Wheeling v. Selene Finance
250 A.3d 197
Md.2021Background
- Petitioners (Eric & Whitney Wheeling; Joanne Rodriguez) were occupants/owners of residential properties on which Selene Finance (mortgage servicer) and agent Gina Gargeu/Century 21 posted statutory eviction notices and threatened self-help repossession without a court order.
- Petitioners did not vacate; they consulted counsel and alleged emotional distress with physical manifestations and pre‑litigation attorney’s fees to "know their rights." Rodriguez had an active foreclosure case and a sheriff’s writ date; Wheelings’ property had no foreclosure filed.
- Petitioners amended their complaint to assert (1) violation of Md. Code, Real Prop. § 7-113 (limits nonjudicial evictions; requires a reasonable inquiry before posting a statutory abandonment notice) and (2) violations of the Maryland Consumer Protection Act (MCPA), CL § 13-101 et seq.
- The circuit court dismissed the amended complaint for failure to state a claim; the Court of Special Appeals affirmed in part, holding RP § 7-113 private cause of action required dispossession and that MCPA damages were not pled with the needed specificity.
- The Court of Appeals reversed in part and affirmed in part: it held plaintiffs adequately pleaded claims under RP § 7-113 and under the MCPA (emotional damages pleaded with physical manifestations meet pleading standard), but refused to allow recovery of pre‑litigation attorney’s fees as separate compensatory damages under the collateral-litigation exception to the American Rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RP § 7-113 private cause of action requires actual dispossession (vacatur) before recovery | RP: statute prohibits "take possession or threaten to take possession" so violation of (b)(2) (failure to make reasonable inquiry before posting notice) gives rise to remedies in (d) even if resident was not displaced | Selene/Gargeu: remedies in (d) apply only where subsection (b)(1) acts occurred (actual dispossession or imminent threat); safe-harbor (b)(2) is an exception, not a standalone violation | Held: No vacatur required. A protected resident may recover actual damages and fees for any violation of subsection (b), including posting notices without reasonable inquiry. |
| Sufficiency of pleaded MCPA damages (including emotional distress) | Petitioners: alleged "emotional damages with physical manifestations" and attorney fees; MCPA private claims require pleading of actual damages but not a heightened standard beyond Rule 2-303(b) | Respondents: damages not pleaded with sufficient specificity; emotional harms not shown with objective physical manifestations | Held: Pleading standard is the general Rule 2-303(b) — alleging "emotional damages with physical manifestations" suffices at pleading stage; proof later must meet the Vance/Hoffman objective-physical-manifestation rule. |
| Whether pre‑litigation attorney’s fees (consulting counsel to "know their rights") are recoverable as damages | Petitioners: attorneys’ fees were actual out‑of‑pocket losses caused by defendants’ unlawful notices | Respondents: American Rule bars such fees unless statutory or within established common‑law exceptions | Held: Pre‑litigation consultation fees are not recoverable as separate compensatory damages. Collateral‑litigation exception requires litigation with a third party or similar circumstances; the Court will not expand the exception. |
| Applicability of agency/advisory guidance and imminence definition to transform statutory notice into a threat | Petitioners: administrative guidance and circumstances show respondents failed reasonable inquiry and notice itself constituted an unlawful threat | Respondents: statutory notice with 15‑day response period is not an "imminent" threat; definitions and statutory structure support their view | Held: Even if notice could be evidence of a threat, failure to conduct reasonable inquiry itself suffices to state a claim under § 7-113; court declines to narrowly cabin "imminent" so as not to frustrate remedial purpose of statute. |
Key Cases Cited
- Nickens v. Mount Vernon Realty Group, 429 Md. 53 (2012) (recognized common‑law peaceable self‑help; prompted legislative response that became § 7-113)
- Golt v. Phillips, 308 Md. 1 (1986) (MCPA private actions require actual injury or loss; restitution depends on proof of injury)
- Citaramanis v. Hallowell, 328 Md. 142 (1992) (distinguishing public enforcement from private MCPA claims; private claims require actual injury)
- Lloyd v. General Motors Corp., 397 Md. 108 (2007) (actual injury under MCPA can include economic loss to remedy defect; no need for physical injury to property)
- Hoffman v. Stamper, 385 Md. 1 (2005) (emotional‑distress damages require accompanying physical manifestations capable of objective determination)
- Vance v. Vance, 286 Md. 490 (1979) (history and rule that emotional‑distress recovery requires physical injury or objectively ascertainable manifestations)
- Eastern Shore Title Co. v. Ochse, 453 Md. 303 (2017) (describing Maryland exceptions to the American Rule, including the collateral‑litigation doctrine for recovery of attorney’s fees)