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Williams v. JP Morgan Mortgage Acquisition Corp.

March 19, 2010


The opinion of the court was delivered by: Honorable Patrick J. Duggan


At a session of said Court, held in the U.S. District Courthouse, Eastern District of Michigan, on March 19, 2010.


This action arises from the foreclosure of real property in Addison Township, Michigan, owned by Plaintiffs Steven Williams and Tanya Williams (collectively "Plaintiffs"). In a Complaint filed on May 21, 2009, in the Circuit Court for Oakland County, Michigan, Plaintiffs allege that Defendant JP Morgan Acquisition Corporation ("Defendant") promised that it would modify Plaintiffs loan on the property and delay a Sheriff's Sale during the loan modification process.*fn1 Plaintiffs allege the following "claims" against Defendant based on these alleged promises: (I) Quiet Title; (II) Unjust Enrichment; (III) Breach of Implied Agreement/Specific Performance; (IV) Constructive Trust; and (V) Injunction. On June 1, 2009, Defendant removed the Complaint to this Court pursuant to 28 U.S.C. § 1332(a) and 1441. Presently before the Court is Defendant's motion for summary judgment pursuant to Federal Rule of Civil Procedure 56(c), filed January 15, 2010. The motion has been fully briefed and, on March 17, 2010, this Court issued a notice informing the parties that it is dispensing with oral argument pursuant to Eastern District of Michigan Local Rule 7.1(f).

I. Standard for Summary Judgment

Summary judgment is appropriate if "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed R. Civ. P. 56(c). The central inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512 (1986). After adequate time for discovery and upon motion, Rule 56(c) mandates summary judgment against a party who fails to establish the existence of an element essential to that party's case and on which that party bears the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552 (1986).

The movant has an initial burden of showing "the absence of a genuine issue of material fact." Id. at 323, 106 S.Ct. at 2553. Once the movant meets this burden, the "nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986) (quoting Fed. R. Civ. P. 56(e)). To demonstrate a genuine issue, the nonmoving party must present sufficient evidence upon which a jury could reasonably find for that party; a "scintilla of evidence" is insufficient. See Liberty Lobby, 477 U.S. at 252, 106 S.Ct. at 2512. The court must accept as true the non-movant's evidence and draw "all justifiable inferences" in the non-movant's favor. See id. at 255, 106 S.Ct. at 2513.

II. Factual and Procedural Background

In May 2007, Plaintiff obtained a loan from First National Bank of Arizona to purchase the subject property and executed a mortgage on the Property to secure the loan. On September 12, 2008, Mortgage Electronic Registration Systems, Inc., as nominee for First National Bank of Arizona, assigned the mortgage to Defendant.

Plaintiffs subsequently defaulted on the terms of the loan and stopped making payments altogether in May 2008. Around the same time, Plaintiffs attempted to obtain a loan modification. According to the allegations in Plaintiffs' Complaint, they were in contact with Defendant regarding a loan modification from September 2008 through February 2009. Eventually it was determined that Plaintiffs did not qualify for a loan modification and Defendant initiated foreclosure proceedings by advertisement.

A Sheriff's Sale was held on November 4, 2008, where Defendant was the successful bidder. Plaintiffs' right of redemption under Michigan law expired on May 4, 2008, and on November 13, 2008, Defendant quit claimed the property to Homesales, Inc.

Plaintiffs thereafter filed their Complaint in the State Court, contending that Defendant assured them that during the loan modification process it would reschedule the Sheriff's Sale so that they would not lose their home. (Compl. ¶ 11.) Plaintiffs also allege "[t]hat Defendant committed a material misrepresentation by promising or representing that Defendant would consider a loan modification of the subject property." (Id. ¶ 42.) As indicated earlier, Defendant removed the Complaint to this Court and has now filed a summary judgment motion.

III. Applicable Law and Analysis

In the motion for summary judgment, Defendant contends that Plaintiffs' claims are barred by the statute of frauds set forth in Michigan Compiled Laws Section 566.132(c). In response, Plaintiffs contend that Defendant "has missed the gravamen of [their] Complaint" and that "[t]his is not a breach of promise case under MCL 566.132(2) which requires a writing in order to avoid the Statute of Fraud." (Resp. at 1.) Instead, Plaintiffs' explain, this is a material misrepresentation case based on Defendant's misrepresentation that it would either modify Plaintiffs' loan "or have a definitive decision on whether they would obtain a [l]oan [m]odification before [it] would go forward with a Sheriff [sic] Sale." (Id.) In an affidavit submitted in support of their response, Mr. Williams states that Plaintiffs would have filed for bankruptcy, obtained a TRO, or confirmed in writing that Defendant would adjourn the Sheriff's Sale until after the loan modification was made. ...

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