IN THE CIRCUIT COURT OF MARYLAND

FOR MONTGOMERY COUNTYDOE

)

)

Plaintiff/Counter-Defendant,

)

)

v.

)Case No.: XXXXX-X

)

DEFENDANT ONE,

)and

)TITLE COMPANY,

)and

)DEFENDANT TWO

)and

)MORTGAGE COMPANY

)

)

Defendants/Counter-Plaintiffs.)

DEFENDANT TITLE COMPANYS MOTION TO DISMISS

Defendant Title Company, by and through undersigned counsel, moves this Honorable Court pursuant to Maryland Rule 2-322 to dismiss the claim made in Count I of Plaintiffs Complaint against the Defendant Title Company, because, as more fully explained below, Plaintiff has failed to state a claim upon which relief can be granted.

Respectfully submitted

________________________________

Counsel for Defendant, Title CompanyIN THE CIRCUIT COURT OF MARYLAND

FOR MONTGOMERY COUNTYDOE

)

)

Plaintiff/Counter-Defendant,

)

)

v.

)Case No.: XXXXX-X

)

DEFENDANT ONE,

)and

)TITLE COMPANY,

)and

)DEFENDANT TWO

)and

)MORTGAGE COMPANY

)

)

Defendants/Counter-Plaintiffs.)

DEFENDANT TITLE COMPANYS MEMORANDUM IN SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO MD RULE 2-322

I. PROCEDURAL HISTORYOn December 7, 2006, Plaintiff filed a Complaint in the Bankruptcy Court, and filed an Amended Complaint on or about December 20, 2006 in the same Bankruptcy Court that was later dismissed for lack of subject matter jurisdiction. The allegations made in Plaintiffs Complaint, in this Case, are fairly similar to the allegations made in both the original Complaint and the Amended Complaint that was filed in the adversary proceedings in the Bankruptcy Court.

Plaintiff alleged that Defendant Title Company is in violation of the provisions of the Protection of Homeowners In Foreclosure Act statutes in Count I of the Complaint and should therefore be liable for treble damages, and costs.

Defendant Title Company avers that PHIFA is inapplicable to Maryland title insurers while conducting settlement services, or while issuing title insurance. Title Company therefore requests this Court to dismiss Count I of Plaintiffs Complaint against Defendants Title Company.

II. FACTS

Plaintiff Gwen Plaintiff (Plaintiff) was the legal title holder of real property located at 14319 Bald Hill Court, Burtonsville, Maryland. At some point, Plaintiff failed to make payments to her mortgagee and faced the prospect of foreclosure. She then filed a Chapter 13 voluntary petition for bankruptcy pursuant to 11 U.S.C. 1301-1330.

Subsequently, Plaintiff allegedly entered into an agreement with Defendant One, doing business as Financial Company, in which Defendant FINANCIAL COMPANY allegedly arranged for Plaintiff to sell her real property to Defendant Two. The alleged arrangement provided that Plaintiff would pay rent to Two which would cover Twos monthly mortgage obligations, and eventually, Two would convey the property back to Plaintiff.

Defendant Title Company was retained by Defendant Two and/or her mortgage holder, Option One Mortgage, to conduct a title search of the property and to provide customary title and closing services, including the preparation of the HUD-1 Statement and disbursement of funds to the parties as directed by Option One. Title Company conducted the settlement of the sales transaction on July 13, 2005. At no time during the process of preparing the transaction for settlement or even on the date of settlement did Plaintiff inform Title Company that she was in bankruptcy or that she had entered into a rent-back agreement with the buyer, Defendant Two. The settlement was held without objection by any party at the offices of Financial Company. A check in the amount of $86,865.65 payable to Plaintiff was prepared by Title Company on the settlement date. Pursuant to the express oral and written instructions of Plaintiff, however, Title Company caused the check to be delivered to Financial Company. The check was cashed on July 15, 2005. As shown in the HUD-1, the fees for title services in the amount of $550 payable to Title Company were shared equally by the buyer and seller, in accordance with local custom and the parties agreement.III. STANDARD OF REVIEWIt is well established that a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 2-322(b)(2) should be granted if it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim which would entitle her to relief. See Rossaki v. NUS Corp., 116 Md. App. 11, 695 A.2d 203 (1997) (The grant of a motion to dismiss is proper if the complaint does not disclose, on its face, a legally sufficient cause of action); See also Century Natl Bank v. Makkar, 132 Md. App. 84, 751 A.2d 1 (2000) (Motion to dismiss was properly granted where the allegations all failed to state a claim for which relief could be granted); Lubore v. RPM Assocs., 109 Md. App. 312, 674 A.2d 547 (1996) (When moving to dismiss, a defendant is asserting that, even if the allegations of the complaint are true, the plaintiff is not entitled to relief as a matter of law). In determining whether to dismiss the complaint, this Court must view the pleadings in a light most favorable to the plaintiff, with the alleged facts accepted as true. See Bennett Heating & Air Conditioning, Inc. v. NationsBank, 342 Md. 169, 674 A.2d 534 (1996) (Appellate court considered the facts to be those that were well pleaded by plaintiffs, including those facts that could be fairly inferred from the matters expressly alleged); See also Rossaki, 695 A.2d at 203 (In considering a motion to dismiss for failure to state a claim under section (b)(2) of this Rule, a court must assume the truth of all well pleaded facts and all inferences that can reasonably be drawn from them); Lubore, 674 A.2d at 547 ([Court] shall assume the truth of all well-pleaded relevant facts as alleged in [Plaintiffs] complaint and all reasonable inferences drawn therefrom [sic]). A complaint may be dismissed as a matter of law for one of two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal claim. See Rossaki, 695 A.2d at 203. The standard of review for a motion to dismiss for failure to state a claim upon which relief may be granted is de novo, as a question of law. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530 (C.A.9 (Cal.), 1984); See also Alonzo v. ACF Property Mgt., Inc., 643 F.2d 578, 579 (9th Cir. 1981). IV. ARGUMENTGenerally, PHIFA provides that a homeowner has the right to rescind certain contracts and transactions within a certain time, as well as protecting homeowners in foreclosure from being taken advantage of by prohibiting certain documents from being recorded within a certain period. Penalties for violations of PHIFA by an individual include a fine of $10,000 and up to three years imprisonment. See Md. Code 7-321(a) (2005). The Act, however, does not apply to all Maryland companies involved in real estate transactions. Section 7-302(a)(5), Md. Code (2005), of the PHIFA code reads:

7-302. Applicability of subtitle. (a) To whom it does not apply. Except as provided in subsection (b) of this section, this subtitle does not apply to: (5) [a] title insurer authorized to conduct business in the State, while performing title insurance and settlement services.PHIFA expressly excludes title companies from liability under this Act unless they are acting as mortgage consultants. Title Company is a Maryland corporation licensed to conduct business in the State of Maryland. The company provides all aspects of title and settlement services, including escrow services, title search and examination, survey, preparation of all required legal documents and other required services. Throughout the course of the settlement process, Title Company was acting in its capacity as a title company. Plaintiff alleges no facts in her Complaint that would construe Title Company to be acting in any way other than as a title company. Clearly, PHIFA does not apply to Title Company. Therefore, Count I of the Complaint as to Title Company must be dismissed because Title Company, in its role as a title company, is not covered by the PHIFA statute.Title Company had no knowledge of any foreclosure agreement between Plaintiff and Two, and Title Company filed the deed in accordance with their responsibilities to the buyer and the mortgagee. Plaintiff, in her complaint, does not allege that Title Company knew of her foreclosure agreement between herself and Two. Plaintiff only confirms that Title Company acted within its capacity as a title company or title insurer. Since Title Company had no knowledge of Plaintiff property being in foreclosure, there was no reason that they could fall under PHIFA. The ten day rescission period therefore is not applicable, and Title Company thus did not violate the PHIFA statute as alleged by Plaintiff. See Complaint, 37. Therefore, Plaintiff has failed to state a claim against Title Company for which relief may be granted under PHIFA. Accordingly, this Court must grant the motion to dismiss as to Count 1.V. CONCLUSION

As shown above, Plaintiff can prove no set of facts upon which relief can be granted as to Count I against Defendant Title Company. PHIFA does not apply to Title Company in its capacity as a title company or title insurer, and even if the statute did apply, Plaintiff alleges no facts to support her claims that Title Company violated the Act. Therefore, for the foregoing reasons, Title Company respectfully requests that this Honorable Court grant its Motion to Dismiss Count I of the Complaint.Respectfully submitted,

_________________________________

Counsel to Defendant Title CompanyCERTIFICATE OF SERVICE

I HEREBY CERTIFY that, on this __th day of December, 2007, a copy of the foregoing Motion for Summary Judgment By Defendant Title Company Title was mailed first-class, postage prepaid to: Counsel for Plaintiff

Counsel for Defendant TwoDefendant Mortgage Company

Counsel for Defendant One

_________________________________

Counsel to Defendant Title Company