Love v. Select Portfolio Servicing Inc. et al

Filing 36

ORDER denying 29 Motion for Relief from Judgment; denying 30 Motion to Enforce Settlement Agreement and/or Stay State Court Proceedings; finding as moot 35 Motion to Expedite Hearing. Signed by District Judge Arthur J. Tarnow. (MLan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

DWAIN LOVE,
Case No. 13-11647
Plaintiff,
SENIOR U.S. DISTRICT JUDGE
ARTHUR J. TARNOW

v.
SELECT PORTFOLIO SERVICING, INC.,
ET AL.,

MAG. JUDGE DAVID R. GRAND

Defendants.
/

ORDER DENYING PLAINTIFF’S MOTION FOR RELIEF FROM JUDGMENT [29],
DENYING PLAINTIFF’S MOTION TO ENFORCE SETTLEMENT AGREEMENT AND/OR
STAY STATE COURT PROCEEDINGS [30], AND DENYING AS MOOT PLAINTIFF’S
MOTION TO EXPEDITE HEARING [35]

Plaintiff initiated this lawsuit on April 12, 2013, attacking a judgment of
eviction secured in Michigan state court and affirmed on appeal. On July 15, 2013,
Defendants Federal National Mortgage Association (Fannie Mae) and Select
Portfolio Servicing, Inc. filed a Motion to Dismiss [16]. Plaintiff failed to respond
to the motion to dismiss prior to a hearing held on July 9, 2014—approximately
one year after the motion was filed. On July 14, 2014, the Court entered an Order

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Granting Defendants’ Motion to Dismiss [27] and a Judgment [28] in favor of
Defendants.
On August 11, 2014, Plaintiff filed a Motion for Relief from Judgment [29]
pursuant to Federal Rules of Civil Procedure 59(e) and 60(b). On September 8,
2014, Plaintiff filed a Motion to Enforce Settlement Agreement and/or Stay State
Court Proceedings [30].1 Defendants filed Responses [33, 34] to these motions on
September 26, 2014. On December 8, 2014, Plaintiff filed a Motion to Expedite
Hearing on Plaintiff’s Pending Motions [35].
The Court finds Plaintiff’s pending motions suitable for resolution without a
hearing. For the reasons stated below, Plaintiff’s Motion for Relief from Judgment
[29] and Motion to Enforce Settlement Agreement and/or Stay State Court
Proceedings [30] are DENIED. Plaintiff’s Motion to Expedite Hearing [35] is
therefore DENIED AS MOOT.
FACTUAL BACKGROUND
Prior to filing this suit, Plaintiff defaulted on a loan secured by a mortgage
on his property. Defendant Select Portfolio Servicing, Inc. foreclosed on the
property and conveyed it to Defendant Fannie Mae.

After the expiration of

Plaintiff’s six-month statutory redemption period, Defendant Fannie Mae secured a
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Plaintiff filed a supplemental brief in support of this motion [31] on September
19, 2014.
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possession judgment in Michigan’s 36th District Court on September 11, 2012.
Plaintiff appealed the possession judgment to the Wayne County Circuit Court,
which dismissed the appeal and remanded for further eviction proceedings on
December 14, 2012. On April 12, 2013, the 36th District Court granted Defendant
Fannie Mae’s motion for a writ of restitution, granting Defendant Fannie Mae
possession of the disputed property. The same day, Plaintiff filed his Complaint
[1] in this Court.
Defendants Fannie Mae and Select Portfolio Servicing, Inc. filed a Motion to
Dismiss [16] on July 15, 2013.2 The Court held a conference with the parties on
August 22, 2013, and directed the parties to confer regarding settlement.
Defendants sent a draft settlement agreement to Plaintiff’s counsel, Stuart
Sandweiss, in November 2013.

In January and February 2014, Defendants

reported to the Court that Plaintiff’s counsel was unresponsive to settlement
communications.

The Court met with the parties again on April 4, 2014.

Plaintiff’s counsel agreed to submit to Defendants proposed edits to a draft
settlement agreement by April 7, 2014. On April 29, 2014, Defendants reported to

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Plaintiff also named the Federal Housing Finance Agency and Orlans Associates,
P.C. as defendants in this case. Both defendants were dismissed from the case in
April 2014 [23, 24].
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the Court that Plaintiff’s counsel had not sent any communications regarding
settlement, despite Defendants’ written follow-up.
On May 16, 2014, the Court scheduled a hearing on Defendants’ Motion to
Dismiss [16] for May 20, 2014. Later that day, in consideration of reported
scheduling difficulties on the part of Plaintiff’s counsel, the Court rescheduled the
hearing to July 9, 2014. The Court also directed Plaintiff to file a response to the
Motion to Dismiss by June 6, 2014.

On June 4, 2014, Plaintiff’s counsel

requested Defendants’ consent to an extension of the response deadline.
Defendants agreed and asked Plaintiff’s counsel to prepare a stipulated order
extending the deadline. The Court never received such an order and likewise never
received a response to the Motion to Dismiss.
The Court held a hearing on Defendants’ Motion to Dismiss [16] on July 9,
2014. The Court asked Defendants’ counsel about the status of the settlement
negotiations. Defendants’ counsel responded, “As far as I’m concerned, there are
no settlement negotiations.” Before ruling on the motion, the Court acknowledged
that nothing in the record and nothing said at the hearing indicated any prospect of
settlement. The Court proceeded to grant the Motion to Dismiss on the basis of the
grounds raised in the supporting brief and Plaintiff’s failure to respond. The Court
noted that Plaintiff’s counsel had apparently adopted a strategy of noncooperation
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in an effort to prolong proceedings. The Court expressed its unwillingness to
indulge further delay. The Court entered an Order Granting Defendants’ Motion to
Dismiss [29] and a Judgment [30] on July 14, 2014.
On August 11, 2014, Plaintiff filed a Motion for Relief from Judgment [29]
pursuant to Federal Rules of Civil Procedure 59(e) and 60(b). On September 8,
2014, Plaintiff filed a Motion to Enforce Settlement Agreement and/or Stay State
Court Proceedings [30]. The Court held a status conference with the parties on
September 19, 2014. The Court directed Defendants to respond to Plaintiff’s postjudgment motions by September 26, 2014. Defendants submitted Responses [33,
34] on that date. On December 8, 2014, Plaintiff filed a Motion to Expedite
Hearing on Plaintiff’s Pending Motions [35].
ANALYSIS
“A district court may alter or amend a judgment under [Federal Rule of Civil
Procedure] 59(e) to correct a clear error of law; account for newly discovered
evidence or an intervening change in the controlling law; or otherwise prevent
manifest injustice.” Heil Co. v. Evanston Ins. Co., 690 F.3d 722, 728 (6th Cir.
2012) (citing GenCorp, Inc. v. Am. Int’l Underwriters, 178 F.3d 804, 834 (6th Cir.
1999)). In relevant part, Federal Rule of Civil Procedure 60(b) authorizes relief
from judgment where the movant proves “(4) the judgment is void; (5) the
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judgment has been satisfied, released or discharged; it is based on an earlier
judgment that has been reversed or vacated; or applying it prospectively is no
longer equitable; or (6) any other reason that justifies relief.”3 A movant seeking
relief under the “catch-all” provision of Rule 60(b)(6) must prove “exceptional or
extraordinary circumstances which are not addressed by the first five numbered
clauses of the Rule . . .[and which constitute] unusual and extreme situations where
principles of equity mandate relief.” Jinks v. AlliedSignal, Inc., 250 F.3d 381, 387
(6th Cir. 2001) (quoting Olle v. Henry & Wright Corp., 910 F.2d 357, 365 (6th Cir.
1990)).

Plaintiff’s Motion for Relief from Judgment [29] advances three

arguments for relief under Federal Rules of Civil Procedure 59(e) and 60(b).
First, Plaintiff argues that he has alleged defects and fraud in the foreclosure
process sufficient to warrant setting aside the foreclosure sale if Plaintiff
demonstrates actual prejudice. He asks the Court to set aside the Judgment and
hold an evidentiary hearing as to whether Plaintiff was prejudiced. However,
Defendants devoted roughly ten pages of their Motion to Dismiss [16] to an
argument that Plaintiff “ha[d] not alleged fraud or irregularity sufficient to set
aside the foreclosure sale.” If Plaintiff wished to rebut that argument, he should
have done so in the ample time he was given prior to entry of the Judgment. Rules
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Plaintiff has moved for relief from judgment pursuant only to subsections (4), (5),
and (6) of Rule 60(b).
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59(e) and 60(b) are not vehicles Plaintiff may use to belatedly argue the case. See,
e.g., Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5 (2008) (acknowledging
that Rule 59(e) “may not be used to relitigate old matters, or to raise arguments or
present evidence that could have been raised prior to the entry of judgment”)
(quoting WRIGHT & MILLER, 11 FED. PRAC. & PROC. § 2810.1 (2d ed. 1995)); Jinks
v. AlliedSignal, Inc., 250 F.3d 381, 387 (6th Cir. 2001) (recognizing that Rule
60(b) “does not provide relief simply because litigants belatedly present new facts
or arguments after the district court has made its final ruling”).
Second, Plaintiff argues that the Judgment is void because Defendants
lacked standing to bring their Motion to Dismiss. However, Plaintiff cites no
authority in support of this proposition.

Plaintiff’s cited authority concerns

dismissal of a case on the grounds that a plaintiff lacks standing to bring suit—not
denial of dismissal on the grounds that a defendant lacks standing to bring a
motion. Plaintiff thus fails to demonstrate that the Judgment is void.
Finally, Plaintiff argues that the parties have reached a settlement agreement,
and that the Court should therefore set aside the Judgment and enforce the
agreement. Exhibit A to the Motion for Relief from Judgment [29] is a draft
settlement document signed by Plaintiff on August 11, 2014 (nearly a month after
entry of the Judgment). It has not been signed by any Defendant. Plaintiff argues
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that the draft settlement document was an offer that Defendant never rescinded,
and that Plaintiff’s signature on the document therefore bound both parties to the
settlement contract.

However, Defendants’ counsel stated at the hearing on

Defendants’ Motion to Dismiss that settlement negotiations were no longer
ongoing. The Court acknowledged that there was no prospect of settlement before
entering judgment in Defendants’ favor. Plaintiff had no power to subsequently
bind the parties to a settlement by signing a long-neglected draft document.
Plaintiff’s Motion to Enforce Settlement Agreement and/or Stay State Court
Proceedings [30] repeats Plaintiff’s argument concerning the draft settlement. The
motion further argues that the Court, in aid of its jurisdiction, should enjoin state
court eviction proceedings pending the Court’s resolution of that argument. The
Court rejects Plaintiff’s request to enforce the purported settlement agreement for
the reasons described above, rendering Plaintiff’s request to enjoin state court
proceedings moot.
CONCLUSION
As the Court noted at the hearing on Defendants’ Motion to Dismiss [16],
Plaintiff’s counsel avoided substantive argument and good-faith negotiation
throughout the pendency of this case in an apparent effort to prolong the
proceedings. Plaintiff’s post-judgment motions appear to be merely the latest step
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in this effort. For the reasons stated above, the Court finds the motions meritless.
Accordingly,
IT IS ORDERED that Plaintiff’s Motion for Relief from Judgment [29] and
Plaintiff’s Motion to Enforce Settlement Agreement and/or Stay State Court
Proceedings [30] are DENIED.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Expedite Hearing
on Pending Motions [35] is DENIED AS MOOT.
SO ORDERED.

Dated: December 11, 2014

s/Arthur J. Tarnow
Arthur J. Tarnow
Senior United States District Judge

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