Veasley v. The Federal National Mortgage Association et al
Filing
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OPINION and ORDER Regarding Plaintiff's 28 Motions for Reconsideration and for Leave to File First Amended Complaint. Signed by District Judge Gerald E. Rosen. (JOwe)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
THEOLA VEASLEY,
Plaintiff,
No. 12-CV-13642
Hon. Gerald E. Rosen
vs.
THE FEDERAL NATIONAL MORTGAGE
ASSOCIATION and BAC HOME LOANS
SERVICING, LP FKA COUNTRYWIDE
HOME LOANS SERVICING, LP,
Defendants.
___________________________________/
OPINION AND ORDER REGARDING PLAINTIFF’S
MOTIONS FOR RECONSIDERATION AND FOR LEAVE TO FILE FIRST
AMENDED COMPLAINT
On September 26, 2014, this Court issued an opinion and order granting
Defendants’ Motion to Dismiss. Judgment was entered in Defendants’ favor on
the same day. Pending before the Court is Plaintiff’s Motion for Reconsideration,
pursuant to Federal Rule of Civil Procedure 59 and Eastern District of Michigan
Local Rule 7.1(h), and for Leave to Filed a First Amended Complaint. For the
reasons stated below, the Court denies the motions.
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I. Motion for Reconsideration
First, the Court addresses Plaintiff’s Motion for Reconsideration. Federal
Rule of Civil Procedure 59(e) provides: “A motion to alter or amend a judgment
must be filed no later than 28 days after entry of the judgment.” The decision of
whether to grant relief under Rule 59(e) is within the district court’s discretion.
Davis by Davis v. Jellico Cmty. Hosp. Inc., 912 F.2d 129, 132 (6th Cir. 1990).
That discretion, however, is limited to: (1) accommodating an intervening change
in controlling law; (2) accounting for new evidence which was not available at
trial; or (3) correcting a clear error of law or preventing manifest injustice.
Kenneth Henes Special Projects Procurement v. Continental Biomass Industries,
Inc., 86 F. Supp. 2d 721, 726 (E.D. Mich. 2000).
Rule 59 motions “are not intended as a vehicle to relitigate previously
considered issues; should not be utilized to submit evidence which could have been
previously submitted in the exercise of reasonable diligence; and are not the proper
vehicle to attempt to obtain a reversal of a judgment by offering the same
arguments previously presented.” Kenneth Henes, 86 F. Supp. 2d at 726 (emphasis
omitted) (quotiong Nagle Indus., Inc. v. Ford Motor Co., 175 F.R.D. 251, 254
(E.D. Mich. 1997), aff’d, 194 F.3d 1339 (Fed. Cir. 1999)) (internal quotations
omitted).
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The requirements for the granting of motions for reconsideration in this
Court are further set forth in Local Rule 7.1(h), which provides in relevant part:
Generally, and without restricting the court's discretion, the court will
not grant motions for rehearing or reconsideration that merely present
the same issues ruled upon by the court, either expressly or by
reasonable implication. The movant must not only demonstrate a
palpable defect by which the court and the parties and other persons
entitled to be heard on the motion have been misled but also show that
correcting the defect will result in a different disposition of the case.
Local Rule 7.1(h)(3), U.S. District Court, Eastern District of Michigan.
A
“palpable defect” is “a defect that is obvious, clear, unmistakable, manifest or
plain.” United States v. Lockette, 328 F. Supp. 2d 682, 684 (E.D. Mich. 2004).
This mortgage foreclosure case was removed to this Court from the Oakland
County Circuit Court on August 16, 2012. The facts and allegations of this case
are set forth in detail in the Court’s September 26, 2014 opinion and order granting
Defendants’ Motion to Dismiss (Dkt. # 26). Accordingly, they will not be repeated
here.
In her motion for reconsideration, Plaintiff primarily reraises the same res
judicata arguments that she raised in her summary judgment briefs. The Court is
not persuaded by Plaintiff’s attempts to distinguish the relevant case law, nor has
Plaintiff identified any new cases or authorities that might support a different
result. In any event, this Court generally “will not grant motions for rehearing or
reconsideration that merely present the same issues ruled upon by the court, either
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expressly or by reasonable implication,” Local Rule 7.1(g)(3), Eastern District of
Michigan, and the issues raised in Plaintiff’s present motion were squarely
addressed in the Court’s September 26, 2014 opinion and order. 1
II. Motion for Leave to File First Amended Complaint
Plaintiff also moves for leave to file a First Amended Complaint. Federal
Rule of Civil Procedure 15(a)(2) provides that “the court should freely give leave
when justice so requires.” However, granting leave to amend the complaint is
inappropriate if the proposed amendment would not survive a motion to dismiss.
Miller v. Calhoun Cnty., 408 F.3d 803, 817 (6th Cir. 2005) (“Amendment of a
complaint is futile when the proposed amendment would not permit the complaint
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Plaintiff does, however, now allege that in the state summary proceeding, “the
district court judge refused to even consider any challenge to the foreclosure in the
context of the proceeding and instead merely concluded on the basis of nothing but
a threadbare complaint that [Fannie Mae] had a right to possession, and she further
directed Plaintiff to assert any challenge to the foreclosure in circuit court -precisely what [Plaintiff] did.” Pl’s Mot. for Reconsideration, Dkt. # 28, at ¶ 22.
Plaintiff does not provide any factual support for that allegation, claiming that a
transcript of the hearing “will demonstrate” that the judge made such comments,
despite the fact that the letter from the 46th District Court that Plaintiff provides
states that “there was nothing place[d] on the record for the . . . case.” Id. at Ex. C.
Regardless, even if the judge did misinform Plaintiff or refuse to hear her defenses,
the proper course of action would have been to appeal the result of the summary
proceeding, as allowed for under M.C.L. § 600.5753 (“Any party aggrieved by the
determination or judgment of the court under this chapter may appeal to the circuit
court of the same county. The appeal shall be made in the same manner as an
appeal in other civil actions from the same court, with bond and procedure as
provided by court rules.”). Instead, Plaintiff filed a separate action, which is
subject to res judicata principles.
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to survive a motion to dismiss.”). Where a motion to amend the complaint is made
in response to a summary judgment motion or order, “the Court may properly look
to the affidavits and other evidence in the record.” Horacek v. Seaman, No. 0810866, 2009 WL 2928546, at *14 (E.D. Mich. Sept. 10, 2009); see also Bauchman
for Bauchman v. W. High Sch., 132 F.3d 542, 562 (10th Cir. 1997) (“A court
properly may deny a motion for leave to amend as futile when the proposed
amended complaint would be subject to dismissal for any reason, including that the
amendment would not survive a motion for summary judgment.”); Wilson v. Am.
Trans Air, Inc., 874 F.2d 386, 392 (7th Cir. 1989) (“An amendment is a ‘futile
gesture’ if the amended pleading could not survive a motion for summary
judgment.”).
Plaintiff’s proposed First Amended Complaint is largely the same as her
original complaint, but adds a new claim, alleging that Defendants violated M.C.L.
§ 600.3240(2) because they “prevented Plaintiff from [redeeming the Property] by
refusing to cooperate in the redemption process and refusing to accept tender of the
exact amount necessary to redeem.” Pl.’s Mot. for Leave to File First Am. Compl.,
Dkt # 28-11, ¶ 43. The proposed amendment does nothing to remedy the res
judicata problem regarding the first claim, as discussed above. Thus, the Court
need only consider whether the new second claim “rest[s] on sufficient factual
allegations and viable legal theories of recovery.” Selakowski v. Fed. Home Loan
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Mortg. Corp., No. 13-12335, 2014 WL 1207874, at *9 (E.D. Mich. Mar. 24,
2014). 2
M.C.L. § 600.3240(2) provides, in relevant part, that
[t]he purchaser [at the sheriff’s sale] shall provide an affidavit with
the deed to be recorded under this section that states the exact amount
required to redeem the property under this subsection, including any
daily per diem amounts, and the date by which the property must be
redeemed shall be stated on the certificate of sale. The purchaser may
include in the affidavit the name of a designee responsible on behalf
of the purchaser to assist the person redeeming the property in
computing the exact amount required to redeem the property. The
designee may charge a fee as stated in the affidavit and may be
authorized by the purchaser to receive redemption money. The
purchaser shall accept the amount computed by the designee.
Claims alleging deficiencies in the foreclosure process are circumscribed when
they are brought after expiration of the redemption period. As the Sixth Circuit has
articulated:
Michigan's foreclosure-by-advertisement scheme was meant to, at
once, impose order on the foreclosure process while still giving
security and finality to purchasers of foreclosed properties. To
effectuate this interest in finality, the ability for a court to set aside a
sheriff's sale has been drastically circumscribed. Michigan courts have
held that once the statutory redemption period lapses, they can only
2
Plaintiff’s new claim could also arguably be barred by res judicata just like her
first claim: just as that claim seeks to relitigate the question of which party has the
right to possession of the property in question, this claim also asks the Court to set
aside the foreclosure because of the alleged deficiencies in the redemption process.
Plaintiff also seeks damages in her amended complaint, but those damages are still
based on the theory that Plaintiff was injured by being deprived of rightful
possession of the property. However, because her new claim fails to present a
viable theory of recovery, the court need not address the question of whether res
judicata would bar it.
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entertain the setting aside of a foreclosure sale where the mortgagor
has made “a clear showing of fraud, or irregularity.”
Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 359 (6th Cir. 2013)
(citations omitted) (quoting Schulthies v. Barron, 16 Mich. Ct. App. 246, 167
N.W.2d 784, 785 (1969)). Claims seeking to toll the redemption period must also
demonstrate fraud or irregularity. Thompson v. JPMorgan Chase Bank, N.A., 563
F. App’x 440, 442 (6th Cir. 2014) (“Although plaintiff filed the suit before the
redemption period expired, the filing of the lawsuit was insufficient to toll the
redemption period because plaintiff did not allege fraud or irregularity by the
defendants.”).
Plaintiff has not demonstrated sufficient fraud or irregularity that would
enable her new claim to survive a motion to dismiss. M.C.L. § 600.3240(2)
requires the purchaser to “provide an affidavit with the deed” that declares the
“exact amount” of payment required for redemption. And indeed, Fannie Mae
provided such an affidavit at the time of sale. Dkt. # 20-10. The statute also
permissively allows the purchaser to provide a designee to aid the redeeming party
in calculating the exact amount of redemption. M.C.L. § 600.3240(2). Fannie
Mae did so, naming Orlans Associates, P.C. (“Orlans”), as designee. Dkt. # 20-10.
Plaintiff points to no specific language from § 600.3240 that placed a duty on
Defendants that they failed to uphold.
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Thus, the Court finds that Plaintiff’s
proposed First Amended Complaint fails to allege any violation of M.C.L. §
600.3240.
Further, the Court finds no general evidence of fraud or irregularity in the
redemption process. Plaintiff alleges in her proposed First Amended Complaint
that on August 3, 2011, she made a “written request to Orlans for the exact
redemption amount and communicated that $67,000 of funds to redeem were
coming from a retirement account and that a [sic] four business days were required
in order to complete the withdrawal processes necessary to tender the funds.” Pl.’s
Mot. for Leave to File First Am. Compl., Dkt # 28-11, ¶ 19. But plaintiff does not
provide the written request in the record, instead only providing a facsimile cover
page from August 3 indicating that some transmission was sent from Veasly’s
representation to Orlans.3 Pl.’s Mot. for Summ. J., Ex. K, Dkt. # 17-2. Assuming
that Plaintiff did request an extension as alleged, she cites to no law that would
require Fannie Mae to grant the extension.
Plaintiff then alleges that “[b]etween August 4 and August 17, 2011,
representatives of Plaintiff had numerous communications with the Bank and
Orlans via telephone and email regarding the exact amount to redeem,” Pl.’s Mot.
3
The cover page does have handwriting on it that says “extension request,” though
it provides no details of what request was made. Pl.’s Mot. for Summ. J., Ex, K.,
Dkt. # 17-2. In their answer to the complaint, Defendants admit that “on or around
August 5, 2011, a[] representative for Plaintiff from Dynamic Housing Solutions
requested a payoff amount for redemption.” Answer, Dkt. # 6, ¶ 18.
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for Leave to File First Am. Compl., Dkt # 28-11, ¶ 21, but Plaintiff provides no
evidence of any of these communications except for a letter sent on August 17
from Plaintiff’s representative to Orlans, requesting a calculation of the redemption
amount and a four-day extension, Pl.’s Mot. for Summ. J., Ex. J, Dkt. # 17-2.
Plaintiff acknowledges that Orlans sent the redemption calculation on August 17,
five days before the end of the redemption period. 4 Pl.’s Mot. for Leave to File
First Am. Compl., Dkt # 28-11, ¶ 22. She alleges that “[b]etween August 18 and
21, 2014 [sic], Plaintiff made various attempts to communicate with the Bank,
[Fannie Mae], Orlans, and BAC in order to redeem the property,” but again, she
provides no evidence of any of these communications. Id. ¶ 23. Nor does she
provide any evidence of “documentation to facilitate redemption” that she alleges
she sent to Orlans on August 21, 2011. Id. ¶ 24.
Finally, Plaintiff claims that “an extension of the August 22 deadline was
thereafter granted,” but she provides no evidence supporting this. She provides a
series of emails between Plaintiff and Bank of America sent between August 30,
2011 and September 9, 2011, but none of the emails indicate an extension was
granted. Instead, they discuss a reinstatement sale -- an entirely different concept
from an extension of the redemption period. And even if the emails did indicate
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The redemption calculation provided by Plaintiff herself is actually dated August
16, 2011, four business days before the end of the redemption period, though
Plaintiff may not have received it until August 17. Pl.’s Mot. for Summ. J., Ex. I,
Dkt. # 17-2.
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promise of an extension, Bank of America had no authority grant an extension on
behalf of Fannie Mae, which became title holder to the property at the end of the
redemption period on August 22, 2011.
Thus, based on the record presented, the Court finds that Plaintiff’s proposed
First Amended Complaint fails to state a claim under M.C.L. § 600.3240, and
further fails to provide evidence of sufficient fraud or irregularity in the
redemption process. Therefore, Plaintiff’s proposed First Amended Complaint
would be futile, and the Court thus denies Plaintiff’s motion.
IV. CONCLUSION
For all of the foregoing reasons,
IT IS HEREBY ORDERED that Plaintiff’s Motion for Reconsideration
(Dkt. #28) is DENIED.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to File a First
Amended Complaint (Dkt. #28) is DENIED.
IT IS SO ORDERED.
Dated: October 29, 2014
s/Gerald E. Rosen
Chief, Judge, United States District Court
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CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on October 29, 2014, by electronic and/or ordinary mail.
s/Julie Owens
Case Manager, (313) 234-5135
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