Windesheim v. Larocca
116 A.3d 954
Md.2015Background
- Borrowers obtained 2006–2007 HELOCs from PNC Mortgage (Windesheim) and Prosperity/National City structure.
- Borrowers were guided by Realtor Defendants to a buy-first-sell-later plan to fund new homes via HELOCs.
- Mathews (Prosperity) fabricated or targeted false pre-approval paperwork and rental income to enable primary mortgages.
- Windesheim completed HELOC applications without borrower contact, falsely stating borrower interactions and primary-residence security.
- Borrowers later discovered forged leases and misrepresented income after counsel contacted them in 2010–2011.
- Court resolved whether statute of limitations and SMLL claims bar Counts I–XI and whether indirect advertising liability exists.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Windesheim a “lender” under the SMLL? | Borrowers allege liability extends to Windesheim as a lender. | Petitioners contend employee not a lender under SMLL. | No, not a lender under SMLL. |
| Are Borrowers’ SMLL claims viable under the statute of limitations? | Borrowers argue tolling or discovery rules apply. | Defendants argue 3-year limit applies; discovery not tolled. | Counts I–IX, XI barred by 3-year statute; discovery/fiduciary tolling not established. |
| Does the 12-year specialty statute apply to SMLL claims? | Borrowers rely on SMLL as specialty and tolling. | Petitioners argue 12-year period applies; improper tolling. | SMLL claims not tolled by 12-year specialty; 3-year applicable. |
| Did Windesheim/PNC indirectly advertise false statements under CL 12-403(a)? | Prosperity’s ads and transfers implicate indirect advertising. | No direct or indirect advertisement by Windesheim/PNC; no conspiracy basis. | No indirect advertising liability; no evidence of bringing about false ads or conspiracy. |
Key Cases Cited
- Bank of New York v. Sheff, 382 Md. 235 (Md. 2004) (discovery notice when documents contradict expectations)
- Miller v. Pacific Shore Funding, 224 F. Supp. 2d 977 (D. Md. 2002) (inquiry notice upon signing loan documents identifying alleged charges)
- Frederick Rd. Ltd. P’ship v. Brown & Sturm, 360 Md. 76 (Md. 2000) (discovery rule and tolling explained)
- Poffenberger v. Risser, 290 Md. 631 (Md. 1981) (discovery rule applicability; notice required for accrual)
- Dashiell v. Meeks, 396 Md. 149 (Md. 2006) (concealment exception to discovery rule; Fifth Amendment inference cautioned)
- West Maryland Dairy v. Chenowith, 180 Md. 236 (Md. 1942) (civil conspiracy elements and agency liability)
- Polek v. J.P. Morgan Chase Bank, N.A., 424 Md. 333 (Md. 2012) (fiduciary relationship standards and special circumstances)
- Thompkins v. Mountaineer Investments, LLC, 439 Md. 118 (Md. 2014) (purpose of SMLL and consumer-protection interest)