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Donald-Coleman v. Nationstar Mortgage LLC

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

July 12, 2017




         I. Introduction

         In this lawsuit Plaintiff Felecia Donald-Coleman seeks to quiet the title to a property that Defendant Nationstar Mortgage has foreclosed upon and Defendant U.S. Bank has purchased at a sheriff's sale. Plaintiff filed the lawsuit in state court, and Defendants recently removed the case to this Court. Plaintiff has filed a motion seeking a temporary restraining order (TRO) and a preliminary injunction to stay the redemption period for the property. Defendants oppose the motion. For the reasons outlined below, Plaintiff's motion with respect to her request for a TRO is DENIED AS MOOT and Plaintiff's motion with respect to her request for a preliminary motion is DENIED.

         II. Background

         In 2005, Plaintiff purchased with her former husband, Alex Cole-man, property located at 21401 Eastlawn St., Saint Clair Shores, MI 48080. Dkt. 6-2, Pg. ID 211. They obtained a mortgage from FMC Capital, LLC. Dkt. 6-2, Pg. ID 228. This mortgage was then assigned and re-assigned to various entities, and ultimately belonged to U.S. Bank. Dkt. 6-2, Pg. ID 221. Nationstar is the servicer of U.S. Bank, meaning Nationstar was responsible for conducting and supervising the foreclosure process. Dkt. 6-2, Pg. ID 214.

         Plaintiff and Coleman separated in February of 2013 and divorced in August of 2016. Dkt. 6, Pg. ID 171. They stopped making payments on the mortgage in November, 2013. Dkt. 1-2, Pg. ID 25.[1]On November 4, 2016-three years after Plaintiff and Coleman stopped paying their mortgage-Nationstar sent Plaintiff a letter stating that she and Coleman were in foreclosure and that a sheriff's sale was scheduled for December 2, 2016. Dkt. 6-2, Pg. ID 256. Plaintiff responded (presumably by mail, as that is how the other communications between the parties took place, but the record is unclear on this fact) that she was unable to prevent the sheriff's sale by satisfying her mortgage obligations because of the divorce litigation. Dkt. 6, Pg. IDs 171-72. Nationstar went ahead with the foreclosure anyway, and the sheriff's sale took place on December 2, 2016. Dkt. 6, Pg. IDs 171-72.

         Nationstar notified Plaintiff by mail that the redemption period-six months during which the property owner can prevent loss of title to the property by paying the purchaser (in this case, U.S. Bank) the foreclosure sale price in addition to any interest, taxes, and insurance costs that accumulated during the window- would end on June 2, 2017. Dkt. 6-2, Pg. ID 258; see also Mich. Comp. Law § 600.3240 (creating six-month redemption period).

         Halfway through the redemption period (on March 3, 2017), Plaintiff entered into a Consent Judgment of Divorce in which Plaintiff and Coleman agreed that he would receive title to the property (subject to the outstanding mortgage that was in foreclosure) while she would receive the right to redeem the property.[2] Dkt. 6-2, Pg. ID 236. Thus if Plaintiff redeemed the property, Cole-man would be legally obligated to file a Quit Claim Deed assigning the property to Plaintiff. Dkt. 6-2, Pg. ID 238.

         One day before the end of the redemption period, Plaintiff filed suit in Macomb County Circuit Court, seeking to be awarded title to the property and also seeking an equitable extension of the redemption period. Dkt. 1-2, Pg. ID 12. Plaintiff also filed an ex parte motion for a TRO and a preliminary injunction, Dkt. 6-1, Pg. ID 188, arguing that the redemption period should have started on March 3, 2017 (the date the Consent Judgment of Divorce was filed), not December 2, 2016 (the date of the sheriff's sale). Dkt. 6-2, Pg. ID 193-94. The state court issued a TRO and scheduled a hearing so Defendants could appear and contest Plaintiff's request for a preliminary injunction. Dkt. 6-1, Pg. ID 200.

         Defendants then removed the case to this Court, three days before the hearing would have taken place. Dkt. 1-4, Pg. ID 75. And upon removal, Plaintiff filed a new motion for a TRO and a preliminary injunction. Dkt. 6, Pg. ID 161.

         The Court concludes that oral argument would not help resolve Plaintiff's motion. So the Court will decide the motion based solely on the parties' written submissions. See E.D. Mich. LR 7.1(f).

         III. Standard of Review

         A court may issue a TRO or a preliminary injunction pursuant to Federal Rule of Civil Procedure 65. The purpose of a TRO is to maintain current circumstances between parties-to press “pause”-until the Court has an opportunity to determine whether it will issue a preliminary injunction. See First Tech. Safety Sys. Inc. v. Depinet, 11 F.3d 641, 650 (6th Cir. 1993).

         When determining whether to issue a preliminary injunction, the Court considers and balances four factors: “(1) whether the mo-vant has a strong likelihood of success on the merits; (2) whether the movant would otherwise suffer irreparable injury; (3) whether issuance of a preliminary injunction would cause substantial harm to others; and (4) whether public interest would be served by issuance of a preliminary injunction.” Summit County Democratic Central and Executive Committee v. Blackwell, 388 F.3d 547, 550 (6th Cir. 2004) (internal quotations omitted).

         The Court must make a finding on each of the four factors unless consideration of fewer factors so clearly resolves the motion that additional findings would not change the outcome. Six Clinics Holding Corp., II v. Cafcomp Systems, Inc., 119 F.3d 393, 399 (6th Cir. 1997). For example, a finding that there is “simply no likelihood of success on the merits” is generally sufficient to end the inquiry. O'Toole v. O'Connor, 802 F.3d 783, 788 (6th Cir. 2015).

         IV. Analysis

         Plaintiff has requested both a TRO and a preliminary injunction. Dkt. 6, Pg. ID 161. The Court will address each request separately, starting with the request for a TRO.

         a. Temporary Restraining Order

         Defendants take the position that the state court's TRO expired by its own terms on June 16, 2017, which was 14 days after the date it was entered by Macomb County Circuit Judge Kathryn Viviano, on June 2, 2017. Dkt. 6-1, Pg. ID 200-01. Under Michigan Court Rule 3.310(B)(3), a TRO endures for only 14 days unless it is extended by the court. But the problem with Defendants' position is that they removed the case to federal court on June 16, 2017- the 14th day of the state court-issued TRO, the last day when it was still in effect. Once a case has been removed to federal court, federal procedural law takes the place of state procedural law. See Granny Goose Food Inc. v. Brotherhood of Teamsters and Auto Truck Drivers Local No. 70 of Alameda County, 415 U.S. 423 (1974). And under federal procedural law, “[a]ll injunctions, orders, and other proceedings had in such action prior to its removal shall remain in full force and effect until dissolved or modified by the district court.” 28 U.S.C. § 1450. Defendants elected to remove the case before the TRO expired, and before the state court could hold ...

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