United States District Court, E.D. Michigan, Southern Division
ORDER GRANTING DEFENDANT BANA'S MOTION TO DISMISS
[#9] AND GRANTING DEFENDANTS BSI, TRUST, AND MCM'S JOINT
MOTION TO DISMISS [#13]
DENISE PAGE HOOD CHIEF JUDGE.
7, 2016, Plaintiffs Edward Griffor and Mariela Griffor
(“the Griffors”) filed a Complaint against
Defendants Service One, Inc., d/b/a BSI Financial
(“BSI”); Ventures Trust 2012-I-H-R
(“Trust”); MCM Capital Partners, LLLP
(“MCM”); and Bank of America, N.A.
(“BANA”) in the Wayne County Circuit Court. The
Complaint alleges Breach of Contract (Count I); Violation of
the Michigan Mortgage Brokers, Lenders, and Servicers
Licensing Act (Count II); Defamation (Count III); Negligence
(Count IV); and Breach of Oral Contract (Count V). (Doc #
1-2, Pg ID 12-20) BANA filed a Notice of Removal based upon
diversity jurisdiction on July 7, 2016. (Doc # 1) On August
2, 2016, BANA filed a Motion to Dismiss. (Doc # 9) On August
12, 2016, BSI, Trust, and MCM filed a Joint Motion to
Dismiss. (Doc # 13) Responses and Replies have been filed.
(Doc # 17; Doc # 18; Doc # 20; Doc # 22)
Griffors are husband and wife who own the property at 1342
Three Mile Drive in the City of Grosse Pointe Park
(“Property”). (Doc # 1-2; Pg ID 13) On November
7, 2007, Edward Griffor signed a Note to borrow $417, 000.00
from LaSalle Bank. (Doc # 9-3) To secure payment, the
Griffors granted a Mortgage on the Property to LaSalle Bank.
(Doc # 9-2) The Griffors declared bankruptcy in 2010. (Doc #
1-2, Pg ID 14) The loan was assigned to BANA in 2011, and the
Complaint alleges that payments were made to BANA.
to the Griffors, on or around January 2013, monthly
statements from BANA showed that payments were not being
credited to the Griffors' account. Id. The
Griffors contacted BANA and supplied the requested
information. Id. They began experiencing economic
hardship in 2014 and contacted BANA to request a loan
2014, BANA transferred servicing of the Mortgage to BSI.
Id. The Griffors allege that BANA assured them that
the loan modification was in process and would be transferred
to BSI. Id. The Griffors claim that they tried to
contact BSI to no avail, and that from February 2015 to
present, BSI and/or Trust has transmitted false information
about the Griffors to various credit reporting agencies,
causing their credit to be impaired. Id. In December
2015, the Griffors wrote to BSI “detailing the disputed
misappropriation of payments” and requesting
documentation of all payments made to date. Id. On
February 2, 2016, BSI wrote to the Griffors indicating that
no payments had been received since June 2011. Id.
at 15. On February 25, 2016, BSI issued a Notice of Default
and Intent to Accelerate on behalf of Trust. Id. In
March 2016, the Griffors requested detailed accounting from
BSI of all payments made on the loan to date. Id.
BSI responded that the request for information was overbroad
and unduly burdensome. Id. Plaintiffs replied
“disputing the accounting practices” and
indicating that funds were missing. Id. In early
2016, a Notice of Foreclosure for the Mortgage was published
setting a Sheriff's sale date of June 6, 2016 for the
Property. Id. On June 15, 2016, a Circuit Court
Judge granted the Griffors a Temporary Restraining Order
staying the foreclosure sale. (Doc 1-2, Pg ID 23-25)
Standard of Review
12(b)(6) of the Federal Rules of Civil Procedures provides
for a motion to dismiss for failure to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). This type
of motion tests the legal sufficiency of the plaintiff's
complaint. Davey v. Tomlinson, 627 F.Supp. 1458,
1463 (E.D. Mich. 1986). 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.” Directv Inc.
v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). A court,
however, need not accept as true legal conclusions or
unwarranted factual inferences.” Id. (quoting
Gregory v. Shelby Cnty., 220 F.3d 443, 446 (6th Cir.
2000)). “[L]egal conclusions masquerading as factual
allegations will not suffice.” Edison v. State of
Tenn. Dep't of Children's Servs., 510 F.3d 631,
634 (6th Cir. 2007).
Supreme Court has explained, “a plaintiff's
obligation to provide the ‘grounds' of his
‘entitle[ment] to relief' requires more than labels
and conclusions, and a formulaic recitation of the elements
of a cause of action will not do. Factual allegations must be
enough to raise a right to relief above the speculative
level… .” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (citations omitted);
see LULAC v. Bresdesen, 500 F.3d 523, 527 (6th Cir.
2007). To survive dismissal, the plaintiff must offer
sufficient factual allegations to make the asserted claim
plausible on its face. Ashcroft v. Iqbal, 556 U.S.
662, 663 (2009). “A claim has facial plausibility when
the pleaded factual content allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
Claims Against MCM
argues that it has no connection to the present litigation
because it has acted only as a Trustee and is not the owner
of or party to the Mortgage or Note. In their Response, the
Griffors concede that all counts should be dismissed as to
MCM with prejudice because MCM is merely acting as Trustee
for the Mortgage holder. (Doc # 17, Pg ID 215) The Complaint
itself describes MCM as “a trustee for mortgage-backed
securitized trusts.” (Doc # 1-2, Pg ID 13) The Court
dismisses all claims against MCM with prejudice.
Breach of Contract Claim
Griffors claim that “Defendants” breached the
Note and Mortgage that the Griffors signed in 2007 “by
failing to apply payments made by Plaintiffs to
Plaintiffs' loan, ” as required by the terms of the
Note. (Doc # 1-2) The Complaint alleges that this “led
to the Defendants filing foreclosure action on the Property,
” and the Griffors have suffered compensatory damages.
Trust argue that the Griffors have failed to allege that BSI
or Trust breached the Mortgage contract or what part of the
Mortgage contract was breached. BSI and Trust further argue
that the Griffors have failed to allege that they made all
the payments that were due, that the payments were made
timely, or who the payments were made to. BSI and Trust note
that the Griffors have not alleged that they ever made
payments after January 2013.
state a claim for breach of contract in Michigan, a plaintiff
must allege: (1) the existence of a valid contract, (2) the
terms of the contract, (3) breach of the contract, and (4) an
injury caused by the breach. See Webster v. Edward D.
Jones & Co., L.P., 197 F.3d 815, 819 (6th Cir.
Court finds that the Breach of Contract claim fails as to BSI
and Trust because the Griffors have not alleged that they
ever made payments after January 2013, or that they ever made
payments to BSI and/or Trust. The Complaint merely alleges
that “payments were made” to BANA (Doc # 1-2, Pg
ID 14), and the Response states that “Plaintiffs made
payments directly through the Bankruptcy Court until January
2013” (Doc # 17, Pg ID 212). The Griffors cannot meet
the third element of a breach of contract claim because they
cannot establish that BSI or trust breached the contract by
failing to apply any payments. Plaintiffs claim in their
Response that “the facts in this case are so numerous
and cumbersome that not all of the payments and account
information could be included in one factual statement in the
Complaint.” The Griffors' factual allegations must
nevertheless “be enough to raise a right to relief
above the speculative level … .”
Twombly, 550 U.S. at 555.
argues that the Griffors have failed to allege any specific
facts that show that BANA breached the terms of the Note and
Mortgage. BANA argues that even if they “failed to
apply” payments, that does not establish the existence
of a breach under the terms of the Note and Mortgage. The
Griffors respond with a new allegation that a contract
existed with BANA, other than the original Note and Mortgage.
In their Response, the Griffors allege that BANA breached a
modification agreement by failing to communicate the
assignment of interest to Trust, by losing documents, by
repeatedly requesting documents it had already received, by
giving conflicting and confusing instructions to the
Griffors, by not responding to inquiries, and by making
mistakes in processing documents.
allegations against BANA are not in the Complaint, and the
Griffors also attach new documents to their Response that
were not attached to the Complaint. The Court will not
consider these. Even if the Court were to consider these, the
Griffors would still fail to state a Breach of Contract Claim
against BANA because they fail to attach or allege a