Tamlin v. Citi Mortgage Servicing

Filing 12

MEMORANDUM and ORDER granting Defendant's 6 Motion for Summary Judgment. Signed by District Judge Avern Cohn. (SSch)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

EDWARD TAMLIN,
Plaintiff,
vs.

Case No. 11-10889

CITI MORTGAGE SERVICING,
Defendant.
____________________________________/
MEMORANDUM AND ORDER
GRANTING DEFENDANT’S MOTION TO DISMISS OR FOR SUMMARY JUDGMENT
(Doc. 6)1
I. Introduction
This is another of one of many cases pending in this district involving a default on
a mortgage. Plaintiff Edward Tamlin, proceeding pro se, is suing defendant Citi
Mortgage Servicing, raising a host of claims relating to his mortgage.
Before the Court is defendant’s motion to dismiss or for summary judgment. For
the reasons that follow, the motion will be granted and the case will be dismissed.
II. Background
On January 5, 2007, plaintiff obtained a loan a $165,404.00 loan to purchase
property in Romulus, Michigan. The loan was issued by ABN AMRO Mortgage Group,
defendant’s predecessor in interest and is evidenced by a note. The loan was secured
by a mortgage granted in favor of defendant. By 2010, plaintiff was in default. On
August 8, 2010, defendant notified plaintiff of the default.
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The Court deems this matter appropriate for decision without oral argument.
See Fed. R. Civ. P. 78(b); E.D. Mich. LR 7.1(f)(2).

On March 7, 2011, plaintiff filed this action. The complaint describes the action
as follows:
This is an action for rescission of an illegal and void Mortgage and Note to
certain real estate. This purported mortgage and note and the actions taken by
the Plaintiff contain unfair trade practices and predatory lending practices.
The complaint lists 25 separate counts. Defendant says the complaint can be distilled
into three essential claims (1) violations of the Truth in Lending Act (“TILA”), 15 U.S.C. §
1601, et seq (2) violation of the Real Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. § 2601 et seq., and (3) improper/illegal breach/notice of default. The Court
agrees with defendant’s liberal construction of the complaint. These claims, and
corresponding counts, will be addressed in turn below.
III. Legal Standards
A Rule 12(b)(6) motion seeks dismissal for a plaintiff’s failure to state a claim
upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “The court must construe
the complaint in the light most favorable to the plaintiff, accept all the factual allegations
as true, and determine whether the plaintiff can prove a set of facts in support of its
claims that would entitle it to relief.” Bovee v. Coopers & Lybrand C.P.A., 272 F.3d 356,
360 (6th Cir. 2001). To survive a motion to dismiss under Rule 12(b)(6), a “‘complaint
must contain either direct or inferential allegations respecting all the material elements
to sustain a recovery under some viable legal theory.’” Advocacy Org. for Patients &
Providers v. Auto Club Ins. Ass’n, 176 F.3d 315, 319 (6th Cir. 1999) (quoting Scheid v.
Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988)). A complaint will
survive a motion to dismiss if it “contain[s] sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its face, Bell Atl.Corp. v. Twombly, 550 U.S.
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544, 570 (2007), and a claim is plausible on its face if “the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged,” Ashcroft v. Iqbal, ---U.S. ----, ----, 129 S.Ct. 1937,
1949 (2009) (quoting Twombly, 550 U.S. at 556).
Summary judgment is appropriate when the moving party demonstrates that
there is “no genuine issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law.” FED. R. CIV. P. 56(c). There is no genuine issue of
material fact when “the record taken as a whole could not lead a rational trier of fact to
find for the non-moving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986).
The Court must decide “whether the evidence presents a sufficient disagreement
to require submission to a [trier of fact] or whether it is so one-sided that one party must
prevail as a matter of law.” In re Dollar Corp., 25 F.3d 1320, 1323 (6th Cir. 1994)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). In so doing, the
Court “must view the evidence in the light most favorable to the non-moving party.”
Employers Ins. of Wausau v. Petroleum Specialties, Inc., 69 F.3d 98, 101 (6th Cir.
1995).
V. Analysis
A. TILA Claims
In Counts I, II, III., IV, V, VII, VIII, IX, X, XI and XII, plaintiff alleges a host of
violation of the TILA and accompanying regulations. Defendant says these claims are
untimely and lack merit. The Court agrees.
The purpose of a TILA claim is that it:
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provides statutory penalties for failure to make certain disclosures required
under the statute. One of the primary purposes of the TILA is to assure a
meaningful disclosure of credit terms so that the consumer will be able to
compare more readily the various credit terms available to him and avoid
the uninformed use of credit.
Thielen v. GMAC Mortg. Corp., 671 F.Supp.2d 947, 953 (E.D.Mich. 2009) (citation
omitted).
Plaintiff alleges that defendant violated TILA by, among other things: (I) engaging
in unfair trade practices, (ii) failing to give him a proper disclosure statement, (iii) failing
to inform him of right to cancel, (iv) failing to give him a good faith estimate, (v) failure to
disclose a calculation of mortgage balance.
As to TILA, “[a]ny action under this section may be brought in any United States
district court, or in any other court of competent jurisdiction, within one year from the
date of the occurrence of the violation.” 15 U.S.C. § 1640(e). See Thielen v. GMAC
Mortgage Corp., 671 F. Supp. 2d 947, 953 (E.D. Mich. 2009). The statute begins to run
“when the plaintiff has a complete and present cause of action and thus can file suit and
obtain relief.” Id. (internal quotations & citations omitted).
Here, plaintiff’s allegations concerning the receipt, or failure to receive, disclosure
documents fall withing the scope of TILA. Any damage claims that allegedly resulted
from TILA violations expired on January 5, 2008, one year after the transaction took
place. Plaintiff did not file his complaint until March 7, 2011, well after that time. Thus,
his TILA claims are barred by 15 U.S.C. § 1640(e).
Moreover, to the extent that plaintiff wants this Court to declare his mortgage is
void and rescind the note and mortgage under TILA, this request is barred by the
statute of repose. See 15 U.S.C. § 1635(f) (“An obligor’s right of rescission shall expire
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three years after the date of the consummation of the transaction.”); see also Thielen,
671 F. Supp. 2d at 954-55. Plaintiff’s complaint was filed more than three years after
the transaction took place.
Finally, as defendant points out in its papers, plaintiff’s TILA claim for recision
fails because under TILA, there is no right to rescind a “residential mortgage
transaction.” See 15 U.S.C. § 1602(w); Barrett v. JP Morgan Chase Bank. N.A., 445
F.3d 874, 879 (6th Cir. 2006).
B. RESPA Claims
Plaintiff also alleges RESPA violations. See Counts V (right to rescind), XIII
(failure to disclose itemization of damages), XIV (inflation of acceleration of fees) and
XV (failure to disclose date). Defendant says these claims are time barred. The Court
agrees.
An action arising under section 2607 must be brought within one year after the
alleged violation occurs. See 12 U.S.C. § 2614 (“Any action pursuant to the provisions
of section . . . 2607 . . . of this title may be brought . . . within . . . 1 year . . . from the
date of the occurrence of the violation . . . .”); Egeger v. Woodland Realty, Inc., 556 F.3d
415, 421 (6th Cir. 2009) (“Claims pursuant to § 2607(a) must be brought within one year
from the date the violation occurs in accordance with 12 U.S.C. § 2614 . . . .”). Here, the
alleged RESPA violation—defendants’ purported disclosure failures—would have
occurred, if at all, no later than the date of the transaction/closing on January 5 2007.
See Egeger, 556 F.3d at 421 n.7 (noting that the one-year period commenced on the
date the sale was complete). Plaintiff’s RESPA claims expired on January 5,
2008—over three years before plaintiff filed this action—and are, therefore, time-barred.
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See 12 U.S.C. § 2614; Egerer, 556 F.3d at 421.
Finally, even if the RESPA claims were timely, violations of RESPA cannot
support a finding that the mortgage is invalid or unenforceable. See Brown v.
Countrywide Home Loans, 2009 U.S. Dist. LEXIS 72396 (E.D. Mich. Aug., 17, 2009).
C. Improper Notice of Default
Count XXIII appears to allege improper or illegal actions based on the notice of
default defendant sent to plaintiff. The notice of default, attached as Exhibit D to
defendant’s papers, complied with all applicable regulations. Plaintiff was in default.
Plaintiff received notice of the default, of his right to cure and of defendant’s right to
accelerate payments because of the default.
D. Other Claims
Although plaintiff has not plead any state law claims, he refers to fraud,
unconscionability and predatory lending in his response to defendant’s motion. To the
extent the complaint is construed to include such claims, they also fail. The elements
that a plaintiff must prove for a fraud/misrepresentation claim are:
(1) defendants made a material representation; (2) it was false; (3) when
defendants made it, defendants knew that it was false or made recklessly
without knowledge of its truth or falsity; (4) defendants made it with the
intent that plaintiffs would act upon it; (5) plaintiffs acted in reliance upon it;
and (6) plaintiffs suffered damage.
Mitchell v. Dahlberg, 547 N.W.2d 74, 77 (Mich.App. 1996) (quoting Arim v. General
Motors Corp., 520 N.W.2d 695 (1994)). However, since this transaction involves a
financial institution, the statute of frauds applies. M.C.L. § 566.132(2)(a) provides:
[a]n action shall not be brought against a financial institution to enforce
any of the following promises or commitments of the financial institution
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unless the promise or commitment is in writing and signed with an
authorized signature by the financial institution:[a] promise or commitment
to lend money, grant or extend credit, or make any other financial
accommodation.
Under the statute of frauds, “a party is precluded from bringing a claim -no matter its label -- against a financial institution to enforce the terms of an oral
promise . . . .” Crown Tech. Park v. D&N Bank, FSB, 242 Mich. App. 538, 550; 619
N.W.2d 66 (2000). This bar extends to misrepresentation claims. Manire v. Am. Equity
Mortgage, Inc., No. 04-60278, 2005 WL 2173679, at * 2 (E.D. Mich., Sept 6, 2005)
(dismissing intentional and negligent misrepresentation claims against a financial
institution under the statute of frauds). Thus, to the extent plaintiff is claiming fraud
based on oral promises, he cannot prevail as a matter of law.
Moreover, any fraud claims are not plead with any particularity and therefore fail
to meet the basic pleading requirements. Dismissal is appropriate on these grounds.
As to a claim for unconscionability. M.C.L. § 440.2302 provides:
(1) If the court as a matter of law finds the contract or any clause of the contract
to have been unconscionable at the time it was made the court may refuse to
enforce the contract, or it may enforce the remainder of the contract without the
unconscionable clause, or it may so limit the application of any unconscionable
clause as to avoid any unconscionable result.
(2) When it is claimed or appears to the court that the contract or any clause
thereof may be unconscionable the parties shall be afforded a reasonable
opportunity to present evidence as to its commercial setting, purpose and effect
to aid the court in making the determination.

M.C.L. § 440.2302(1)-(2). Under Michigan law, a court may invalidate a contract that is
determined to be unconscionable. Courts may even invalidate commercial contracts
due to unconscionability. See e.g., Johnson v. Mobil Oil Corp., 415 F. Supp. 264 (E.D.
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Mich.1976). However, unconscionability is not a separate cause of action. Rather, it is
a defense to enforcement of a contract. See Newman v. Roland Machinery Co., No.
08-cv-185, 2009 WL 3258319,*10-11 (W.D. Mich. Oct. 8, 2009) (A plain reading of
M.C.L. § 440.2302(1)-(2) indicates that it is to be used for protection against
enforcement and not as an affirmative action for damages.”) Thus, plaintiff cannot
maintain a claim based on unconscionability.
Finally, plaintiff’s predatory lending claim must be dismissed because Michigan
does not recognize a claim for predatory lending. See Saleh v. Home Loan Services,
Inc., 2009 WL 2496682 at *2 n. 1 (E.D. Mich. Aug.17, 2009); see also Beydoun v.
Countrywide Home Loans, Inc., 2009 WL 1803198 at *4 (E.D. Mich. June 23, 2009).
VI. Conclusion
For the reasons stated above, plaintiff’s claims are either time barred or
otherwise lacking in merit. Defendant’s motion is GRANTED. Plaintiff’s pending
motions are DENIED AS MOOT.
This case is DISMISSED.
SO ORDERED.

Dated: June 29, 2011

S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE

I hereby certify that a copy of the foregoing document was mailed to Edward Tamlin,
6208 Loraine, Romulus, MI 48174 and the attorneys of record on this date, June 29,
2011, by electronic and/or ordinary mail.

S/Julie Owens
Case Manager, [phone]
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