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Skaggs v. Nationstar Mortgage, LLC

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

April 17, 2017

DEBRA SKAGGS, Plaintiff,



         This is a diversity action in which Plaintiff Debra Skaggs seeks to recover payments made to Defendant Nationstar Mortgage, LLC (“Nationstar”) and to prevent it from foreclosing on her home. Count I of the complaint seeks an injunction to prevent Nationstar from proceeding with a foreclosure sale. In Count II, Plaintiff alleges that she made payments to Nationstar for approximately 10 years under a mistake of fact. In Count III, she alleges that Nationstar falsely represented that she owed a debt, when in fact that debt had been discharged in bankruptcy. In Count IV, she alleges that Nationstar has been unjustly enriched by her payments. In Count V, she alleges that Nationstar violated 11 U.S.C. § 524, which enjoins the collection of a discharged debt. Before the Court is Nationstar's motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 10.) For the reasons stated herein, the motion will be granted.


         When reviewing a motion under Rule 12(b)(6), the 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, '” but it “‘need not accept as true legal conclusions or unwarranted factual inferences.'” Hunter v. Sec'y of U.S. Army, 565 F.3d 986, 992 (6th Cir. 2009) (quoting Jones v. City of Cincinnati, 521 F.3d 555, 559 (6th Cir. 2008)). A complaint must contain “a short and plain statement of the claim showing how the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The purpose of this statement is to “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

         The complaint need not contain detailed factual allegations, but it must include more than labels, conclusions, and formulaic recitations of the elements of a cause of action. Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). A complaint must allege facts that “state a claim to relief that is plausible on its face, ” and that, if accepted as true, are sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 570.

         Generally, when reviewing a Rule 12(b)(6) motion to dismiss, “a district court may not consider matters beyond the complaint.” Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 575 (6th Cir. 2008) (citing Kostrzewa v. City of Troy, 247 F.3d 633, 643 (6th Cir. 2001)). The Court “may consider the [c]omplaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to 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).


         In 2003, Plaintiff and her former husband, Scott Strzempek, purchased a home in Benzonia, Michigan (the “Property”), while they were lawfully married. To finance the purchase, Strzempek obtained a loan for $122, 200.00 from Homecomings Financial Network, Inc., as evidenced by a promissory note. (Note, ECF No. 1-3.) The loan was secured by a mortgage on the home granted to Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for the lender. (Mortgage, ECF No. 1-4.)[1] Strzempek signed the Note. Both Plaintiff and Strzempek signed the Mortgage. In 2005, they filed for bankruptcy under Chapter 7 of the United States Bankruptcy Code. During the bankruptcy proceedings, they allegedly offered to reaffirm the Note, but the creditor did not respond. On April 27, 2005, the bankruptcy court issued an order of discharge to Plaintiff and Strzempek under 11 U.S.C. § 727. (ECF No. 10-6.) Because the Note was not reaffirmed, it was discharged. That same year, Plaintiff and Strzempek divorced, and Plaintiff received title to the Property.

         Following the discharge, Plaintiff continued to receive monthly statements purporting to show a debt due on the Note and the accrual of interest. Plaintiff believed that she was required to pay these statements, so for the next 10 years that is what she did. In 2015, Plaintiff contacted Nationstar to obtain a lower interest rate on the debt. Nationstar informed Plaintiff that the Note was discharged in bankruptcy and that she could not refinance the debt because Strzempek, not Plaintiff, had signed the Note. After learning that the debt had been discharged, and that Nationstar would not refinance at a lower interest rate, Plaintiff stopped making payments to Nationstar.

         On May 25, 2016, Nationstar sent Plaintiff a letter purporting to accelerate the debt owed under the Note and notifying her that she had 30 days to dispute the validity of that debt. Plaintiff's attorney sent a reply and asked for verification of the validity and existence of the debt. Nationstar did not respond as demanded. Instead, it scheduled a sheriff's sale for the Property for July 20, 2016. Plaintiff brought this action in state court on July 19, 2016. On August 24, 2016, Nationstar removed the action to this Court.


         A. Count I: Preliminary Injunction

         Plaintiff seeks a preliminary injunction to stop the foreclosure sale. Nationstar asserts that it voluntarily canceled the foreclosure sale and that, in any event, Plaintiff is not entitled to a preliminary injunction because she fails to state a viable claim for relief. When considering a request for a preliminary injunction, the court must consider four factors: (1) the likelihood that the party seeking the preliminary injunction will succeed on the merits of her claim; (2) whether the party seeking the injunction will suffer irreparable harm without the grant of the extraordinary relief; (3) the probability that granting the injunction will cause substantial harm to others; and (4) whether the public interest is advanced by the issuance of the injunction. Washington v. Reno, 35 F.3d 1093, 1099 (6th Cir. 1994).

         Plaintiff's request for an injunction will be denied because she cannot demonstrate a likelihood of success on the merits of her claims. All of her claims arise from a mistaken belief that, when the debt due under the Note was discharged in bankruptcy, the Mortgage became ...

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