United States District Court, E.D. Michigan, Southern Division
Honorable Nancy G. Edmunds, Judge.
AND RECOMMENDATION TO GRANT DEFENDANT CITIMORTGAGE INC.'S
MOTION FOR SUMMARY JUDGMENT , DEFENDANT DITECH FINANCIAL
LLC'S MOTION FOR SUMMARY JUDGMENT , AND MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS INC.'S MOTION FOR
JUDGMENT ON THE PLEADINGS 
R. GRAND UNITED STATES MAGISTRATE JUDGE.
Phillip Strehle (“Strehle”), an attorney, brings
this action in pro per. Defendants CitiMortgage,
Inc. (“CMI”), Green Tree Servicing LLC
(“Green Tree”), DiTech Financial, LLC
(“DiTech”), and Mortgage Electronic Registration
Systems, Inc. (“MERS”) (collectively,
“Defendants”) are entities that, at one time or
another, were affiliated with a mortgage obtained by
Strehle. Strehle filed his complaint in the State
of Michigan's 52nd District Court on May 5, 2017. (Doc.
#1 at 9-42 (“Compl.”)). DiTech and MERS timely
removed the case to federal court on June 5, 2017. (Doc. #1).
CMI and DiTech filed motions for summary judgment on January
11 and 15, 2018, respectively. (Docs. #18, #22). MERS filed a
motion for judgment on the pleadings on January 15, 2018.
(Doc. #21). Strehle responded to each of these motions.
(Docs. #30, #31, #29). CMI and DiTech each filed replies in
support of their motions. (Docs. #32, #33). These motions
were referred to this Court for a Report and Recommendation
pursuant to 28 U.S.C. § 636(b)(1)(B). (Doc. #12).
reasons set forth below, IT IS RECOMMENDED
that CMI's Motion for Summary Judgment (Doc.
#18), DiTech's Motion for Summary Judgment
(Doc. #22), and MERS' Motion for
Judgment on the Pleadings (Doc. #21) be
Factual and Procedural Background
claims arise out of a $99, 450.00 home loan he obtained on
March 5, 2003 from Residential Loan Services. (Doc. #18-2).
To secure repayment of the loan, Strehle granted a mortgage
on real property located at 9318 Sherwood Drive in Davisburg,
Michigan (the “Mortgage”). (Id.). The
Mortgage named MERS as the mortgagee. (Id.). On
March 1, 2004, CMI became the servicer of the Mortgage. (Doc.
#18-3). As the servicer, CMI became the entity to which
Strehle was required to send his monthly Mortgage payments.
(Doc. #18-2 at ¶ 20). Strehle was notified of this
change through a letter dated February 12, 2004. (Doc.
#18-3). CMI serviced the Mortgage until April 1, 2014, when
the servicing was transferred to Green Tree. (Doc. #18-4).
Strehle was notified of this change in servicing via a letter
dated March 17, 2014. (Id.). He admits that he
received notice of this transfer. (Doc. #18-5 at 13).
made his monthly Mortgage payments to Green Tree from April
1, 2014 to July 2015. (Compl. at ¶¶ 13, 14).
However, Strehle abruptly stopped paying Green Tree after
July 2015 because he had grown upset with Green Tree's
servicing. (Id.). Strehle found Green Tree to be
“incompetent and not professional” because it
allegedly failed to properly apply his payments towards the
Mortgage's principal and billed him for expenses which
were calculated incorrectly. (Docs. #29 at 13, #31 at 15-16).
Thus, after more than one year of what Strehle alleges was
untenable servicing, he decided to take matters into his own
on August 22, 2015, Strehle began sending his Mortgage
payments to CMI - i.e., the entity he knew to be his
former Mortgage servicer. (Doc. #18-6). To several
of these payments Strehle attached letters where he explained
he was aware CMI was no longer his servicer, but that he had
grown so frustrated with Green Tree that he would no longer
recognize it as his servicer. (Id. at 24-38). In the
end, Strehle submitted a total of thirteen checks to CMI
between August 22, 2015 and April 15, 2016. (Id.).
When CMI received these payments from Strehle, the checks
were returned, and CMI sent him a letter stating: “As
you are aware, the servicing of your mortgage account
transferred to Green Tree Servicing LLC effective April 1,
2014. All correspondence relating to the servicing of your
mortgage loan should now be directed solely to Green Tree
Servicing LLC.” (Doc. #18-7). Nonetheless, Strehle
persisted and continued trying to make payments to CMI,
telling them: “You have two choices: you can service
the contract yourself or you can hire someone else to
properly service the contract.” (Doc. #18-6). Strehle
also told CMI: “[b]ecause you returned my checks after
I properly tendered them, I will not pay any penalties,
interest, or any other amount arising out of your return of
these  checks . . . it is your fault and not mine that you
did not accept it.” (Id.).
November 9, 2015, MERS assigned the Mortgage itself - not
merely the servicing - to DiTech, which by this time had
absorbed Green Tree. (Docs. #22-8, #22-9); see also
note 1. Thus, while DiTech (then operating as Green Tree)
became Strehle's servicer on April 1, 2014,
DiTech also became the mortgagee on November 9,
2015. Accordingly, by November 9, 2015, DiTech was both the
Mortgage's servicer and the mortgagee. (Doc. #22-8).
November 2015, Strehle stopped sending checks to CMI and
began making his Mortgage payments to DiTech. (Doc. #1-11 at
¶ 25). While no new transfers or assignments took place
after this date - either in regard to the Mortgage or the
servicing - this did not mark the end of Strehle's
disagreements arising under the Mortgage. During the period
of time when Strehle had refused to make payments to his
assigned servicer, he had been assessed several charges which
he believes he was not required to pay.
August 27, 2015, DiTech (operating as Green Tree in its
capacity as the servicer of the Mortgage) became aware that
Strehle had overdue property taxes, and that the local
assessor had turned over the unpaid taxes to the Oakland
County Treasurer for collection. (Doc. #22-6). After
disbursing a total of $1, 253.36 to the Oakland County
Treasurer to cover this expense, DiTech proceeded to notify
Strehle that pursuant to the terms of the Mortgage agreement,
it would be establishing an escrow account to ensure
reimbursement for this amount. (Doc. #22-5). DiTech later
notified Strehle that his new Mortgage payment was being
increased so as to account for the escrow payments which
Strehle had to make. (Doc. #22-7).
Strehle believes that he did not have to make the higher
Mortgage payment. Though the monthly payment due to DiTech
had risen from roughly $700.00 to $777.26, Strehle only paid
the amount he believed he owed under the Mortgage, sending
checks for $699.10 in November 2015 and for $700.10 in
December 2015. (Docs. #1, #22-7). These insufficient payments
ultimately left Strehle's account past due in the amount
of $1, 017.94. (Doc. #22-5 at ¶ 22). In turn, this
triggered an important provision in the Mortgage contract.
(Doc. #22-2 at ¶ 2). Under the Mortgage, DiTech has the
right, when the Mortgage is overdue, to accept any payment or
partial payment insufficient to bring the loan current, and
to hold those funds in an unapplied funds account until the
loan is made current. (Id.). When DiTech did just
that, Strehle faulted all of the defendants for their
interconnected roles in allegedly creating this dispute.
Specifically, Strehle believes that CMI's refusal to
accept his payments was improper, and that because any unpaid
expenses were attributable to CMI's inaction, the steps
that DiTech subsequently took against him were unjustified.
what appears to be Strehle's confusion over the
difference between a claim and remedy, he asserts six counts
in his complaint: Count I) a declaratory judgment that CMI
and DiTech cannot withhold applying mortgage payments to the
Mortgage's principal and interest, create an escrow
account, keep an escrow amount after declaring it terminated,
or refuse to collect payments that Strehle made to a previous
servicer; Count II) a claim for breach of the Mortgage
contract against CMI, DiTech, and MERS; Count III) a
claim for negligence against CMI, DiTech, and MERS; Count IV)
an accounting by Green Tree only; Count V) a claim against
DiTech only for violation of the Fair Credit Reporting Act
(“FCRA”), in particular 15 U.S.C. §§
1681n, 1681o, 1681p, and 1681s-2(a); and Count VI)
“respondeat superior/vicarious liability” against
MERS only. (Doc. #1). As noted above, CMI and DiTech filed
motions for summary judgment, and MERS filed a motion for
judgment on the pleadings. (Docs. #18, #21, #22). Each
requested that all of the counts brought against them be
motion, CMI asserts: 1) Count I must be dismissed because
declaratory relief is not a valid cause of action; 2) summary
judgment should be granted as to Count II because the breach
of contract claim against CMI stems from a period of time
when CMI was no longer affiliated with Strehle's
Mortgage, meaning CMI could not and did not commit a breach;
and 3) summary judgment should be granted as to the
negligence claim in Count III because CMI did not owe a duty
of care outside of the obligations it previously owed under
the contract. (Doc. #18).
own summary judgment motion, DiTech makes the same argument
as CMI regarding Count I, and asserts that summary judgment
should also be granted as to the remaining counts as: 1)
DiTech did not breach its contract with Strehle as alleged in
Count II given all of its actions were in accord with the
contract's express terms, and in any event, Strehle was
the first party to breach the contract which bars his claim;
2) Strehle's negligence claim against DiTech alleged in
Count III is barred because their relationship was governed
exclusively by a contract; and 3) Strehle's FCRA claim in
Count V relies on a provision which does not confer a private
right of action. (Doc. #22).
MERS argues in its motion for judgment on the pleadings that
because respondeat superior and vicarious liability are not
independent causes of action, Count VI for “respondeat
superior/vicarious liability” must be dismissed. (Doc.
Summary Judgment Standard Pursuant to Fed.R.Civ.P. 56
judgment is proper if the moving party 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).
A dispute is “genuine” if a reasonable jury could
return a verdict in favor of the nonmoving party, and a fact
is “material” if it has the potential to affect
the outcome of the suit. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). Viewing the evidence in
a light most favorable to the nonmoving party, the
court's task is to determine “whether the evidence
presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must
prevail as a matter of law.” Id. at 251-52.
party seeking summary judgment bears the initial burden of
informing the court of the basis for its motion, and must
identify particular portions of the record that demonstrate
the absence of a genuine dispute as to any material fact.
See Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). Once this occurs, the nonmoving party must counter
with specific facts upon which a reasonable jury could find
in its favor. Vereecke v. Huron Valley Sch. Dist.,
609 F.3d 392, 399 (6th Cir. 2010) (citing Anderson,
477 U.S. at 252). A mere scintilla of proof or some
metaphysical doubt as to a material fact is insufficient to
forestall summary judgment. Sierra Club v. ICG Hazard,
LLC, 781 F.3d 281, 284 (6th Cir. 2015).
“Conclusory statements unadorned with supporting facts
are insufficient to establish a factual dispute that will
defeat summary judgment.” Alexander v.
Caresource, 576 F.3d 551, 560 (6th Cir. 2009) (citing
Lewis v. Phillip Morris, Inc., 355 F.3d 515, 533
(6th Cir. 2004)).
Judgment on the Pleadings Standard Pursuant to Fed.R.Civ.P.
Civ. P. 12(c) provides that, “[a]fter the pleadings are
closed . . . a party may move for judgment on the
pleadings.” A Rule 12(c) motion is designed to provide
a means of disposing of cases when the material facts are not
in dispute between the parties and judgment on the merits can
be achieved by focusing on the content of the competing
pleadings, attached exhibits, matters incorporated into the
pleadings, and any facts of which the court may take judicial
notice. 5C Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1367 (2009). For a Rule
12(c) motion, all well-pleaded material allegations of the
pleadings of the opposing party must be taken as true and the
motion may be granted only of the moving party is
nevertheless clearly entitled to judgment. Tucker v.
Middleburg-Legacy Place, 539 F.3d 545, 549 (6th Cir.
2008). The court, however, need not accept as true legal
conclusions or unwarranted factual inferences.
Barany-Snyder v. Weiner, 539 F.3d 327, 332 (6th Cir.
2008). A Rule 12(c) motion is appropriately granted when no
material issue of fact exists and the moving party is
entitled to judgment as a matter of law. Tucker, 539
F.3d at 549. In this sense, it is similar to a motion under
motion under 12(c) is also analyzed similarly to a motion
under Rule 12(b)(6), in that the outcome turns exclusively on
the pleadings. See Id. at 550; Sensations, Inc.
v. City of Grand Rapids, 526 F.3d 291, 295 (6th Cir.
2008). “The manner of review of Fed.R.Civ.P. 12(c) is
the same as review under Rule 12(b)(6).” Jelovsek
v. Bredesen, 545 F.3d 341, 434 (6th Cir. 2008). Rule
12(b)(6) requires that a complaint “contain something
more . . . than . . . a statement of facts that merely
creates a suspicion [of] a legally cognizable right of
action.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007) (internal citation omitted). A
“plaintiff's obligation to provide the
‘grounds' of his ‘entitlement to relief'
requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not
do.” Id. Threadbare recitals of the elements
of a cause of action, supported by mere conclusory statements
do not suffice. Ashcroft v. Iqbal, 556 U.S. 662,
678-79 (2009). As is the case when ruling on a motion to
dismiss, the Court may consider “documents relating to
the note, mortgage, assignment, loan modification process,
and foreclosure that are referenced in the complaint and
integral to” a plaintiff's claims. Gardner v.
Quicken Loans, Inc., 567 Fed.Appx. 362, 365 (6th Cir.
CMI's Motion for Summary Judgment
argues in its motion that Count I (declaratory relief) should
be dismissed, and that summary judgment should be granted in
its favor as to Count II (breach of contract) and Count III
(negligence). In each instance, the Court agrees.
Count I: Declaratory Relief
argues that Strehle's claim for declaratory relief in
Count I “merits dismissal pursuant to Fed.R.Civ.P.
12(c) because declaratory relief is a form of relief, and not
a cause of action.” (Doc. #18 at 6). In his response,
Strehle contends that “[t]he only way to get
[declaratory] relief before a court is to put it in a
pleading in order to initiate a civil action, as that is the
only way for invoking the jurisdiction of the Court.”
(Doc. #30 at 17). While a party may only be able to obtain
declaratory relief by requesting it in a complaint,
Strehle's argument does not address the crucial fact that
“declaratory relief” is not a claim which can
stand on its own.
well-settled that “[d]eclaratory relief is a remedy . .
. not a claim.” McCann v. U.S. Bank, N.A., 873
F.Supp.2d 823, 848 (E.D. Mich. 2012) (citing Mettler
Walloon, L.L.C. v. Melrose Twp., 281 Mich.App. 184, 221
(2008)); see also Wiggins v. City of Burton, 291
Mich.App. 532, 561 (2011) (“Although it has become
commonplace in this state for a plaintiff to assert a request
for declaratory relief as a separately labeled cause of
action within his or her complaint, this is technically
improper because declaratory relief is a remedy, not a
claim.”). “Nevertheless, a complaint must be read
as a whole, and it is well settled that this Court will look
beyond the mere procedural labels used in the
pleadings.” Wiggins, 291 Mich.App. at 536
(quoting Adams v. Adams (on reconsideration), 276
Mich.App. 704, 710-711, 742 N.W.2d 399 (2007).
the foregoing case law, Count I against CMI should be
Count II: ...