Peden v. Bww Law Group, Llc et al

MOTION to Dismiss for Failure to State a Claim

D. Md.April 28, 2017

US_ACTIVE-133513616 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (GREENBELT DIVISION) YWUANA PEDEN, Plaintiff, v. BWW LAW GROUP, LLC, et al., Defendants. Case No. 8:16cv4012-PWG PNMAC’S MOTION TO DISMISS Defendant PennyMac Loan Services, LLC (“PNMAC”), incorrectly sued as Penny Mac Corporation, by counsel, pursuant to Fed. R. Civ. P. 12(b)(1), 12(b)(6) and 9(b), moves this Court to dismiss Plaintiff Ywuana Peden’s (“Plaintiff”) Complaint and for such other relief as is just and proper. The claims raised against PNMAC in Plaintiff’s Complaint are barred by the Rooker-Feldman doctrine and res judicata. Moreover, the Complaint fails to state any cognizable claims against PNMAC. Plaintiff filed this Complaint improperly seeking to unwind a state foreclosure action after sale of the property, ratification of the sale, and judgment of possession was awarded by the state court. For these reasons and those set out in PNMAC’s Memorandum in Support of its Motion to Dismiss which are incorporated herein by reference, PNMAC respectfully requests this Court to dismiss Plaintiff’s Complaint with prejudice. A proposed order is attached. Case 8:16-cv-04012-PWG Document 11 Filed 04/28/17 Page 1 of 3 - 2 - Respectfully submitted, PENNYMAC LOAN SERVICES, LLC By Counsel /s/ Brent R. Gary Maryland Federal Bar No. 18998 REED SMITH LLP 7900 Tysons One Place Suite 500 McLean, Virginia 22102 Telephone: 703-641-4200 Facsimile: 703-641-4340 bgary@reedsmith.com Counsel for PennyMac Loan Services, LLC Case 8:16-cv-04012-PWG Document 11 Filed 04/28/17 Page 2 of 3 - 3 - CERTIFICATE OF SERVICE I hereby certify that on this 28th day of April 2017, I caused a true and correct copy of the foregoing to be filed and served on all counsel of record via the court’s Electronic Case Filing system, and mailed to the Plaintiff at the following address: Ywuana Peden 219 Dateleaf Avenue Capitol Heights, MD 20743 /s/ Brent R. Gary Maryland Federal Bar No. 18998 REED SMITH LLP 7900 Tysons One Place Suite 500 McLean, Virginia 22102 Telephone: 703-641-4200 Facsimile: 703-641-4340 bgary@reedsmith.com Counsel for PennyMac Loan Services, LLC Case 8:16-cv-04012-PWG Document 11 Filed 04/28/17 Page 3 of 3 US_ACTIVE-134157757 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Greenbelt Division) YWUANA PEDEN, Plaintiff, v. BWW LAW GROUP, LLC, et al., Defendants. Case No. 8:16cv4012-PWG ORDER UPON CONSIDERATION of Defendant PennyMac Loan Services, LLC’s (“PNMAC”) Motion to Dismiss, and any opposition thereto, it is hereby ORDERED that PNMAC’s Motion to Dismiss is GRANTED. Further, it is hereby ORDERED that Plaintiff’s Complaint and all claims asserted by Plaintiff against PNMAC are hereby DISMISSED with PREJUDICE. ______________________________ U.S. District Court for the District of Maryland Case 8:16-cv-04012-PWG Document 11-1 Filed 04/28/17 Page 1 of 1 US_ACTIVE-133513942 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Greenbelt Division) YWUANA PEDEN, Plaintiff, v. BWW LAW GROUP, LLC, et al., Defendants. Case No. 8:16cv4012-PWG PNMAC’S MEMORANDUM IN SUPPORT OF ITS MOTION TO DISMISS Defendant PennyMac Loan Services, LLC (“PNMAC”), incorrectly sued as Penny Mac Corporation, by counsel, pursuant to Fed. R. Civ. P. 12(b)(1), 12(b)(6) and 9(b), hereby submits this memorandum in support of its motion to dismiss Plaintiff Ywuana Peden’s (“Plaintiff” or “Peden”) Complaint. For the reasons stated below, PNMAC respectfully requests the Court to dismiss Plaintiff’s Complaint with prejudice and for such other relief as is just and proper. INTRODUCTION Plaintiff’s Complaint is legally deficient and should be dismissed pursuant to Federal Rules 12(b)(1) and 12(b)(6). The claims against PNMAC are barred by the Rooker-Feldman doctrine because Plaintiff is seeking to have this Court review and reverse the holdings of the Circuit Court of Prince George’s County in a foreclosure proceeding. Similarly, Plaintiff’s causes of action are barred by res judicata because they were previously alleged or could have been set forth in the foreclosure action, which was resolved and adjudged on the merits. In that action, Plaintiff challenged the right of the Substitute Trustees to foreclose by filing a Motion to Dismiss, which the Circuit Court of Prince George’s County denied. The Circuit Court then Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 1 of 20 - 2 - issued an order ratifying the foreclosure sale, which operates as a final judgment on the merits. Therefore, both the Rooker-Feldman doctrine and res judicata bar Plaintiff from re-litigating the same issues that were raised or could have been raised in the state court foreclosure action and which were adjudicated on the merits against Plaintiff. Further, even if the Complaint is not barred, Plaintiff’s claims are all legally deficient and inadequately pled. Plaintiff’s Complaint fails to sufficiently state a cognizable claim against PNMAC under Federal Rules 12(b)(6) and (9)(b). For these reasons, PNMAC respectfully requests that this Court dismiss all claims brought by Plaintiff against PNMAC with prejudice. ALLEGED FACTUAL BACKGROUND Plaintiff seeks to unwind her foreclosure proceeding in Prince George’s County Maryland. See Carrie M. Ward et al. v. Ywuana Peden, Case No. CAEF14-24083 (Prince George’s Cnty. Cir. Ct., filed Sept. 2, 2014);1 see Compl. ¶¶ 1, 38 (requesting the Court to void the foreclosure, sale and eviction). In addition, Plaintiff requests that damages of $10,000,000 be entered against Defendants. Id. ¶ 107. It appears the basis for Plaintiff’s Complaint is the conclusory claim that the promissory note and deed of trust in Plaintiff’s foreclosure proceeding are forgeries. Id. ¶ 1. In conclusory fashion, Plaintiff asserts that PNMAC and the Substitute Trustees appointed by PNMAC (or their attorneys) have been involved in a scheme to forge the promissory note and deed of trust in the foreclosure proceeding. Id. ¶¶ 1, 38. Without alleging any facts, Plaintiff also seeks to unwind her foreclosure action on the alleged basis that PNMAC and other Defendants are liable under the Fair Debt Collection Practices Act (“FDCPA”). 1 The docket for this case is available online at the Maryland Judiciary website. See: http://casesearch.courts.state.md.us/casesearch/. Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 2 of 20 - 3 - Compl. ¶¶ 1, 38, 74-75. On the basis of these purely conclusory and unintelligible allegations, Plaintiff asks the Court to void her state foreclosure proceeding in its entirety. Compl. ¶ 1. PROCEDURAL BACKGROUND2 PNMAC was the holder of a note secured by a deed of trust from Plaintiff for the real property known as 219 Dateleaf Avenue, Capitol Heights, MD 20743. See Order to Docket, Prince George’s County Circuit Court, Case No. CAEF14-24083 (Dkt. 1). PNMAC’s title to the property is derivative of a deed dated January 30, 2007 and was recorded among the Land Records of Prince George’s County. Id. Plaintiff failed to make the necessary payments required under her Deed of Trust. See id. On July 21, 2014, PNMAC appointed Carrie M. Ward, Howard N. Bierman, Jacob Geesing, Pratima Lele, Tayyaba C. Monto and Joshua Coleman of BWW Law Group as Substitute Trustees (collectively “Substitute Trustees”) through a Deed of Appointment of Substitute Trustees recorded in the Land Records of Prince George’s County. Appointment of Substitute Trustees, Case No. CAEF14-24083 (Dkt. 5) (attached as Exhibit 1). On September 2, 2014, the Substitute Trustees filed a foreclosure action against Plaintiff in Prince George’s County Circuit Court. Order to Docket, Case No. CAEF14-24083 (Dkt. 1). On January 6, 2015, Plaintiff, in an attempt to forestall the foreclosure proceeding, filed for Bankruptcy in the U.S. Bankruptcy Court for the District of Maryland. Suggestion of Bankruptcy, Case No. CAEF14-24083 (Dkt. 14). This bankruptcy case was quickly dismissed due to Plaintiff’s failure to comply with mandated credit counseling requirements. Order 2 In reviewing a 12(b)(6) dismissal motion, a court may “properly take judicial notice of matters of public record” without converting the dismissal motion into one for summary judgment. Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). Court filings are public records of which a federal court may take judicial notice. See Witthohn v. Fed. Ins. Co., 164 F. App'x 395, 397 (4th Cir. 2006). Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 3 of 20 - 4 - Finding Certification Not Satisfactory and Dismissing Case, In re: Monica Ywuana Peden, Case No. 15-10115 (Bankr. D. Md.) (Dkt. 6). After the termination of the bankruptcy case and after the Substitute Trustees informed the state court that the bankruptcy case had terminated, Plaintiff filed a Motion to Dismiss along with a sprawling 131-page, unintelligible document titled “Notice of Constitutional Challenge to Statute.” Case No. CAEF14-24083 (Dkts. 20, 22). The state court denied Plaintiff’s Motion to Dismiss ruling that “the Motion does not state a valid defense or present meritorious argument, pursuant to MD Rule 14-211(b) and fails to state factual and legal, basis, pursuant to MD Rule 14-211(a)(3)(B).” September 17, 2015 Memorandum and Order of Court, Case No. CAEF14-24083 (Dkt. 23) (attached as Exhibit 2). The property was sold on March 3, 2015. Report of Sale and Affidavit of Fairness of Sale and Truth of Report, Case No. CAEF14-24083 (Dkt. 15). The Substitute Trustees ultimately obtained an Order of Ratification and Referral to Auditor (“Order of Ratification”) on November 10, 2015, which ratified the sale of the property. See November 10, 2015 Order of Ratification and Referral to Auditor, Case No. CAEF14-24083 (Dkt. 24) (attached as Exhibit 3). Plaintiff never filed an appeal to the Order of Ratification. Plaintiff then filed a “Motion for Setoff” which the state court denied and determined was “unintelligible and not meritorious.” Memorandum and Order of Court, Case No. CAEF14-24083 (Dkt. 35) (attached as Exhibit 4). After the Circuit Court entered the Order of Ratification, it entered an order ratifying the auditor’s report on January 28, 2016. See Order of Ratification of Report, Case No. CAEF14- 24083 (Dkt. 29) (attached as Exhibit 5). Subsequently, the state court entered an Order of Judgment awarding possession of the subject property. September 13, 2016 Order of Judgment Awarding Possession of Property, Case No. CAEF14-24083 (Dkt. 38) (attached as Exhibit 6). A writ of possession was issued by Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 4 of 20 - 5 - the state court on October 3, 2016. Writ of Possession, Case No. CAEF14-24083 (Dkt. 42) (attached as Exhibit 7). The foreclosure proceeding has concluded. Plaintiff’s Complaint in this Court is nothing more than yet another baseless attempt to unwind her state foreclosure proceedings. STANDARD OF REVIEW PNMAC moves to dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(1) – among other grounds – because this Court does not have jurisdiction to overrule the state courts’ foreclosure proceeding rulings, re-adjudicate the disputed issues and rule upon the requested relief. See, e.g., D.C. Court of Appeals v. Feldman, 460 U.S. 462, 486-87 (1983). Because the existence of subject matter jurisdiction is a threshold issue, this court must address a Rule 12(b)(1) motion before addressing the merits of the case. See Steel Co. v. Citizens for a Better Environ., 523 U.S. 83, 95-102 (1998); accord Jones v. Am. Postal Workers Union, 192 F.3d 417, 422 (4th Cir. 1999). Subject matter jurisdiction is both a constitutional and statutory requirement which restricts federal judicial power to a limited set of cases and controversies. Thus, “no action of the parties can confer subject matter jurisdiction upon a federal court.” Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). The party seeking federal jurisdiction has the burden of proving that subject matter jurisdiction exists. See Richmond, Fredericksburg & Potomac R.R. Co., 945 F.2d at 768. When a defendant challenges subject matter jurisdiction, “the district court is to regard the pleadings’ allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Id. A district court should grant a Rule 12(b)(1) motion to dismiss Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 5 of 20 - 6 - “if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Id.; see also Evans v. B.F. Perkins Co., 166 F .3d 642, 647 (4th Cir. 1999). Further, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (internal quotations marks omitted). To survive a Rule 12(b)(6) challenge, a complaint must provide the grounds for a plaintiff’s entitlement to relief beyond mere labels and conclusions, and “formulaic recitation of the elements of a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). The factual allegations contained in a complaint “must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” G.M. Pusey and Associates, Inc. v. Britt/Paulk Ins. Agency, Inc., No. RDB-07-3229, 2008 WL 2003747, at *4 (D. Md. May 6, 2008) (citing Twombly, 550 U.S. at 555). Thus, a complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Id. While “notice pleading requires generosity in interpreting a plaintiff's complaint . . . generosity is not fantasy.” Bender v. Suburban Hosp., Inc., 159 F.3d 186, 191 (4th Cir. 1998). In considering a motion to dismiss, the court “need not accept as true unwarranted inferences, unreasonable conclusions, or arguments” nor “the legal conclusions drawn from the facts.” Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship., 213 F.3d 175, 180 (4th Cir. 2000). Additionally, as Plaintiff attempts to raise causes of action associated with fraud, she must comply with Rule 9(b) of the Federal Rules of Civil procedure which provides that “[i]n alleging fraud . . . a party must state with particularity the circumstances constituting fraud. . . .” Thus, Plaintiff’s Complaint must allege the “time, place, and contents of the false Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 6 of 20 - 7 - representations, as well as the identity of the person making the misrepresentation and what [s]he obtained thereby.” Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999). Although affirmative defenses typically must be raised in an answer, dismissal is proper on a Rule 12(b)(6) motion “when the face of the complaint clearly reveals the existence of a meritorious affirmative defense.” See G & H Clearing and Landscaping v. Whitworth, 66 Md. App. 348, 503 A.2d 1379 (1986); Antigua Condominium Ass'n v. Melba Investors Atlantic, Inc., 65 Md. App. 726, 501 A.2d 1359, vacated on other grounds, 307 Md. 700, 517 A.2d 75 (1986); Villarreal v. Glacken, 63 Md. App. 114, 492 A.2d 328 (1985); accord 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1357, at 714 (3rd Ed. 2004) (“A complaint showing that the governing statute of limitations has run on the plaintiff’s claim for relief is the most common situation in which the affirmative defense appears on the face of the pleading and provides a basis for a motion to dismiss under Rule 12(b)(6)”). Statutes of limitation are strictly construed and implied equitable exceptions are disfavored. E.g., Walko Corp v. Burger Chef Sys. Inc., 281 Md. 207, 378 A.2d 1100, 1102 (1977). ARGUMENT Plaintiff’s Complaint should be dismissed because 1) this Court does not have subject matter jurisdiction over Plaintiff’s claims pursuant to the Rooker-Feldman doctrine; 2) the doctrine of res judicata compels dismissal; and 3) to the extent not barred under the Rooker- Feldman doctrine or dismissed on res judicata or other grounds, Plaintiff’s Complaint fails to adequately plead a claim against PNMAC under Federal Rules 12(b)(6) and 9(b). Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 7 of 20 - 8 - I. The Rooker-Feldman Doctrine Deprives This Court Of Subject Matter Jurisdiction. Plaintiff’s Complaint is an impermissible collateral attack on the ratified foreclosure sale in the Circuit Court of Prince George’s County, in which the foreclosure sale was completed by the Substitute Trustees and ratified by the Circuit Court notwithstanding a Motion to Dismiss and a Motion for Setoff. Because Plaintiff is seeking federal court review of a state court foreclosure action and the denial of the defenses she raised in that action, the Court should dismiss this case for lack of subject matter jurisdiction under the Rooker-Feldman doctrine. The Rooker-Feldman doctrine precludes federal courts from exercising subject matter jurisdiction over “cases brought by state-court losers complaining of injuries caused by state- court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus., 544 U.S. 280, 284 (2005) (explaining that federal law lodges appellate jurisdiction over state court judgments exclusively in the United States Supreme Court). Federal district courts lack subject matter jurisdiction over not only claims decided by the state court, but also claims the state court did not directly decide but are “inextricably intertwined” with the state court decision. D.C. Court of Appeals v. Feldman, 460 U.S. 462, 486-87 (1983). Claims not decided by the state court are “inextricably intertwined” with decided claims where “success on the federal claim depends upon a determination that the state court wrongly decided the issues before it.” Plyler v. Moore, 129 F.3d 728, 731 (4th Cir. 1997). In short, the Rooker-Feldman doctrine properly applies where: “(1) the federal court plaintiff lost in state court; (2) the plaintiff complains of ‘injuries caused by state-court judgments’; (3) the state court judgment became final before the proceedings in federal court Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 8 of 20 - 9 - commenced; and (4) the federal plaintiff ‘invit[es] district court review and rejection of those judgments.’” Willner v. Frey, 243 F. App’x 744, 746 (4th Cir. 2007). Here, Plaintiff’s Complaint attempts to revisit the issues that were raised and which were adjudged against Plaintiff by the Circuit Court in the foreclosure action. Plaintiff filed a Motion to Dismiss in the foreclosure action against the Substitute Trustees that raised various issues. Case No. CAEF14-24083 (Dkts. 19-22). The Circuit Court denied Plaintiff’s Motion to Dismiss and ratified the foreclosure sale. Id. at Dkts. 23, 24. The Complaint attempts to revisit the ruling of the Circuit Court in the form of claims for affirmative relief alleging harm arising from the foreclosure sale. The success of Plaintiff on her present claims would require this Court to revisit and reverse the ruling of the state court in its ratification of the foreclosure sale and rejection of the Plaintiff’s Motion to Dismiss. As such, Plaintiff’s success on the claims raised in the Complaint depends upon a determination that the state court wrongly decided the issues before it, and the Rooker-Feldman doctrine precludes this Court from exercising subject matter jurisdiction of the claims. The Complaint should be dismissed with prejudice. II. PNMAC’s Motion To Dismiss Should Be Granted Under The Doctrine Of Res Judicata. Plaintiff’s Complaint is also barred by the doctrine of res judicata, and for this the Complaint should be dismissed with prejudice. Because the claims alleged in the Complaint either were raised or could have been raised during the foreclosure proceeding, the doctrine of res judicata requires dismissal of her Complaint. “It is well established that the doctrine of res judicata bars the re-litigation of matters previously litigated between parties and their privies, as well as those claims that could have been asserted and litigated in the original suit.” Anyanwutaku v. Fleet Mortg. Grp., Inc., 85 F. Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 9 of 20 - 10 - Supp. 2d 566, 570 (D. Md. 2000) (emphasis in original) (collecting cases). “The purpose of the principle of res judicata is to end litigation. The theory is that parties should not have to litigate issues which they have already litigated or had a reasonable opportunity to litigate.” J. Aron & Co. v. Serv. Transportation Co., 515 F. Supp. 428, 445 (D. Md. 1981); see also Hawkins v. Citicorp Credit Servs., Inc., 665 F. Supp. 2d 518, 524, 2009 BL 235702, 5 (D. Md. 2009) (quotations omitted) (“The purpose of res judicata is to protect litigants from the burden of relitigating an identical issue with the same party or his privy and to promote judicial economy by preventing needless litigation”). “To successfully assert a res judicata defense, a party must demonstrate each of the following three elements: ‘(1) the parties in the present litigation are the same or in privity with the parties to the earlier litigation; (2) the claim presented in the current action is identical to that determined or that which could have been raised and determined in the prior litigation; and (3) there was a final judgment on the merits in the earlier suit.’” Fether v. Frederick Cnty., No. 12- 1674, 2013 WL 1314190, at *5 (D. Md. Mar. 29, 2013) (quoting Hall v. St. Mary's Seminary & Univ., 608 F. Supp. 2d 679, 684 (D. Md. 2009)). A ratification order is a final judgment for the purposes of res judicata. Turner v. JPMorgan Chase Bank, N.A., No. TDC-14-0576, 2014 WL 4843689, at *9 (D. Md. Sept. 25, 2014). “Maryland courts and [the U.S. District Court], applying Maryland law, have consistently held that res judicata bars collateral attacks on foreclosure judgments entered in the Circuit Courts.” Jones v. HSBC Bank USA, N.A., Case No. 09-cv-2904-RWT, 2011 WL 382371, at *4-5 (D. Md. Feb. 3, 2011) (holding that Circuit Court’s order granting possession is final adjudication of the rights of the parties); see also Hersh v. Allnutt, 250 A.2d 629, 632 (Md. 1969) (“[T]he law is firmly established in Maryland that the final ratification of the sale of property in Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 10 of 20 - 11 - foreclosure proceedings is res judicata as to the validity of such sale, except in case of fraud or illegality, and hence its regularity cannot be attacked in collateral proceedings.”).3 All three elements of res judicata are met in this case, and accordingly the Complaint should be dismissed. A. The Parties In The Present Litigation Are The Same As Or Are In Privity With Those In The Earlier Litigation. First, the parties in the present litigation, Plaintiff and PNMAC, are the same as or are in privity with those in the earlier litigation. Plaintiff is the identical party that appeared as a defendant in the foreclosure action. See November 10, 2015 Order of Ratification and Referral to Auditor, Case No. CAEF14-24083 (Dkt. 24) (attached as Exhibit 3). In addition, PNMAC is in privity with the Substitute Trustees and appointed the Substitute Trustees who initially prosecuted the foreclosure action. Appointment of Substitute Trustees, Case No. CAEF14- 24083 (Dkt. 5) (attached as Exhibit 1). The first element of res judicata thus is satisfied. B. The State Court Foreclosure Proceedings Yielded A Final Judgment On The Merits By A Court Of Competent Jurisdiction In Accordance With Due Process. Second, the state court foreclosure proceedings yielded a final judgment on the merits by a court of competent jurisdiction in accordance with due process. “Maryland courts and [the U.S. District Court], applying Maryland law, have consistently held that res judicata bars collateral attacks on foreclosure judgments entered in the Circuit Courts.” Jones v. HSBC Bank 3 Under Maryland law, a party must allege extrinsic fraud not intrinsic fraud sufficient to overcome res judicata. Sewell v. Dore, No. 0867 SEPT. TERM 2015, 2016 WL 3654232, at *4 (Md. Ct. Spec. App. July 8, 2016) (“To establish fraud under Rule 2–535(b), a movant must show extrinsic fraud, not intrinsic fraud.”) cert. denied, 450 Md. 238, 147 A.3d 405 (2016). As discussed infra, Plaintiff does not allege any facts sufficient to state a claim for fraud. Even assuming arguendo that Plaintiff stated such facts, allegations that documents in the foreclosure process are fraudulent do not rise to the level of extrinsic fraud. Id. (“Appellant’s assertions of fraud related to what she believes to have been fraudulent signatures and affidavits, do not rise to the level of extrinsic fraud.”) (denying a party’s attempt to set aside rulings ratifying a foreclosure sale by alleging that documents in the foreclosure process were fraudulent). Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 11 of 20 - 12 - USA, N.A., Case No. 09-cv-2904-RWT, 2011 WL 382371, at *4-5 (D. Md. Feb. 3, 2011) (holding that Circuit Court’s order granting possession is final adjudication of the rights of the parties); see also McMillan v. Bierman, Geesing, Ward & Wood LLC, 2012 WL 425823 (D. Md. 2012) (“[T]he foreclosure proceeding is indisputably a final judgment on the merits of the foreclosure.”). Plaintiff filed both a Motion to Dismiss and an unintelligible Motion for Setoff only to have both motions denied in the foreclosure proceeding. The foreclosure proceeding resulted in a sale of the Plaintiff’s property on March 3, 2015, which the state court ratified on November 10, 2015. See Exhibit 3; Hersh v. Allnutt, 250 A.2d at 632. The state court subsequently ratified the auditor’s report on January 28, 2016. See Exhibit 5. The state court awarded judgment for possession of the property on September 9, 2016 and a writ of possession of the property was issued on October 3, 2016. See Exhibits 6 and 7. Here, Plaintiff’s foreclosure proceedings were conducted in the Prince George’s County Circuit Court, which had jurisdiction over the foreclosure. See Md. R. 14-203 (“An action to foreclose a lien shall be filed in the county in which all or any part of the property subject to the lien is located. . . . The court’s jurisdiction over the property subject to the lien attaches when an action to foreclose is filed.”). Plaintiff was afforded due process in that proceeding. Indeed Plaintiff filed motions in that proceeding. The state court ratified the sale of Plaintiff’s property on November 10, 2015, and Plaintiff has subsequently been evicted from the home pursuant to a writ of possession. This foreclosure action resulted in a final order on the merits resolving the disputes as to ownership and possession of the Property. The second element of res judicata is satisfied. Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 12 of 20 - 13 - C. The Claims And Issues Presented In The Current Action Are Identical To Those Determined, Or That Could Have Been Raised And Determined, In The Prior Litigation. Third, the claims presented in the current action are identical to claims determined, or that could have been raised and determined, in Plaintiff’s foreclosure proceeding. Federal courts and Maryland state courts have adopted the “transaction test” to determine the identity of the causes of action. See Adkins v. Allstate Ins. Co., 729 F.2d 974, 976 (4th Cir. 1984); DeLeon v. Slear, 328 Md. 569, 589-90 (1992). Under this test, claims are considered a part of the same cause of action when they arise out of the same transaction or series of transactions. In making this determination, courts consider such pragmatic factors as “whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage.” See Anyanwutaku v. Fleet Mortg. Group, Inc., 85 F. Supp. 2d 566, 571 (D. Md. 2000) (quoting Restatement (Second) of Judgments § 24(2) (1982)). Claims may also arise out of the same transaction or series of transactions even if they involve different harms or different theories or measures of relief. Id. “The rules of claim preclusion provide that if the later litigation arises from the same cause of action as the first, then the judgment in the prior action bars litigation ‘not only of every matter actually adjudicated in the earlier case, but also of every claim that might have been presented.’” Orca Yachts v. Mollican, Inc., 287 F.3d 316, 318 (4th Cir. 2002); accord McMillan v. Bierman, Geesing, Ward & Wood LLC, 2012 WL 425823 (D. Md. Feb. 8, 2012). Here, Plaintiff’s request for relief plainly encompasses relief that could have been requested in the state court foreclosure proceeding. Indeed, Plaintiff filed both a motion to dismiss in the foreclosure proceeding and a Motion for Setoff in the foreclosure proceeding. Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 13 of 20 - 14 - Both motions were denied. Case No. CAEF14-24083 (Dkts. 23, 35). Plaintiff now seeks to unwind her foreclosure proceeding. Although difficult to discern, the relief sought by Plaintiff appears to involve questions of the validity of the debt and lien which led to the foreclosure action, the foreclosure sale, the ratification of the foreclosure sale, and the eviction – all issues that cut to the core of the dispute and relief at issue in the foreclosure proceeding. See Compl. ¶¶ 1, 38 (seeking to unwind the foreclosure action). Because the issues presented for resolution are identical to that determined, or that which could have been raised and determined, in prior litigation, res judicata operates as a bar to the declaratory relief claim in this case.4 III. The Complaint Fails To Adequately State A Claim Against PNMAC Pursuant to Rules 12(b)(6) And 9(b) To the extent not barred or dismissed on other grounds, Plaintiff’s Complaint should be dismissed because it fails to plead a claim against PNMAC under Federal Rules 12(b)(6) and 9(b). 4 Cf., e.g., Jones v. HSBC Bank USA, N.A., 2011 WL 382371, at *5 (D. Md. Feb. 3, 2011), aff'd, 444 F. App'x 640 (4th Cir. 2011) (plaintiff’s claim that the foreclosure was improper because defendants submitted false and insufficient affidavits in connection therewith is a claim that clearly could have been raised in the circuit court proceeding); Capel v. Countrywide Home Loans, Inc., Civ. Nos. WDQ-09-2374 & -2439, 2010 WL 457534, at *4 (D. Md. Feb. 3, 2010) (concluding that current claims related to alleged defects in contract formation were transactionally related to determination in foreclosure action that the trustees had the right to foreclose); McGhee v. JP Morgan Chase Bank, N.A., 2013 WL 4495797 (D. Md. 2013) (concluding claims in complaint were identical for res judicata purposes to those that were raised or could have been raised in the foreclosure proceedings, where present claims “all stem[med] from actions taken by lenders, servicers, and their trustees in connection with the refinancing of their two properties and the subsequent foreclosure of those properties based on what Plaintiffs claim were predatory loans, willful misrepresentations, and failure to comply with all legal requirements”); McMillan, 2012 WL 425823 (concluding plaintiffs’ claims were barred by res judicata because the present causes of action were identical to those in the prior state foreclosure proceeding, the same transaction formed the basis for both actions, and the facts clearly were related in time, space, origin, and motivation and would form a convenient trial unit). Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 14 of 20 - 15 - A. Plaintiff Fails To Plead Allegations Of Fraud With Particularity Although Plaintiff does not enumerate a specific cause of action for fraud, the crux of Plaintiff’s Complaint is that the promissory note and deed of trust at issue in the state foreclosure action are forgeries and fraudulently created. See Compl. ¶¶ 1, 6-9, 38, 46, 55, 62, 65-70. Plaintiff’s conclusory allegation that the promissory note and deed of trust are forgeries does not establish a plausible claim against PNMAC for fraud. “In order to recover damages in an action for fraud or deceit, a plaintiff must prove (1) that the defendant made a false representation to the plaintiff, (2) that its falsity was either known to the defendant or that the representation was made with reckless indifference as to its truth, (3) that the misrepresentation was made for the purpose of defrauding the plaintiff, (4) that the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) that the plaintiff suffered compensable injury resulting from the misrepresentation.” Ellerin v. Fairfax Savings, F.S.B., 652 A.2d 1117, 1123 (Md. 1995) (quotation omitted). Additionally, under Maryland law, a party claiming fraud must show that they “not only relied upon the misrepresentation, but had a right to rely upon it in the full belief of its truth, and that he would not have done the thing from which the injury resulted had no such misrepresentation been made.” Martens Chevrolet, Inc. v. Seney, 439 A.2d 534, 537 (Md. 1982). Plaintiff’s conclusory allegation that the promissory note and deed of trust are forgeries does not constitute a valid claim for fraud against PNMAC. Compl. ¶¶ 1, 38. As an initial matter, Plaintiff fails to allege any specific action by PNMAC related to Plaintiff’s naked allegations of forgery, much less alleging the time, place or manner in which PNMAC’s actions support a claim for fraud. See Compl. ¶¶ 1, 6-9, 38, 46, 55, 62, 65-70. Plaintiff has not alleged the circumstances of fraud with particularity as to the “who, what, when, where, and how.” In addition, Plaintiff fails to identify any specific representation by PNMAC made to her regarding Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 15 of 20 - 16 - the note and deed of trust that were false. In short, Plaintiff cannot articulate any of the required elements for fraud, including detrimental reliance, as she is unable to identify any representation by PNMAC. Accordingly, to the extent Plaintiff relies on allegations of fraud against PNMAC, her Complaint fails as a matter of law and should be dismissed with prejudice. B. Plaintiff Fails To Plead A Claim Under The FDCPA Against PNMAC Plaintiff’s FDCPA claim fails as she does not allege any specific conduct by PNMAC, does not allege that PNMAC is a debt collector and to the extent the actions complained of occurred prior to December 16, 2015, they are time barred. 1. PNMAC Is Not A “Debt Collector” Under the FDCPA. To state a claim under the FDCPA sufficient to survive a motion to dismiss, a plaintiff “must allege facts that make it plausible to believe that the defendant is in fact a debt collector as defined by the FDCPA.” Givens v. Citimortgage, Inc., CIV. PJM 10-1249, 2011 WL 806463, at *2 (D. Md. Feb. 28, 2011) (citing 15 U.S.C. § 1692a(6); Sparrow v. SLM Corp., No. RWT 08– 00012, 2009 WL 77462, at *2 (D. Md. Jan. 7, 2009)). FDCPA specifically defines the term “debt collector” as: any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due to or asserted to be owed or due another. 15 U.S.C. § 1692a(6) (emphasis added). As “numerous courts have held . . . creditors collecting their own debts are not ‘debt collectors’ for the purposes of the FDCPA.” Ausar-El v. Barclay Bank Delaware, CIV. PJM 12-0082, 2012 WL 3137151 at *2 (D. Md. July 31, 2012) motion for relief from judgment denied, 2012 WL 5897668 (D. Md. Nov. 21, 2012) (citing Givens 2011 WL 806463, at *2 (“[T]he FDCPA expressly exempts creditors and mortgagees from its definition of Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 16 of 20 - 17 - a debt collector.”)); see also Glover v. Univ. Motor Co., C/A 3:08-2254-JFAJRM, 2010 WL 234903 *3 (D.S.C. Jan. 15, 2010) (“The FDCPA applies only to ‘debt collectors’ as that term is defined in the statute, and creditors, mortgagors, and mortgage servicing companies are not debt collectors under the FDCPA and are therefore exempt from liability under the FDCPA.”) (citing Scott v. Wells Fargo Home Mortgage. Inc., 326 F.Supp.2d 709, 717–718 (E.D.Va. 2003, aff'd, 67 Fed. Appx. 238 (4th Cir. 2003)). PNMAC is a “creditor” and mortgagee as defined by the FDCPA and the Court can and should ignore the Plaintiff’s merely conclusory allegations that PNMAC is a “debt collector.” Compl. ¶¶ 37-38. Rather than accept Plaintiff’s mere conclusion of law, the Court should consider the factual allegations. See Standard of Review, supra. Plaintiff has failed to allege any facts that show that PNMAC is anything other than a creditor and mortgagee. Accordingly, because Plaintiff has not alleged facts stating that PNMAC is a debt collector, Plaintiff’s FDCPA claim must be dismissed. 2. Plaintiff Does Not Allege Any Action Taken By PNMAC That Is Prohibited By The FDCPA To state an FDCPA claim, Plaintiff must allege: (1) he is a consumer who has been harmed by violations of the FDCPA; (2) PNMAC is a debt collector;5 (3) the challenged practice involves an attempt to collect as defined by the Act; and (4) PNMAC violated, by act or omission, a provision of the FDCPA. 15 U.S.C. §§ 1692a-1692o; see also Boosahda v. Providence Dane LLC, 462 F. App’x 331, 333 (4th Cir. 2012) (quoting Ruggia v. Wash. Mut., 719 F. Supp. 2d 642, 647 (E.D. Va. 2010)). The Fourth Circuit employs the “least sophisticated consumer” standard to determine if a violation of § 1692e has occurred. Lembach v. Bierman, 528 Fed. Appx. 297, 302 (4th Cir. 2013). “Under this standard, a false statement that would not 5 As noted supra, Plaintiff has failed to do so. Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 17 of 20 - 18 - mislead the ‘least sophisticated consumer’ is not actionable.” Id. (citing United States v. Nat'l Fin. Servs., Inc., 98 F.3d 131, 135-36 (4th Cir. 1996)). In order for a violation of § 1692e or § 1692f to occur, the misrepresentation must be material. Id. at 303. Further, Plaintiff fails to identify any specific action taken by PNMAC prohibited by the FDCPA. Instead, Plaintiff relies solely on the conclusory allegation that PNMAC is a debt collector and broad conclusory allegations and innuendo regarding the note and deed of trust being forged. See Compl. ¶¶ 1, 33-35, 38, 74-75. Plaintiff fails to plead a single misrepresentation by PNMAC, much less any that are material. Absent an allegation of wrongful activity in violation of the FDCPA, Plaintiff’s FDCPA claim must fail as a matter of law. Accordingly, Plaintiff’s FDCPA claim fails as a matter of law and should be dismissed. 3. Plaintiff’s FDCPA Claim Is Time-Barred To The Extent It Relies On Actions That Occurred Prior To December 16, 2015. Plaintiff’s FDCPA claim is time-barred to the extent it relies on actions that occurred prior to December 16, 2015. Claims under the FDCPA are subject to a one-year statute of limitations that begins to run on “the date on which the violation occurs.” 15 U.S.C. § 1692k(d). It is difficult to discern any facts upon which Plaintiff rests her FDCPA claim. Therefore, it is unclear when any of the actions complained of in Plaintiff’s FDCPA claim occurred, but since the Complaint was not filed until December 16, 2016, Plaintiff’s FDCPA claim is time-barred as to all actions by PNMAC that occurred prior to December 16, 2015. The foreclosure sale (March 3, 2015) and the ratification thereof by the state court (November 9, 2015) both took place before December 16, 2015. Therefore, to the extent Plaintiff bases her FDCPA claim on the foreclosure sale and the ratification of the foreclosure sale, and any other actions taking place in the foreclosure proceeding prior to December 16, 2015, her FDCPA claim is time-barred. Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 18 of 20 - 19 - CONCLUSION For the foregoing reasons, Plaintiff fails to state a claim upon which relief may be granted. PNMAC respectfully requests that this Court grant PNMAC’s motion to dismiss Plaintiff’s Complaint in its entirety with prejudice and grant any further relief the Court deems just and proper. Respectfully submitted, PENNYMAC LOAN SERVICES, LLC By Counsel /s/ Brent R. Gary Maryland Federal Bar No. 18998 REED SMITH LLP 7900 Tysons One Place Suite 500 McLean, Virginia 22102 Telephone: 703-641-4200 Facsimile: 703-641-4340 bgary@reedsmith.com Counsel for PennyMac Loan Services, LLC Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 19 of 20 - 20 - CERTIFICATE OF SERVICE I hereby certify that on this 28th day of April 2017, I caused a true and correct copy of the foregoing to be filed and served on all counsel of record via the court’s Electronic Case Filing system, and mailed to the Plaintiff at the following address: Ywuana Peden 219 Dateleaf Avenue Capitol Heights, MD 20743 /s/ Brent R. Gary Maryland Federal Bar No. 18998 REED SMITH LLP 7900 Tysons One Place Suite 500 McLean, Virginia 22102 Telephone: 703-641-4200 Facsimile: 703-641-4340 bgary@reedsmith.com Counsel for PennyMac Loan Services, LLC Case 8:16-cv-04012-PWG Document 11-2 Filed 04/28/17 Page 20 of 20 Case 8:16-cv-04012-PWG Document 11-3 Filed 04/28/17 Page 1 of 3 Case 8:16-cv-04012-PWG Document 11-3 Filed 04/28/17 Page 2 of 3 Case 8:16-cv-04012-PWG Document 11-3 Filed 04/28/17 Page 3 of 3 Case 8:16-cv-04012-PWG Document 11-4 Filed 04/28/17 Page 1 of 2 Case 8:16-cv-04012-PWG Document 11-4 Filed 04/28/17 Page 2 of 2 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 1 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 2 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 3 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 4 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 5 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 6 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 7 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 8 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 9 of 10 Case 8:16-cv-04012-PWG Document 11-5 Filed 04/28/17 Page 10 of 10 Case 8:16-cv-04012-PWG Document 11-6 Filed 04/28/17 Page 1 of 2 Case 8:16-cv-04012-PWG Document 11-6 Filed 04/28/17 Page 2 of 2 Case 8:16-cv-04012-PWG Document 11-7 Filed 04/28/17 Page 1 of 3 Case 8:16-cv-04012-PWG Document 11-7 Filed 04/28/17 Page 2 of 3 Case 8:16-cv-04012-PWG Document 11-7 Filed 04/28/17 Page 3 of 3 Case 8:16-cv-04012-PWG Document 11-8 Filed 04/28/17 Page 1 of 3 Case 8:16-cv-04012-PWG Document 11-8 Filed 04/28/17 Page 2 of 3 Case 8:16-cv-04012-PWG Document 11-8 Filed 04/28/17 Page 3 of 3 Case 8:16-cv-04012-PWG Document 11-9 Filed 04/28/17 Page 1 of 2 Case 8:16-cv-04012-PWG Document 11-9 Filed 04/28/17 Page 2 of 2