Minter v. Wells Fargo Bank, N.A.

888 F. Supp. 2d 714, 2012 WL 3764040
Procedural entryThis page is a short order in Minter v. Wells Fargo Bank, N.A.. Read the opinion of the Court — 274 F.R.D. 525
District Court, D. Maryland·Decided August 29, 2012·No. Civil Action Nos. WMN-07-3442, WMN-08-1642·Published

Opinion

MEMORANDUM & ORDER

WILLIAM M. NICKERSON, Senior District Judge.

Before the Court in these related certified class actions are motions filed by the named-plaintiffs in a putative class action pending in a Maryland state court, Larocca et al. v. The Creig Northrop Team et al., No. 13-C-11-89075 (Cir.Ct.How.Co.). ECF No. 391 in Civil Action No. WMN-07-3442 (Minter) and ECF No. 282 in Civil Action No. WMN-08-1642 (Petry). While these motions are styled as “motions to intervene,” the true import of the motions is a request to extend deadlines in these federal class actions to give class members more time to opt out of these federal actions and become a part of the state class action. The motions are fully briefed. For the reasons discussed below, the motions will be denied.

Minter and Petry have both been pending in this Court for more than four years. The gravamen of these cases, in the most general terms, is that Prosperity Mortgage Company (Prosperity) was created as a sham entity to facilitate kick-backs and inflate settlement costs and that Defendants hid from borrowers the actual role of Prosperity. Opt-out classes including about 150,000 members were certified in both of these actions more than a year ago. In addition, two subclasses have been certified in Minter. Class notice in both actions was mailed on July 20, 2012, which specified an opt-out deadline of September 4, 2012. The briefing of summary judgment motions will commence this week and the trial in Petry is currently scheduled for March 18, 2013, through April 4, 2013, and the trial of the Minter action for May 6, 2013, through May 30, 2013.

The Larocca action was filed in the Circuit Court for Howard County on December 8, 2011. While some of the defendants in Larocca are the same as the defendants in Minter/Petry and involve some of the same mortgage transactions, the allegations in Larocca are entirely different. The allegations in Larocca involve only a single Prosperity Mortgage office and a single Long & Foster Realty office. The Larocca plaintiffs alleged that these offices perpetrated a fraudulent scheme designed to induce homeowners to purchase new homes before selling their current homes by use of fraudulently obtained home equity bridge loans taken on those current homes. Thus, while the alleged loss to each individual plaintiff is significantly greater in the Larocca action than in the Minter/Petry actions, the number of potential class members in much smaller. The Larocca plaintiffs indicate that they have located 23 individuals that were defrauded under this scheme and opine that there may be an additional 50 to 60 class members. The Larocca action is still in the midst of pre-certification discovery.

The Larocca Plaintiffs argue that they can intervene in these actions as a matter of right under Rule 24(a)(2) of the Federal [716]*716Rules of Civil Procedure. Under that Rule, a court must permit anyone who, on timely motion, “claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” As their interest in the subject matter of the Minter/Petry litigation, Lancea Plaintiffs proffer the possibility that the three Defendants who are defendants in Minter/Petry and Lancea — Prosperity, Wells Fargo Bank, and Long & Foster Real Estate, Inc. — may raise res judicata as a defense in the Lancea action if the Minter/Petry action reaches final judgment or settlement before the Lancea action.

As to the named-plaintiffs in Lancea and the 23 individuals who have been identified by Lancea Plaintiffs’ counsel as potential Lancea class members, the answer to any fear that the defense of res judicata will be raised against them in Lancea is straightforward: those individuals can simply opt-out of the Minter/Petry class actions. The purported interveners’ concern, therefore, relates only to the Minter/Petry class members who, while now aware through class notice of their potential claims that are the subject of the Minter/Petry actions, may be unaware of the very different claims that might be theirs as asserted in Lancea. While there are good arguments to the contrary, the Court will assume for the purpose of this opinion that the representatives of an uncertified putative class action can assert the interests of unidentified members of the putative class.

Notwithstanding that assumption, the Court finds that, because there is no risk that the resolution of the claims raised in Minter/Petry will bar by res judicata the very different claims raised in Lancea, there is no interest to protect and thus no need for intervention. “The doctrine of res judicata bars the relitigation of a claim if there is a final judgment in a previous litigation where the parties, the subject matter and causes of action are identical or substantially identical as to issues actually litigated and as to those which could have or should have been raised in the previous litigation.” Anne Arundel County Bd. of Educ. v. Norville, 390 Md. 93, 887 A.2d 1029 (2005). Under Maryland law, the elements of res judicata, or claim preclusion, are: (1) that the parties in the present litigation are the same or in privity with the parties to the earlier dispute; (2) that the claim presented in the current action is identical to the one determined in the prior adjudication; and, (3) that there has been a final judgment on the merits. Id. at 1037. The elements of res judicata under federal law are analogous: (1) identical parties, or parties in privity, in the two actions; (2) the claim in the second matter is based upon the same cause of action involved in the earlier proceeding; and, (3) a prior and final judgment on the merits, rendered by a court of competent jurisdiction in accordance with due process requirements. Id. at 1037-38.

Here, the causes of action or claims are not the same in both actions. As recently narrowed by Plaintiffs, the sole claim now to be asserted in Minter is a RESPA claim, and in Petry, a claim under the Finder’s Fee Act and for conspiracy. See ECF No. 396 in Minter. The factual issues are primarily limited to whether Prosperity is a sham entity and whether it functioned as a mortgage broker. As acknowledged by the interveners, the Lancea action raises different claims having an entirely different factual focus: “the facts supporting the claims set forth in the Lancea Action are independent of the Minter/Petry Actions, as the causes of action arise from separate and distinct [717]*717facts.” Mot. to Intervene at 8-9. As the Minter/Petry Plaintiffs note, the claims in Larocca could not be asserted in Minter/Petry because they would not meet Rule 23’s commonality and typicality requirements.

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Minter v. Wells Fargo Bank, N.A., 888 F. Supp. 2d 714, 2012 WL 3764040 (D. Md. 2012).

888 F. Supp. 2d 714 (Minter v. Wells Fargo Bank, N.A.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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