United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING IN PART AND DENYING IN
PART DEFENDANTS' MOTIONS [22, 25] AND REMANDING THE
STEPHEN J. MURPHY, III UNITED STATES DISTRICT JUDGE.
Regan Guevara claims she cannot get a straight answer on her
debt. Faced with foreclosure, she brought the instant suit in
the wake of her correspondence with entities involved in the
ownership, servicing, and collection of the debt. Now before
the Court are two motions for judgment, collectively filed by
five of the seven defendants: Trott Law, Bosco Credit II
Trust Series, Deutsche Bank National Trust Company, Franklin
Credit Management Corporation, and Mortgage Electronic
Registration Systems, Inc. ECF 22, 25.
begin, Guevara is mainly asserting state-law claims. The
amended complaint has eight counts: (1) Quiet Title, (2)
Common Law Slander of Title, (3) Statutory Slander of Title,
(4) Innocent/Negligent Misrepresentation, (5) Fraud, (6)
Violation of the Fair Debt Collection Practices Act (FDCPA),
(7) Violation of the Michigan Debt Collection Practices Act
(MDCPA), and (8) Violation of the Real Estate Settlement
Procedures Act (RESPA). The first five counts are against all
the defendants, while the FDCPA and MDCPA counts are
exclusively against Defendants Trott and Franklin Credit, and
the RESPA count is solely against Franklin Credit.
light of the limited federal nature of Guevara's suit,
the Court will first evaluate whether the federal claims
should be dismissed, and then determine whether the remaining
action is more suitable for state-court adjudication.
simultaneously move for summary judgment under Rule 56 and
judgment on the pleadings under Rule 12(c). See ECF
22, PgID 697; ECF 25, PgID 1106. Although the portions of
their motions addressing the FDCPA and RESPA counts do not
specifically mention what rule Defendants rely upon, the
relief they seek is "dismissal, " so the Court will
construe these motions under Rule 12.
Court reviews a Rule 12(c) motion as it would a Rule 12(b)(6)
motion, and focuses on a plaintiff's allegations. It may
also consider "matters of public record, orders, items
appearing in the record of the case, and exhibits attached to
the complaint[.]" Barany-Snyder v. Weiner, 539
F.3d 327, 332 (6th Cir. 2008). A court may also consider
exhibits not included in the complaint but attached to the
motion, "so long as they are referred to in the
Complaint and are central to the claims contained
therein." Bassett v. Nat'l Collegiate Athletic
Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). If the
exhibits are not referenced in the complaint, the court may
still consider them, but must treat the motion as one for
summary judgment under Rule 56 and "[a]ll parties must
be given a reasonable opportunity to present all the material
that is pertinent to the motion." Fed.R.Civ.P. 12(d).
relied upon three relevant exhibits that were not attached to
the Complaint. One (ECF 22-13) is a truth-in-lending document
describing the terms of the debt-consolidation agreement
referred to by Guevara in her affidavit and over which the
debt-collection dispute arises. See ECF 23-2, PgID
1004, ¶ 9. The other two exhibits, however, are letters
allegedly sent by Franklin Credit (ECF 22-27, 22-28). They
are not referred to in the Complaint-although letters sent
before and after them were. See ECF 23-2, PgID
1051-52 (Guevara's QWR letter), 1053-54 (Franklin
Credit's final response to the QWR letter); ECF 23-2.
Trott's motion does not rely upon the letters, but the
other defendants' joint motion does. The Court may
therefore consider the Trott motion under the Rule 12(c)
standard, but must convert the other into a motion for
summary judgment under Rule 56.
The Rule 12(c) Standard
reviewing a motion under 12(c), the Court accepts as true all
well-pleaded material allegations of the pleadings and draws
reasonable factual inferences in favor of the non-moving
party, but "need not accept as true legal conclusions or
unwarranted factual inferences." JPMorgan Chase
Bank, N.A. v. Winget, 510 F.3d 577, 581-82 (6th Cir.
2007) (quoting Mixon v. Ohio, 193 F.3d 389, 400 (6th
Cir. 1999)). The complaint must "give the defendant fair
notice of what the claim is and the grounds upon which it
rests, " Nader v. Blackwell, 545 F.3d 459, 470
(6th Cir. 2008) (quoting Erickson v. Pardus, 551
U.S. 89, 93 (2007)), "raise a right to relief above the
speculative level, and  state a claim to relief that is
plausible on its face." Hensley Mfg. v. ProPride,
Inc., 579 F.3d 603, 609 (6th Cir. 2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570
(2007)). It is not enough to just offer "'labels and
conclusions' or 'a formulaic recitation of the
elements of a cause of action[.]'" Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 555).
The Rule 56 Standard
Court must grant summary judgment "if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). The moving party must identify specific
portions of the record "which it believes demonstrate
the absence of a genuine issue of material fact."
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Once the moving party has met its burden, the non-moving
party may not simply rest on the pleadings, but must present
"specific facts showing that there is a genuine issue
for trial." Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986) (quoting
Fed.R.Civ.P. 56(e)) (emphasis omitted).
is material if proof of that fact would establish or refute
an essential element of the cause of action or defense.
Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.
1984). A dispute over material facts is genuine "if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In
considering a motion for summary judgment, the Court must
view the facts and draw all reasonable inferences "in
the light most favorable to the nonmoving party." 60
Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th
The Origins of the Debts
purchased 404 Laurie Dr. in Flushing, Michigan (the Property)
for $145, 000 on November 5, 2004. ECF 23-2, PgID 988. The
following June, she entered into an agreement to pay off her
credit card debt and, in so doing, granted Summit Mortgage a
security interest in the Property. ECF 22-13. Guevara,
however, is hazy on the transaction. In her affidavit, she
confirmed that she "spoke with a company about a
possible debt consolidation loan, " that she took out a
debt-consolidation loan to pay off her credit cards, and that
she began making payments on the new loan in July 2005. ECF
23-2, PgID 1003-04. But she claims that "the only
document [she] recall[s] signing" and having notarized
was two pages in length and "was represented as just a
notice and not anything binding." Id. at 1004.
In any event, Guevara started making the new monthly payments
on the debt in July 2005 and continued to make payments into
2012. ECF 23-2, PgID 1004, ¶ 9; ECF 23-2, PgID 1020-35.
The Debt Collections
federal claims arise from correspondence about the 2005 debt
that took place several years later, during 2016-17. The
trouble began when Guevara received two letters, each dated
April 21, 2016 and each informing her that she was in default
on her mortgage. One letter was sent by
Franklin and demanded she pay $21, 183.23 by May
26, 2016 to cure her default and keep Franklin Credit from
initiating a foreclosure. ECF 23-2, PgID 1043. The other
letter was sent by Trott Law ("Trott"), which
purported to represent Franklin Credit. Although the letter
did not demand payment, it listed her "total
indebtedness" as $54, 470.48. Id. at 1040. The
Trott letter explained that unless Guevara notified Trott
that she disputed the validity of the debt within 30 days of
receiving the letter, Trott would assume the debt was valid.
Id. The Franklin Credit letter did not give a
timeline for disputing the debt, but did list a number to
call if Guevara "wishe[ed] to dispute the
delinquency" or "the calculation of amount of the
delinquency and reinstatement amount[.]" Id. at
1046. The Trott letter stated at the top, "THIS FIRM IS
A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT" and the
Franklin Credit letter likewise stated that "FRANKLIN
CREDIT MANAGEMENT CORPORATION IS A DEBT COLLECTOR[.]"
Id. at 1040, 1046.
and her husband apparently sent a timely response to the
Trott letter that included a summary of payments she made
from December 2005 to May 2012. See ECF 23-2, PgID
1003 (affidavit of Guevara attesting that she sent a
"debt validation demand letter"), 1017 (letter from
Trott recognizing the receipt of a letter dated April 30,
2016), 1034-35 (the summary of payments). Trott, again on
behalf of Franklin Credit, responded to Guevara's letter
on May 20, 2016 and explained that Franklin Credit
"hereby verifies that your debt is valid."
Id. at 1017. The letter declared that a payment
history "in support of [the debt's] validity"
was enclosed. Id.
that year, Franklin Credit sent a letter dated on November 4,
2016 (a Friday) that advised Guevara that it "agrees to
release its deed of trust/lien on the above listed account
for the minimum amount of $15, 000.00." Id. at
1064. The letter explained that the offer was only valid
until Tuesday and that Guevara had to acknowledge her
agreement "to the terms outlined in th[e] letter by
signing" in the space provided. Id.
also sent a letter to Franklin Credit, dated November 8,
2016, in which she stated, "Please allow this letter to
serve as formal written request for a Qualified Written
Statement pursuant to RESPA (Real Estate Settlement
Procedures Act)[.]" Id. at 1053. She explained
that she disputed the amount she allegedly owed on the
account as well as "the servicing and false
information" she had been given and consequently was
"unclear as to who[m] this debt is owed to[.]"
Id. She then requested several specific documents
relating to her loans and credit reporting. Id. at
Credit confirmed that it receive Guevara's written
request in a letter dated November 21, ECF 22-27, and sent
another letter dated December 14, 2016 in which it requested
an additional time to respond, ECF 22-28. Franklin finally
sent its full response to Guevara's November letter on
January 6, 2017. The letter included many of the documents
requested by Guevara and also informed her that as of
November 30, 2005 (when Franklin began servicing the loan),
"the loan was current and had an unpaid principal of
$36, 920.20." ECF 23-2, PgID 1051. The letter also
informed Guevara that a request "was sent to the credit