Justia Maryland Supreme Court Opinion Summaries

In this case questioning whether the addition of a definition of "lender" to the Maryland Usury Law during code revision effected a significant change in that law that lay latent for four decades before this case arose, the Court of Appeals held that code revision did not change Maryland law applicable to assignees of mortgage loans.Donna Kemp entered into a mortgage loan secured by a deed of trust on her home. The loan was later assigned to Fannie Mae, which contracted with the predecessor of Nationstar Mortgage, LLC to service the loan. Nationstar later declared Kemp to be in default. Kemp, Fannie Mae, and Nationstar entered into a loan modification agreement to resolve the default, but Kemp objected to the assessment of property inspection fees. Kemp filed a complaint, which the circuit court dismissed for failure to state a cause of action. The Court of Appeals held (1) the prohibition on property inspection fees applied to Nationstar as the agent of Fannie Mae; and (2) Kemp's complaint adequately stated a claim under the Maryland Consumer Debt Collection Act. View "Nationstar Mortgage v. Kemp" on Justia Law

The Court of Appeals held that a change in life insurance beneficiary constitutes a conveyance under the Maryland Uniform Fraudulent Conveyance Act (MUFCA), Md. Code Comm. Law 15-201(c), and that a guardian of property is not granted the authority to change a life insurance beneficiary on a policy of the ward under section 15-102(t) of the Estates and Trusts Article (ET).In a case arising from a decade-long dispute between the adult children of the Buckingham family and United Bank, the United States District Court for the District of Maryland certified two questions of law to the Court of Appeals regarding whether the children intentionally defrauded the Bank when they successfully diverted significant amounts of life insurance proceeds away from the declining family business and to their personal use. The Court of Appeals answered the questions as follows: (1) a change of the beneficiary designation of a life insurance policy constitutes a conveyance under MUFCA; and (2) the guardian of property does not have the authority to change the beneficiary on a life insurance policy of a ward under ET 15-102(t). View "United Bank v. Buckingham" on Justia Law

The trial court in a second lawsuit against Defendants seeking reformation of a refinance deed of trust properly determined that the elements of res judicata and collateral estoppel were satisfied and thus barred Plaintiffs from bringing the claims.Financial Institution, the former owner of a note for a refinance mortgage loan, sued Defendants, a married couple, for reformation of the refinance deed of trust because the wife had not signed the refinance deed of trust, leaving Financial Institution unable to institute foreclose proceedings against Defendants’ property. The trial court ruled in favor of Defendants. Three years later, the current owner of the note and the title insurer of the refinance mortgage loan (collectively, Plaintiffs) sued Defendants for reformation of the refinance deed of trust. The trial court again in favor of Defendants, concluding that Plaintiffs were barred by res judicata and collateral estoppel from bringing and relitigating the claims in the second lawsuit. The Court of Appeals affirmed, holding that the trial court in the second lawsuit (1) properly declined to apply judicial estoppel to bar Defendants’ argument that Plaintiffs were in privity with Financial Institution; and (2) correctly determined that res judicata and collateral estoppel barred Plaintiffs from relitigating their claims in the second lawsuit. View "Bank of New York Mellon v. Georg" on Justia Law

Lender’s assignee (Assignee), while operating as an unlicensed debt collector, obtained a judgment against a credit card debtor (Debtor) in district court. Debtor’s contract with Lender included an arbitration provision. Debtor then filed a class action suit collaterally attacking the judgment based on violations of Maryland consumer protection laws. Assignee filed a motion to arbitrate the class action suit pursuant to an arbitration clause between Lender and Debtor. Assignee moved to compel arbitration. The circuit court granted the motion to compel, thus rejecting Debtor’s argument that Assignee waived its right to arbitrate when it brought its collection action against Debtor. The Court of Special Appeals affirmed. The Court of Appeals reversed, holding that because Assignee’s collection action was related to Debtor’s claims, Assignee waived its contractual right to arbitrate Debtor’s claims when it chose to litigate the collection action. View "Cain v. Midland Funding, LLC" on Justia Law

Following his arrest for illegal drug activity, Petitioner was released on bond and withdrew all of the money contained in two bank accounts. Law enforcement traced the money to Petitioner’s sister’s bank account and seized the bank account. Less than ninety days after the conclusion of Petitioner’s criminal proceedings, the Department of Finance of Montgomery County filed a complaint petition for currency forfeiture as to the sister’s bank account. Petitioner’s sister argued that her bank account was not “money” under Maryland's forfeiture statute and that the complaint for forfeiture was untimely filed. The circuit court rejected that argument and ultimately found that the funds in the bank account constituted illegal drug proceeds. The court, therefore, granted forfeiture of the entire amount. The Court of Special Appeals affirmed. The Court of Appeals affirmed, holding (1) the funds contained in a bank account are “money” for purposes of the forfeiture statute; and (2) the forfeiting authority timely filed the complaint for forfeiture of the bank account within the deadline applicable to the filing of a complaint for forfeiture of money. View "Bottini v. Dep’t of Finance, Montgomery County" on Justia Law

The Fangmans sought to represent a class of approximately 4,000 to 5,000 individuals who, from 2009 to 2014, retained Genuine Title for settlement and title services and utilized various lenders for the purchase and/or refinancing of their residences, allegedly as a result of referrals from the lenders. All of the lenders are servicers of federally related mortgage loans. The complaint alleges an illegal kickback scheme and that “sham companies” that were created by Genuine Title to conceal the kickbacks, which were not disclosed on the HUD-1 form. After dismissing most of the federal claims, the federal court certified to the Maryland Court of Appeals the question of law: Does Md. Code , Real Prop. [(1974, 2015 Repl. Vol.) 14-127 imply a private right of action?” The statute prohibits certain consideration in real estate transactions. That court responded “no” and held that RP 14-127 does not contain an express or implied private right of action, as neither its plain language, legislative history, nor legislative purpose demonstrates any intent on the General Assembly’s part to create a private right of action. View "Fangman v. Genuine Title, LLC" on Justia Law

While living in Maryland, Petitioner opened a personal line of credit and a credit card account with Respondent. Respondent later filed two complaints against Petitioner in a Maryland district court, one for the outstanding balance on the credit card account and the other for the amount owed on the line of credit. At the time of the filings, Petitioner was living and working in Texas. Respondent was awarded default judgments. Respondent subsequently secured two writs of garnishment in the same actions from the district court. The writs were served on the resident agent of Petitioner’s employer. Petitioner moved to quash the writs, arguing that his wages earned solely for work he performed in Texas were not subject to garnishment in Maryland. The district court denied the motions to quash. The Court of Appeals affirmed, holding that the district court in its continuing and ancillary jurisdiction properly ordered Petitioner’s wages earned in Texas to be subject to garnishment served upon Petitioner’s employer because of the employer’s continuous and systematic business in Maryland. View "Mensah v. MCT Fed. Credit Union" on Justia Law

At issue in this case was whether a lender who takes possession of property but does not become the fee simple record owner of the property through foreclosure or a deed in lieu of foreclosure is liable for homeowners’ association assessments. The resolution of the question was not addressed on appeal, however. Petitioner, a homeowners association, filed a complaint against Respondent, a bank, alleging that Respondent had failed to pay homeowners’ association dues since taking possession of property. The district court granted Respondent’s motion to dismiss. The circuit court affirmed. The Supreme Court dismissed Petitioner’s appeal for lack of jurisdiction because Petitioner’s appeal from the district court to a circuit court was untimely. View "Brownstones at Park Potomac Homeowners Ass’n v. JP Morgan Chase Bank, N.A." on Justia Law

Respondents, three married couples, obtained home equity lines of credit from Petitioners, a bank and its loan officer. Approximately four years later, Petitioners filed a putative class action alleging that these transactions were part of an elaborate “buy-first-sell-later” mortgage fraud arrangement carried out by Petitioners and other defendants. Petitioners alleged numerous causes of action, including fraud, conspiracy, and violations of Maryland consumer protection statutes. The circuit court granted summary judgment for Petitioners, concluding that the statute of limitations barred several of Respondents’ claims and that no Petitioner violated the Maryland Secondary Mortgage Loan Law as a matter of law. The Court of Special Appeals reversed. The Court of Appeals reversed, holding that the Court of Special Appeals (1) erred in concluding that Respondents stated a claim upon which relief could be granted under the Maryland Secondary Mortgage Loan Law; and (2) erred in concluding that it was a question of fact to be decided by the jury as to whether Respondents’ claims against Petitioners were barred by the relevant statute of limitations. View "Windesheim v. Larocca" on Justia Law

At issue in this case was whether a borrower may rescind a loan that has not been consummated pursuant to the federal Truth in Lending Act (TILA). Prior to closing on a home refinancing loan, Respondent submitted to the lender a notice of rescission of the loan. Thereafter, Respondent signed a note and deed of trust consistent with the negotiated terms of the loan. The loan proceeds were distributed as previously agreed to by the parties, and Respondent made payments on the note for approximately two years. Respondent subsequently defaulted on the loan, and the home was sold at a foreclosure public auction. Respondent filed exceptions to the foreclosure sale, arguing that he had rescinded the loan. The circuit court overruled the exceptions and ratified the sale. The court of special appeals reversed, holding that the rescission notice was timely because there was no language in 15 U.S.C. 1635 or TILA’s implementing regulation prohibiting a borrower from rescinding a loan prior to consummation of the transaction, and therefore, such an action was supported by statute. The Court of Appeals reversed, holding that, under TILA, a loan may not be rescinded before it is consummated. View "Burson v. Capps" on Justia Law