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Karp v. Citimortgage, Inc.

United States District Court, E.D. Michigan, Southern Division

January 23, 2015

BRUCE B. KARP, Plaintiff,
v.
CITIMORTGAGE, INC. and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants

For Bruce B. Karp, Plaintiff: David G. Lutz, LEAD ATTORNEY, David Lutz Law PC, Troy, MI.

For CitiMortgage, Inc., Defendant: Wade Fink, Dickinson Wright PLC, Detroit, MI; Kathryn J. Miller, Dickinson Wright, Ann Arbor, MI.

For Mortgage Electronic Registration Systems Inc., Defendant: Kathryn J. Miller, Dickinson Wright, Ann Arbor, MI.

DAVID R. GRAND, United States Magistrate Judge. Honorable Sean F. Cox.

REPORT AND RECOMMENDATION TO GRANT DEFENDANTS' MOTION TO DISMISS THE COMPLAINT [4]

DAVID R. GRAND, United States Magistrate Judge

I. RECOMMENDATION

Plaintiff Bruce B. Karp (" plaintiff") commenced this action against Citimortgage, Inc. (" CMI") and Mortgage Electronic Registration Systems, Inc.[1](" MERS") (collectively " defendants") seeking to invalidate the alleged foreclosure sale of his property and compel CMI to grant him a loan modification. Before the Court is defendants' motion to dismiss the complaint. [4]. Plaintiff filed a response, to which defendants filed a reply. [8, 9]. The motion has been referred to this Court for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). For the following reasons, the Court RECOMMENDS that defendants' motion [4] be GRANTED.

II. REPORT

A. Background

On October 20, 2004, plaintiff and his wife (who is now deceased) executed a mortgage loan with Quicken Loans, Inc. (" Quicken") in the amount of $185, 600. [4, Ex. A, B].[2] The mortgage was secured by plaintiff's property located at 6886 Chesterfield in Waterford Township, Michigan. [ Id.]. The mortgage listed MERS as Quicken's nominee and indicated that MERS would act as the mortgagee on behalf of Quicken and its successors and assigns. [4, Ex. A at 2]. The mortgage was duly recorded in the Oakland County Register of Deeds and provided that the mortgagee could sell the property in the event plaintiff defaulted on the mortgage. [ Id. at ¶ 22]. MERS then assigned the mortgage to CMI on September 12, 2012. [4, Ex. C].

What happened next is not entirely clear. Plaintiff does not acknowledge whether he ever defaulted on the mortgage and, although he admits to making an unsuccessful attempt at some form of loan modification, the record is devoid of any written correspondence between the parties substantiating these efforts. What is clear is that CMI at some point initiated foreclosure proceedings that never culminated in a sheriff's sale. [8, at 5]. Thereafter, plaintiff filed the instant complaint in Oakland County Circuit Court asserting causes of action for wrongful foreclosure, breach of contract and fraudulent representation. CMI timely removed the matter to this Court on October 21, 2014. [1].

In their instant motion, defendants argue that MERS should be dismissed from this case because it played no role in the foreclosure process. With respect to the mortgage foreclosure claim, defendants maintain that plaintiff has not suffered any redressable injuries because no foreclosure sale has taken place. Defendants also assert that the complaint fails to specify how CMI violated Michigan's foreclosure by advertisement statute. Regarding the breach of contract claim, defendants contend that the complaint fails to identify which mortgage provisions CMI allegedly violated. To the extent plaintiff argues that CMI breached the implied covenant of good faith and fair dealing by declining to grant him a loan modification, defendants argue that Michigan law does not recognize this cause of action. Insofar as plaintiff purports that CMI orally promised to forego foreclosure proceedings while it reviewed his application for a loan modification, defendants maintain that these allegations are barred by the statute of frauds. Furthermore, defendants assert that the fraudulent representation claim should be dismissed because plaintiff's allegations are not sufficiently particular under Fed.R.Civ.P. Rule 9(b) and they are barred by the statute of frauds.

B. Legal Standard

A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) tests a complaint's legal sufficiency. " To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). The plausibility standard " does not impose a probability requirement at the pleading stage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct]." Twombly, 550 U.S. at 556. Put another way, the complaint's allegations " must do more than create speculation or suspicion of a ...


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