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Lawson v. Bank of America, N.A.

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

April 24, 2015

Vernon Lawson and Lavernia Luckett Lawson, Plaintiffs,
v.
Bank of America, N.A., et al., Defendants.

Mag. Judge Michael J. Hluchaniuk

OPINION AND ORDER DENYING PLAINTIFFS’ MOTION FOR RECONSIDERATION [25] AND TO SHOW CAUSE

JUDITH E. LEVY United States District Judge

This matter is before the Court on plaintiffs’ Motion for Reconsideration of the Court’s September 4, 2014 Order Granting Defendants’ Motion to Dismiss. (Dkt. 25.) For the reasons set forth below, the motion will be denied.

I. Standard

To prevail on a motion for reconsideration, a movant must “not only demonstrate a palpable defect by which the court and the parties and other persons entitled to be heard on the motion have been misled but also show that correcting the defect will result in a different disposition of the case.” E.D. Mich. L.R. 7.1(h)(3). “A palpable defect is a defect that is obvious, clear, unmistakable, manifest or plain.” Witzke v. Hiller, 972 F.Supp. 426, 427 (E.D. Mich. 1997). The “palpable defect” standard is consistent with the standard for amending or altering a judgment under Fed.R.Civ.P. 59(e). Henderson v. Walled Lake Consol. Schs., 469 F.3d 479, 496 (6th Cir. 2006).

Motions for reconsideration should not, however, be granted if they “merely present the same issues ruled upon by the court, either expressly or by reasonable implication.” E.D. Mich. L.R. 7.1(h)(3). A motion for reconsideration thus “is not a vehicle to re-hash old arguments, or to proffer new arguments or evidence that the movant could have presented earlier.” Gowens v. Tidwell, No. 10-10518, 2012 WL 4475352, at *1 (E.D. Mich. Sept. 27, 2012) (citing Sault St. Marie v. Engler, 146 F.3d 367, 374 (6th Cir.1998)); accord Roger Miller Music, Inc. v. Sony/ATV Publ'g, 477 F.3d 383, 395 (6th Cir.2007) (noting “[i]t is well-settled that parties cannot use a motion for reconsideration to raise new legal arguments that could have been raised before a judgment was issued”); Owner–Operator Indep. Drivers v. Arctic Express, Inc., 288 F.Supp.2d 895, 900 (S.D. Ohio 2003) (stating that “[m]otions for reconsideration do not allow the losing party ... to raise new legal theories that should have been raised earlier.”).[1]

Accordingly, “a party may not introduce evidence for the first time in a motion for reconsideration where that evidence could have been presented earlier.” Shah v. NXP Semiconductors USA, Inc., 507 F.App'x 483, 495 (6th Cir. 2012) (affirming denial of motion for reconsideration brought under local rules of Eastern District of Michigan); accord Bank of Ann Arbor v. Everest Nat. Ins. Co., 563 F. App’x 473, 476 (6th Cir. 2014) (holding party may not introduce evidence for the first time in a Rule 59(e) motion that could have been presented earlier). “If district judges were required to consider evidence newly presented but not newly discovered after judgment, there would be two rounds of evidence in a great many cases.” Navarro v. Fuji Heavy Industries, Ltd., 117 F.3d 1027, 1032 (7th Cir. 1997).

Whether to strike new evidence or only to disregard it is within the district court’s discretion. See, e.g., Int’l Union, United Auto., Aerospace, & Agricultural Implement Workers of Am. v. Aguirre, 410 F.3d 297, 304 (6th Cir. 2005) (reviewing district court’s striking of affidavit under abuse-of-discretion standard).

II. Analysis

The factual background to this case is recounted in the Court’s September 4, 2014 Opinion and Order (Dkt. 24) and is adopted here.

A. Plaintiffs’ Exhibits A, B, D, and F to their Motion for Reconsideration are new evidence and will be stricken

As an initial matter, plaintiffs have attached six exhibits to their motion. Four of these – Exhibits A, B, D, and F – constitute new evidence that plaintiffs failed to submit earlier. Plaintiffs have not shown these four exhibits – all dated before plaintiffs filed their response to defendant’s motion to dismiss – could not have been submitted earlier, specifically, with their July 16, 2014 response to defendant’s motion to dismiss. These four exhibits will therefore be stricken. See Shah, 507 F. App’x at 495.

Exhibit A is a letter from defendant Saxon to plaintiff Vernon Lawson, dated February 28, 2012. (Dkt. 25-2.) Plaintiffs have not previously submitted this letter, nor have they shown that they could not have submitted it earlier. Exhibit A will be stricken.

Exhibits B and D comprise a series of letters and statements from Countrywide Home Loans and Countrywide Bank to Vernon Lawson, dated May 1, 2006, July 1, 2006, January 18, 2009, and January 28, 2009. (Dkt. 25-3, 25-5.) Plaintiffs have not previously submitted these documents, nor have they shown that they could not have submitted them earlier. Exhibits B and D will be stricken.

Exhibit C is a copy of the decision in Residential Funding Co., LLC v. Saurman, 490 Mich. 909 (2011). (Dkt. 25-4.) The decision is a matter of public record and does not qualify as new evidence. Exhibit C will not be stricken.

Exhibit E comprises a copy of the Notary Public Complaint filed by Mr. Lawson in Texas; several letters between Mr. Lawson and the office of the Texas Secretary of State, dated April 9 and October 23, 2012, and February 20 and August 1, 2013; and a copy of a section of the Texas Administrative Code. (Dkt. 25-6.) Plaintiffs have previously submitted these materials with their response to defendant’s motion to dismiss; Exhibit E will not be stricken.

Exhibit F comprises a notice from Ocwen Loan Servicing, LLC to Mr. Lawson, dated June 18, 2013, and an Annual Escrow Account Disclosure Statement from Ocwen to Mr. Lawson, dated July 3, 2014. Plaintiffs have not previously submitted these documents, nor have they shown that they could not have submitted them with their July 16, 2014 response to defendant’s motion to dismiss. Exhibit F will be stricken.

As discussed below, plaintiffs’ new evidence, even if properly considered on this motion, would not change the outcome.

B. Plaintiffs have failed to demonstrate a palpable defect in the Court’s Opinion and Order

Plaintiffs’ central argument is that the assignment of the Note and Mortgage from MERS to defendant [hereinafter “Assignment”] was invalid for three reasons: (1) MERS could not transfer the Note or the Mortgage, because it did not hold the Note, (2) the Assignment was fraudulently notarized, and (3) BAC Home Loans obtained the Mortgage by an earlier merger, but failed to record the Mortgage, and was thus unable to later transfer to defendant the right to foreclose the Mortgage. Plaintiffs have raised these arguments before; for this reason alone, their motion will be denied. See E.D. Mich. L.R. 7.1(h)(3). The Court will nonetheless again explain why plaintiffs’ arguments lack merit.

1. Plaintiffs’ ability to challenge the Assignment

As an initial matter, plaintiffs claim the Court erred in finding they lack standing to challenge the Assignment. In support, plaintiffs cite an opinion from this district, Keyes v. Deutsche Bank Nat’l Trust Co., 921 F.Supp.2d 749, 756-57 (E.D. Mich. 2013), in which the court held that “[i]n cases where the foreclosing party was not the holder of the note but only a holder of the mortgage . . . a plaintiff is able to assert a challenge to the assignment that would render it valid, ineffective, or ...


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