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Thompson v. Five Brothers Mortgage Company Services and Securing Inc.

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

May 9, 2019




         Plaintiff Nichole Thompson defaulted on a mortgage of her home located in Grand Rapids, Michigan. The mortgagee, U.S. Bank, pursued a non-judicial foreclosure and purchased the property at a July 24, 2013, sheriff's sale. After the redemption period expired, U.S. Bank engaged Defendant Five Brothers Mortgage Company to secure the property. U.S. Bank neither sought nor obtained a judicial order for possession.

         Defendant subsequently entered the property, removed and disposed various items located inside, and changed the locks on the house. Plaintiff initiated this civil action on January 15, 2015, alleging the Defendant's actions violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq and Michigan's Anti-Lockout Act, Mich. Comp. Laws § 600.2918.

         The Court has asked the parties to address whether any question of material fact remains in the case following a new decision of the Supreme Court that invalidated, or at least undermined, the Sixth Circuit authority upon which the Court had relied to move the case to trial. The Court now concludes there is no outstanding issue of fact remaining and that Defendant is entitled to judgment as a matter of law.


         Plaintiff Thompson took out a mortgage on her home located at 1101 Noble St SE Grand Rapids, Michigan. Plaintiff subsequently defaulted on her mortgage and the mortgagee, U.S. Bank, initiated a non-judicial foreclosure. A sheriff's sale was held on July 24, 2013 where U.S. Bank purchased the home for $17, 250.00. This left a deficiency of approximately $52, 435.19 because the full amount Plaintiff was stated to have been in default was $69, 685.19. (ECF Nos. 45-1; 45-2).[1]

         After purchasing the home, U.S. Bank hired Defendant to “coordinate securing and property preservation services of the Property.” (Sutton Decl. ¶ 6, ECF No. 66-1, PageID.314). Defendant conducted an exterior inspection on August 10, 2013. (Id. at ¶ 9). The statutory redemption period after the sheriff's sale then expired on January 24, 2014. (Id. at ¶ 10). After the redemption period expired, Defendant attempted to contact Plaintiff, and affixed a “Hello Letter” to the entrance of the property in January 2014 and again in February 2014. (Id. at ¶¶ 11-15). After the second attempt, Defendant determined the property was vacant. (Id. at ¶ 15).

         Thereafter, on February 21, 2014, U.S. Bank directed Defendant to secure the home. This entailed affixing lock boxes and padlocks to the exterior doors. Defendant also performed what it says was routine property maintenance, and that included “monthly inspections, winterization, removal of debris and hazards, and removal of wet carpet from the basement.” (Id. at ¶¶ 16-17). Then on April 7, 2014, a subcontractor for Defendant removed what Defendant calls debris and what Plaintiff calls personal property. (ECF 40-1, PageID.178). All this was done without any State Court order of eviction or order adjudicating possessory rights to the home, but after the redemption period had expired.

         On approximately April 8, 2014, Plaintiff discovered she was unable to enter the home and called U.S. Bank. The Complaint asserts U.S. Bank put Plaintiff in contact with Defendant so that she could get back into the house, (Compl. ¶¶ 11-12, ECF No. 1, PageID.2), and told Plaintiff they would arrange for her to access the property. (Id. at ¶ 13). Plaintiff was able to access her house on Monday April 14, 2014. On that date she discovered that Defendant had disposed of all her personal property. (Id. at ¶ 14).


         Plaintiff sued Defendant on January 14, 2015, asserting a violation of the FDCPA, 15 U.S.C. § 1692f(6), and a violation of Michigan's Anti-Lockout Act, Mich. Comp. Laws §600.2918. The case proceeded without any motion practice.

         On May 20, 2016, the Court adjourned the final pretrial conference and trial settlement conference because the requisite pretrial materials had not been timely filed. (ECF No. 30.) Before issuing a new schedule, the Court ordered the parties to submit supplemental briefing that addressed “(1) the legal and factual issues of the FDCPA claim in Count 1 of the Complaint; and (2) whether the Court should, or should not, exercise supplemental jurisdiction over the state law claim in Count 2 of the Complaint.” (ECF No. 39, PageID.169). The parties submitted briefs. Plaintiff primarily rested her argument as to Defendant's alleged FDCPA liability on the Sixth Circuit's decision in Glazer v. Chase Home Fin. LLC, 704 F.3d 453 (6th Cir. 2013). The Court agreed. Even though the alleged wrongdoing occurred after a foreclosure and after the redemption period, “a theoretical risk of deficiency judgment remained, and there was no judicial order settling possession. Under these circumstances, defendant could fall within the statutory definition of debt collector based on the Circuit's decision in Glazer.” (ECF No. 46, PageID.227). The Court then issued a new final pretrial conference and trial schedule. (Id.).

         Before the final pretrial conference was held, however, the Supreme Court issued its decision abrogating Glazer in Obduskey v. McCarthy & Holthus LLP, 139 S.Ct. 1029 (Mar. 20, 2019). The Court subsequently ordered further briefing on “whether any question of material fact remains after [the decision] as to whether Defendant qualifies as a debt collector under the FDCPA.” (ECF No. 62, PageID.263). The Court's order satisfied Rule 56(f)'s notice requirement for judgment independent of a motion. See Fed. R. Civ. P. 56(f); Smith v. Perkins Bd. of Educ., 708 F.3d 821, 829 (6th Cir. 2013) (noting that there is adequate notice if the losing party had knowledge that it “had to muster the necessary facts to withstand summary judgment[.]”) Plaintiff has filed a brief (ECF No. 64) and Defendant (represented by new counsel) has also filed a brief. (ECF No. 66). The matter is ready for decision.


         1. Plaintiff's FDCPA Claim

         In Count 1, Plaintiff states that Defendant “violated the FDCPA by dispossessing plaintiff from her home and her personal property when there was no legal right to possession[.]” (Compl. ¶ 17 [sic], ECF No. 1, PageID.3). Plaintiff specifically ...

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