United States District Court, E.D. Michigan, Southern Division
Timothy M. Jodway, Appellant,
Fifth Third Bank, Servicer for Fifth Third Bank Mortgage Company, Appellee.
K. Majzoub United States Magistrate Judge
OPINION AND ORDER AFFIRMING BANKRUPTCY COURT'S
DECISION TO DISMISS CHAPTER 13 BANKRUPTCY CASE
GERSHWIN A. DRAIN United States District Court Judge
an appeal from a bankruptcy court's dismissal of a
Chapter 13 bankruptcy case. For the reasons stated below, the
Court will AFFRIM the bankruptcy court's decision.
August 3, 2005, the Jodways took out a $649, 000 mortgage on
a property at 324 Bay Street in Boyne City, Michigan (the
“Property”), from Fifth Third Mortgage Company
(hereinafter “Appellee” or “Fifth Third
Co.”). Bankruptcy R., Dkt. No. 4, p. 94 (Pg. ID 104).
Eventually, the Jodways failed to meet their mortgage
obligations, the Appellee referred the matter to foreclosure,
and a Chapter 13 Bankruptcy case commenced. The Jodways have
an extensive history before the bankruptcy court. This appeal
involves four separate stages of litigation involving the
Jodways, the Appellee, and the Property.
September 2008, the Jodways filed suit in the Charlevoix
County Circuit Court alleging fraud claims against Fifth
Third LLC, inter alia. Zanke-Jodway v. Capital
Consultants, Inc., No. 1:08-CV-930, 2010 WL 776743, at
*3 (W.D. Mich. Mar. 3, 2010). The Jodways claimed that they
were fraudulently induced into the Mortgage. Id. at
*5-6. The case was removed on federal question grounds to the
U.S. District Court for the Western District of Michigan on
October 3, 2008. Id. at *4. Fifth Third LLC moved
for summary judgment. However, the Jodways failed to file any
opposition to Fifth Third LLC's Motion. Id. at
*4. On March 3, 2010, the U.S. District Court dismissed the
Jodways' claims against Fifth Third LLC under Federal
Rule of Civil Procedure 41(b) for failure to prosecute.
Id. at *12-13. On January 20, 2011, the mortgage was
assigned to Appellee, Fifth Third Mortgage Company. Dkt. No.
4, p. 75 (Pg. ID 1309).
the course of the litigation of Jodway I, the
Jodways failed to meet their mortgage obligations. Fifth
Third Co. referred the matter to foreclosure and in June
2014, foreclosure notice was posted. Dkt. No. 4, p. 99 (Pg.
ID 110). The Sheriff's sale was scheduled for June 27,
2014. Id., p. 730 (Pg. ID 739). Tim Jodway filed for
Chapter 13 relief in bankruptcy court on June 26, 2014 to
stay Fifth Third Co.'s foreclosure. Id., p. 72
(Pg. ID 82).
February 11, 2015, while in bankruptcy, the Jodways filed an
adversary proceeding against Fifth Third Co.
(“Jodway II”). Id. The
Complaint raised the same allegations they raised in
Jodway I. On March 3, 2015, Fifth Third Co. moved
for dismissal. The bankruptcy court dismissed the action on
April 13, 2015. The bankruptcy court issued its opinion from
the bench, holding that Count I was barred by the doctrines
of res judicata and collateral estoppel, and that Counts II
and III were not independent causes of action under Michigan
law. The Jodways did not appeal the bankruptcy court's
dismissal of their complaint. The Jodways, the Trustee, and
Fifth Third Co. eventually stipulated to the entry of an
Order Confirming Plan of Restructuring (“the
Plan”). As a part of the Plan, the Jodways agreed to
surrender the Property. That order was entered by the
bankruptcy court on May 12, 2015. Fifth Third Co. later again
tried to commence foreclosure proceedings, allegedly in
accordance with stipulations in the Plan, but the Jodways
disputed their claim. On April 15, 2016, the State court
granted Fifth Third Co. judgment of foreclosure on the
Property in the amount of $945, 139.55.
April 13, 2016, the Jodways filed a Motion to Reopen the
Case, and a Rule 60 Motion for relief from the April 13, 2015
Judgment (“Jodway III”). On May 16,
2016, the bankruptcy court heard the parties' arguments
and denied the motion from the bench. The bankruptcy court
denied relief for the “reasons in [Fifth Third
Co.'s] brief” and further held that the Jodways
were estopped from pursuing their fraud claims further
because they had already agreed to surrender the Property as
a part of their restructuring. Dkt. No. 6 at 1095 (Pg. ID No.
1116). On August 29, 2016, this Court affirmed the bankruptcy