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Lnu v. Federal National Mortgage Association

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

August 26, 2016

NANCY LNU, NANCY J. GARDNER, and DONALD M. GARDNER, Plaintiffs,
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION, ET AL., Defendants.

          Nancy LNU, Plaintiff, Pro Se.

          Nancy J. Gardner, Plaintiff, Pro Se.

          Donald M. Gardner, Plaintiff, Pro Se.

          Federal National Mortgage Association, Defendant, represented by Chantelle R. Neumann, Potestivo and Assoc..

          Potestivo and Associates, P.C., Defendant, represented by Chantelle R. Neumann, Potestivo and Assoc..

          REPORT AND RECOMMENDATION

          R. STEVEN WHALEN, Magistrate Judge.

         This is essentially a mortgage foreclosure case. On August 14, 2015, the Plaintiffs, who identify themselves as "Agent Nancy on behalf of Nancy J. Gardner and Don on behalf of Donald M. Gardner, " filed a pro se civil complaint concerning real property that was previously foreclosed upon under Michigan law, sold at a Sheriff's sale, and transferred to Defendant Federal National Mortgage Association ("Fannie Mae"). On March 16, 2016, the District Court adopted my recommendation to deny Plaintiffs' Motion for Injunction on the basis that Plaintiffs had not shown a strong likelihood of success on the merits of the case. Docket #27.

         Presently before the Court is Defendants Fannie Mae and Postestivo & Associates, P.C.'s ("P&A's") Motion to Dismiss [Docket #10] which has been referred for a Report and Recommendation under 28 U.S.C. § 636(b)(1)(B). For the reasons set for below, I recommend that the motion be GRANTED as to the motion to dismiss and DENIED as to the motion for for costs and fees. I recommend further that Plaintiffs be required to obtain leave of the Court before filing future complaints.

         I. FACTS

         Plaintiffs' complaint appears to allege that Defendant Fannie Mae refused to accept payment for the mortgage debt that Plaintiffs owed. Plaintiffs cite several provisions of Article III of the Uniform Commercial Code.

         Plaintiffs have engaged in a number of actions in Michigan Courts, this Court, the Sixth Circuit, and the Bankruptcy Court for the Eastern District of Michigan, all concerning the real property that is the subject of the present suit. Plaintiffs filed a previous suit in State court that was removed to this Court, Nancy Gardner v. Quicken Loans, et al., E.D. Mich. Case No. 13-12720. The defendants in that case were Quicken Loans (the assignee of the mortgage), Flagstar Bank (the original mortgagee), and P&A (the defendants' attorney). In that case, the Plaintiffs sought to set aside the foreclosure on numerous grounds, including non-compliance with Article III of the UCC, the defendants' lack of standing to foreclose, violation of the Real Estate Settlement Procedures Act, and non-enforceability of a "contract of adhesion." On August 27, 2013, this Court granted the defendants' motion to dismiss. Id, Dkt. #22. On June 2, 2014, the Sixth Circuit affirmed the dismissal. Id., Dkt. #26.

         On September 18, 2014, the 72nd District Court in Port Huron, Michigan, gave a judgment of possession to Fannie Mae. On February 20, 2015, Plaintiffs filed a declaratory judgment action regarding the property in the St. Clair County Circuit Court, naming as defendants Fannie Mae, P&A, and Flagstar Bank. Part of that action was based on an ersatz "claim of lien, " also part of the basis of the present action. On June 29, 2015, St. Clair County Circuit Court Judge Daniel J. Kelly granted the defendants' motion to dismiss, and the "claim of lien" recorded on May 8, 2015 was ruled invalid discharged, and released.

         On June 26, 2015, three days before Judge Kelly granted the defendants' motion to dismiss, Plaintiff filed another action in St. Clair County Circuit Court against "Chief Executive Officers of the United States of America, " Flagstar, Quicken Loans, Fannie Mae, P&A, the St. Clair County Sheriff, and the State of Michigan, again alleging she was entitled to foreclose on a lien against Defendants. Defendants' Brief at 8, Exhibit 25.

         On September 30, 2015, St. Clair County Circuit Court Judge Michael L. West granted the defendants' motion to dismiss, finding that "[a]t this point, based upon the history of litigation between the parties, all of Plaintiff's right, title or interest in the property has been extinguished by the foreclosure sale and Plaintiff's failure to redeem." Opinion and Order, 7, Case no. 15-001505-CH. Judge West determined further:

At the present time, no possible factual development will support the claim Plaintiff makes in her complaint to foreclose the May 8, 2015 lien. Judge Kelly's order discharging the lien, which is a matter of public record, also supports Defendants' motion brought pursuant to M.C.R. 2.116(C)(10) as no genuine issue of material fact exists regarding the status of the claim of lien. Plaintiff has no present right, title or interest in the real estate that is in dispute. In Plaintiff's action to proceed, ...

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