United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
DAVID M. LAWSON, District Judge.
This matter is before the Court on the defendant's motion to dismiss. This case returns to the Court a third time, following the dismissal of plaintiffs' first and second actions seeking to set aside or prevent the foreclosure on their property at 7330 Deer Park Trail, Clarkston, Michigan. The Court dismissed both actions with prejudice; the second was dismissed on the basis of res judicata as raising claims that either were or should have been raised in the first action. The defendant filed its motion to dismiss on October 8, 2014. The plaintiff did not file a response, and the time for doing so long has passed. The Court has reviewed the pleadings and motion papers and finds that the papers adequately set forth the relevant facts and law and oral argument will not aid in the disposition of the motion. Therefore, it is ORDERED that the motion be decided on the papers submitted. See E.D. Mich. LR 7.1(f)(2). The hearing previously scheduled for January 12, 2015 is CANCELLED. After reviewing the pleadings and the defendant's motion, the Court now finds - for the second time - that the plaintiff's claims are barred by the doctrine of res judicata and therefore will grant the defendant's motion and dismiss the case with prejudice.
Because this is a motion to dismiss, the Court accepts all well-pleaded material facts in the complaint as true. According to his latest complaint, plaintiff Petar Berishaj's wife Pashka Berishaj bought the Deer Park Trail property in December 2004. On September 19, 2006, Ms. Berishaj refinanced the property with Countrywide Home Loans, Inc., also known as "America's Wholesale Lender." Countrywide held the note, and defendant Mortgage Electronic Registration Systems, Inc. (MERS) was the mortgagee. On November 28, 2009, MERS assigned its interest in the mortgage to defendant Mellon. Countrywide was dissolved in 2007, and Mellon bought certain of Countrywide's assets, including the note associated with the Deer Park Trail property.
Apparently, Ms. Berishaj fell behind on the note payments, because the complaint alleges that defendant Mellon foreclosed the mortgage by advertisement, and a sheriff's deed was issued to it on August 23, 2011. Before any of that occurred, however, she filed her first lawsuit in the Oakland County, Michigan circuit court on August 24, 2010. Ms. Berishaj brought that case against Countrywide and Wholesale Mortgage Group, Inc., alleging (1) fraudulent misrepresentation; (2) violation of the Truth in Lending Act, 15 U.S.C. § 1601 et seq., and the Real Estate Settlement Procedures Act; (3) violation of the Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act, Mich. Compiled Laws § 445.1672 et seq.; (4) breach of contract; (5) malpractice; and (6) violation of Michigan Compiled Laws § 600.3205a. She sought money damages and: (1) "a declaratory judgment that the Defendants may not proceed with foreclosure and dispossession without complying with the provisions of [Michigan Compiled Laws § 600.3205a]"; (2) a judgment quieting title in the property to the plaintiffs; and (3) an injunction to "[r]estrain and enjoin Defendants... from doing any act to interfere with Plaintiff's possession and enjoyment of the property, " including "initiating or continuing any foreclosure proceedings." Compl. at 7-8, Berishaj v. America's Wholesale Lender, No. 10-14109 (E.D. Mich. Oct. 13, 2010). Countrywide removed the case to this Court on October 13, 2010.
Ms. Berishaj never served defendant Wholesale Mortgage Group, Inc. in that case. On November 10, 2010, Countrywide filed a motion to dismiss. On April 26, 2011, Ms. Berishaj filed an untimely response to the motion to dismiss, captioned as a "supplemental brief." By then, foreclosure proceedings were underway. In her response to the motion to dismiss, Ms. Berishaj asserted that "Defendants sought foreclosure under the Michigan Foreclosure by Advertisement statute (MCL § 600.3204 et seq). Mortgage Electronic Registration Systems, Inc. (MERS) acted as nominee for the Defendants in bringing the Foreclosure by Advertisement and Sheriff's sale." Plaintiff's Supplemental Brief at 1, Berishaj, No. 10-14109 (Apr. 26, 2011) [dkt. #11]. She attached to the supplemental brief as Exhibit 1 two advertisements of foreclosure dated December 22, 2009 and January 7, 2010.
On May 4, 2011, at the hearing on the motion to dismiss, Ms. Berishaj's attorney stated that "[a] foreclosure proceeding by advertisement was instituted.... It had not happened at the time we filed the Complaint. It has happened since then... at the beginning of 2010." Tr. of Hr'g on Mot. to Dismiss at 13, 15, Berishaj, No. 10-14109 (E.D. Mich. Mar. 2, 2012) [dkt. #16]. Berishaj's attorney stated that he had received the first notice of foreclosure when "it was faxed to me by my clients when I filed this brief and the issue came up." Id. at 16.
At the hearing on May 4, 2011, the Court found that all of Ms. Berishaj's claims lacked merit and granted the motion to dismiss from the bench. The Court found that (1) the complaint failed to support the claim of fraud with any facts; (2) the Michigan Mortgage Brokers, Lenders, and Servicers Act does not provide a private cause of action; (3) the plaintiff failed to point to any contract, or even a mutual agreement to support the claim of breach; (4) the plaintiff failed to explain how Countrywide could be liable for the malpractice of a contracted appraiser; and (5) the plaintiff filed the complaint in 2010, but claims under RESPA and the Truth in Lending Act for misrepresentations during a loan transaction are subject to a one-year statute of limitations, and the loan closed four years prior in 2006. On May 4, 2011, the Court entered an order dismissing the complaint with prejudice as to defendant Countrywide and dismissing without prejudice as to defendant Wholesale Mortgage Group, Inc.
On November 30, 2011, Petar (denoted as "Peter") and Pashka Berishaj filed a second complaint in the Oakland County, Michigan circuit court seeking to stop the foreclosure of their home. The complaint sought money damages as well as: (1) "a declaratory judgment that the Defendants may not proceed with foreclosure and dispossession without complying with the provisions of [Michigan Compiled Laws § 600.3205a]"; (2) a judgment quieting title in the property to the plaintiffs; and (3) an injunction to "[r]estrain and enjoin Defendants... from doing any act to interfere with Plaintiff's possession and enjoyment of the property." Compl. at 4, Berishaj v. The Bank of New York Mellon, No. 12-10892 (E.D. Mich. Nov. 30, 2011). The plaintiffs alleged that (1) "[a]t no time did Plaintiffs receive notice of the reasons the mortgage was not [sic] in default [or] a list of housing counselors to attempt to work out a modification"; and (2) "Plaintiffs would meet the criteria of a ratio of their housing related debt to their gross income of 38%." Id. ¶¶ 12-13. On February 28, 2012, the defendants removed the second lawsuit to this Court and filed a motion to dismiss it. On October 10, 2012, after a hearing, the Court granted the defendants' motion and dismissed the case with prejudice, after concluding "that the plaintiffs' claims in this case are barred by the doctrine of claim preclusion, because they were or should have been litigated in the prior case between the same parties, and the prior case was dismissed with prejudice." Op & Order [dkt. #20] at 6, Berishaj, No. 12-10892 (E.D. Mich. Oct. 10, 2012).
After the Court dismissed the plaintiffs' second complaint, the Bank of New York filed a complaint in the state district court in Clarkston, Michigan, seeking a judgment of possession and an order of eviction. The plaintiffs filed a counter-complaint raising numerous claims. On May 14, 2013, the district court entered a judgment of possession and ordered that a writ of execution to evict the plaintiffs from the home would issue after May 24, 2013. Def.'s Mot. to Dismiss [dkt. #10], Ex. 9, Judgment of Possession. The plaintiffs appealed the judgment of possession to the circuit court, contending, inter alia, that the mortgage was forged and fraudulent. On August 28, 2013, the circuit court dismissed the plaintiffs' appeal. Id., Ex. 11. The plaintiffs filed a motion for reconsideration, which was denied. Id., Ex. 13. The plaintiffs then filed a motion for relief from judgment in the district court, which also was denied. Id., Ex. 15.
In January 2014, in an attempt to forestall the eviction, Ms. Berishaj "re-filed her Chapter 13 Voluntary Petition [for Bankruptcy]." The bankruptcy proceeding, however, was dismissed soon thereafter when Ms. Berishaj failed to make required filings. Compl. ¶¶ 41-43.
On August 12, 2014, Petar Berishaj filed a third complaint in the Oakland County circuit court, again challenging the foreclosure. In his complaint, Mr. Berishaj alleges that the mortgage recorded by the original lender was forged and fraudulent because he never signed it. The plaintiff purported to attach to the complaint the "true mortgage, " which is signed by Ms. Berishaj only, and which bears a notary's certification dated November 14, 2011. Compl., Ex. F, "The Pashka Mortgage" (Pg ID 60-70). Berishaj also attached to his complaint the affidavit of a "renowned handwriting examiner" purporting to attest that the signature on the forged mortgage is not his. Mr. Berishaj contends that "[o]nly after the [judgment of possession was entered]... and [his attorney] reviewed and compared the documents did the Plaintiff (and Pashka) learn that Countrywide/AWL recorded a mortgage with the addition of Petar's signature." Compl. ¶ 30. Mr. Berishaj asserts that after filing a notice of appeal of the judgment of possession, his attorney failed timely to file a brief in support of the appeal, "for a number of personal reasons." Compl. ¶ 34. Mr. Berishaj sought leave to file a late brief, but the circuit court denied that relief and dismissed the appeal "for [the] procedural reason [that the plaintiffs] failed to file a timely brief." Compl., Ex. H, Order Denying Mot. for Reconsideration at 3 (Pg ID 81). According to the plaintiff, the question whether the mortgage was fraudulently recorded has not been litigated by the parties in any prior action, because "the fraud was not part of the trial court record in the Eviction Action as, when the Eviction Action took place, neither Petar nor Pashka were aware of the fraud." Compl. ¶ 36.
In his third complaint, Mr. Berishaj seeks a declaration that the "forged" mortgage is void (count I), reformation of the mortgage to obliterate the putative signature of the plaintiff (count II), a judgment setting aside the foreclosure and sheriff's deed (count III), and an injunction barring the defendant from proceeding with any attempt to recover the property or enforce the mortgage (count IV). Berishaj further seeks money damages on account of the defendant's fraud (count IV).
The defendant represents in its motion that, notwithstanding the proceedings discussed above, the plaintiffs were in fact evicted from the home "on June 5, 2014, at which time ...