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Doering v. Jp Morgan Chase Bank, N.A.

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

May 26, 2015



R. STEVEN WHALEN, Magistrate Judge.

Before the Court is Plaintiff Steven J. Doering's Motion for Leave to Amend Complaint [Doc. #32]. For the following reasons, the motion will be DENIED.

Despite the general rule of liberality with which leave to file amended complaints is to be granted, see Fed.R.Civ.P. 15(a), the Sixth Circuit has held that when a proposed amended complaint would not survive a motion to dismiss, the court may properly deny the amendment. Neighborhood Development Corp. v. Advisory Council on Historic Preservation, 632 F.2d 21, 23 (6th Cir. 1980); Thiokol Corporation v. Department of Treasury, 987 F.2d 376 (6th Cir. 1993). The Plaintiff's proposed amended claims in this case fail as a matter of law, and permitting the amendment would therefore be futile.

The Plaintiff's claims arise from a loan and mortgage contract. The claims for intentional infliction of emotional distress (Count 1), negligent infliction of emotional distress (Count II), negligence (Count III), and fraudulent misrepresentation (Count IV) are all torts, and thus barred by the economic loss doctrine. "Under Michigan law, a party is barred from recovering economic losses in tort, where those losses were suffered because of a breach of duty assumed only by contract." Kemp v. Resurgent Capital Services, 2013 WL 5707797, *9 (E.D.Mich. 2013), citing Neibarger v. Universal Coops, 439 Mich. 512, 525-26, 486 N.W.2d 612 (1992); Fultz v. Union Commerce-Assoc., 470 Mich. 460, 467, 683 N.W.2d 587 (2004).[1]

In addition, as a substantive matter, the proposed amended complaint does not set forth a plausible claim of either intentional or negligent infliction of emotional distress. To establish intentional infliction of emotional distress, a plaintiff must show "(1) extreme and outrageous conduct, (2) intent or recklessness (or negligence), (3) causation, and (4) severe emotional distress." Graham v. Ford, 237 Mich.App. 670, 674, 604 N.W.2d 713 (1999); Roberts v. Auto-Owners Insurance Co., 422 Mich. 594, 374 N.W.2d 905 (1985). Liability under this theory requires that the conduct complained of "has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized community." Graham, 237 Mich.App. at 674. Under this standard, it is not sufficient to show that the defendant acted tortiously, intentionally, or even criminally. Id. The test has been described as whether "the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, Outrageous!'" Roberts, 422 Mich. at 603.

The Plaintiff does not dispute that he defaulted on his mortgage. As a result, Chase initiated foreclosure proceedings, as it was permitted to do. Chase's alleged failure to provide information or documentation to the Plaintiff does not rise to level of outrageous conduct, or conduct that would lead to severe emotional distress.

In Hesse v. Ashland Oil, Inc., 466 Mich. 21, 34, 642 N.W.2d 330 (2002), the Court set for the elements of negligent infliction of emotional distress as follows:

"(1) serious injury threatened or inflicted on a person, not the plaintiff, of a nature to cause severe mental disturbance to the plaintiff, (2) shock by the plaintiff from witnessing the event that results in the plaintiff's actual physical harm, (3) close relationship between the plaintiff and the injured person (parent, child, husband, or wife), and (4) presence of the plaintiff at the location of the accident at the time the accident occurred or, if not presence, at least shock fairly contemporaneous' with the accident."

"Michigan has refused to apply the tort of negligent infliction of emotional distress beyond the situation where a plaintiff witnesses negligent injury to a third person and suffers mental disturbance as a result.'" Samberg v. Detroit Water & Sewer Co., 2015 WL 2084682, *3 (E.D.Mich. 2015) (quoting Duran v. The Detroit News, 200 Mich.App. 622, 629, 504 N.W.2d 715 (1993)). Again, Plaintiff's claims arise from his own default on a mortgage and subsequent foreclosure proceedings. This is not a case where he suffered emotional harm after witnessing a negligent injury to a third person.

Plaintiff's proposed claims of negligent misrepresentation and breach of contract also fail as a matter of law. These claims are based on Chase's alleged unfulfilled promise to provide "the costs breakdown and proof of the listed service documents, " Proposed Amended Complaint, Doc. #32, ¶ 62, and Chase's promise "to reinstate Plaintiff's loan upon payment of back installments and then refusing to provide accurate amount of arrearage and the institution of foreclosure proceedings." Id ¶ 67. A claim of negligent misrepresentation requires a showing of a duty of care. Chase's duties to Plaintiff were contained in the mortgage, under which it was entitled to pursue foreclosure upon Plaintiff's default. There was no duty within the mortgage contract that would entitle the Plaintiff to "the costs breakdown and proof of the listed services documents." As to the claimed breach of contract, any oral promises that are not incorporated into the mortgage contract with a financial institution-and these were not-are barred by the statute of frauds. Crown Tech Park v. D&N Band, FSB, 242 Mich.App. 538, 550, 619 N.W.2d 66 (2000).

Because Plaintiff's claims would not survive a motion to dismiss, his motion for leave to amend his ...

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