Younan v. Bank of America, N.A., et al

Filing 17

OPINION AND ORDER granting 4 Motion to Dismiss. Signed by District Judge Patrick J. Duggan. (MOre)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
WISSAM YOUNAN,
Plaintiff,
v.

Case No. 11-15641
Honorable Patrick J. Duggan

BANK OF AMERICA, N.A., fka LASALLE
BANK, N.A.; FIRST FRANKLIN MORTGAGE
LOAN TRUST 2007-FF2; and MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC.,
Defendants.
___________________________________/
OPINION AND ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS
On November 22, 2011, Plaintiff filed this action against Defendants in the Circuit
Court for Macomb County, Michigan, seeking to quiet title to real property located at
41537 Gardenway Drive, Sterling Heights, Michigan (“Property”). On December 27,
2011, Defendants removed Plaintiff’s Complaint to federal court based on diversity
jurisdiction. Presently before the Court is Defendants’ motion to dismiss under Federal
Rule of Civil Procedure 12(b)(6), filed January 3, 2012. After Defendants filed their
motion, Plaintiff’s counsel moved and was granted leave to withdraw. Plaintiff
subsequently retained new counsel who was given an extension of time to respond to the
motion. The motion now has been fully briefed. On February 8, 2012, this Court issued
a notice dispensing with oral argument with respect to Defendants’ motion pursuant to
Eastern District of Michigan Local Rule 7.1(f).
I.

Applicable Standard

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests
whether a legally sufficient claim has been pleaded in a complaint, and provides for
dismissal when a plaintiff fails to state a claim upon which relief may be granted. Fed. R.
Civ. P. 12(b)(6). “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. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 555, 570, 127 S. Ct. 1955, 1974 (2007)). A claim is facially plausible
when a plaintiff pleads factual content that permits a court to reasonably infer that the
defendant is liable for the alleged misconduct. Id. (citing Twombly, 550 U.S. at 556, 127
S. Ct. at 1965). This plausibility standard “does not impose a probability requirement at
the pleading stage; it simply calls for enough fact[s] to raise a reasonable expectation that
discovery will reveal evidence of illegal [conduct].” Twombly, 550 U.S. at 556, 127 S.
Ct. at 1965.
When assessing whether a plaintiff has set forth a “plausible” claim, the district
court must accept all of the complaint’s factual allegations as true. Ziegler v. IBP Hog
Mkt., Inc., 249 F.3d 509, 512 (6th Cir. 2001). Even so, “the pleading must contain
more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally
cognizable right of action.” Twombly, 550 U.S. at 555, 570, 127 S. Ct. at 1965. A
plaintiff has the duty to provide “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do . . . .” Id. Therefore,
“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
2

statements, do not suffice.” Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 555,
127 S. Ct. at 1965).
II.

Factual Background
On December 27, 2006, Plaintiff executed a promissory note (“Note”) in the

principal amount of $359,000 to purchase the Property. (Defs.’ Mot. Ex. A.) First
Franklin a division of National City Bank (“First Franklin”) was the originating lender.
(Id.) First Franklin endorsed the Note to First Franklin Financial Corporation. (Id.)
As security for the Note, Plaintiff granted a mortgage on the Property
(“Mortgage”) to Mortgage Electronic Registration Systems, Inc. (“MERS”) “as nominee
for the lender and the lender’s successors and assigns.” (Defs.’ Mot. Ex. B.) On March
1, 2008, MERS assigned the Mortgage to LaSalle Bank, N.A. as trustee for First Franklin
Mortgage Loan Trust 2007-FF2, Mortgage Loan Asset-Backed Certificates, Series 2007FF2 (“LaSalle as Trustee”). (Compl. ¶ 11; Defs.’ Mot. Ex. C.)
At some unspecified time, Plaintiff defaulted on the Note and LaSalle as Trustee
initiated foreclosure proceedings. The Property was sold at a Sheriff’s Sale on February
6, 2009, with LaSalle as Trustee as the purchaser. (Compl. Ex. 1.) The redemption
period expired by statute on August 6, 2009. (Id.)
LaSalle as Trustee thereafter instituted eviction proceedings in Michigan’s 41st
District Court. (Defs.’ Mot. Ex. E.) Plaintiff failed to appear and a Judgment granting
LaSalle the right of possession to the Property was entered on November 30, 2009. (Id.)
Plaintiff appealed the eviction to the Macomb County Circuit Court, which the court
3

dismissed as “vexatious and frivolous” in an order entered August 30, 2010. (Id. Ex. F.)
As indicated previously, Plaintiff then filed this action to quiet title to the Property
on November 22, 2011. In his Complaint, Plaintiff asserts only a single count to quiet
title.
III.

Analysis
Defendants argue in their motion to dismiss that Plaintiff’s action to quiet title fails

because all interest in the Property became vested in LaSalle as Trustee upon expiration
of the redemption period. Further, Defendants maintain that Plaintiff’s attempt to
challenge the foreclosure is precluded by the doctrine of res judicata as he failed to assert
his challenge in the eviction proceedings.
Pursuant to Michigan law, once the redemption period following foreclosure of
property has expired, the former owner’s rights in and title to the property are
extinguished. Piotrowski v. State Land Office Bd., 302 Mich. 179, 187, 4 N.W.2d 514
(1942); see also Mich. Comp. Laws § 600.3236. At that point, the former owner loses
standing to assert claims with respect to the property. Overton v. Mortgage Electronic
Registration Systems, Inc., No. 28490, 2009 WL 1507342, at *1 (Mich. Ct. App. May 28,
2009) (unpublished opinion). An exception to this rule arises only where there is “a clear
showing of fraud or irregularity” in the foreclosure process. Id., at *2 (quoting Schulthies
v. Barron, 16 Mich. App. 246, 247-48, 167 N.W.2d 784 (1969)).
Here, the redemption period has expired and Plaintiff fails to make “a clear
showing of fraud or irregularity.” Plaintiff argues that none of the defendants were
4

authorized to seek foreclosure by advertisement, relying on the Michigan Court of
Appeals’ decision in Residential Funding Co. v. Saurman, 292 Mich. App. 321, 807
N.W.2d 412 (2011). The Michigan Supreme Court reversed that decision however,
holding that the mortgagee is “the owner . . . of an interest in the indebtedness secured by
the mortgage” capable of seeking foreclosure by advertisement. Residential Funding Co.
v. Saurman, 490 Mich. 909, 805 N.W.2d 183 (2011) (quoting Mich. Comp. Laws
§ 600.3204(1)(d)).
For these reasons, Plaintiff fails to state a claim to quiet title to the Property on
which relief may be granted.
Accordingly,
IT IS ORDERED, that Defendants’ motion to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6) is GRANTED.
Dated: June 12, 2012

s/PATRICK J. DUGGAN
UNITED STATES DISTRICT JUDGE

Copies to:
Scott F. Smith, Esq.
Michelle T. Thomas, Esq.

5