United States District Court, E.D. Michigan, Southern Division
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION TO DISMISS, OR INTHE ALTERNATIVE, FOR
SUMMARY JUDGMENT [#7]
Page Hood Chief Judge
October 26, 2016, Plaintiff filed an action in Genesee County
Circuit Court regarding the foreclosure sale of his home by
Defendant on April 27, 2016. Defendants filed a Notice of
Removal of Plaintiff's cause of action with this Court on
November 11, 2016. Presently before the Court is
Defendant's Motion to Dismiss, or in the Alternative, for
Summary Judgment [Dkt. No. 3], which has been fully
briefed. For the reasons that follow, Defendant's Motion
is granted in part and denied in part.
STATEMENT OF FACTS
November 12, 2007, Plaintiff purchased a property at 5416
River Meadow Boulevard, Flint Township, Michigan (the
“Property”). Dkt. No. 1, Complaint ¶ 9. In
connection with the purchase of the Property, Plaintiff
executed a mortgage and note for $165, 648 in favor of
MAC-CLAIR MORTGAGE CORPORATION. Dkt. No. 1, Complaint ¶
11; Dkt. No. 3, Ex. 1, Ex. 2. Later that month, Plaintiff was
given notice that servicing of the mortgage loan was assigned
from MAC-CLAIR MORTGAGE CORPORATION to defendant U.S. Bank
National Association (“Defendant”), Dkt. No. 3,
Ex. 3, and the mortgage and note also were assigned to
Defendant. Dkt. No. 1, Complaint ¶ 15; Dkt. No. 3, Ex.
4, Ex. 2 at 2.
29, 2009, Plaintiff was advised by Defendant that he was
“pre-approved for a Loan Modification.” Dkt. No.
3, Ex. 5. The 2009 offer for Loan Modification was finalized
in February 2010, added the delinquent interest and escrow to
the principal balance of the loan, and reduced the interest
rate from 7% to 5.75%. In 2011, Plaintiff again requested
mortgage assistance after falling behind on his monthly
payments due under the mortgage loan. Dkt. No. 3, Ex. 7.
Defendant advised Plaintiff on July 8, 2011, that he was
“pre-approved for a Loan Modification.” Dkt. No.
3, Ex. 8. Under the 2011 Loan Modification, finalized in
December 2011, the delinquent interest and escrow were added
to the principal balance of the loan, the interest rate was
reduced from 5.75% to 5.125%, and the maturity date of the
loan was extended.
February 1, 2013, Plaintiff submitted another application for
mortgage assistance. Dkt. No. 3, Ex. 10. On June 5, 2013,
Defendant advised Plaintiff that he was in default and
offered Plaintiff a special forbearance. Dkt. No. 3, Ex. 11.
The forbearance offer was never accepted, and Plaintiff
advised Defendant that he would “not be able to do
repay plan.” Dkt. No. 3, Ex. 12. On July 22, 2013,
Defendant advised Plaintiff that “[d]ue to the status
of your account, it is necessary to initiate foreclosure
action.” Dkt. No. 3, Ex. 13.
September 8, 2015, Plaintiff was notified that he was in
breach of the mortgage loan for failure to pay the monthly
installments when due. Dkt. No. 3, Ex. 14. The last payment
made by Plaintiff under the mortgage loan was for September
2015. Dkt. No. 3, Ex. 15. On March 17, 2016, Defendant
acknowledged receiving another application for mortgage
assistance from Plaintiff that was incomplete. Dkt. No. 3,
Ex. 16. In the letter, Defendant advised Plaintiff that
during the review of the application, “all foreclosure
activities, including a potential foreclosure sale, will
proceed as scheduled.” Dkt. No. 3, Ex. 16 at 2. On
March 18, 2016, Plaintiff was advised that Defendant elected
to accelerate the total indebtedness due and owing under the
mortgage loan. Dkt. No. 3, Ex. 17.
March 25, 2016, Plaintiff was mailed a copy of the
publication notice advising Plaintiff that a foreclosure sale
would take place on April 27, 2016 at 11:00 a.m. Dkt. No. 3,
Ex. 18. Notice of default and the foreclosure sale were
published in the Flint-Genesee County Legal News on March 23,
March 30, April 6, and April 13, 2016. Dkt. No. 3, Ex. 19.
Notice of the default and the foreclosure sale were also
posted on the Property on April 4, 2016. Dkt. No. 3, Ex. 20.
Publication and posting of the default and foreclosure are
acknowledged in the Complaint. Dkt. No. 1, Complaint
¶¶ 45-46. The sheriff's sale took place as
scheduled on April 27, 2016, and the Property was sold at
foreclosure to Defendant for $154, 160. Dkt. No. 1, Complaint
¶¶ 18, 47; Dkt. No. 3, Ex. 21. The redemption
period expired on October 27, 2016. Dkt. No. 1, Complaint
¶ 54; Dkt. No. 3, Ex. 21 at 6.
October 24, 2016, two days before filing his Complaint,
Plaintiff sent a qualified written request
(“QWR”) to Defendant. Dkt. No. 1, Complaint
¶ 13. Defendant timely responded to the QWR on November
8, 2016. Dkt. No. 3, Ex. 22. On October 26, 2016, Plaintiff
filed his fifteen-count Complaint seeking equitable,
declaratory and monetary relief against Defendant. His claims
are: (1) Count I -Declaratory Relief; (2) Count II - Quiet
Title; (3) Count III - Illegal Foreclosure under M.C.L.
§ 600.3204 et seq.; (4) Count IV - Illegal
Foreclosure - Respecting Notice of Default; (5) Count V -
Illegal Foreclosure - Respecting Foreclosure Alternatives;
(6) Count VI - Violation of the Fair Debt Collection
Practices Act (“FDCPA”); (7) Count VII -
Violations of 12 C.F.R. § 1024.41 et seq. -
Regulation X; (8) Count VIII -Violations of 15 U.S.C. §
1601 et seq. - Regulation Z; (9) Count IX -
Violations of 12 U.S.C. § 2605 et seq.
(Regulation X); (10) Count X - Breach of Contract; (11) Count
XI - Intentional Misrepresentation and Fraud; (12) Count XII
- Slander of Title; (13) Count XIII - Declaratory Relief -
Foreclosure Barred by Unclean Hands; (14) Count XIV -
Declaratory Relief - Violation of Michigan Consumer
Protection Act (“MCPA”); and (15) Count XV -
Request for Conversion to Judicial Foreclosure.
12(b)(6) motion to dismiss tests the legal sufficiency of the
plaintiff's complaint. Accepting all factual allegations
as true, the court will review the complaint in the light
most favorable to the plaintiff. Eidson v. Tennessee
Dep't of Children's Servs., 510 F.3d
631, 634 (6th Cir. 2007). As a general rule, to survive a
motion to dismiss, the complaint must state sufficient
“facts to state a claim to relief that is plausible on
its face.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007). The complaint must demonstrate more
than a sheer possibility that the defendant's conduct was
unlawful. Id. at 556. Claims comprised of
“labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.”
Id. at 555. Rather, “[a] claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Counts I - IV
Michigan, “all the right, title, and interest” a
mortgagor has in real property is extinguished upon the
expiration of the redemption period. M.C.L. § 600.3236;
Conlin v. MERS, Inc., 714 F.3d 355, 359 (6th Cir.
2013) (“Unless the premises described in [the
sheriff's] deed shall be redeemed within the time limited
for such redemption . . . such deed shall thereupon become
operative, and shall vest in the grantee . . . all the right,
title, and interest which the mortgagor had at the time of
the execution of the mortgage”). See also Bryan v.
JPMorgan Chase Bank, 304 Mich.App. 708, 713-14 (2014)
(“by failing to redeem the property within the
applicable time, plaintiff lost standing to bring her
claim”); Spartan Distrs., Inc. v. Golf Coast
Int'l, L.L.C., 2011 WL 1879722 (Mich.App. 2011).
Michigan, the redemption period is six months from the date
of the foreclosure sale. See M.C.L. §
600.3240(8). See also Piotrowski v. State Land Office
Bd., 302 Mich. 179, 187 (1942); Overton v. Mortgage
Electronic Registration Systems, No. 284950, 2009 WL
1507342, at *1 (Mich. App. May 28, 2009); Jackson v.
CitiMortgage, Inc., No. 10-14221, 2011 WL 479923, at *2
(E.D. Mich. Feb. 4, 2011); Moriarty v. BNC Mortgage,
Inc., No. 10-13860, 2010 WL 5173830, at *2 (E.D. Mich.
Dec. 10, 2010); Mission of Love v. Evangelist Hutchinson
Ministries, No 266219, 2007 WL 1094424, at *5 (Mich.
App. April 12, 2007).
case, the redemption period expired on October 27, 2016, six
months after the sheriff's sale of the Property.
Plaintiffs filed the instant cause of action on October 26,
2016, one day prior to the expiration of the redemption
period. Even though Plaintiff filed his Complaint the day
before the redemption period expired, the redemption period
still expired on the same date (October 27, 2016). One's
ability to challenge the foreclosure is not tolled simply by
filing a complaint, so Plaintiff lacks standing to challenge
the foreclosure even though his Complaint pre-dated October
27, 2016 (six months after the foreclosure sale). See
Overton, 2009 WL 1507342, at *1 (Mich. App. May 28,
2009) (“Although [plaintiff] filed his suit before the
redemption period expired, that was insufficient to toll the
redemption period”); Jackson, 2011 WL 479923,
at *2; Moriarty, 2010 WL 5173830, at *2; Mission
of Love, 2007 WL 1094424, at *5.
Michigan law, a plaintiff may challenge the foreclosure sale
after the expiration of the redemption period by alleging
fraud or irregularity in the foreclosure sale process.
See, e.g., Paige v. Kress, 80 Mich. 85, 89 (1890);
Overton, 2009 WL 1507342, at *1; Stein v. U.S.
Bancorp, No. 10-14026, 2011 WL 740537, at *6 (E.D. Mich.
Feb. 24, 2011) (“A court has no authority to set aside
a properly conducted foreclosure in the absence of a clear
showing of fraud, accident, or mistake in the foreclosure
proceedings.”). As Defendant argues, Plaintiff has
failed to allege any fraud or irregularity in the foreclosure
process itself, as the alleged.
Court dismisses Counts I-IV of the Complaint.
Count V, Plaintiff alleges “Defendants unlawfully
caused a foreclosure proceeding to commence and continue when
Plaintiff was being considered for foreclosure alternatives
prior to the publication of the notice of sale and holding of
the foreclosure sale.” Dkt. No. 1, Complaint ¶
101. Defendant asserts, and the language used by Plaintiff
supports a finding, ...