UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 15-2332

JEFFREY V. HOWES; TONYA H. HOWES,

Plaintiffs - Appellants,

v.

WELLS FARGO BANK, N.A.; US BANK NATIONAL ASSOCIATION; 

CARRINGTON MORTGAGE SERVICES, LLC; CHRISTIANA TRUST, a 

Division of Wilmington Savings Fund Society, FSB,

Defendants - Appellees,

and

SELENE FINANCE, L.P.,

Defendant,

ELLEN W. COSBY,

Trustee.

Appeal from the United States District Court for the District of Maryland, at Baltimore. 

Ellen L. Hollander, District Judge. (1:14-cv-02814-ELH)

Argued: December 6, 2016 Decided: February 16, 2017 

Before NIEMEYER, DUNCAN, and WYNN, Circuit Judges.

Affirmed in part and remanded in part by unpublished per curiam opinion.
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ARGUED: Gregory Bryl, BRYL LAW OFFICES, Washington, D.C., for Appellants. 

Kyle James Moulding, MCCABE, WEISBERG, AND CONWAY, LLC, Laurel, 

Maryland, for Appellees. ON BRIEF: Douglas B. Riley, TREANOR POPE & 

HUGHES, P.A., Towson, Maryland, for Appellees Wells Fargo Bank, N.A. and U.S. 

Bank National Association.

Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:

In a Chapter 13 bankruptcy proceeding that Jeffrey Howes filed to forestall 

foreclosure on his residence in Howard County, Maryland, Jeffrey and his wife Tonya 

commenced this adversary action against four banks that played various roles in 

collecting the indebtedness. The Howes alleged fraud and violations of relevant statutes, 

and sought sanctions for the banks’ defective proofs of claim filed in the bankruptcy 

proceeding. 

The record shows that in 2001, the Howes borrowed $696,130 from The Columbia 

Bank, executing a note in favor of the bank and a deed of trust on their residence to 

secure the notes’ repayment. Thereafter, The Columbia Bank sold the note and deed of 

trust to another bank, which in turn resold them. The assignments were repeated, and at 

least once included an assignment into a mortgage-backed securitization trust. 

In April 2009, when the Howes defaulted on their loan, they began protracted 

efforts to renegotiate the note’s terms with Wells Fargo Bank, N.A., which was at the 

time servicing the note on behalf of US Bank National Association. When the efforts

failed, US Bank filed a foreclosure action, stating that it was “the owner and holder of the 

loan evidenced by the Note.”

In an effort to halt the foreclosure sale, Jeffrey Howes filed a Chapter 13 

bankruptcy proceeding in November 2012, in which US Bank then filed a proof of claim 

for $740,334.24, with $200,196.79 representing pre-bankruptcy arrears. Jeffrey opposed 

US Bank’s claim, arguing that US Bank lacked documentation supporting the arrearage. 

In response, Wells Fargo filed an amended claim listing it as the mortgage creditor and 
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attaching documents to support the arrearage. Jeffrey objected to the amended claim on 

the ground that Wells Fargo had no power to enforce the note. 

During the bankruptcy, the Howes’ note was again assigned, this time to 

Carrington Mortgage Services, LLC, as servicing agent for Christiana Trust, and the two 

accordingly filed notice of their interest in the amended proof of claim.

Jeffrey and Tonya Howes thereafter filed this adversary proceeding against Wells 

Fargo, US Bank, Carrington, and Christiana, alleging that all defendants had committed 

fraud and all had submitted defective proofs of claim. The Howes’ claims were based on 

the premise that none of the defendants were in possession of the note and that none 

therefore could show that it had the power to enforce it. The bankruptcy court dismissed 

the Howes’ fraud claim with prejudice and the remaining claims without prejudice. The 

court concluded that the plaintiffs could not possibly state a claim for fraud, finding 

meritless the Howes’ claim that none of the banks could enforce the note. As to the 

remaining claims, the court gave the Howes leave to file an amended complaint or to

object to the latest claim filed by Christiana and Carrington. At the same time, it required 

Christiana to file an affidavit showing that it in fact had the right to enforce the note, as it 

alleged. 

As directed, Christiana filed an affidavit, attaching documents showing that the 

original note had been lost but showing also that the chain of assignments of parties’ 

interests in the note and deed of trust ended with their assignment to Christiana. The 

plaintiffs, however, did not amend their complaint, as authorized by the bankruptcy court, 
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nor did they revise their objection to the amended proof of claim. Rather, they filed an 

appeal to the district court, challenging the bankruptcy court’s dismissal order.

The district court affirmed the bankruptcy court’s ruling in a 99-page 

memorandum opinion. The court stated further, however, that the bankruptcy court could 

grant the Howes leave to file an amended objection to the proof of claim and to raise 

recoupment defenses to the amounts stated in the claim, as the Howes had challenged the 

amount owed. The Howes declined to do so, and instead filed this appeal from the 

district court’s order.

During oral argument, the banks’ counsel reported a factual development that 

occurred after the district court had issued its opinion and order. Counsel stated that the 

Howes’ original note had in fact been discovered and was currently being held by US 

Bank as trustee for a third-party real estate investment trust. Because this fact is material 

to plaintiffs’ claims challenging enforcement of the note, we find it appropriate to have 

this new fact considered, as well as the Howes’ arguments challenging the amount owed.

Accordingly, for the reasons stated by the district court, we affirm the order 

dismissing the Howes’ fraud claim with prejudice. We also affirm the court’s order 

denying the Howes’ request for sanctions against the banks for allegedly filing defective 

proofs of claim. As the district court explained, the bankruptcy court did not abuse its 

discretion in denying sanctions based on the original claim filed by US Bank or the 

amended claim filed by Wells Fargo. Finally, in light of the discovery of the original 
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note, we remand the Howes’ remaining claims for further proceedings to consider that 

fact and to consider the Howes’ challenge to the amounts owed on the note.

AFFIRMED IN PART AND REMANDED IN PART