Maxwell v. Residential Credit Solutions, Inc.
Filing
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ORDER (1) Adopting 25 Report and Recommendation; (2) Overruling Plaintiff's 28 Objections; (3) Granting Defendant's 17 Motion to Dismiss and/or for Summary Judgment; and (4) Dismissing Action with Prejudice. Signed by District Judge Matthew F. Leitman. (TMcg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
KIA L. MAXWELL,
Plaintiff,
Case No. 14-cv-10355
Hon. Matthew F. Leitman
v.
RESIDENTIAL CREDIT
SOLUTIONS, INC.,
Defendant.
_________________________________/
ORDER (1) ADOPTING REPORT AND RECOMMENDATION (ECF #25);
(2) OVERRULING PLAINTIFF’S OBJECTIONS (ECF #28); (3)
GRANTING DEFENDANT’S MOTION TO DISMISS AND/OR FOR
SUMMARY JUDGMENT (ECF #17); AND (4) DISMISSING ACTION
WITH PREJUDICE
INTRODUCTION AND PROCEDURAL HISTORY
Plaintiff Kia L. Maxwell (“Maxwell”) filed two separate actions against
Defendant Residential Credit Solutions, Inc. (“RCS”), one in state court and one in
this Court. Maxwell first filed suit against RCS in the Macomb County Circuit
Court on January 14, 2014 (the “State Court Action”). In the State Court Action,
Maxwell challenged the impending foreclosure sale of her home and asserted four
causes of action: (1) violation of Mich. Comp. Laws (“M.C.L.”) § 600.3204(4)(a);
(2) violation of M.C.L. § 600.3220; (3) violation of M.C.L. § 600.3204(1)(a); and
(4) silent fraud. (See ECF #17-2 at 6-10, Pg. ID 184-88.) Maxwell also moved the
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state court to issue a preliminary injunction enjoining RCS’s foreclosure
proceedings, which the state court denied on January 17, 2014. (Id. at 11-14, Pg.
ID 189-92; ECF #17-3 at 2-3, Pg. ID 201-02.)
Ten days after Maxwell filed the State Court Action, on January 24, 2014,
Maxwell filed a second suit against RCS in this Court (the “Federal Court
Action”). The factual allegations and claims asserted against RCS in the Federal
Court Action are substantially similar to those in the State Court Action. In the
Federal Court Action, Maxwell alleges that RCS (1) violated the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692 et seq. (the “FDCPA”); (2) violated the
same foreclosure statutes listed in the State Court Action (MCL §§ 600.3204(4)(a),
600.3220, and 600.3204(1)(a)); and (3) committed fraudulent concealment. On
April 14, 2014 – while the Federal Court Action was pending in this Court – the
state court dismissed Maxwell’s State Court Action in its entirety “with prejudice.”
(ECF #17-5 at 2, Pg. ID 240.)
On February 3, 2015, RCS filed a motion in the Federal Court Action to
dismiss Maxwell’s claims and/or for summary judgment (the “Motion”). (See ECF
#17, Pg. ID 149.) In her response opposing the Motion, Maxwell sought leave to
obtain counsel and moved to file an amended complaint. (See ECF #22 at 2, Pg. ID
256.) On August 7, 2015, the assigned Magistrate Judge issued a Report and
Recommendation (the “R&R”) in which she recommended that the Court grant the
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Motion, deny Maxwell’s request for counsel and to file an amended complaint, and
dismiss Maxwell’s claims with prejudice. (See ECF #25 at 1, Pg. ID 305.)
Maxwell filed objections to the R&R on September 3, 2015. (See ECF #28, Pg. ID
323.)
For the reasons explained below, the Court (1) OVERRULES Maxwell’s
objections to the R&R, (2) ADOPTS the R&R as the Opinion of the Court, (3)
GRANTS the Motion, and (4) DISMISSES this action with prejudice.
GOVERNING LEGAL STANDARD
A.
R&R Standard of Review
Where a party has objected to portions of a Magistrate Judge’s Report and
Recommendation, the Court conducts a de novo review of those portions. See Fed.
R. Civ. P. 72(b)(3).
B.
Motion to Dismiss Standard of Review
Rule 12(b)(6) provides for dismissal of a complaint when a plaintiff fails to
state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). “To
survive a motion to dismiss” under Rule 12(b)(6), “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, (2009) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible when a
plaintiff pleads factual content that permits a court to reasonably infer that the
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defendant is liable for the alleged misconduct. Id. (citing Twombly, 550 U.S. at
556). When assessing the sufficiency of a plaintiff’s claim, a district court must
accept all of a complaint's factual allegations as true. See Ziegler v. IBP Hog Mkt.,
Inc., 249 F.3d 509, 512 (6th Cir. 2001). “Mere conclusions,” however, “are not
entitled to the assumption of truth. While legal conclusions can provide the
complaint's framework, they must be supported by factual allegations.” Iqbal, 556
U.S. at 664. A plaintiff must therefore provide “more than labels and conclusions,”
or “a formulaic recitation of the elements of a cause of action” to survive a motion
to dismiss. Twombly, 550 U.S. at 556. “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do not suffice.” Id.
C.
Summary Judgment Standard of Review
A movant is entitled to summary judgment when it “shows that there is no
genuine dispute as to any material fact....” SEC v. Sierra Brokerage Services, Inc.,
712 F.3d 321, 326–27 (6th Cir. 2013) (citing Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 251–52 (1986)) (quotations omitted). When reviewing the record, “the
court must view the evidence in the light most favorable to the non-moving party
and draw all reasonable inferences in its favor.” Id. “The mere existence of a
scintilla of evidence in support of the [non-moving party’s] position will be
insufficient; there must be evidence on which the jury could reasonably find for
[that party].” Anderson, 477 U.S. at 252. Summary judgment is not appropriate
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when “the evidence presents a sufficient disagreement to require submission to a
jury.” Id. at 251-252. Indeed, “[c]redibility determinations, the weighing of the
evidence, and the drafting of legitimate inferences from the facts are jury
functions, not those of a judge…” Id. at 255.
ANALYSIS
In the R&R, the Magistrate Judge concluded that as a result of the state
court’s dismissal of Maxwell’s State Court Action, res judicata bars Maxwell from
proceeding with the Federal Court Action here. Specifically, the Magistrate Judge
concluded that (1) the State Court Action and the Federal Court Action involved
the same parties, (2) the state’s summary dismissal of the State Court Action
constituted a decision on the merits, and (3) the fraudulent concealment and
FDCPA claims in the Federal Court Action – which were not litigated in the State
Court Action – arose from the same foreclosure proceedings at issue in the state
court and therefore could have been resolved in that litigation. (See R&R at 6-9,
Pg. ID 310-313.) The Magistrate Judge further concluded that Maxwell’s requests
to amend her complaint and for the Court to appoint counsel for her were improper
because they were combined with Maxwell’s responsive pleading and because
Maxwell failed to provide a proposed amended pleading in accordance with the
Court’s Local Court Rules. (See id. at 11, Pg. ID 315.)
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Maxwell raises two objections to the R&R. (See ECF #28 at 2-3, Pg. ID 32425.) First, Maxwell argues that the Magistrate Judge misapplied res judicata to her
FDCPA claim because RCS’s debt collection efforts – which Maxwell challenges
in the Federal Court action – and RCS’s foreclosure proceedings – which were
subject of the State Court Action – did not arise out of the same transaction. (Id.)
But the section in Maxwell’s federal complaint entitled “Allegations Common to
All Claims” undermines her argument. (See ECF #1 at 2, Pg. ID 2.) Maxwell
relies on the factual allegations in that section to support both the claims that she
asserted in the State Court Action and the FDCPA claim that she asserts here. (See
id. at 5-9, Pg. ID 5-9.) Thus, the complaint’s plain text shows that her claims arise
out of the same transaction. Moreover, Maxwell has not cited any case in which
any court has declined to apply res judicata on circumstances like those presented
here. And at least one federal court has applied the doctrine to bar an FDCPA
claim where, as here, the claim arose out of foreclosure proceedings that the
plaintiff had previously challenged in state court. See Byrd v. Homecomings Fin.
Network, 407 F. Supp. 2d 937, 945 (N.D. Ill. 2005) (applying res judicata to bar
FDCPA claim that was “inextricably linked” to prior state court foreclosure
proceedings).
Second, Maxwell objects that the Magistrate Judge improperly denied her
request for leave to obtain counsel and file an amended complaint in lieu of
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dismissal. (See ECF #28 at 3-4, Pg. ID 325-26.) However, as the Magistrate Judge
correctly pointed out, any alleged amendments arising out of the same foreclosure
proceedings would be futile due to the applicability of res judicata. (See R&R at
11, Pg. ID 315.) Maxwell also has not provided the Court with any additional facts
that might establish a plausible claim for relief under any theory. And although the
Court certainly is sympathetic to the serious medical complications Maxwell
experienced during this litigation, there is no reason to believe that Maxwell’s
amended complaint could survive a motion to dismiss or that allowing her to
obtain counsel would change the result. Thus, her request will be denied. See
Thiokol Corp. v. Mich. Dept. of Treasury, 987 F.2d 376, 383 (6th Cir. 1993)
(holding a court should deny a motion to amend if the amendment would be futile).
CONCLUSION
For the reasons stated above, IT IS HEREBY ORDERED that Maxwell’s
objections to the R&R (ECF #28) are OVERRULED, the R&R (ECF #25) is
ADOPTED as the Opinion of this Court, RCS’s Motion is GRANTED (ECF
#17), and this action is DISMISSED WITH PREJUDICE.
s/Matthew F. Leitman
MATTHEW F. LEITMAN
UNITED STATES DISTRICT JUDGE
Dated: September 15, 2015
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I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on September 15, 2015, by electronic means and/or
ordinary mail.
s/Teresa McGovern
in the Absence of Holly A. Monda
Case Manager
(313) 234-5113
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