United States District Court, E.D. Michigan, Southern Division
DANIEL R. CARTER, Plaintiff,
CROSSCOUNTRY MORTGAGE, INC., Defendant.
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION TO DISMISS [#18]
Page Hood United States District Court Judge.
about March 7, 2017, Plaintiff Daniel R. Carter
(“Carter”) commenced this action in the
30th Circuit Court for Ingham County, Michigan.
(Doc # 1, Pg ID 2) On August 14, 2017, Carter amended his
Complaint and named CrossCountry Mortgage, Inc.
(“CrossCountry”) as a defendant and alleged two
state law claims: (1) Breach of Contract; and (2) Breach of
Fiduciary Duty. (Id.) The parties involved in the
action stipulated to change the venue of the case to the
4th Circuit Court for the County of Jackson,
Michigan on October 11, 2017. (Id. at 1-2.)
CrossCountry removed this action to federal court on August
30, 2018. (Doc # 1-3, Pg ID 27)
September 19, 2018, CrossCountry filed a Motion to Dismiss
Carter's Amended Complaint (Doc # 2), which the Court
granted on February 11, 2019 (Doc # 15). In the Court's
Order granting CrossCountry's Motion to Dismiss (Doc #
2), it gave Carter the ability to amend his Amended
Complaint, but ordered that he could only pursue his Breach
of Contract claim. (Doc # 15, Pg ID 470-471) Carter filed his
Third Amended Complaint on February 21, 2019, alleging: (1)
Breach of Contract (Common Law) (Count I); and Breach of
Contract (the Real Estate Settlement Procedures Act
(“RESPA”), 12 U.S.C. § 2601 et seq.
and Regulation X, 12 C.F.R. § 1024) (Count II). (Doc #
16) CrossCountry filed a Motion to Dismiss Carter's Third
Amended Complaint on March 14, 2019. (Doc # 18) Carter filed
his Response on April 4, 2019 (Doc # 20) and CrossCountry
filed its Reply on April 18, 2019 (Doc # 21). This Motion is
currently before the Court.
January 9, 2016, Carter purchased a home at 12950 Cooper
Road, Leslie, Michigan 49251 (“subject
property”). (Doc # 16, Pg ID 474) The funds used to
purchase the subject property were provided by CrossCountry
pursuant to a Mortgage Agreement. (Doc # 16, Pg ID 474; Doc #
16-2) Following the execution of the Mortgage Agreement,
CrossCountry paid a one-year property insurance premium of
$1, 010.00 to State Farm Insurance (“State Farm”)
through the title company out of escrowed funds. (Doc # 16,
Pg ID 474; Doc # 16-3) According to the escrow and property
insurance provisions of the Mortgage Agreement, Carter's
monthly payments included sums that were to be held in escrow
by CrossCountry for property insurance premiums. (Doc # 16,
Pg ID 474)
January 14, 2016, State Farm notified CrossCountry that there
would be a property insurance premium increase of $642.00.
(Doc # 16, Pg ID 475; Doc # 16-5) CrossCountry neglected to
pay the $642.00 property insurance premium increase even
though the terms of the Mortgage Agreement and RESPA dictated
that CrossCountry was obligated to pay any increased
premiums. (Doc # 16, Pg ID 475) On July 13, 2016, State Farm
sent CrossCountry a Notice of Cancellation as a result of
CrossCountry's failure to pay the premium increase. (Doc
# 16, Pg ID 475; Doc # 16-6) The Notice of Cancellation was
effective beginning August 17, 2016, and on that date,
Carter's State Farm coverage was terminated. (Doc # 16,
Pg ID 475-476)
residence was destroyed by fire on December 18, 2016.
(Id. at 476.) The destruction of Carter's house
caused him to suffer various financial losses. (Id.)
Carter alleges that these losses include: $252, 000.00 in
“structure loss”; $189, 000.00 in “personal
property loss”; $7, 000.00 in “debris
removal”; and an unlimited amount in the “loss of
the use” of his residence. (Id.) Carter now
asks the Court to find that CrossCountry breached the
Mortgage Agreement, which he claims was the direct and
proximate cause of his financial losses.
Standard of Review
12(b)(6) of the Federal Rules of Civil Procedure provides for
a motion to dismiss for failure to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). This type of
motion tests the legal sufficiency of the plaintiff's
complaint. Davey v. Tomlinson, 627 F.Supp. 1458,
1463 (E.D. Mich. 1986). When reviewing a motion to dismiss
under Rule 12(b)(6), a court must “construe the
complaint in the light most favorable to the plaintiff,
accept its allegations as true, and draw all reasonable
inferences in favor of the plaintiff.” Directv Inc.
v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). A court,
however, need not accept as true legal conclusions or
unwarranted factual inferences.” Id.
(quoting Gregory v. Shelby Cnty., 220 F.3d 443, 446
(6th Cir. 2000)). “[L]egal conclusions masquerading as
factual allegations will not suffice.” Edison v.
State of Tenn. Dep't of Children's Servs., 510
F.3d 631, 634 (6th Cir. 2007).
Supreme Court has explained, “a plaintiff's
obligation to provide the ‘grounds' of his
‘entitle[ment] to relief' requires more than labels
and conclusions, and a formulaic recitation of the elements
of a cause of action will not do. Factual allegations must be
enough to raise a right to relief above the speculative
level… .” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (citations omitted);
see LULAC v. Bresdesen, 500 F.3d 523, 527 (6th Cir.
2007). To survive dismissal, the plaintiff must offer
sufficient factual allegations to make the asserted claim
plausible on its face. Ashcroft v. Iqbal, 556 U.S.
662, 663 (2009). “A claim has facial plausibility when
the pleaded factual content allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
Breach of ...