Christopher v. Ownit Mortgage Solutions, Inc. et al

Filing 43

OPINION AND ORDER denying 42 Motion for Reconsideration filed by Kenneth J. Christopher. Signed by District Judge Robert H. Cleland. (Ciesla, C)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

KENNETH J. CHRISTOPHER,
Plaintiff,
v.

Case No. 12-11872

OWNIT MORTGAGE
SOLUTIONS, INC., et al.,
Defendants.
/
OPINION AND ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION
On April 17, 2013, Plaintiff Kenneth Christopher moved for reconsideration of the
court’s March 14, 2013 order granting summary judgment in favor of Defendants
Mortgage Electronic Registration Systems, Inc., (“MERS”) and U.S. Bank, N.A. A
motion for reconsideration must be filed within fourteen days after an order is entered.
E.D. Mich. LR 7.1(h)(1). As Plaintiff’s motion was filed over a month after the court’s
order, the motion will be denied as untimely filed.
Even if the motion were timely filed, Plaintiff has not identified a “palpable defect”
in the court’s order to warrant relief. A motion for reconsideration shall be granted only
if the movant can (1) “demonstrate a palpable defect by which the court and the parties
. . . have been misled” and (2) “show that correcting the defect will result in a different
disposition of the case.” E.D. Mich. LR 7.1(h)(3). “A ‘palpable defect’ is a defect that is
obvious, clear, unmistakable, manifest, or plain.” United States v. Lockett, 328 F. Supp.
2d 682, 684 (E.D. Mich. 2004).

Plaintiff first alleges that the court erred in finding that he lacks standing to
challenge MERS’s assignment of the mortgage to U.S. Bank, N.A. Plaintiff asserts that
he has standing to challenge the assignment and cites El-Seblani v. OneWest, FSB,
No. 11-11178, 2011 WL 6309255 (E.D. Mich. Dec. 15, 2011), to support his claim.
However, Plaintiff does not discuss the facts or ruling of El-Seblani or otherwise explain
how that case impacts the court’s order. The court relied on Livonia Properties
Holdings, LLC v. 12840-12976 Farmington Road Holdings, LLC, 399 F. App’x 97, 102
(6th Cir. 2010), in finding that Plaintiff lacks standing because he was a non-party to the
assignment. Plaintiff asks the court to adopt the holding in Talton v. BAC Home Loans
Servicing LP, 839 F. Supp. 2d 896 (E.D. Mich. 2012), that “Livonia Properties does not
compel the conclusion that a foreclosure plaintiff can never attack the foreclosure by
challenging the validity of an underlying assignment.” Id. at 906. The Talton court’s
ruling, issued by another judge in this district, is not binding on this court. Furthermore,
other courts on the Eastern District of Michigan that have applied Livonia Properties
after Talton was issued do not agree with the Talton court’s interpretation of Livonia
Properties. See, e.g., Carmack v. Bank of N.Y. Mellon, No. 12-cv-11669, 2012 WL
2389863, at *3 (E.D. Mich. June 25, 2012) (citing Livonia Properties for the proposition
that “[a] non-party cannot challenge a mortgage assignment”). Accordingly, this court’s
decision to not adopt the Talton court’s ruling does not amount to an “obvious” or
“unmistakable” defect.
As explained in the court’s order granting summary judgment for Defendants, a
non-party to an assignment has standing to challenge that assignment in limited

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circumstances. A mortgagor “may assert as a defense any matter which renders the
assignment absolutely invalid or ineffective, or void,” such as “nonassignability of the
instrument, assignee’s lack of title, [or] a prior revocation of the assignment.” Livonia
Props., 339 F. App’x at 102 (citations omitted). Mortgagors have standing to raise
those defenses when there is a “genuine claim” as to the identify of the rightful owner of
the loan such that mortgagors may be subject to double liability and “cannot otherwise
protect themselves from having to pay the same debt twice.” Id. The court found that
Plaintiff was not at risk of double liability for two reasons. First, a record chain of title
existed demonstrating that U.S. Bank, N.A., was the owner of the mortgage. Second,
Plaintiff did not allege that he attempted to make a mortgage payment after the
assignment.
Plaintiff disagrees with the ruling. To support his position, Plaintiff discusses
Fannie Mae’s lawsuit against Merrill Lynch & Co., Inc., (“Merrill Lynch”). On September
2, 2011, Fannie Mae sued Merrill Lynch alleging that Merrill Lynch made false
representations about residential mortgage-backed securities that Fannie Mae
purchased. (Dkt. # 42-3.) One of the securities at issue in the lawsuit is Ownit
Mortgage Loan Trust, Ownit Mortgage Loan Asset-Backed Certificates, Series 2006-4,
which allegedly contains the Trust that owns Plaintiff’s mortgage. Plaintiff argues that,
because the lawsuit remains unresolved, “[i]t cannot be definitively stated that Plaintiff
could not be in jeopardy of having his property claimed by two different creditors.” (Dkt.
# 42 at Pg ID 1100.) The conclusion is tenuous and speculative, thereby falling far
short of a palpable defect.

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Finally, in response to Defendants’ summary judgment motion, Plaintiff argued
that the mortgage assignment was invalid because it did not comply with the terms of
the Pooling and Servicing Agreement (“PSA”) that governs Ownit Mortgage Loan Trust,
Ownit Mortgage Loan Asset-Backed Certificates, Series 2006-4. The court found that
Plaintiff lacks standing to challenge a breach of the PSA’s terms because he was not a
party or third-party beneficiary to the PSA. In an attempt to identify a palpable defect,
Plaintiff asserts only that this court’s ruling “is equally addressed in [Talton].” (Dkt. # 42
at Pg ID 1100.) No effort is made to apply Talton to the present case, and
consequently no defect is identified.
Plaintiff’s untimely motion for reconsideration fails to demonstrate a palpable
defect in the court’s March 14, 2013 order granting summary judgment in favor of
Defendants. Accordingly,
IT IS ORDERED that Plaintiff’s motion for reconsideration [Dkt. # 42] is DENIED.

s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: June 24, 2013
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, June 24, 2013, by electronic and/or ordinary mail.
s/Carolyn Ciesla for Lisa Wagner
Case Manager and Deputy Clerk
[phone]

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