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Hagan v. CitiMortgage, Inc.

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

October 27, 2016

Amber Hagan, Plaintiff,
v.
CitiMortgage, Inc., Defendant. v.

          OPINION

          Paul L. Maloney, United States District Judge.

         This case is yet another in a long line. It begins with a mortgagor who, for one reason or another, fails to pay his or her mortgage as contractually required; the mortgagee then lawfully forecloses upon the property in state courts; and in response, the mortgagor files a lawsuit, alleging meritless claims as a stalling tactic.

         The mortgagor wins because he or she can live rent-free in the interim-usually for many months (or more)-by hiring a lawyer to stonewall the process; the mortgagor's lawyer wins because he or she receives a fee and devotes typically little time to the case, recycling the same complaint and responsive brief to an inevitable motion to dismiss.

         However, where there are winners, there are losers.

         The defendant loses because it is prevented from taking lawful possession and selling the property to recoup any losses, bearing litigation costs in the process. The Court also loses to a degree, expending time and resources rejecting the same meritless claims.

         The Court recognizes Plaintiff's present counsel assumed this case from prior counsel; however, in the absence of an amended complaint, he is responsible what remains pled. Moreover, Plaintiff's counsel included arguments in his brief regarding claims that have not even been pled. (ECF No. 32 at PageID.422-25 (“Breach of contract has been properly pled”) (“Fraudulent misrepresentation is sufficiently pled”).) One particular argument stands out: “As stated in Plaintiff's Complaint, ‘Defendant intended to induce the Plaintiff to refrain from defending the foreclosure in reliance on the representations made by Defendant.' [Plaintiff's Complaint, para. 58].” (Id. at PageID.423.) However, Plaintiff's complaint ends with paragraph 54.

         This is strong evidence that Plaintiff's counsel (and others like him) simply recycle the same pleadings and responses to dispositive motions over and over. And Plaintiff's counsel also failed to respond to the renewed motion to dismiss and had to respond to a show-cause . (ECF No. 26.) This pattern of behavior is at least arguably “objectively unreasonable” under the Federal Rules. See Fed. R. Civ. P. 11(b). Counsel should tread more carefully in the future.

         Nevertheless, Plaintiff has failed to state a claim upon which relief can be granted under Counts I, III, and IV. Since Count II was dismissed by stipulation in response to the Court's order because the claim was without merit, no counts remain, and the Court must dismiss this action with prejudice.

         A. Background

         On a motion under Fed.R.Civ.P. 12(b)(6), the Court must accept all factual allegations contained in the Complaint as true.

         In 2003, Alisa Hagan (whose Estate is being represented by Plaintiff Amber Hagan) obtained a mortgage for 1603 Buena Vista Street in Kalamazoo, MI. (ECF No. 24 at PageID.232.)

         Alisa Hagan passed away on November 18, 2012, and Plaintiff Amber Hagan opened probate proceedings in Kalamazoo County on May 2, 2013. Letters of authority were issued to her thereafter. (Id.) On March 13, 2013, the mortgage was reassigned to CitiMortgage. (Id. at PageID.233.)

         From June 1, 2013 until on or about February 28, 2014, Plaintiff Amber Hagan kept up with the mortgage payments as agreed. (Id. at PageID.233.) Because the “area economy has been depressed over the past few years, ” Plaintiff went “delinquent on the mortgage.” (Id.)

         On March 15, 2014, “Plaintiff applied for mortgage assistance with Defendant, CitiMortgage, Inc., and submitted a request for mortgage assistance, 4506(t), Dodd Frank Certification Form, UBA, current pay stubs, 1 utility bill, hardship letter, proof of income, and Letters of Authority for Amber N. Hagan.” (Id.) Plaintiff alleges she continued to update her request for assistance.

         On August 15, 2014, “John Blume, a representative for Defendant, indicated by teleconference that Plaintiff had submitted a complete request for assistance. He then instructed Plaintiff to wait for a written response from CitiMortgage, Inc. as to an approval or denial of the request, which was never forthcoming.” (Id.) “Over the next few months, ” Plaintiff spoke to Defendant's representatives and “requested Defendant follow HAMP guidelines and reduce her mortgage payment to less than 31% of her gross monthly income.” (Id.) Plaintiff alleges “[t]hat concurrently with the apparent attempt to get Plaintiff a HAMP Loan Modification, the Defendant . . . initiated foreclosure proceedings which culminated in a foreclosure sale of 9/25/2014.” (Id.)

         B. Legal Framework

         1. Rule 12(b)(1) (Standing)

         “A plaintiff must meet Article III and prudential standing requirements to proceed with his case.” McGlone v. Bell, 681 F.3d 718, 728 (6th Cir. 2012). To establish standing under Article III of the U.S. Constitution, a plaintiff must show:

(1) it has suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Id. at 729; Cleveland NAACP v. City of Parma, 263 F.3d 513, 523-24 (6th Cir. 2001) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Serv., 5 ...


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