Shoemaker v. CitiMortgage, Inc.

Filing 11

ORDER granting 6 defendant's Motion to Dismiss. Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
CALVIN SHOEMAKER,
Plaintiff,
Case No. 14-CV-13962
vs.
HON. GEORGE CARAM STEEH
CITIMORTGAGE, INC.,
Defendant.
_____________________________/
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS [DOC. 6]
Plaintiff Calvin Shoemaker filed this case in Jackson County Circuit Court on
September 15, 2014, after his mortgage was foreclosed, seeking to have the Sheriff’s
Deed set aside so that the matter could proceed as a judicial foreclosure. Defendant
Citimortgage, Inc. (“CMI”) removed the case to this court on October 15, 2014. The
matter is presently before the court on CMI’s motion to dismiss. The court does not
believe that it would benefit from oral argument, and so informed the parties that it
would make a determination on the briefs, pursuant to L.R. 7.1(f)(2). Plaintiff has failed
to file a timely response to defendant’s motion.
In his complaint, Shoemaker alleges wrongful foreclosure due to CMI’s failure to
follow the requirements of MCL 600.3201 et seq., breach of contract arising out of CMI’s
failure to fairly negotiate loss mitigation assistance, and fraudulent misrepresention
when CMI allegedly made false statements to Shoemaker which caused him to refrain
from challenging the foreclosure.

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FACTUAL BACKGROUND
On May 14, 2003, Shoemaker signed a promissory note, secured by a mortgage
with Allied Home Mortgage Capital Corp. (“Allied”). The mortgage was recorded on
May 28, 2003, in the Jackson County Register of Deeds. The mortgage was assigned
to ABN AMRO Mortgage Group on May 14, 2003. CMI is successor in interest to ABM
AMRO by reason of merger. The mortgage contained a power of sale, which allowed
the mortgagee to sell the property upon default of the mortgage.
In 2013 Shoemaker defaulted on his mortgage and CMI and Shoemaker
engaged in unsuccessful loss mitigation efforts. CMI foreclosed on the mortgage by
sheriff’s sale on October 23, 2013. CMI purchased the property at the sale. The
redemption period expired six months later, on April 23, 2014.
RULE 12(b)(6) DISMISSAL STANDARD
Rule 12(b)(6) allows the Court to make an assessment as to whether the plaintiff
has stated a claim upon which relief may be granted. Under the Supreme Court’s
articulation of the Rule 12(b)(6) standard in Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 554-56 (2007), 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. “[N]aked assertions devoid of further factual
enhancement” are insufficient to “state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). 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.” Ass’n of
Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (quoting
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Bell Atlantic, 550 U.S. at 555) (citations and quotations omitted). 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.” Id. (citing Bell Atlantic, 550 U.S. at 555).
ANALYSIS
Michigan law grants a mortgagor of residential property a statutory redemption
period of six months. M.C.L. § 600.3240(8). When the redemption period expires, the
purchaser of the sheriff’s deed is vested with “all the right, title, and interest” in the
property. M.C.L. § 600.3236. In this case, the redemption period expired on April 23,
2014. At that time, Shoemaker’s rights in the property were extinguished. Once the
redemption period expires, the Michigan Court of Appeals has held that a plaintiff lacks
standing to bring a claim. Bryan v. JP Morgan Chase Bank, 304 Mich. App. 708, 71315 (2014). The Sixth Circuit, applying Michigan law, has held that once the redemption
period has lapsed, in order to avoid dismissal, plaintiffs must come forward with a “clear
showing of fraud, or irregularity” in the foreclosure proceedings. Conlin v. Mortg. Elect.
Reg. Sys., 714 F.3d 355, 360 (6th Cir. 2013) (quoting Overton v. Mortg. Elec. Reg.
Sys., No. 284950, 2009 WL 1507342, at *1 (Mich. App. 2009)).
Shoemaker has not pled any facts raising a plausible inference that CMI
engaged in fraud or irregularity which would warrant setting aside the foreclosure sale.
In order to justify setting aside a sheriff’s sale, a defect must relate to the sale procedure
itself. In addition, the borrower must demonstrate that as a result of the fraud or
irregularity, the borrower’s ability to maintain his interest in the subject property was
prejudiced. See Kim v. JP Morgan Chase Bank, N.A., 493 Mich. 98, 113, 115-16
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(2012). Shoemaker has not filed any response to CMI’s motion to dismiss, and has not
set forth any allegations, let along evidence, to support a finding of fraud in the sale
process that prejudiced his ability to maintain his interest in the property.
The property was sold at sherif’s sale on October 23, 2013. Shoemaker failed to
redeem the property during the six month redemption period, and has also failed to
demonstrate fraud or irregularity with the foreclosure process. Therefore, CMI is vested
with “all right, title, and interest” that Shoemaker previously held in the property.
Shoemaker does not have standing to challenge the validity of the foreclosure, or to ask
the court to set aside the sheriff’s sale.
CONCLUSION
For the reasons stated in this opinion, defendant’s motion to dismiss is
GRANTED.
Dated: February 24, 2015
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
February 24, 2015, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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