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Cerget v. Deutsche Bank Trust Co. Americas

March 30, 2010


The opinion of the court was delivered by: VIRGINIA M. Morgan United States Magistrate Judge


(Doc. No. 19)

In this civil action, Plaintiffs James and Stacy Cerget ("Plaintiffs") allege that Defendants Deutsche Bank Trust Company Americas and Saxon Mortgages Services, Inc. ("Defendants") unlawfully increased Plaintiffs' mortgage payment, assessed excess fees, penalties, and charges, and illegally foreclosed upon Plaintiffs' property. Presently before the court is Defendants' motion for summary judgment, filed June 22, 2009. (Doc. No. 19). Plaintiffs did not file a response. in accordance with Local Rule 7.1(e)(2), the court dispensed with oral argument. (Doc. No. 21). For the reasons stated below, the court GRANTS Defendants' motion, and dismisses Plaintiffs' complaint with prejudice.

I. Background

On November 28, 2001, Plaintiffs executed a thirty-year, adjustable rate mortgage with Franklin Mortgage Funding for a home in Utica, Michigan. (Doc. No. 19, Defs.' MSJ, Ex. 3, Mortgage). The initial interest rate on the loan was 11.5%, and Plaintiffs' initial monthly payment was $2,592.59. (Doc. No. 19, Defs.' MSJ, Ex. 1, Adjustable Rate Note ¶¶ 2-3). The loan documents specify that the Plaintiffs' interest rate could change on December 1, 2003, "and on that day every sixth month thereafter." (Id. at ¶ 4(A)). After December 1, 2003, the interest rate was to be based on an index of the "average of interbank offered rates for six month U.S. dollar-denominated deposits in the London market ("LIBOR"), as published in the Wall Street Journal." (Id. at ¶ 4(B)). The interest rate could never rise above 18.5%. (Id. at ¶ 4(D)). In the event that Plaintiff failed to make timely payments, a late charge of 5% of the overdue payment of principal and interest would be assessed. (Id. at ¶ 7(A)). The mortgage also allowed the Lender to require Plaintiffs to escrow tax and insurance payments, in the event that Plaintiffs failed to independently make the payments directly. (No. 19, Defs.' MSJ, Ex. 3, Mortgage § 3).

On September 30, 2005, after Plaintiffs had failed to pay their property taxes in 2004, an escrow account was established by the Lender, thereby increasing Plaintiffs' monthly payment. (Doc. No. 19, Defs.' MSJ Ex. 9, Stacy Cerget Dep. 41, 43, 46). Also, Plaintiffs made late payments and were assessed late charges. (Id. at 32). By November 2005, Plaintiffs' interest rate was 15% and was set to increase to 16%. (Id. at 23-24). At some point thereafter, Plaintiffs defaulted on their mortgage. (Id. at 26).

The mortgage was assigned to Defendants on January 13, 2006. (Doc. No. 19, Defs.' MSJ Ex. 4, Assignment of Mortgage). It is unclear from the evidence provided whether the mortgage assignment took place before or after Plaintiffs defaulted on their mortgage.

A notice of foreclosure was placed in the Macomb County Legal News on August 21, 2007, August 28, 2007, September 4, 2007, and September 11, 2007. (Doc. No. 19, Defs.' MSJ Ex. 6, Foreclosure Notice). The foreclosure notice was also affixed to Plaintiffs' home on August 31, 2007. (Id.)

On September 21, 2007, the Macomb County Sheriff conducted a sheriff's sale of Plaintiffs' home and Defendants bought the property. (Doc. No. 19, Defs.' MSJ Ex. 7, Sheriff's Deed on Mortgage Sale).

On March 20, 2008, Plaintiffs filed the instant lawsuit in Macomb County Circuit Court. (Doc. No. 1, Notice of Removal Ex. A., Verified Complaint [hereinafter "Compl."]). In the complaint, Plaintiffs accused Saxon of improperly raising the interest rate on the mortgage, "assessing excessive late fees and charges not allowed by the mortgage contract," and illegally instituting an escrow account for tax payments that were not yet due. (Compl. ¶¶ 9-12). Plaintiffs also alleged that Deutsche Bank of lacked standing to initiate foreclosure proceedings. (Compl. ¶ 23). Plaintiffs brought the following claims against Defendants: fraudulent misrepresentation, conversion, breach of contract, violation of the foreclosure by advertisement statute, Mich. Comp. Laws § 600.3212, and civil conspiracy. (Compl.). Plaintiffs sought injunctive relief, declaratory relief, and monetary damages. (Compl.).

On April 4, 2008, Defendants removed Plaintiffs' complaint to this court. (Doc. No. 1, Notice of Removal).

Pursuant to 28 U.S.C. §36(c) and Fed. R. Civ. P. 73, the parties consented to this court's jurisdiction, thereby allowing the Honorable Virginia M. Morgan, United States Magistrate Judge, to conduct any further proceedings in the case, including trial, order the entry of a final judgment, and conduct all post-judgment proceedings. (Doc. No. 4).

Defendants filed the instant motion for summary judgment on June 22, 2009. (Doc. No. 19).

Plaintiffs have not filed a response, and the response time has long expired. (Doc. No. 21). The court, therefore, finds that ...

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