UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 11-1259

DENNIS MCLEOD; BETTY MCLEOD; ANDY S. NEWMAN, on behalf of 

themselves and others similarly situated,

Plaintiffs - Appellants,

v.

PB INVESTMENT CORPORATION, a Delaware Corporation; M&T BANK 

CORPORATION, a New York corporation and successor, by merger 

to PB Investment Corporation,

Defendants - Appellees.

No. 11-1266

DAVID HUTCHISON; KATHERINE HUTCHISON,

Plaintiffs - Appellants,

v.

SOVEREIGN BANK,

Defendant - Appellee.

No. 11-1270

CHARLES HEBB; CHARLENE HEBB,

Plaintiffs - Appellants,

v.
2

HOMEQ SERVICING CORPORATION, f/k/a TMS Mortgage,

Defendant – Appellee,

and

FIRSTPLUS HOME LOAN TRUST 1996-2; FIRSTPLUS HOME LOAN OWNER 

TRUST 1996-3; FIRSTPLUS HOME LOAN OWNER LOAN TRUST 1996-4; 

FIRSTPLUS HOME LOAN OWNER TRUST 1997-1; FIRSTPLUS HOME LOAN

OWNER TRUST 1997-2; FIRSTPLUS HOME LOAN OWNER TRUST 1997-3; 

FIRSTPLUS HOME LOAN OWNER TRUST 1997-4; FIRSTPLUS HOME LOAN

OWNER TRUST 1998-1; FIRSTPLUS HOME LOAN OWNER TRUST 1998-2; 

FIRSTPLUS HOME LOAN OWNER TRUST 1998-3; FIRSTPLUS HOME LOAN

OWNER TRUST 1998-4; FIRSTPLUS HOME LOAN OWNER TRUST 1998-5; 

GERMAN AMERICAN CAPITAL CORPORATION; UBS WARBURG REAL ESTATE 

SECURITIES, INCORPORATED; ACE SECURITIES CORPORATE HOME LOAN

TRUST 1999 A; SOVEREIGN BANK, a United States Savings Bank; 

REAL TIME RESOLUTIONS, INCORPORATED; U. S. BANK NATIONAL 

ASSOCIATION, ND, a National Bank; GRMT MORTGAGE LOAN TRUST 

2001-1, a Trust organized under the laws of New York; THE 

CORNERSTONE FINANCIAL GROUP, INCORPORATED, a Colorado 

corporation; EMPIRE FUNDING HOME LOAN OWNER TRUST 1997-1, a 

Delaware business trust; EMPIRE FUNDING HOME LOAN OWNER 

TRUST 1997-2, a Delaware business trust; EMPIRE FUNDING HOME 

LOAN OWNER TRUST 1997-3, a Delaware business trust; EMPIRE 

FUNDING HOME LOAN OWNER TRUST 1997-4, a Delaware business 

trust; EMPIRE FUNDING HOME LOAN OWNER TRUST 1998-1, a 

Delaware business trust; EMPIRE FUNDING HOME LOAN OWNER 

TRUST 1998-2, a Delaware business trust; EMPIRE FUNDING HOME 

LOAN OWNER TRUST 1998-3, a Delaware business trust; EMPIRE 

FUNDING HOME LOAN OWNER TRUST 1999-1, a Delaware business 

trust; PB INVESTMENT CORPORATION, a Delaware Corporation; PB 

REIT INCORPORATED, a Delaware Corporation; CITYSCAPE 

CORPORATION, a New York Corporation; MASTER FINANCIAL, 

INCORPORATED; GMAC RESIDENTIAL FUNDING CORPORATION; IMC 

MORTGAGE COMPANY, a Florida Corporation; LIFE SAVINGS BANK, 

a California Corporation; PREMIER FINANCIAL CORPORATION, 

n/k/a Maximus Financial Corporation,

Defendants.
3

No. 11-1276

EMANUEL PHILLIPS; GERALDINE PHILLIPS,

Plaintiffs - Appellants,

v.

RESIDENTIAL FUNDING COMPANY, LLC, f/k/a Residential Funding 

Corporation; THE BANK OF NEW YORK MELLON, f/k/a The Bank of 

New York Trust Company; JP MORGAN CHASE BANK, N.A., f/k/a JP 

Morgan Chase Bank, f/k/a The Chase Manhattan Bank, successor 

by merger to The Chase Manhattan Bank, N.A.,

Defendants - Appellees.

No. 11-1277

WILLIAM F. RODWELL; SHARON L. RODWELL,

Plaintiffs - Appellants,

v.

PSB LENDING CORPORATION; WELLS FARGO BANK MINNESOTA, N.A., 

as Indenture Trustees for HOME LOAN TRUST 2001-HLV2, SERIES 

2001 HLV2; UNITED STATES BANK NATIONAL ASSOCIATION, as 

trustee for the C-BASS MORTGAGE LOAN ASSET-BACKED 

CERTIFICATES, SERIES 2006-SL1; LITTON LOAN SERVICING, LP; 

WELLS FARGO BANK, N.A.,

Defendants - Appellees.

No. 11-1281

LYNN A. FULMORE,

Plaintiff - Appellant,
4

v.

SOVEREIGN BANK, a U.S. Savings Bank,

Defendant - Appellee.

No. 11-1284

EDWIN RUBLE,

Plaintiff - Appellant,

v.

BANC ONE FINANCIAL SERVICES, INCORPORATED,

Defendant – Appellee,

and

THE MORTGAGE CONSULTANTS INCORPORATED,

Defendant.

No. 11-1289

JUDITH J. MOFFITT,

Plaintiff - Appellant,

v.

JP MORGAN CHASE BANK, N.A.; RESIDENTIAL FUNDING COMPANY, 

LLC,

Defendants – Appellees,

and
5

MASTER FINANCIAL, INCORPORATED; GMAC RESIDENTIAL FUNDING 

CORPORATION; BALTIMORE AMERICAN MORTGAGE CORPORATION,

Defendants.

No. 11-1291

In re: DONNA RENEE TIPTON,

Debtor.

--------------------

JP MORGAN CHASE BANK, N.A.; RESIDENTIAL FUNDING COMPANY, 

LLC, f/k/a Residential Funding Corporation,

Plaintiffs - Appellees,

BALTIMORE AMERICAN MORTGAGE CORPORATION,

Defendant,

v.

DONNA RENEE TIPTON,

Defendant – Appellant,

ROGER SCHLOSSBERG,

Trustee.

No. 11-1292

In re: MCLAREN BREWSTER; VANTA OTHELLA BREWSTER,

Debtors.

--------------------

MCLAREN BREWSTER; VANTA OTHELLA BREWSTER,
6

Plaintiffs - Appellants,

GEORGE W. LIEBMANN,

Trustee - Appellant,

v.

FAIRBANKS CAPITAL CORPORATION; PB INVESTMENT CORPORATION,

Defendants – Appellees,

and

SELECT PORTFOLIO SERVICING, INCORPORATED, f/k/a Fairbanks 

Capital Corporation,

Defendant.

No. 11-1295

THOMAS A. GEPHARDT; MICHELLE L. GEPHARDT,

Plaintiffs - Appellants,

v.

SOVEREIGN BANK,

Defendant – Appellee,

and

THE MORTGAGE CONSULTANTS INCORPORATED,

Defendant.
7

No. 11-1297

LINDA OREM,

Plaintiff - Appellant,

v.

BANK OF AMERICA CORPORATION, as successor in interest to 

MBNA America Bank (Delaware), N.A.; MORTGAGE ELECTRONIC 

REGISTRATION SYSTEM, INCORPORATED; HOUSEHOLD FINANCE 

CORPORATION,

Defendants – Appellees,

and

PACIFIC SHORE FUNDING INCORPORATED,

Defendant.

No. 11-1299

JAMES E. MITCHELL, SR.; BRENDA L. MITCHELL; KATHY T. CARY,

Plaintiffs - Appellants,

MARIE O. FELDER, individually and on behalf of all others 

similarly situated,

Plaintiff,

v.

PSB LENDING CORPORATION; PSB LENDING HOME LOAN OWNER TRUST 

1997-4,

Defendants – Appellees,

and
8

CALIFORNIA LENDING GROUP, INCORPORATED, d/b/a United Lending 

Group; WACHOVIA BANK NATIONAL ASSOCIATION, as successor by 

merger to FIRST UNION NATIONAL BANK; BAYVIEW LOAN SERVICING, 

LLC,

Defendants.

No. 11-1304

DEREK MOHRE; CHRISTINE MOHRE; LINDA FLOYD; SHERI C. PARKER, 

individually and on behalf of others similarly situated,

Plaintiffs - Appellants,

v.

HOUSEHOLD FINANCE CORPORATION; BANK OF AMERICA CORPORATION, 

as successor in interest to MBNA AMERICA BANK (DELAWARE), 

N.A.; MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INCORPORATED,

Defendants – Appellees,

and

HOMEQ SERVICING CORPORATION; BANC ONE FINANCIAL SERVICES, 

INCORPORATED; AMAXIMIS LENDING, LP; PACIFIC SHORE FUNDING; 

BALTIMORE AMERICAN MORTGAGE CORPORATION,

Defendants.

No. 11-1308

In re: SHELDON JOHNSON,

Debtor.

--------------------
9

RESIDENTIAL FUNDING COMPANY, LLC; DEUTSCHE BANK TRUST 

COMPANY AMERICAS,

Plaintiffs - Appellees,

v.

SHELDON JOHNSON,

Defendant – Appellant,

and

BALTIMORE AMERICAN MORTGAGE CORPORATION,

Defendant.

No. 11-1316

DENNIS C. TROJANOWSKI; PEGGY L. TROJANOWSKI,

Plaintiffs - Appellants,

v.

FIFTH THIRD BANK, INCORPORATED,

Defendant – Appellee,

and

SOVEREIGN BANK; UNITED MORTGAGEE, INCORPORATED; FIRSTPLUS 

HOME LOAN TRUST 1996-2; FIRSTPLUS HOME LOAN OWNER TRUST 

1996-3; FIRSTPLUS HOME LOAN OWNER LOAN TRUST 1996-4; 

FIRSTPLUS HOME LOAN OWNER TRUST 1997-1; FIRSTPLUS HOME LOAN

OWNER TRUST 1997-2; FIRSTPLUS HOME LOAN OWNER TRUST 1997-3; 

FIRSTPLUS HOME LOAN OWNER TRUST 1997-4; FIRSTPLUS HOME LOAN

OWNER TRUST 1998-1; FIRSTPLUS HOME LOAN OWNER TRUST 1998-2; 

FIRSTPLUS HOME LOAN OWNER TRUST 1998-3; FIRSTPLUS HOME LOAN

OWNER TRUST 1998-4; FIRSTPLUS HOME LOAN OWNER TRUST 1998-5; 

UBS WARBURG REAL ESTATE SECURITIES, INCORPORATED; ACE 

SECURITIES CORPORATE HOME LOAN TRUST; REAL TIME RESOLUTIONS, 

INCORPORATED; U. S. BANK NATIONAL ASSOCIATION, ND, a 

National Bank; AMAXIMIS LENDING, LP, a Texas Limited 
10

Partnership; GRMT MORTGAGE LOAN TRUST 2001-1, a Trust 

organized under the laws of New York; GERMAN AMERICAN 

CAPITAL CORPORATION,

Defendants.

Appeals from the United States District Court for the District 

of Maryland, at Baltimore. J. Frederick Motz, Senior District 

Judge. (1:09-cv-03218-JFM; 1:10-cv-00082-JFM; 1:09-cv-02334-

JFM; 1:10-cv-00252-JFM; 1:09-cv-02202-JFM; 1:09-cv-02028-JFM; 

1:09-cv-02056-JFM; 1:09-cv-02029-JFM; 8:11-cv-00055-JFM; 1:10-

cv-01434-JFM; 1:10-cv-01537-JFM; 1:10-cv-01177-JFM; 1:09-cv02287-JFM; 1:09-cv-02246-JFM; 1:10-cv-02769-JFM; 1:09-cv-02588-

JFM)

Argued: January 25, 2012 Decided: August 1, 2012

Before WILKINSON, NIEMEYER, and SHEDD, Circuit Judges.

Affirmed by unpublished opinion. Judge Shedd wrote the opinion,

in which Judge Wilkinson and Judge Niemeyer joined.

ARGUED: Edwin David Hoskins, LAW OFFICE OF E. DAVID HOSKINS, 

LLC, Baltimore, Maryland, for Appellants. Gerard J. Gaeng, 

ROSENBERG, MARTIN & GREENBERG, LLP, Baltimore, Maryland; James 

Christopher Martin, REED SMITH, LLP, Pittsburgh, Pennsylvania, 

for Appellees. ON BRIEF: Daniel O. Myers, THE LAW OFFICES OF 

DANIEL O. MYERS, LLC, Mt. Pleasant, South Carolina, for 

Appellants. John M. McIntyre, Colin E. Wrabley, David J. Bird, 

REED SMITH, LLP, Pittsburgh, Pennsylvania, for Appellees 

Sovereign Bank, Residential Funding Company, LLC, Deutsche Bank 

Trust Co. Americas, Bank of New York Mellon, and JP Morgan Chase 

Bank, N.A.; James D. Mathias, Anthony P. Ashton, DLA PIPER LLP 

(US), Baltimore, Maryland, for Appellees PB Investment 

Corporation and M&T Bank Corporation; Gregory L. Lockwood, 

TREANOR, POPE & HUGHES, Towson, Maryland, for Appellee Homeq 

Servicing Corporation; Daniel J. Tobin, BALLARD SPAHR, LLP, 

Bethesda, Maryland, for Appellees Wells Fargo Bank Minnesota, 

N.A., United States Bank National Association, Litton Loan

Servicing, LP, and Wells Fargo Bank, N.A.; Brian L. Moffet, 

GORDON, FEINBLATT, ROTHMAN, HOFFBERGER & HOLLANDER, LLC, 
11

Baltimore, Maryland, for Appellees PSB Lending Corporation and 

PSB Lending Home Loan Owner Trust 1997-4; Daniel H. Squire, 

Reginald B. McKnight, WILMER CUTLER PICKERING HALE AND DORR, 

LLP, Washington, D.C., for Appellees Mortgage Electronic 

Registration System, Incorporated, and Household Finance 

Corporation; Jefferson V. Wright, E. Hutchinson Robbins, Jr., 

Scott R. Wilson, MILES & STOCKBRIDGE, PC, Baltimore, Maryland, 

for Appellee Bank of America Corporation; LeAnn Pedersen Pope, 

Victoria R. Collado, Andrew LeMar, BURKE, WARREN, MACKAY & 

SERRITELLA, PC, Chicago, Illinois, for JP Morgan Chase Bank, 

N.A. and Banc One Financial Services, Incorporated; Edward J. 

Longosz, II, Daniel A. Glass, ECKERT SEAMANS CHERIN & MELLOTT, 

LLC, Washington, D.C., Dorothy A. Davis, ECKERT SEAMANS CHERIN & 

MELLOTT, LLC, Pittsburgh, Pennsylvania, for Appellee Fairbanks 

Capital Corporation.

Unpublished opinions are not binding precedent in this circuit.
12

SHEDD, Circuit Judge:

In these consolidated appeals,1 a group of homeowners who 

obtained second mortgages on their homes challenge the district 

court’s dismissal of their claims seeking damages from various 

financial institutions for alleged violations of Maryland law in 

connection with those loans. For the following reasons, we 

affirm.

I

A

The cases that form these consolidated appeals arise from a 

host of complaints filed against several different defendants, 

but the underlying facts and allegations are relatively 

straightforward and nearly identical. Between September 1996 and 

August 2000, the individual plaintiffs and class representatives 

 1 During the pendency of these appeals, defendant 

Residential Funding Company, LLC, f/k/a Residential Funding 

Corporation filed a voluntary petition for bankruptcy under 11 

U.S.C. § 101, et seq., in the United States Bankruptcy Court for 

the Southern District of New York. Pursuant to 11 U.S.C. 

§ 362(a)(1), the filing of such a petition operates as an 

automatic stay of any judicial proceeding against Residential 

Funding Company, LLC, including appellate proceedings. See In re 

Convention Masters, Inc., 46 B.R. 339, 342 (Bankr. D. Md. 1985). 

Accordingly, the following appeals are automatically stayed as 

to defendant Residential Funding Company, LLC: Emanuel Phillips 

v. Residential Funding Co. (No. 11-1276); Judith Moffitt v. JP 

Morgan Chase Bank, N.A. (No. 11-1289); Donna Tipton v. JP Morgan 

Chase Bank, N.A. (No. 11-1291); and Residential Funding Co. v. 

Sheldon Johnson (No. 11-1308). However, these appeals are not 

stayed as to the non-bankrupt co-defendants. See A.H. Robins Co. 

v. Piccinin, 788 F.2d 994, 999 (4th Cir. 1986). 
13

(collectively, the “plaintiffs”) all obtained second mortgages 

secured by real property in Maryland. In connection with each of 

these mortgages, the lenders that originated the loans 

(collectively, the “originating lenders”) received a promissory 

note and were named the beneficiary of a secondary mortgage deed 

of trust to secure the loan. The originating lenders charged 

closing costs and fees in connection with each plaintiff’s loan. 

Subsequently, each originating lender assigned each plaintiff’s 

loan to another financial institution (collectively, the 

“assignees”), often immediately after the loan was closed. After 

obtaining ownership of the loan, each assignee serviced the loan

by continuing to collect interest and other charges in 

connection with the loan until it was assigned again or repaid 

by each plaintiff. Because the originating lenders held the 

loans for only a short time before assigning them, they rarely 

collected any interest on the loans.

B

Although the facts are straightforward, the procedural 

history of these appeals is more complicated. Between 2001 and 

2003, more than forty individual and class action lawsuits were 

filed in the Circuit Court for Baltimore City, Maryland, 

asserting claims in connection with these secondary mortgage 

loans. In particular, the plaintiffs in these actions alleged 

that each originating lender violated Maryland’s Secondary 
14

Mortgage Loan Law (“SMLL”) at the time the loans were made by 

charging fees and closing costs in excess of the maximum amounts 

permitted by the SMLL. In addition, the lawsuits alleged that 

the originating lenders had failed to provide the plaintiffs 

with the mandatory disclosure forms required by the SMLL. In 

these lawsuits, the plaintiffs sought damages from the 

originating lenders, the assignees, and certain third-party 

servicers of the loans (collectively, the “defendants”). 

Eventually, a number of these cases were voluntarily 

dismissed as part of four class action settlements, and the 

Maryland Circuit Court then dismissed the remaining complaints,

finding that the claims for violation of the SMLL were barred by 

a three-year statute of limitations. The Court of Appeals of 

Maryland subsequently reversed the Maryland Circuit Court, 

holding that claims brought under the SMLL are an “other

specialty” subject to a twelve-year statute of limitations. See

Master Fin., Inc. v. Crowder, 972 A.2d 864 (Md. 2009). 

After the Crowder decision, the plaintiffs amended their 

complaints in several of the cases and also filed additional new 

state court actions against the defendants. On remand to the 

Maryland Circuit Court, the defendants removed all of the cases 

to the federal district court, where they were consolidated. The 

defendants then moved to dismiss the complaints under Rule 

12(b)(6), arguing that there was no legal basis to assert 
15

derivative liability against the assignees and loan servicers

for the originating lenders’ alleged SMLL violations. After an 

initial hearing, the district court granted the plaintiffs leave 

to amend their complaints to further specify the grounds for 

assignee liability. The defendants again moved to dismiss and, 

after a second hearing, the district court granted the 

defendants’ motions and entered judgment in their favor.

The plaintiffs timely appealed the dismissal of their 

complaints, the denial of their motions for leave to amend, and 

the denial of their motions to remand. We address each issue in 

turn. 

II

In each of the cases forming these consolidated appeals, 

the plaintiffs’ principal complaint has been that the 

originating lenders violated the SMLL by failing to provide 

required disclosure forms and charging excessive fees for the 

secondary mortgages obtained by the plaintiffs. However, many of 

the originating lenders have dissolved and are now judgment 

proof, and with one exception all of the loans that are the 

subject of this appeal have been paid in full.2 Thus, even though 

the plaintiffs do not allege that the assignees were involved in 

 2 The only appeal involving a loan that has not been paid 

off is Rodwell v. PSB Lending Corp., et al. (No. 11-1277). The 

last scheduled payment under this loan is December 19, 2012.
16

the origination of their loans or committed any of the 

complained-of SMLL violations, they contend the assignees are

derivatively liable for statutory penalties and treble damages

based solely on the originating lenders’ alleged violations.3

To this end, the plaintiffs have alleged a variety of 

evolving legal theories throughout the underlying litigation to 

support their claims against the assignees. Our review is 

limited to only two of those theories:4 whether the assignees are 

liable for the originating lenders’ alleged SMLL violations 

either (1) by operation of Section 3-306 of the Maryland Uniform 

Commercial Code (“UCC”), or (2) by operation of 15 U.S.C. 

 3 The claims in this appeal are primarily against the 

assignees; none of the claims is against any originating lender, 

and only one appealed issue relates to defendants that merely 

serviced a loan.

4 As the district court noted, “[a]t an earlier stage of 

this litigation it appeared that plaintiffs were arguing that 

the SMLL creates assignee liability. They no longer do so.” 

Fulmore v. Premier Financial Corp., No. 09-2028, 2010 WL 

4286362, at *2 (D. Md. Oct. 29, 2010). The plaintiffs 

acknowledge as much in their briefs, see Opening Br. of 

Appellants, at 25 (“[T]he SMLL, by itself, does not provide for 

such derivative liability.”), and counsel acknowledged the same 

during oral argument. In addition, the plaintiffs have abandoned 

their claims that Maryland common law or Section 3-305 of the 

Maryland UCC provide a basis for any derivative liability claims 

against the assignees. See Edwards v. City of Goldsboro, 178 

F.3d 231, 241 n.6 (4th Cir. 1999) (claims not raised in 

appellant's opening brief are deemed abandoned).
17

§ 1641(d)(1), a provision of the federal Home Ownership and 

Equity Protection Act of 1994 (“HOEPA”).5

The district court dismissed both of these theories for

failure to state a claim under Fed. R. Civ. P. 12(b)(6). The 

district court found that Section 3-3066 of the Maryland UCC 

applies to controversies between persons who have competing 

claims to an instrument or its proceeds, not to claims asserted 

by a borrower against an assignee. Therefore, the district court 

concluded that Section 3-306 does not authorize the plaintiffs 

to assert a claim for affirmative relief against the assignees, 

 5 The Home Ownership and Equity Protection Act of 1994, Pub. 

L. No. 103-325, §§ 151-58, 108 Stat. 2160, 2190-98 (codified as 

amended in scattered sections of 15 U.S.C.), amended portions of 

the Truth in Lending Act, 15 U.S.C. § 1601 et seq. (“TILA”). By 

its terms, HOEPA seeks only to regulate a special class of loans 

known as “high-cost mortgages.” 15 U.S.C. § 1602(aa); 12 C.F.R. 

§ 226.32(a)(1)(i)-(ii). If a loan qualifies as a high-cost 

mortgage, HOEPA requires the lender to comply with special

disclosure requirements and prohibits the mortgages from 

containing certain potentially abusive terms. 15 U.S.C. § 1639.

Lenders who fail to comply with these HOEPA requirements may be 

liable for penalties or damages, and the borrower has the right 

to rescind the loan within a specified time period. Id. §§ 1635, 

1640.

6 Section 3-306 provides:

A person taking an instrument, other than a person 

having rights of a holder in due course, is subject to 

a claim of a property or possessory right in the 

instrument or its proceeds, including a claim to 

rescind a negotiation and to recover the instrument or 

its proceeds. A person having rights of a holder in 

due course takes free of the claim to the instrument. 

Md. Code Ann., Com. Law, § 3-306.
18

including a claim based on the originating lenders’ alleged 

violations of the SMLL. In addition, the district court 

concluded that § 1641(d)(1), which renders the assignees of 

certain mortgages “subject to all claims and defenses . . . that 

the consumer could assert against the creditor of the mortgage,”7

does not create an affirmative right of action against an 

assignee for SMLL claims the plaintiffs could have asserted

against the originating lenders. Rather, the district court 

concluded that § 1641(d)(1) merely eliminates the holder in due 

course defense for an assignee that is seeking to collect on a 

high-cost mortgage.

III

We review a district court's order granting a motion to 

dismiss de novo, focusing only on the legal sufficiency of the 

complaint, Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.

 7 HOEPA’s assignee liability provision provides in relevant 

part: 

Any person who purchases or is otherwise assigned a 

[HOEPA] mortgage . . . shall be subject to all claims 

and defenses with respect to that mortgage that the 

consumer could assert against the creditor of the 

mortgage, unless the purchaser or assignee 

demonstrates, by a preponderance of the evidence, that 

a reasonable person exercising ordinary due diligence, 

could not determine, based on the documentation 

required by [HOEPA], the itemization of the amount 

financed, and other disclosure of disbursements that 

the mortgage was a [high-cost mortgage].

15 U.S.C. § 1641(d)(1).
19

2008), and we will dismiss a complaint “if it does not allege 

‘enough facts to state a claim to relief that is plausible on 

its face,’” id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 

544, 570 (2007)). The complaint must allege facts sufficient “to 

raise a right to relief above the speculative level.” Twombly, 

550 U.S. at 555. We may affirm the district court’s dismissal of 

the complaint on any basis fairly supported by the record, 

Eisenberg v. Wachovia Bank, N.A., 301 F.3d 220, 222 (4th Cir. 

2002), including “on different grounds than those employed by 

the district court,” Shafer v. Preston Memorial Hosp. Corp., 107 

F.3d 274, 275 n.1 (4th Cir. 1997).

Applying this familiar standard, we affirm the district 

court’s decision to dismiss the plaintiffs’ complaints under 

Rule 12(b)(6), albeit on different grounds. On appeal, the 

plaintiffs argue that the district court erred in concluding 

that they failed to state a claim under Section 3-306 or 15 

U.S.C. § 1641(d)(1). We need not reach this issue, however, 

because assuming arguendo that Section 3-306 or § 1641(d)(1) 

does provide the plaintiffs with a cause of action in these 

cases, the plaintiffs’ claims here are time-barred by the 

applicable statute of limitations.8 See King v. Otasco, Inc., 861 

 8 Although the district court did not dismiss the 

plaintiffs’ complaints on statue of limitations grounds, it did 

indicate in a footnote that a “substantial limitations question” 

(Continued)
20

F.2d 438, 441 (5th Cir. 1988) (“When a suit alleges several 

distinct causes of action, even if they arise from a single 

event, the applicable limitations period must be determined by 

analyzing each cause of action separately.”). 

The Maryland UCC provides that an action “to enforce an 

obligation, duty, or right arising under [Article 3] . . . must 

be commenced within 3 years after the cause of action accrues.”

Md. Code Ann., Com. Law § 3-118(g)(iii). TILA and HOEPA provide 

a one-year statute of limitations for affirmative actions for 

damages. 15 U.S.C. § 1640(e) (“Any action under this section may 

be brought in any United States district court, or in any other 

court of competent jurisdiction, within one year from the date 

of the occurrence of the violation . . . .”); Gilbert v. 

Residential Funding LLC, 678 F.3d 271, 278 (4th Cir. 2012)

(noting same). 

According to the complaints in these cases, the alleged 

violations - failure to provide mandatory loan disclosures and 

charging excessive fees – occurred at the latest at the time of 

the loan closing. However, it is undisputed that in all of these

consolidated appeals the plaintiffs brought suit against the 

defendants more than three years after the closing of the loans.

 

would be presented if HOEPA did authorize the affirmative right 

of action sought by the plaintiffs. J.A. 853 n.5. 
21

See In re Community Bank of Northern Virginia, 622 F.3d 275, 303 

(3d Cir. 2010) (“[A] claim for damages under TILA and 

HOEPA . . . is subject to a one-year limitations period that 

begins to run from the date the loan closed.”). Thus, regardless 

of whether the plaintiffs have a cause of action by operation of 

Section 3-306 or § 1641(d)(1), their claims are untimely under 

either express statute of limitations. 

Nevertheless, the plaintiffs contend that because their 

claims against the assignees are ultimately for violations of 

the SMLL, their claims should be governed by the twelve-year 

statute of limitations applicable to SMLL claims. See Master 

Financial v. Crowder, 972 A.2d 864 (Md. 2009). We disagree. The 

plaintiffs acknowledge that the SMLL, by itself, does not create 

derivative liability on the part of the assignees for the 

alleged misconduct of the originating lenders. See supra, at 

n.4. Thus, under the plaintiffs’ own theories, the assignees are 

derivatively liable – if at all – for the originating lenders’ 

violations of the SMLL only by operation of Section 3-306 or 

§ 1641(d)(1). Therefore, to the extent the plaintiffs can 

maintain a cause of action against the assignees, that cause of 

action has its source in Article 3 of the Maryland UCC or HOEPA, 

and the controlling limitations period is governed by those 

respective statutory schemes. See Crowder, 972 A.2d at 873

(“Because we are dealing with statutes, one preliminary and 
22

possibly decisive factor is whether the Legislature has provided 

a specific period of limitations for enforcement of the statute.

Some statutes that prohibit or require conduct and provide 

remedies for violations contain such provisions, and if they do, 

those provisions ordinarily will govern.”); Lyons P’ship, L.P. 

v. Morris Costumes, Inc., 243 F.3d 789, 798 (4th Cir. 2001)

(“[W]hen Congress creates a cause of action and provides both 

legal and equitable remedies, its statute of limitations for 

that cause of action should govern, regardless of the remedy 

sought.”). It would be extraordinary for us to find an implied

derivative right of action under Section 3-306 or § 1641(d)(1) 

and then to permit that right of action to proceed under a 

statute of limitations that is longer than the limitations 

period Congress or the Maryland legislature has clearly provided

for express rights of action under these statutes, and we will 

not do so.

Accordingly, we affirm the district court’s dismissal of 

the plaintiffs’ claims under Section 3-306 and 15 U.S.C. 

§ 1641(d)(1).

IV

In addition to their primary legal argument, the plaintiffs 

also raise several secondary issues with respect to the 

consolidated appeals, which we address briefly. First, the 

plaintiffs argue that the district court abused its discretion 
23

by denying their motions to file amended complaints to assert 

additional claims against certain loan servicers.9 The district 

court denied the plaintiffs’ motion to amend as futile. We have 

reviewed the record and conclude that because this was an 

adequate basis for denying the motion to amend, the district 

court did not abuse its discretion. See Glaser v. Enzo Biochem, 

Inc., 464 F.3d 474, 476 (4th Cir. 2006) (noting that a denial of 

a motion to amend is reviewed for abuse of discretion); Laber v. 

Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (en banc) (noting 

district court may deny a motion to amend when the amendment 

would be futile). Accordingly, we affirm for the reasons stated 

by the district court. William Rodwell, et al. v. PSB Lending 

Corp., Inc. et al., No. 1:09-cv-02202-JFM (D.Md. Feb. 8, 2011); 

James E. Mitchell, Sr. et al. v. PSB Lending Corp. et al., No. 

1:09-02287-JFM (D.Md. Feb. 8, 2011). 

Second, the plaintiffs challenge the district court’s 

dismissal of various state law claims regarding the assignees’ 

alleged failure to provide to the plaintiffs copies of the loan 

documents relating to the secondary mortgage loans. However, 

after the parties submitted their initial briefing on this issue 

and on the day before oral argument was heard in this appeal,

 9 This issue pertains only to Rodwell v. PSB Lending, Corp. 

(No. 11-1277), and Mitchell v. PSB Lending (No. 11-1299).
24

the Maryland Court of Appeals held that once a mortgage loan is 

paid in full, the assignee is under no common law or statutory 

obligation to provide copies of the loan documents to the 

borrowers. Polek v. J.P. Morgan Chase Bank, N.A., 36 A.3d 399 

(Md. 2012). In light of Polek, the parties now agree that the 

plaintiffs’ state law claims in this appeal are foreclosed. 

Accordingly, we affirm the district court’s dismissal of these 

claims. 

Finally, the plaintiffs appeal the district court’s denial 

of their motion to remand several of the consolidated appeals. 

However, the plaintiffs have since voluntarily dismissed those 

appeals; therefore, we need not address the district court’s 

remand rulings.10

V

For the reasons stated above, we affirm the judgment of the 

district court.

AFFIRMED

 10 Appellant Donna Renee Tipton, along with appellees JP 

Morgan Chase Bank, N.A. and Residential Funding Company, LLC 

f/k/a Residential Funding Corp. (the only parties to appeal No. 

11-1291), have filed a joint motion to sever and dismiss with 

prejudice appeal No. 11-1291, with each side to bear its own 

costs. Similarly, Appellants Thomas A. Gephardt and Michelle L. 

Gephardt, along with appellee Sovereign Bank (the only parties 

to appeal No. 11-1295), have filed a joint motion to sever and 

dismiss with prejudice appeal No. 11-1295, with each side to 

bear its own costs. We hereby grant these motions.