Polek v. J.P. Morgan Chase Bank, N.A.
36 A.3d 399
Md.2012Background
- Five consolidated Maryland cases allege SMLL, CPA, and contract claims arising from secondary mortgage loan closings where multiple itemized fees were charged, not a single origination fee.
- Polek case: 2009 secondary loan of $40,000; HUD-1 showed no origination fee; plaintiff alleges aggregate fees exceeded cap and §12-407.1 disclosure was missing; assignee liability argued.
- Dinnis case: 1997 loan; borrowers could not obtain closing docs; suit asserts assignee liability and SMLL/CPA violations for failure to provide documents; certificate of satisfaction later recorded.
- Kinsey case: 2000 loan with multiple itemized fees; asserted SMLL violations and assignee liability based on HUD-1; sought treble damages.
- Schultz case: 1999 loan; borrower lacked closing docs; alleged assignee liability and SMLL/CPA violations; complaint dismissed for failure to state a claim.
- Moore case: 1996 loan; borrowers lacked closing docs; alleged assignee liability and SMLL/CPA violations; complaint dismissed for failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §12-405 cap restrict to one origination fee or permit multiple itemized fees under aggregate cap? | Polek argues only a single origination fee is allowed, despite components. | J.P. Morgan Chase argues aggregate origination-related fees may be itemized if total remains under 10% of net proceeds. | Ambiguous; permits itemized fees if aggregate does not exceed 10%. |
| Does §12-407.1 require a disclosure form for commercial-use loans to non-commercial borrowers? | Appellants contend form was required for all closings. | Defendants assert form applies only when proceeds are used for commercial purposes. | No disclosure required for non-commercial borrowers; no §12-407.1 violation. |
| Are assignees liable under §3-306 and related law for failure to retain loan documents after satisfaction? | Dinnis/Schultz/Moore allege assignee liability and breach of contract/CPA due to lack of documents. | Assignees owe no continuing duty to retain documents post-satisfaction; no fiduciary duty arises absent special circumstances. | Assignees owe no implied duty to retain closing documents after satisfaction; no direct/derivative liability; claims dismissed. |
Key Cases Cited
- Parker v. Columbia Bank, 91 Md. App. 346, 604 A.2d 521 (Md. App. 1992) (limits fiduciary duties; outlines implied good-faith doctrines in banking)
- Blondell v. Littlepage, 413 Md. 96, 991 A.2d 80 (Md. 2010) (implied covenant of good faith and fair dealing; limits in contract performance)
- Continental Masonry Co. v. Verdel Constr. Co., 279 Md. 476, 369 A.2d 566 (Md. 1977) (requires certainty in alleging contractual obligation and breach)
- Johnson v. Bugle Coat, Apron & Linen Serv., 191 Md. 268, 60 A.2d 686 (Md. 1948) (cites fiduciary duty concepts in service-provider relationships)