Samulak v. Carington Mortgage Services, LLC et al

Filing 46

ORDER OVERRULING Objections 44 , ADOPTING Report and Recommendation 43 , and GRANTING Defendants' Motion for Judgment on the Pleadings 31 . Signed by District Judge Stephen J. Murphy, III. (KJac)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ROBERT LEE SAMULAK,
Plaintiff,

Case No. 2:16-cv-11229

v.

HONORABLE STEPHEN J. MURPHY, III

CARINGTON MORTGAGE SERVICES,
LLC, et al.,

MAGISTRATE STEPHANIE DAWKINS DAVIS

Defendants.
/
ORDER OVERRULING OBJECTIONS [44],
ADOPTING REPORT AND RECOMMENDATION [43], AND
GRANTING DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS [31]
In an effort to stop the foreclosure sale of his deceased parents' home, Plaintiff Robert
Lee Samulak filed an action alleging violations of (1) the Racketeering Influenced and
Corrupt Organization Act, 18 U.S.C. §§ 1961–68; (2) the Dodd-Frank Wall Street Reform
and Consumer Protection Act; and (3) Michigan Court Rule 2.112(B)(1). The Court referred
the matter to the magistrate judge. ECF 18. Defendants Carington Mortgage Services, LLC
and Mortgage Electronic Registration Service, Inc. filed a Motion for Judgment on the
Pleadings Pursuant to Fed. R. Civ. P. 12(c). ECF 31. The magistrate judge issued a Report
and Recommendation ("Report") suggesting the Court grant Defendants' motion and
dismiss Plaintiff's claims with prejudice. ECF 43. Plaintiff then filed timely objections. ECF
44. Having examined the record and considered the objections de novo, the Court will
overrule the objections, adopt the Report, grant Defendants' Motion for Judgment on the
Pleadings, and dismiss the complaint.

BACKGROUND
The Report properly details the events giving rise to Plaintiff's action. ECF 43, PgID
635–39. The Court will adopt that portion of the Report.
STANDARD OF REVIEW
Civil Rule 72(b) governs the review of a magistrate judge's report. A district court's
standard of review depends upon whether a party files objections. The Court need not
undertake any review of portions of a Report to which no party has objected. Thomas v.
Arn, 474 U.S. 140, 153 (1985). De novo review is required, however, if the parties "serve
and file specific written objections to the proposed findings and recommendations." Fed.
R. Civ. P. 72(b)(2). In conducting a de novo review, "[t]he district judge may accept, reject,
or modify the recommended disposition; receive further evidence; or return the matter to
the magistrate judge with instructions." Fed. R. Civ. P. 72(b)(3).
DISCUSSION
I.

Plaintiff's Claims are Barred by Res Judicata
Plaintiff objects to the magistrate judge's determination that res judicata bars his

claims. Obj. 11, ECF 44, PgID 667. Plaintiff's principal argument is that all claims and
issues have not been fully adjudicated on the merits. Plaintiff's Objection No. 11 is
overruled.
The original adjudication occurred in a federal bankruptcy court, so federal law
governs its preclusive effect. Hamilton's Bogarts, Inc. v. Michigan, 501 F.3d 644, 650 (6th
Cir. 2007) (preclusive effect of a judgment issued by a federal court is governed by federal
law). Under federal law, res judicata applies "when (1) there is a final decision on the merits
of the first action by a court of competent jurisdiction; (2) the second action involves the
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same parties, or their privies, as the first; (3) the second action raises an issue actually
litigated or which should have been litigated in the first action; and (4) there is identity of
claims." Walker v. Gen. Tel. Co., 25 F. App'x 332, 336 (6th Cir. 2001) (citing Sanders
Confectionery Prod., Inc. v. Heller Fin., Inc., 973 F.2d 474, 480 (6th Cir. 1992)). Once res
judicata is established, it "extinguishes all rights of the plaintiff to remedies against the
defendant with respect to all or any part o[f] the transaction, or series of connected
transaction, out of which the action arose." Walker, 25 F. App'x at 336 (quoting J.Z.G. Res.,
Inc. v. Shelby Ins. Co., 84 F.3d 211, 215 (6th Cir. 1996)).
Res judicata applies here, and Plaintiff's claims are barred. The Court will address
each element in turn.
A. There was a final decision on the merits.
The record shows that Plaintiff brought an adversary complaint in a federal
bankruptcy court challenging the promissory note, mortgage, and foreclosure at issue here.
ECF 31-11. After oral argument, the bankruptcy court filed an order dismissing the
complaint "in its entirety and with prejudice." ECF 31-12, PgID 367. The order was a final
order1 on the merits by a court of competent jurisdiction for purposes of res judicata. See
Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 578 (6th Cir. 2008); In re John
Richards Homes Bldg. Co., L.L.C., 405 B.R. 192, 227 (E.D. Mich. 2009).
B. The bankruptcy court's decision pertained to the same parties.

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Plaintiff asserts that there is a pending Motion for Relief on this order, ECF 44, PgID
667, but he is incorrect. The Court reviewed the bankruptcy court's docket, and there are
no such motions filed after the bankruptcy court granted the defendant's motion to dismiss.
See Adversary Proceeding 16-04944. In the lead bankruptcy docket, Plaintiff filed a Motion
to Vacate Judgment. Bankruptcy Petition 16-51819, ECF 44. That motion, however,
pertains to an Order on Motion for Relief from Stay that is distinct from the order at issue
here.
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Plaintiff and Defendant Carington Mortgage Services LLC were both parties to the
adversary complaint in the bankruptcy proceedings. ECF 31-12, PgID 367. Defendant
Mortgage Electronic Registration Systems, Inc., as nominee to the underlying mortgage,
is in privity with Defendant Carington Mortgage Services LLC. See ECF 31-2; Adelson v.
Ocwen Fin. Corp., No. 07-13142, 2017 WL 927619, at *9 (E.D. Mich. Feb. 16, 2017) (citing
Kimball v. Orlans Assocs. P.C., 651 F. App'x 477, 481 (6th Cir. 2016)), report and
recommendation adopted, No. 07-13142, 2017 WL 1148922 (E.D. Mich. Mar. 28, 2017).
C. The issues were actually litigated.
Plaintiff's adversary complaint sought to determine his interest in the same residential
real estate at issue here. ECF 31-11, PgID 355. In the complaint, Plaintiff, inter alia,
challenged Defendant's right to enforce the promissory note, ECF 31-11, PgID 358, sought
to prevent foreclosure, id. at 362, requested declaratory judgment as to whether Defendant
had a valid claim on the underlying loan, id. at 359, and prayed for "[a]ny and all other
remedies appropriate and necessary," id. at 362. Defendant then moved to dismiss the
complaint, and the bankruptcy court, after hearing oral argument and weighing the issues,2
decided to dismiss the complaint "in its entirety and with prejudice." ECF 31-12, PgID 367.
D. There is an identity of claims.
Identity of claims exist "where the facts and events creating the right of action and the
evidence necessary to sustain each claim are the same." Heike v. Central Michigan Univ.
Bd. of Tr., 573 F. App'x 476, 483 (6th Cir. 2014). Analysis of identity largely turns on the

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Although Plaintiff asserts the dismissal was based on a technicality, ECF 44, PgID 667,
the order states that the bankruptcy court heard oral argument and provided a reasoned
analysis on the record. ECF 31-12, PgID 367. Plaintiff may have waived his opportunity to
file a written response, but that is not a technicality that precluded the bankruptcy court
from making a decision on the merits.
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factual overlap of the two claims. United States v. Tohono O'Odham Nation, 563 U.S. 307,
316 (2011). Here, the two claims pertain to the same piece of property, the same
promissory note, the same mortgage, and the same foreclosure. There is substantial
factual overlap, and thus, there is an identity of claims.
With all the elements of res judicata satisfied, the Court holds that Plaintiff's action is
barred.
II.

Plaintiff's Remaining Objections
The rest of Plaintiff's objections are irrelevant because res judicata, as a threshold

matter, extinguishes all of Plaintiff's rights against Defendants with respect to all or any part
of the underlying transaction. Walker, 25 F. App'x at 336. That principle is true despite
Plaintiff's attempts to allude to new evidence that might change the outcome of the case.
Saylor v. United States, 315 F.3d 664, 668 (6th Cir. 2003). Therefore, Plaintiff's Objections
Nos. 1–10 and 12–13 are overruled.
ORDER
WHEREFORE, it is hereby ORDERED that Plaintiff's Objections [44] are
OVERRULED, and the magistrate judge's Report and Recommendation [43] is ADOPTED.
IT IS FURTHER ORDERED that Defendant's Motion for Judgment on the Pleadings
[31] is GRANTED.
IT IS FURTHER ORDERED that Plaintiff's claims are DISMISSED WITH

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PREJUDICE.
This is a final order and closes the case.
SO ORDERED.
s/Stephen J. Murphy, III
STEPHEN J. MURPHY, III
United States District Judge
Dated: September 14, 2017
I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on September 14, 2017, by electronic and/or ordinary mail.
s/Keisha Jackson
for David Parker, Case Manager

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