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Thomas v. JPMorgan Chase Bank, N.A.

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

May 12, 2015

JOE THOMAS and BERNICE THOMAS, Plaintiffs,
v.
JPMORGAN CHASE BANK, N.A. and FEDEREAL HOME LOAN MORTGAGE CORPORATION, Defendants.

OPINION AND ORDER REGARDING DEFENDANTS' MOTION TO DISMISS

GERALD E. ROSEN, Chief District Judge.

I. INTRODUCTION

Plaintiffs Joe Thomas and Bernice Thomas commenced this suit in Wayne County Circuit Court on September 19, 2014, asserting claims against Defendants JPMorgan Chase Bank, N.A., and Federal Home Loan Mortgage Corporation, arising from the foreclosure sale of Plaintiffs' home in Detroit, Michigan. Plaintiffs claim that Defendants conducted the foreclosure process without regard to Michigan's statutory requirements - in particular that Defendant JPMorgan Chase Bank, N.A. failed to include one of the mortgagee's names in the Notice of Foreclosure and that Defendant Federal Home Loan Mortgage Corporation is not a valid purchaser under Michigan foreclosure law. Defendants removed the case to this Court on October 30, 2014, and Defendants have now filed a Motion to Dismiss (Dkt. # 3). Collectively, Defendants argue that Plaintiffs lack standing to bring this suit because the statutory redemption period for the foreclosure has passed and, in the alternative, that Plaintiffs have failed to sufficiently allege any violation of Michigan's foreclosure laws.

Having reviewed and considered the parties' briefs and supporting documents and the entire record of this matter, the Court has determined that the pertinent allegations and legal arguments are sufficiently addressed in these materials and that oral argument would not assist in the resolution of this motion. Accordingly, the Court will address the motion "on the briefs." See L.R. 7.1(f)(2).

II. PERTINENT FACTS

On December 19, 2008, Plaintiffs Joe Thomas and Bernice Thomas, a married couple, entered into a loan agreement with Defendant JPMorgan Chase Bank, N.A. ("Chase") in the amount of $219, 000 ("the Loan"). Pl's Compl., Dkt. # 1-2, ¶ 6. The Loan was secured by a mortgage ("the Mortgage") against the property at issue in this case, 17381 Pontchartrain Blvd., Detroit, Michigan 48203 ("the Property"). Id. ¶¶ 4, 6; See also Mortgage, Dkt. # 3-2. The Mortgage was recorded on December 30, 2008 in the Wayne County Records, with Chase acting as servicer for the Mortgage. Pl.'s Compl. ¶¶ 8, 12, see generally Mortgage.

Plaintiffs defaulted on the Loan at some point in 2013, and Chase subsequently initiated the foreclosure by advertisement process by mailing a Notice of Foreclosure to Plaintiffs and by publishing a Notice of Foreclosure in the Detroit Legal News once per week between October 14, 2013, and November 4, 2013. Pl's Compl. ¶¶ 12-13. Importantly for purposes of Plaintiffs' theory, both the published and the mailed Notice of Foreclosure identified the mortgagor as "Joe Nathan Thomas, married, " but did not mention Bernice Thomas or identify her interest in the Loan, Mortgage, or Property. Id. ¶ 14.

The Loan remained in default, and accordingly a Sheriff's Sale was held on March 20, 2014. Id. ¶ 17; see also Sherriff's Deed, Dkt. # 3-3. Defendant Federal Home Loan Mortgage Corporation ("Freddie Mac") won the auction with a bid of $109, 387.43, and was granted a Sherriff's Deed, which was recorded on April 3, 2014. Sherriff's Deed, Dkt. # 3-3, at 1. The statutory redemption period was set to expire on September 20, 2014. Id. at 1, 4.

On September 19, 2014, one day prior to the expiration of the redemption period, Plaintiffs brought this suit in Wayne County Circuit Court. Plaintiffs' complaint asserts four claims for relief: wrongful foreclosure in violation of MCL § 600.3201 et seq. (Count I); quiet title (Count II); slander of title (Count III); and violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (Count IV). Each claim, however, relies on the same two theories of relief: (1) that Chase's failure to name Bernice Thomas as a party to the Mortgage renders the foreclosure proceedings invalid, and (2) that Freddie Mac is not a valid purchaser under MCL § 600.3228, and accordingly "was not authorized by statute to purchase the... Property." See, e.g., Pl.'s Compl. ¶¶ 19-20. Defendants removed the action to this Court on October 30, 2014. Def.'s Removal, Dkt. # 1. The September 20, 2014 expiration of the redemption period has now passed, and Plaintiffs have not redeemed the Property.

III. DISCUSSION

A. Rule 12(b)(6) Standard

In deciding a motion brought under Rule 12(b)(6), the Court must construe the complaint in the light most favorable to Plaintiffs and accept all well-pled factual allegations as true. League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). To withstand a motion to dismiss, however, a complaint "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The factual allegations in the complaint, accepted as true, "must be enough to raise a right to relief above the speculative level, " and must "state a claim to relief that is plausible on its face." Id. at 570. "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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court must "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff." DirecTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). However, the Court "need not accept as true legal conclusions or unwarranted factual inferences." Id. (quoting Gregory v. Shelby Cnty., 220 F.3d 433, 446 (6th Cir. 2000)).

If the well-pled facts in Plaintiffs' Complaint - accepted as true - are insufficient for Plaintiffs to recover on a claim, that claim must be dismissed. Iqbal, 556 U.S. at 680 ("Because the well-pleaded fact of parallel conduct, accepted as true, did not plausibly suggest an ...


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