# Davis v. PNC Mortgage, a division of PNC Bank, N.A.

> United States Bankruptcy Court, D. Maryland · January 29, 2021

URL: https://www.frixlaw.com/law-library/cases/10458324

## Case

- **Court:** United States Bankruptcy Court, D. Maryland
- **Decided:** January 29, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10458324

## How later opinions describe it (automated extraction)

- finding that the appeals court cannot reverse the trial court’s decision on the grounds that it would have weighed the evidence differently if it were the trier of fact so long as the trial court’s interpretation is plausible
- finding that a loan modification was binding when the borrower signed and returned it despite a blank signature line on the agreement for the bank

## Opinion text

Signed: January 29th, 2021 ise
RY 4 a,
(2; Wpse □□
aoe □
OF MASS
DAVID E. □□□□
U.S. BANKRUPTCY JUDGE

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
(Baltimore Division)
In re: )
)
CHRISTOPHER DAVIS, ) Case No. 16-15555-DER
and TERESA DAVIS, ) (Chapter 13)
)
Debtors. )
__)
)
TERESA DAVIS, et al., )
)
Plaintiffs, )
)
VS. ) Adversary Pro. No. 17-00280
)
PNC BANK, N.A., )
)
Defendant. )
__)
MEMORANDUM OPINION
The United States Court of Appeals for the Fourth Circuit recently opined:
Perhaps not surprisingly, given the large stakes for financially stressed
homeowners, and in light of widespread media reports of bureaucratic bungling
(and worse) on the part of lenders, mortgage servicers, and their myriad agents,
[the Home Affordable Modification Program (“HAMP”’)] has given rise to a
large number of civil claims by mortgagors against financial industry firms.

Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 774 (4th Cir. 2013). This is such a case. The
HAMP modification agreement in dispute here was signed by the plaintiffs, Teresa Davis and
Christopher Davis (collectively, the “Davises”), and recorded in the land records, but was never
signed by the defendant, PNC Bank, N.A. (“PNC”).1 The Davises argue that PNC is nevertheless
bound by the agreement and that they are entitled to relief against PNC for its breach. PNC

counters that no binding agreement was ever created because PNC exercised an allegedly unilateral
right to terminate before the Davises satisfied all the conditions precedent—including bankruptcy
court approval.
A trial on the merits was conducted on July 29 and 30, 2019. At trial, three witnesses
testified, and the parties introduced ninety-nine exhibits into evidence.2 After closing argument in
October 2019 as well as post-trial briefing, the Court held this matter under advisement.
Subsequently, the Covid-19 pandemic intervened and delayed the Court’s resolution of this matter.
After consideration of all the evidence and due deliberation,3 the Court will rule in favor of the
Davises.

JURISDICTION
The court has subject matter jurisdiction over this proceeding under 28 U.S.C. § 1334,
28 U.S.C. § 157(a), and Rule 402 of the Local Rules of the United States District Court for the
District of Maryland. This is a “core proceeding” under 28 U.S.C. § 157(b).4 This memorandum

1 PNC most often acted under the name “PNC Mortgage”, which is an unincorporated division of PNC that has no
separate legal existence apart from PNC itself. Thus, an action taken by or in the name of PNC Mortgage was an
action taken by PNC.
2 The documents marked collectively for identification as Plaintiffs’ Exhibits 5 and 46 were not admitted into
evidence and were not considered by the Court in making the decision reflected in this Memorandum Opinion.
3 In addition to reviewing the various pleadings and legal memoranda filed by the parties, the Court has reviewed all
the exhibits admitted into evidence and listened to the recording of the testimony at trial and the closing arguments of
counsel.
4 The Court has considered and rejects PNC’s assertion that this adversary proceeding is not a statutory core
proceeding under 28 U.S.C. § 157(b). The question of the enforceability of the mortgage modification agreement at
issue here is one that must be resolved as part of the claims allowance process. Moreover, PNC asserted as much
opinion constitutes the court’s findings of fact and conclusions of law in accordance with
Rule 52 of the Federal Rules of Civil Procedure (made applicable here by Rule 7052 of the Federal
Rules of Bankruptcy Procedure).5
FINDINGS OF FACT
After consideration of all the evidence and of the demeanor and credibility of the witnesses,

the Court makes the following findings of fact based upon the preponderance of the evidence.
The Witnesses
Teresa Davis works for Northrop Grumman Corporation (“Northrop Grumman”) and has
held a high-level security clearance for more than thirty years as a result of her employment at the
National Security Agency and other government agencies. She was the spouse primarily dealing
with PNC, and as such has actual first-hand knowledge of the relevant events. Because of her
financial difficulties and bankruptcy cases, she has successfully undergone annual security reviews
(including polygraph tests) for the last six years to maintain her security clearance. The Court
finds her to be a credible witness.

Christopher Davis is a correctional officer for the Sheriff’s Department of Frederick
County, Maryland. He has been in law enforcement since 2009. He has actual first-hand
knowledge of the events at issue here and the Court finds him to be a credible witness.

itself when it filed a motion in this Court asserting that the agreement was part of the loan documents evidencing its
alleged secured claim. Thus, it is clear that the claims made against PNC are matters under § 157(b)(2)(B) concerning
the “allowance and disallowance of claims” or under § 157(b)(2)(C) concerning “counterclaims by the estate against
persons filing claims against the estate.” To the extent that it is found that the Court lacks authority to enter its order
herein as a final order, the court submits this memorandum opinion as proposed findings of fact and conclusions of
law in accordance with 28 U.S.C. § 157(c)(1). Wellness Int’l Network, Ltd. v. Sharif, 575 U.S. 665 (2015); Executive
Benefits Ins. Agency v. Arkison (In re Bellingham Ins. Agency, Inc.), 573 U.S. 25 (2014); Stern v. Marshall, 564 U.S.
462 (2011).
5 To the extent any finding of fact may constitute a conclusion of law, it is adopted as such. To the extent any
conclusion of law may constitute a finding of fact, it is likewise adopted as such.
Dorothy Thomas was the only witness called to testify by PNC.6 She has worked for PNC
and its predecessor in interest, National City Corporation, since 1992. She currently works in
PNC’s default litigation department as a “default litigation specialist senior.” Ms. Thomas was
not involved in any of the events or decisions made at issue here. Meaning, her testimony has no
basis in first-hand personal knowledge—it was based solely on her review of PNC’s records after

the fact and in preparation for trial in this litigation.7 The Court does not doubt that she is
knowledgeable about PNC’s mortgage servicing systems and testified truthfully about her
understanding of PNC’s records. Nevertheless, the Court gives little weight to her testimony
because (i) Ms. Thomas has no first-hand knowledge, and (ii) PNC offered no witness with actual
knowledge to corroborate her testimony or the contents of PNC’s records.
Background
The Davises purchased real property known as 304 Saddleback Trail, Mount Airy,
Maryland 21771 (the “Property”) on or about August 25, 2005 for $725,585.00,8 a few months
after getting married. They own the Property as tenants by the entirety. The Property is, and at

all relevant times was, the primary residence of the Davises and their family.

6 Ms. Thomas was also called as a witness by the Davises as part of their case in chief. During the discovery phase
of this case, Ms. Thomas was designated to testify on PNC’s behalf pursuant to Rule 30(b)(6) of the Federal Rules of
Civil Procedure (made applicable here by Rule 7030 of the Federal Rules of Bankruptcy Procedure).
7 Ms. Thomas offered extensive testimony about and interpretation of the cryptic terminology recorded in what PNC
refers to as Loss Mitigation Notes [Defendant’s Exhibit 22] and Servicing Notes [Defendant’s Exhibit 23]. Numerous
persons made these entries and none of them was called as witnesses. The business record information in the Loss
Mitigation Notes and the Servicing Notes may be evidence—but it is not conclusive evidence. The Court thus gives
such information little weight when it conflicts with testimony of Teresa Davis and Christopher Davis who have first-
hand knowledge, were subject to cross examination at trial, and the Court finds are credible witnesses. See Wolff v.
Rodgers Consulting, Inc., 2012 U.S. Dist. LEXIS 70559, at *8 (D. Md. May 18, 2012) (“It is within the complete
providence of the trier of fact to judge the credibility and accuracy of witness testimony and to weigh such testimony
accordingly.”). See also Anderson v. Bessemer City, 470 U.S. 564, 573-74 (1985) (finding that the appeals court
cannot reverse the trial court’s decision on the grounds that it would have weighed the evidence differently if it were
the trier of fact so long as the trial court’s interpretation is plausible).
8 Deed dated August 25, 2005 [Plaintiffs’ Exhibit 1].
PNC is, and at all relevant times was, the servicer for the first mortgage loan secured by a
deed of trust on the Property (the “Deed of Trust”).9 The holder of the promissory note (the
“Note”) secured by the Deed of Trust is 21st Mortgage Corporation, as Master Servicer for
Christiana Trust, a division of Wilmington Savings Fund Society, FSB as Trustee for Knoxville
2012 Trust (“21st Mortgage Corporation”).

Under the Note, the Davises borrowed $545,245.00 to be repaid on an interest only basis
for ten years. After that the loan would convert automatically on October 1, 2015 to a 20-year
fully amortizing loan due to be paid in full by September 1, 2035.10
The present dispute arose years later when PNC sent the Davises a mortgage billing
statement requiring a payment of $51,372.48 by April 1, 2016 (the “Mortgage Statement”).11 The
Mortgage Statement indicated that (i) the Davises owed PNC a current monthly payment of
$3,019.18, plus past due amounts of $48,353.30, and (ii) PNC was holding unapplied funds of
$6,378.27, apparently derived from various partial payments made by the Davises. Around the
same time, PNC sent the Davises a separate letter containing “delinquency notice information”

asserting the total due to PNC (after taking into account the unapplied funds) was only $41,975.03
(the “Delinquency Letter”).12 PNC calculated both of these alleged delinquencies based upon the
original loan terms rather than those of the mortgage modification agreement at the center of this
dispute. This adversary proceeding is in large part about whether PNC had the right to collect the
substantial delinquency it asserted in March of 2016. The Court concludes that it did not.

9 Purchase Money Deed of Trust, executed on August 25, 2005 [Plaintiffs’ Exhibit 2].
10 Adjustable Rate Note and Interest Only Payment Period Addendum to Adjustable Rate Note, both dated August 25,
2005 [Defendant’s Exhibit 1].
11 Mortgage Statement dated March 16, 2016 [Plaintiffs’ Exhibit 8].
12 Letter dated March 16, 2016 [Plaintiffs’ Exhibit 9]. The letter was unsigned, did not contain the name of its author,
and contained a signature block that simply read “Sincerely, PNC Mortgage.”
By reason of the alleged delinquency, PNC scheduled a foreclosure sale of the Property for
April 25, 2016.13 On April 22, 2016, however, the Davises filed a voluntary petition in this Court
seeking relief under Chapter 13 of Title 11 of the United States Code (the “Bankruptcy Code”).14
On January 25, 2017, Brian McNair as the attorney for PNC filed a motion for relief from
the automatic stay under § 362(d) of the Bankruptcy Code (the “Lift Stay Motion”) so PNC could

continue with foreclosure proceedings.15 It states: “A Loan Modification Agreement was
completed and executed by the parties herein. A copy of the loan modification is attached hereto
as Exhibit D.”16 Exhibit D was a copy of a Home Affordable Modification Agreement bearing the
notarized signatures of the Davises as recorded in the Land Records of Carroll County, Maryland
at Liber 8179, Folio 222 on December 16, 2015 (the “Modification Agreement”).17
In their Response to the Motion for Relief (the “Response”),18 the Davises recount the
events surrounding the Modification Agreement. After a few continuances pending resolution of
this adversary proceeding, PNC filed an amended motion for relief from the automatic stay on
January 9, 2018 (the “Amended Lift Stay Motion”)19 to address that it has “removed” the
Modification Agreement and that “the aforementioned loan modification agreement is invalid.”20

The Davises opposed the Amended Lift Stay Motion, asserting—among other things—that PNC

13 PNC Response to Request for Admission No. 9 [Plaintiffs’ Exhibit 48, at p. 5].
14 In re Christopher Davis and Teresa Davis, Case No. 16-15555-DER (the “Main Case”). The Davises paid the
filing fee for their petition of $310.00. Main Case Docket No. 3. They agreed to pay their attorney a fee of $4,625.00
for representation in the Main Case. Main Case Docket No. 72.
15 Main Case Docket No. 77 [Plaintiffs’ Exhibit 19]. In the Lift Stay Motion, PNC states that it is acting as the
servicer for 21st Mortgage Corporation.
16 Id. ¶ 7, at Page 2 of 5.
17 Main Case Docket No. 77-2, at Pages 33 to 42 of 44 [Plaintiffs’ Exhibit 19]. Apart from the redactions, this is the
same document as the copy of the Modification Agreement admitted into evidence as Defendant’s Exhibit 3. Both
copies of the Modification Agreement as recorded are incomplete in the sense that they do not include a copy of the
Land Instrument Intake Sheet recorded at Liber 8179, Folio 232. The entire Modification Agreement as recorded in
Carroll County (where the Property is located) was admitted into evidence as Plaintiffs’ Exhibit 7.
18 Main Case Docket No. 79.
19 Main Case Docket No. 111 [Defendant’s Exhibit 55].
20 Id. ¶ 6, at Page 2 of 5. The gist of PNC’s basis for this assertion is essentially the same as the defense mounted in
this adversary proceeding.
“has been on actual notice of the recorded modification for almost two (2) years and is only now
amending the Motion for Relief filed more than a year ago.”21 A hearing on the Lift Stay Motion
and the Amended Lift Stay Motion is now scheduled for February 10, 2021.
Five months before filing the Lift Stay Motion, Brian McNair as the attorney or authorized
agent for 21st Mortgage Corporation filed its proof of claim on August 26, 2016 asserting that it

held a claim in the amount of $596,473.91 secured by the Property.22 A few days later he filed an
objection to confirmation of the Davises’ proposed Chapter 13 plan asserting arrearages of
$65,893.10.23 In their response to this objection the Davises alleged that the state foreclosure
proceeding that necessitated this bankruptcy relied on the recorded Modification Agreement.24
The foreclosure proceeding was filed by Brian McNair’s law firm. No evidence was introduced
at trial as to whether PNC actually relied upon the Modification Agreement in the state court
foreclosure proceeding. If it was not relied upon there, it is difficult for the Court to understand
how an experienced attorney such as Brian McNair would mistakenly turn around and rely on it
in the Life Stay Motion only a few months later. PNC has offered no explanation apart from the

Amended Lift Stay Motion, which sets forth little more than a statement of position.
The Prior Bankruptcy Case
In any event, understanding the Modification Agreement requires understanding events
that took place in an earlier bankruptcy case. On November 4, 2014 the Davises filed their first
Chapter 13 case.25 Until January 4, 2016, Joseph Laumann represented the Davises in that case.26

21 Main Case Docket No. 113.
22 Main Case Claims Docket, Claim No. 9-1 [Defendant’s Exhibit 45]. The proof of claim identifies PNC as the
servicer for the loan and as the party who should receive notices and payments on behalf of the creditor, which is
identified as 21st Mortgage Corporation.
23 Objection to Confirmation of Plan, Main Case Docket No. 40.
24 Debtors’ Response to Trustee’s [sic] Objection to Confirmation of Chapter 13 Plan, Main Case Docket No. 53.
25 In re Christopher Patrick Davis and Teresa Lynn Davis, Case No 14-27008-DER (the “Prior Case”).
26 Notice of Withdrawal of Appearance and Substitution of Counsel, Prior Case Docket No. 101. Thereafter, the
Davises were represented by attorney Mary Albrecht Jordan. The Court of Appeals of Maryland indefinitely
Their Chapter 13 plan provided for the payment of arrears due to PNC in equal monthly payments
and was confirmed on June 17, 2015.27 Later that year on November 5, 2015, Laumann filed a
motion on behalf of the Davises seeking approval of the Modification Agreement with PNC, which
seemingly increased their monthly payment amount by more than $800.00 (the “HAMA Motion”)
due to the conversion of the payment from interest only to principal and interest.28 In reality, as

of October 2015 the Note under its original terms automatically converted the loan to principal
and interest, increasing the monthly payment to $3,628.36—meaning the Modification Agreement
in truth reduced the monthly payment by $620.96. A hearing on the HAMA Motion was scheduled
for January 13, 2016.29 Because of the apparent increase in the monthly payment, the Chapter 13
trustee objected to the HAMA Motion (the “Objection”).30 The HAMA Motion, the Hearing
Notice, and the Objection were each served electronically on Brian McNair as counsel for PNC.31

suspended Joseph Laumann from the practice of law on May 14, 2018. Attorney Grievance Commission of Maryland
v. Laumann, 459 Md. 164 (2018).
27 Order Confirming Plan, Prior Case Docket No. 67.
28 Motion for Authority to Incur Secured Debt for the Purpose of Modifying the Terms of an Existing Secured Loan
for Real Property and Notice of Opportunity to Object, Prior Case Docket No. 82 [Defendant’s Exhibit 36]. The
HAMA Motion indicates that (i) the Davises’ new monthly payment would be $3,007.40 (which included a monthly
escrow payment of $677.85), and (ii) their then current monthly payment was $2,184.00. Thus, the proposed
modification seemed to increase the monthly payment on the loan by $823.40—an impression that was inaccurate for
several reasons. The most important reason being that PNC filed a Notice of Mortgage Payment Change on July 21,
2015 in which PNC notified the Davises that effective October 1, 2015 their monthly payment increased to $3,628.36,
an amount that incorporated an interest rate change and the conversion of the loan from interest only to one fully
amortizing by September 1, 2035. Thus, the proposed loan modification did not increase the monthly payment but
rather decreased it by $620.96 ($3,628.36 minus $3,007.40). The HAMA Motion may not have been artfully drafted
and the Davises, their attorney, and the Chapter 13 Trustee may have been unclear about the benefits of the proposed
loan modification, but PNC and its attorney were at all times aware that the modification would reduce the amount of
the then monthly payment from $3,628.36 to $3,007.40.
29 Notice of Motion for Authority to Incur Secured Debt for the Purpose of Modifying the Terms of an Existing
Secured Loan for Real Property and Notice of Opportunity to Object, Prior Case Docket No. 84 (the “Hearing Notice”)
as amended by the Court’s Deficiency Notice issued on November 5, 2015, Prior Case Docket No. 85 [Defendant’s
Exhibit 38].
30 Objection to Debtors’ Motion to Approve Loan Modification, Prior Case Docket No. 89 [Defendant’s Exhibit 40].
The Chapter 13 Trustee also objected on the ground that “[d]ocumentation of the loan modification terms are not
attached to the motion.”
31 Brian McNair entered an appearance on behalf of PNC on November 21, 2014. Line Entering Appearance and
Request for Service of Notice, Prior Case Docket No. 22 (“You are hereby given notice that Brian McNair has been
engaged by the creditor identified below to serve as its authorized agent in this matter: PNC Bank, NA. and its
successors and/or assigns.”). As a result, he was thereafter automatically given electronic notice of all pleadings,
notices and docket entries in the Prior Case.
Subsequently, Joseph Laumann filed an amended HAMA Motion on November 19, 2015
(the “Amended HAMA Motion”).32 The hearing on approval of the proposed loan modification
remained set for January 13, 2016.33 Because of the apparent increase in the monthly payment,
the Chapter 13 trustee again objected (the “Second Objection”)34 and PNC was again served with
the Amended HAMA Motion, the Amended Hearing Notice, and the Second Objection through

Brian McNair as its counsel.
Approval of the Modification Agreement was derailed when PNC sent the Davises an
unexpected and surprising letter in December of 2015—a letter that PNC now characterizes as an
exercise of its supposed unilateral right to terminate the Modification Agreement at any time prior
to execution of the agreement by PNC (the “Termination Letter”).35 As explained below, the
Termination Letter contained a false explanation for PNC’s action, telling the Davises that: “After
being offered a Trial Period Plan or Home Affordable Modification you notified us on
December 22, 2015 that you did not wish to accept the offer.”36

32 Amended Motion for Authority to Incur Secured Debt for the Purpose of Modifying the Terms of an Existing
Secured Loan for Real Property and Notice of Opportunity to Object, Prior Case Docket No. 91 [Defendant’s
Exhibit 41]. The Amended HAMA Motion is accompanied by a copy of a Home Affordable Modification Agreement
signed by the Davises that provides for a monthly payment as of November 1, 2015 of $3,007.40. For reasons
unknown to the Court, the Amended HAMA Motion incorrectly identifies the new monthly payment as $3,101.17
(which was the monthly payment during the TPP (defined below) offered by PNC and accepted by the Davises). The
Amended HAMA Motion again failed to make clear that the monthly payment increased from the one that existed
when the case was commenced because the loan converted from interest only to fully amortizing effective October 1,
2015. Regardless of the inaccuracies in the Amended HAMA Motion, PNC and its attorney were aware that the
proposed modification would reduce the monthly payment made by the Davises from $3,628.36 to $3,007.40.
33 Amended Notice of Motion for Authority to Incur Secured Debt for the Purpose of Modifying the Terms of an
Existing Secured Loan for Real Property and Notice of Opportunity to Object, Prior Case Docket No. 92 (the
“Amended Hearing Notice”).
34 Objection to Debtors’ Amended Motion to Approve Loan Modification, Prior Case Docket No. 95 [Defendant’s
Exhibit 42] (“The Trustee questions how the loan modification is in the Debtors’ best interest. Pursuant to paragraph 3
of the Debtors’ Motion, the Debtors will now be paying over $800 a month more in mortgage payments than before
the modification.”).
35 Letter dated December 22, 2015 [Defendant’s Exhibit 20]. The letter was unsigned, did not contain the name of
its author, and contained a signature block simply read “Sincerely, PNC Mortgage.”
36 Id.
After postponing the January 13, 2016 hearing on approval of the Modification Agreement
through their new counsel, Mary Albrecht Jordan, the Davises ultimately sought dismissal of the
Prior Case on March 10, 2016.37 The Court dismissed the Prior Case the following day.38 At that
point, bankruptcy court approval was no longer an operative condition under the Modification
Agreement.

The Origin of the Loan Modification Agreement with PNC
The Davises pursuit of a loan modification agreement with PNC predated the filing of the
Prior Case. In April of 2013, Teresa Davis was given notice by Northrop Grumman that she would
be laid off due to the federal government budget sequestration. A five-month period of
employment and economic uncertainty for the Davises thus began. Teresa Davis’s official notice
came in May of 2013 when her manager told her to go home for two weeks to find other
employment.39 When she returned two weeks later to get debriefed and turn in her badge, Northrop
Grumman offered her job back temporarily until July 26, 2013.40 In July, she was told that her
layoff was delayed yet again to August 30, 2013.41 Lastly, in August, for what proved to be the
final time the effective date of her layoff was delayed to October 4, 2013.42 On October 1, the

37 Motion to Dismiss, Prior Case Docket 116. In that motion, the Davises state that they were seeking to voluntarily
dismiss the Prior Case because, “After lengthy review and communications with counsel for the Trustee, it became
clear that the Debtors’ goal in filing the instant case, including addressing federal tax debt and properly stripping a
second lien attached to their residence, cannot be properly achieved within the confines of this instant case in
accordance with the rules of this Court and the Bankruptcy Code.” The motion makes no reference to the Modification
Agreement.
38 Order Dismissing Case, Prior Case Docket No. 117 [Defendant’s Exhibit 44].
39 Memorandum re Notification of Layoff – Reduction in Force dated May 21, 2013 [Plaintiffs’ Exhibit 22] (“I regret
to inform you that due to a reduction in funding, you are being notified of layoff. This memo serves as your written
notice that your layoff will be effective June 4, 2013.”).
40 Memorandum re Revision of Layoff Effective Date dated June 4, 2013 [Plaintiffs’ Exhibit 23] (“A Notification of
Layoff memo was provided to you on 5/21/13 stating that 6/4/13 would be your last day of employment. This memo
serves as your written notice that the anticipated effective date of your layoff has been changed to 7/26/13.”).
41 Memorandum re Revision of Layoff Effective Date dated July 18,2013 [Plaintiffs’ Exhibit 24] (“A Notification of
Layoff memo was provided to you on 5/21/13 stating that 6/4/13 would be your last day of employment. This memo
serves as your written notice that the anticipated effective date of your layoff has been changed to 08/30/13”).
42 Memorandum re Revision of Layoff Effective Date dated August 28,2013 [Plaintiffs’ Exhibit 25] (“A Notification
of Layoff memo was provided to you on 5/21/13 stating that 6/4/13 would be your last day of employment. This
memo serves as your written notice that the anticipated effective date of your layoff has been changed to 10/4/13”).
layoff was rescinded.43 In sum, although she was under constant threat of layoff for five months
and was only employed temporarily, Teresa Davis remained at work until she received another
permanent position effective on November 18, 2013, a position that amounted to a 25% reduction
in pay because the government contract funding only provided for 30 hours per week.
At the beginning of this five-month ordeal, Teresa Davis contacted PNC about the

possibility of a modification of her mortgage loan. PNC advised her that her loan needed to be
three months behind in payments before the Davises could start the loan modification process.
And so, the Davises did not make their mortgage payments to PNC for the months of April, May,
and June of 2013 and then requested, completed, and submitted a formal loan modification
application.44
Following their initial application up until they received the October 21, 2015 approval for
a modification, the Davises were in constant contact with PNC. They grew frustrated with
numerous requests by PNC for additional documentation—often requests for documentation they
had previously provided but that became out of date while PNC was waiting on other documents.

In January 2014 they were told that the laws had changed so they needed to start the exasperating
application process over again. They did so.45 Although Teresa Davis was no longer under threat
of layoff, by this time the Davises were many months behind on their mortgage and wanted to
continue with the modification process in order to get out of the interest-only loan and modify it

43 Memorandum re Rescission of Reduction in Force/Layoff Notice dated October 1, 2013 [Plaintiffs’ Exhibit 26]
(“I am pleased to inform you that your layoff which was to take effect on October 4, 2013 has been rescinded and you
will continue your at-will employment with Northrop Grumman.”).
44 Making Home Affordable Program Request for Mortgage Assistance dated June 24, 2013 [Plaintiffs’ Exhibit 29].
45 Making Home Affordable Program Request for Mortgage Assistance dated January 21, 2014 [Plaintiffs’
Exhibit 30].
to a principal and interest loan. At this point, the Davises were notified by PNC that their loan
was being referred for foreclosure.46
The frustrating process to obtain a loan modification and foreclosure threats created
understandable mental distress for the Davises. It included numerous duplicative requests for
payroll documents from the Davises’ employers that caused embarrassment—at one point leading

the Davises to separate and contemplate divorce.47 On other occasions PNC hung notices on their
house informing them of scheduled foreclosures causing more embarrassment and distress.
Between June 2013 and the end of 2015, PNC’s records indicated that the Davises personally had
at least fifty phone calls with PNC.48 The Davises testified about the ultimate distress caused by
the actions of PNC during these years—the fear they would lose the house they had built and raised
their children in to foreclosure because PNC told them they had to be delinquent on payments
before PNC would consider modifying their mortgage.

46 Letter dated January 9, 2014 [Defendant’s Exhibit 6] (“Your loan has been reviewed by our foreclosure committee
and has been approved for referral to the foreclosure department. Please note that all foreclosure activity will continue
until a mortgage workout program is approved.”). The letter was unsigned, did not identify the name of its author,
and contained a signature block that simply read “Sincerely, PNC Mortgage.” By letter dated February 18, 2014,
counsel for PNC notified the Davises that a foreclosure action would be commenced. Letter dated February 18, 2014
[Defendant’s Exhibit 7] (“Our office has been instructed to institute foreclosure proceedings.”). On February 21,
2014, PNC sent the Davises Notices of Intent to Foreclose. Affidavit dated February 21, 2014 [Plaintiffs’ Exhibit 20].
Thereafter, PNC notified the Davises that their request for a loan modification was denied. Notice dated March 31,
2014 [Defendant’s Exhibit 8] (“Based on a review of the information you provided, we are unable to offer mortgage
payment assistance to you at this time.”). The Notice was printed on PNC Mortgage letterhead, but is unsigned, did
not identify the name of its author, and did not contain a signature block.
47 PNC insinuated many times during trial that because Christopher Davis never moved out of the Property that the
Davises falsified their various hardship affidavits because they never separated. The Court rejects this contention.
Teresa Davis testified that the Davises slept in separate bedrooms, consulted divorce attorneys, and didn’t speak for
often weeks at a time despite living under the same roof. Their reality at the time was that they simply couldn’t afford
to hire divorce attorneys or pay for another domicile for Christopher Davis. The credible testimony by the Davises
demonstrates that their marital difficulties stemming from their financial problems and frustration with PNC were
serious and threatened their relationship to the point that they essentially isolated themselves from each other. In any
event, the circumstances were made known to and clarified for PNC before it offered the Modification Agreement.
Making Hone Affordable Program Hardship Affidavit dated May 8, 2015, at p. DX012-004 [Defendant’s Exhibit 12]
(“Unfortunately the length of time of consistently being threatened to lose our primary source of income had an
extremely negative impact on our marriage. We separated for over a year and even consulted divorce attorneys. We
have recently agreed to attempt reconciliation for the sake of our four children. We do not want to lose our home, this
house is where we’ve raised our children.”).
48 Loss Mitigation Notes [Defendant’s Exhibit 22], at pp. DX022-027 to DX022-068.
Eventually, the Davises were notified that a foreclosure sale of the Property by public
auction was scheduled to be held on November 10, 2014.49 That sale was automatically stayed
when the Davises commenced the Prior Case in this Court on November 4, 2014.
The Trial Period Plan
After filing the Prior Case, the Davises were undeterred and pressed on with efforts to

obtain a mortgage modification with PNC. Their efforts were successful. In June 2015, PNC
offered them a trial period plan (the “TPP”) under the Home Affordable Modification Program
(“HAMP”).50 In the TPP Letter, PNC advised the Davises that, “You have been approved for a
conditional Trial Period Plan.” The TPP Letter further states:
This is the first step toward qualifying for more affordable mortgage payments
or manageable terms. Please review the terms and follow the instructions
thoroughly so that you can decide whether you would like to accept this Trial
Period Plan offer and, if so, you will know how to successfully complete the
Trial Period Plan and permanently modify your mortgage.51

In the TPP Letter, PNC described the terms of the TPP it was offering to the Davises:
The terms of your Trial Period Plan below are effective on the day you make
your first trial period payment, provided we have received it on or before
August 1, 2015.

After all the trial period payments are made on time and you have submitted the
required documents, and if you continue to qualify, your mortgage will be
permanently modified. Your existing loan and loan requirements remain in
effect and unchanged during the trial period. If each payment is not received
by PNC Mortgage in the month in which it is due, this offer will end and your
loan will not be modified under the terms described in this offer.52

49 Letters dated October 23, 2014 [Plaintiffs’ Exhibit 21]. The letters were unsigned but were sent on letterhead and
with a blank signature block for the Alba Law Group, P.A. law firm.
50 Letter dated June 18, 2015 [Defendant’s Exhibit 14] (the “TPP Letter”). Like many—if not all—of PNC’s
correspondence and documents here, the TPP Letter was not signed by anyone on behalf of PNC, does not identify its
author, and does not contain a signature block.
51 Id., at p. DX014-003 (emphasis added).
52 Id. (emphasis added). There can be no question that PNC regarded the TPP Letter as an offer. It was accompanied
by preprinted form correspondence to be signed and returned by the Davises—a form that was titled “Offer
Acceptance” and included a statement as follows: “With my signature, I agree to the offer described in full in this
letter dated June 18, 2015.” Id., at p. DX014-006.
It also set forth what PNC described as the “instructions for accepting the conditional Trial Period
Plan,” which required the Davises to (i) “[c]omplete and return the attached Offer Acceptance
page” by July 2, 2015, and (ii) “[m]ake the first payment under the Plan” by August 1, 2015.53
The Davises accepted the TPP and made the required payments of $3,101.17 for the months of
August, September, and October 2015.

The Modification Agreement
In October 2015, PNC sent the Davises a letter that offered them the Modification
Agreement (the “HAMA Letter”).54 That letter read:
Congratulations! You are eligible for a Home Affordable Modification. As
previously described, if you comply with the terms of the Home Affordable
Modification Trial Period Plan, we will modify your mortgage loan and waive
all prior late charges that remain unpaid.

The enclosed Home Affordable Modification Agreement (“Modification
Agreement”) reflects the proposed terms of your modified mortgage.

How to Accept This Offer:

Step 1 COMPLETE AND RETURN THE ENCLOSED AGREEMENT
BY THE DUE DATE

To accept this offer, you must sign and return both copies of the Modification
Agreement to us in the enclosed, pre-paid envelope by 11/04/15. … If you do
not send both signed copies of the Modification Agreement by the above date,
you must contact us if you still wish to be considered for this program and have
your loan modified.

Step 2 CONTINUE TO MAKE YOUR TRIAL PERIOD PAYMENTS
ON TIME

Be certain to make any remaining trial period payments on or before the dates
they are due. ….55

53 Id., at p. DX014-004 (referring to the preprinted form correspondence at page DX014-006).
54 Letter dated October 21, 2015 [Plaintiffs’ Exhibit 3] (A copy of the letter with enclosures was also admitted into
evidence as Defendant’s Exhibit 17). Like the TPP Letter, the HAMA Letter also was not signed by anyone on behalf
of PNC, does not identify its author, and does not contain a signature block.
55 Id., at p. DX017-001 (emphasis in original).
These two conditions for acceptance of PNC’s offer are the only ones stated in the HAMA Letter.
Nothing in the HAMA Letter states that PNC’s offer is conditioned on bankruptcy court approval
let alone approval by any deadline; it makes no reference to bankruptcy court approval whatsoever.
While PNC disputes whether the Davises complied with Step 1, the Court finds that they completed
both Step 1 and Step 2, thereby accepting the offer made in the HAMA Letter. As a result, PNC

was contractually obligated to modify the loan and execute the Modification Agreement once the
Davises satisfied the conditions stated in the Modification Agreement.
The HAMA Letter was accompanied by two copies of the Modification Agreement, a
Temporary Payment Coupon for the first modified loan payment,56 a return envelope, a prepaid
return Federal Express label, and a second letter containing instructions for the Davises signatures
to be notarized without cost by Title First Agency.57 Around that time, PNC also sent a letter to
the Davises then attorney, Joseph Laumann, with instructions for bankruptcy court approval of the
Modification Agreement.58 PNC sent a similar letter to Ellen Cosby, the Chapter 13 trustee in the

56 Temporary Payment Coupon dated October 21, 2015 [Plaintiffs’ Exhibit 3, at p. DAVIS00000192]. The
Temporary Payment Coupon contained instructions that stated: “Below is your temporary coupon. Please return the
coupon with the payment due when returning the two signed modifications. Your modifications will need to be
notarized if instructed. Going forward you will receive a monthly bill.” No evidence was introduced at trial to
demonstrate that PNC ever sent, or the Davises ever received, any monthly bills for modified loan payments of
$3,007.40 due on or after December 1, 2015.
57 Letter undated and addressed to “Dear Borrower” [Plaintiffs’ Exhibit 4]. The letter stated in part: “Since your
HAMP modification documents require your signature(s) to be notarized, we have contracted with a company to make
it easy for you. The company is Title First Agency and their service will be paid for by PNC Mortgage. They will be
contacting you by phone to set up a convenient time to take care of this for you.” The letter is unsigned, did not
identify the name of its author, and contained a signature block that simply read “Thank you, PNC Mortgage.”
58 Letter to Joseph Laumann dated October 21, 2015 [Defendant’s Exhibit 15]. Again—the letter was unsigned, did
not identify the name of its author, and contained a signature block that simply read “Sincerely, PNC Mortgage
Customer Advocacy Group.” The letter reads:
The above reference client has recently been qualified for a HAMP modification under the
Home Affordable Modification Program. Please be advised PNC Mortgage must obtain a
signed court order approving the modification by the bankruptcy court before we can officially
approve and begin the modification process. Please refer to the modification included in this
mailing for specific deadlines to assist our client. In addition, PNC Mortgage must be notified
of the approval process steps as follows:
 PNC must be notified when the motion is filed requesting the Court approval hearing.
 PNC must be notified of the date of the Court approval hearing once scheduled.
Prior Case.59 Neither the Modification Agreement60 nor the letters to Joseph Laumann and Ellen
Cosby specified any deadline—much less a 60-day deadline—for the Davises to obtain approval
of the Modification Agreement from this Court. Moreover, nothing in any of those documents
indicates that PNC retained a unilateral right prior to affixing its signature to simply terminate the
Modification Agreement.

When the Davises received the HAMA Letter they were relieved and excited by the news
that they were at last being offered a loan modification. Teresa Davis contacted PNC about Title
First Agency and was told that “we were fine to go to a PNC branch of the bank and have them
notarized there.”61 On Saturday, October 31, 2015, the Davises went to the PNC branch in Mount
Airy, Maryland and signed the Modification Agreement in front of a notary. That same day they
deposited the signed Modification Agreement in a Federal Express drop box using the return label
provided by PNC.62 On Monday, November 2, 2015, Teresa Davis called PNC and informed PNC

 PNC must be notified of the Court’s decision regarding approval or denial of the HAMP
Modification immediately following that decision.
Upon receipt of Court approval or in the case of discharge or dismissal, PNC must receive the
signed HAMP Modification within 15 calendar days from the decision date. Failure to return
the signed HAMP Modification within 15 days will result in removal from the HAMP program.
Id. (emphasis added). These instructions are not only confusing but differ in some ways from those in the HAMA
Letter. Significantly, the letter to Joseph Laumann makes clear that the requirement for bankruptcy court approval
was not applicable when (as eventually happened here) a bankruptcy case is dismissed.
59 Letter to Ellen W. Cosby dated October 21, 2015 [Defendant’s Exhibit 16]. Yet another letter that was unsigned,
did not identify the name of its author, and contained a signature block that simply read “Sincerely, PNC Mortgage
Customer Advocacy Group.” Nothing in PNC’s letter to Ellen Cosby indicated there was any deadline by which PNC
expected the Modification Agreement to be approved by the bankruptcy court.
60 The only reference in the Modification Agreement to bankruptcy court approval is the representation made by the
Davises in Section 3(H) that “I have obtained all necessary approvals for acceptance of this Modification required by
the Bankruptcy Court and the trustee appointed to my bankruptcy case.”
61 Testimony of Teresa Davis, July 29, 2019 Transcript, at p. 62, lines 16-18 [Docket No. 106, Page 62 of 248].
62 PNC went to great lengths to try to establish through testimony by Dorothy Thomas about its business records that
PNC never received the notarized Modification Agreement signed by the Davises. PNC introduced its record of the
out bound and return Federal Express shipping labels that were enclosed with the HAMA Letter [Defendant’s Exhibit
25]. The return tracking number was indicated therein to be 795080882513 (the “Return Tracking Number”). PNC’s
records indicated that the Return Tracking Number was not recorded for any Federal Express package received by
PNC between October 20, and December 17, 2015 [Defendant’s Exhibit 24]. Although the shipping labels that
accompanied the TPP Letter were introduced [Defendant’s Exhibit 14, at p. DX014-002], the evidence before the
Court does not include a copy of the actual return Federal Express shipping label enclosed with the HAMA Letter.
Based upon the evidence, the Court finds that either (i) the Return Tracking Number was not the one on the label
enclosed with the HAMA Letter, (ii) the PNC receipt records for Federal Express packages were mistaken, or (iii) the
that the Modification Agreement had been signed and returned, and that the first payment would
be made at the Mount Airy branch of PNC.63 After that, (i) the HAMA Motion was filed on Friday,
November 5, 2015, (ii) the Davises made the first payment due under the Modification Agreement
at the Mount Airy branch of PNC on Saturday, November 6, 2015,64 (iii) and the Amended HAMA
Motion attempting to cure the deficiencies that led to the Chapter 13 Trustee’s Objection was filed

on November 19, 2015.65 Thus, PNC was on notice at the latest by November 19, 2015 that (a)
the Davises intended to proceed with the Modification Agreement, (b) they had filed a motion for
approval of the Modification Agreement, and (c) the Court had scheduled a hearing on January 13,
2016 for the purpose of determining whether to approve the Modification Agreement. At no time
did PNC advise the Davises that the hearing on approval of the Modification Agreement was
scheduled for a date after expiration of a secret 60-day deadline.
PNC has argued that the Modification Agreement was procured by the Davises by means
of false statements made in their various hardship affidavits and letters submitted to PNC. The
Court rejects this contention. PNC relies primarily on its contention that (i) Teresa Davis was not

unemployed or laid off, and (ii) the Davises were never separated. The evidence shows that their
employment and marital problems were real and that those problems materially impacted their
financial circumstances. The Davises accurately disclosed their circumstances to PNC in a letter

return shipping label enclosed with the HAMA Letter was addressed to Title First Agency. In any of those
circumstances, the Modification Agreement was timely returned by the Davises to PNC as instructed in the HAMA
Letter. That instruction was to return the Modification Agreement using the enclosed pre-paid label. The Court finds
that the Davises did so.
63 The corresponding entry in the PNC Loss Mitigation Notes confirms that Teresa Davis made the call, and states in
relevant part as follows: “BWR STATED ALREADY MAILED MOD DOCS STATED WILL TAKE 1ST PMT TO
PNC BRANCH.” Defendant’s Exhibit 22, at p. DX022-027. As of November 2, 2015, PNC was therefore on notice
that the Davises intended to proceed with the Modification Agreement, had returned the signed Modification
Agreement, and would make the first modified loan payment.
64 Receipt dated November 7, 2015 [Plaintiffs’ Exhibit 6].
65 Attached to the Amended HAMA Motion was a copy of the Modification Agreement signed by the Davises without
notarization. Copies of the Amended HAMA Motion and the Amended Hearing Notice were served by the Court’s
CM/ECF system on PNC’s attorney, Brian McNair.
that accompanied the hardship affidavit submitted shortly before PNC offered the TPP.66 Their
statements to PNC on these subjects were not false—they were truthful and were backed up by
their credible testimony at trial.
The False Termination Letter
In December 2015 shortly before Christmas Day, the Davises became aware of PNC’s

attempt to terminate the Modification Agreement when they received the Termination Letter that
PNC contends revoked its offer of the Modification Agreement.67 The Termination Letter reads:
We have completed our review of your hardship assistance request under the
Making Home Affordable Program (MHAP). However, we are unable to
proceed further with your request for assistance for the following reason(s):

- Offer Not Accepted by Borrower/Request Withdrawn

We are not considering your request for modification because:

After being offered a Trial Period Plan or Home Affordable Modification you
notified us on December 22, 2015 that you did not wish to accept the offer.68

66 Hardship Affidavit dated May 8, 2015 [Defendant’s Exhibit 12], at p. DX012-004. PNC’s relies on the mysterious
letter dated October 25, 2016 [Defendant’s Exhibit 28]. That reliance is misplaced. Whatever its origins or accuracy,
that letter was not relied upon by PNC when it offered the TPP or made the offer in the HAMA Letter. The letter was
apparently transmitted long after the events that gave rise to the Modification Agreement. The Court finds that, as
represented by the Davises in Section 1(E) of the Modification Agreement under penalty of perjury, all documents
and information submitted to PNC were true and correct.
67 Letter dated December 22, 2015 [Defendant’s Exhibit 20; Plaintiffs’ Exhibit 16]. Not surprisingly by now—the
letter was unsigned, did not identify the name of its author, and contained a signature block that simply read “Sincerely,
PNC Mortgage.” The Court has taken pains to point out the many unsigned documents with no acknowledgement of
the individual at PNC making any decisions or taking ownership of any action by PNC. The Court points this out for
two reasons. First, PNC clearly considered these many unsigned letters, notices, and offers sent to the Davises to be
legally binding action by PNC—despite the lack of the formality of a blue ink on white paper traditional signature by
a PNC representative. That being the case, PNC’s adamant insistence on the supposed legal significance of the
absence of such a signature on the Modification Agreement rings hollow. Second, this pattern among financial
institutions appearing before this Court of operating in a manner where no individual appears responsible for any
decisions is concerning. Such institutions often, including during trial here, insist that no individual is making
decisions on their behalf—the computer is. These institutions rarely call witnesses with first-hand knowledge of any
events to testify and seem to believe pleading inability to control the decisions of a computer program will shield them
from any wrongdoing. This is simply not a credible defense to any mistake, violation of the automatic stay, violation
of the discharge injunction, or other similar bad acts.
68 Id. (emphasis in original).
This was simply false. PNC knew when it sent this letter that it was false. PNC knew that
the Davises had not contacted PNC to withdraw their request for a loan modification. PNC
maintained electronic records of the actions of its loan servicing employees that included the Loss
Mitigation Notes69 and the Servicing Notes.70 From October 21, to December 22, 2015, the Loss
Mitigation Notes contain 15 sets of entries, none indicating the Davises notified PNC of any desire

to abandon the Modification Agreement they had struggled so long to obtain.71 Teresa Davis
testified credibly that the Davises never did so.72 In her testimony, Dorothy Thomas conceded that
the Davises had not done so.73
So why did PNC revoke the offer? Because it had imposed a 60-day deadline by which
the Davises were supposedly required to obtain bankruptcy court approval of the Modification
Agreement—a deadline never disclosed to the Davises, their attorney, the Chapter 13 trustee, or
this Court. The 60-day deadline was a secret.
Regardless, PNC argues that the false statement made in the Termination Letter was
accurate because the following indicated that the Davises were no longer interested in mortgage

assistance: (a) PNC had no record of receipt of the signed Modification Agreement, and (b) the

69 LMT Process Notes [Defendant’s Exhibit 22] (covering the period from December 1, 2011 to May 16, 2017). A
separate set of the Loss Mitigation Notes was introduced by the Davises. LMT Process Notes [Plaintiffs’ Exhibit 15]
(covering the period from February 11, 2015 to May 16, 2017). For the relevant time period, these two exhibits appear
to be identical.
70 SER Process Notes [Defendant’s Exhibit 23]. In her testimony on the witness stand, Dorothy Thomas indicated
that PNC maintained a third set of electronic notes known as the Bankruptcy Notes. Apparently, the Bankruptcy
Notes were never produced by PNC. Testimony of Dorothy Thomas, July 29, 2019 Transcript, at p. 231, line 12
through p. 232, line 9 [Docket No. 106, Pages 231-32 of 248]; July 30, 2019 Transcript, at p. 52, lines 9-24 [Docket
No. 107, Page 52 of 193]. In any event, the Bankruptcy Notes were not introduced into evidence.
71 LMT Process Notes [Defendant’s Exhibit 22, pages DX022-027 to DX022-028]. The recorded communications
in the Loss Mitigation Notes are all consistent with the intent of the Davises to proceed the Modification Agreement.
72 When asked if PNC’s statement in the Termination Letter was true, Teresa Davis testified: “No, that is not true.
Why would we withdraw something that we waited all of those years for? We worked so hard to get it, why would
we withdraw it?” Testimony of Teresa Davis, July 29, 2019 Transcript, at p. 69, lines 20-22 [Docket No. 106, Page 69
of 248].
73 Testimony of Dorothy Thomas, July 29, 2019 Transcript, at p. 227, lines 7-10 [Docket No. 106, Pages 227 of 248].
In addition, PNC employees were monitoring the Court’s docket in the Prior Case via the PACER System, which
indicated a hearing was scheduled on the Amended HAMA Motion for January 13, 2016.
Davises had not obtained an order from this Court approving the Modification Agreement.
Ms. Thomas testified that the Termination Letter simply confirmed that PNC had not received the
Modification Agreement nor had court approval by the secret 60-day deadline been obtained and
so PNC assumed that the Davises were no longer interested. PNC’s own records indicate that the
Davises informed PNC seven weeks earlier (on November 2, 2015) that they had returned the

signed Modification Agreement. Any simple glance at the voluminous record of the telephone
calls from Teresa Davis and her attempts at getting a modification over the preceding two years
would have made it clear that it was unlikely the Davises would simply walk away once they
finally received an offer from PNC. For PNC to suggest otherwise is simply not credible. If it
made such an assumption, it did so without justification and in breach of its contractual obligations.
The Court rejects this attempt, after the fact, to justify the false Termination Letter based upon a
secret deadline.
Recordation of the Modification Agreement
Unbeknownst to the Davises when they received the Termination Letter, the Modification

Agreement had actually been recorded in the Land Records of Carroll County, Maryland a few
days earlier on December 16, 2015. The Modification Agreement was submitted for recordation
by Title First Agency74 and shortly thereafter PNC received the recorded original Modification

74 PNC admitted that Title First Agency recorded the Modification Agreement. In its response to one of the Plaintiffs’
requests for admission, PNC stated: “PNC denies that Title First Agency acted as PNC’s authorized agent when it
improperly recorded the invalid Loan Modification.” Defendant PNC Bank, N.A.’s Response and Objections to
Plaintiffs’ First Request for Admission of Fact and Genuineness of Documents [Plaintiffs’ Exhibit 48, at p. 5.]
(emphasis added). Moreover, the other evidence before the Court demonstrates that Title First Agency recorded the
Modification Agreement. As drafted and presented to the Davises by PNC, the Modification Agreement contains a
note to the clerk that states, “After Recording Return to: Title First Agency, National Operations, Attn: Post Closing,
2944 Fuller Ave. NE, Suite 200, Grand Rapids, MI 49505” [Defendant’s Exhibit 17, at p. DX017-010]. In addition,
paragraph 10 of the Land Instrument Intake Sheet submitted and recorded with the Modification Agreement indicates
that the recorded document was to be “Return[ed] to Contact Person” and under “Instrument Submitted By or Contact
Person” it identifies, “Tony, Title First Agency, 2944 Fuller Ave NE, Grand Rapids, MI 49505” [Plaintiffs’ Exhibit 7,
at Liber 8179, Page 232].
Agreement.75 PNC then transferred the recorded Modification Agreement to what Ms. Thomas
referred to as “cold storage.”76 The Modification Agreement as recorded contains hand written
notations that were not made by the Davises and suggest that it was recorded by someone acting
on behalf of PNC. PNC did not notify the Davises that the Modification Agreement had been
recorded or take any action to undo what they allege to the Court was now a “mistake.” The

Davises only learned of the recordation well after the fact. Incredibly, PNC undertook no
investigation upon receipt of the recorded Modification Agreement to determine how it came to
be recorded in the land records or who may have authorized such recordation on its behalf.
Damages
PNC’s breach of the Modification Agreement had adverse, real-world consequences for
the Davises. In their testimony, the Davises provided a compelling and credible account of the
impact financial difficulties have on individuals and their families. They are understandably
frustrated and angry at PNC after their now more than seven-year ordeal in pursuit of a loan
modification. PNC did much to justify that frustration and anger. In this adversary proceeding,

however, the Court is not asked to address whether PNC could or should be held liable for all such
conduct. The question before the Court is what consequences PNC must face for injuries due to
its breach of contract—that is, for injuries arising after and by reason of its wrongful Termination
Letter sent to the Davises on December 22, 2015.77

75 The Servicing Notes contain an entry on January 6, 2016 that states: “MOD AGREEMENT REC’D BACK FROM
COUNTY RECORDER.” SER Process Notes [Defendant’s Exhibit 23, at p. DX023-016]. Based upon the evidence,
the recorded Modification Agreement was returned to PNC not by the record office, but by Title First Agency.
76 In response to a question about her testimony that PNC did not receive the signed Modification Agreement from
the Davises, she said “That is correct. We did not get it back. We got back the recorded mod in early 2016. However,
it was then sent to cold storage because at that point, because we did not have court approval, it was not a valid
agreement.” Testimony of Dorothy Thomas, July 29, 2019 Transcript at p. 201, lines 13-16 [Docket No. 106, Page
201 of 248]. The Court notes that at the time PNC received the recorded Modification Agreement (as it did on its
secret deadline date) that this Court had a pending hearing scheduled regarding such approval for January 13, 2016.
77 Based upon the evidence in the record, the Court is unable to determine when many of the events mentioned by the
Davises occurred. In many instances, the evidence indicates that the events took place before, not after, the date of
For starters, the Modification Agreement would have brought the Davises current on their
mortgage and likely would have ended the Prior Case. Had that occurred, the Davises would be
in a far different financial situation today. They could have moved on with their lives and would
have been able to build back up their credit scores. There would have been no need for the current
Chapter 13 case and the fees incurred in it by the Davises. PNC refused to accept monthly

payments from the Davises, demanding instead payment in full under the Mortgage Statement.78
PNC’s refusal constituted a rejection of tender of monthly payments under the Modification
Agreement. Beginning in January of 2018, the Davises began escrowing their monthly mortgage
payments with their attorney.79 As a result, years of interest has accrued on the principal balance
of the loan and late charges and other fees have arisen that would not have occurred under the
Modification Agreement.
The Davises also took time off from work to deal with PNC’s actions and this litigation.80
Christopher Davis took approximately 10 to 12 days off from work to deal with hearings and
meetings related to this case.81 As of December 27, 2013, his biweekly rate of pay was

the Termination Letter. For example, the Davises blame PNC for their marital difficulties and resulting separation,
marriage counseling, and consultation with divorce attorneys. The testimony by the Davises on these points is
credible. These difficulties certainly occurred before December 22, 2015 since they are described in the letter that the
Davises submitted to PNC as part of the process that resulted in the Modification Agreement. Hardship Affidavit
dated May 8, 2015 [Defendant’s Exhibit 12], at p. DX012-004. It may be that these difficulties continued after or
were made worse by the Termination Letter, but the Court cannot make that finding based upon this record.
Accordingly, the Court limits its discussion of damages that follows to those injuries the record demonstrates occurred
after the December 22, 2015 date of the Termination Letter.
78 Testimony of Teresa Davis, July 29, 2019 Transcript, at p. 77, lines 21-24, [Docket No. 106, Page 77 of 248] (“They
either wanted the full amount that was due or nothing.”).
79 Id., at p. 157, line 11 through p. 158, line 10 [Docket No. 106, Pages 157-58 of 248]. The Davises suggested that
their tax difficulties stem in part from the fact that they were unable to take advantage of a deduction for mortgage
interest on their tax returns for payments made in escrow with their attorney. According to the proof of claim filed by
the Internal Revenue Service, the Davises apparently had tax difficulties long before they began to escrow monthly
payments in 2018. Main Case Claims Docket, Claim No. 4-3 (asserting claims for unpaid taxes for years 2011, 2013,
2014, 2015, 2016, and 2017 that total in the aggregate $34,556.51, plus penalties of $1,584.41). No evidence was
presented that would enable the Court to make a determination of the extent to which the Davises (i) paid more in
taxes than they would have if the deduction would have been available, and (ii) were actually injured as a result.
80 Although the Davises assert that PNC’s actions negatively impacted their careers, no evidence was introduced that
would show that their employers took any adverse personnel actions against either of them.
81 Testimony of Cristopher Davis, July 29, 2019 Transcript, at p. 175, lines 17-23 [Docket No. 106, Page 175 of 248].
$1,828.08.82 That rate equals $182.80 per day, and it is consistent with (i) the most recent tax
return that was introduced into evidence,83 and (ii) Schedule I filed by the Davises in their
Chapter 13 bankruptcy case on June 3, 2016 (“Schedule I”), which indicates a rate equivalent to
$187.95 per day.84 The Court finds that Christopher Davis took 11 days off from work by reason
of PNC’s breach of the Modification Agreement, at a rate of $185.00 per day. Accordingly, the

Court finds that the value of his time off was $2,035.00.
Teresa Davis also took time off from work for the same reason, which she estimated
amounted to 25 days over the course of the two Chapter 13 bankruptcy cases (not including three
days for trial).85 As of January 10, 2014, her biweekly pay rate was $5,576.93. That rate equals
$557.69 per day, and it is also consistent with (i) the most recent tax return that was introduced
into evidence, and (ii) Schedule I, which indicates a rate equivalent to $571.64 per day.86 The
Court finds that Teresa Davis took 18 days off from work by reason of PNC’s breach of the
Modification Agreement, at a rate of $570.00 per day. Accordingly, the Court finds that the value
of her time off was $10,260.00.

In addition, the Court finds that an additional award of general damages is appropriate in
this case. PNC’s breach of contract clearly caused other injuries to the Davises that are not
susceptible to itemization or arithmetical calculation. Mere determination of the number of days

82 Frederick County earnings statement attached to Request for Mortgage Assistance dated January 21, 2014
[Plaintiff’s Exhibit 30], at p. DAVIS00000094.
83 Form 1040, U.S. Individual Income Tax Return for 2015 [Defendant’s Exhibit 33, at p. DX033-001, line 7. The
Davises reported income of $190,595.00 for the year ending December 31, 2015. The annualized total of the combined
biweekly pay of the Davises as of January 1, 2014 was $192,530.26.
84 Schedule I: Your Income [Main Case Docket No. 21, Page 20 of 44]. The monthly wages for Christopher Davis
reported therein are $4,072.45—a rate that equals $187.95 per day.
85 Testimony of Teresa Davis, July 29, 2019 Transcript, at p. 88, line 10 through p. 89, line 8 [Docket No. 106, Pages
88-89 of 248] (“there were times that either I just needed a mental health day or that I had to get the documentation
back in time”). When asked to place a dollar figure on the value of her time, Teresa Davis responded that, “I would
have to do the calculations, but probably $30,000 -- $25,000 to $30,000.” Her estimate on the witness stand was high,
but it was of the right order of magnitude. The Court finds that the calculation of a daily rate based upon the available
evidence of her rate of pay is the appropriate measure.
86 The monthly wages for Teresa Davis reported in Schedule I are $12,385.45—a rate that equals $571.64 per day.
a person was off work does not take into account the other time and inconvenience resulting from
the disruption of the lives of the Davises and their family—for example, time spent at the kitchen
table debating amongst themselves what action they should take or explaining the family’s
circumstance to their children. The Court finds that a material amount of such time and effort was
expended as a result of and after PNC’s Termination Letter, and that an appropriate such award in

this case is $5,000.00.
For these reasons, the Court finds that breach of contract damages should be awarded to
the Davises in the amount of $22,230.00, comprised of (a) $4,935.00 for filing and attorney’s fees
for their Chapter 13 case, (b) $12,295.00 for time off work, and (c) $5,000.00 for general damages.
Emotional Distress Damages
PNC’s actions also had serious emotional impact on the Davises. Christopher Davis was
concerned that the stress of the impending trial in this adversary proceeding might impact his job
performance and endanger both himself and coworkers so he removed himself from work one
evening and took leave under the Family and Medical Leave Act (“FMLA”).87 Further, he was
embarrassed that he had to explain these circumstances to his supervisor.88

PNC’s actions also had a serious emotional impact on Teresa Davis. For example, Teresa
Davis holds a high-level security clearance from the United States government in connection with
her work. An ongoing Chapter 13 bankruptcy case triggers an annual review of her security
clearance, requiring her to provide a financial disclosure and to undergo a background
investigation and a polygraph examination. Ordinarily, such reviews only take place once every

87 Testimony of Christopher Davis, July 29, 2019 Transcript, at p. 175, lines 1-16 [Docket No. 106, Page 175 of 248]
(“I didn’t know if we were going to lose our house ultimately at the end. And I guess – I wasn’t in a good place
mentally.”).
88 Id., at lines 12-14 (“I told my boss that, you know, it was very embarrassing that I was having this trial come up
and that I didn’t know where it was going to leave us, leave our family.”).
five years. The commencement of the current Chapter 13 case has required such annual reviews
and polygraph examinations for each of the past five years.89 These annual reviews are
understandably stressful because they create fear and uncertainty about whether Teresa Davis will
retain the security clearance necessary for her continued employment in the defense industry.
It is clear to the Court from their testimony taken as a whole (as well as from observation

of their behavior on the witness stand) that the Davises experienced serious anxiety and emotional
distress as a result of PNC’s actions after December 22, 2015. The Davises have been forced to
live their lives for the past five years with the uncertainty of not knowing whether they will be able
to continue to reside at the Property, a home that is emotionally important to both of them. Based
on the evidence, the Court finds that an award of damages of $50,000.00 for emotional distress is
warranted and appropriate.90
CONCLUSIONS OF LAW
This case comes down to two issues: a basic breach of contract claim and whether that
breach was in turn a violation of the Maryland Consumer Debt Collection Act (the “MCDCA”),91
as well as the Maryland Consumer Protection Act (the “MCPA”).92 The essence of the defense

is that PNC had the right to revoke its offer and did so before the Davises satisfied the conditions
for acceptance of that offer. PNC contends that the conditions for acceptance included satisfaction

89 Id., at p. 45, line 19 through p. 46, line 1 [Docket No. 106, Pages 45-46 of 248]; Id., at p. 79, line 21 through p. 80,
line 7 [Docket No. 106, Pages 79-80 of 248]; Id., at p. 144, lines 5-21 [Docket No. 106, Page 144 of 248].
90 If the Court were to consider the emotional distress experienced by the Davises prior to December 22, 2015, the
amount awarded would be substantially higher. In the Court’s view that distress is only relevant in this limited sense:
the prior ordeal gave way to a feeling of relief upon receipt of the HAMA Letter that was then dashed a few weeks
later by the Termination Letter, resulting in a profound emotional impact.
91 Md. Code Ann., Com. Law §§ 14-201, et seq.
92 Md. Code Ann., Com. Law §§ 13-101 et seq.
of not only the conditions stated in the HAMA Letter, but also those stated in the Modification
Agreement.93
The Court disagrees. In the court’s view, the HAMA Letter was an offer to provide a loan
modification to the Davises on the terms of the Modification Agreement once the Davises satisfied
the conditions stated in the Modification Agreement. The Davises accepted the offer made in the

HAMA Letter. As a result, PNC was obligated to perform under that contract—that is, to modify
the loan—once the Davises satisfied the conditions in the Modification Agreement. The only such
condition at issue here was bankruptcy court approval, a condition that was satisfied by the Davises
when the Court dismissed the Prior Case on March 11, 2016.
At that point, PNC was contractually obligated to modify the loan on the terms of the
Modification Agreement. PNC has steadfastly refused to do so based on a supposed condition
requiring court approval by December 22, 2015—a condition nowhere stated in any of the relevant
documents. Of course, PNC could have specified that date in the Modification Agreement as a
deadline for court approval. It did not do so. PNC cannot now ask this Court to rewrite the

Modification Agreement to insert such a deadline after the fact.
Count I - Breach of Contract
In Count I of their amended complaint (the “Amended Complaint”),94 the Davises assert
that PNC is liable for breach of contract. The Court agrees with their assertion.
An enforceable contract is formed under the general rule of Maryland law when “one party
makes an offer and the other party accepts before the offer is revoked.” Fedder Dev. Corp. v. FB

93 The Court recognizes that PNC has made an alternative argument that the Modification Agreement was an offer
made by the Davises that was never accepted by PNC. The evidence before the Court simply does not support that
contention. The HAMA Letter specifies two steps for how the Davises were “to accept this offer.” The Court has
found that the Davises in fact completed both steps stated as conditions for acceptance. The Court sees no basis in
fact or law for interpreting this language to mean the opposite of its plain meaning—namely, that PNC was and
understood itself to be the party making an offer.
94 Plaintiffs’ First Amended Complaint, Docket No. 42.
Hagerstown, LLC, 181 Fed. Appx. 384, 390 (4th Cir. 2006) (citing Prince George’s County v.
Silverman, 472 A.2d 104 (Md. App. 1984)). “An ‘offer’ is the ‘manifestation of willingness to
enter into a bargain, so made as to justify another person in understanding that his assent to that
bargain is invited and will conclude it.’” Silverman, 472 A.2d at 112 (quoting 1 Restatement
Contracts (2d) § 24 (1979)). Under Maryland law, a court looks to the written language of the

contract to determine the intentions of the parties. Barr v. Flagstar Bank, FSB, 303 F.Supp.3d
400, 412 (D. Md. 2018) (citing Ford v. Antwerpen Motorcars Ltd., 443 Md. 470 (2015) (quoting
Curtis G. Testerman Co. v. Buck, 340 Md. 569 (1995))).
PNC makes much of its argument that no contract was formed because it never signed the
Modification Agreement. In doing so, PNC fails to recognize that a contract was formed under
the plain language chosen by PNC when the offer it made in the HAMA Letter was accepted by
the Davises. Thereafter PNC was obligated to modify the loan on the terms of the Modification
Agreement once (as they eventually did here) the Davises satisfied all the conditions for PNC’s
performance. Thus, PNC is obligated to complete the loan modification process by signing the

Modification Agreement. PNC’s failure to do so was, and continues to be, a breach of its
contractual obligations.
It has long been the law that “a signature is not required in order to bring a contract into
existence, nor is a signature always necessary to the execution of a written contract.” Porter v.
Gen. Boiler Casing Co., Inc., 284 Md. 402, 410 (1979). Indeed, many courts have held this to be
true against banks in the case of loan modifications. See Wigod v. Wells Fargo Bank, N.A., 673
F.3d 547 (7th Cir. 2012) (discussing bank’s position that language requiring the return by the bank
of an executed loan modification agreement before the loan was modified turned ‘an otherwise
straightforward offer into an illusion’ as it would allow the bank to refuse a loan modification for
any reason whatsoever after the borrower had already performed); Adam v. Wells Fargo Bank,
N.A., 901 F. Supp. 2d 623 (D. Md. 2012) (finding that a loan modification was binding when the
borrower signed and returned it despite a blank signature line on the agreement for the bank);
Azimirad v. HSBC Mortg. Corp., 2011 U.S. Dist. LEXIS 40080, *10 (D. Md. April 12, 2011)
(holding that when there is no explicit statement making the bank’s signature a condition

precedent, it is a question of intent of the parties to be determined by the court whether the bank’s
signature was simply “one step in the parties process of memorializing their existing agreement”);
but see Fedder Dev. Corp., 181 Fed. Appx. at 390 (4th Cir. 2006) (ruling that no binding contract
was created because of a clause stating that “the contract is not binding on either party unless and
until executed by and delivered to both parties.”).
The exception to this rule is “when the terms of the contract make the parties’ signatures a
condition precedent to the formation of the contract.” Adam, 901 F. Supp. 2d at 633 (citations
omitted). Despite PNC’s arguments, that exception is simply not applicable here. PNC argues
that Section 2(B) of the Modification Agreement (the “PNC Signature Clause”) satisfies this

exception. The PNC Signature Clause is not a condition to contract formation, it is merely the
final step in acknowledgement that the Davises satisfied the conditions in the Modification
Agreement and the loan documents have been accordingly modified. This is made clear by the
PNC Signature Clause itself, which states:
I understand that the Loan Documents will not be modified unless and until (i)
the Lender accepts this Agreement by signing and returning a copy of it to me,
and (ii) the Modification Effective Date (as defined in Section 3) has occurred.
I further understand and agree that the Lender will not be obligated or bound to
make any modification of the Loan Documents if I fail to meet any one of the
requirements of this Agreement.95

95 Modification Agreement [Defendant’s Exhibit 17 at p. DX017-005].
The first sentence speaks to the timing for modification of the loan; it is not a condition that
nullifies the contract obligations under the HAMA Letter offer accepted by the Davises. More
telling, the implication of the second sentence is that PNC is obligated to modify the loan if the
reverse is true—that is, that PNC is obligated and bound to modify the loan documents if (as is the
case here) the Davises met the requirements of the Modification Agreement.

Moving on from PNC’s “signature” argument, when “ambiguity is found in a contract, it
becomes a question of fact to decipher the intent of the parties.” Adam, 901 F. Supp. at 634 (quoting
City of Bowie v. Mie Props. Inc., 398 Md. 657 (2007)). Once a court determines the contract is
ambiguous, it may rely on extrinsic evidence to determine the parties’ intent. Beale v. Am Nat’l
Lawyers Ins. Reciprocal, 379 Md. 643, 658 (2004). “[W]here one party is responsible for the
drafting of an instrument, absent evidence indicating the intention of the parties, any ambiguity
will be resolved against that party.” Truck Ins. Exchange v. Marks Rentals, Inc., 288 Md. 428,
435 (1980) (citing National Grange Mut. Ins. v. Pinkney, 284 Md. 694, 705-706 (1979)). Although
the Court does not find the various contract documents to be ambiguous, if the Court were to make

that determination it would reach the same conclusion.
Much like with the rest of the attempts by the Davises to obtain a loan modification, PNC
sent the Davises, their lawyer, and the Chapter 13 Trustee documents that might be viewed to be
confusing and to contain conflicting and impossible terms. The HAMA Letter, however, is not
such a document. It plainly identified itself as an offer. It congratulated the Davises and informed
them they were “eligible for a Home Affordable Modification.”96 Immediately thereafter, the
HAMA Letter states, “As previously described, if you comply with the terms of the [TPP] we will
modify your mortgage loan and waive all prior late charges that remain unpaid.”97 What follows

96 HAMA Letter [Defendant’s Exhibit 17], at p. DX017-001.
97 Id. (emphasis added).
are PNC’s instructions on “How to Accept This Offer.”98 The TPP Letter contained similar
language assuring the Davises that their loan would be modified if they complied with the terms
specified by PNC.99
The Modification Agreement continues with the “offer” language: “If my representations
and covenants in Section 1 continue to be true in all material respects, then this Home Affordable

Modification Agreement (“Agreement”) will … amend and supplement (1) the Mortgage on the
Property, and (2) the Note secured by the Mortgage.”100 The Modification Agreement contains at
least one term that both parties knew was an impossibility as of the time the Davises were directed
to sign and return the agreement—namely that they had “obtained all necessary approvals for
acceptance of this Modification required by the Bankruptcy Court and the trustee appointed to my
bankruptcy case.”101 The paragraph immediately below the PNC Signature Clause states, “If my
representations and covenants in Section 1 [which includes the impossible Court Approval Clause]
continue to be true in all material respects and all preconditions to the modification set forth in
Section 2 [which includes the PNC Signature Clause] have been met, the Loan Documents will
automatically become modified on 11/1/15 ….”102 In sum, the Modification Agreement by its

own terms became automatically effective on November 1, 2015 even though the Davises had
until November 4, 2015 to return it to PNC (which would leave no time prior to the effective date
for PNC to sign and return the Modification Agreement to the Davises).

98 Id. (emphasis in original).
99 Id. (“After all the trial period payments are made on time and you have submitted the required documents, and if
you continue to qualify, your mortgage will be permanently modified.”) (emphasis added).
100 Id. (emphasis added). The TPP Letter identified itself as the first step in the process. It stated, “This is the first
step toward qualifying for more affordable mortgage payments or more manageable terms.” TPP Letter [Defendant’s
Exhibit 14], at p. DX014-003.
101 Id. at p. DX017-005 (the “Court Approval Clause”).
102 Id.
The Court can only conclude that the PNC Signature Clause (i) was not a condition that
somehow reversed the roles of PNC and the Davises as offeror and offeree, and (ii) did not negate
the formation of a contract once the Davises accepted the offer made in the HAMA Letter.103 To
the extent these are ambiguities, they must be resolved against PNC as the drafter of all the relevant
contract documents. To hold otherwise would render the agreement of the parties illusory.

Finally, these circumstances are far different from those considered by the Fourth Circuit
in Spaulding v. Wells Fargo Bank, N.A.104 In that case, the bank responded to a borrower’s request
for a HAMP mortgage modification by requesting additional information. No TPP was offered to
the borrower. When the borrower did not timely supply the requested information, the bank
considered the request cancelled and proceeded with collection action. As the Fourth Circuit said
in Spaulding, the evidence was “clear that further action was required on the part of [the bank]
before an offer would be extended. When there is no offer, there can be no contract.”105 Here,
however, PNC offered both a TPP and a HAMP loan modification—each of which was accepted
by the Davises.

Accordingly, the Court finds that the PNC Signature Clause was (i) intended by the parties
to be a simple formality to memorialize the culmination of their already obligatory agreement, and
(ii) was neither a condition precedent to the formation of a contract pursuant to the HAMA Letter
nor a provision that gave PNC a unilateral right to terminate the Modification Agreement at a time
when the Davises were undertaking compliance with the sole remaining condition for PNC’s
performance. Thus, the contract was formed, and PNC has breached it.

103 At the time PNC purported to terminate the Modification Agreement, PNC itself recognized that the HAMA Letter
contained an offer subject to acceptance by the Davises. Termination Letter [Defendant’s Exhibit 20] (“After being
offered a Trial Period Plan or Home Affordable Modification you notified us on December 22, 2015 that you did not
wish to accept the offer.”) (emphasis added).
104 714 F.3d 769 (4th Cir. 2013).
105 Id. at 778.
Count II – The Maryland Consumer Debt Collection Act
In Count II of the Amended Complaint, the Davises assert that PNC’s conduct was also a
violation of the MCDCA. The Court agrees with their assertion.
The MCDCA provides in relevant part that, “In collecting or attempting to collect an
alleged debt, a collector may not … claim, attempt, or threaten to enforce a right with knowledge

that the right does not exist.”106 PNC is a “collector” within the meaning of the MCDCA.107 The
statute provides that, “A collector who violates any provision of [the MCDCA] is liable for any
damages proximately caused by the violation, including damages for emotional distress or mental
anguish suffered with or without accompanying physical injury.”108
The Davises argue that the various collection attempts by PNC after their Prior Case was
dismissed on March 11, 2016 violated the MCDCA. The Court agrees. The rights of the Davises
under the Modification Agreement were enforceable as of that date because all conditions were
satisfied. Thereafter, PNC sent the Davises (i) the Mortgage Statement demanding that they pay
$51,372.48 by April 1, 2016,109 and (ii) the Delinquency Letter requiring that they pay $41,975.03
to reinstate their loan and threating to conduct a foreclosure sale of the Property.110 PNC claimed

these amounts based upon the original loan terms, not the terms of the Modification Agreement.

106 Md. Code Ann., Com. Law § 14-202(8).
107 Id. § 14-201(b) (“Collector means a person collecting or attempting to collect an alleged debt arising out of a
consumer transaction.”). Under the MCDCA, “consumer transaction” means “any transaction involving a person
seeking or acquiring real or personal property, services, money, or credit for personal, family, or household purposes.”
Id. § 14-201(c). Thus, the Modification Agreement and the underlying Note and Deed of Trust constituted a consumer
transaction within the meaning of the MCDCA. Each of the Davises and PNC is a “person” within the meaning of
the MCDCA. Id. § 14-201(d) (“‘Person’ includes an individual, corporation, business trust, statutory trust, estate,
trust, partnership, association, two or more persons having a joint or common interest, or any other legal or commercial
entity.”).
108 Id. § 14-203.
109 Mortgage Statement dated March 16, 2016 [Plaintiff’s Exhibit 8].
110 Delinquency Letter dated March 16, 2016 [Plaintiff’s Exhibit 9] (“Failure to bring your loan current may result in
fees and foreclosure – the loss of your home. As of the date of this letter, your loan is 746 days delinquent. Your loan
has been delinquent as of March 01, 2014. If you are experiencing financial difficulty, see below information about
mortgage counseling or assistance. First legal foreclosure action has been taken.”) (emphasis on original).
It then scheduled a foreclosure sale for April 25, 2016. At the same time, PNC was refusing to
accept any payment from the Davises that was less than the full amount PNC asserted was required
to cure the alleged delinquencies. These actions entirely ignored the rights of the Davises under
the Modification Agreement. Under it, no more than four monthly payments of $3,007.40 were
then due.

Next, the Court must determine whether PNC took these collection actions with knowledge
that its asserted right to collect the delinquency did not exist. The meaning of “knowledge” under
the MCDCA has been considered in several opinions issued by the United States District Court
for the District of Maryland (the “District Court”). While the “knowledge” requirement of the
MCDCA “does not immunize debt collectors from liability for mistakes of law,” the MCDCA “is
not a strict liability statute” like its federal counterpart, the Federal Fair Debt Collection Practices
Act. Spencer v. Hendersen-Webb, Inc., 81 F.Supp.2d 582, 594-595 (D. Md. 1999). “This has been
held to mean that a party may not attempt to enforce a right with actual knowledge or with reckless
disregard as to the falsity of the existence of the right.” Kouabo v. Chevy Chase Bank, F.S.B.,
336 F.Supp.2d 471, 475 (D. Md. 2004) (citing Spencer, 81 F.Supp.2d at 595).111

111 In an unreported opinion, the District Court further explained the ruling in Spencer as follows:
In Spencer, the court observed that the construction of the “knowledge” requirement under the
MCDCA was a matter of first impression. Noting the remedial aim of the statute, the court in
Spencer held that, with regard to mistakes of fact, knowledge can either mean actual knowledge
or that the defendant acted with reckless disregard. Explaining its holding, the court in Spencer
stated: “This standard comports with the level of knowledge required for the similar common
law actions of fraud … and defamation.” As the court in Ellerin noted, “reckless disregard …
does not mean a situation where the defendant honestly, but negligently, believed that the
representation was true.” Ellerin v Fairfax Sav. Bank, F.S.B., 337 Md. 216, 234 (1995).
Shah v. Collecto, Inc., 2005 WL 2216242, at *10; 2005 U.S. Dist. LEXIS 19938 at *32; (D. Md. Sept. 12, 2005)
(citations omitted). This is hardly such a case. PNC did not honestly, but negligently, believe that it was entitled to
collect the amounts demanded. It sent the Davises the Termination Letter in which PNC falsely stated that the Davises
did not wish to accept the Modification Agreement at time when (i) PNC knew the Davises were taking active steps
to obtain court approval, and (ii) PNC’s employees were simultaneously stating in its internal records that the
termination was based upon a 60-day time limit never set forth in the Modification Agreement or any of the related
correspondence PNC sent to the Davises.
The Court concludes that PNC acted either with the requisite knowledge or with the
reckless disregard required under the MCDCA. When it sent the Mortgage Statement and the
Delinquency Letter to the Davises on March 16, 2016, PNC knew that (i) the Davises had accepted
the offer made in the HAMA Letter, (ii) its reason for revoking the Modification Agreement stated
in the Termination Letter was false, (iii) the Modification Agreement had been recorded by Title

First and no effort had been made to remove it from the land records, (iv) the Prior Case had been
dismissed thereby satisfying its secret December 21, 2015 deadline for bankruptcy court approval,
and (v) under the terms of the Modification Agreement no more than four monthly payments of
$3,007.40 were then due. Nevertheless, PNC refused to acknowledge the rights of the Davises
under the Modification Agreement.
Consequently, the Court must consider whether the record here demonstrates a basis for an
award of emotional distress damages as allowed under the statute. The Court concludes that the
evidence is adequate for such an award. In a case concerning the Fair Credit Reporting Act
(the “FCRA”),112 the Fourth Circuit said,

Our previous cases establish the type of evidence required to support an award
for emotional damages. We have warned that “[n]ot only is emotional distress
fraught with vagueness and speculation, it is easily susceptible to fictitious and
trivial claims. For this reason, although specifically recognizing that a
plaintiff’s testimony can provide sufficient evidence to support an emotional
distress award, we have required a plaintiff to “reasonably and sufficiently
explain the circumstances of [the] injury and not resort to mere conclusory
statements.” Thus, we have distinguished between plaintiff testimony that
amounts only to “conclusory statements” and plaintiff testimony that
“sufficiently articulate[s]” true “demonstrable emotional distress.”

Sloane v. Equifax Info. Svcs., LLC, 510 F.3d 495, 503 (4th Cir. 2007) (citations omitted) (changes
in original).

112 15 U.S.C. § 1681, et seq.
The Sloane court outlined the following factors to be considered when determining whether
an award of emotional distress damages is excessive:
They include the factual context in which the emotional distress arose; evidence
corroborating the testimony of the plaintiff; the nexus between the conduct of
the defendant and the emotional distress; the degree of such mental distress;
mitigating circumstances, if any; physical injuries suffered due to the emotional
distress; medical attention resulting from the emotional distress; psychiatric or
psychological treatment; and the loss of income, if any.

Id. (citing Knussman v. Maryland, 272 F.3d 625, 640 (4th Cir. 2001)). After considering the
evidence in Sloane, the Fourth Circuit held that the jury’s award of $245,000.00 in emotional
distress damages was excessive and reduced the award to $150,000.00.113
In applying the Sloane factors to this case, the Court is mindful that the Davises presented
no evidence of physical injury, medical attention, or psychiatric or psychological treatment
attributable to emotional distress arising from PNC’s actions after December 21, 2015.114 The
evidence does show, however, the context in which the emotional distress arose and the nexus
between PNC’s actions and the emotional distress experienced by the Davises. Based upon that
evidence, the Court found that real and serious emotional distress occurred. Suffice it to say that
the Davises experienced a dramatic emotional shock at the time they received the Termination
Letter—which letter falsely stated that the Davises had notified PNC that they were abandoning
their long struggle to obtain a HAMP loan modification. And this emotional distress was not a
one-time event. For example, Christopher Davis thereafter requested FMLA leave from work due

113 In Sloane, the Fourth Circuit stated that its survey of emotional distress awards in FCRA cases “suggests that
approved awards more typically range between $20,000 and $75,000.” 510 F.3d at 505. The Court finds that range
instructive for purposes of the determination that must be made here.
114 The Termination Letter was itself an act to collect a debt in violation of MCDCA because it effectively asserted
that the Davises were bound to pay PNC in accordance with the original loan terms rather than those of the
Modification Agreement. PNC knew that its stated reason was false. PNC also knew that its actual reason was a
supposed condition never disclosed to and therefore not binding on the Davises. For that reason, PNC’s liability under
the MCDCA arises as of the date of the Termination Letter.
to stress and Teresa Davis has been subjected to ongoing stressful annual background
investigations and polygraph examinations.
After considering the Sloane factors and the evidence, the Court concludes that PNC is
liable to the Davises for the emotional distress damages proximately caused by its actions.
Accordingly, the Court will enter judgment under the MCDCA in favor of the Davises and against

PNC in the amount of $50,000.00.
Count III – The Maryland Consumer Protection Act
In Count III of the Amended Complaint, the Davises also assert a claim against PNC for
violation of the MCPA. The Court agrees with this assertion.
The MCPA prohibits use by any person of “unfair and deceptive trade practices” in
connection with, among other things, the “extension of consumer credit” or the “collection of
consumer debts.”115 Each of the Davises is a “consumer” within the meaning of the MCPA.116
PNC is a “person” within the meaning of the MCPA.117
An unfair or deceptive trade practice under the MCPA is expressly defined to include any
violation of a provision of the MCDCA.118 Thus, the District Court has held that “a violation of

the MCDCA is a per se violation of the MCPA.” Hawkins v. Kilberg, 165 F. Supp. 3d 386, 389
(D. Md. 2016). Since this Court has concluded that PNC violated the MCDCA, it therefore follows
that PNC violated the MCPA.119

115 Md. Code Ann., Com. Law §13-301.
116 Id. § 13-101(c)(1) (“‘Consumer’ means an active or prospective purchaser, lessee, or recipient of consumer goods
consumer services, consumer realty, or consumer credit.”). Under the MCPA, “consumer credit” means credit that is
“primarily for personal, family, household, or agricultural purposes.” Id. § 13-101(d). Thus, the Modification
Agreement constituted an extension of consumer credit within the meaning of MCPA.
117 Id. § 13-101(h) (“‘Person’ includes an individual, corporation, business trust, statutory trust, estate, trust,
partnership, association, two or more persons having a joint or common interest, or any other legal or commercial
entity.”). PNC is also a “merchant” within the meaning of the MCPA. Id. § 13-101(g).
118 Id. § 13-301(14)(iii).
119 Under the MCPA, an unfair or deceptive trade practice is defined to include any “[f]alse, falsely disparaging, or
misleading oral or written statement, visual description, or other representation of any kind which has the capacity,
A private party “may bring an action for injury or loss” sustained as a result of a violation
of the MCPA.120 In such private enforcement actions, the Court of Appeals of Maryland has held
that the MCPA “requires an aggrieved consumer to establish the nature of the actual injury or loss
that he or she has allegedly sustained as a result of the prohibited practice.” CitaraManis v.
Hallowell, 613 A.2d 964, 969 (Md. 1992). Under the MCPA, “the injury must be objectively

identifiable.” Lloyd v. General Motors Corp., 916 A.2d 257, 277 (Md. 2007). In the instant case,
this Court has determined that the Davises are entitled to recover objectively identifiable and actual
damages from PNC by reason of its violation of the MCDCA. Thus, the Davises have established
such damages under the MCPA as well.
In addition, the MCPA provides that “any person who brings an action to recover for injury
or loss under this section and who is awarded damages may also seek, and the court may award,
reasonable attorney’s fees.”121 It is clear from the evidence before the Court that the Davises have
incurred attorney’s fees and expenses by reason of PNC’s conduct in violation of the MCPA. The
Court concludes that this is a case in which an award of attorney’s fees is justified. The Davises

may file a motion for attorney’s fees in accordance with Rule 54(d)(2) of the Federal Rules of
Civil Procedure (as made applicable here by Rule 7054(b)(2) of the Federal Rules of Bankruptcy
Procedure). PNC may file an opposition to such motion as provided in the Local Bankruptcy
Rules. As the Fourth Circuit held in the context of the FCRA, the provisions of Rule 54(d)(2) are
“not discretionary.” Sloan v. Equifax Information Services, LLC, 510 F.3d at 507. Accordingly,

tendency, or effect of deceiving or misleading consumers.” Id. § 13-301(1). PNC’s Termination Letter falls squarely
within this definition—it contained a false statement and was predicated on a secret deadline that was never disclosed
to the Davises.
120 Id. § 13-408(a).
121 Id. § 13-408(b).
the Court will enter a separate order establishing a briefing schedule on the question of the amount
that should be awarded as reasonable attorney’s fees.
Count IV - Equitable Relief
In Count IV of the Amended Complaint, the Davises argue that this Court should grant
them equitable relief against PNC in the form of (i) a determination that they were “seriously

harmed, emotionally impacted, unreasonably inconvenienced, and victimized” by PNC’s actions,
(ii) an award of “sanctions … in an amount sufficient to bring the mortgage … current as of the
date of this filing,” (iii) an award of “sanctions … in an amount sufficient to cure all tax liability
attributable to a lack of a mortgage interest deduction,” and (iv) an award of “legal fees and
expenses for being forced to bring and defend this adversary [proceeding].” The Davises repeated
these requests in their post-trial brief. The Davises base their argument on § 105(a) of the
Bankruptcy Code and on the well-known general principle that the bankruptcy court is a court of
equity. For the most part, the Court is not convinced that equity affords the Davises any additional
relief.

This Court is of course a court of equity and has the power to grant equitable relief when
appropriate. The claims made in Count IV, however, merely duplicate in large part relief sought
by the Davises under Counts I, II, and III of the Amended Complaint. For the reasons explained
below, the Court will grant only limited equitable relief.
The Court has determined that the Modification Agreement was and is an offer made and
accepted—that is, it is an enforceable contract that modified the terms of the Note and Deed of
Trust. Accordingly, the Davises are entitled to cure any default and reinstate the mortgage loan
on the terms of the Modification Agreement. Based upon the evidence presented and the record
in this adversary proceeding and the Main Case, it is not possible to determine the amount that
must be paid to reinstate the mortgage loan. Prior to entry of judgment, the Court will therefore
order PNC to file an accounting of all amounts necessary to reinstate the loan under the terms of
the Modification Agreement without penalties, late charges, attorney’s fees or other collection
costs incurred after December 22, 2015. The Davises will be permitted to object to the accounting.
If the parties are unable to agree, the Court will conduct such further limited evidentiary

proceedings as are necessary solely for the purpose of determining that amount.
The Court has already determined that an award of damages, including damages for
emotional distress under the MCDCA and attorney’s fees under the MCPA, is appropriate in this
case. The Court sees no basis in equity to award other or further such damages or sanctions.
The Court has already determined that the evidence does not support an award of damages
with respect to the claim that the Davises incurred tax liabilities or were otherwise injured by
reason of an inability to take a mortgage interest deduction on their tax returns. The Court sees no
basis in equity to award sanctions with respect to that claim.
CONCLUSION

For the above reasons, the court will enter an order that establishes a briefing schedule on
the issues of attorney’s fees and the loan reinstatement amount. Following determination of these
two amounts, the Court will enter judgment accordingly.

cc: Christopher P. Davis
Teresa Davis
304 Saddleback Trail
Mount Airy, MD 21771

Plaintiffs
Mary Migues-Jordan, Esq.
Law Office of Mary A. Jordan
14 Crain Highway S.W.
Glen Burnie, MD 21061

Sari Karson Kurland, Esq.
The Kurland Law Group
211 Jersey Lane
Rockville, MD 20850

Attorneys for the Plaintiffs

Daniel J. Tobin, Esq.
Ballard Spahr LLP
300 East Lombard Street, 18th Floor
Baltimore, MD 21202

Attorney for the Defendant

-- End of Memorandum Opinion --

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10458324. Public record. Not legal advice.