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Karmol v. Ocwen Loan Servicing, LLC

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

July 19, 2017

MICHAEL KARMOL, Plaintiff,
v.
OCWEN LOAN SERVICING, LLC, et al., Defendants.

          OPINION REGARDING DEFENDANT OCWEN'S MOTION TO DISMISS

          GORDON J. QUIST UNITED STATES DISTRICT JUDGE

         Plaintiff, Michael Karmol, filed a complaint against Defendants, Ocwen Loan Servicing, LLC, Karessa Rollins, and Trott & Trott, P.C., in the Ingham County Circuit Court on or about February 22, 2017. Karmol alleged state-law claims of (1) common law fraud; (2) innocent misrepresentation; (3) breach of contract; (4) conversion; (5) tortious interference with business relationship or expectancy; (6) unfair trade practices (violation of the Michigan Consumer Protection Act (MCPA)); and (7) injunctive relief, declaratory relief, and quiet title. Defendant Ocwen removed the case to this Court on March 20, 2017, alleging diversity of citizenship and federal question jurisdiction as bases for removal jurisdiction. On June 20, 2017, the Court denied Karmol's motion to remand based on lack of subject matter jurisdiction. (ECF No. 14.)

         Ocwen moves to dismiss Karmol's complaint, arguing that Karmol's claims are barred by the doctrines of res judicata and collateral estoppel and otherwise fail on a number of different grounds. Karmol has filed a response, and Ocwen has filed a reply. The motion is thus ready for decision.[1]

         For the reasons that follow, the Court will grant Ocwen's motion and dismiss Karmol's complaint.

         I. Background

         This case is Karmol's second effort to block Ocwen from foreclosing on a mortgage on Karmol's real property. On December 11, 2016, this Court granted Ocwen's motion to dismiss Karmol's first complaint. See Karmol v. Ocwen Loan Servicing, LLC, No. 1:16-CV-1178 (ECF Nos. 9, 10).

         The Court set forth the pertinent background facts in its prior Opinion:

On April 22, 2004, Karmol obtained a mortgage loan from GMAC Mortgage Corporation in the amount of $116, 471.00. (ECF No. 1-2.) As security for repayment of the loan, Karmol granted a mortgage (the Mortgage) to Mortgage Electronic Residential Systems (MERS), as nominee for GMAC, on real property located at 4531 Don Street, Holt, Michigan 48842. (Id.) The Mortgage was recorded in the Ingham County Register of Deeds on May 13, 2004. On December 24, 2015, MERS assigned the Mortgage to Ocwen pursuant to a Corporate Assignment of Mortgage. (Id.) The Corporate Assignment of Mortgage was recorded in the Ingham County Register of Deeds on January 15, 2016. (Id.)
Karmol filed his complaint in this case on September 26, 2016. It appears that Karmol used a form complaint that he obtained from some source, possibly the internet. The complaint generally alleges that Ocwen illegally charged late fees, misapplied unspecified payments, mishandled his escrow account, and charged marked-up fees for default-related services. (ECF No. 1 at PageID.2-5.)

(Case No. 1:16-CV-1178, ECF No. 9 at PageID.170 (footnote omitted).)

         Karmol filed his complaint in the instant case in state court on or about February 22, 2017, seeking, among other things, an injunction precluding Defendant Trott & Trott, P.C. (also referred to as Trott Law), from proceeding with a sheriff's sale that was scheduled to occur on February 23, 2017. (ECF No. 1-2 at PageID.106.) Karmol's instant allegations essentially concern facts that occurred in February 2017. Karmol alleges that Ocwen engaged in “dual tracking”-a lender's practice of proceeding with a foreclosure sale while the mortgagor/borrower's loan modification application is still being reviewed by the lender.

         According to Karmol, Ocwen informed him on February 10, 2017, and February 13, 2017, that Ocwen's team was still reviewing his loan modification papers and it would be at least 30 days before a decision was made. (Id. at PageID.18.) Karmol further alleges that Defendant Karessa Rollins-Ocwen's agent or representative-promised that the February 23, 2017, sheriff's sale was cancelled and that Karmol would hear about his loan modification application from Ocwen's loss mitigation department. (Id.) Rollins also instructed Karmol to call Trott Law. Although Karmol called Trott Law, Trott Law failed to respond to Karmol's messages. (Id.)

         II. Discussion[2]

         In the prior case, the Court held that: (1) Karmol's Michigan Consumer Protection Act (MCPA) claim failed because residential loan transactions are exempt under the MCPA; (2) Karmol failed to plead the predicate acts of his RICO claim with specificity, as required by Rule 9(b); (3) Karmol's Fair Debt Collection Practices Act claim failed because his allegations were too conclusory to allege a claim; (4) Karmol's unjust enrichment claim failed because the mortgage governed the parties rights and obligations with regard to the default-related services; (5) Karmol's fraud claim did not comply with ...


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