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Griffor v. BSI Financial Services Ventrues Trust 2013-I-H-R By Mcm Capital Partners LLC

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

March 31, 2017

EDWARD GRIFFOR, MARIELA GRIFFOR, Plaintiffs,
v.
BSI FINANCIAL SERVICES VENTURES TRUST 2013-I-H-R By MCM CAPITAL PARTNERS LLC, BANK OF AMERICA N.A., Defendants.

          ORDER GRANTING DEFENDANT BANA'S MOTION TO DISMISS [#9] AND GRANTING DEFENDANTS BSI, TRUST, AND MCM'S JOINT MOTION TO DISMISS [#13]

          HON. DENISE PAGE HOOD CHIEF JUDGE.

         I. BACKGROUND

         On June 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)

         The 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. Id.

         According 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 modification. Id.

         In late 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)

         II. ANALYSIS

         A. Standard of Review

         Rule 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).

         As the 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.

         B. Claims Against MCM

         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.

         C. Breach of Contract Claim

         The 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.

         BSI and 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.

         To 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. 1999).

         The 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.

         BANA 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.

         The new 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 wri ...


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