United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO
DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT [ECF NO.
V. PARKER U.S. DISTRICT JUDGE
Houda Ali Zaher (“Plaintiff”), through counsel,
initiated this action against Defendants Argent Mortgage
Company LLC (“Argent”), AMC Mortgage Services,
Inc. (“AMC”), Citi Residential Lending Inc.
(“Citi”), American Home Mortgage Servicing, Inc.
(“AHMSI”), AH Mortgage Acquisition Co. Inc.
(“AH Mortgage”), Homeward Residential Inc.
(“Homeward”), and Ocwen Loan Servicing, LLC
(“Ocwen”) in state court on or about March 7,
2014, alleging that Defendants misapplied the payments she
made toward her residential mortgage loan and wrongfully
claimed she was in default on the loan. Plaintiff filed a
First Amended Complaint on May 1, 2014. Defendants timely
removed the action to this Court on May 8, 2014 on the basis
of diversity jurisdiction, 28 U.S.C. § 1332. Presently
before the Court is Defendants' motion to dismiss
Plaintiff's First Amended Complaint, filed pursuant to
Federal Rule of Civil Procedure 12(b)(6). (ECF No. 27.)
Finding the facts and legal arguments sufficiently presented
in the parties' briefs, the Court dispensed with oral
argument pursuant to Eastern District of Michigan Local Rule
7.1(f). For the reasons that follow, the Court grants
Defendants' motion and dismisses the action with
Standard for Motion to Dismiss
motion to dismiss pursuant to Rule 12(b)(6) tests the legal
sufficiency of the complaint. RMI Titanium Co. v.
Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir.
1996). Under Federal Rule of Civil Procedure 8(a)(2), a
pleading must contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” To survive a motion to dismiss, a complaint
need not contain “detailed factual allegations, ”
but it must contain more than “labels and
conclusions” or “a formulaic recitation of the
elements of a cause of action . . ..” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint
does not “suffice if it tenders ‘naked
assertions' devoid of ‘further factual
enhancement.' ” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at
Supreme Court provided in Iqbal and
Twombly, “[t]o survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.' ” Id. (quoting
Twombly, 550 U.S. 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.”
Id. (citing Twombly, 550 U.S. at 556). The
plausibility standard “does not impose a probability
requirement at the pleading stage; it simply calls for enough
facts to raise a reasonable expectation that discovery will
reveal evidence of illegal [conduct].”
Twombly, 550 U.S. at 556.
deciding whether the plaintiff has set forth a
“plausible” claim, the court must accept the
factual allegations in the complaint as true. Erickson v.
Pardus, 551 U.S. 89, 94 (2007). This presumption is not
applicable to legal conclusions, however. Iqbal, 556
U.S. at 668. Therefore, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. (citing
Twombly, 550 U.S. at 555).
the court may not consider matters outside the pleadings when
deciding a Rule 12(b)(6) motion to dismiss. Weiner v.
Klais & Co., Inc., 108 F.3d 86, 88 (6th Cir. 1997)
(citing Hammond v. Baldwin, 866 F.2d 172, 175 (6th
Cir. 1989)). A court that considers such matters must first
convert the motion to dismiss to one for summary judgment.
See Fed. R. Civ. P 12(d). However, “[w]hen a
court is presented with a Rule 12(b)(6) motion, it may
consider the [c]omplaint and any exhibits attached thereto,
public records, items appearing in the record of the case and
exhibits attached to [the] defendant's motion to dismiss,
so long as they are referred to in the [c]omplaint and are
central to the claims contained therein.” Bassett
v. Nat'l Collegiate Athletic Ass'n, 528 F.3d
426, 430 (6th Cir. 2008). Thus, a court may take judicial
notice of “other court proceedings” without
converting a motion to dismiss into a motion for summary
judgment. Buck v. Thomas M. Cooley Law Sch., 597
F.3d 812, 816 (6th Cir. 2010) (citing Winget v. J.P.
Morgan Chase Bank, N.A., 537 F.3d 565, 575 (6th Cir.
Factual and Procedural Background
August 6, 2004, Plaintiff secured a residential mortgage loan
from Defendant Argent related to real property located at 756
Dover Street, Dearborn Heights, Michigan
(“Property”). (Amend. Compl. ¶ 19.) In
connection with the transaction, Plaintiff executed a Fixed
Rate Note in favor of Argent in the amount of $198, 000.00.
(ECF No. 27-2 at Pg ID 802.) To secure repayment of the loan,
Plaintiff granted a mortgage (“Mortgage”) on the
Property to Argent, as mortgagee. (ECF No. 1-4 at Pg ID 77.)
The mortgage was recorded in the Wayne County Register of
Deeds on September 10, 2004. (Id.)
transferred the servicing rights to Ameriquest Mortgage
Company, LLC on or about August 11, 2004. (ECF No. 27-4 at
Pg ID 807.) Next, AMC transferred its servicing rights to
Defendant Citi on October 1, 2007. (ECF No. 27-5 at Pg ID
811.) The third transfer of service occurred on February 11,
2009, when Citi transferred its servicing rights to Defendant
American Home Mortgage Servicing, Inc., which later changed
its name to Homeward Residential, Inc.
(“Homeward”). (ECF No. 27-6 at Pg ID 813; see
also Amend. Compl. ¶¶ 43-45.)
parties agree that no late fees or penalties were assessed by
Defendants Argent, AMC, or Citi. (See Amend. Compl.
¶¶ 22, 25, 29; ECF No. 27 at Pg ID 780.) Plaintiff
alleges that she was first unjustly charged with late payment
fees by Defendant Homeward. (Amend. Compl. ¶
¶ 35, 44.) Plaintiff reached out to Defendant Homeward,
advising them to correct their accounting and requesting an
accounting history. (Id., ¶¶ 36, 37.)
Plaintiff did not receive a response. (Id. , ¶
38.) Plaintiff continued to receive late fee charges along
with letters stating that her payments were late until July
2012. (Id., ¶ 44.)
letter dated February 22, 2013, Plaintiff was notified that
Defendant Homeward would transfer the servicing rights to the
mortgage loan to Defendant Ocwen Loan Servicing, LLC
(“Ocwen”) effective on March 11, 2013. (ECF No.
27-7 at Pg ID 816.) Plaintiff alleges that she received
letters from Defendant Ocwen “stating payments were
allegedly not being made timely, threatening to foreclose on
the mortgage and added late fee charges” until December
2013. (Amend. Compl. ¶ 52.)
filed a First Amended Complaint (“Amended
Complaint”) on May 1, 2014, in which she asserts the
following claims: (I) “Negligent Accounting and
Assessment of Late Fees” against Defendants American
Home Mortgage Servicing, Inc.; AH Mortgage Acquisition
Company, Inc.; and Homeward Residential, Inc; (II)
“Negligent Accounting and Assessment of Late
Fees” against Defendant Ocwen Loan Servicing, LLC;
(III) “Breach of Contract” for wrongful
foreclosure against all Defendants; (IV) fraud and
misrepresentation against all Defendants; (V) violation of
the Michigan Consumer Protection Act, Mich. Comp. Laws
§445.901; (VI) violations of the Michigan Collection
Practices Act, Mich. Comp. Laws §§ 339.918 and
339.915(e); (VII) negligence against Defendant Argent; (VIII)
civil conspiracy; and (IX) quiet title. Defendants filed a motion
to dismiss the First Amended Complaint on April 5, 2016,
requesting that this Court dismiss Plaintiff's amended
complaint with prejudice and award Defendants their costs and
attorneys' fees. (ECF No. 27 at Pg ID 798.)
present seven arguments in favor of dismissal. First,
Defendants argue that “negligent accounting” is
not a cause of action. Alternatively, if Plaintiff is
requesting an accounting, Plaintiff fails to state a claim
for accounting and Plaintiff's claims regarding an
alleged violation of the Michigan Mortgage Brokers, Lenders,
and Servicers Licensing Act fail. (Id. at Pg ID
783.) Second, Defendants argue that Plaintiff fails to state
a claim for either breach of contract or for wrongful
foreclosure. (Id. at Pg ID 785-87.) Third,
Defendants allege that Plaintiff has failed to allege fraud
with the particularity required under the Federal Rules of
Civil Procedure. (Id. at Pg ID 787.) Fourth,
Defendants state that they did not violate the Michigan
Consumer Protection Act or the Michigan Collection Practices
Act. (Id. at Pg ID 788-90.) Fifth, Defendants argue
they do not owe a separate duty to Plaintiff outside of the
mortgage loan agreement. (Id. at Pg ID 792.) Sixth,
Defendants contend that Plaintiff fails to properly allege a
civil conspiracy. (Id. at Pg ID 794.) Seventh,
Defendants claim that Plaintiff has failed to allege a prima
facie case to quiet title. (Id. at Pg ID 795.)
Applicable Law and Analysis
alleges that Defendants Homeward and Ocwen were negligent in
failing to adhere to “ethical and legal guidelines of
accounting standards….” (Amend. Compl.
¶¶ 58, 68.) In particular, Plaintiff argues that
Defendants violated their duty to provide Plaintiff with
accurate accounting statements. (ECF No. 32 at Pg ID 923.)
Plaintiff requests an accounting between Plaintiff and
Defendants from 2004 until the present date and an award in
damages exceeding $25, 000, because “the precise sum of
the mortgage is unknown to Plaintiff.” (ECF No. 32 at
Pg ID 924.) Defendants contend that there is no cause of
action for “negligent accounting” and in the
alternative, Plaintiff cannot state a claim for accounting.
(ECF No. 27 at Pg ID 783.)
accounting is “an extraordinary remedy, and like other
equitable remedies, is available only when legal remedies are
inadequate.” Bradshaw v. Thompson, 454 F.2d
75, 79 (6th Cir. 1972); see also Alshaibani v. Litton
Loan Servicing, L.P., No. 2:12-CV-063, 2012 WL 3239088,
at *4 (S.D. Ohio Aug. 7, 2012), aff'd, 528 F.
App'x 462 (6th Cir. 2013). The burden of proof rests with
Plaintiff to demonstrate that legal remedies are inadequate.
Sower v. Chase Home Finance, L.L.C., No. 13-15274,
2016 WL 4446589 at *6 (E.D. Mich. Aug. 24, 2016). An
accounting is deemed unnecessary “where discovery is
sufficient to determine the amounts at issue.”
Barkho v. Homecomings Fin., LLC, 657 F.Supp.2d 857,
865 (E.D. Mich. 2009) (quoting Cyril J. Burke, Inc. v.
Eddy & Co., Inc., 51 N.W.2d 238, 239 (Mich. 1952)).
Plaintiff's accounting claim is based on the amount due
under the mortgage note. Plaintiff fails to indicate why
discovery would be inadequate to determine the precise sum of
the mortgage. Because Plaintiff has failed to show that legal
remedies are inadequate, Plaintiff's claim for negligent
accounting under Counts I and II are dismissed for failure to
state a claim pursuant to Rule 12(b)(6).
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