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Albrecht v. Mortgage Electronic Registration Systems, Inc.

United States District Court, Eastern District of Michigan, Southern Division

February 5, 2015



Nancy G. Edmunds United States District Judge

Plaintiff’s suit arises out of the foreclosure and March 11, 2014 sheriff’s sale of residential property located at 9001 Gladys, White Lake, Michigan, 48386 (the “Property”) to Christina Trust, a division of Wilmington Savings Fund Society, FSB, as Trustee for the bank. (“Trustee” or “Defendant”). Plaintiff alleges, inter alia, that the Trustee (1) failed to follow the requirements set forth under Michigan’s foreclosure by advertisement statute, Mich. Comp. Laws. § 600.3201 et seq, and (2) made fraudulent misrepresentations with respect to the availability of a loan modification. Plaintiff seeks relief in the form of a judgment setting aside the sheriff’s sale.

Currently before the Court is the Trustee’s motion to dismiss Plaintiff’s complaint. (Dkt. # 3). For the reasons stated below, the Court GRANTS the Trustee’s motion.


On or about October 20, 2006, Plaintiff entered into a mortgage loan transaction with non-party Assured Capital Funding, Inc. (the “Lender”). As security for the loan, Plaintiff executed a promissory note in the amount of $154, 000 in favor of the Lender, which was subsequently transferred to BAC Home Loan Servicing, LP. (“BAC”) (Def.’s Mot. Ex. B). The note was secured by a mortgage on the Property in favor of the Lender and its successors and assigns. (Id. at Ex. A). Several years later, Bank of America, N.A., as successor to BAC, assigned all of its “right, title and interest . . . .” in the mortgage to the Trustee. (Id. at Ex. B). The assignment to the Trustee was the final transaction establishing the record chain of title.

At some point, Plaintiff defaulted on his obligations under the note. According to the Complaint, Plaintiff attempted to avoid foreclosure by requesting loss mitigation alternatives, and the Trustee “under fraudulent pretenses, allowed Plaintiff to submit documentation to support his request for several loan modifications.” (Plf.’s Resp. 5). For reasons unknown to the Court, it appears as though Plaintiff’s request for a loan modification was denied, and the Trustee opted to move forward with the foreclosure process. Between February 7 and February 28, 2014, the Trustee published notice of the foreclosure sale in the Oakland County Legal News. On March 11, 2014, the Property was sold at a foreclosure sale to the Trustee for $211, 408.88. The statutory redemption period expired on September 11, 2014, at which point legal title vested in the Trustee.

On October 3, 2014, the Trustee removed this case from the Oakland County Circuit Court to this Court on the basis of diversity jurisdiction. In his complaint, Plaintiff maintains that the Trustee (1) fraudulently allowed Plaintiff to submit several loan modifications, (2) failed to follow the procedures set forth under Michigan’s foreclosure-by-advertisement statute, and (3) breached the implied covenant of good faith and fair dealing by disingenuously negotiating loss mitigation alternatives. On November 6, 2014, the Trustee filed a motion to dismiss Plaintiff’s complaint. Plaintiff submitted his untimely response on December 15.


A. Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6)

The Sixth Circuit recently noted that under the United States Supreme Court's heightened pleading standard laid out in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), “a complaint only survives a motion to dismiss if it contains sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Estate of Barney v. PNC Bank, Nat'l Assoc., 714 F.3d 920, 924-25 (6th Cir. 2013) (internal quotations and citations omitted). The court in Estate of Barney goes on to state that under Iqbal, “[a] claim is plausible 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. (internal quotations and citations omitted). Furthermore, “[w]hile the plausibility standard is not akin to a ‘probability requirement, ’ the plausibility standard does ask for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]’-‘that the pleader is entitled to relief.’ ” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). If the plaintiffs do "not nudge[ ] their claims across the line from conceivable to plausible, their complaint must be dismissed." Twombly, 550 U.S. at 570. Finally, the Court must always keep in mind that “on a motion to dismiss, courts are not bound to accept as true a legal conclusion couched as a factual allegation.” Id. at 555.

Moreover, “documents attached to the pleadings become part of the pleadings and may be considered on a motion to dismiss.” Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 335 (6th Cir.2007) (citing Fed.R.Civ.P. 10(c)). “A court may also consider matters of public record in deciding a motion to dismiss without converting the motion to one for summary judgment.” Id. at 336. In addition documents not attached to the pleadings may still be considered part of the pleadings when the “document is referred to in the complaint and is central to the plaintiff's claim.” Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir.1999) (internal quotation marks and citations omitted).


The Trustee argues that each of Plaintiff’s three claims have been emphatically rejected by the Sixth Circuit or controlling Michigan precedent. The crux of the Trustee’s legal position is relatively simple: Plaintiff failed to redeem the Property before the expiration of the redemption period and has not and cannot make a showing of fraud or irregularity sufficient to set aside the foreclosure sale. Furthermore, with respect to Plaintiff’s fraudulent ...

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