Joseph Coyer, et al v. HSBC Mortgage Services, Inc.
PER CURIAM OPINION and JUDGMENT filed : The judgment of the district court is AFFIRMED. Decision for publication. Gilbert S. Merritt, Boyce F. Martin , Jr., and Ronald Lee Gilman, Circuit Judges. (THIS DECISION WAS ORIGINALLY ISSUED AS AN "UNPUBLISHED OPINION" FILED ON NOVEMBER 13, 2012. ON NOVEMBER 30, 2012 THE COURT DESIGNATED THE OPINION AS ONE RECOMMENDED FOR FULL-TEXT PUBLICATION.)
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 12a0396p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JOSEPH J. COYER; JANET M. COYER,
Plaintiffs-Appellants, No. 11-2378
HSBC MORTGAGE SERVICES, INC.,
Appeal from the United States District Court
for the Eastern District of Michigan at Bay City.
No. 1:10-cv-14339—Thomas L. Ludington, District Judge.
Decided and Filed: November 13, 2012*
Before: MERRITT, MARTIN, and GILMAN, Circuit Judges.
ON BRIEF: Francis R. Ortiz, Jennifer L. Newby, DICKINSON WRIGHT PLLC,
Detroit, Michigan, for Appellee. Joseph J. Coyer, Janet M. Coyer, Pinconning,
Michigan, pro se.
PER CURIAM. Joseph and Janet Coyer, pro se Michigan residents, appeal a
district court order dismissing their civil complaint.
In 2005, the Coyers entered into a mortgage agreement with Option One
Mortgage Corporation (Option One) for the purchase of property located in Linwood,
Michigan. Later that year, Option One assigned the mortgage to Mortgage Electronic
Registration Systems, Inc. (MERS). Subsequently, HSBC Mortgage Services, Inc.
This decision was originally issued as an “unpublished decision” filed on November 13, 2012.
The court has now designated the opinion as one recommended for full-text publication.
Coyer, et al. v. HSBC
(HSBC) purchased the mortgage from MERS. After the Coyers allegedly stopped
making payment to HSBC in 2010, HSBC began foreclosure proceedings pursuant to the
mortgage contract’s “power of sale” clause. The sale was originally scheduled to occur
in December 2010.
In October 2010, the Coyers filed a complaint asserting numerous allegations
concerning alleged illegal conduct routinely practiced in the mortgage industry. With
respect to HSBC, the Coyers argue that HSBC conspired to induce them into a predatory
loan agreement. Specifically, the Coyers asserted the following claims: (1) breach of
fiduciary duty; (2) negligence/negligence per se; (3) common law fraud; (4) breach of
the implied covenant of good faith and fair dealing; (5) violation of the Truth in Lending
Act (TILA), 15 U.S.C. § 1601 et seq.; and (6) intentional infliction of emotional distress.
The Coyers also filed a motion for preliminary injunction and a motion for a temporary
restraining order seeking to enjoin the sale of their home. HSBC filed a response.
Following a hearing on the motions, a magistrate judge filed a report, recommending that
the district court deny the Coyers a temporary restraining order. The district court
rejected the Coyers’ objections, adopted the magistrate judge’s report, and denied their
motions. The Coyers filed a motion for reconsideration, arguing that Magistrate Judge
Charles Binder should be disqualified from serving as a magistrate judge, pursuant to
28 U.S.C. § 631(c), because he was employed as a faculty member with the United
States Air Force Academy’s Department of Law. The district court denied the motion
for reconsideration as untimely.
HSBC filed a motion to dismiss the complaint. The Coyers filed a response and
HSBC filed a reply. The Coyers also filed a motion to amend their complaint. HSBC
moved for an order removing the Coyers’ common law lien on the property and to enjoin
the Coyers from filing any further liens or encumbrances on the property.
The district court construed HSBC’s motion to dismiss as a motion for judgment
on the pleadings and granted judgment in favor of HSBC. The district court concluded
that HSBC was entitled to judgment because: (1) a fiduciary duty does not generally
arise within the context of a borrower-lender relationship, and the Coyers failed to allege
Coyer, et al. v. HSBC
special circumstances to override the general rule; (2) the Coyers’ negligence claim is
barred by the applicable three-year statute of limitations and, even if the claim were not
barred, HSBC was not involved in any alleged lack of disclosures between the Coyers
and Option One; (3) the Coyers’ fraud claim also relates to an alleged lack of disclosures
made at the time they entered into their mortgage agreement with Option One, and
HSBC had no involvement with that transaction; (4) Michigan law does not recognize
a claim for breach of the implied covenant of good faith and fair dealing; (5) the Coyers’
TILA claim is barred by the applicable one-year statute of limitation, and even if the
claim is not barred, HSBC had no involvement with the inception of the Coyers’
mortgage with Option One; and (6) the Coyers failed to sufficiently allege a claim for
intentional infliction of emotional distress because they did not present evidence that
HSBC’s actions with respect to the planned foreclosure were so outrageous and extreme
as to go beyond all possible bounds of decency. The district court also granted HSBC’s
motion to remove the Coyers’ common law lien, denied the motion to prohibit the
Coyers from placing further liens on the property, and denied the Coyers’ motion to
amend their complaint. After filing their notice of appeal, the Coyers filed a Federal
Rule of Civil Procedure 60(b) motion, which the district court denied. The Coyers then
filed an amended notice of appeal to include that order.
On appeal, the Coyers reassert their claims that: HSBC breached its fiduciary
duty; HSBC is liable for negligence and negligence per se; HSBC committed common
law fraud; HSBC breached the implied covenant of good faith and fair dealing; and
HSBC violated TILA. The Coyers also argue that the district court erred by failing to:
deny HSBC’s motion to withdraw the Coyers’ common law lien on their property; report
that Magistrate Judge Charles Binder was not qualified to serve as a magistrate judge in
light of his employment with the USAFA; properly scrutinize HSBC’s arguments; grant
their motion to amend their complaint by falsely stating that the Coyers did not submit
a copy of the proposed amended complaint; and properly review their Rule 60(b)
Coyer, et al. v. HSBC
The Coyers present no arguments on appeal challenging the district court’s
dismissal of their claim for intentional infliction of emotional distress. Therefore, they
have abandoned this claim and we will not review it. See Post v. Bradshaw, 621 F.3d
406, 413–14 (6th Cir. 2010), cert. denied, 131 S. Ct. 2902 (2011); Grace Cmty. Church
v. Lenox Twp., 544 F.3d 609, 618 n.1 (6th Cir. 2008).
We review de novo a district court’s entry of judgment on the pleadings under
Federal Rule of Civil Procedure 12(c). See Sensations, Inc. v. City of Grand Rapids,
526 F.3d 291, 295 (6th Cir. 2008). “For purposes of a motion for judgment on the
pleadings, all well-pleaded material allegations of the pleadings of the opposing party
must be taken as true, and the motion may be granted only if the moving party is
nevertheless clearly entitled to judgment.” Tucker v. Middleburg-Legacy Place,
539 F.3d 545, 549 (6th Cir. 2008) (citation and internal quotation marks omitted). “A
motion brought pursuant to Rule 12(c) is appropriately granted when no material issue
of fact exists and the party making the motion is entitled to judgment as a matter of law.”
Id. (citation and internal quotation marks omitted).
The district court properly dismissed the Coyers’ claim for breach of fiduciary
duty. Under Michigan law, “a fiduciary relationship arises from the reposing of faith,
confidence, and trust and the reliance of one on the judgment and advice of another.”
See Teadt v. Lutheran Church Mo. Synod, 603 N.W.2d 816, 823 (Mich. Ct. App. 1999).
However, there is generally no fiduciary relationship between a mortgagor and a
mortgagee. In re Sallee, 286 F.3d 878, 893 (6th Cir. 2002). Here, HSBC purchased the
Coyers’ mortgage and serviced the mortgage, but the Coyers have not shown that any
special circumstances exist to avoid the general rule that such a relationship does not
involve fiduciary duties.
The district court also properly dismissed the Coyers’ claim for breach of an
implied covenant of good faith and fair dealing because “Michigan does not recognize
a claim for breach of an implied covenant of good faith and fair dealing . . . .” See Belle
Isle Grill Corp. v. City of Detroit, 666 N.W.2d 271, 279 (Mich. Ct. App. 2003).
Coyer, et al. v. HSBC
The district court properly dismissed the Coyers’ negligence and fraud claims.
“Under Michigan law, a plaintiff alleging a claim of negligence must demonstrate the
following four elements: 1) a duty owed to the plaintiff by the defendant, 2) breach of
that duty, 3) causation, and 4) damages.” Brown v. United States, 583 F.3d 916, 920
(6th Cir. 2009) (citing Case v. Consumers Power Co., 615 N.W.2d 17, 20 (Mich. 2000)).
In order to establish a fraud claim, a plaintiff must demonstrate that: “(1) the defendant
made a material representation; (2) the representation was false; (3) when the defendant
made the representation, the defendant knew that it was false, or made it recklessly,
without any knowledge of its truth as a positive assertion; (4) the defendant made the
representation with the intention that the plaintiff would act upon it; (5) the plaintiff
acted in reliance upon it; and (6) the plaintiff suffered damage.” Bennett v. MIS Corp.,
607 F.3d 1076, 1100–01 (6th Cir. 2010) (citing Cummins v. Robinson Twp., 770 N.W.2d
421, 435 (Mich. Ct. App. 2009)).
The Coyers’ allegations concerning negligence and fraud relate to statements and
misrepresentations made at the time that they entered their mortgage with Option One.
However, it is undisputed that HSBC was not a party to that transaction, and that HSBC
purchased the mortgage on the secondary market. Therefore, HSBC was not involved
in any alleged lack of disclosures between the Coyers and Option One. Although the
Coyers now argue that HSBC is liable for the misrepresentations and failures to disclose
information made by Option One and its agents, they have presented no persuasive
authority to support this contention. The Coyers argue that HSBC is subject to its claims
against Option One by virtue of 16 C.F.R. § 433.2. However, that provision does not
apply to mortgages. See Johnson v. Long Beach Mortgage Loan Trust 2001-4, 451 F.
Supp. 2d 16, 55 (D.D.C. 2006).
Even if the Coyers had stated a negligence claim, that claim is barred by the
applicable three-year statute of limitations. See Mich. Comp. Laws § 600.5805. The
Coyers’ claims stem from their allegations that they were not fully made aware of the
terms of their mortgage loan when they agreed to the loan in June 2005. However, they
Coyer, et al. v. HSBC
did not file their complaint until October 28, 2010, approximately two years beyond the
The district court properly dismissed the Coyers’ claims under TILA. “TILA
requires that creditors make certain disclosures as to the terms of lending arrangements
and provides for civil liability for failure to comply with its provisions.” United States
v. Petroff-Kline, 557 F.3d 285, 294 (6th Cir. 2009) (citing 15 U.S.C. § 1640). The
Coyers failed to allege facts indicating how HSBC violated TILA. As stated above, the
Coyers’ allegations that they were induced to enter into a predatory loan agreement via
misrepresentation and fraud relates back to the time they entered their mortgage with
Option One, and HSBC was not a party to that transaction. Moreover, any claim under
TILA is barred by the applicable one-year statute of limitations. See 15 U.S.C.
§ 1640(e); MacDermid v. Discover Fin. Servs., 488 F.3d 721, 734 n.3 (6th Cir. 2007).
Although the Coyers signed the loan in 2005, they waited until 2010 to file their
complaint challenging the alleged failures to disclose information about the pertinent
terms of the loan. The Coyers argue that their claim did not accrue until they had read
a book entitled “Truth in Lending” and a document entitled “Truth-In-Lending
Disclosure Requirements, Violations, and Remedies.” However, a version of “Truth in
Lending” has been available since 1986, and the book is currently in its seventh edition.
The “Truth-In-Lending Disclosure Requirements, Violations, and Remedies” document
was written in 2007. The Coyers’ cause of action would have accrued no later than
2007, and the limitations period would have expired in 2008. Therefore, the Coyers’
2010 complaint is untimely.
The Coyers’ remaining appellate arguments do not entitle them to relief. The
district court properly granted HSBC’s motion to remove the Coyers’ common law lien
on their property because an individual cannot place a lien on his or her own property.
See Gould v. Day, 94 U.S. 405, 413 (1876) (noting that “[o]ne cannot have a lien upon
his own property”). Therefore, the Coyers’ lien is void. Second, the Coyers argue that
the district court’s rulings are void because the district court did not address their
argument that Magistrate Judge Charles Binder was not qualified to serve as a magistrate
Coyer, et al. v. HSBC
judge pursuant to 28 U.S.C. § 631(c). Section 631(c) provides that “[a] magistrate judge
may hold no other civil or military office or employment under the United States: . . . .”
However, even assuming that Magistrate Judge Binder was unqualified for service
because of other employment, the district court’s orders are not void because that court
withdrew the reference to the Magistrate Judge and conducted a de novo review before
dismissing the Coyers’ complaint. Moreover, the district court properly declined to rule
on this argument because it was first made in an untimely motion for reconsideration.
The Coyers’ suggestions that Judge Ludington is biased are meritless.
The record belies the Coyers’ claim that the district court did not “properly
scrutinize” HSBC’s arguments. As stated above, the district court conducted a de novo
review of the Coyers’ claims and HSBC’s responses to those claims. In addition,
although the Coyers argue that the district court determined, without any evidence, that
HSBC had an interest in the mortgage, the Coyers themselves submitted papers
documenting that Option One had assigned the mortgage to MERS, and that MERS had
assigned its interest to HSBC. The Coyers’ claim that the district court “falsely” stated
that they did not submit a copy of their proposed amended complaint is also belied by
the record. The district court docket sheet reflects that the Coyers submitted only a
motion for leave to amend, but did not attach a copy of the proposed amended complaint.
Finally, the district court properly denied the Coyers’s Rule 60(b) motion. We
review a district court’s denial of a Rule 60(b) motion for an abuse of discretion.
Thompson v. Bell, 580 F.3d 423, 442 (6th Cir. 2009). “‘Abuse of discretion is defined
as a definite and firm conviction that the trial court committed a clear error of
judgment.’” Id. (quoting Burrell v. Henderson, 434 F.3d 826, 831 (6th Cir. 2006)). In
denying the Rule 60(b) motion, the district court noted that the Coyers had advanced
“new legal and factual arguments” that were not previously included as part of their six
enumerated causes of action against HSBC, and declined to address any new claims.
The Coyers argue that the district court erred because it failed to rule on the entirety of
their Rule 60(b) motion because Rule 60(b) provides for relief based on newly
See Fed. R. Civ. P. 60(b)(2).
However, a motion for
Coyer, et al. v. HSBC
reconsideration under Rule 60(b) is not the proper vehicle for asserting new claims. See
Dean v. City of Bay City, Mich., 239 F. App’x 107, 111 (6th Cir. 2007).
The district court’s order is affirmed.
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