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Wilson v. Deutsche Bank National Trust Co.

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

March 20, 2017

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee, in trust for registered Holders of First Franklin Mortgage Loan Trust 2005-FFH4, Asset-Backed Certificates, Series 2005-FFH4, and SELECT PORTFOLIO SERVICING, INC., Defendants.

          R. Steven Whalen United States Magistrate Judge


          Paul D. Borman United States District Judge

         Plaintiff Johnny Wilson alleges that Defendants Deutsche Bank National Trust Company ("Deutsche Bank") and Select Portfolio Servicing, Inc. ("SPS") wrongfully foreclosed on his home, and accordingly seeks to have the foreclosure and sheriffs sale set aside.

         Defendants now move for dismissal under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. Because Plaintiff has not adequately pled the facts necessary to support an award of the relief that he seeks, the Court will grant Defendants' Motion to Dismiss.

         I. BACKGROUND

         On October 3, 2005, Plaintiff executed a mortgage and the related note in favor of First Franklin, a division of National City Bank of Indiana, which secured a home in Farmington, MI. The mortgage was recorded on October 26, 2005. (ECF No. 1, Notice of Removal, Ex. A, Compl. at ¶ 7; ECF No. 4, Defs.' Mot., Ex. A, Mortgage.) On or about August 23, 2013, First Franklin assigned the mortgage to Defendant Deutsche Bank. (ECF No. 4, Defs.' Mot., Ex. B, Assignment.)[1]

         Plaintiff alleges that over the course of 2014 and 2015, he has made numerous inquiries with Defendant SPS[2] in an attempt to modify the mortgage loan. (Compl. at ¶ 8.) In 2014, having retained the services of a California loan modification specialist, Plaintiff applied for a modification of the mortgage loan, and submitted all documents required in order for Plaintiff to be considered for one. (Compl. at ¶¶ 9-10.) Plaintiff received no response as to the status of his loan modification application for approximately a full calendar year. (Compl. at ¶ 11.)

         In 2015, Plaintiff submitted a second completed loan modification application to Defendant SPS. (Compl. at ¶ 12.) Despite having complied with all of Defendant SPS's requests for supplemental documentation, Plaintiff alleges, he has never received a formal decision on his loan modification applications from either Defendant SPS or Defendant Deutsche Bank. (Compl. at ¶¶ 13-14.)

         On or about January 5, 2016, after Plaintiff defaulted on the loan, foreclosure by advertisement proceedings were commenced and Plaintiffs home was sold at a sheriffs sale to Defendant Deutsche Bank. (Compl. at ¶ 15; Defs.' Mot., Ex. C, Sheriffs Deed.)[3]

         Plaintiff filed this action in the Oakland County Circuit Court on September 28, 2016, and Defendants removed it to this Court on October 28, 2016. (ECF No. 1.) After reciting the factual allegations summarized in the section above, the Complaint asserts in its sole count ("Wrongful Foreclosure") that Defendants' actions violated 12 C.F.R. § 1024.41(g), colloquially known as "Regulation X."[4]Specifically, Plaintiff alleges that Defendants failed to comport with "the requirement that [they] complete the review of Plaintiffs loan modification applications and provide Plaintiff with a formal response as to whether he qualified for a loss mitigation option, " and so their foreclosure on his home was wrongful. (Id. ¶ 19.) Plaintiff further alleges that he did not reject any loss mitigation options from Defendants (because none were offered), that he did not fail to perform on any agreement as to a loss mitigation option, and that if he had been offered a loss mitigation option, he would have taken it. (Id. ¶¶ 21-23.) Plaintiff seeks temporary relief enjoining any eviction or transfer of the property pending a trial on the merits, a judgment setting aside the sheriffs sale, compensation for "any and all damages incurred by Plaintiff... as a proximate result" of Defendants' actions, and an award of actual costs and attorney's fees. (See Id. at 7-8.)

         Defendants filed the present Motion to Dismiss on December 5, 2016. (ECF No. 4, Def.'s Mot.) Plaintiff filed his Response on January 26, 2017 (ECF No. 7, PL's Resp.), and Defendants filed their Reply on Feburary 9, 2017 (ECF No. 8, Def.'s Repl.).


         Federal Rule of Civil Procedure 12(b)(6) allows for the dismissal of a case where the complaint fails to state a claim upon which relief can be granted. When reviewing a motion to dismiss under Rule 12(b)(6), a 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." DirectTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007).

         To sufficiently state a claim, a complaint must provide a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "[T]he complaint 'does not need detailed factual allegations' but should identify 'more than labels and conclusions.'" Castas v. Wal-Mart Stores, Inc., 695 F.3d 428, 435 (6th Cir. 2012) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). But the court "need not accept as true legal conclusions or unwarranted factual inferences." Treesh, 487 F.3d at 476 (quoting Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir. 2000)). "[L]egal conclusions masquerading as factual allegations will not suffice." Eidson v. State of Tenn. Dep't of Children's Servs., 510 F.3d 631, 634 (6th Cir. 2007).

         A plaintiff must provide more than "formulaic recitation of the elements of a cause of action" and "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal citations omitted). The Sixth Circuit recently reiterated that "[t]o survive a motion to dismiss, a litigant must allege enough facts to make it plausible that the defendant bears legal liability. The facts cannot make it merely possible that the defendant is liable; they must make it plausible." Agema v. City of Allegan, 826 F.3d ...

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