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David Kissi v. Emc Mortgage Corporation

August 17, 2012

DAVID KISSI, PLAINTIFF,
v.
EMC MORTGAGE CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Reggie B. Walton United States District Judge

MEMORANDUM OPINION AND ORDER

This Court found that the doctrines of res judicata (claim preclusion) and collateral estoppel (issue preclusion) applied to this case and dismissed all of the plaintiff's claims. See Kissi v. EMC Mortgage Corp., 627 F. Supp. 2d 27, 33-34 (D.D.C. 2009). The plaintiff appealed the decision to the District of Columbia Circuit. While the appeal was pending, the Maryland Court of Special Appeals vacated in part the judgment of the Circuit Court for Prince George's County, Maryland ("P.G. Circuit Court" or "Circuit Court"), on which this Court's dismissal was based. The District of Columbia Circuit remanded the case with instruction that this Court, "in light of the Maryland Court of Special Appeals' decision in Kissi v. EMC Mortgage Corp. of Texas (Md. Ct. Spec. App. No. 499, Aug. 13, 2009), . . . consider anew whether the claims in [the plaintiff's] complaint are precluded . . ., and if so, to what extent." Kissi v. EMC Mortgage Corp., 402 F. App'x 532 (D.C. Cir. 2010) (per curiam).

Pursuant to the Court's September 27, 2011 Order, the parties have had an opportunity to address whether the plaintiff's claims remain precluded by res judicata and collateral estoppel, and the Court now considers those questions.

I. BACKGROUND

A. Foreclosure Case No. CAE-05-15718

Edith Truvillon ("Truvillon") obtained a mortgage in the amount of $210,000 from Wells Fargo Bank, N.A., for real property located at 4303 Ammendale Road, Beltsville, Maryland ("Ammendale Road property"), and on August 16, 2004, she executed an Adjustable Rate Note. See Memorandum in Support of EMC Mortgage Corporation and David Panzer's Joint Motion to Dismiss [Dkt. #3], Ex. 1 (Declaration of David S. Panzer), Ex. A ("Record Extract") at E 113-116 (Deed of Trust Note).*fn1 On that same date, Truvillon and the plaintiff ("Kissi") executed a Deed of Trust, see Record Extract at E 25-43 (Deed of Trust dated August 16, 2004), securing the Note. The Deed of Trustallowed for the substitution of trustees, Record Extract at E 41 ¶ 24, and required, in the event of foreclosure, that Kissi and Truvillon compensate the trustees for litigation expenses, id. at E 37 ¶ 14. Wells Fargo apparently assigned the Deed of Trust and Note to EMC Mortgage Corporation ("EMC"), and defendant Joseph V. Buonassissi ("Buonassissi") was appointed one of five substitute trustees, id. at E 56 (Deed of Appointment of Substitute Trustees dated July 20, 2005).*fn2

Truvillion defaulted on her payments, and on July 26, 2005, she entered into a Foreclosure Forbearance Agreement with EMC, id. at E 261-66 (EMC's Opposition to Counter-Plaintiffs' Motion for New Trial, Ex. 4 (Foreclosure Forbearance Agreement)), pursuant to which, she was required to pay the lender's attorney's fees and costs in the event of foreclosure. See id. at E 264-65. Again Truvillon defaulted, and as of July 20, 2005, she owed a total of $226,320.00 on the Note. See id. at E 89 (Statement Under Oath as to Mortgage Debt and Military Affidavit) ¶¶ 5-6. The substitute trustees, represented by the law firm Buonassissi, Henning & Lash, P.C., initiated foreclosure proceedings ("foreclosure case") in the P.G. Circuit Court. See id. at E 23-90 (Order to Docket dated July 27, 2005, with attachments). Defendant David Panzer ("Panzer") represented EMC both in foreclosure case in the P.G. Circuit Court and on appeal ("foreclosure appeal") of the P.G. Circuit Court's decision to the Maryland Court of Special Appeals.

On March 24, 2006, the day of the foreclosure sale, Kissi and Truvillon filed in the P.G. Circuit Court a document titled "Objections to the Foreclosure Sale on 3/24/06 of 4303 Ammendale Rd., Beltsville, MD 20705 Combined With A Tort Complaint Seeking $100 Million for Fraud and Misrepresentation Against Joseph V. Buonassissi, II Personally and Against EMC Mortgage of Texas Re: Mortgage Loan # 0003236643." Id. at E 91-92. Buonassissi and EMC allegedly "owed [Kissi and Truvillon] a duty . . . to have provided [them] with each monthly mortgage and principal and interest payment going back to the first payment . . . made in 1999," id. at E 91,and proceeded to foreclosure without providing them adequate notice of the foreclosure sale, id. at E 92. Accusing Buonassissi and EMC of "negligent misrepresentation and fraud . . . for attempting to steal [their] property . . . through an illegal foreclosure sale," id. at E 91, Kissi and Truvillon "in a counterclaim" demanded "a $100 million judgment" against both defendants "not only for . . . bad faith, . . . but also for their misrepresentation and fraud and for the unjustified emotional distress that they have intentionally brought upon [Kissi and Truvillon] in pursuit of unjust enrichment." Id. at E 92. Lastly, Kissi and Truvillon expressly sought a ruling to "make the foreclosure sale defective and the sale . . . cancelled." Id. The foreclosure sale took place as scheduled, and the P.G. Circuit Court deemed Kissi's and Truvillon's objections moot. Id. at E 94 (Memorandum of Court dated March 28, 2006). However, insofar as the March 24, 2006 filing "appear[ed] to contain therein allegations of fraud and 'negligent misrepresentation,' and . . . request[ed] a jury trial," id., the P.G. Circuit Court treated it as an unserved countercomplaint to which Buonassissi and EMC were directed to respond.*fn3 See generally id. at E 94-95.

On or about April 17, 2006, Kissi and Truvillon filed a "Post Sale Objection To The Foreclosure Sale of 4303 Ammendale Rd., Beltsville, MD 20705 On The Grounds Of Fraud Pursuant To 37 CJA § 59. See p. 4,"*fn4 id. at E 96, and "[o]n April 26, 2006, [] Kissi filed a document captioned 'Affidavit Disputing the Mortgage Notes In Controversy at 4303 Ammendale Rd., Beltsville, MD.'"*fn5 EMC Defendants' Brief Regarding Res Judicata and Collateral Estoppel Issues ("EMC Brief") [Dkt. #89], Declaration of Davis S. Panzer, Ex. A (Opinion, Kissi v. EMC Mortgage Corp. of Texas, No. 499 (Md. Ct. Spec. App. Aug. 13, 2009)) (hereinafter "Opinion") at 4. The P.G. Circuit Court treated the latter document as exceptions to the foreclosure sale, Opinion at 4, and set a hearing on the exceptions on July 10, 2006, Record Extract at E 3 (Docket Entry dated May 8, 2006). On or about May 28, 2006, Kissi and Truvillon filed another document titled "Second Affidavit on Objection to the Foreclosure Sale of 4303 Ammendale Rd., Beltsville, MD 20705 And A Motion To Sanction Plaintiffs For $100 Million For Bad Faith." Record Extract at E 183-84 ("Motion for Sanctions"). The substitute trustees and EMC jointly filed "Plaintiff[s'] Response to Objection to the Foreclosure Sale, Response to the Notice of Opposition of Ratification of Sale and Motion to Dismiss Complaint" on or about May 19, 2006. See id. at E 4 (Docket Entry dated 05-23-2006); see also id. at E 142-187 (with attachments). Kissi and Truvillon claimed not to have received adequate advance notice of the foreclosure sale, notwithstanding the trustees' showing that they sent a total of 20 letters by regular mail or certified mail (acceptance of which Kissi and Truvillon refused), see id. at E 142-43, and that Truvillon responded with a letter showing that she had knowledge of the date of the foreclosure sale, see id. at E 143. Additionally, the substitute trustees and EMC argued that Kissi's and Truvillon's filings either misstated or failed to comply with Maryland rules by erroneously asserting that the substitute trustees were required to produce a mortgage payment history. Id. at E 144. Further, they argued that Truvillon's and Kissi's filing neither stated with particularity the bases for their exceptions to the foreclosure sale, id., nor adequately alleged claims of fraud, unjust enrichment, or negligent misrepresentation with respect to the foreclosure sale. See id. at E 144-46.

The P.G. Circuit Court held a hearing on July 14, 2006, id. at E 268-73 (excerpt of Transcript ("Tr.")), and after having "read and considered the exceptions[,] denied and overruled" them, id. at E 273 (Tr. at 15:8-9). In addition, the Circuit Court ratified the foreclosure sale and referred the matter to an auditor in accordance with Maryland rules. See id. at E 6 (Docket Entry dated July 14, 2006). The P.G. Circuit Court expressly allowed for the award of attorney's fees to Buonassissi and EMC, the amount to be determined by the auditor.*fn6

Opinion at 5.

On July 20, 2006, Kissi and Truvillon, by counsel, filed "Defendants' Motion for New Trial And/Or Motion to Alter or Amend Judgment or, Alternatively, Motion to Revise Judgment," see Record Extract at E 230-34, arguing, among other things, that they were entitled to an evidentiary hearing on their objections to the foreclosure sale, id. at E 230, and were denied an opportunity at the July 10, 2006 hearing to argue the bases of their objections to the foreclosure sale, id. at E 231. EMC and Buonassissi filed an opposition to the motion on August 7, 2006, id. at E 235-85 (EMC's Opposition to Counter-Plaintiffs' Motion for New Trial), and the P.G. Circuit Court denied the motion on August 21, 2006, id. at E 286-87 (Order), finding that it lacked "substantial justification," id. at E 286.

Both Buonassissi and EMC moved for attorney's fees as an expense of the foreclosure sale. Id. at E 288-340 (Affidavit of David S. Panzer, Esq. in Support of EMC's Attorney['s] Fees, with attachments, dated August 18, 2007), E 341-47 (Attorney's Fees Affidavit, with attachments, dated August 2, 2006), E 348-57 (Motion for Attorneys' Fees and Statement of Grounds and Authorities), and E 413 (Revised Supplemental Affidavit of David S. Panzer, Esq. in Support of EMC's Motion for Attorneys['] Fees, with attachments). Kissi and Truvillon, by counsel, opposed the motions. Id. at E 359-69 (Defendants' Opposition to Motion for Attorney's fees dated October 30, 2006).*fn7

According to the auditor's report, the foreclosure sale yielded $310,000. Id. at E 471 (Auditor's Account "A"). After deducting from the proceeds the expenses of the foreclosure sale, including the outstanding principal balance ($209,280.39) and awards of attorney's fees to the substitute trustees ...


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