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Bantom v. Bayview Loan Servicing

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

December 18, 2017

Audrey Bantom, as Personal Representative of the Estate of Robert L. Cornell, Jr. et al., Plaintiff,
v.
Bayview Loan Servicing et al., Defendants.

          Elizabeth A. Stafford, United States Magistrate Judge

          OPINION AND ORDER GRANTING DEFENDANT BAYVIEW'S MOTION FOR JUDGMENT ON THE PLEADINGS [14]

          GERSHWIN A. DRAIN United States District Judge

         I. Introduction

         This is a mortgage foreclosure case. Plaintiffs Anthony Cornell and Estate of Robert Cornell Jr., by and through personal representative Audrey Bantom, initially filed this action in state court on or about May 25, 2017. Dkt. No. 1, p. 1 (Pg. ID 1); see also Dkt. No. 1-2, p. 2 (Pg. ID 8). Plaintiffs filed an Amended Complaint in state court on June 14, 2017.[1] See Dkt. No. 4. Defendant Bayview Loan Servicing removed the action to this Court on June 29, 2017. See Dkt. No. 1.

         Plaintiffs' Amended Complaint asserts the following causes of action against Defendant Bayview: lack of standing to foreclose under 12 U.S.C. § 1701j-3 and Michigan Compiled Laws 445.1626 (Count I); fraudulent misrepresentation under Michigan law (Count II); wrongful foreclosure in violation of Michigan Compiled Laws 600.3204 (Count III); and exemplary damages under Michigan law (Count IV). Dkt. No. 4, pp. 4-7 (Pg. ID 26-29). Additionally, Plaintiffs assert a claim of quiet title, Count V, against the other Defendant in this case, Thien Hoang Tran. Id. at pp. 7-8 (Pg. ID 29-30).

         Presently before the Court is Defendant Bayview's Motion for Judgment on the Pleadings, which Defendant Tran has joined through his motion in concurrence [14, 16]. The motion is fully briefed. Pursuant to Eastern District of Michigan Local Rule 7.1(f)(2), the Court has decided this motion without a hearing. For the reasons discussed herein, the Court will GRANT Defendant Bayview's Motion for Judgment on the Pleadings, and Defendant Tran's concurrence in the motion [14, 16].

         II. Background

         The events leading to this litigation began with Robert Cornell's unfortunate death on July 29, 2015. Dkt. No. 4, pp. 2-3 (Pg. ID 24-25). Cornell had entered a mortgage contract for a property located at 8615 Wisconsin Street, Detroit, Michigan 48204 (the “Property”). Id. at pp. 2, 18 (Pg. ID 24, 40). Defendant Bayview became the mortgagee on this contract on June 4, 2015. See Dkt. No. 14-4, p. 2 (Pg. ID 137). At the time of Cornell's death, the mortgage was not in default, and indeed, all balances already due had been paid in full. Dkt. No. 4, p. 3 (Pg. ID 25).

         After Cornell's death, his daughter Audrey Bantom served as the personal representative of his estate. Id. at p. 2 (Pg. ID 24). Bantom opened Cornell's probate estate around August 11, 2015. Dkt. No. 14, pp. 11-12 (Pg. ID 96-97). Additionally, Plaintiff Anthony Cornell, the decedent's son, was living at the Property when Plaintiffs filed the Complaint. Dkt. No. 4, p. 2 (Pg. ID 24).

         Bantom contends that she notified creditors of Cornell's death, including Bayview, shortly after she opened the probate estate. Id. But, according to Bantom, Bayview did not respond to the notice. Id. Bantom did speak with Bayview representatives following Cornell's death, however. Id. Plaintiffs assert Bantom told Bayview that the Cornell family intended to retain the Property. Id. The Amended Complaint does not specify when Bantom's communications with Bayview took place. See Id. Bayview suggests that the first such communication was on November 8, 2016, more than one year after Cornell's death. Dkt. No. 14, pp. 13-14 (Pg. ID 98-99).

         A payment on the mortgage was due on the 1st of each month, and as no payment was made in August 2015, Bayview alleges that it mailed to the Property a Notice of Default and Intent to Accelerate the Mortgage. Id. at p. 12 (Pg. ID 97); see also Dkt. No. 14-6, p. 2 (Pg. ID 144). The Notice is dated September 16, 2015. Dkt. No. 14-6, p. 2 (Pg. ID 144). In addition to not making an August 2015 payment on the mortgage, no mortgage payments were made from September 2015 through December 2015. Dkt. No. 4, p. 20 (Pg. ID 42). As of December 2015, the outstanding principal balance on the mortgage was $113, 358.12. Id.

         Considering the mortgage to be in default, Defendant Bayview initiated a sheriff's sale of the Property, which occurred on November 3, 2016. Id. at p. 18 (Pg. ID 40). The Property was sold to Defendant Tran on March 7, 2017 for $18, 900.00. Id. at p. 2 (Pg. ID 25); see also Dkt. No. 14, p. 14 (Pg. ID 99). Defendants assert that the Property was sold subject to a right of redemption. Dkt. No. 14, p. 14 (Pg. ID 99).

         The redemption period expired on May 3, 2017. Id. at p. 15 (Pg. ID 100). Yet Bantom contacted Bayview on April 21, 2017 to ascertain how the Cornell family might retain the Property. Id. at p. 14 (Pg. ID 99). On April 24, 2017, Anthony Cornell received a letter from Bayview indicating that it would respond to the family's inquiries about retaining the Property by June 6, 2017. Dkt. No. 4, p. 3 (Pg. ID 25).

         Plaintiffs contend that, instead of informing Plaintiffs of how they might have retained the Property, Bayview covertly proceeded with the foreclosure sale. Id. Plaintiffs assert that they only learned of the sale because individuals began visiting the Property and claiming ownership over it. Id. The sheriff's deed on the mortgage sale, however, indicates that a notice of foreclosure was published in a conspicuous place on the Property, at least at some point prior to the initiation of foreclosure proceedings in November 2016. Id. at p. 18 (Pg. ID 40).

         By the time Bayview responded to Plaintiffs' inquiries, on May 19, 2017, the redemption period had ended. See Dkt. No. 14, pp. 14-15 (Pg. ID 99-100). Indeed, Bayview's May 19, 2017 response simply notified Bantom that Bayview had sold the Property and that the redemption period had expired. Id. at p. 15 (Pg. ID 100).

         III. Legal Standard

         Federal Rule of Civil Procedure 12(c) allows a party to move for judgment on the pleadings “[a]fter the pleadings are closed-but early enough not to delay trial.” Motions for judgment on the pleadings are analyzed under the same standard as motions to dismiss under Rule 12(b)(6). See Warrior Sports, Inc. v. Nat'l Collegiate Athletic Ass'n, 623 F.3d 281, 284 (6th Cir. 2010) (citing EEOC v. J.H. Routh Packing Co., 246 F.3d 850, 851 (6th Cir. 2001)). “ ‘For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.' ” Id. (quoting JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007)).

         In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court explained that “a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level[.]” Id. at 555 (citation omitted). A plaintiff's factual allegations, while “assumed to be true, must do more than create speculation or suspicion of a legally cognizable cause of action; they must show entitlement to relief.” LULAC v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citing Twombly, 550 U.S. at 555). “To state a valid claim, a complaint must contain either direct or inferential allegations respecting all the material elements to sustain recovery under some viable legal theory.” Id. (citing Twombly, 550 U.S. at 562).

         When deciding a 12(c) motion for judgment on the pleadings, matters outside the pleadings ordinarily may not be considered unless the motion is converted to one for summary judgment under Federal Rule of Civil Procedure 56. See Weiner v. Klais & Co., 108 F.3d 86, 88 (6th Cir. 1997). A court may, however, examine “ ‘the complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion [for judgment on the pleadings] so long as they are referred to in the complaint and are central to the claims contained therein.' ” Luis v. Zang, 833 F.3d 619, 626 (6th Cir. 2016) (quoting Kreipke v. Wayne State Univ., 807 F.3d 768, 774 (6th Cir. 2015)).

         IV. Discussion

         Defendant Bayview argues it is entitled to a Judgment on the Pleadings on Counts I-IV, and Defendant Tran claims a Judgment on the Pleadings is warranted for Count V. Bayview contends that 12 U.S.C. § 1701j-3 does not authorize a private right of action or does not apply to Plaintiffs' claim; that Plaintiffs have no viable fraudulent misrepresentation claim; that the Property was not unlawfully foreclosed upon in violation of Michigan Compiled Laws 600.3204; and that exemplary damages is not a standalone cause of action. Separately, Defendant Tran argues that Plaintiffs' quiet title claim, too, fails.

         The Court will find that none of Plaintiffs' claims can survive the Motion for Judgment on the Pleadings. In addition, the Court notes that the Motion is for a Judgment on the Pleadings, or in the alternative, for Summary Judgment under Rule 56 of the Federal Rules of Civil Procedure. As the Court can resolve the claims without resorting to ...


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