Collins v. CitiMortgage, Inc.
ORDER granting 5 Motion to Dismiss. Signed by District Judge Julian Abele Cook. (KDoa)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Case No. 12-14394
Honorable Julian Abele Cook, Jr.
This civil action is based upon an accusation by the Plaintiff, Connett Collins, who contends
that the Defendant, CitiMortgage, Inc. (“CitiMortgage”), violated several state and federal laws
when it (1) issued an illegal mortgage loan to her in connection with a residential property in Flint,
Michigan, and (2) later foreclosed on the same property. Subsequent to the filing of a complaint by
Collins in the Genesee County Circuit Court of Michigan on September 5, 2012, CitiMortgage
caused the removal of the case to this Court pursuant to 28 U.S.C. §§ 1331, 1441(a). Currently
before the Court is CitiMortgage’s motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).
On April 9, 1999, Collins obtained a mortgage loan from American Home Loans in order
to finance the purchase of the subject property in Flint, Michigan. Shortly thereafter, the mortgage
was initially processed by the Standard Federal Bank and, thereafter, to the CitiMortgage. The
assignment to Citimortgage was recorded with the Genesee County Register of Deeds on September
When she obtained the loan, Collins worked as a temporary employee of General Motors,
LLC. However, she later lost her job which, in turn, caused her to (1) become delinquent in making
the obligatory monthly mortgage payments, and (2) default in her contractual commitments on the
loan. After her default, CitiMortgage commenced foreclosure by advertisement proceedings
pursuant to a provision within the mortgage which authorized the mortgagee to sell the property in
the event of a default. The property was sold at a sheriff’s sale on January 18, 2012 to CitiMortgage
for $72,497.93. Six months later, on July 18th, the statutory redemption period expired.
In her effort to challenge the legal efficacy of CitiMortage’s effort to acquire possession of
the Flint property, Collins commenced
this lawsuit on September 5, 2012. In response,
CitiMortgage (1) denied her substantive allegations of wrongdoing, and (2) filed a motion which,
if granted, would dismiss Collins’ lawsuit.
When considering a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, the Court will (1) accept Collins’ well-pleaded allegations as being correct, and (2)
construe all of them in a light that is most favorable to her. Bennett v. MIS Corp., 607 F.3d 1076,
1091 (6th Cir. 2010). However, this assumption of truth does not extend to her legal conclusions
because “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint “must
contain either direct or inferential allegations respecting all material elements to sustain a recovery
under some viable legal theory.” Bishop v. Lucent Techs., Inc., 520 F.3d 516, 519 (6th Cir. 2008)
(citation and internal quotation marks omitted).
In order to survive an application for dismissal, the complaint must allege “enough facts to
state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007). To meet this standard, “[Collins must] plead[ ] factual content that allows the court to draw
the reasonable inference that [CitiMortgage] is liable for the misconduct alleged.” Iqbal, 556 U.S.
at 678. In essence, “[a] pleading that states a claim for relief must contain . . . a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
In considering a 12(b)(6) motion, “documents attached to the pleadings become part of the
pleading and may be considered.” Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327,
335 (6th Cir. 2007) (citing Fed. R. Civ. P. 10©). “In determining whether to grant a Rule 12(b)(6)
motion, the court primarily considers the allegations in the complaint, although matters of public
record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also
may be taken into account.” Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001) (emphasis
omitted)). Moreover, “documents that a defendant attaches to a motion to dismiss are considered
part of the pleadings if they are referred to in the . . . complaint and are central to [her] claim.”
Weiner, D.P.M. v. Klais & Co., 108 F.3d 86, 88 n.3 (6th Cir. 1997); see also Bassett v. NCAA, 528
F.3d 426, 430 (6th Cir. 2008). Supplemental documents attached to the motion to dismiss do not
convert the pleading into one for summary judgment where the documents do not “rebut, challenge,
or contradict anything in the . . . complaint.” Song v. City of Elyria, 985 F.2d 840, 842 (6th Cir.
1993) (citing Watters v. Pelican Int’l, Inc., 706 F. Supp. 1452, 1457 n.1 (D. Colo. 1989)).
In her complaint, Collins raises the following nine claims; namely, (1) fraudulent
misrepresentation; (2) violation of the Michigan Mortgage Brokers, Lenders, and Servicer
Licensing Act, Mich. Comp. Laws 445.1672 et seq.; (3) breach of contract; (4) violation of the
Federal Real Estate Settlement Procedures Act (“RESPA”) and the Truth in Lending Act (“TILA”),
15 U.S.C. § 1601 et seq.; (5) violation of 15 U.S.C. § 1639; (6) quiet title pursuant to Mich. Comp.
Laws § 600.2932; (7) violation of Mich. Comp. Laws 600.3204 et seq.; (8) malpractice; and (9)
injunctive relief. In response, CitiMortgage asserts that (1) all of these claims are barred by the
doctrine of laches, (2) Collins lacks standing to challenge the sheriff’s sale, and (3) the complaint
fails to state a claim upon which relief can be granted.
CitiMortgage initially argues1 that Collins does not have standing to challenge the
foreclosure proceedings because her redemption period has expired. In Michigan, foreclosures by
advertisement are governed by statute. Conlin v. Mortgage Elec. Registration Sys., 714 F.3d 355 (6th
Cir. 2013). After a property is purchased at a sheriff’s sale, the mortgagor has a period of six months
in which to redeem the property. Mich. Comp. Laws § 600.3240(8). Once the redemption period has
expired, the purchaser of the property is vested with “all right, title, and interest” in the property.
Mich. Comp. Laws § 600.3236. At this point, a court can set aside the foreclosure sale only if “the
mortgagor has made ‘a clear showing of fraud, or irregularity.” Conlin, 714 F.3d at 359 (quoting
Schulthies v. Barron, 167 N.W.2d 784, 785 (Mich. Ct. App. 1969)). As described in Conlin, courts
are divided as to whether this issue is one of standing, see, e.g., Overton v. Mortg. Elec.
Registrations Sys., No. 284950, 2009 WL 1507342 (Mich. Ct. App. May 28, 2009), or a
determination on the merits, see, e.g., El-Seblani v. IndyMac Mortg. Svs., 510 F. App’x 425, 429-30
(6th Cir. 2013). Conlin, 714 F.3d at 359. Nevertheless, it is clear that a statutory foreclosure cannot
As CitiMortgage’s motion to dismiss will be granted on other grounds, the Court will
decline to address its laches argument.
be set aside in the absence of “a strong case of fraud or irregularity.” Sweet Air Inv., Inc. v. Kenney,
739 N.W.2d 656, 659 (Mich. Ct. App. 2007). Significantly, this claim of misconduct must relate
to the foreclosure proceeding itself. El-Seblani, 510 F. App’x at 429.
In this case, the sheriff’s sale was held on January 18, 2012 and the redemption period
expired six months later on July 18th. Collins did not file this lawsuit until September 5, 2012 - well
after the expiration of the redemption period. Therefore, the challenged foreclosure may not be set
aside without a “strong”showing of fraud or irregularity in the foreclosure proceedings. The only
pending claim which relates to some form of irregularity in the foreclosure proceedings is Count
seven, where Collins alleges that (1) CitiMortgage initiated foreclosure proceedings without giving
proper notice as required by Mich. Comp. Laws § 600.3204 and (2) the foreclosure notice failed to
comply with Mich. Comp. Laws § 600.3205a. However, Collins does not allege any facts which
support her claim of impropriety in the foreclosure proceedings. Her bare assertions - without more do not allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 570 (2007). For example, she fails to identify (1) the statutory provision
of 600.3204 which was violated by CitiMortgage, (2) the manner in which the notice was deficient,
or (3) what CitiMortgage should have done in order to comply with this statute. Her conclusory
assertions are insufficient to withstand a motion to dismiss.
Moreover, even if CitiMortgage failed to comply with § 600.3204, the foreclosure would not
be set aside. Instead it would be voidable upon a showing of prejudice to Collins. Kim v. JPMorgan
Chase Bank, N.A., 825 N.W.2d 329, 337 (2012). To make such a showing, Collins would have to
establish that “[she] would have been in a better position to preserve [her] interest in the property
absent [CitiMortgage’s] noncompliance with the statute.” Id. In fact, she has failed to advance any
facts which would indicate that CitiMortgage’s actions prevented her from preserving her interest
in the property. As a result, Collins’ challenge to the foreclosure sale under Mich. Comp. Laws §
600.3204 - Count seven of the complaint - will be dismissed.
Count One - Fraudulent misrepresentation
In Count One, Collins contends that CitiMortgage made intentional false representations
when the original loan was issued. CitiMortgage, on the other hand, maintains that the allegations
in the complaint fail to satisfy the pleading requirements of Federal Rule of Civil Procedure 9(b).
This Rule requires the following: “In alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions
of a person's mind may be alleged generally.” To satisfy the requirement of particularity, a plaintiff
is required “at a minimum, to allege the time, place, and content of the alleged misrepresentation
on which he or she relied; the fraudulent scheme; the fraudulent intent of the defendants; and the
injury resulting from the fraud.” Coffey v. Foamex L.P., 2 F.3d 157, 161-62 (6th Cir. 1993) (internal
quotation marks omitted); see also Frank v. Dana Corp. 547 F.3d 564, 570 (6th Cir. 2008)
(describing particularity requirement of Rule 9(b) as specifying (1) the alleged fraudulent
statements, (2) the speaker of the statements, (3) where and when statements were made, and (4)
why statements were fraudulent); Sanderson v. HCA-The Healthcare Co., 447 F.3d 873, 877 (6th
Cir. 2006) (Rule 9(b) requires that “plaintiff specify the who, what, when, where, and how of
According to the law in Michigan, the elements of fraudulent misrepresentation are as
(1) That defendant made a material representation; (2) that it was
false; (3) that when he made it he knew that it was false, or made it
recklessly, without any knowledge of its truth and as a positive
assertion; (4) that he made it with the intention that it should be acted
upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6)
that he thereby suffered injury.
Titan Ins. Co. v. Hyten, 817 N.W.2d 562, 567-68 (Mich. 2012). “Each of these facts must be proved
with a reasonable degree of certainty, and all of them must be found to exist; the absence of any one
of them is fatal to a recovery.” Id.
In this case, Collins complains that three misrepresentations were made: (1) the value of the
payments would fully amortize the loan, (2) the appraisal established that the value of the property
exceeded the amount of the loan, and (3) all terms and conditions had been fully disclosed as
required by law. The content of the alleged misrepresentations, alone, however, are insufficient to
satisfy Rule 9(b), and here no other supporting facts are given. Collins neither identifies the
person(s) who made the allegedly false statements, nor when or where they were made. Moreover,
she does not explain what terms or conditions were withheld or misrepresented. As a result, this
claim must also be dismissed. See, e.g., Yermian v. Countrywide Home Loans, Inc., 09-CV-12665,
2009 WL 5150882 (E.D. Mich. Dec. 17, 2009); Swarich v. OneWest Bank, F.S.B., 09-13346, 2009
WL 4041947 (E.D. Mich. Nov. 20, 2009).
Count Two - Violation of the Mortgage Brokers, Lenders, and Servicers Licensing Act
Collins maintains that CitiMortgage violated the Michigan Mortgage Brokers, Lenders, and
Servicers Licensing Act (“MBLSLA”), in violation of Mich. Comp. Laws § 445.1672 et seq., by
making an unethical agreement with an appraiser to over-inflate the value of the appraisal. As an
initial matter, this claim must fail because the MBLSLA does not provide a private right of action.
See Shaya v. Countrywide Home Loans, Inc., No. 10-13878, 2011 WL 1085617 (E.D. Mich. Mar.
22, 2011) (citing Mich. Comp. Laws § 445.1663). Moreover, even if a private right of action does
exist, Collins has failed to set forth any facts that would support her claim.
Federal Rule of Civil Procedure 8(a)(2) requires that a pleading “must contain a short and
plain statement showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “It is
significant that Rule 8(a)(2) requires a ‘showing’ of entitlement to relief, rather than merely a
‘blanket assertion.’ Langford v. Caruso, 11-CV-10219, 2011 WL 3348060 *2 (E.D. Mich. Aug.
3, 2011) (citing Twombly, 550 U.S. at 556). The statement required by Rule 8 must not only give
a defendant fair notice of the claim but also of “the grounds upon which it rests.” Twombly, 550
U.S. at 555 (citing Conley v. Gibson, 355 U.S. 41, 47 (1957)). “[A] plaintiff’s obligation to provide
the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. “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.” Hensley Mfg. v. ProPride, Inc.,
579 F.3d 603, 609 (6th Cir. 2009) (citing Iqbal, 556 U.S. at 678). “To state a valid claim, a
complaint must contain either direct or inferential allegations respecting all the material elements
to sustain recovery under some viable legal theory.” League of United Latin Am. Citizens v.
Bredesen, 500 F.3d 523, 527 (6th Cir. 2007).
Here, Collins does not assert any facts to substantiate her claim that CitiMortgage agreed
with the appraiser to over-inflate the appraisal. Her conclusory statement that an agreement existed
is insufficient to survive a motion to dismiss.
Count Three - Breach of Contract
Collins next alleges that CitiMortgage breached its agreement with her by “failing to
disclose material facts, by making false and misleading statements and by having [Collins] rely on
a grossly inflated appraisal.” She appears to refer to the original loan agreement that was executed
in 1999. The elements of a breach of contract claim under Michigan law are as follows: “(1) a
contract between the parties, (2) the terms of the contract require performance of a certain action,
(3) a breach, and (4) the breach caused injury to the other party.” Synthes Spine Co., L.P. v. Calvert,
270 F. Supp. 2d 939, 942 (E.D. Mich. 2003) (citing Webster v. Edward D. Jones & Co., 197 F.3d
815, 819 (6th Cir. 1999)). Here, Collins fails to identify (1) any terms of the agreement which were
breached, (2) which material facts were withheld, (3) what statements were false, or (4) any facts
regarding the inflation of the appraisal. Her conclusory statements are insufficient to state a claim.
As such, this claim must be dismissed.
Count Four - Violation of RESPA and TILA
Collins contends that CitiMortgage failed to give notices and disclosure, as required by the
Federal Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., and the Truth
in Lending Act (“TILA”), 15 U.S.C. § 2601 et seq. CitiMortgage disagrees, by asserting that this
claim is time-barred under the relevant statute of limitations. RESPA contains two limitation
periods. 12 U.S.C. § 2614. A claim for a violation of § 2607 or § 2608 must be brought within one
year “from the date of the occurrence of the violation,” while a claim for a violation of § 2605 must
be filed within three years. Id. Although Collins has not specified which provision was allegedly
violated by CitiMortgage, her claim is time-barred under either limitations period. The alleged
illegal acts pertain to the time when she originally executed the loan agreement in 1999. Collins
did not file her complaint until thirteen years later in 2012.
The Truth in Lending Act (“TILA”), 15 U.S.C. § 2601 et seq., also contains two limitations
periods: a one-year period for damage claims and a three-year period for rescission claims. 15
U.S.C. § 1640(e). The limitations period begins to run “when the plaintiff has a complete and
present cause of action.” Thielen v. GMAC Mortg. Corp., 671 F. Supp. 2d 947, 953 (E.D. Mich.
2009) (quoting Wike v. Vertrue, Inc., 566 F.3d 590, 593 (6th Cir. 2009)). Again, this claim refers
to those events which occurred in 1999. This lawsuit was not filed until well after the expiration
of either of these periods. As a result, Count four must be dismissed.
Count Five - Violation of HOEPA
Collins next contends that CitiMortgage violated section 1639(h) of the Home Ownership
and Equity Protection Act (“HOEPA”), which is an amendment to TILA. The one-year statute of
limitations for damages claims under TILA also applies to claims under HOEPA. Id. Therefore,
this claim is also time-barred.
Count Eight - Malpractice
Collins next brings a claim of malpractice, contending that the appraiser created a fraudulent
appraisal of the property. Under Michigan law, the limitations period for a claim of malpractice is
two years. Mich. Comp. Laws § 600.5805(6). “[A]ccrual occurs on the last day of professional
service, regardless of when the plaintiff discovers or otherwise has knowledge of the claim.”
Gebhardt v. O'Rourke, 510 N.W.2d 900, 903 (Mich. 1994). Here, Collins’ claim of malpractice is
based on an appraisal that occurred approximately in 1999. As a result, this claim must be
dismissed because it is barred by the statute of limitations.
Collins contends that equitable tolling should apply to Counts four, five, and eight because
CitiMortgage delayed in making a decision as to the status of her request for a loan modification
until after the expiration of the limitations period. In order to qualify for equitable tolling, Collins
must proffer that (1) CitiMortgage concealed the alleged misconduct which constitutes the cause
of action; (2) this concealment prevented her from discovering the cause of action within the
limitations period; and (3) until discovery, she exercised due diligence in trying to find out about
the cause of action. Egerer v. Woodland Realty, Inc., 556 F.3d 415, 422 (6th Cir. 2009). Here, any
delay by CitiMortgage in deciding whether to modify the loan did not serve to conceal the causes
of action under RESPA, TILA, or HOEPA. Collins has not alleged sufficient facts to establish that
she is entitled to equitable tolling of the relevant statutes of limitations.
Counts Six and Nine - Quiet Title and Injunctive Relief
Collins’ claims for quiet title and for injunctive relief are remedies - not separate causes of
action and therefore must be dismissed. Goryoka v. Quicken Loan, Inc., No. 11-2178, 2013 WL
1104991 (6th Cir. Mar. 18, 2013).
Moreover, the claim for quiet title appears to be based on her claim that the foreclosure
proceedings violated Mich. Comp. Law § 600.3204. This claim was dismissed above. Inasmuch
as Collins has been unable to establish a defect in the foreclosure proceedings, she is not entitled
to quiet CitiMortgage’s title. See Beulah Hoagland Appleton Qualified Personal Residence Trust
v. Emmet County Rd. Comm’n, 600 N.W.2d 698 (Mich. Ct. App. 1999).
For the reasons that have been stated above, CitiMortgage’s motion to dismiss (ECF No.
5) will be granted.
IT IS SO ORDERED.
Date: September 25, 2013
s/Julian Abele Cook, Jr.
JULIAN ABELE COOK, JR.
U.S. District Judge
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing Order was served upon counsel of record via the Court's ECF System to their respective
email addresses or First Class U.S. mail to the non-ECF participants on September 25, 2013.
s/ Kay Doaks
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