Mayer v. Wells Fargo Bank, N.A.
Filing
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ORDER Granting 2 Motion to Dismiss and Denying 4 , 10 Motions to Compel as Moot. Signed by District Judge Denise Page Hood. (DPar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ROBERT MAYER,
Plaintiff,
Case No. 15-12503
V.
Honorable Denise Page Hood
WELLS FARGO BANK, N.A.,
Defendant.
/
ORDER GRANTING MOTION TO DISMISS
AND
DENYING MOTIONS TO COMPEL AS MOOT
I.
BACKGROUND
On July 14, 2015, this action was removed by Defendant Wells Fargo Bank,
N.A. from the Washtenaw County Circuit Court, State of Michigan. (Doc. No. 1)
Plaintiff Robert Mayer, proceeding pro se, filed the instant suit against Defendant
alleging fraud in servicing the mortgage and mortgage assignment, violation of the
Deceptive Trade Practices Act, violation of the Real Estate Procedures Act, unjust
enrichment and for quiet title. Plaintiff seeks return of the property in fee simple title
holder and damages in the amount of $197,000. (Doc. No. 1, Ex. A)
On July 28, 2010, Plaintiff purchased the subject property from Defendant for
$197,000, borrowing from Defendant $218.711. (Doc. No. 8, Exs. A & B) Plaintiff
defaulted on the mortgage loan and the sheriff’s sale was scheduled for July 30, 2015.
In lieu of an Answer, Defendant filed the instant Motion to Dismiss under Rule
12(b)(6) of the Rules of Civil Procedure. An objection/response to the motion was
filed by Plaintiff and Defendant replied to Plaintiff’s objection/response. Plaintiff
filed a Motion to Compel and a Motion to Compel Default. Defendant filed
responses to Plaintiff’s motions and a hearing was held on the matter.
II.
ANALYSIS
A.
Defendant’s Motion to Dismiss/Plaintiff’s Request to Amend
1.
Standard of Review
Rule 12(b)(6) of the Rules of Civil Procedure provides for a motion to dismiss
based on failure to state a claim upon which relief can be granted. Fed. R. Civ. P.
12(b)(6). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court
explained that “a plaintiff's obligation to provide the ‘grounds’ of his ‘entitle[ment]
to relief’ requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do[.] Factual allegations must be enough to
raise a right to relief above the speculative level....” Id. at 555 (internal citations
omitted). Although not outright overruling the “notice pleading” requirement under
Rule 8(a)(2) entirely, Twombly concluded that the “no set of facts” standard “is best
forgotten as an incomplete negative gloss on an accepted pleading standard.” Id. at
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563. To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at
570. A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. Id. at 556. Such allegations are not to be discounted because
they are “unrealistic or nonsensical,” but rather because they do nothing more than
state a legal conclusion–even if that conclusion is cast in the form of a factual
allegation. Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). To survive a motion to
dismiss, the non-conclusory “factual content” and the reasonable inferences from that
content, must be “plausibly suggestive” of a claim entitling a plaintiff to relief. Id.
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. Fed. R. Civ. P. 8(a)(2). The court primarily considers the
allegations in the complaint, although matters of public record, orders, items
appearing in the record of the case, and exhibits attached to the complaint may also
be taken into account. Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001).
Rule 15(a) provides that a party may amend its pleading once as a matter of
course within 21 days after a responsive pleading is served. Fed. R. Civ. P. 15(a)(1).
Rule 15(a)(2) further provides that a party may amend its pleading on leave of court.
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Leave shall be freely given when justice so requires. Fed. R. Civ. P. 15(a)(2). A
district court may deny leave to amend in cases of undue delay, undue prejudice to
the opposing party, repeated failure to cure deficiencies by amendment previously
allowed or futility. Foman v. Davis, 371 U.S. 178, 184 (1962). Delay alone,
regardless of its length is not enough to bar amendment if the other party is not
prejudiced. Duggins v. Steak ‘N Shake, Inc., 195 F.3d 828, 834 (6th Cir. 1999).
Allowing an amendment after the close of discovery and dispositive motion deadline
has passed creates significant prejudice because discovery would have to be reopened
and the defendant must now prepare a defense for a claim quite different than the
claim that was before the court. Id. When an amendment is sought at a late state of
litigation, there is an increased burden on the moving party to show justification for
failing to move earlier. Bridgeport Music, Inc. v. Dimension Films, 401 F.3d 647,
662 (6th Cir. 2004). If a complaint cannot withstand a motion to dismiss under Rule
12(b)(6), the motion to amend should be denied as futile. Rose v. Hartford
Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000).
Federal courts hold the pro se complaint to a “less stringent standard” than
those drafted by attorneys. Haines v. Kerner, 404 U.S. 519 (1972). A pro se litigant
“must conduct enough investigation to draft pleadings that meet the requirements of
the federal rules.” Burnett v. Grattan, 468 U.S. 42, 50 (1984).
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2.
Allegations in the Complaint
Defendant asserts it is unable to determine any facts or plausible claim Plaintiff
has alleged against Defendant in the Complaint. Defendant claims Plaintiff’s
Complaint notes certain laws, but fails to allege any facts as to how Defendant
violated these laws and how Plaintiff was damaged by any violation. Defendant
further asserts that Plaintiff’s Complaint are “little more than a random collection of
legal authorities, none of which are related to anything else stated in the Complaint.”
(Doc. No. 2, Pg ID 64)
Plaintiff responds that he is able to amend the Complaint to conform to the
Federal Rules. Plaintiff’s first argument is as to standing: that he has proper standing
to raise Defendant’s lack of legitimate ownership interest in the indebtedness; that
Defendant’s lien was never publicly declared; and, that Defendant has no standing to
foreclose because it is not the holder in due course of the indebtedness. Plaintiff’s
second argument is as to the Federal Fair Debt Collection Practices Act, 15 U.S.C.
§ 1692: that Defendant made false representations as to an outstanding mortgage
debt and that there is no contractual language in the mortgage that gives Defendant
the independent right to enforce the note or to assign the mortgage. Plaintiff’s third
argument is that he can establish legal violations to demonstrate the need to quiet title
based on fraud and that he has not received proof of any valid documentation that
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shows a loan or lien from the Defendant.
In reply, Defendant argues that Plaintiff’s response fails to state a claim upon
which relief may be granted and that any amendment would be futile. Defendant
claims that in his response, Plaintiff failed to attach a copy of his proposed amended
complaint as required by the rules. Defendant seeks dismissal of the action as
baseless.
3.
Standing
a.
Plaintiff’s Standing
As to the standing issue, Defendant does not dispute Plaintiff’s ownership of
the property. The Court finds that Plaintiff has standing to bring an action related to
his ownership of the property.
b.
Defendant’s Standing
Plaintiff argues Defendant has no standing to foreclose on the mortgage, but
based on the documents related to the purchase of the subject property and the
mortgage note, Defendant is the security holder and lender. Plaintiff makes mention
of an improper assignment in his Complaint. At the hearing, Plaintiff argued that as
a loan servicer, Defendant cannot foreclose on the property.
In Michigan, mortgage foreclosures by advertisement are governed by M.C.L.
§ 600.3204 which permits “either the owner of the indebtedness or of an interest in
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the indebtedness secured by the mortgage or the servicing agent of the mortgage” to
foreclose a mortgage by advertisement. M.C.L. § 600.3204(1). In Residential
Funding Co., LLC v. Saurman, 490 Mich. 909 (2011), the Michigan Supreme Court
ruled that an entity holding a mortgage, but not the note, had authority to foreclose
under M.C.L. § 600.3204. Saurman, 490 Mich. at 910 (“It has never been necessary
that the mortgage should be given directly to the beneficiaries. The security is always
made in trust to secure obligations, and the trust and the beneficial interest need not
be in the same hands. . . . The choice of a mortgagee is a matter of convenience”).
Claims based on the securitization of a mortgage and the alleged separation of the
mortgage and note have been ill-received by courts around the nation and courts have
viewed them as unconvincing subsequent to the Saurman decision. Gregory v.
CitiMortgage, Inc., 890 F. Supp. 2d 791, 800-01 (E.D. Mich. 2012).
Defendant, as record holder of the mortgage, has the authority to foreclose on
the property at issue under M.C.L. §§ 600.3204(1)(d) and (3). Because the Defendant
was the mortgagee at the time of foreclosure, Plaintiff has no basis to claim that the
purported transfer of interest in the underlying indebtedness had any impact on
Defendant’s right foreclose. Plaintiff’s claims of improper assignment or
securitization and lack of standing by Defendant fail to state a claim upon which
relief may be granted. Any amendment to the issue of Defendant’s standing or
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improper assignment would be futile.
4.
Fair Debt Collections Practices Act, 15 U.S.C. § 1692
Plaintiff notes the FDCPA in his response. The FDCPA, 15 U.S.C. § 1601 et
seq., governs debt collectors’ actions. The purpose of the FDCPA is to eliminate
abusive debt collection practices by debt collectors and to promote actions to protect
consumers against debt collection abuses. 15 U.S.C. § 1692(e); Grden v. Leikin
Ingber & Winters, PC, 643 F.3d 169, 172 (6th Cir. 2011). Violators of the FDCPA
are subject to actual damages, statutory damages and attorney fees. 15 U.S.C. §
1692k. 15 U.S.C. § 1692e(2)(A) provides:
A debt collector may not use any false, deceptive, or
misleading representation or means in connection with the
collection of any debt. Without limiting the general
application of the foregoing, the following conduct is a
violation of this section:
* * *
(2) The false representation of –
(A) the character, amount, or legal status of
any debt; ...
15 U.S.C. § 1692e(2)(A). The FDCPA applies only to a “debt collector,” which is
defined as a person who “attempts to collect, directly or indirectly, debts owed or due
or asserted to be owed or due another.” 15 U.S.C.A. § 1692a(6); see Glazer v. Chase
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Home Finance, LLC, 704 F.3d, 453, 457 (2013). In Joyner v. MERS, 451 F. App’x
505, 507 (6th Cir. 2011), the Sixth Circuit stated that “a creditor is not a debt
collector under the FDCPA.” As servicer and the owner of the debt at issue and
where the loan was not in default when the servicer or assignee began servicing or
acquired the loan, the servicer is not a “debt collector” under the Act. See Bridge v.
Ocwen Fed. Bank, FSB, 681 F.3d 355, 359-61 (6th Cir. 2012).
Liberally viewing Plaintiff’s Complaint, the Court finds he failed to allege any
facts that Defendant is a debt collector under the FDCPA or any facts as to what false
misrepresentations Defendant used in violation of the FDCPA. Even though Plaintiff
asserts in his Complaint that the mortgage document at issue is a “bogus document,”
the mortgage documents indicate Defendant is the security holder and lender. (Doc.
Nos. 1-2, 1-4) As the “creditor,” Defendant is not a debt collector under the FDCPA
and is not subject to the FDCPA. Plaintiff fails to state a claim upon which relief may
be granted against Defendant under the FDCPA. Any amendment to the Complaint
regarding an FDCPA claim would be futile.
5.
Quiet Title
Plaintiff asserts he has evidence to prove he has title to the property and that
the Court should issue quiet title in his favor. Plaintiff claims he has evidence of
fraud and that Defendant has failed to show evidence of its right to foreclose.
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Defendant argues that Plaintiff’s quiet title claim to the property should be dismissed
because Plaintiff fails to establish the elements of a quiet title cause of action.
Defendant further argues that there is no dispute that Plaintiff has title to the property
at this time.
M.C.L. § 600.2932(1), which governs actions that determine interests in land,
states:
Any person, whether he is in possession of the land in
question or not, who claims any right in, title to, equitable
title to, interest in, or right to possession of land, may bring
an action in the circuit courts against any other person who
claims or might claim any interest inconsistent with the
interest claimed by the plaintiff, whether the defendant is
in possession of the land or not.
M.C.L. § 600.2932(1). The statute “codifi[e]s actions to quiet title and authorizes
suits to determine competing parties’ respective interests in land.” Republic Bank v.
Modular One LL., 591 N.W.2d 335, 337 (Mich. Ct. App. 1998), overruled on other
grounds by Stokes v. Millen Roofing Co., 466 Mich. 660, 649 N.W. 2d 371 (2002).
In a quiet title claim, the complaint must allege: (1) the interest the plaintiff claims
in the premises; (2) the interest the defendant claims in the premises; and (3) the facts
establishing the superiority of the plaintiff’s claim. M.C.R. 3.411(B)(2). The plaintiff
has the burden of proof in a quiet title action, and must demonstrate a prima facie case
of title. Beulah Hoagland Appleton Qualified Pers. Residence Trust v. Emmet Co.
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Rd. Comm’n, 236 Mich. App. 546, 550 (1999). If the plaintiff establishes a prima
facie case, the burden shifts to the defendant to establish that defendant has superior
right or title to the property. Beulah, 600 N.W.2d at 701.
Liberally reviewing the Complaint, the Court finds Plaintiff has failed to state
a claim upon which relief may be granted since there is no dispute at this time that
Plaintiff has title to the property at issue. Any amendment to this claim would be
futile.
As to Plaintiff’s allegation of fraud, the Court finds he has failed to state a
claim based on fraud. The Sixth Circuit has interpreted Rule 9(b) as requiring a
plaintiff to allege the time, place, and content of the alleged misrepresentation on
which they relied; the fraudulent scheme; the fraudulent intent of the defendants; and
the injury resulting from the fraud. See, Yuhasz v. Brush Welman, Inc., 341 F.3d 559,
563 (6th Cir. 2003). A liberal reading of the Complaint shows Plaintiff has failed to
allege the specific fraudulent statements made by Defendant or its representatives, the
time and place of such statements, the fraudulent scheme involved and the fraudulent
intent of the Defendant. Plaintiff’s fraud claims fail to meet the requirements under
Rul 9(b) with sufficient specificity and such claims must be dismissed. Because
there is no quiet title claim at this time, any amendment to Plaintiff’s allegation of
fraud would be futile.
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Plaintiff also claims he is entitled to review the original note before Defendant
is permitted to foreclose. In Michigan, there is no statutory requirement that the
original note or so called “wet-ink” mortgage be presented prior to foreclosure
proceedings. Michigan’s foreclosure by advertisement statute does not require the
original note. See, Aliahmad v. U.S. Bank N.A., 2012 WL 3639282, at *5 (E.D. Mich.
Aug. 24, 2012); Jozlin v. U.S. Bank N.A., 2012 WL 12760, at *3 (E.D. Mich. Jan. 4,
2012). A liberal review of Plaintiff’s Complaint shows Plaintiff cannot state a claim
that an original note is required before Defendant is permitted to foreclose on the
subject property. Any amendment to such a claim would be futile.
B.
Plaintiff’s Motion to Compel Discovery
Plaintiff seeks an order to compel Defendant to respond to Plaintiff’s First Set
of Interrogatories and Request for Production of Documents. Defendant responds
that Plaintiff’s request is premature under Fed. R. Civ. P. Rule 26(d)(1).
Rule 26(d)(1) provides that “[a] party may not seek discovery from any source
before the parties have conferred as required by Rule 26(f),” except where disclosures
are exempted or the court so orders. Here, the parties have yet to meet and confer as
required under Rule 26(f). Plaintiff’s request for discovery is premature. In any
event, in light of the ruling on Defendant’s Motion to Dismiss, the request for
discovery is denied as moot.
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C.
Plaintiff’s Motion to Compel and Order Default
Plaintiff asserts that default judgment should be entered since Defendant failed
to respond to the Complaint timely. Defendant responds that in lieu of an answer, it
filed a Motion to Dismiss and that default judgment is inappropriate.
The entry of default under Fed. R. Civ. P. 55(a) is the first procedural step
necessary in obtaining a default judgment. Shepard Claims Serv., Inc. v. William
Darrah & Associates, 796 F.2d 190, 193 (6th Cir. 1986). Rule 55(a) provides:
“When a party against whom a judgment for affirmative relief is sought has failed to
plead or otherwise defend, and that failure is shown by affidavit or otherwise, the
clerk must enter the party's default.” Fed. R. Civ. P. 55(a). Rule 55(b)(2) states that
a party must apply to the Court for a default judgment. The Court may conduct an
accounting, determine the amount of damages, establish the truth of any allegation
by evidence, or investigate any other matter. Fed. R. Civ. P. 55(b)(2).
Plaintiff in this case did not request a Clerk’s entry of default as required by
Rule 55(a), but instead requested a Default Judgment before this Court under Rule
55(b). In any event, Defendant filed a Motion to Dismiss in lieu of an Answer which
is allowed under Rule 12(b)(6). As set forth in Rule 55(a), an opposing party may
“otherwise defend” the action, which Defendant has done by filing a Motion to
Dismiss under Rule 12(b)(6). Plaintiff is not entitled to a default judgment since
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Defendant has appeared to defend the action.
III.
CONCLUSION
For the reasons set forth above,
IT IS ORDERED that Defendant’s Motion to Dismiss (Doc. No. 2) is
GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Compel Discovery
(Doc. No. 4) and Plaintiff’s Motion to Compel Default Judgment (Doc. No. 10) are
DENIED as MOOT.
IT IS FURTHER ORDERED that this action is DISMISSED with prejudice.
S/Denise Page Hood
Denise Page Hood
United States District Judge
Dated: December 1, 2015
I hereby certify that a copy of the foregoing document was served upon counsel of
record or party on December 1, 2015, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager
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