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Jodway v. Fifth Third Bank

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

May 31, 2017

Timothy M. Jodway, Appellant,
v.
Fifth Third Bank, Servicer for Fifth Third Bank Mortgage Company, Appellee.

          Mona K. Majzoub United States Magistrate Judge

          OPINION AND ORDER AFFIRMING BANKRUPTCY COURT'S DECISION TO DISMISS CHAPTER 13 BANKRUPTCY CASE

          HON. GERSHWIN A. DRAIN United States District Court Judge

         I. Introduction

         This is 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.

         II. Facts

         On 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.

         Jodway I

         In 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).

         Over 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).

         Jodway II

         On 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.

         Jodway III

         On 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 court's decision.

         Jodwa ...


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