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Hubbard v. Select Portfolio Servicing, Inc.

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

August 30, 2017




         On April 22, 2017, Plaintiff Sherman Hubbard, proceeding pro se, filed a complaint naming Select Portfolio Servicing, Inc., Bank of America, and Deutsche Bank as Defendants. ECF No. 1. All pretrial matters were referred to Magistrate Judge Patricia T. Morris. ECF No. 3. On December 12, 2016, Defendants filed two motions for summary judgment. ECF Nos. 27, 28. On March 16, 2017, Judge Morris issued a report recommending that the motions be granted and the complaint dismissed. ECF No. 41. On March 28, 2017, Hubbard filed a motion for leave to file an amended complaint. ECF No. 41. He also filed objections to Judge Morris's report and recommendation. ECF No. 42. For the following reasons, Hubbard's objections will be overruled, the motion to file an amended complaint will be denied, the report and recommendation will be adopted, and Hubbard's complaint will be dismissed.


         Judge Morris's factual summary of Hubbard's complaint will be adopted in full. For clarity, a brief summary will be provided here. According to Hubbard, he is bringing claims of breach of contract and fraud. Compl. at 2, ECF No. 1. On January 14, 2004, Hubbard entered into an “Adjustable Rate Note” with Nationwide Lending. Id.[1] The loan was assigned to Bank of America and then sold to Deutsche Bank. In 2008, Hubbard paid $41, 887 to Bank of America during a bankruptcy proceeding. Id. at 3.[2] In 2012, Select Portfolio Servicing became the loan servicer. Id.

         In 2013, Hubbard was informed that he would receive a loan modification pursuant to “the U.S. Justice Department and State Attorney General's Global Settlement.” Id. After making three trial payments of $1, 375.74, Hubbard was informed that “the monthly payments would be Substantially less than $1, 375.74 and the interest rate on the loan would be at market Rate of 2.75-3.75% The final loan modification offer was $136, 000 loan amount Interest Rate of 8.78% and a monthly payment amount of $1375.74.” Id. (sic throughout).

         Accordingly, Hubbard argues that Defendants “failed to perform on the federally ordered settlement by not offering [a]n at market interest rate at the time of the loan modification.” Id. He alleges that “Defendants have knowingly and willfully . . . fraudulently deceived Plaintiff and Plaintiffs Attorney by having them submit loan modification documentation in excess of 15 time Each and every time claiming some form of paperwork is missing, incomplete, or Expired. Defendant has repeatedly changed or assigned a new loan servicer to Further delay the loan modification process.” Id. (sic throughout). Hubbard further alleges that on “4 separate occasions defendant has offered loan modifications without Any paper work to plaintiff with deceptive open ended terms.” Id.

         As a result of Defendants' alleged misconduct, Hubbard's home was foreclosed upon for “nonpayment of taxes.” Id. He asserts that, because Defendants are unwilling to complete the mortgage modification mandated by the federal settlement, he is “unable to repair credit” and “unable to make necessary repairs to property.” Id. at 4.


         Pursuant to Federal Rule of Civil Procedure 72, a party may object to and seek review of a magistrate judge's report and recommendation. See Fed. R. Civ. P. 72(b)(2). Objections must be stated with specificity. Thomas v. Arn, 474 U.S. 140, 151 (1985) (citation omitted). If objections are made, “[t]he district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to.” Fed.R.Civ.P. 72(b)(3). De novo review requires at least a review of the evidence before the magistrate judge; the Court may not act solely on the basis of a magistrate judge's report and recommendation. See Hill v. Duriron Co., 656 F.2d 1208, 1215 (6th Cir. 1981). After reviewing the evidence, the Court is free to accept, reject, or modify the findings or recommendations of the magistrate judge. See Lardie v. Birkett, 221 F.Supp.2d 806, 807 (E.D. Mich. 2002).

         Only those objections that are specific are entitled to a de novo review under the statute. Mira v. Marshall, 806 F.2d 636, 637 (6th Cir. 1986). “The parties have the duty to pinpoint those portions of the magistrate's report that the district court must specially consider.” Id. (internal quotation marks and citation omitted). A general objection, or one that merely restates the arguments previously presented, does not sufficiently identify alleged errors on the part of the magistrate judge. See VanDiver v. Martin, 304 F.Supp.2d 934, 937 (E.D. Mich. 2004). An “objection” that does nothing more than disagree with a magistrate judge's determination, “without explaining the source of the error, ” is not considered a valid objection. Howard v. Sec'y of Health and Human Servs., 932 F.2d 505, 509 (6th Cir. 1991). Without specific objections, “[t]he functions of the district court are effectively duplicated as both the magistrate and the district court perform identical tasks. This duplication of time and effort wastes judicial resources rather than saving them, and runs contrary to the purposes of the Magistrate's Act.” Id.


         In the report and recommendation, Judge Morris first notes that Hubbard “has raised very few factual allegations against any defendant.” Rep. & Rec. at 15, ECF No. 41. Likewise, Judge Morris concluded that Hubbard's “failure to distinguish between the defendants fails to put any particular defendant on notice of his claims against them, and thus violates the requirement of Federal rule of Civil Procedure 8(a)(1) that pleadings” contain a short and plain statement of the claims. Id. Specifically, Hubbard does not specify which Defendant, if any, had legal obligations to comply with the federally ordered settlement. He further does not specify which Defendant he alleges is responsible for providing the loan modification he seeks. And, to the extent Hubbard alleges claims of fraud, his conclusory pleadings do not meet the “heightened pleading standards attendant to fraud claims under Federal Rule of Civil Procedure 9(b). Id. at 16-17.

         As to Defendant Deutsche Bank, Judge Morris asserts: “Even assuming [that the loan in question was sold to Deutsche Bank], Plaintiff has not set forth any viable claim for relief against Deutsche Bank. That Deutsche Bank was assigned a loan as trustee is not, in and of itself, a tort, violation of contract, or other actionable claim for relief.” Id. at 17. Judge Morris thus recommends that Deutsche Bank be dismissed.

         With regards to Defendant Select Portfolio Servicing (“SPS”), Judge Morris likewise recommends dismissal. After acknowledging that Hubbard's complaint is “minimally sufficient to allege the claim that SPS violated its promise to provide a mortgage modification at a particular rate, ” Judge Morris concluded that “this claim is not one upon which relief can be granted.” Id. at 18. Specifically, “Plaintiff makes no attempt to identify any federal or state statute or provision which could support such a right, and the Court is aware of no such statute.” Id. at 19. Judge Morris further explained that “[c]laims of promissory estoppel brought against financial institutions under the circumstances described above fail unless the petitioner presents a written copy of the alleged promise or commitment, signed by the financial institution.” Id. at 20. And to the extent Hubbard alleged that SPS violated an implied covenant of good faith and fair dealing, Michigan law does not recognize a cause of action for that claim. Finally, Judge Morris found that Hubbard's fraud claims failed to meet the Rule 9(b) standard.

         Thus, Judge Morris recommends dismissal of Bank of America. First, she found that Hubbard's claims against Bank of American are barred by the applicable statute of limitations. And even if the claims were timely, they would be barred for the same reasons that no claims against Deutsche Bank and SPS have been stated.

         Hubbard has articulated eight objections, none of which have merit. The objections will ...

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