WILMINGTON SAVINGS FUND SOCIETY, FSB, doing business as CHRISTINA TRUST, as Trustee for CARLSBAD FUNDING MORTGAGE TRUST, by its Servicer, RUSHMORE LOAN MANAGEMENT SERVICES, LLC, Plaintiff-Appellant,
ROGER DUANE CLARE and NANCY JO CLARE, Defendants-Appellees, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendant.
Saginaw Circuit Court LC No. 15-025725-CH
Before: Stephens, P.J., and Shapiro and Ronayne Krause, JJ.
purchased a house financed through a mortgage issued by
plaintiff's privy.The mortgagee foreclosed on the mortgage
due to non-payment. Following an unsuccessful action for
possession, plaintiff filed this action to set aside the
foreclosure, reinstate the mortgage, and to obtain judicial
foreclosure. The trial court granted the mortgagors and the
current occupants of the property, defendants Roger and Nancy
Clare (defendants), summary disposition under MCR
2.116(C)(10) (no genuine issue of material fact). Plaintiff
appeals by right. We affirm in part and remand for
proceedings consistent with this opinion.
material facts in this case are not in dispute. Defendants
executed a mortgage on real property located in Hemlock,
Michigan, in favor of Mortgage Electronic Registration System
(MERS), as nominee for Quicken Loans, Inc. The mortgage
secured a $250, 600 loan from Quicken Loans to defendant
Roger Clare. In May 2009, the mortgage was assigned to
OneWest Bank, FSB. In August 2010, OneWest initiated
foreclosure-by-advertisement proceedings against the
property. In November 2010, after a sheriff's sale, a
sheriff's deed was granted to OneWest, subject to a
12-month redemption period. In December 2010, OneWest
quitclaimed the property to the Federal National Mortgage
Association (Fannie Mae). In November 2011, the redemption
thereafter, Fannie Mae commenced district court eviction
proceedings against defendants for possession of the
property. In March 2012, the case proceeded to a bench trial.
At the close of Fannie Mae's proofs, defendants moved for
a directed verdict, which the court granted. An order
dismissing the case with prejudice was entered on March 5,
2012. Fannie Mae appealed the district's court ruling to
the circuit court, which concluded that the basis for the
district court's decision was not clear, and remanded
with direction that the district court make findings of fact
and conclusions of law. On December 18, 2012, the district
court issued its opinion on remand, which stated that Fannie
Mae "has failed to show that title to the property was
properly passed to it, the proofs being of a hearsay nature,
without full documentation regarding the chain of title. . .
. No evidence was presented from the prior title holders
showing a valid transfer of title to the plaintiff."
Fannie Mae did not appeal the district court's ruling on
and a half later, in September 2014, Ocwen Loan Servicing,
LLC, acting as attorney-in-fact for OneWest, the last party
to hold the mortgage prior to the sheriff's sale,
recorded what the parties refer to as an "expungement
affidavit" in Saginaw County. The affidavit read in
5. That OneWest Bank, FSB agrees to set aside the above
Sheriff's Deed, making it void and of no force or effect,
thus reinstating and reviving the above mortgage and Note, as
if the foreclosure had not occurred. Additionally, any
conveyance made subsequent and pursuant to the Sheriff's
Deed is likewise set aside, making it void and of no force
and effect. The foreclosure sale, Sheriff's Deed, and any
subsequent conveyance are being set aside pursuant to an
order issued by the 70th Judicial Court of the State of
Michigan under Case No. 11-2817-LT.
* * *
7. That the mortgage referenced in Paragraph 2 above is
hereby reinstated and is again in full force and effect.
October 2014, OneWest assigned the mortgage to Ocwen.
February 2015, Ocwen filed the instant action in circuit
court seeking a determination of interests in land and a
judicial foreclosure. After the suit was filed, the mortgage
was assigned at least twice, the last one being an assignment
to plaintiff. Plaintiff asserted that the 2010 sheriff's
sale was voided by the expungement affidavit and that as a
result, the mortgage should be reinstated with the parties
back in the positions they were in prior to the sheriff's
sale. Plaintiff requested that the trial court enter a
judgment invalidating the sheriff's sale, rescinding the
sheriff's deed, reinstating the mortgage, and granting
judicial foreclosure of the property. In the alternative,
plaintiff sought to amend its complaint to add claims of
equitable mortgage and unjust enrichment.
trial court issued a written opinion and order granting
defendants' motion for summary disposition pursuant to
MCR 2.116(C)(10). As an initial matter, the court concluded
that the suit was not barred by res judicata or collateral
estoppel arising out of the 2012 district court case. Neither
party has asserted that this was error. The trial court also
concluded that plaintiff lacked standing because it no longer
had any interest in the property as the mortgage had been
extinguished and the expungement affidavit was without
effect. Lastly, it denied plaintiff's motion for leave to
amend its complaint on the ground that the proposed amendment
"would do nothing to correct the standing defect, "
and therefore, any such amendment would be futile.
raises three issues on appeal. First, that the trial court
erred by concluding that plaintiff lacked standing. Second,
that the court erred by finding that the expungement
affidavit was without effect. Third, that the court erred by
not allowing plaintiff to amend its complaint. We agree with
plaintiff that it had standing to bring its action, however,
we affirm the trial court's ruling that the expungement
affidavit has no legal effect and that as a result,
plaintiff's claim based on the mortgage fails as a ...