Habib et al v. Bank of America, N.A., et al.

Filing 16

ORDER granting Defendant's 8 Motion to Dismiss. Signed by District Judge Gershwin A. Drain. (Monda, H)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
SARMAD HABIB, et al.,
Plaintiffs,
Case No. 13-cv-10853
Honorable Gershwin A. Drain
v.

BANK OF AMERICA, N.A., et al.,
Defendants.
____________________________/

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS (#8)

I. INTRODUCTION
The instant matter was removed from the Circuit Court for the County of Macomb
by Defendant, where a complaint was filed by Plaintiffs Sarmad Habib and Souad Habib
(the “Habibs” or “Plaintiffs”) against Bank of America, N.A. and Nationstar Mortgage, LLC1.
Plaintiffs seek to challenge the foreclosure of a mortgage that encumbered property located
at 7107 Tottenham, Shelby Township, Michigan (the “Property”). Plaintiffs bring four claims:
quiet title, count I; breach of M.C.L. 600.3205c, count II; request for declaratory relief and
for specific performance of consent judgment in national mortgage settlement (third party
beneficiary), count III; and injunctive relief, count IV.

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Defendant, Nationstar Mortgage (“Nationstar”) was never served with the Summons and copy of
the Complaint. Therefore, Defendant Nationstar is dismissed from this action based on Plaintiffs’ failure to
timely serve Defendant.

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Presently before the court is Defendant’s Motion to Dismiss. This motion has been
fully briefed, and the Court concludes that a hearing is unnecessary. See E.D. Mich. LR
7.1(e)(2). For the reasons that follow, the Court GRANTS Defendant’s Motion to Dismiss.

II. FACTUAL BACKGROUND
On December 27, 2004, Plaintiff Sarmad Habib entered into a mortgage loan
transaction (the “Loan”) with Pulte Mortgage, LLC (“Pulte”). Plaintiff then executed a
promissory note in the amount of $358,751.00 (the “Note”) along with a mortgage
(“Mortgage”) that secured the Property in favor of Pulte nominee, Mortgage Electronic
Registration Systems, Inc. (“MERS”). See Mot., Dkt. No. 8-5, Ex. D., pg. 2. On January 19,
2005, the mortgage was recorded in favor of MERS in Liber 16306, page 199 of the
Macomb County Register of Deeds. See Id., Dkt. No. 8-6, Ex. E. On May 16, 2011, MERS
assigned the Mortgage to BAC Home Loans Servicing, L.P. (“BACHLS”). On October 16,
2012, the servicing of the Loan was transferred to Nationstar Mortgage, LLC (“Nationstar”).
See generally, Dkt. No. 8-8, Ex. 8.
It appears that Plaintiffs have experienced financial difficulties causing them to
default on their obligations under the Mortgage and Note. See Dkt. No. 1, ¶ 8; see also
Mot., Dkt. No. 8, pg. 10. Plaintiffs claim that Defendant denied them a loan modification
intentionally precluding Plaintiffs from retaining possession of the Property.

III. LAW AND ANALYSIS
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A. STANDARD OF REVIEW
Federal Rule of Civil Procedure12(b)(6) allows the court to make an assessment as
to whether the plaintiff has stated a claim upon which relief may be granted. See Fed. R.
Civ. P. 12(b)(6). "Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain
statement of the claim showing that the pleader is entitled to relief,' in order to ‘give the
defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Conley v. Gibson, 355 U.S. 41,
47 (1957). Even though the complaint need not contain "detailed" factual allegations, its
"factual allegations must be enough to raise a right to relief above the speculative level on
the assumption that all of the allegations in the complaint are true." Ass'n of Cleveland Fire
Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (quoting Bell Atlantic, 550
U.S. at 555).
The court must construe the complaint in favor of the plaintiff, accept the allegations
of the complaint as true, and determine whether plaintiff's factual allegations present
plausible claims. To survive a Rule 12(b)(6) motion to dismiss, plaintiff's pleading for relief
must provide "more than labels and conclusions, and a formulaic recitation of the elements
of a cause of action will not do." Id. (citations and quotations omitted). "[T]he tenet that
a court must accept as true all of the allegations contained in a complaint is inapplicable
to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Nor does a complaint
suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'" Id. "[A]
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.'" Id. The plausibility standard requires "more than a sheer
possibility that a defendant has acted unlawfully." Id. "[W]here the well-pleaded facts do
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not permit the court to infer more than the mere possibility of misconduct, the complaint has
alleged–but it has not ‘show[n]'– ‘that the pleader is entitled to relief.'" Id. at 679.

B. MOTION TO DISMISS
1. Quiet Title
Plaintiffs argue that the Court should grant them legal title in the subject Property,
award them damages, costs and attorney’s fees as a result of Defendant’s alleged denial
of Plaintiffs’ request for a loan modification. See Dkt. No. 1, ¶¶ 10,11, 19-23. Defendant
argues that Plaintiffs have not provided any foundation for their allegations that the Court
should Quiet Title to the Property free of the mortgage. See Mot., Dkt. No. 8, pg. 12.
Defendant contends that Plaintiffs have not presented sufficient facts, such as proof that
the loan has been paid in full or proof that title to the Property is clouded, that would
demonstrate that they have superior title to the Property to sustain an action for Quiet Title.
See Id. The Court agrees with the Defendant.
Plaintiffs have not alleged a Quiet Title claim that meets the requirements set forth
in M.C.R. § 3.411. This rule requires that Plaintiffs properly allege their ownership interest
in the property. M.C.R. § 3.411(B)(2) states the complaint must allege: (a) the interest the
plaintiffs claim in the premises; (b) the interest the defendant claims in the premises; and
(c) the facts establishing the superiority of the plaintiffs’ claim. To state it another way,
Plaintiffs must show that they have title to the property superior to claims by others with an
interest in the property. Beaulah Hoagland Appelton Qualified Pers. Residence Trust v.
Emmet County Road Comm'n, 236 Mich. App. 546, 550 (1999).
If Plaintiffs succeed in making a prima facie case of title, the burden shifts to the
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Defendant to prove it has superior right or title. Id.
Here, Plaintiffs’ and Defendant both correctly claim an interest in the property.
Although Plaintiffs have failed to make timely payments, the foreclosure process has not
been finalized, and they still owe a mortgage to Defendant on the subject Property.
Plaintiffs have not satisfied the mortgage loan on the Property and Plaintiffs cannot show
possession of superior title. Therefore, Count I of Plaintiffs’ complaint is dismissed.

2. Breach of M.C,L. § 600.3205c
Plaintiffs urge the Court to grant them legal title to the subject Property, including
damages and attorney fees as a result of Defendant’s alleged failure to comply with M.C.L.
§ 600.3205c. See Dkt. No. 1, pgs. 13-14. Defendant correctly argues that the relief
Plaintiffs seek is outside of the scope of available remedies provided for under §
600.3205c. See Smith v. Bank of Am. Corp., 485 F. App’x 749, 756 (6th Cir. 2012).
Specifically, M.C.L. § 600.3205c provides in part:
(8) If a mortgage holder or mortgage servicer begins
foreclosure proceedings under this chapter in violation of 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),
and subsection (7) does not apply, the court shall enjoin
foreclosure of the mortgage by advertisement and order that
the foreclosure proceed under chapter 31.
Furthermore, Plaintiffs reference general subsections of § 600.3205c and do not
explain how Defendants violated the specific subsections mentioned. See Dkt. No. 1., pg.

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14. Plaintiffs generally allege that Defendant failed to complete the loan modification
process and subsequently denied their request for a loan modification. Yet, Plaintiffs
present the Court with no law supporting the proposition that M.C.L. § 600.3205c requires
that Defendant provide them with a loan modification in order for Defendant to be in
compliance with the statute. Regardless, in light of the undisputed facts, Defendant was
entitled to move forward with the foreclosure process and its actions were not in violation
of Michigan’s modification statute. Even viewing the facts in the light most favorable to the
Plaintiffs, no facts have been presented that would cause a reasonable trier of fact to find
that Defendant violated M.C.L. § 600.3205c. Therefore, Count II is dismissed.

3. Request for Declaratory Relief and Specific Performance of Consent Judgment in
National Mortgage Settlement

Plaintiffs argue that they are in the class of borrowers who are beneficiaries of a
Consent Judgment pursuant to a complaint filed in the United States District Court for the
District of Columbia. Plaintiffs contend that as a result of the Consent Judgment, Defendant
is obligated to provide Plaintiffs with a loan modification.
Conversely, Defendant states that Plaintiffs are not a party to the National Mortgage
Settlement and cannot sue to enforce its terms as a third-party. Moreover, because
Plaintiffs are a third-party to the Consent Judgment, Defendant also contends that Plaintiffs
have no right to enforce a consent judgment such as the National Mortgage Settlement. In
support of their proposition, Defendant points the Court to the United States Supreme Court
case of Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975). In Blue Chip
Stamps, the Court held as a general matter that consent judgments are “not enforceable
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directly or in collateral proceedings by those who are not parties to it even though they were
intended to be benefited by it.” 421 U.S. 723, 750.
The Consent Judgment that Plaintiffs refer to resulted from a complaint filed by the
United States Department of Justice and the attorneys general of forty-nine states and the
District of Columbia against five mortgage servicers, including Defendant, alleging various
foreclosure abuses in the case of United States v. Bank of America, N.A., et al., Case No.
12-cv-00361 (D.D.C. Apr. 5, 2012). See Rehbein v. CitiMortgage, Inc., Case No. 2:13cv65,
2013 U.S. Dist. LEXIS 49104, at * 13. The parties reached a settlement (the “National
Mortgage Settlement”) and the Consent Judgment memorializes the standards agreed
upon by the parties to protect homeowners. Id.
Plaintiffs cite no authority nor do Plaintiffs present any facts supporting their
assertion that pursuant to the National Mortgage Settlement Defendant agreed to or is
obligated to provide Plaintiffs with a loan modification. Consent judgments and decrees are
“to be construed for enforcement purposes basically as a contract.” United States v. ITT
Cont. Baking Co., 420 U.S. 223, 238 (1975)The Consent Judgment of the National
Mortgage Settlement expressly provides that “obligations under this Consent Judgment
shall be enforceable solely in the U.S. District Court for the District of Columbia. An
enforcement action under this Consent Judgment may be brought by any Party to this
Consent

Judgment

or

the

Monitoring

Committee.”

See

Consent

Judgment,

https://d9klfgibkcquc.cloudfront.net/Consent_Judgment_BoA-4-11-12.pdf, ¶J. 1, 2.
Plaintiffs have not pled that they are parties to the National Mortgage Settlement nor
have they shown that they are members of the Monitoring Committee. And even if Plaintiffs
were parties, pursuant to the express language of the Consent Judgment, enforcement of
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the obligations under the agreement fall under the jurisdiction of the U.S. District Court for
the District of Columbia. Accordingly, Count III of Plaintiffs’ complaint is dismissed.

4. Injunctive Relief
Defendant argues that a claim for injunctive relief must be dismissed because
injunctive relief is a remedy, not a cause of action. Defendant is correct. See Terlecki v.
Stewart, 278 Mich. App. 644, 663 (2008); See also Tann v. Chase Home Fin., L.L.C.,
Case No.10-14696, 2011 U.S. Dist. LEXIS 96026, 2011 WL 3799841, at *10 (E.D. Mich.
Aug. 26, 2011) ( "[P]laintiff cannot seek an injunction as a stand-alone cause of action; it
is only available as an equitable remedy."). Therefore, because Plaintiffs cannot set
forth an underlying cause of action against Defendant and injunctive relief is not an
independent cause of action, Plaintiffs’ request for injunctive relief must be dismissed.
IV. Conclusion
For the reasons stated above, Defendant’s motion to dismiss [#15] is GRANTED.

SO ORDERED.
Dated: July 15, 2013

s/Gershwin A Drain
GERSHWIN A. DRAIN
United States District Judge

I hereby certify that a copy of the foregoing document was served upon counsel of
record on July 15, 2013, by electronic and/or ordinary mail.
S/Tanya Bankston
Case Manager

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