Green v. Bank of America Corporation et al
Filing
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OPINION AND ORDER granting 16 Motion for Judgment on the Pleadings. Signed by District Judge Marianne O. Battani. (BThe)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
PATRICIA GREEN, individually and on behalf of
all other persons similarly situated,
Plaintiff,
CASE NO. 11-10511
HON. MARIANNE O. BATTANI
v.
BANK OF AMERICA CORPORATION, BANK
OF AMERICA, N.A., d/b/a BANK OF AMERICA
HOME LOANS, f/k/a COUNTRYWIDE HOME
LOANS, INC., BAC HOME LOANS SERVICING,
LP, a Texas limited partnership, f/k/a
COUNTRYWIDE HOME LOANS SERVICING,
LP,
MORTGAGE
ELECTRONIC
REGISTRATION SYSTEMS, INC., a Delaware
corporation and BANK OF NEW YORK
MELLON, N.A., f/k/a THE BANK OF NEW
YORK TRUST COMPANY, N.A., Jointly and
Severally,
Defendants.
/
OPINION AND ORDER GRANTING DEFENDANTS’
MOTION FOR JUDGMENT ON THE PLEADINGS
Before the Court is Defendant Bank of America Corporation, Bank of America, N.A.,
BAC Home Loans Servicing, L.P., Mortgage Electronic Registration Systems, Inc., and
Bank of New York Mellon, N.A.’s Motion for Judgment on the Pleadings (Doc. No. 16).
The Court has reviewed all the filings and finds oral argument will not aid in the resolution
of this dispute. See E. D. Mich. LR 7.1(f)(2). For the reasons discussed below, the Court
GRANTS the motion.
I.
INTRODUCTION
Plaintiff Patricia Green filed suit, alleging violations of federal and state law arising
out of the foreclosure of her mortgage. Because Plaintiff concedes that Defendants are
entitled to a judgment on the pleadings as to Counts II and III of her Complaint, the Court
directs its attention to the facts underlying Count I, which advances a claim against
Mortgage Electronic Registration Systems Inc. (“MERS”), and/or Bank of New York Mellon
N.A. (“BNYM”).
On October 26, 2006, Green purchased real estate located at 19613 Lochmorre
Street in Harper Woods, Michigan. (Compl. at ¶ 20). Plaintiff borrowed $143,500 from
Countrywide Home Loans, Inc., and executed a promissory note, which was secured by
a mortgage naming MERS as nominee for the Lender and Lender’s successors and
assigns. She stopped paying on her note in August 2009. On December 29, 2010, MERS
assigned the mortgage to BNYM. (Doc. No. 1, ¶ 23, and Ex. B). On December 31, 2010,
BNYM instituted foreclosure by advertisement and published a notice in the Detroit Legal
News. Plaintiff subsequently filed this action.
In Count I, Plaintiff asserts that under the mortgage agreement, the Lender had to
notify the Borrower of acceleration, but failed to do so. (Compl. at ¶¶ 21-24). In addition,
Green asserts that MERS could not foreclose by advertisement because the mortgage
holder BNYM had not authorized MERS to act as its nominee.
II. STANDARD OF REVIEW
“A pleading that states a claim for relief must contain. . .a short and plain statement
of the claim showing that the pleader is entitled to relief. . . .” Fed. R. Civ. P. 8(a)(2). The
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requirement is meant to provide the opposing party with “ ‘fair notice of what the. . .claim
is and the grounds upon which it rests.’ ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555,
(2007) (quoting Conley v. Gibson, 355 U.S. 42, 47 (1957)).
“To 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. Igbal, 129 S. Ct. 1937, 1949 (2009)
(quoting Twombly, 550 U.S. at 570)). “Facial plausibility” requires the plaintiff to include
sufficient “factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id.
If a complaint does not meet that standard, the opposing party may move to dismiss
it for failure to state a claim at any time before filing an answer or for judgment on the
pleadings after filing an answer. See Fed. R. Civ. P. 12(b)(6) & (c). “[T]he legal standards
for adjudicating Rule 12(b)(6) and Rule 12(c) motions are the same. . . .” Lindsay v. Yates,
498 F.3d 434, 437 n. 5 (6th Cir. 2007).
“A complaint attacked by a Rule [12(c) motion for judgment on the pleadings] does
not need detailed factual allegations.” Twombly, 550 U.S. at 555 (citations omitted).
Nevertheless, “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.” Id. “Factual allegations must be enough to raise a right to
relief above a speculative level, on the assumption that all the allegations in the complaint
are true. . . .“ Id. at 555-56 (citations omitted).
Rule 12(d) provides that “[i]f, on a motion under Rule 12(b)(6) or 12(c), matters
outside the pleadings are presented to and not excluded by the court, the motion must be
treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). Under
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certain circumstances, however, a document that is not formally incorporated by reference
or attached to a complaint may still be considered part of the pleadings. See 11 James
Wm. Moore et al., Moore's Federal Practice § 56.30[4] (3d ed.1998). This occurs when
“a document is referred to in the complaint and is central to the plaintiff's claim. . . .” Id.
In such event, “the defendant may submit an authentic copy to the court to be considered
on a motion to dismiss, and the court's consideration of the document does not require
conversion of the motion to one for summary judgment.” Id.; see, e.g., Weiner v. Klais &
Co., 108 F.3d 86, 89 (6th Cir.1997) (considering pension plan documents that defendant
attached to the motion to dismiss part of the pleadings because the documents were
referred to in the complaint and were central to the plaintiff's claim for benefits under the
plan). In sum, a court may consider “documents incorporated into a complaint by
reference and matters of which a court may take judicial notice” without converting the
motion into one for summary judgment. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551
U.S. 308 (2007).
III. ANALYSIS
Before addressing the merits of Defendants’ motion, the Court notes that
Defendants attached an Assignment of Note, which was not referenced in the Complaint.
(See Doc. No. 16,. Ex. 2). Because this document is central to Plaintiff’s claim, the Court
considers it without converting the motion to one for summary judgment.
The mortgage securing Plaintiff’s loan named MERS as the mortgagee as nominee
for Lender and Lender’s successors and assigns. (Compl. ¶ 19). Paragraph 22 of the
mortgage reads:
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Lender shall give notice to Borrower prior to acceleration following
Borrower’s breach of any covenant or agreement in this Security Instrument
(but not prior to acceleration under Section 18 unless Applicable Law
provides otherwise). The notice shall specify: (a) the default; (b) the action
required to cure the default; (c) a date, not less than 30 days from the date
the notice is given to Borrower, by which the default must be cured; and (d)
that failure to cure the default on or before the date specified in the notice
may result in acceleration of the sums secured by this Security Instrument
and sale of the Property. The notice shall further inform Borrower of the
right to reinstate after acceleration and the right to bring a court action to
assert the nonexistence of a default or any other defense of Borrower to
acceleration and sale. If the default is not cured on or before the date
specified in the notice, Lender at its option may required immediate payment
in full of all sums secured by this Security Instrument without further demand
and may invoke the power of sale and any other remedies permitted by
Applicable law.
There is no dispute that Plaintiff defaulted on her loan in August 2009. Nor is there
any dispute that on November 6, 2009, BAC Home Loans Servicing, LP sent Plaintiff a
Notice of Intent to accelerate, (Doc. No. 9, Ex. 2), informing Plaintiff of her right to cure the
default on or before December 6, 2009, as well as the amount required. The Notice of
Intent added that if Plaintiff failed to cure the mortgage payments would be accelerated.
(Id.).
Green did not cure her default, and on December 31, 2010, BNYM published a
foreclosure notice indicating its intent to sell Plaintiff’s property in a foreclosure sale to be
held February 3, 2011. The sale was adjourned to February 10, 2011. After Plaintiff filed
this lawsuit, the parties agreed that the sate would be adjourned on a weekly basis.
1. Notice of Default
Although Plaintiff is correct that neither MERS nor BNYM sent her a notice of
acceleration, her loan servicer, BAC Home Loans Servicing, LP, did. The notice satisfies
the mortgage provision inasmuch as the mortgage does not require that the Lender
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personally send the notice. Further, the mortgage authorizes the Lender to employ agents
to act on its behalf, and the loan servicer’s job was to “collect Periodic Payments due
under the Note and this Security Instrument and perform other mortgage loan servicing
obligations.” (Doc. No. 16, Ex. 1 at 9, ¶ 20). The documents demonstrate that Plaintiff
received the required notice. Green does not challenge this position in her response.
Thus, the Court finds that the uncontested facts undermine Plaintiff’s failure to provide
notice claim, and Defendants are entitled to judgment on the pleadings relative to this
claim.
2. Authority to Foreclose
Although Plaintiff abandoned her notice claim, in her response she raised a
challenge to BNYM’s authority to foreclose by statute. Because she states in her
Complaint that Count I is directed solely to Defendant MERS, in her response, Plaintiff
seeks leave to amend to the extent that the Court finds other defendants should be added
to Count I.
Leave to amend should be freely given “when justice so requires,” under Rule
15(a)(2), Fed. R. Civ. P. In deciding motions brought under this rule, the courts look to the
factors first articulated in Foman v. Davis, 371 U.S. 178, 182 (1962), and revisited in
Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330-31(1971). Denial of
a motion to amend may be warranted where there has been undue delay or bad faith in
making the motion, when granting the motion would unduly prejudice the nonmoving party,
or when the proposed amendment would be futile.
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The Court finds that last factor--futility--warrants a denial of Plaintiff’s request.
More particularly, here, Plaintiff attempts to recast her claim to conform to the holding in
Residential Funding Co. v. Saurman,
N.W. 2d
, Nos. 290248, 291443, 2011 WL
1516819 (Mich. Ct. App. Apr. 21, 2011) (holding MERS may not foreclose by
advertisement).
The Michigan appellate court held that MERS may not initiate a
foreclosure by advertisement because it is neither the owner of the indebtedness nor the
servicing agent. Id.
At the outset, the Court observes that MERS did not bring the foreclosure; BNYM
did. According to Green, on the date BNYM instituted nonjudicial foreclosure proceedings,
it did not have an interest in the note and the mortgage, therefore, the statute does not
empower it to initiate a foreclosure. The Court disagrees.
The statute and the Saurman decision requires only that the foreclosing party have
a “legal share, title, or right in the note” when foreclosure by advertisement is initiated. Id.,
2011 WL 1516819; Mich. Comp. Laws § 600.3204(1)(d).
Because BNYM was in
possession of the Note, endorsed in blank by Countrywide, the original lender, it had the
authority to foreclose. (See Doc. No. 16, Ex. 2 at 3). Livonia Property Holdings, LLC v.
12840-12976 Farmington Road Holdings. LLC, 717 F. Supp. 2d 724, 732-34 (E.D. Mich.
2010). In sum, BNYM had legal authority to begin statutory foreclosure proceedings
based upon its ownership of the note as of December 29, 2010, two days before the
foreclosure notice was published.
Further, BNYM had both the note and the mortgage at the time the foreclosure sale
was scheduled. Specifically, BNYM acquired the interest in the mortgage on January 4,
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2011. (Doc. No. 19, Ex. B). The statute requires only that a record chain of title exist
“prior to the date of sale. . .evidencing the assignment of the mortgage to the party
foreclosing the mortgage.” Mich. Comp. Laws § 600.3204(3). Accord Gathing v. MERS,
Inc., No. 1:09-CV-07, 2010 WL 889945 (W.D. Mich. March 10, 2010).
Therefore,
Plaintiff’s challenge fails. BNYM held the note and mortgage in compliance with the
statute.
IV. CONCLUSION
Therefore, the Court GRANTS Defendants’ motion. This matter is DISMISSED in
its entirety.
IT IS SO ORDERED.
s/Marianne O. Battani
MARIANNE O. BATTANI
UNITED STATES DISTRICT JUDGE
Date: October 26, 2011
CERTIFICATE OF SERVICE
Copies of this Opinion and Order were mailed and/or electronically filed to counsel of
record on this date.
s/Bernadette M. Thebolt
Case Manager
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