United States District Court, E.D. Michigan, Northern Division
SHERMAN M. HUBBARD, Plaintiff,
NATIONWIDE LENDING CORP, Defendants.
Patricia T. Morris Magistrate Judge
ORDER OVERRULING OBJECTIONS, ADOPTING REPORT AND
RECOMMENDATION IN PART, GRANTING MOTION TO DISMISS, AND
L. LUDINGTON UNITED STATES DISTRICT JUDGE
September 12, 2017, Plaintiff Sherman Hubbard filed a suit in
Alcona County Circuit Court which named Nationwide Lending
Corporation, New Century Mortage Corporation, Deutsche Bank
National Trust Company, and Select Portfolio Servicing
Incorporated as Defendants. ECF No. 1. On October 3, 2017,
the Defendants removed the case to federal court. ECF No. 1.
All pretrial matters were referred to Magistrate Judge
Patricia T. Morris. ECF No. 6. On October 10, 2017,
Defendants Deutsche Bank National Trust Company and Select
Portfolio Servicing Incorporated filed a motion to dismiss.
ECF No. 3. The remaining Defendants have not been served.
January 29, 2018, Judge Morris issued a report recommending
that the motion to dismiss be granted and the complaint
dismissed. ECF No. 12. Hubbard timely objected, ECF No. 14,
and the served Defendants have responded, ECF No. 15. For the
following reasons, Hubbard's objections will be
overruled, the report and recommendation will be adopted in
part, the motion to dismiss will be granted, and the
complaint will be dismissed.
premise of the motion to dismiss and the basis on which Judge
Morris recommended dismissal is the same. Hubbard previously
filed an action involving two of the same parties and
alleging the same misconduct. See Hubbard v. Select
Portfolio Servicing, Inc., Case No. 16-cv-11455. That
action was dismissed because Hubbard failed to state a claim.
Case No. 16-cv-11455, ECF No. 50. Hubbard appealed that
dismissal. ECF No. 54. On June 7, 2018, the Sixth Circuit
affirmed the dismissal. ECF No. 56.
Court's August 30, 2017, opinion and order adopting Judge
Morris's report and recommendation in the first case, the
Court summarized the allegations in Hubbard's complaint.
Case No. 16-cv-11455, ECF No. 50. These allegations were all
drawn directly from Hubbard's complaint. And it is, of
course, axiomatic that at the pleading stage all well-pleaded
allegations in a plaintiff's complaint are assumed to be
. . . According to Hubbard, he is bringing claims of breach
of contract and fraud. Compl. at 2, ECF No. 1. On January 14,
2004, Hubbard entered into an “Adjustable Rate
Note” with Nationwide Lending. Id. The loan
was assigned to Bank of America and then sold to Deutsche
Bank. In 2008, Hubbard paid $41, 887 to Bank of America
during a bankruptcy proceeding. Id. at 3.2 In 2012,
Select Portfolio Servicing became the loan servicer.
In 2013, Hubbard was informed that he would receive a loan
modification pursuant to “the U.S. Justice Department
and State Attorney General's Global Settlement.”
Id. After making three trial payments of $1, 375.74,
Hubbard was informed that “the monthly payments would
be Substantially less than $1, 375.74 and the interest rate
on the loan would be at market Rate of 2.75-3.75% The final
loan modification offer was $136, 000 loan amount Interest
Rate of 8.78% and a monthly payment amount of
$1375.74.” Id. (sic throughout).
Accordingly, Hubbard argues that Defendants “failed to
perform on the federally ordered settlement by not offering
[a]n at market interest rate at the time of the loan
modification.” Id. He alleges that
“Defendants have knowingly and willfully . . .
fraudulently deceived Plaintiff and Plaintiffs Attorney by
having them submit loan modification documentation in excess
of 15 time Each and every time claiming some form of
paperwork is missing, incomplete, or Expired. Defendant has
repeatedly changed or assigned a new loan servicer to Further
delay the loan modification process.” Id. (sic
throughout). Hubbard further alleges that on “4
separate occasions defendant has offered loan modifications
without Any paper work to plaintiff with deceptive open ended
As a result of Defendants' alleged misconduct,
Hubbard's home was foreclosed upon for “nonpayment
of taxes.” Id. He asserts that, because
Defendants are unwilling to complete the mortgage
modification mandated by the federal settlement, he is
“unable to repair credit” and “unable to
make necessary repairs to property.” Id. at 4.
Id. at 1-3.
complaint in the present action includes similar allegations.
He frames the action as one “to quiet title to real
property” which he owns. Compl. at 1, ECF No. 1, Ex. A.
Like in his original complaint, Hubbard alleges that he
“entered into a note and mortgage with Defendant
Nationwide Lending corp on January 14 2004.”
Id. at 2. He then alleges that on December 20, 2004,
Nationwide “assigned the mortgage and note to Defendant
New Century Mortgage Corporation.” Id. Several
weeks later, Nationwide “filed another assignment of
mortgage to Defendant Deutsche Bank National Trust.
Id. In 2008, Hubbard “filed chapter 7
later, on February 10, 2015, “Defendant Deutchse Bank
has Defendant Select Portfolio Serving file an affidavit
regarding lost or misplaced assignment.” Id.
In March of 2015, Defendant Select Portfolio Servicing hired
Trott and Trott to start a foreclosure proceeding.”
Id. Around the same time, “Plaintiff sent
Trott and Trott a letter disputing Defendants claims.”
Id. According to Hubbard, “Defendant Deutchse
Bank claims Plaintiffs' mortgage is part of a trust of
pass through certificates.” Id. Hubbard
alleges that “this is impossible as the mortgage and
note were not in possession of Deutsche Bank [but] in fact
New Century Mortgage Corp still had possession of the
mortgage and the note.” Id.
the gravamen of Hubbard's factual allegations is that his
mortgage was assigned by Nationwide to New Century, and so
the later assignment to Deutchse Bank was invalid. Because
New Century went bankrupt in 2008, Hubbard believes that ...