Kevelighan et al v. Trott & Trott, P.C. et al
OPINION AND ORDER granting 101 Motion for Judgment; granting 104 Motion Judgment on the Pleadings. Signed by District Judge Patrick J. Duggan. (MOre)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
TRACEY L. KEVELIGHAN, KEVIN W.
KEVELIGHAN, JAMIE LEIGH
COMPTON, JAMIE LYNN COMPTON,
and KEVIN KLEINHANS,
Case No. 09-12543
Honorable Patrick J. Duggan
TROTT & TROTT, P.C.; ORLANS
ASSOCIATES, P.C.; AMERICA’S
SERVICING COMPANY; DEUTSCHE
BANK NATIONAL TRUST COMPANY;
REGISTRATION SYSTEMS, INC.;
WEBSTER BANK, N.A.; FANNIE MAE;
FIRST HORIZON HOME LOANS, aka
FIRST TENNESSEE BANK, N.A., aka
METLIFE HOME LOANS, aka FIRST
HORIZON ASSET SECURITIES, INC.;
BANK OF NEW YORK; U.S. BANK
HOME MORTGAGE; WELLS FARGO
HOME MORTGAGE, and HSBC
OPINION AND ORDER
At a session of said Court, held in the U.S.
District Courthouse, Eastern District
of Michigan, on_May 26, 2011.
THE HONORABLE PATRICK J. DUGGAN
U.S. DISTRICT COURT JUDGE
On June 29, 2009, Tracey L. Kevelighan, Kevin W. Kevelighan, Jamie Lynn
Compton, Jamie Leigh Compton, and Kevin Kleinhans filed this purported class-action
lawsuit, alleging numerous violations of state and federal law in connection with the
administration and enforcement of mortgage agreements. On October 27, 2009, Plaintiffs
filed an Amended Complaint spanning 145 pages, containing 634 numbered paragraphs,
and naming 40 purported plaintiff and defendant sub-classes.
Several defendants filed motions to dismiss, and this Court issued an Opinion and
Order on July 7, 2010 granting these motions in part and denying them in part. Due to the
length, complexity, and disorganization of the Amended Complaint, the Court sent a letter
to all counsel of record on August 18, 2010, identifying a list of each plaintiff’s remaining
claims against each defendant. The Court invited counsel to object to the proposed list of
claims, and no objections were received. Accordingly, the Court indicated its intent to
proceed with the understanding that only the claims in that list were pending.
Defendants Orlans Associates, P.C. (“Orlans”) and U.S. Bank Home Mortgage
(“U.S. Bank”) have each filed a motion for judgment on the pleadings, arguing that
Plaintiffs’ claims against them must be dismissed. Remaining against Orlans are Tracey
Kevelighan’s claims under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §
1692 et seq., and common law claims of unjust enrichment. U.S. Bank faces only Kevin
Kleinhans’ claim of unjust enrichment. The Court heard oral argument on May 12, 2011,
and for the reasons stated below, grants both motions.
I. Factual Background
A. Plaintiff Tracey Kevelighan (Lamplighter Lane Property)
On July 3, 2008, Orlans sent Tracey Kevelighan a letter stating that America’s
Servicing Company (“ASC”) had instructed Orlans to commence foreclosure proceedings
on her mortgage. See Am. Compl. Ex. 10. The letter detailed the loan’s outstanding
balance, unpaid interest, late charges, advances, and related fees. It stated:
You may have the right to reinstate the mortgage, subject to the creditor’s
approval by paying all past due installments, late charges, delinquent taxes,
insurance premiums, costs and fees incurred in the foreclosure. To request
reinstatement information, contact our Loan Resolution Department.
Id. Kevelighan responded to Orlans in a letter dated July 25, 2008, in which she made her
“demand for a reinstatement quote.” Am. Compl. Ex. 11 at 2. She has not alleged that she
received any further correspondence from Orlans. Orlans later agreed to discontinue the
foreclosure proceedings. Am. Compl. ¶ 71.
Trott & Trott, P.C. (“Trott”) replaced Orlans as foreclosure counsel. On April 21,
2009, Trott sent Kevelighan a letter indicating that ASC had requested it to commence
foreclosure proceedings. See Am. Compl. Ex. 12. Kevelighan responded through counsel
on April 24, 2009, requesting, inter alia, a “reinstatement quote.” On May 8, 2009, Trott
sent a reinstatement quote to Kevelighan, providing that she could reinstate her loan by
tendering payment of $65,953.10, of which $1,373.00 was recoverable legal fees. See
Am. Compl. Ex. 15. Kevelighan did not reinstate the loan or pay these attorney’s fees.
B. Plaintiff Kevin Kleinhans
Kevin Kleinhans obtained a mortgage loan from NBD Mortgage Company to buy a
home in Alma, Michigan. See U.S. Bank Mot. Ex. 1. The mortgage on the property was
subsequently assigned to the Michigan State Housing Development Authority in February
1985. See U.S. Bank Mot. Ex. 2. U.S. Bank services the loan for the Michigan State
Housing Development Authority. After Kleinhans defaulted on the loan, U.S. Bank
initiated foreclosure proceedings through Trott. Kleinhans sought a reinstatement quote
from Trott. Trott responded in a letter dated October 18, 2007, stating that Kleinhans
could reinstate by paying the outstanding monthly payments, late charges, inspection fees,
tax advances, and insurance advances, which totaled $3,226.97, plus legal fees and costs
of $1,322.25. Am. Compl. Ex. 52 at 1. Kleinhans reinstated the loan by making payment
of these amounts. Am. Compl. ¶ 260.
II. Standard of Review
A motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules
of Civil Procedure is subject to the same standards of review as a 12(b)(6) motion to
dismiss for failure to state a claim upon which relief can be granted. Grindstaff v. Green,
133 F.3d 416, 421 (6th Cir. 1998). A motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6) tests the legal sufficiency of the complaint. RMI Titanium Co. v.
Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996). Under Federal Rule of
Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim
showing that the pleader is entitled to relief.” As the Supreme Court recently provided in
Iqbal, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
--- U.S. ----, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570, 127 S. Ct. 1955, 1974 (2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556,
127 S. Ct. at 1965). The plausibility standard “does not impose a probability requirement
at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that
discovery will reveal evidence of illegal [conduct].” Twombly, 550 U.S. at 556, 127 S. Ct.
In deciding whether the plaintiff has set forth a “plausible” claim, the court must
accept the factual allegations in the complaint as true. Id.; see also Erickson v. Pardus,
551 U.S. 89, 94, 127 S. Ct. 2197, 2200 (2007). This presumption, however, is not
applicable to legal conclusions. Iqbal, 129 S. Ct. at 1949. Therefore, “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do
not suffice.” Id. (citing Twombly, 550 U.S. at 555, 127 S. Ct. at 1964-65). Ultimately,
“[d]etermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial experience
and common sense.” Id. at 1950. In conducting this analysis, the Court may consider the
pleadings, exhibits attached thereto, and documents referred to in the complaint that are
central to the plaintiff’s claims. See Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514
(6th Cir. 1999).
A. Tracey Kevelighan’s FDCPA Claims
Orlans argues that Tracey Kevelighan’s FDCPA claims against it must be dismissed
because Orlans did not act as a “debt collector” under the statute. The Court notes that
while Plaintiffs responded to Orlans’ motion, they did not address this argument.
The FDCPA provides that “[a] debt collector may not use unfair or unconscionable
means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. “Debt” is as an
“obligation or alleged obligation of a consumer to pay money.” Id. § 1692a(5). Tracey
Kevelighan has not alleged actions that constitute an attempt to collect a debt. A statement
of the intent to enforce a security interest is insufficient to impose liability under the
FDCPA. 1/18/2011 Op. & Order at 8; see also Montgomery v. Huntington Bank, 346 F.3d
693, 700 (6th Cir. 2003). The July 3, 2008 letter from Orlans only indicated its intent to
enforce a security interest. Because Tracey Kevelighan has not established that Orlans’
actions constituted an attempt to collect a debt, her claims under the statute fail.
B. Tracey Kevelighan’s Unjust Enrichment Claims
Kevelighan alleges unjust enrichment based on the collection of tax advances and
excessive attorney’s fees. A plaintiff asserting a claim of unjust enrichment must show
that the defendant received a benefit from the plaintiff and an inequity resulted as a
consequence of defendant’s retention of that benefit. Liggett Rest. Group, Inc. v. City of
Pontiac, 260 Mich. App. 127, 137, 676 N.W.2d 633, 639 (Mich. Ct. App. 2003). Because
Plaintiff did not pay the attorney’s fees listed in her reinstatement quote, the Court cannot
conclude that Orlans received a benefit. As for the tax advances, Kevelighan’s mortgage
agreement permitted the lender to seek repayment of funds advanced to pay property
taxes. See Am. Compl. Ex. 1 §§ 3, 4. The law will not imply a contract to prevent unjust
enrichment where there is an express contract covering the same subject matter. Liggett
Rest. Group, Inc., 260 Mich. App. at 137, 676 N.W.2d at 639. Accordingly, Kevelighan’s
unjust enrichment claims fail.
C. Kevin Kleinhans’ Unjust Enrichment Claim
Kevin Kleinhans contends that U.S. Bank was unjustly enriched through excessive
attorney’s fees. Kleinhans alleges that he paid attorney’s fees when reinstating his loan,
Am. Compl. ¶ 260, but he does not allege that he paid those fees to U.S. Bank. Kleinhans’
reinstatement quote from Trott indicates that attorney’s fees must be paid directly to Trott.
Am. Compl. Ex. 52 at 1. In its brief, U.S. Bank denied receiving payment of these fees.
Plaintiffs did not address this argument in their response or at the hearing, and there is no
evidence before this Court indicating that U.S. Bank received a benefit from Kleinhans’
payment of attorney’s fees. Absent such evidence, the unjust enrichment claim fails. See
Liggett Rest. Group, Inc., 260 Mich. App. at 137, 676 N.W.2d at 639.
IT IS ORDERED that Orlans Associates, P.C.’s motion for judgment on the
pleadings is GRANTED;
IT IS FURTHER ORDERED that U.S. Bank Home Mortgage’s motion for
judgment on the pleadings is GRANTED.
s/PATRICK J. DUGGAN
UNITED STATES DISTRICT JUDGE
Kevin W. Kevelighan, Esq.
Peter W. Macuga, II, Esq.
Timothy B. Myers, Esq.
Dana M. Hathaway, Esq.
Lawrence C. Mann, Esq.
Mark P. Schneebeck, Esq.
Matthew J. Boettcher, Esq.
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