Yanakeff v. Chase Bank, N.A. et al
Filing
32
OPINION and ORDER Dismissing Plaintiff's 18 Complaint, ( Hearing set for 12/19/2013 10:00 AM before District Judge Gerald E. Rosen) Signed by District Judge Gerald E. Rosen. (JOwe)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
LAURA A. YANAKEFF,
Plaintiff,
No. 2:12-cv-13221
Hon. Gerald E. Rosen
vs.
JP MORGAN CHASE BANK, N.A.,
MERSCORP, INC., MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS and FREEDOM MORTGAGE
CORPORATION,
Defendants.
___________________________________/
OPINION AND ORDER DISMISSING PLAINTIFF’S COMPLAINT
I. INTRODUCTION
The idiom concerning not reinventing the wheel only makes sense if the
wheel actually works. Before this Court is a lawsuit arising out of the foreclosure
of Plaintiff’s home that unfortunately makes this point. Plaintiff’s Complaint is
virtually identical to a complaint recently filed in this district in another matter
involving Plaintiff’s attorney, which Judge Cohn dismissed as wholly without
merit.
Undeterred by the failure of those legal theories before Judge Cohn,
Plaintiff’s attorney now reproduces those same theories before this Court.
Plaintiff’s attorney also repeats, nearly word-for-word, the same Response to
1
Defendants’ dispositive motions in this case that he advanced in front of Judge
Cohn. The Complaint and Response are so canned, they even fail in large part to
cater to the factual differences of this lawsuit -- like making simple changes to
reflect that there is only one plaintiff in this case or that a defendant in the other
case is not a defendant here.
Presently before this Court are Defendants’ Motions to dismiss Plaintiff’s
Complaint. Having reviewed and considered Defendants’ Motions and supporting
briefs, Plaintiff’s response thereto, and the entire record of this matter, the Court
has determined that the relevant allegations, facts, and legal arguments are
adequately presented in these written submissions, and that oral argument would
not aid the decisional process. Therefore, the Court will decide this matter “on the
briefs.” See Eastern District of Michigan Local Rule 7.1(f)(2). As set forth in
more detail below, the Court finds Plaintiff’s cut-and-paste, cookie cutter
Complaint to be without merit and dismisses it with prejudice.
II. FACTUAL BACKGROUND
On May 22, 2009, Plaintiff borrowed $139,420.00 from Defendant Freedom
Mortgage Corporation (Freedom Mortgage). (Plf’s Am. Compl., Dkt. # 18, at ¶¶
6-7; Ex. A to Defs’ Mtn., Dkt. # 21-2). In exchange, Plaintiff gave a Mortgage to
Defendant Mortgage Electronic Registration Systems (MERS) on her home in St.
Clair Shores, Michigan (the Property). (Plf’s Am. Compl., Dkt. # 18, at ¶¶ 6-7;
2
Ex. B. to Defs’ Br., Dkt. # 21-3). MERS assigned the Mortgage to Freedom
Mortgage on September 22, 2011. (Plf’s Am. Compl., Dkt. # 18, at ¶ 9; Ex. C to
Defs’ Br., Dkt. # 21-4). The Mortgage and the Assignment were duly recorded in
the Macomb County Register of Deeds. (Plf’s Am. Compl., Dkt. # 18, at ¶¶ 8-9).
Plaintiff lost her job in July 2009 and could no longer afford her mortgage
payments. (Ex. 3 to Plf’s Resp., Dkt. # 26, at 39). Freedom Mortgage eventually
instituted foreclosure proceedings in October 2011 under M.C.L. § 600.3201 et
seq, Michigan’s foreclosure by advertisement statute. (Exs. D & E to Defs’ Br.,
Dkt. ## 21-5, 21-6). Freedom Mortgage provided Plaintiff with the requisite
statutory notice pursuant to M.C.L. § 600.3205a. (Id.). Plaintiff did not respond to
the notice and did not request a meeting to attempt to work out a modification of
the Mortgage to avoid foreclosure pursuant to this notice. (Ex. E to Defs’ Br., Dkt.
# 21-6). The Macomb County Sherriff held a Sherriff’s sale on December 8, 2011,
with Freedom Mortgage purchasing the Property. (Id.). The statutory redemption
period expired June 8, 2012. (Id.; Plf’s Am. Compl., Dkt. # 18, at ¶ 114).
Plaintiff filed her initial pro se Complaint in Macomb County Circuit Court
on July 2, 2012. (Plf’s Compl., Dkt. # 1-2). Following removal, Plaintiff obtained
counsel and filed a seven-count Amended Complaint. (Plf’s Am. Compl., Dkt. #
18). The Amended Complaint challenges the foreclosure with a myriad of theories
under several provisions of Federal and Michigan statutory and common law,
3
which are set forth in more detail below. Currently pending before the Court are
Defendants’ dispositive motions: (1) Defendant JP Morgan Chase Bank’s Motion
to Dismiss (Def’s Mtn., Dkt. # 20); and (2) Defendants MERSCORP, MERS, and
Freedom Mortgage’s Motion for Dismissal/Summary Judgment (Defs’ Mtn., Dkt.
# 21).
III. DISCUSSION
A.
Applicable Standards
All Defendants seek dismissal of Plaintiff’s Complaint for failing to state a
claim under Rule 12(b)(6).
Defendants MERSCORP, MERS, and Freedom
Mortgage also alternatively move for summary judgment under Rule 56.
In
support of this alternative, Defendants MERSCORP, MERS and Freedom
Mortgage attached a variety of documents relative to the Mortgage and the
subsequent foreclosure.
These exhibits and information contained therein are
referenced in Plaintiff’s Complaint and are central to Plaintiff’s claims. As such,
they may be deemed to form part of the original Complaint and would not
normally require the Court to convert Defendants’ Motion to a Rule 56 motion.
Weiner v. Klais and Co., Inc., 108 F.3d 86, 89 (6th Cir. 1997). In Response,
however, Plaintiff submitted materials outside her Complaint -- an affidavit and
various documents apparently relating to attempts to short sell Plaintiff’s home.
Therefore, the Court will treat those portions of Defendants’ Motions that rely on
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the pleadings alone as seeking dismissal and those sections where Plaintiff
presented collateral material as seeking summary judgment.
1.
Rule 12 Standard
In deciding a motion brought under Rule 12(b)(6), the Court must construe
the complaint in the light most favorable to Plaintiffs and accept all well-pled
factual allegations as true. League of United Latin Am. Citizens v. Bredesen, 500
F.3d 523, 527 (6th Cir. 2007). To withstand a motion to dismiss, however, a
complaint “requires more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007). The factual allegations in the complaint, accepted as true,
“must be enough to raise a right to relief above the speculative level,” and must
“state a claim to relief that is plausible on its face.” Id. at 570. “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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility of an inference
depends on a host of considerations, including common sense and the strength of
competing explanations for defendant’s conduct.” 16630 Southfield Ltd. P’ship v.
Flagstar Bank, F.S.B., 727 F.3d 502, 504 (6th Cir. 2013).
The Sixth Circuit has emphasized that the “combined effect of Twombly and
Iqbal [is to] require [a] plaintiff to have a greater knowledge . . . of factual details
5
in order to draft a ‘plausible complaint.’” New Albany Tractor, Inc. v. Louisville
Tractor, Inc., 650 F.3d 1046, 1051 (6th Cir. 2011) (citation omitted). Put another
way, complaints must contain “plausible statements as to when, where, in what or
by whom,” Center for Bio-Ethical Reform, Inc. v. Napolitano, 648 F.3d 365, 373
(6th Cir. 2011), in order to avoid merely pleading an “unadorned, the-defendantunlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678.
2.
Rule 56 Standard
Summary judgment is proper if the moving party “shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). As the Supreme Court has explained, “the
plain language of Rule 56[] mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party who fails to make a
showing sufficient to establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at trial.” Celotex Corp.
v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552 (1986). In addition, where a
moving party -- here, Defendants -- seeks an award of summary judgment in its
favor on a claim or issue as to which it bears the burden of proof at trial, this
party’s “showing must be sufficient for the court to hold that no reasonable trier of
fact could find other than for the moving party.” Calderone v. United States, 799
F.2d 254, 259 (6th Cir. 1986) (internal quotation marks, citation, and emphasis
6
omitted).
In deciding a motion brought under Rule 56, the Court must view the
evidence in a light most favorable to the nonmoving party. Pack v. Damon Corp.,
434 F.3d 810, 813 (6th Cir. 2006). Yet, the nonmoving party may not rely on mere
allegations or denials, but must “cit[e] to particular parts of materials in the record”
as establishing that one or more material facts are “genuinely disputed.” Fed. R.
Civ. P. 56(c)(1). But, “the mere existence of a scintilla of evidence that supports
the nonmoving party’s claims is insufficient to defeat summary judgment.” Pack,
434 F.3d at 814 (alteration, internal quotation marks, and citation omitted).
B.
Plaintiff’s Claims
Before turning to Plaintiff’s claims, a brief discussion regarding Plaintiff’s
Complaint is in order.
Plaintiff’s 221-paragraph Complaint is nearly
indistinguishable from the 218-paragraph complaint filed in Minneweather v. Wells
Fargo Bank, N.A. by Plaintiff’s attorney. (Compare Plf’s Am. Compl., Dkt. # 18
with Minneweather, 12-cv-13391, Dkt. # 11). They are so corresponding, for
example, that Plaintiff’s Complaint consistently references “Plaintiffs” despite
there only being one plaintiff in this case (but two in Minneweather). (Plf’s Am.
Compl., Dkt. # 18, at ¶¶ 22, 80, 95, 97, 101, 104, 105, 106, 107, 117, 124, 125,
179, 180, 186, 187, 188, 189, 190, 191, 192, 195, 197, 203). Plaintiff’s Complaint
also makes several references to a defendant in Minneweather (Wells Fargo) that is
7
not a defendant in this case. (Id. at ¶¶ 100, 193, 194, 200, 213). It is apparent to
this Court that Plaintiff’s attorney just recycled the Minneweather Complaint and
made very little effort to specifically tailor it to his client’s circumstances.
Not surprisingly, Plaintiff’s Response fares no better.
It makes no
discernible attempt to tailor her arguments to her facts and the arguments
presented by the Defendants in this case. Instead, the Court is left with a pleading
echoing the Minneweather Response in all relevant aspects. (Compare Plf’s Resp.,
Dkt. # 26 with Minneweather, 12-cv-13391, Dkt. # 16). As but one example, the
Response here distinguishes a case cited by “Defendants” on “page 11 of their
memorandum.” (Plf’s Resp., Dkt. # 26, at 8-9). The Defendants in this matter
mentioned no such case and this reference is just a sloppy carry-over from the
Response filed in Minneweather. (See 12-cv-13391, Dkt. # 16., at 9-10).1
Given the similarities between this case and Minneweather, this Court finds
Judge Cohn’s opinion in Minneweather to be persuasive. Accordingly, this Court
dismisses Plaintiff’s Complaint with prejudice, as well as orders Plaintiff’s
attorney to show cause as to why he should not be sanctioned for his conduct in
this litigation.
1
The Court also notes that both Responses fail to comply with the Local Rules as
they do not “contain a concise statement of the issues presented and, on the
following page, the controlling or most appropriate authority for the relief
sought”). See Eastern District of Michigan Local Rule 7.1(d)(2).
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1.
Michigan Consumer Protection Act (Count I)
Michigan’s Consumer Protection Act (MCPA) generally prohibits unfair,
unconscionable, and deceptive trade practices. M.C.L. § 445.901 et seq. Plaintiff
alleges that Defendants violated the MCPA by utilizing MERS’ electronic registry
system, which tracks certain mortgage servicing rights and ownership interests.
This system, Plaintiff claims, hides the “true mortgage owner from homeowners,
other stakeholders, [and] the public” (Plf’s Am. Compl., Dkt. # 18, at ¶ 81) and
allows entities to assign and foreclose on mortgages without “possess[ing the
requisite] authority to act because the mortgage loan [is] never properly transferred
to the purported beneficial owner.” (Id. at ¶ 89). As an initial matter, Plaintiff puts
forth no facts relative to her Mortgage, or subsequent foreclosure as it relates to the
MCPA. Notwithstanding this pleading defect, Judge Cohn rejected this exact
theory in Minneweather, reasoning as follows:
Section 445.904(1)(a) of the MCPA excludes from the MCPA any
“transaction or conduct specifically authorized under laws
administered by a regulatory board or officer acting under statutory
authority of this state or the United States.” Mich. Comp. Laws §
445.904(1)(a). Courts have unanimously held that this exclusion to
the MCPA applies to residential lending activities of state and federal
banks. See, e.g., Newton v. Bank West, 262 Mich. App. 434, 441, 686
N.W.2d 491 (2004) (“Both Michigan courts and federal courts
applying Michigan law have consistently held that the MCPA does
not apply to claims arising out of residential mortgage loan
transactions.”); Steinberg v. Fed. Home Loan Mortg. Corp., –––
F.Supp.2d ––––, 2012 WL 4498297, at *7 (E.D. Mich. 2012) (citing
Newton, 262 Mich. App. at 438, 686 N.W.2d 491); Droski v. Wells
Fargo Bank, N.A., No. 11–11193, 2012 WL 3224134, at *6 (E.D.
9
Mich. Aug. 6, 2012) (“Michigan courts have found that residential
mortgage loan transactions are exempt from the MCPA.”) (citation
omitted); Jozlin v. U.S. Bank Nat. Ass’n, No. 11–12749, 2012 WL
12760, at *6 (E.D. Mich. Jan. 4, 2012) (“Those Michigan courts and
federal courts which have applied Michigan law have consistently
held that the MCPA does not apply to those claims which have arisen
out of residential mortgage loan transactions.”) (citations omitted).
This case is no different.
To the extent that the MCPA does apply to MERS, plaintiffs have
failed to state a claim against MERS because its only involvement
was assigning the mortgage from MBS to Wells Fargo. The mortgage
expressly stated that it was given to MERS as the “nominee for
Lender [MBS].” Further, the mortgage granted MERS the power of
sale upon plaintiffs’ default on the note, giving MERS an interest in
the indebtedness. See Residential Funding Co., L.L.C. v. Saurman,
490 Mich. 909, 805 N.W.2d 183 (2011). MERS assigned the
mortgage to Wells Fargo. As it relates to MERS, plaintiffs’ amended
complaint does nothing more than recite elements required to
establish a deceptive practices claim. This is not enough to satisfy the
pleading requirements in Iqbal, supra.
Minneweather, 2012 WL 5844682, at *2 (alterations in original); see also McCann
v. U.S. Bank, N.A., 873 F. Supp. 2d 823, 831 (E.D. Mich. 2012) (“MERS has the
specific authority created by the mortgage to act as the mortgagee and the original
lender’s nominee.
Consequently, MERS has statutory authority to enforce a
mortgage granted to it as nominee for the lender, including assigning the
mortgage.”). This Court agrees and finds that Plaintiff’s MCPA claim similarly
fails as a matter of law.
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2.
Slander of Title (Count II)
Plaintiff premises her slander of title claim on the assertion that MERS
lacked authority to assign the Mortgage to Freedom Mortgage because MERS did
not have an interest in the Note. (Plf’s Am. Compl., Dkt. # 18, at ¶ 103). In order
to prove slander of title under Michigan law, Plaintiff must show: (1) that
Defendants maliciously published false matter; (2) that disparaged her title; and (3)
caused special damages. GKC Mich. Theaters, Inc. v. Grand Mall, 222 Mich. App.
294, 301 (1997) (statutory slander of title pursuant to M.C.L. § 565.108); Sullivan
v. Thomas Org., PC, 88 Mich. App. 77, 82 (1979) (common law slander of title).
This claim fails for a litany of reasons.
First, Plaintiff was not a party to the assignment and therefore lacks standing
to challenge the assignment. Livonia Properties Holdings, LLC v. 12840-12976
Farmington Rd. Holdings, LLC, 717 F. Supp. 2d 724, 735-37 (E.D. Mich. 2010).
Second, even if Plaintiff were to have standing, MERS, as the nominee of Freedom
Mortgage, had the power to assign her Mortgage to Freedom Mortgage. See
Saurman, 805 N.W.2d at 183; McCann, 873 F. Supp. 2d at 831. And third,
Plaintiff must do more than allege the assignment was invalid in order to prove
malice. As Judge Cohn spelled out for Plaintiff’s attorney in Minneweather:
[A]side from the mere recitation that defendants acted maliciously and
intentionally, [the] complaint fails to allege any acts that show
defendants acted with malice. The Michigan Court of Appeals has
held that recording an invalid assignment, without more, is not enough
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to show malice in supporting a slander of title claim. Stanton v.
Dachille, 186 Mich. App. 247, 262, 463 N.W.2d 479 (1990) (“Malice
cannot be inferred merely from the filing of an invalid lien. To
sustain a claim of slander of title, the plaintiff must show that the
defendant knowingly filed an invalid lien with the intent to cause the
plaintiff injury.”). Thus, plaintiffs’ bare-boned assertion that the
assignment was invalid does not survive a Rule 12(b)(6) motion.
Minneweather, 2012 WL 5844682, at *3. Here, Plaintiff’s Complaint similarly
fails to allege any specific acts of malice and therefore fails.
3.
Wrongful Foreclosure (Counts III & IV)
Count III asserts a violation of M.C.L. § 600.3205a.2 Under Michigan law, a
borrower receiving a foreclosing party’s notice “may request a meeting . . . to
attempt to work out a modification of the mortgage loan to avoid foreclosure.”
M.C.L. § 600.3205a(1)(d). A borrower must request such a meeting “within 14
days after the notice is sent.” (Id.).
Plaintiff generally asserts that Freedom Mortgage did not provide Plaintiff
with the opportunity to meet and work out a modification of her Mortgage to avoid
foreclosure. (Plf’s Am. Compl., Dkt. # 18, at ¶ 110). Plaintiff also claims that
Chase and Freedom Mortgage “failed to comply with the tort of good faith and fair
dealing” by “fail[ing] to follow-up with plaintiffs (sic) requests to either do [a]
short sale or to produce paperwork to modify [the] loan.” (Id. at ¶ 111-12).
2
This provision was subsequently amended effective December 22, 2011. The
Court provides reference to the provision of this statute in effect at the time of the
events in this lawsuit.
12
According to Plaintiff, Chase and Freedom Mortgage “would lose her application
and ask her to resubmit [the application] in a scheme to have [the] redemption
period expire.” (Id. at ¶ 113).3
Plaintiff has not, however, put forth any evidence to dispute that she did not
request a loan modification pursuant to the statutory requirements set forth in
M.C.L. § 600.3204(4). And, even if Plaintiff did request such a meeting, Michigan
law limits the remedy she seeks. As this Court recently explained:
Even if Plaintiff had demonstrated that Defendants failed to comply
with the provisions of the statute, the only relief to which she would
be entitled under Michigan law is to convert the foreclosure by
advertisement to a judicial foreclosure. See M.C.L. § 600.3205c(8):
If a mortgage holder or mortgage servicer begins
foreclosure proceedings under this chapter in violation of
3
In addition to the assertions set forth in her Amended Complaint, Plaintiff also
attached an affidavit and various materials as part of her Response to Defendants’
dispositive motions that do not raise genuine issues of material fact. She, for
example, attests that “the requirements of MCL 600.3204(3) were not strictly
complied with, and the foreclosure sale should be set aside,” without providing any
specifics as to why this was the case. (Ex. 1 to Plf’s Resp., Dkt. # 26, at 25).
Though it is not entirely clear, Plaintiff claims that she “was cheated” because she
had submitted paperwork for either a loan modification or short sale but was “told
[her] paperwork and applications were lost . . . which clearly shows the fr5aud (sic)
and gamesmanship that was being played.” (Id.). Plaintiff’s various documents
also indicate that: (1) she requested relief from her loan’s servicer due to her
financial hardship in February 2011 (Id. at 44-45); (2) she entered into an
agreement in June 2011 to sell her house that was contingent upon the acceptance
of a short sale (Id. at 56-60); (3) she entered into agreements with “Nationwide
Loan Help” and “Pinnacle Law Group” to consult with her regarding her Mortgage
and/or for her short sale after the foreclosure (Id. at 33-42); and (4) her loan’s
servicer denied her application for “Loss Mitigation Assistance” on June 5, 2012.
(Id. at 46).
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this section, the borrower may file an action in the circuit
court for the county where the mortgaged property is
situated to convert the foreclosure proceeding to a
judicial foreclosure. If a borrower files an action under
this section and the court determines that the borrower
participated in the process under section 3205b, a
modification agreement was not reached, and the
borrower is eligible for modification under subsection (1)
..., the court shall enjoin foreclosure of the mortgage by
advertisement and order that the foreclosure proceed
under chapter 31 [as a judicial foreclosure].
Id.
The statute does not provide a plaintiff with a cause of action to quiet
title, enable her to avoid foreclosure, or permit the recovery of
damages or any other relief. Courts have examined this issue on
multiple occasions and have concluded that a borrower’s sole relief
for a purported violation of the loan modification statutes is to seek to
convert the foreclosure sale to a judicial foreclosure. See e.g., Stein v.
U.S. Bancorp, 2011 WL 740537 at *9–10 (E.D. Mich. Feb. 14, 2011)
(Cook, J.) (the sole remedy available to plaintiff is that “the
mortgagee is not permitted to [ ] foreclosure by advertisement, and
must instead proceed via judicial foreclosure.”); Adams v. Wells
Fargo Bank, N.A., 2011 WL 3500990 at *4 (E.D. Mich. Aug. 10,
2011) (Battani, J.) (“Even if Plaintiff is correct about Defendant's
failure to agree to a modification, he failed to show that he is entitled
to the requested relief. The plain language of § 600.3205c(8) limits
his relief. It does not authorize the Court to set aside the
foreclosure.”); Ellison v. JPMorgan Chase, N.A., 2012 WL 4513799
at *5 (E.D. Mich. Oct. 2, 2012) (Cohn, J.) (the statute “does not
require Chase to modify any specific loan, and it does not provide any
basis for unwinding the foreclosure .... the borrower’s sole relief for
an alleged violation of the loan modification statutes is to seek the
conversion of the foreclosure sale to a judicial foreclosure, prior to the
sale.”); see also Benford v. CitiMortgage, Inc., 2011 WL 5525942 at
*5 (E.D. Mich. Nov. 14, 2011) (Duggan, J.) (“To the extent that
Plaintiff has asserted a violation of [the loan modification statutes],
his claim fails because the statute does not permit the Court to set
aside a completed foreclosure sale.... The statute plainly requires the
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borrower to seek his remedy prior to the completion of the foreclosure
sale, as it merely converts the proceeding into one of judicial
foreclosure. A borrower may not challenge a completed foreclosure
sale under this statute.”).
Riley-Jackson v. Ocwen Loan Servicing, 2013 WL 5676827, at *3-4 (E.D. Mich.
Oct. 18, 2013) (omissions and alterations in original).
Plaintiff’s Count III
therefore fails.
Count IV alleges a violation of M.C.L. § 600.3204(3), asserting that MERS
“does not own the promissory note secured by the mortgage” and that “a record of
chain of title” did not exist at the time of the foreclosure. (Plf’s Am. Compl., Dkt.
# 18, at ¶¶ 117-24) (citing M.C.L. § 600.3204(3)). Judge Cohn in Minneweather
dismissed this well-worn claim:
A provision in the mortgage granted MERS and its successors and
assigns the power of sale in the event of a default on the loan. MERS
assigned the mortgage to Wells Fargo. The mortgage and assignment
were recorded. In Collins v. Wickersham, the court reasoned that
“[p]laintiffs provide no authority whatsoever for the assertion that an
assignment from MERS cannot establish a record chain of title under
the foreclosure statute.” 862 F. Supp. 2d 649, 658 (E.D. Mich. 2012).
Indeed, the court stated that, under the statute, “an assignment by the
record holder of the mortgage is plainly satisfactory to establish a
record chain of title.... It cannot be disputed that a record chain of title
existed ... as the assignment from MERS to Wells Fargo was recorded
with the Register of Deeds....” Id. at 658–59. The court reached a
similar conclusion in McLaughlin v. Chase Home Finance, LLC:
Here, the Mortgage clearly declares MERS the
mortgagee. Plaintiffs granted the Property and power of
sale to MERS and its successors and assigns. The
Mortgage also grants MERS the right to foreclose.
MERS in turn executed an unambiguous document
15
assigning its rights under the Mortgage to Chase. Thus, a
record chain of title clearly exists, providing Chase the
right to foreclose.
No. 11–11012, 2012 WL 995284, at *4 (Mar. 23, 2012) (internal
citations to record omitted).
This case is identical to Collins and McLaughlin. MERS’s recorded
assignment of the mortgage to Wells Fargo established a record chain
of title. Further, the note itself was endorsed to Wells Fargo.
Plaintiffs’ claim has no merit.
Minneweather, 2012 WL 5844682, at *3-4. The same is applicable here and
Plaintiff’s claim is without merit.4
4.
Fraud (Count V)
Plaintiff’s fraud claim is again lifted directly from the Minneweather
complaint, generally asserting that MERS is a scheme used to perpetrate mortgage
fraud.
Such assertions, noted Judge Cohn, were “copied verbatim from a
complaint filed by the State of Delaware against MERS.” Id. at *4 (citing State of
Delaware v. MERSCORP, Inc., 2011 WL 5128209 (Del. Ch. 2011) (No. 6987).
Judge Cohn then found that the allegations in Minneweather failed to satisfy the
particularity requirements of Federal Rule of Civil Procedure 9(b):
Plaintiffs generally challenge the MERS business model as a whole.
Plaintiffs claim that MERS and Wells Fargo worked together to
misrepresent the true holder of plaintiffs’ mortgage and effectuate a
wrongful foreclosure. As best as can be seen from the complaint and
4
Because the Court determines that Plaintiff’s wrongful foreclosure claims are
without merit, the Court declines to address whether Plaintiff is guilty of laches.
(Defs’ Br., Dkt. # 21, at 19-20).
16
plaintiffs’ papers, they are challenging the assignment of the mortgage
from MERS to Wells Fargo.
Plaintiffs fail to state with particularity any facts sufficient to make
out a claim of fraud or misrepresentation. In order to meet the
particularity requirements of Rule 9(b), a plaintiff must “(1) specify
the statements that the plaintiff contends were fraudulent, (2) identify
the speaker, (3) state where and when the statements were made, and
(4) explain why the statements were fraudulent.” Frank v. Dana
Corp., 547 F.3d 564, 569–70 (6th Cir. 2008) (citation omitted).
Plaintiffs’ amended complaint patently fails to meet the particularity
requirements of Rule 9(b). In the sixty-seven paragraphs of the
complaint pertaining to the fraud count, plaintiffs fail to identify (1)
the allegedly false statements, (2) the speaker, and (3) when, where,
and under what circumstances the statements were made.
Id. Here, Plaintiff does not put forth any other factual allegations different from
those in Minneweather, and her claim for fraud therefore fails as a matter of law.
5.
Quiet Title (Count VI)
Plaintiff next seeks a determination from this Court that “neither MERS or
(sic) Freedom Mortgage can hold title” to the subject property and seeks to
“[e]njoin the foreclosure sale and resulting Sheriff’s Deed, declare them illegal and
wrongfully obtained making Plaintiffs’ (sic) title in the subject property superior to
that of Defendants.” (Plf’s Am. Compl., Dkt. # 18, at ¶¶ 195-96). She also states
that “Wells Fargo now purports to hold title to the subject property, assigned under
fraudulent conditions” and that, pursuant to M.C.L. § 555.55, “Wells Fargo is not
the true holder of the title in the subject property.” (Id. at ¶¶ 193-94). This claim
17
for quiet title replicates the allegations set forth in Minneweather. (Compare id. at
¶¶ 191-96 with Minneweather, 12-cv-13391, Dkt. # 11, at ¶¶ 188-93).
Plaintiff’s slipshod pleading -- wholly copying and pasting an asserted cause
of action from an inapplicable matter -- merits dismissal. First, Wells Fargo is not
a party to this suit and does not have any interest in the property.
In
Minneweather, Wells Fargo was a third party to the original mortgage transaction.
Minneweather, 2012 WL 5844682 at *3-4. Because there is no similarly situated
party to Wells Fargo in the instant case, the Court declines to speculate as to whom
Plaintiff may have meant to refer. Second, unlike Minneweather, a foreclosure
sale has already occurred. Third, Michigan repealed M.C.L. § 555.55, the Revised
Uniform Principal and Income Act in 2004. See Public Act 159 of 2004. Fourth,
quiet title is a remedy, not a cause of action under Michigan law. See Shaya v.
Countrywide Home Loans, Inc., 489 F. App’x 815, 819 (6th Cir. 2012). Fifth, it is
undisputed that the six-month statutory redemption period expired on June 8, 2012,
at which point Plaintiff’s rights in and title to the property extinguished. See
Rabbah v. Federal Home Loan Mortgage Corp., 2013 WL 153729, at *3–*4 (E.D.
Mich. Jan. 15, 2013) (Cox, J.); Saroki v. Bank of New York Mellon, 2012 WL
5379169, at *3–*4 (E.D. Mich. Oct. 31, 2012) (Duggan, J.). Upon the expiration
of this redemption period, “the mortgagor may undo the [sheriff’s sale of the
property] only by demonstrating fraud or irregularity in the foreclosure
18
proceedings,” and Plaintiff’s canned Complaint fails to set forth any fraud or
irregularity. Saroki, 2012 WL 5379169, at *4; see also Rabbah, 2013 WL 153729,
at *4. Plaintiff’s claim therefore fails as a matter of law.
6.
Truth in Lending Act (Count VII)
At the risk of sounding like a broken record, Plaintiff’s Truth in Lending Act
(TILA) claim is again copied verbatim from the Minneweather complaint.
(Compare Plf’s Am. Compl, Dkt. # 1, at ¶¶ 197-205 with Minneweather, 12-cv13391, Dkt. # 11, at ¶¶ 194-202).
She even again erroneously refers to the
Mortgage’s assignment to Wells Fargo, as well as to a “REMIC trust:”
200. Defendant Wells Fargo allegedly was assigned the Mortgage on
February 10, 2010.
201. Plaintiff was never notified that his (sic) promissory note was
sold to a REMIC trust.
(Plf’s Am. Compl., Dkt. # 18, at ¶ 200-01). Plaintiff claims that “Defendants’ (sic)
and its (sic) predecessor’s fail[ed] to notify Plaintiff of the change in creditor” and
are therefore liable for statutory damages under 15 U.S.C. § 1641(g). (Id. at ¶ 20205).
TILA mandates that creditors make certain disclosures “as to the terms of
lending arrangements and provides for civil liability for failure to comply with its
provisions.”
Minneweather, 2012 WL 5844682, at *4 (citations omitted).
Plaintiff’s reference to Wells Fargo and a “REMIC” trust makes her TILA claim
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indiscernible on this basis alone. Assuming that Plaintiff rests her TILA claim on
the fact that MERS assigned her Mortgage to Freedom Mortgage on September 22,
2011, this claim fails. TILA’s notice provision concerning the sale, transfer or
assignment of a “mortgage loan” to a third party, 15 U.S.C. § 1641(g)(1), does not
apply because Plaintiff has not alleged that any such sale, transfer, or assignment to
a third party took place. MERS did not assign the debt, which was always payable
to Freedom Mortgage since the loan’s origination. Freedom Mortgage was not a
third party in any cognizable sense of the term. Plaintiff’s TILA claim fails.
7.
Defendant JPMorgan Chase Bank’s involvement in this matter
Plaintiff filed her original Complaint against Chase, MERS, and Freedom
Mortgage on July 2, 2012 in state court. (Plf’s Compl., Dkt. # 1-2). Following
removal, Plaintiff (acting pro se) stipulated to dismissing Chase without prejudice.
(Dkt. #5).
Plaintiff’s attorney subsequently appeared and filed the Amended
Complaint, again naming Chase as a Defendant despite the fact that the exhibits
attached to Plaintiff’s original Complaint make clear that Chase had no
involvement in originating, servicing, or foreclosing on Plaintiff’s Mortgage. (Exs.
B-D to Plf’s Compl., Dkt. # 1-2). The Amended Complaint only references Chase
in two ways: (1) it, along with other national banks, is a member of MERS (Plf’s
Am. Compl., Dkt. # 18, at ¶ 13); and (2) it allegedly committed improprieties
related to Plaintiff’s request to conduct a short sale or modify her loan (Id. at ¶¶
20
112-13).5 Plaintiff has put forth no other facts as to how its membership in MERS
is related to her or how Chase was involved in a short sale or home modification
given that her prior filings do not show any involvement in her Mortgage or
foreclosure. When presented with this fact by Chase in its Motion to Dismiss
(Def’s Br., Dkt. # 20), Plaintiff’s attorney failed to even mention Chase in
Response. (Plf’s Resp., Dkt. # 26). In sum, Plaintiff’s attorney presented no
reason as to why he brought Chase back into this lawsuit. In addition to the
reasons set forth above, these defects with respect to Chase further support a
dismissal of Plaintiff’s Complaint.
C.
Sanctions
Given the foregoing discussion, the Court is deeply troubled by the conduct
of Plaintiff’s attorney. Boilerplate language assists practitioners and courts alike in
terms of framing-out complaints, pleadings, and opinions.
Cookie cutter
complaints and other pleadings that fail to link boilerplate language to an
individual litigant’s specific facts do nothing more than to needlessly cause others - in this case, Defendants and this Court -- to expend unnecessary time and
resources. This Court therefore directs Plaintiff’s attorney, Lawrence N. Radden,
5
All Plaintiff asserts with respect to this is that Chase: (1) “failed to follow-up with
plaintiffs (sic) requests to either do the short sale or to produce paperwork to
modify (sic) loan” and (2) “would lose her application and ask her to resubmit in a
scheme to have (sic) redemption period to (sic) expire, where sheriff’s sale (sic)
held on December 8, 2011.” (Plf’s Am. Compl., Dkt. # 18, at ¶¶ 112-13).
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to appear before the Court on December 19, 2013 at 10:00am with his client and
SHOW CAUSE as to why he should not be sanctioned under Federal Rule of Civil
Procedure 11(b) and 28 U.S.C. § 1927.
IV. CONCLUSION
For all of the foregoing reasons,
IT IS HEREBY ORDERED that Defendant JP Morgan Chase Bank’s
Motion to Dismiss [Dkt. # 20] is GRANTED.
IT IS FURTHER ORDERED that Defendants MERSCORP, MERS, and
Freedom Mortgage Corporation’s Motion for Dismissal/Summary Judgment [Dkt.
# 21] is GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s attorney, Lawrence N. Radden,
appear before the Court on December 19, 2013 at 10:00am with his client and
SHOW CAUSE as to why he should not be sanctioned under Federal Rule of Civil
Procedure 11(b) and 28 U.S.C. § 1927.
IT IS FURTHER ORDERED that all Defendants shall submit a petition for
their fees incurred in this matter after August 27, 2012 -- the date Plaintiff’s
attorney appeared -- no later than seven days before the Show Cause hearing.
IT IS SO ORDERED.
Dated: December 5, 2013
s/Gerald E. Rosen
GERALD E. ROSEN
CHIEF, U.S. DISTRICT COURT
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CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document was mailed to the
attorneys of record on this date, December 5, 2013, by electronic and/or
ordinary mail.
s/Julie Owens
Case Manager, 313-234-5135
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