May v. CitiMortgage, Inc. et al
Filing
40
OPINION and ORDER Granting 29 MOTION for Summary Judgment with Brief and Certificate of Service, and Denying 30 MOTION to Amend/Correct Verified Complaint - Signed by District Judge Laurie J. Michelson. (JJoh)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
MICHAEL G. MAY,
Plaintiff,
v.
Case No. 12-14603
Honorable Laurie J. Michelson
Magistrate Judge Michael J. Hluchaniuk
CITIMORTGAGE, INC. and
ABN AMRO MORTGAGE GROUP, INC.,
Defendants.
OPINION AND ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY
JUDGMENT [29] AND DENYING PLAINTIFF’S MOTION TO AMEND [30]
In 2003, Plaintiff Michael May and non-party Valerie May, then married, borrowed
money from Defendant ABN AMRO Mortgage Group, Inc., and secured their promise to repay
by mortgaging their condominium. Although both Michael and Valerie agreed to make monthly
payments under the note, the note contemplated that those payments would leave a large balance,
due upon maturity in seven years. Along with the note, Michael and Valerie signed an
addendum, providing that if certain conditions were met at the time of maturity, they could
refinance the loan instead of paying the balance. By the time that the note matured, however,
Michael and Valerie had divorced. Under the judgment of divorce, Michael was awarded title to
the condominium and agreed to hold Valerie harmless for her obligations under the note. So
Michael attempted to complete the refinancing process by himself. Defendant CitiMortgage, Inc.
(ABN AMRO Mortgage Group’s successor through merger), maintained that it was necessary
for Valerie to also sign the refinancing paperwork. As such, CitiMortgage refused to refinance
the note. May thought that was a breach of their contract and so he filed this lawsuit.
Before the Court for resolution is CitiMortgage’s motion for summary judgment. (For
ease of reference, the Court will refer to both Defendants as “CitiMortgage.”) Also before the
Court is May’s motion to amend his complaint to add a Fair Credit Reporting Act claim. The
Court has been fully advised through briefing, and thus proceeds without oral argument. See E.D.
Mich. LR 7.1(f)(2). As detailed below, the plain language of the addendum required both Valerie
and Michael to sign paperwork to complete the refinancing process. Further, May’s Fair Credit
Reporting Act claim fails to state a claim for relief. As such, CitiMortgage’s motion will be
granted and May’s denied.
I.
The Court presents the events giving rise to this lawsuit from May’s perspective with
reasonable inferences drawn from the evidence in May’s favor. See Lexicon, Inc. v. Safeco Ins.
Co. of Am., 436 F.3d 662, 667 (6th Cir. 2006).
A.
In July 2003, Michael May and his then-wife, Valerie May, borrowed $264,500 from
CitiMortgage as evidenced by a promissory note (“Note”). (Dkt. 39, Jt. Exs., Ex. 1, Note.)
Michael and Valerie secured their promise to repay the loan by granting CitiMortgage the right
to foreclose on their condominium in the event of default (“Mortgage”). (Jt. Exs., Ex. 4,
Mortgage at PID 568; see also Dkt. 30-1, Proposed Am. Compl. ¶ 38.) Under the Note, even if
Michael and Valerie paid every monthly payment in full, over $200,000 in principal would
remain outstanding by the maturity date. (See Note at PID 557; See Pl.’s Resp. Ex. F at PID
312.) The Note thus provided, “If, on August 1, 2010, I still owe amounts under this Note, I will
pay those amounts in full on that date, which is called the ‘Maturity Date.’” (Note at PID 557.)
The signature blocks of both the Note and Mortgage identified each of Michael and Valerie as
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“Borrowers.” (Note at PID 559; Mortgage at PID 579.) The Mortgage additionally identified
Michael and Valerie this way: “‘Borrower’ is Michael G. May and Valerie May, Wife and
Husband and wife.” (Mortgage at PID 566 (strikethrough in original, italics indicate hand-written
correction in original).) Michael and Valerie each signed the Note and Mortgage. (Note at PID
559; Mortgage at PID 579.)
Given the “balloon” nature of the Note, Michael and Valerie each executed two
additional documents in connection with the Note and Mortgage. Most relevant here is a
document titled “Balloon Note Addendum (Conditional Right to Refinance).” (Jt. Exs., Ex. 2,
Addendum.) As its name implies, the Addendum granted Michael and Valerie the right to
“obtain a new loan” with a later maturity date should certain conditions be satisfied. Because
May’s argument stresses his satisfaction of these conditions, the Court reproduces them in some
detail:
1. CONDITIONAL RIGHT TO REFINANCE
At the Maturity Date of the Note and the Security Instrument (the
“Maturity Date”), I will be able to obtain a new loan (“New Loan”) with a new
Maturity Date of August 1, 2033, and with an interest rate equal to the “New Note
Rate” determined in accordance with Section 3 below if all the conditions
provided in Section 2 and 5 below are met (the “Conditional Refinancing
Option”). . . .
2. CONDITIONS TO OPTION
If I want to exercise the Conditional Refinancing Option at maturity,
certain conditions must be met as of the Maturity Date. These conditions are: (a) I
must still be the owner of the Property subject to the Security Instrument (the
“Property”); (b) I must be current in my monthly payments and cannot have been
more than 30 days late of any of the 12 scheduled monthly payments immediately
preceding the Maturity Date; (c) the New Note Rate cannot be more than five
percentage points above the Note Rate; and (d) I must make a written request to
the Note Holder as provided in Section 5 below.
***
3
5. EXERCISING THE CONDITIONAL REFINANCING OPTION . . . .
If I meet the conditions of Section 2 above, I may exercise the Conditional
Refinancing Option by notifying the Note Holder no later than 45 calendar days
prior to the Maturity Date. The Note Holder will calculate the fixed New Note
Rate . . . . I will then have 30 calendar days to provide the Note Holder with
acceptable proof of my required ownership. Before the Maturity Date, the Note
Holder will advise me of the new interest rate (the New Note Rate), new monthly
payment amount, and a date, time, and place at which I must appear to sign any
documents required to complete the required refinancing. . . .
(Addendum at PID 561.) Each of Michael and Valerie signed the Addendum as a “Borrower.”
(Addendum at 561.)
The second ancillary document, titled “Balloon Rider (Conditional Right to Refinance)”
sets forth identical conditions—the Rider is to the Mortgage as the Addendum is to the Note.
(See generally, Jt. Exs. Ex. 3, Rider.) Each of Michael and Valerie signed the Rider as a
“Borrower.” (Rider at PID 564.)
B.
In April 2009, Michael and Valerie divorced. (See Dkt. 31, Pl.’s Resp. Ex. B, Divorce J.)
Regarding their home, the Consent Judgment of Divorce assigned Michael title and provided that
he would indemnify Valerie from her “obligations” under the mortgage:
IT IS FURTHER ORDERED that Michael G. May is awarded as his sole and
separate property, free and clear of any interest, right, title or claim of Valerie
May, the following: . . .
The marital residence located [on] . . . N. River Woods Drive, Canton, Michigan
48188, MI, subject to the mortgage and equity line of credit thereon. Michael G.
May shall be responsible for the timely payment of the mortgage and home equity
lines of credit monthly statements and shall indemnify and hold Valerie May
harmless from obligations. Valerie May shall execute and deliver to Michael G.
May a recordable Quit Claim Deed transferring her interest in the marital
residence to him; . . . .
(Divorce J. at PID 367.)
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C.
In June 2010, CitiMortgage sent May a letter asking whether he intended to refinance the
loan. (Pl.’s Resp. Ex. I, May Aff. ¶ 4.) May informed CitiMortgage that he intended to refinance
the loan. (May Aff. ¶¶ 5–6.) And, on June 24, May “sent to CitiMortgage the second set of
documentation setting forth [his] intentions to exercise the option under the” Note. (May Aff.
¶ 7.)
“Thereafter” (the timing is unclear), May received a balloon note modification agreement
from CitiMortgage. (May Aff. ¶ 8.) Apparently, the agreement identified Michael and Valerie as
married, which led May to contact Susan McNamara at CitiMortgage to inform her of the
divorce and his sole ownership of the property. (See May Aff. ¶ 10.) McNamara then prepared a
second balloon note modification agreement, but “it still identified the Borrowers as Michael G.
May, a married man, and Valerie May, a married woman.” (May. Aff. ¶ 12.)
On July 27, 2010, May faxed CitiMortgage a copy of the Consent Judgment of Divorce.
(See Pl.’s Resp. Ex. D.) The fax was to McNamara’s attention and the cover letter stated, “Here
is a copy of my divorce decree, [i]f you have any questions or concerns I can be reached at . . . .”
(Pl.’s Resp. Ex. D. at PID 436–37.) The record does not reflect what CitiMortgage did in
response to this fax.
On August 1, 2010, the Note matured and the outstanding loan balance became due. (See
Note at PID 557.) The unpaid principal was approximately $221,000. (See Pl.’s Resp. Ex. E at
PID 440.)
On August 18, 2010, May sent another fax to CitiMortgage, this one directed to a
“Marilyn Cashman.” (Pl.’s Resp. Ex. D at PID 438.) May’s cover letter stated, “Here is a copy of
the quick Claim Deed [sic] and a copy of my divorce decree as requested to start my
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modification. On 8/18/2010 I will be out of the country until Sep 1, 2010 during this time I will
not have phone access.” (Id.)
A week later, CitiMortgage wrote a letter to both Michael and Valerie and sent it to the
River Woods Drive address. (Pl.’s Resp. Ex. E PID 440.) The August 25 letter stated,
We have processed your election to reset your balloon mortgage in accordance
with your mortgage documents. This letter will provide you with the information
and instructions you need to reset your mortgage. We have enclosed two originals
of a Balloon Loan Modification document. Instruction for completing these
documents appear on the next page
***
What you must do to reset your mortgage
1.
All Borrowers listed on the enclosed Balloon Loan Modification must date
and sign copies of the Document and the signatures must be notarized. Sign your
name exactly as it is typed. All signatures must be witnessed. . . .
2.
Return both of the signed and notarized Balloon Loan Modifications and a
check made payable to CitiMortgage, Inc. in the amount of $1,075.64 . . . for the
transaction costs and the accrued interest and Escrow payment to the following
address so that we receive the documents and the checks no later than
09/08/10 . . . .
***
What we do after we receive the documents and your check
1.
We verify that both of the Balloon Loan Modifications have been properly
signed, dated and notarized.
***
Should you decide not to reset your mortgage, you must pay your mortgage in full
on or before 09/08/10. . . . Also, on the top of one of the Balloon Loan
Modifications, please [1] [w]rite in the following words: “I/We do not want to
reset my/our mortgage”
(Pl.’s Resp. Ex. E at PID 440–42.)
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The document referred to in the letter, titled “Balloon Loan Modification (Pursuant to the
Terms of the Balloon Note Addendum and Balloon Rider)” (“Loan Modification Document”),
identified both Michael and Valerie as “Borrower”:
TWO ORIGINAL BALLOON LOAN
EXECUTED BY THE BORROWER . . .
MODIFICATIONS
MUST
BE
This Balloon Loan Modification (“Modification”), entered into effective as of the
1st day of August, 2010, between Michael G. May, a single person, and Valerie
May, a single person (“Borrower”) and CitiMortgage, Inc. (“Lender”), amends
and supplements (1) the Mortgage[] . . . dated 07/09/03[;] . . . and . . . the Balloon
Note bearing the same date . . . .
(Jt. Exs. Ex. 7, Loan Modification Doc. at PID 582.) The Loan Modification Document further
provided, “The Borrower promises to make monthly payments of principal and interest of U.S.
$1,334.05, beginning on the 1st day of September, 2010, and continuing thereafter on the same
day of each succeeding month until principal and interest are paid in full.” (Loan Modification
Doc. at PID 583.) The Loan Modification Document included a space for “Michael G. May” as
“Borrower” to sign and a space for “Valerie May” as “Borrower” to sign. (Id.) It also included a
space for the signature of “Colleen Nentwig,” a CitiMortgage vice president. (Id.)
On or around September 3, 2010, May sent the Loan Modification Document back to
CitiMortgage. (See Pl.’s Resp. Ex. C at PID 434; Compl. ¶ 10.) The Loan Modification
Document included his signature. (Pl.’s Resp. Ex. C at PID 434.) But it did not include Valerie’s.
(Id.) And Nentwig (or anyone else at CitiMortgage) never signed the Loan Modification
Document. (See Defs.’ Mot. Ex. 4, Schneider Aff. ¶ 11.) Three days later, May wrote a check to
CitiMortgage to cover the refinancing fees referenced in the August 25, 2010 letter. (Pl.’s Resp.
Ex. F.)
May asserts that CitiMortgage “subsequently ‘lost’ the documents [he] was asked to sign
and return.” (Compl. ¶ 11; see also Dkt. 30-1, Proposed Am. Compl. ¶ 13.) Nonetheless, on
7
September 15, 2010, CitiMortgage wrote another letter to Michael and Valerie and sent it to
May’s River Woods address. (See Def.’s Mot. Ex. 6.) The letter informed,
In order to move forward with the reset modification process, additional action on
your part is required as noted below.
[x] Valerie May must also sign the Borrower Intention Statement/Request form.
Please have this individual sign and resubmit the form.
[x] Valerie May must also sign the Balloon Loan Modification documents or
submit a Release of Liability.
[] Notary page is incorrect/incomplete. Please correct/complete and return the
Modification documents.
If we do not receive the requested documents by 09/29/10, then we cannot reset
your mortgage and you will be required to pay your mortgage in full on or before
09/29/10.
(Defs.’ Mot. Ex. 6.)
At some point (apparently after this September 15 letter) CitiMortgage responded to
May’s “recent inquiry regarding the process to remove one or more of the original borrowers
from your mortgage loan.” (Defs.’ Mot. Ex. 3.) CitiMortgage’s letter explained, “[t]o initiate [the
Release of Liability] process, you must complete the enclosed application package.” (Id.) May
submitted the enclosed “Release of Liability” application to CitiMortgage sometime after
November 8, 2010. (See Pl.’s Resp. at 8 & Ex. G.) A copy of the application is not in the record.
A $900 fee acknowledgment form is in the record. It is signed only by Michael. A line provided
for Valerie’s signature is blank. (Pl.’s Resp. Ex. G at PID 447.)
May asserts that CitiMortgage lost his Release of Liability application and the
accompanying $900 fee. (Compl. ¶¶ 11, 16; see also Proposed Am. Comp. ¶ 13.) He says that
CitiMortgage employees have told him that his “reset application including the check for
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$900.00 was ‘sitting in the drawer’ of an employee of Defendant CitiMortgage, rather than being
processed[.]” (Proposed Am. Compl. ¶ 15.)
In January 2011, May wrote a letter to Vikram Pandit at CitiMortgage. It begins, “I need
your Help! I have been a customer with CitiMortgage for 7 years and I have never missed a
mortgage payment. I am so frustrated with the way my account is being handled. Without going
into detail please look up my account and you will understand what I have been going
through . . . .” (Pl.’s Resp. Ex. H.) May then detailed his efforts to refinance his loan. (Id.)
May avers that even after the August 2010 maturity date of the Note, he continued to
make monthly mortgage payments to CitiMortgage totaling approximately $13,000. (Pl.’s Resp.
at 8.) CitiMortgage either held the payments but failed to apply them to the loan balance, or used
them to pay for property insurance that May was fully capable of paying on his own. (Pl.’s Resp.
at 8; Proposed Am. Compl. ¶ 20.)
In August 2012, CitiMortgage offered May, individually, a loan modification. (Proposed
Am. Compl. ¶¶ 41–42.) According to May, the modification contemplated a principal balance
approximately $23,000 more than that the principal balance on the Note at the time of maturity.
(Id. ¶ 42.) Further, May “fundamentally objected” to a loan modification in part because “it was
predicated upon [him] . . . being in default[.]” (Id. ¶ 43.)
In September 2012, May filed this lawsuit.
D.
May’s Complaint asserts that CitiMortgage is liable for breach of contract. (See Compl.
¶ 16.) His theories are several. Primarily, it appears, May maintains that CitiMortgage is in
breach because it failed to refinance his loan even though he met all of the refinance conditions
set forth in the Addendum (and Rider). (See Compl. ¶ 16; Pl.’s Resp. at 12–14.) The Complaint
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further alleges that CitiMortgage is in breach because it “los[t]” May’s paperwork, which he
submitted twice, and lost the Release of Liability application and the accompanying $900
payment. (Compl. ¶ 16; Pl.’s Resp at 14–17.) May further claims that CitiMortgage breached its
contractual obligations to him by returning his mortgage payments, forcing him to attend credit
counseling, attempting to charge him a higher interest rate, adding $23,000 to the outstanding
principal, and failing to apply over $13,000 in payments to the loan balance. (Compl. ¶ 16.)
In March 2013, CitiMortgage sought to join Valerie as a necessary party. (Dkt. 10.) The
district judge to whom this case was previously assigned denied the motion. (Dkt. 22.)
In May 2014, CitiMortgage moved for summary judgment. (Dkt. 29.)
II.
“The court shall grant summary judgment if the movant 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 noted at the outset, in deciding if CitiMortgage has carried this burden, the
Court views the evidence, and any reasonable inferences drawn from the evidence, in the light
most favorable to the non-movant, here May. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986).
A.
Although May’s Complaint and summary-judgment response could be clearer, it appears
that May’s breach of contract claim is premised on the Addendum. May says he met every
condition set forth in the Addendum and “did all he could to perfect his right to reset his
mortgage balance under the Balloon Note Addendum.” (Pl.’s Resp. at 11–12.) In contrast, says
May, CitiMortgage negligently failed to process both the Loan Modification Document and the
Release of Liability application. (Pl.’s Resp. at 15–17.) May says, “No matter what [I] did,
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[CitiMortgage] did everything it could to impede the implementation of the Balloon Loan
Modification.” (Pl.’s Resp. at 18.)
CitiMortgage responds that it had no obligation to refinance May’s loan “where a
necessary party, Ms. May, had not signed the document. The [Loan Modification Document]
involved a reset of the 2003 Note, which required signatures by all parties to the Note, including
M[s.] May.” (Defs.’ Mot. at 8.)
The Court agrees with CitiMortgage. Although May repeatedly stresses that he met the
conditions set forth in the Addendum, he overlooks critical language in that agreement requiring
Valerie’s signature. In particular, the Addendum said,
5. EXERCISING THE CONDITIONAL REFINANCING OPTION . . . .
If I meet the conditions of Section 2 above, I may exercise the Conditional
Refinancing Option by notifying the Note Holder no later than 45 calendar days
prior to the Maturity Date. The Note Holder will calculate the fixed New Note
Rate . . . . I will then have 30 calendar days to provide the Note Holder with
acceptable proof of my required ownership. Before the Maturity Date, the Note
Holder will advise me of the new interest rate (the New Note Rate), new monthly
payment amount, and a date, time, and place at which I must appear to sign any
documents required to complete the required refinancing. . . .
(Addendum at PID 561 (emphasis added).) The emphasized language unambiguously provides
that to “complete the require refinancing,” there may be documents that must be signed. And “I”
undoubtedly refers to “Borrower” and the Addendum identifies both Michael and Valerie as a
“Borrower.” To prevail, May would have to show that “I” meant only him, not Valerie. But this
is not a plausible reading of the Addendum. See Hastings Mut. Ins. Co. v. Safety King, Inc., 778
N.W.2d 275, 281 (Mich. Ct. App. 2009) (“[C]ontracts are to be interpreted to avoid absurd or
unreasonable conditions and results”).
That the Addendum required Valerie to sign documents to complete the refinancing is
entirely consistent with CitiMortgage’s position during the refinance process. The August 25,
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2010 letter that CitiMortgage wrote to both Michael and Valerie provided that “All Borrowers
listed on the enclosed Balloon Loan Modification must date and sign copies of the Document
and the signatures must be notarized.” (Pl.’s Resp. Ex. E at PID 441.) The enclosed Loan
Modification Document provided that it had to be signed by the “Borrower” and defined that
term as “Michael G. May, a single person, and Valerie May, a single person.” (Loan
Modification Doc. at PID 582.) The signature page of the Loan Modification Document included
a place for a CitiMortgage representative, Michael, and Valerie to sign. (Loan Modification Doc.
at 582.) When only May signed the Loan Modification Document, CitiMortgage sent May a
letter informing him that “Valerie May must also sign the Balloon Loan Modification documents
or submit a Release of Liability.” (Defs.’ Mot. Ex. 6.) CitiMortgage subsequently sent May a
Release of Liability application. Although a copy of the application is not in the record, nothing
suggests that Valerie ever signed it. To the contrary, the $900 fee acknowledgment form is
signed only by Michael despite a spot for Valerie to sign. (Pl.’s Resp. Ex. G at PID 447.)
May appears to have two rebuttals to the conclusion that he and CitiMortgage did not
reach an agreement to refinance the terms of the Note. First, May stresses that, at the time he
sought refinancing, he was divorced, held title to the condominium in his name only, agreed to
indemnify and hold Valerie harmless for her obligations under the Note, and, on more than one
occasion, proved these facts to CitiMortgage. But all of this misses the point. May and Valerie
each signed the Note. (Note at PID 559.) And the Note provided,
If more than one person signs this Note, each person is fully and personally
obligated to keep all of the promises made in this Note, including the promise to
pay the full amount owed. Any person who is a guarantor, surety or endorser of
this Note is also obligated to do these things. Any person who takes over these
obligations, including the obligations of a guarantor, surety or endorser of this
Note, is also obligated to keep all of the promises made in this Note. The Note
Holder may enforce its rights under the Note against each person individually or
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against all of us together. This means that any one of us may be required to pay all
of the amounts owed under the Note.
(Note at PID 558 (emphases added).) May does not explain why CitiMortgage’s right to hold
either Michael or Valerie responsible for their agreement to repay the loan should be stripped by
an agreement between only Michael and Valerie. He offers no explanation for why, under the
quoted language, CitiMortgage would only be able to seek payment from Michael even if, under
a hypothetical divorce decree, all the marital property went to Valerie. More importantly, the
plain language of the Addendum required both Michael and Valerie to sign documents to
complete the refinancing irrespective of their marital status. The Mays’ agreement for Michael to
take on Valerie’s responsibilities under the Note does not rewrite a term agreed upon by Michael,
Valerie, and CitiMortgage, i.e., that each of Michael and Valerie may be required to sign
documents to “complete the require refinancing.” (See Addendum at PID 561.)
May also stresses that CitiMortgage was negligent in processing the paperwork to
refinance and to release Valerie from the Note. Even so, May has not shown that CitiMortgage’s
negligence caused Valerie not to sign the required documents. See Schultz v. Consumers Power
Co., 506 N.W.2d 175, 177 (Mich. 1993) (providing that a “requisite element[] of a negligence
cause of action” is that “the breach was a proximate cause of the damages suffered”). That is,
even if CitiMortgage lost May’s paperwork or it is sitting in someone’s desk drawer, May has
not shown that absent those negligent acts, he would have obtained the refinancing. And, as just
explained, he cannot make this showing because he has not produced evidence that he complied
with the Addendum’s requirement for Valerie to sign required refinance documents.
In short, the Addendum is clear: “Before the Maturity Date, the Note Holder will advise
me [Michael/Valerie] of the new interest rate (the New Note Rate), new monthly payment
amount, and a date, time, and place at which I [Michael/Valerie] must appear to sign any
13
documents required to complete the required refinancing.” And where the language is
unambiguous, the Court applies the plain language without aid of a jury. See In re Smith Trust,
745 N.W.2d 754, 757–58 (Mich. 2008) (“[I]t is a court’s obligation to determine the intent of the
parties by examining the language of the contract according to its plain and ordinary meaning. If
the contractual language is unambiguous, courts must interpret and enforce the contract as
written, because an unambiguous contract reflects the parties’ intent as a matter of law.”
(footnotes omitted)). That plain language required Valerie’s signature. It follows that May’s
breach of contract claim fails as a matter of law.
B.
May’s Complaint mentions “promissory estoppel”—exactly once and in the relief
section. (Compl. at PID 13.) May does not mention that legal theory in his summary-judgment
response. This is despite CitiMortgage’s assertion in its motion that the Complaint does not plead
a promissory estoppel claim and, even if it had, it is barred under Michigan’s statute of frauds.
(Defs.’ Mot. at 6.) May’s proposed amended complaint also does not mention promissory
estoppel. Given every sign from May that he has elected to abandon a promissory estoppel claim
(if there was one in the first place), the Court finds the claim to be forfeited. Cf. United States v.
Johnson, 440 F.3d 832, 846 (6th Cir. 2006) (“[I]t is a settled appellate rule that issues adverted to
in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed
waived.”).1
1
True, the district judge to whom this case was previously assigned said, “The court
notes that plaintiff’s claims are brought under theories of promissory estoppel and breach of
contract for the reinstatement of the balloon loan Modification Agreement. For instance, plaintiff
claims he reasonably relied on the Yoho letter stating ‘Citimortgage is not requiring that Valerie
May sign the modification’ in forming his expectation that he could refinance the loan without
his ex-wife.” (Dkt. 22, Order on Mot. for Joinder at 5.) The Court has examined the one page of
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III.
After discovery—and after CitiMortgage moved for summary judgment—May filed a
motion to amend his Complaint. (Dkt. 30, Pl.’s Mot. to Amend.) The proposed amended
complaint does not provide material information about the refinancing process not accounted for
above. (See Proposed Am. Compl. ¶¶ 1–25.) But it does attempt to plead a new cause of action:
that CitiMortgage violated the Fair Credit Reporting Act (“FCRA”). May’s theory is that
CitiMortgage falsely reported to credit agencies that he is in default “or in a Mortgage
foreclosure situation,” (id. ¶ 21), and that this false information has, among other things, lowered
his credit rating and made it difficult for him to obtain financing both from CitiMortgage and
other lenders, (id. ¶¶ 23, 34–35).
Federal Rule of Civil Procedure 15(a)(2) provides that leave to amend should be “freely
given when justice so requires.” But a court may deny leave based on undue delay, bad faith,
dilatory motive, or futility. Foman v. Davis, 371 U.S. 178, 182 (1962). Futility is assessed under
the Federal Rule of Civil Procedure 12(b)(6) standards. See Rose v. Hartford Underwriters Ins.
Co., 203 F.3d 417, 421 (6th Cir. 2000).
Although an argument could be made for undue delay resulting in prejudice (and
CitiMortgage has made one (Dkt. 33, Defs.’ Resp. to Mot. to Amend at 7–9)), the Court does not
address any such argument because it agrees with CitiMortgage that May’s FCRA claim is futile.
the Yoho letter—which was not part of the summary-judgment briefing—and concludes that the
letter was written sometime around October 2012 in apparent response to the August 2012 loan
modification that CitiMortgage offered to May, individually. (See Proposed Am. Compl. ¶ 41,
Ex. L; Dkt. 13, Pl.’s Resp. to Mot. for Joinder, Ex. 2 at PID 150.) But May has “fundamentally
objected” to this modification as it would require him to admit default under the Note. (Proposed
Am. Compl. ¶ 43.) The Court, therefore, does not believe that May intended the Yoho letter to be
a basis for a promissory estoppel claim.
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May’s proposed amended complaint does not specify a provision of the FCRA that
CitiMortgage allegedly violated. Subsection 1681-s2(a) of the Act prohibits transmitting false
information to a credit reporting agency; but there is no private right of action under that
subsection. Boggio v. USAA Fed. Sav. Bank, 696 F.3d 611, 615 (6th Cir. 2012). Defendants have
pointed this out to May (see Defs.’ Resp. at 4), and, in response, May points out that the court in
Boggio found a private right of action under § 1681s-2(b), (Dkt. 36, Pl.’s Reply to Defs.’ Resp.
to Mot. to Amend at 5).
But May has not pled a cause of action under § 1681s-2(b). As an initial matter, it
appears that May has only alleged that he contacted CitiMortgage (via the letter to Vikram
Pandit) about the allegedly false reporting. (Proposed Am. Compl. ¶ 37; see also Pl.’s Reply at
4–5.) But to state a cause of action under § 1681s-2(b), May needed to plead that he contacted
the credit reporting agency. Brown v. Wal-Mart Stores, Inc., 507 F. App’x 543, 547 (6th Cir.
2012) (“Brown’s allegations that he directly informed Citibank and GEMB did not obligate them
to investigate. . . . Directly contacting the furnisher of credit information does not actuate the
furnisher’s obligation to investigate a complaint.” (citation omitted)). It is true that May alleges
that CitiMortgage “knew full well [that] Plaintiff was disputing the position being taken on the
credit reports of Plaintiff with all credit reporting agencies.” (Proposed Am. Compl. ¶ 46.) But
this conclusory allegation—failing to identify which agencies were contacted, when they were
contacted, or what was said—does not permit the plausible inference that CitiMortgage is liable
under § 1681s-2(b). Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). And even if it did, May
makes no allegation that any credit reporting agency ever contacted CitiMortgage about the
dispute. Boggio, 696 F.3d at 615–16 (“In light of § 1681s–2(c)’s express limits, consumers may
step in to enforce their rights only after a furnisher has received proper notice of a dispute from a
16
CRA.”); Brown, 507 F. App’x at 547 (“A private cause of action against a furnisher of
information does not arise until a consumer reporting agency provides proper notice of a
dispute.”).
May’s Fair Credit Reporting Act claim is thus futile.
IV.
For the reasons stated, Defendants ABN AMRO Mortgage Group, Inc. and CitiMortgage,
Inc.’s Motion for Summary Judgment (Dkt. 29) is GRANTED and Plaintiff Michael May’s
Motion Seeking Court Approval to File First Amended Complaint (Dkt. 30) is DENIED. A
separate judgment dismissing the Complaint will follow.
SO ORDERED.
s/Laurie J. Michelson
LAURIE J. MICHELSON
UNITED STATES DISTRICT JUDGE
Dated: December 17, 2014
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing document was served on the
attorneys and/or parties of record by electronic means or U.S. Mail on December 17,
2014.
s/Jane Johnson
Case Manager to
Honorable Laurie J. Michelson
17
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