Davis et al v. Countrywide Home Loans

Filing 17

OPINION AND ORDER granting 10 Motion to Dismiss. Signed by District Judge Patrick J. Duggan. (MOre)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
PHILIP DAVIS JR. and
JESSIE OGLETREE,
Plaintiffs,

Civil Case No. 2:12-cv-15284
Honorable Patrick J. Duggan

v.
COUNTRYWIDE HOME
LOANS a/k/a BANK OF AMERICA,1
Defendants.
______________________________/
OPINION AND ORDER GRANTING DEFENDANTS’ MOTION TO
DISMISS
Plaintiffs initiated this lawsuit against Defendants on November 30, 2012,
asserting damages related to separate home loan mortgages. Presently before the
Court is Defendants’ motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), filed August 8, 2013. The motion has been fully briefed. On
September 13, 2013, this Court issued a notice informing the parties that it is
dispensing with oral argument with respect to the motion pursuant to Eastern
District of Michigan Local Rule 7.1(f). For the reasons that follow, the Court

1

According to Defendants, contrary to Plaintiffs’ caption, Countrywide
Home Loans is an existing and distinct corporate entity from Bank of America,
N.A. Defendants read Plaintiffs’ lawsuit as naming both entities as defendants.
(See Defs.’ Mot. n. 1.)

grants Defendants’ motion.
I.

Applicable Standard of Review
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)

tests whether a legally sufficient claim has been pleaded in a complaint, and
provides for dismissal when a plaintiff fails to state a claim upon which relief may
be granted. Fed. R. Civ. P. 12(b)(6). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.”’ Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct.
1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 555, 570, 127 S.
Ct. 1955, 1974 (2007)). A claim is facially plausible when a plaintiff pleads
factual content that permits a court to reasonably infer that the defendant is liable
for the alleged misconduct. Id. (citing Twombly, 550 U.S. at 556, 127 S. Ct. at
1965). This plausibility standard “does not impose a probability requirement at the
pleading stage; it simply calls for enough fact[s] to raise a reasonable expectation
that discovery will reveal evidence of illegal [conduct].” Twombly, 550 U.S. at
556, 127 S. Ct. at 1965.
When assessing whether a plaintiff has set forth a “plausible” claim, the
district court must accept all of the complaint’s factual allegations as true. Ziegler
v. IBP Hog Mkt., Inc., 249 F.3d 509, 512 (6th Cir. 2001). Even so, “the pleading
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must contain more . . . than . . . a statement of facts that merely creates a suspicion
[of] a legally cognizable right of action.” Twombly, 550 U.S. at 555, 570, 127 S.
Ct. at 1965. A plaintiff has the duty to provide “more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do . . . .” Id.
Therefore, “[t]hreadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S. Ct. at
1949 (citing Twombly, 550 U.S. at 555, 127 S. Ct. at 1965). While the court’s
analysis generally is restricted to the factual allegations within the complaint, the
court also may consider: (1) documents referenced in the pleadings that are central
to the plaintiff’s claims, (2) matters of which a court can properly take notice, (3)
public documents, and (4) decisions of government agencies. Tellabs, Inc. v.
Makor Issues & Rights Ltd., 551 U.S. 308, 322-23, 127 S. Ct. 2499, 2509 (2007);
Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001).
Compared to formal pleadings drafted by lawyers, a generally less stringent
standard is applied when construing the allegations pleaded in a pro se complaint.
Haines v. Kerner, 404 U.S. 519, 520-21, 92 S. Ct. 594, 596 (1972). Even so, pro
se plaintiffs must still provide more than bare assertions of legal conclusions.
Grinter v. Knight, 532 F.3d 567, 577 (6th Cir. 2008) (citing Scheid v. Fanny
Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988)).
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II.

Factual and Procedural Background
When Plaintiffs initiated this lawsuit, they first filed a form “Civil

Complaint.” Except for completing the case caption and contact information and
signing and dating their pleading, Plaintiffs provided no further information and/or
allegations on the form. Plaintiffs did attach numerous exhibits to their
“Complaint.” However all but two of the exhibits were articles generally
discussing Defendants or the home loan foreclosure crisis; and the two exhibits
that related specifically to either Plaintiff did not provide facts sufficient to state
any claim against Defendants. As a result, this Court issued an order requiring
Plaintiffs to file an amended complaint complying with Federal Rule of Civil
Procedure 8.
Plaintiffs filed an Amended Complaint on January 22, 2013. According to
the Amended Complaint, in 2003, Plaintiff Philip Davis Jr. (“Davis”) and his wife
obtained a loan from “Rock Financial a/k/a Quicken Loans” to purchase a home in
Redford, Michigan. Davis claims that he and his wife were misled regarding the
amount of the loans’ monthly payments, which they discovered before closing.
Davis believes that his race (African American) caused the lender to “lump [them]
in the PMI insurance racket to steal more of [their] hard earned money.” (Am.
Compl. at 1.)
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The Amended Complaint indicates that the loan was transferred to
Countrywide Home Loans (“CHL”) at some point in time and that Davis and his
wife were unable to make the monthly payment obligation and eventually filed for
Chapter 13 bankruptcy. Apparently in the bankruptcy proceedings, the monthly
payments Davis and his wife were required to make increased even more. Davis
asserts that “Defendants did unilaterally and contrary to the sign [sic] agreement
raise the monthly payments on the home loan.” (Id. at 2 ¶ 1.) Davis believes that
he and his wife were taken advantage of because of their race. (Id. ¶ 6.)
The Amended Complaint refers specifically to Plaintiff Jessie Ogletree
(“Ogletree”) in only two brief paragraphs:
8.

Plaintiff[] Jessie Ogletree Jr. states that the Bank cause [sic]
him and his wife to lose their dream house that they had saved
up for years to purchase.

9.

Mr. Ogletree claims that the bank did all they could to prevent
them from modifying their loan in order to save their home.
The Bank even had real estate persons attempting to sale [sic]
the home before all options were exhausted.

(Am. Compl.) In the motion to dismiss, Defendants inform the Court of the
specific facts concerning Plaintiffs’ mortgage loans.
On May 2, 2003, Davis and his wife obtained a loan in the amount of
$159,500.00 from Quicken Loans. (See Defs.’ Mot. Ex. C.) The loan was secured

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by a mortgage on real property commonly known as 9128 Nathaline, Redford,
Michigan. (Id.) The mortgage designated MERS as the mortgagee solely as
nominee for the lender and its successors and assigns. (Id.) The mortgage was
recorded with the Wayne County Register of Deeds on June 25, 2003. (Id.)
Davis and his wife refinanced the mortgage loan on January 11, 2008,
securing a $165,886.00 loan from Security Atlantic Mortgage Co., Inc. (“Security
Atlantic”) on that date. (Defs.’ Mot. Ex. E.) The loan was secured by a mortgage
on the property. (Id.) In January 2008, CHL began servicing the loan. (See id. Ex.
I at 19.) The mortgage was assigned to Bank of America on July 2, 2012, and the
assignment was recorded in the Wayne County Registry of Deeds on July 5, 2012.
(Id. Ex. F.)
Davis filed for Chapter 13 bankruptcy in the United States Bankruptcy Court
for the Eastern District of Michigan on June 29, 2004. (Id. Ex. G.) On March 20,
2008, the Chapter 13 Trustee Final Report and Account was issued and, on April
23, 2008, the bankruptcy was closed by order of the bankruptcy court. (Id. and Ex.
H.) The payments Davis disputes in the Amended Complaint are included in the
Trustee’s report and that report was accepted by the bankruptcy court through
closure of the bankruptcy case. (Id.)
On May 1, 2008, soon after the bankruptcy closed, Davis, with the
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assistance of counsel, filed a lawsuit against CHL, Rock Financial Corporation,
and Security Atlantic in the Circuit Court for Wayne County, Michigan (hereafter
“state court action”). (Defs.’ Mot. Ex. I.) In his complaint, Davis asserted claims
of wrongful foreclosure, breach of contract, discrimination, and violations of the
Michigan Consumer Protection Act, Michigan’s Civil Rights Act, and the federal
Fair Debt Collection Practices Act. (See id.) The allegations in the state court
action overlap those in the pending Amended Complaint.
On November 7, 2008, the Honorable Gershwin Drain (then sitting in the
Wayne County Circuit Court) granted CHL’s motion for summary disposition on
all counts of the state court action. (See Defs.’ Mot. Ex. J.)
On November 20, 2003, Ogletree and his wife obtained a loan in the amount
of $204,000 from Quicken Loans Inc. (“Quicken Loans”) that was secured by a
mortgage on real property commonly known as 28835 Murray Crescent Drive,
Southfield, Michigan (“Ogletree mortgage”). (Defs.’ Mot. Ex. A.) The Ogletree
mortgage was recorded with the Oakland County Register of Deeds on December
3, 2003. (Id.) Mortgage Electronic Registration Systems, Inc. (“MERS”) was
identified on the Ogletree mortgage as the mortgagee solely as nominee for the
lender and the lender’s successors and assigns. (Id.)
Ogletree presumably defaulted on the loan and foreclosure proceedings
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ensued. According to a Sheriff’s Deed recorded with the Oakland County Register
of Deeds on December 21, 2009, a sheriff’s sale was conducted on December 8,
2009, with MERS purchasing the property for $213,074.13. (Id. Ex. B.)
III.

Applicable Law and Analysis
A.

Ogletree

As stated in the previous section and in this Court’s order requiring Plaintiffs
to file an amended complaint, to satisfy Rule 8’s pleading requirements, a plaintiff
must plead factual content that permits the court to reasonably infer that the named
defendant[s] is liable for the alleged misconduct. Iqbal, 556 U.S. at 678, 129 S. Ct.
at 1949 (citing Twombly, 550 U.S. at 556, 127 S. Ct. at 1965). Plaintiffs plead no
facts suggesting a relationship between Ogletree and Defendants to render
Defendants liable for any alleged misconduct relating to the Ogletree loan,
mortgage, or property. Ogletree and his wife secured their mortgage loan from
Quicken Loans. MERS was the mortgagee and purchaser of the mortgaged
property at the sheriff’s sale. Even if some unpleaded relationship existed between
Ogletree and Defendants, Ogletree’s claim that he should have received a
modification of the mortgage loan fails as a matter of law for the reasons set forth
in Defendants’ motion to dismiss.

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B.

Davis

Davis’ current claims concern matters that were already decided– or should
have been raised– in the state court action. They are thus barred by the doctrine of
claim preclusion or res judicata. This doctrine “bars a subsequent action between
the same parties when the evidence or essential facts are identical.” Sewell v. Clean
Cut Mgmt., Inc., 463 Mich. 569, 575, 621 N.W.2d 222, 225 (2001). For res
judicata to apply, the following conditions must be met:
(1) there has been a prior decision on the merits, (2) the issue was
either actually resolved in the first case or could have been resolved in
the first case if the parties, exercising reasonable diligence, had
brought it forward, and (3) both actions were between the same parties
or their privies.
Paige v. City of Sterling Heights, 476 Mich. 495, 522 n. 46, 720 N.W.2d 219, 234
n. 46 (2006); see also Sewell, 463 Mich. at 575, 621 N.W.2d at 225. Michigan
courts apply this doctrine broadly to bar “not only claims already litigated, but
every claim arising from the same transaction that the parties, exercising
reasonable diligence, could have raised but did not.” Sewell, 463 Mich. at 575, 621
N.W.2d at 225.
Davis alleges the same misconduct in the Amended Complaint that he
charged in the state court action. (Compare Am. Compl. with Defs.’ Mot. Ex. I.)
The state court granted summary disposition to CHL with respect to Davis’ claims.
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CHL is named as a defendant in both actions. While Bank of America was not
named in the state court action, Michigan courts allow a party to assert the doctrine
of res judicata defensively even when that party is not in privity with a party to the
prior action. See Monat v. State Farm Ins. Co., 469 Mich. 679, 695, 677 N.W.2d
843, 852 (2004). Thus this final element need not be satisfied for res judicata to
bar Davis’ attempt to litigate claims that he raised or could have raised in the state
court action.
Additionally, in the Chapter 13 bankruptcy proceedings, the bankruptcy
court approved the increased monthly mortgage payments which Davis now
challenges. Davis is barred from using this litigation to launch a collateral attack
on the bankruptcy proceedings.
IV.

Conclusion
For the above reasons, the Court concludes that Plaintiffs’ Amended

Complaint fails to state a claim upon which relief may be granted.
Accordingly,
IT IS ORDERED, that Defendants’ motion to dismiss is GRANTED.

Dated: September 16, 2013

s/PATRICK J. DUGGAN
UNITED STATES DISTRICT JUDGE

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Copies to:
Philip Davis, Jr.
9128 Nathaline
Redford, MI 48289
Jessie Ogletree
17600 Northland Park Ct
Southfield, MI 48075
Bridget Hathaway, Esq.

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