived fair trial | Brock & Scott: rulings were within trial court discretion; recusal not timely shown | Court declined to resolve evidentiary and recusal claims on appeal (many issues may recur on remand); new judge will hear retrial and any recusal motions as applicable |
Key Cases Cited
- Chavis v. Blibaum & Associates, 476 Md. 534 (2021) (interprets CL §14‑202(8), holding MCDCA reaches attempts to collect amounts collector knows it has no right to collect; knowledge may be actual or reckless)
- Nationstar Mortgage, LLC v. Kemp, 476 Md. 149 (2021) (applies Chavis; reiterates that knowledge element can be actual knowledge or reckless disregard and is a question of fact)
- Andrews & Lawrence Prof’l Services, LLC v. Mills, 467 Md. 126 (2020) (law firms collecting debts are subject to MCDCA; no categorical exemption for attorneys)
- Mitchell v. Yacko (Yacko I), 232 Md. App. 624 (2017) (a party cannot institute foreclosure on forged documents; forgery is a defense)
- Blackstone v. Sharma, 461 Md. 87 (2018) (discussed by trial court regarding applicability of certain procedural statutes)
- Annapolis Banking & Trust Co. v. Smith, 164 Md. 8 (1933) (tenancy by entireties shields property from individual spouse’s creditors)
- Picking v. Yates, 265 Md. 1 (1972) (authoritative dictum that tenants by entireties must act jointly to encumber property)