Kemp v. Resurgent Capital Services et al

Filing 30

MEMORANDUM AND ORDER GRANTING QUICKEN LOANS MOTION 16 FOR JUDGMENT ON THE PLEADINGS; GRANTING BANK OF NEW YORK MELLON AND BANK OF AMERICAS MOTION 13 TO DISMISS AND GRANTING RESURGENT CAPITAL SERVICES AND TROTT & TROTTS MOTION 19 FOR SUMMARY JUDGMENT; AND DENYING PLAINTIFFS MOTION 24 FOR SUMMARY JUDGMENT; AND MOTION 11 FOR DISCOVERY. CASE DISMISSED. Signed by District Judge Avern Cohn. (SCha)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

LETHA KEMP,
Plaintiff,
vs.

Case No. 13-11794

RESURGENT CAPITAL SERVICES,
QUICKEN LOANS, THE BANK OF NEW
YORK MELLON, f/k/a The Bank of New
York as Trustee for the Certificateholders of
CWALT Inc., Alternative Loan Trust
2005-50CB Montage Pass-Through
Certificates Series 2005-50CB, BANK OF
AMERICA, and TROTT & TROTT, P.C.,

HON. AVERN COHN

Defendants.
____________________________________/
MEMORANDUM AND ORDER
GRANTING QUICKEN LOANS MOTION FOR JUDGMENT ON THE PLEADINGS
(Doc. 16)
GRANTING BANK OF NEW YORK MELLON AND BANK OF AMERICA’S MOTION
TO DISMISS (Doc. 13)
AND
GRANTING RESURGENT CAPITAL SERVICES AND TROTT & TROTT’S MOTION
FOR SUMMARY JUDGMENT (Doc. 19)
AND
DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT (Doc. 24) AND
MOTION FOR DISCOVERY (Doc. 11)
AND
DISMISSING CASE1

1

Although originally schedule for hearing, upon review of the parties’ papers, the
Court deems this matter appropriate for decision without oral argument. See Fed. R.
Civ. P. 78(b); E.D. Mich. LR 7.1(f)(2).

I. Introduction
This is another one of many cases pending in this district involving a default on a
residential mortgage loan and the commencement of foreclosure proceedings. As will
be explained, plaintiff Letha Kemp, proceeding pro se, defaulted on one of two
mortgage loans used to finance her purchase of residential property located at 19532
Redfern, Detroit, Michigan. Kemp contends she has a right to the property. Kemp has
sued Resurgent Capital Services (Resurgent), Quicken Loans, Inc., (Quicken Loans),
Bank of New York Mellon (BNYM), Bank of America, and Trott & Trott, P.C. (Trott &
Trott). The complaint makes the following claims:
Count I

lack of standing

Count III2

common law fraud and injurious falsehood

Count IV

violation of Fair Debt Collection Practices Act

Count V

violation of Truth in Lending Act

Count VI

violation of UCC 3-302 the plaintiff name was forged by the
defendant

Count VII

negligent undertaking

Count VIII

negligent misrepresentation

Kemp essentially claims that defendants wrongfully foreclosed on her property.
She seeks a declaration that she is the rightful owner of the property and a money
judgment in the amount of $4,500,000.00.
Before the Court are several motions. Each defendant has filed a dispositive

2

The complaint does not contain a Count II.
2

motion and Kemp has filed a motion for discovery and requests to admit and a motion
for summary judgment.3 For the reasons that follow, the defendants’ motions will be
granted, Kemp’s motions will be denied, and the case will be dismissed.
II. Background
On August 10, 2005, Kemp entered into a mortgage loan transaction with
Quicken Loans. The transaction involved two loans. The first loan was for $99,200.00.
The second loan was for $16,500.00. At closing, Kemp executed separate notes in
favor of Quicken Loans, Inc. for the loans. As security for the Loan, Kemp granted
Quicken Loans two mortgages, one for each loan. Each mortgage designates
Mortgage Electronic Registration Systems, Inc. (“MERS”) as mortgagee, “acting solely
as a nominee for Lender and Lender’s successors and assigns.”
Shortly after closing, on or about August 22, 2005, Quicken Loans transferred its
interest in the first loan to Countrywide Home Loans, Inc. After that time, Quicken
Loans had no involvement in the loan, mortgage, collection of the debt, or any
foreclosure proceedings regarding the first loan.
On or about August 24, 2005, Quicken Loans transferred its interest in the
second loan to Irwin Home Equity Corporations. After that time, Quicken Loans had no
involvement in the second loan.4

3

Kemp filed a response to all of defendants’ motions. (Docs. 17, 21). One of Kemp’s
responses is styled “Plaintiff’s Opposition to the Defendants et al Motions to
Dismiss/Motion to Strike Pursuant to Rule 12F.” While defendants construed the filing
as a response and a motion to strike, and filed a response to the motion to strike (Docs.
23, 26), the Court construes Kemp’s filing as a response. To the extent Kemp moves to
strike defendants’ motions, the motion is DENIED.
4

It is not clear from the record what became of the second loan.
3

On May 24, 2012, MERS executed an Assignment of Mortgage, assigning its
interest in the first loan to BNYM. The Assignment of Mortgage was recorded on May
29, 2012, with the Wayne County Register of Deeds at Liber 49895, Page 1023. BOA
was a servicer of the loan.
Kemp defaulted on her obligations under the note and mortgage on the first loan.
As a result, BOA, instituted foreclosure proceedings as servicer, and on behalf of the
owner of the indebtedness, BNYM. Kemp was notified of the intent to foreclose via
letter dated October 31, 2012. Trott & Trott is legal counsel in the foreclosure
proceeding and has prepared all of the foreclosure paperwork, including sending
correspondence to Kemp.
Early into the foreclosure proceedings, on or about November 18, 2012,
Resurgent began servicing the loan.
Notice of the foreclosure sale was published in The Detroit Legal News once
each week for four successive weeks between March 18, 2013 and April 8, 2013.
Notice of the foreclosure sale was also posted at the property on March 25, 2013. All of
the notices listed MERS as the mortgagee on behalf of BNYM. Kemp filed this action
on April 22, 2013 in federal court. The foreclosure sale has been postponed pending
the outcome of this litigation.
III. Legal Standards
A. Motion for Judgment on the Pleadings
“Motions for judgment on the pleadings under Fed. R. Civ. P. 12(c) are analyzed
under the same standard as motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).”
Brown v. Potter, No. 10-12374, 2011 WL 2682644, at *2 (E.D. Mich. July 11, 2011); see
4

also Kottmyer v. Maas, 436 F.3d 684, 689 (6th Cir. 2006). “For purposes of a motion for
judgment on the pleadings, all well-pleaded material allegations of the pleadings of the
opposing party must be taken as true, and the motion may be granted only if the moving
party is nevertheless clearly entitled to judgment.” Poplar Creek Development Co. v.
Chesapeake Appalachia, L.L.C., 636 F.3d 235, 240 (6th Cir. 2011).
B. Motion to Dismiss
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests
the sufficiency of a complaint. In a light most favorable to the plaintiff, the court must
assume that the plaintiff’s factual allegations are true and determine whether the
complaint states a valid claim for relief. See Albright v. Oliver, 510 U.S. 266 (1994);
Bower v. Fed. Express Corp., 96 F.3d 200, 203 (6th Cir. 1996). To survive a Rule
12(b)(6) motion to dismiss, the complaint’s “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.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(internal citations and emphasis omitted). See also Ass’n of Cleveland Fire Fighters v.
City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007). “[T]hat a court must accept
as true all of the allegations contained in a complaint is inapplicable to legal
conclusions. Threadbare recitals of all 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 court is “not bound to accept as true a legal conclusion couched as a factual
allegation.” Id. at 679 (internal quotation marks and citation omitted). Moreover, “[o]nly
a complaint that states a plausible claim for relief survives a motion to dismiss.” Id.
“Determining whether a complaint states a plausible claim for relief will . . . be a context5

specific task that requires the reviewing court to draw on its judicial experience and
common sense. But where the well-pleaded facts do not permit the court to infer more
than the mere possibility of misconduct, the complaint has alleged – but it has not
shown – that the pleader is entitled to relief.” Id. (internal quotation marks and citation
omitted). Thus, “a court considering a motion to dismiss can choose to begin by
identifying pleadings that, because they are no more than conclusions, are not entitled
to the assumption of truth. While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations. When there are well-pleaded
factual allegations, a court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief.” Id. In sum, “[t]o survive a motion to
dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a
claim for relief that is plausible on its face.” Id. at 678 (internal quotation marks and
citation omitted).
C. Summary Judgment
“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). A moving party may meet that burden “by
‘showing’ – that is, pointing out to the district court -- that there is an absence of
evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S.
317, 325 (1986). Revised Rule 56 expressly provides that:
A party asserting that a fact cannot be or is genuinely disputed must
support the assertion by:
(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or
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declarations, stipulations (including those made for purposes of the motion
only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1). The revised Rule also provides the consequences of failing to
properly support or address a fact:
If a party fails to properly support an assertion of fact or fails to properly
address another party’s assertion of fact as required by Rule 56(c), the
court may:
(1) give an opportunity to properly support or address the fact;
(2) consider the fact undisputed for purposes of the motion;
(3) grant summary judgment if the motion and supporting materials –
including the facts considered undisputed – show that the movant is
entitled to it; or
(4) issue any other appropriate order.
Fed. R. Civ. P. 56(e). “The court need consider only the cited materials, but it may
consider other materials in the record.” Fed. R. Civ. P. 56(c)(3).
When the moving party has met its burden under Rule 56, “its opponent must do
more than simply show that there is some metaphysical doubt as to the material facts.”
Matsushita Electric Industries Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
Ultimately a district court must determine whether the record as a whole presents a
genuine issue of material fact, id. at 587, drawing “all justifiable inferences in the light
most favorable to the non-moving party,” Hager v. Pike County Bd. Of Education, 286
F.3d 366, 370 (6th Cir. 2002).

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IV. Analysis
A. Quicken Loan’s Motion
Quicken Loans moves for judgement on the pleadings, contending that none of
Kemp’s claims state a viable claim for relief against it. The Court agrees.
As to Count I, Kemp alleges that the “defendants” lacked standing to initiate the
foreclosure proceedings. This claim fails against Quicken Loans for the simple reason
that Quicken Loans has no interest either loan and has no role in the foreclosure
proceedings.
As to the remaining counts, Quicken Loans is correct that they are barred by the
applicable statute of limitations. Count III, alleging fraud and misrepresentation, is
subject to a six year statute of limitations. See Miller v. Pathway Fin., Assured Capital
Funding, No. 12-CV-14387, 2013 WL 1821252 (E.D. Mich. Apr. 30, 2013) (citing Mich.
Comp. Laws § 600.5813; Boyle v. General Motors Corp., 468 Mich. 226, 230 n. (2003)
(noting that a six-year statute of limitations is applicable to fraud actions in Michigan)).
Count III alleges common law fraud an injurious falsehood. To the extent this
count alleges fraud, the six-year limitations period set forth above applies. To the extent
this count alleges injurious falsehood, a three-year limitations period is applicable.
Kollenberg v. Ramirez, 127 Mich. App. 345, 355 (1983) (applying a three-year
limitations period to a claim for injurious falsehood that sought special pecuniary
damages).
Count IV alleges a violation of the Fair Debt Collections Practices Act (FDCPA).

8

FDCPA claims are subject to a one-year limitations period. Davis v. Countrywide Fin.
Corp., No. 09-CV-10228, 2009 WL 2922896, at *2 (E.D. Mich. Sept. 9, 2009).
Count V alleges a violation of the Trust in Lending Act (TILA). “A TILA action
must be brought within one year of the date of the occurrence of the violation.” March v.
Countrywide Home Loans Servicing, 10-12650, 2011 WL 1792592 (E.D. Mich. May 11,
2011) (citing 15 U.S.C. § 1640(e)). Furthermore, any right to rescind based on a
TILA violation expires “three years after the date of consummation of the transaction or
upon the sale of the property, whichever occurs first . . . .” Id. (quoting 15 U.S.C. §
1635(f)).
Count VI alleges a violation of U.C.C. § 3-302 and that Kemp’s name was forged
by “Defendant.” This claim, which alleges that Kemp’s name was forged on the
promissory note, is subject to a three-year limitations period because it alleges an injury
to person or property. Ins. Co. of N. Am. v. Manufacturers Bank of Southfield, N.A., 127
Mich. App. 278, 283 (1983) (“Since payment on a forged indorsement is injury to
property, the three-year statute of limitations applies where suit is brought on an implied
contract theory.”).
Count VII alleges that defendants committed a “negligent undertaking.” This is a
claim for negligence, and it is therefore subject to Michigan’s three-year limitations
period. Coyer v. HSBC Mortgage Servs., Inc., 701 F.3d 1104, 1108 (6th Cir. 2012)
(“Even if the Coyers had stated a negligence claim, that claim is barred by the
applicable three-year statute of limitation.”) (citing Mich. Comp. Laws § 600.5805).
Count VIII alleges negligent misrepresentation. This claim is subject to a
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three-year limitations period in Michigan. Int’l Union, United Auto., Aerospace, & Agr.
Implement Workers of Am. v. Honeywell Int’l, Inc., No. 11-CV-14036, 2013 WL
1303385, at *7 (E.D. Mich. Mar. 28, 2013) (“The negligent misrepresentation . . . claim[]
ha[s] a statute of limitations of three years under Michigan law.”).
All of the above counts are time barred because approximately
seven-and-one-half years passed since Quicken Loans’ last involvement with the
subject loans. As set forth above, Quicken Loans originated the two loans at issue on
August 10, 2005. Shortly thereafter, Quicken Loans transferred its interest in the loans.
Since these transfers, Quicken Loans has had no involvement with these loans, the
related mortgages, collection of the underlying debts, or any foreclosure proceedings
relating to these debts. Thus, any wrongdoing by Quicken Loans would have occurred
at the latest—and if at all—in August of 2005. Kemp filed this lawsuit on April 22, 2013,
which was over seven years after the closing and the sale of Quicken Loans’ interest in
the loans. By this date, all of the applicable limitations periods for Counts III and VIII
had long since expired. Thus, Quicken Loans is entitled to a judgment on the pleadings
in its favor.5
B. BNYM and BOA’s Motion
BNYM and BOA say that none of Kemp’s claims state a viable claim for relief.
The Court agrees. Each count is addressed in turn below.

5

Quicken Loans makes other arguments in support of its motion, including that the
claims are all insufficiently plead or otherwise implausible. The Court declines to
address these arguments as to Quicken Loans, but they will be addressed as to the
other defendants.
10

In Count I, Kemp alleges that defendants lacked standing to foreclose because a
record chain of title does not exist, that the note and mortgage were split, causing the
note to be unsecured and the mortgage to be unenforceable. This claim fails to state a
plausible claim against BNYM or BOA. First, BOA at one point was the servicer of the
loan. As a servicer, it was entitle to initiate foreclosure proceedings under M.C.L. §
600.3204(1)(d) which states, “a party may foreclose a mortgage by advertisement if . . .
the party foreclosing the mortgage is either the owner of the indebtedness . . . or the
servicing agent of the mortgage.” Michigan’s foreclosure by advertisement statute also
permits the “mortgagee of record” to initiate foreclosure. See M.C.L. § 600.3204(1)(d).
If the foreclosing party is not the original mortgagee, a record chain of title must exist
prior to the date of sale. See M.C.L. § 600.3204(3). The record chain of title shows that
BNYM is the mortgagee of record, and that Resurgence foreclosed as servicer on
BNYM’s behalf. BOA did not conduct the foreclosure proceedings.
As stated above, on May 24, 2012, MERS executed an Assignment of Mortgage,
assigning its interest in the Mortgage to BNYM. The Assignment took place well before
the foreclosure was instituted on October 31, 2012. Because BNYM was the record
holder of the mortgage before the foreclosure sale took place, BOA could start to
foreclose on BNYM’s behalf under M.C.L. § 600.3204(1)(d) and (3).
Moreover, Kemp’s “note-splitting” theory fails to state a plausible claim for relief.
In Residential Funding Co. v. Saurman, 805 N.W.2d 183, 184 (Mich. 2011), the
Michigan Supreme Court rejected the theory that separating a note from the mortgage
extinguishes the right to foreclose. “[T]he security is always made in trust to secure

11

obligations, and the trust and the beneficial interest need not be in the same hands.” Id.
See also Leone v. Citigroup, Inc., No. 12-10597, 2012 WL 1564698, at *3 (E.D. Mich.
May 2, 2012) (holding that the securitization process does not invalidate or otherwise
affect a borrower’s obligations under a mortgage.
The mortgage itself demonstrates that MERS is the nominee both for the
originating lender and its successors and assigns. Therefore, if the note is sold, there is
no “split”. See, e.g., Golliday v. Chase Home Fin., LLC, No. 1:10-cv-532, 2011 WL
4352554, at *7 (W.D. Mich. Aug. 23, 2011). Therefore, Plaintiff’s “note-splitting”
argument fails.
Finally, Kemp challenges the “Pooling and Servicing Agreement”, (PSA), alleging
that the PSA requires that all loans it acquires must be validly transferred to the trust”
and that “failure to do so by the closing date is a violation of the express terms of the
loan.” However, Kemp has not alleged that the loan was not transferred pursuant to the
operative PSA. Furthermore, Kemp’s “PSA” theory has been rejected by the courts
because, even if Kemp had identified the alleged PSA or provided its terms, she has not
right to invoke the PSA or to claim any breach, and the parties to the PSA are free to
ratify any alleged “breaches.” Kemp’s vague assertion that the foreclosure is invalid
because it was not made in compliance with a PSA fails under Michigan law. See, e.g.,
Mitchell v. MERS, No. 1:11-cv-425, 2012 WL 1094671, at *3 (W.D. Mich. March 30,
2012) (“Plaintiff’s theory regarding ‘securitization’ has been rejected as a basis for
invalidating an assignment of a mortgage”). In Livonia Property Holdings, L.L.C. v
12840-12976 Farmington Road Holdings, L.L.C., 717 F. Supp. 2d 724, 737 (E.D. Mich.

12

2010), the court rejected plaintiff’s attempt to challenge a Michigan foreclosure by
advertisement because, regardless of the PSA, plaintiff “was not and is not a party to”
the PSA or assignments of the mortgage, and, thus, “lack[ed] standing to challenge their
validity or the parties’ compliance with those contracts[.]”. The court explained:
[T]he Plaintiff here lacks standing to assert any breaches in the terms of any
contracts between the assigning entities. [citing the record] Moreover, any
purported breaches in those contracts would not render the assignments
themselves (which are separate contracts) void. And by transferring the original
Loan Documents, including the Note, Mortgage, and all Assignments, all
assigning entities appear to have ratified any alleged breaches in the terms of
those contracts.
Id. at 748. Thus, Kemp cannot challenge the PSA, as she was not a party to the
agreement. Count I must be dismissed as to BNYM and BOA.
BNYM and BOA argues that Kemp’s fraud based claims, Counts III, VI and VI,
should be dismissed because they are insufficiently pled. In Count III, Kemp alleges
that defendants “misrepresent[ed] facts, or purposely fail[ed] to disclose material facts,
in the alleged lending or servicing of mortgage loans.” (Doc. 1, Compl., ¶ 41.) In Count
VI, she alleges that defendants “induced [her] to enter into the transaction when there
existed in the inducement and execution material representations that were false . . .
including but not limited to the true identity of the Lender, and the fraudulent
misrepresentation as to the Mortgagee.” (Compl., ¶¶ 49, 51.) In Count VI, she alleges
that defendants “forged their signature” and she “denies their signatures on all
documents submitted by Defendant[s] due to their belief of being a victim of forgery.”
(Compl., ¶¶ 73, 74.)
Fed. R. Civ. P. 9(b) requires that allegations of fraud be made with particularity.
13

See Hennigan v. Gen. Elec. Co., No. 09-11912, 2010 WL 3905770, *14 (E.D. Mich.
Sept. 29, 2010). To comply with Rule 9(b), a plaintiff must, at a minimum, allege the
time, place and content of the alleged misrepresentations on which she relied. Thielen
v. GMAC Mortgage Corp., 671 F. Supp. 2d. 947, 956 (E.D. Mich. 2009). Under the
general pleading standards, the complaint must provide “more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Ass’n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007).
None of the fraud-based counts meet either the general pleading standard under
Twombly and Iqbal, or the heightened standard under Rule 9(b). Kemp does not
specify the time, place or contents of these alleged statements, nor does she state who
made the alleged misrepresentation or when. Her conclusory allegations are wholly
insufficient under Rule 9(b).
Moreover, the fraud counts also fail because she has not plead all of the
elements. To state a claim of fraud, Kemp must plead that: (1) defendants made a
material misrepresentation; (2) that was false; (3) which they knew to be false or made it
recklessly, without any knowledge of its truth, and as a positive assertion; (4)
defendants made the representation with the intention that it should be acted upon by
her; (5) Kemp acted in reliance upon it, and; (6) Kemp thereby suffered injury. See
Hi-Way Motor Co. v. Int’l Harvester Co., 398 Mich. 330, 336 (1976) (internal quotations
omitted).
Count III fails because Kemp fails to allege that she acted in reliance upon any
alleged misrepresentation made by defendants. Similarly, Count VI (captioned as a
14

U.C.C. count, but alleging fraud) fails because Kemp does not allege that the
“robo-signing” was done with defendants’ knowledge, with the intention that she act,
that she took action because of the alleged fraud, or that she suffered injury.
Moreover, the “law presumes that one who signs a written agreement knows the
nature of the instrument so executed and understands its contents.” Watts v. Polaczyk,
242 Mich. App. 600, 604 (2000). The mortgage documents which Kemp signed clearly
set forth the terms of the loan and state that if Kemp defaults on her obligations and fails
to cure that default, lender may invoke the power of sale.
As to Kemp’s FDCPA claim, BNYM and BOA say that it must be dismissed
because Kemp has not stated how the FDCPA applies to them because they are not
“debt collectors” or “collection agencies” under the statute. The FDCPA defines “debt
collector” as follows:
[A]ny person who uses any instrumentality of interstate commerce or the mails in
any business the principal purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or indirectly, debts owed or due
or asserted to be owed or due another. . . . [T]he term includes any creditor who,
in the process of collecting his own debts, uses any name other than his own
which would indicate that a third person is collecting or attempting to collect such
debts. . . .
15 U.S.C. § 1692a(6) (emphasis added). “[C]reditors are not subject to the FDCPA
when collecting their accounts.” Montgomery v. Huntington Bank, 346 F.3d 693, 699
(6th Cir. 2003); see also Partlow v. Aurora Loan Servs., L.L.C., No. 11-12940, 2012 WL
12766 *5 (E.D. Mich. Jan. 4, 2012) (“It is well settled that the provisions of the FDCPA
apply only to professional debt collectors, not creditors or mortgagors.”) (citations
omitted). BOA as servicer and BNYM as the owner of the indebtedness are exempt
15

from liability under the FDCPA.
In her response, Kemp points out that a loan servicer, like BOA, can be a debt
collector if the debt was in default or treated as such when it was acquired. However,
Kemp does not allege whether the loan was actually in default when it was assigned to
BNYM or when BOA began servicing it. Her failure to do so makes the claim subject to
dismissal. See Mitchell v. MERS, No. 11-cv-425, 2012 WL 1094671 (W.D. Mich. Mar.
30, 2012) (dismissing FDCPA claim where plaintiff failed to allege the loan was in
default at the time of servicing).
Even if the FDCPA applied to BOA or BNYM, Kemp’s allegations still fail to state
a claim. Dismissing similar counts, the Court in Meyer v Citimortgage, Inc., observed:
[P]laintiffs have not plead any facts illustrating what purported debt collection
activities [the defendant] undertook, or how these activities violated the FDCPA.
Instead, plaintiffs merely recite elements from the statute, which is insufficient to
state a claim.
***
Moreover, plaintiffs fail to plead any facts showing how CMI or Freddie Mac
violated the MOC, and instead merely recite the elements of the statute.
No. 11-13432, 2012 WL 511995, (E.D. Mich. Feb. 16, 2012) *7 (citing Ashcroft v. Iqbal,
129 S. Ct. 1937, 1949 (2009)).
In Count V, Kemp alleges that defendants violated the TILA in that they “failed to
provide necessary disclosures as mandated” under the Truth in Lending Act, 15 U.S.C.
§ 1601 (“TILA”). This claim fails for several reasons.
First, it is time-barred. As noted above, TILA actions must be brought within one
year from the date of the occurrence of the violation. 15 U.S.C. § 1640(e) (“Any action
16

under this section may be brought . . . within one year from the date of the occurrence
of the violation”). Kemp’s TILA claim is well-beyond the limitations period as the Loan
was executed on or around August 10, 2005 and this action was filed on May 22, 2013.
Moreover, Kemp fails to state a TILA claim against defendants, because sections
1639(a)(1)(A), (B) and 1635 (the TILA sections relating to disclosures) simply do not
apply. Section 1639(a)(1)(A) and (B) provides:
[F]or each mortgage referred to in section 1602(aa) of this title, the creditor shall
provide the following disclosures:
(1) ‘You are not required to complete this agreement merely because you have
received these disclosures or have signed a loan application.’.
(2) ‘If you obtain this loan, the lender will have a mortgage on your home. You
could lose your home, and any money you have put into it, if you do not meet
your obligations under the loan.’.” 15 U.S.C. § 1639(a)(1)(A) and (B) (emphasis
added).
Section 1635 provides:
[I]n the case of any consumer credit transaction . . . [t]he creditor shall clearly
and conspicuously disclose, in accordance with regulations of the Board, to any
obligor in a transaction subject to this section the rights of the obligor under this
section. The creditor shall also provide, in accordance with regulations of the
Board, appropriate forms for the obligor to exercise his right to rescind any
transaction subject to this section.” 15 U.S.C. 1635(a) (emphasis added).
Plaintiff alleges only that “Defendants are creditors as defined in the act.” (Compl., ¶
70.) However, this blanket allegation is not plausible because the term “creditor” refers
only to an entity who:
(1) regularly extends, whether in connection with loans, sales of property or
services, or otherwise, consumer credit which is payable by agreement in more
than four installments or for which the payment of a finance charge is or may be
required, and
(2) is the person to whom the debt arising from the consumer credit transaction
17

is initially payable on the face of the evidence of indebtedness or, if there is
no such evidence of indebtedness, by agreement.”
15 U.S.C. § 1602(f) (emphasis added). BOA and BNYM are not the entities to whom
the loan was initially payable, as evidenced by the note and mortgage, which clearly list
“Quicken Loans, Inc.” as the original owner of the indebtedness. Because neither BOA
nor BNYM are the originating lenders and are not creditors as that term is defined under
TILA.
Count V, cites a section of the Uniform Commercial Code (UCC) and makes
fraud allegations. The fraud allegations fails because, as discussed above, the fraud
allegations are not sufficiently pled. As to a violation of the UCC, such a claim fails to
state a plausible claim for relief because the UCC applies to personal property, not real
property. Fodale v. Waste Mgmt. of Mich., Inc., 271 Mich. App. 11, 19 (Mich. Ct. App.
2006). “Article 3 of the UCC does not apply to a mortgage for real property, because it
is not a negotiable instrument.” Pace v. Bank of America, N.A., No. 12-12014, 2012 WL
5929931, at *3 (E.D. Mich. Nov. 27, 2012) see also Jaboro v. Wells Fargo Bank, N.A.,
No. 10-11686, 2010 WL 5296939, at *6 (E.D. Mich. Dec. 20, 2010). Courts have
specifically held that Article 3 of the UCC does not apply to mortgages. See, e.g.,
Schare v. Mortg. Elec. Registration Sys., Inc., No. 11-cv-11889, 2012 WL 2031958
(E.D. Mich. June 6, 2012)
Counts VII and VIII allege negligence. Kemp alleges that defendants “negligently
undertook the misconduct alleged herein and to file false and deceptive records in the
deed records of Wayne County.” (Compl., ¶ 75.) She also alleges that claims

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“Defendants negligently misrepresented the true . . . beneficial owner of notes and
related mortgages filed by them in the County for the purpose of avoiding the
recordation of subsequent transfers and payment of attendant filing fee.” (Compl., ¶ 76.)

Both claims fail. First, to state a claim for negligence under Michigan law, a
plaintiff must allege: “(1) that the defendant owed a duty to the plaintiff; (2) that the
defendant breached the duty; (3) that the defendant’s breach of the duty caused the
plaintiff injuries; and, (4) that the plaintiff suffered damages.” Lelito v. Monroe, 273
Mich. App. 416, 418-19 (Mich. Ct. App. 2006). Kemp has not alleged any of these
elements.
Second, the negligence claims are barred by the economic loss doctrine. Under
Michigan law, a party is barred from recovering economic losses in tort, where those
losses were suffered because of a breach of duty assumed only by contract. Neibarger
v. Universal Coops, 439 Mich. 512, 525–26 (1992); Fultz v. Union Commerce-Assoc.,
470 Mich. 460, 467 (2004). Where a contract exists, as it does here under the note and
mortgage, the economic loss doctrine prohibits a party to the contract from bringing tort
claims that are factually indistinguishable from breach of contract claims. Neibarger,
439 Mich. at 528; Huron Tool Eng’g Co. v. Precision Consulting Servs, 209 Mich. App.
365, 375.
Finally, BNYM and BOA argue that to the extent Kemp seeks to assert a claim
under the Real Estate Settlement Procedures Act (RESPA), such a request should be
denied. Kemp does cite a section of RESPA in her response to BNYM and BOA’s
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motion. The Court agrees that such a claim, if Kemp is seeking to assert it, should be
disregarded because it was not pleaded in the complaint. Moreover, as explained in
BNYM and BOA’s reply brief, Kemp has not articulated a viable RESPA claim and any
amendment to do so would be futile.
Overall, Kemp’s claims against BOA and BNYM fail to state a plausible claim for
relief and must be dismissed.
C. Resurgence and Trott & Trott’s Motion
Resurgence and Trott and Trott move for summary judgment on all of Kemp’s
claims, presenting many of the same arguments advanced by BNYM and BOA.
As to Count I, as explained above, Resurgence as the current servicer of the
loan is entitled to foreclose on BNYM behalf. The foreclosing party is still BNYM.
Trott & Trott, as legal counsel in the foreclosure proceedings, is not the party
actually foreclosing and has no interest in the property. Thus, Kemp does not have a
viable claim against Trott & Trott under Count I.
Moreover, Kemp’s note splitting claim and claim based on a violation of a PSA
found under Count I fail for the reasons set forth above.
Kemp’s fraud based claims under Counts III, IV, V, and VI also fail against
Resurgence and Trott and Trott as they are insufficiently pled. The complaint contains
no detailed allegations of fraud by either Resurgence or Trott & Trott. Additionally, any
forgery claim under Count VI is barred by the statute of limitations, as set forth above.
As to Kemp’s claim under the FDCPA in Count VI, Resurgence and Trott & Trott

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contend that assuming they are debt collectors under the statute, the claim still fails to
state a plausible claim for relief because the complaint does not state how they violated
the FDCPA. Nor, as they have moved for summary judgment, has Kemp come forward
with any evidence to show that they violated the FDCPA.
Resurgence and Trott & Trott also contend, correctly, that Kemp’s TILA claim is
time-barred. As explained above, Kemp’s TILA claim arose in 2005, she filed suit in
2013, well-beyond the one year statute of limitations.
Finally, Kemp’s negligence claims against Resurgence and Trott & Trott fail for
the same reasons they fail against BNYM and BOA. The claims are not sufficiently pled
and are barred by the doctrine of economic loss.
D. Kemp’s Motions
Kemp filed a paper styled “Plaintiff’s Affidavit and Motion for Summary Judgment
Pursuant to Rule 56(e). The motion appears to pertain only to Count IV, her claim for
violation of the FDCPA. She seeks judgment in her favor on this claim against all of the
defendants because they failed to respond to her request to “validate the debt.”
Kemp’s motion must be denied. First, not all of the defendants can be
considered debt collectors under the FDCPA. Even assuming any of the defendants
are debt collectors, Kempt has not put forth any evidence to substantiate her FDCPA
claim such that she would be entitled to summary judgment. The only evidence, outside
of her self-serving affidavit, is a list of alleged mailings to various individuals, some with
tracking numbers, some without, some with apparent delivery codes, and some without.
Kemp did not attach any of the letters she allegedly sent. There is no way to determine
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on the record whether any request was made to validate the debt, to whom it was
made, whether the request was subject to the FDCPA, or whether any of the
defendants failed to properly respond to the request. Summary judgment in her favor is
not appropriate.
Kemp also filed a motion for discovery and request for admissions. This motion
was prematurely filed in light of the fact that all of the defendants filed dispositive
motions. The motion was filed even before BNYM and BOA entered the case.
Moreover, in light of the Court’s decision today, Kemp’s motion is moot.
V. Conclusion
For the reasons stated above, Kemp has not established that the pending
foreclosure should not take place. Her claims challenging the loan and foreclosure
process are not sustainable. Accordingly, defendants’ motions are GRANTED.
Plaintiff’s motions are DENIED.
This case is DISMISSED.
SO ORDERED.
s/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE
Dated: October 21, 2013
I hereby certify that a copy of the foregoing document was mailed to the attorneys of
record on this date, October 21, 2013, by electronic and/or ordinary mail.

S/Sakne Chami
Case Manager, [phone]
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