Wypych v. Deutsche Bank National Trust Company al
OPINION AND ORDER Granting Defendants' 6 Motion to Dismiss. Signed by District Judge Matthew F. Leitman. (HMon)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Case No. 16-cv-13836
Hon. Matthew F. Leitman
DEUTSCHE BANK NATIONAL
TRUST COMPANY, AS INDENTURE
TRUSTEE, ON BEHALF OF THE
HOLDERS OF THE ACCREDITED
MORTGAGE LOAN TRUST 2005-2
ASSET BACKED NOTES, et al.,
OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO DISMISS (ECF #6)
In this action, Plaintiff Thomas Wypych (“Wypych”) alleges that Defendants
Deutsche Bank National Trust Company, as Indenture Trustee, on Behalf of the
Holders of the Accredited Mortgage Loan Trust 2005-2 Asset Backed Notes (“DB”)
and Portfolio Servicing, Inc. (“Portfolio”) (collectively “Defendants”), violated
federal and state laws when they failed to approve him for a mortgage modification
and foreclosed on his home. Defendants now move to dismiss Wypych’s Complaint
(the “Motion to Dismiss”). (See ECF #6.) Wypych’s claims are similar, and in many
cases identical, to claims that this Court has routinely dismissed in other actions
brought by Wypych’s counsel.1 Wypych’s claims fare no better. Therefore, for the
reasons that follow, the Motion to Dismiss is GRANTED.
In his Complaint, Wypych alleges that he was the fee simple owner of real
property located at 54358 Cambridge Drive in Shelby Township, Michigan (the
“Property”). (See Compl. at ¶¶ 4, 9, ECF #1-2 at Pg. ID 18-19.) When he purchased
the Property, Wypych took out a mortgage with Accredited Home Lenders, Inc.
(“AHL”). (See id. at ¶11, ECF #1-2 at Pg. ID 19.) In 2011, AHL assigned the
mortgage to DB. (See id. at ¶16, ECF #1-2 at Pg. ID 20; see also id. at Pg. ID 76.)
DB sold the “loan servicing rights” to Portfolio, which “serviced [Wypych’s]
mortgage loan at all relevant times.” (Id. at ¶17, ECF #1-2 at Pg. ID 20.)
“In or about August of 2013, [Wypych] began to fall behind on his mortgage
payments.” (Id. at ¶23, ECF #1-2 at Pg. ID 21.) He then contacted Portfolio in order
to “work out his mortgage obligations with a loan modification.” (Id. at ¶24, ECF
See, e.g., Cruz v. Capital One, N.A., 192 F.Supp.3d 832, 838 (E.D. Mich. 2016)
(granting motion to dismiss and dismissing foreclosure-related claims brought by
Wypych’s counsel); Fredericks v. Mortgage Elec. Registration Sys., 2015 WL
3473972, at *4 (E.D. Mich. June 2, 2015) (collecting cases dismissing foreclosure
claims brought by Wypych’s counsel and noting that “other courts in this District
have dismissed identical claims in other of Mr. Lutz’s cases based on similarly vague
allegations”); Fredericks v. Allquest Home Mortg. Corp., 2015 WL 1966856 (E.D.
Mich. Apr. 30, 2015) (same); Goodman v. Citimortgage, Inc., 2015 WL 6387451
(E.D. Mich. Oct. 22, 2015) (same). Rimer v. Bank of New York Mellon, 2015 WL
4430292 (E.D. Mich. July 20, 2015) (same).
#1-2 at Pg. ID 21.) According to Wypych, Portfolio’s “actions in this loss mitigation
effort” did not comply with federal or state law. (See, e.g., id. at ¶28, ECF #1-2 at
Pg. ID 22.) Among other things, Wypych claims that Portfolio “routinely lost
documents, misrepresented payment figures and account information, and illegally
charged [him] with excessive fees and interest.” (Id. at ¶66, ECF #1-2 at Pg. ID 26.)
Wypych never worked out a loan modification with Portfolio or DB.
On or about February 10, 2016, Defendants began foreclosure by
advertisement proceedings on the Property. (See id. at ¶42, ECF #1-2 at Pg. ID 23.)
Wypych insists that Defendants did not send him timely notice of a default, failed to
give him the opportunity to cure the default, and did not provide him actual notice
of the scheduled sheriff’s sale. (See id. at ¶¶ 37-41, 50, ECF #1-2 at Pg. ID 23-24.)
Wypych says that if the Defendants had given him the required notices before
beginning the foreclosure proceedings, he “may have been in a position to reinstate
the Loan.” (Id. at ¶52, ECF #1-2 at Pg. ID 25; emphasis added.)
DB purchased the Property at a sheriff’s sale on April 8, 2016. (See id. at ¶48,
ECF #1-2 at Pg. ID 24.) The redemption period for the sale was set to expire on
October 8, 2016. (See id. at ¶55, ECF #1-2 at Pg. ID 25.)
On October 7, 2016, the day before the redemption period was scheduled to
expire, Wypych filed this action in the Macomb County Circuit Court. (See ECF #12.) In the Complaint, Wypych asserts the following causes of action:
“Declaratory Relief” (Count I);
“Quiet Title” (Count II);
“Illegal Foreclosure as to MCL 600.3204 et seq.”(Count III);
“Illegal Foreclosure Respecting Notice of Default” (Count IV);
“Illegal Foreclosure Respecting Foreclosure Alternatives” (Count V);
“Illegal Foreclosure Respecting Notice of Sale/Adjournment” (Count VI);
“Violations of the Fair Debt Collection Practices Act” (Count VII);
“Violations of 12 USC 2605, et seq.” (Count VIII);
“Violations of 12 CFR 1024.41, et seq. Regulation X” (Count IX);
“Violations of 15 USC 1601, et seq. Regulation Z” (Count X);
“Violations of 12 USC 2605, et seq. (Regulation X)” (Count XI);
“Breach of Contract” (Count XII);
“Intentional Misrepresentation and Fraud” (Count XIII);
“Slander of Title” (Count XIV);
“Declaratory Relief Foreclosure Barred by Unclean Hands” (Count XV);
“Declaratory Relief Violation of Michigan Consumer Protection Act”
(Count XVI); and
“Request For Conversion to Judicial Foreclosure” (Count XVII).
On October 7, 2016, the Macomb County Circuit Court entered an ex parte
temporary restraining order and order to show cause, “staying the expiration of the
redemption period” (the “Stay Order”) (ECF #1-3 at 13, Pg. ID 111.) The state court
set a hearing on the Stay Order for November 14, 2016. (See id. at 14, Pg. ID 112.)
On October 28, 2016, before the scheduled hearing on the Stay Order, Defendants
timely removed this action to this Court. (See Notice of Removal, ECF #1.) Wypych
never asked this Court to extend the Stay Order nor moved to convert the stay order
into an injunction, and the Stay Order expired – at the very latest – on November 11,
2016.2 With the expiration of the Stay Order, the redemption period resumed and
On January 9, 2017, Defendants filed the Motion to Dismiss. (See ECF #6.)
Under Michigan law, “a temporary restraining order granted [by a state court]
without notice expires by its terms within such time after entry, not to exceed 14
days, as the court sets….” M.C.R. 3.310(B)(3). Likewise, under federal law, a
temporary restraining order “expires at the time after entry – not to exceed 14 days
– that the court sets.” Fed. Rule Civ. Proc. 65(b)(2). Thus, the Stay Order most likely
expired 14 days after its entry – on October 21, 2016. See Garrow v. JPMorgan
Chase Bank, N.A., 2016 WL 2894066, at *2 n.4 (E.D. Mich. Apr. 27, 2016) (holding
in mortgage foreclosure action brought by Wypych’s counsel that state-court
temporary restraining order entered prior to removal expired “fourteen days after it
was issued”). But in no event would the Stay Order have remained in effect 14 days
following removal to this Court (which occurred on October 28, 2016). See Granny
Goose Foods, Inc. v. Brotherhood Of Teamsters & Auto Truck Drivers Local No 70
of Alameda County, 415 U.S. 423, 439-40 (1974) (“An ex parte temporary
restraining order issued by a state court prior to removal remains in force after
removal no longer than it would have remained in effect under state law, but in no
event does the order remain in force longer than the time limitations imposed by
Rule 65(b), measured from the date of removal”).
Before the Court turns to the merits of the Motion to Dismiss, it pauses to
clarify the governing legal standard. Defendants seek dismissal under Federal Rule
of Civil Procedure 12(b)(6). In his response brief, Wypych argues that “a Rule
12(b)(6) motion should not be granted unless it appears beyond all doubt that the
plaintiff can prove no set of facts in support of his claim which would entitle him to
relief.” (Wypych Resp. to Mot. to Dismiss, ECF #9 at Pg. ID 381) (quoting DirecTV,
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007).) But as this Court recently pointed
out, “the Supreme Court jettisoned the ‘can prove no set of facts’ standard in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 561-63 (2007) and Ashcroft v. Iqbal, 556
U.S. 662 (2009).” Edwards v. Rougeau, 2017 WL 727281, at *2 (E.D. Mich. Feb.
24, 2017). Thus, the standard Wypych relies on is no longer controlling law.3
“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
Wypych’s counsel should be well aware of this change in the law. Last year, in a
similar mortgage-foreclosure case, counsel relied upon the displaced “no set of
facts” standard in his opposition to a motion to dismiss. (See Luke v. U.S. Bank Trust,
N.A., E.D. Mich. Case No. 16-cv-10189, Dkt. #6 at Pg. ID 242-243.) In its Order
dismissing the plaintiff’s claims, the Court in Luke noted that that the “no set of
facts” standard “has not governed motions to dismiss for nearly a decade.” (Id. at
Dkt. #8, Pg. ID 341.) The Court then ordered Wypych’s counsel to show cause why
he should not be sanctioned for, among other things, relying upon the “no set of
facts” standard. (Id. at Dkt. #8, Pg. ID 357.) Here, Wypych’s counsel includes a
citation to Iqbal (see Wypch Resp. to Mot. to Dismiss, ECF #9 at Pg. ID 391), but
that does not excuse his continued reliance on the outdated “no set of facts” standard.
plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).
A claim is facially plausible when a plaintiff pleads factual content that permits a
court to reasonably infer that the 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).
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.” Iqbal, 556 U.S. at 678.
In ruling on a motion to dismiss, the Court may consider “the Complaint and
any exhibits attached thereto, public records, items appearing in the record of the
case and exhibits attached to defendant’s motion to dismiss so long as they are
referred to in the Complaint and are central to the claims contained therein.” Bassett
v. Nat'l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008). The Court may
also consider “documents incorporated into the complaint by reference, and matters
of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007). This may include “documents relating the note,
mortgage, assignment, loan modification process, and foreclosure that are referenced
in the complaint and integral to [plaintiff's] claims.” Gardner v. Quicken Loans, Inc.,
567 Fed. App’x 362, 365 (6th Cir. 2014).
In the Motion to Dismiss, Defendants address each count of Wypych’s
Complaint, individually, and present separate arguments as to why each count fails
to state a cognizable claim. (See Mot. to Dismiss, ECF #6 at Pg. ID 180-201.)
Wypych has not responded in kind. Indeed, in his response to the Motion to Dismiss,
Wypych ignores the vast majority of Defendants’ arguments and fails to present even
a perfunctory defense of most of his claims. Wypych offers no specific response to
Defendants’ arguments with respect to the following claims in his Complaint:
Count I (“Declaratory Relief”);
Count II (“Quiet Title”);
Count III (“Illegal Foreclosure as to MCL 600.3204 et seq.”);
Count IV (“Illegal Foreclosure Respecting Notice of Default”);
Count VII (alleged violations of the Fair Debt Collection Practices
Count VIII (“Violations of 12 USC 2605, et seq.”);
Count X (“Violations of 12 USC 2605, et seq. (Regulation X)”);
Count XIV (“Slander of Title”);
Count XV (“Declaratory Relief Foreclosure Barred by Unclean
Count XVI (alleged violations of the Michigan Consumer Protection
Count XVII (alleged violations of M.C.L. § 600.3205).
The Court therefore finds these claims abandoned and DISMISSES these
counts of the Complaint. See Cruz v. Capital One, N.A., 192 F.Supp.3d 832, 838
(E.D. Mich. 2016) (dismissing multiple foreclosure related claims brought by
Wypych’s counsel on behalf of borrowers because borrowers “did not offer any
argument in defense” of the claims in response to motion to dismiss)4; Mekani v.
Homecomings Fin., LLC, 752 F. Supp. 2d 785, 797 (E.D. Mich. 2010) (“Moreover,
Plaintiff has not responded to Defendant’s motion to dismiss this claim, and the
Court assumes he concedes this point and abandons the claim.”); Beydoun v.
Countrywide Home Loans, Inc., 2009 WL 1803198, at *3 (E.D. Mich. June 23,
Wypych’s counsel likewise “fail[ed] to address” attacks on numerous foreclosurerelated claims that he brought in Winters v. Deutsche Bank National Trust Company,
2016 WL 5944717, at *4 (E.D. Mich. Sept. 14, 2016) (“As defendants note in their
reply, Winters fails to address defendants' attacks on Counts IV, V, and VI of the
complaint, regarding “slander of title,” “foreclosure barred by unclean hands,” and
“preliminary injunction,” respectively. The Court considers these claims
In Counts III – VI of the Complaint, Wypych seeks to set aside the foreclosure
on various grounds. As noted above, Wypych fails to present any response to
Defendants’ attacks on Counts III, IV, and VI, and the Court dismisses those claims
for that reason. The Court adds that all of Wypych’s claims that seek to set aside the
foreclosure fail because the redemption period has expired and Wypych has failed
to satisfy the requirements for setting aside a foreclosure after such expiration.
Under Michigan law, “once the statutory redemption period lapses,” courts
“can only entertain the setting aside of a foreclosure sale where the mortgagor has
made a clear showing of fraud, or irregularity.” Conlin v. Mortgage Elec.
Registration Sys., 714 F.3d 355, 359 (6th Cir. 2013) (internal quotation marks
omitted). “It is further clear that not just any type of fraud will suffice. Rather, the
misconduct must relate to the foreclosure procedure itself.” Id. at 360 (internal
punctuation omitted). Finally, a plaintiff must plead and prove prejudice. “To
demonstrate such prejudice, [a plaintiff] must show that [he] would have been in a
better position to preserve [his] interest in the property absent defendant’s
noncompliance with the statute.” Id. at 361.
Here, Wypych has not alleged prejudice. He alleges only that absent the
alleged irregularities, he “may” have been in a position to avoid foreclosure. (Compl.
at ¶52, ECF #1-2 at Pg. ID 25.) That is not enough. Because Wypych does not
allege prejudice, all of his claims that seek to set aside the foreclosure fail as a matter
Wypych never addresses the prejudice issue in his response to the Motion to
Dismiss. Instead, he raises two arguments in an attempt to save his “illegal
First, Wypych argues that Defendants engaged in “dual
tracking” and wrongly initiated foreclosure proceedings while the parties were
negotiating a mortgage modification that may have allowed Wypych to remain in
his home. (See Wypych Resp. Br., ECF #9 at Pg. ID 385-387.) Second, Wypych
says that his illegal foreclosure claims are viable based on a promissory-estoppel
theory. (See id. at Pg. ID 387-390.) Both of these arguments are beside the point
given Wypych’s failure to allege prejudice. But even if Wypych had alleged
prejudice, the Court would decline to set aside the foreclosure based upon these
arguments because they lack merit.
This Court has repeatedly dismissed foreclosure-related claims brought by
Wypych’s counsel where, as here, the plaintiff-borrower has failed to sufficiently
allege such prejudice. See Nadratowksi v. Mortgage Elec. Registration Sys., 2015
WL 519242, at *2 (E.D. Mich. Feb. 9, 2015) (dismissing nearly-identical illegal
foreclosure claim brought by Wypych’s counsel on behalf of different borrower in
part because “[n]oticeably absent from [p]laintiff's pleadings is any suggestion of
prejudice stemming from a defect in the foreclosure process”); Goodman, 2015 WL
6387451, at *4 (“Plaintiffs fail to suggest how, if at all, they would have been in a
better position had [the defendant bank] complied with the notice requirements
[under Michigan law] and thus plaintiffs failed to plausibly assert prejudice
stemming from [the defendant’s] actions”).
This Court has described the “dual tracking” mentioned by Wypych as
Dual tracking refers to a common tactic by banks that
institute foreclosure proceedings at the same time that a
borrower in default seeks a loan modification. The result
is that the borrower does not know where he or she stands,
and by the time foreclosure becomes the lender's clear
choice, it is too late for the borrower to find options to
Kloss v. RBS Citizens, N.A., 996 F.Supp.2d 574, 585 (E.D. Mich. 2014).
This Court has repeatedly held that, following the expiration of the
redemption period, allegations of dual tracking are insufficient to warrant the setting
aside of a foreclosure. See, e.g., Boluch v. J.P. Morgan Chase Band, 2015 WL
1952285, at *2 (E.D. Mich. Apr. 29, 2015); Radske v. Federal National Mortgage
Assoc., 2016 WL 3667957, at *4 (E.D. Mich. July 11, 2016).6 As noted above, a
court can set aside a completed foreclosure after expiration of the redemption only
where a plaintiff establishes fraud or irregularity “relat[ing] to the foreclosure
proceeding itself.” Conlin, 714 F.3d at 360 (emphasis added). Dual tracking,
See also Trudell v. Carrington Mortgage Services, LLC, 2016 WL 6080822, at *4
(E.D. Mich. Sept. 27, 2016) (recommending dismissal of dual tracking claim and
holding that “[d]espite Plaintiff's attempt to blend the loan modification process and
foreclosure process, case law in this district holds each process separate”); Stokes v.
U.S. Bank Trust, N.A., 2016 WL 4107719, at *4 (E.D. Mich. May 6, 2016) (same).
however, relates to “loan modification process rather than the foreclosure process.”
Kloss, 996 F.Supp.2d at 585. Therefore, Wypych is not entitled to an order setting
aside the foreclosure based upon his allegations of “dual tracking.”7
In his response to the Motion to Dismiss, Wypych invokes the doctrine of
“promissory estoppel” to support his claim that this Court may set aside the
completed foreclosure. (See Wypych Resp. to Mot. to Dismiss, ECF #9 at Pg. ID
387-390.) According to Wypych:
Defendants promised Plaintiff approval of the loan
modification on submittal of the required documents.
Plaintiff, relying on Defendants’ statements, submitted all
requisite documents timely on reasonable belief that he
could be to protect his home from being foreclosed.
Thereby, Defendants induced Plaintiff to refrain from
defending the foreclosure, which ultimately led to the
sheriff’s sale causing damages to Plaintiff.
(Id. at Pg. ID 389.)
Wypych’s reliance on the doctrine of promissory estoppel fails. As this Court
has previously recognized – in a case involving Wypych’s counsel – Michigan’s
Wypych appears to repeat his “dual tracking” argument in Count IX of his
Complaint, titled “Violations of 12 CFR 1024.41, et seq. Regulation X.” The only
reference to Regulation X in Wypych’s response to the Motion to Dismiss is located
in the section in which Wypych makes his “dual tracking” argument. (See Wypych
Resp. to Mot. to Dismiss, ECF #9 at Pg. ID 386.) Wypych’s “dual tracking” claim
in Count IX of his Complaint fails for the same reasons as stated above. Wypych
has not raised any other arguments with respect to his claim under Count IX.
statute of frauds, M.C.L. § 566.132(2), “requires that any agreement by a financial
institution to modify a loan agreement or forbear from proceeding with their
foreclosure rights must be in writing and signed by an authorized agent of the
financial institution.” Fredericks, 2015 WL 3473972, at *5. And Wypych cannot
avoid this statute of frauds on the basis of promissory estoppel. As this Court has
explained, “under the ‘unqualified and broad ban’ of section 566.132,” a plaintiff “is
precluded from bringing a claim – no matter its label – against [a financial
institution] to enforce the terms of an oral promise ... including [an] action for
promissory estoppel.’” Id. at *6 (quoting Crown Technology Park v. D & N Bank,
FSB, 619 N.W.2d 66, 72 (Mich. App. 2000)); see also Koole v. Wells Fargo Bank,
N.A., 2016 WL 1732731, at ** 7-8 (E.D. Mich. Apr. 29, 2016) (rejecting same
promissory estoppel argument raised by Wypych’s counsel in different mortgage
foreclosure case); Martin v. Bank of New York Mellon Corp., 2015 WL 7352006, at
*4 (E.D. Mich. Nov. 20, 2015) (same). Thus, promissory estoppel cannot save
Wypych’s claims here.
In Count X of the Complaint, Wypych claims that Defendants violated the
federal Truth in Lending Act (“TILA”) when they failed to notify him within that
his mortgage loan had been sold or transferred within thirty days of that transfer.
(See Compl. at ¶¶ 144-149, ECF #1-2 at Pg. ID 37-38.)
TILA provides a one year statute of limitations period for claims seeking
Any action under this section may brought in any United
States district court, or in any other court of competent
jurisdiction, within one year from the date of the
occurrence of the violation. This subsection does not bar a
person from asserting a violation of this title in an action
to collect the debt which was brought more than one year
from the date of the occurrence of the violation as a matter
of defense by recoupment or set-off in such action, except
as otherwise provided by State law.
15 U.S.C. § 1640(e).
Here, Wypych filed suit more than five years after his mortgage was assigned
to DB. (See Exhibit 4 to Complaint, ECF #1-2 at Pg. ID 76, providing evidence that
mortgage was assigned on February 25, 2011.) The applicable one-year statute of
limitations therefore bars Wypych’s TILA claim. See Mills v. Equicredit Corp., 294
F.Supp.2d 903, 909-10 (E.D. Mich. 2003) (dismissing TILA claim as barred by oneyear statute of limitations); Radske, 2016 WL 3667957, at *5 (dismissing TILA
claim brought by Wypych’s counsel as time barred).
Wypych counters that the Court should equitably toll the statute of limitations
because “he was completely unaware of the TILA violations until shortly before he
filed his state circuit court complaint.” (Wypych Resp. to Mot. to Dismiss, ECF #9
at Pg. ID 395.) In order to succeed on such an equitable tolling claim, Wypych must
plead and prove that “(1) the [D]efendant[s] took affirmative steps to conceal the
[his] cause of action; and (2) [he] could not have discovered the cause of action
despite exercising due diligence.” Mills, 294 F.Supp.2d at 908 (quoting Jarrett v.
Kassel, 972 F.2d 1415, 1423 (6th Cir.1992)). Wypych does not identify any
allegations in his Complaint that satisfy either of these pleading requirements.
Accordingly, he is not entitled to an equitable tolling of the statute of limitations.
See, e.g., Mrla v. FNMA, 2016 WL 3924112 (E.D. Mich. July 21, 2016) (refusing to
equitably toll TILA’s one-year statute of limitations in case brought by Wypych’s
counsel and holding that plaintiff failed to plead defendants’ alleged “wrongful
concealment” of TILA claim with the required particularity).
Wypych’s TILA claim fails for a second and independent reason: he has
abandoned the claim.
In the Motion to Dismiss, Defendants argue that the
Complaint does not plausibly allege a TILA violation.
Wypych ignores that
argument and in his response maintains only that his TILA claim was not timebarred. Because Wypych offers no response to the attack on the sufficiency of his
TILA allegations, he has abandoned his TILA claim. See Winters, 2016 WL
5944717, at *3 (“In her response, Winters argues at length about her entitlement to
equitable tolling of the statute of limitations, but offers no response to defendants’
primary argument, that the allegations fail to state a claim [under TILA]. Claims left
to stand undefended against a motion to dismiss are deemed abandoned. Having
abandoned the merits of [her TILA] claim, Winters cannot succeed on it”) (internal
quotation marks and citation omitted).
In Count XII of the Complaint, Wypych alleges that Defendants breached his
mortgage contract when they “fail[ed] to provide [him] the notices required by the
Mortgage prior to foreclosing.” (Compl. at ¶156, ECF #1-2 at Pg. ID 39.) In the
Motion to Dismiss, Defendants argue that they fully complied with all requirements
of Wypych’s mortgage and did not breach any parts of that contract. (See Mot. to
Dismiss, ECF #6 at Pg. ID 195-196.) In response, Wypych does not identify any
specific provision of his mortgage that Defendants allegedly breached. (See Resp. to
Mot. to Dismiss, ECF #9 at Pg. ID 392-94.) Nor does he respond in any substantive
way to Defendants’ arguments that they did not breach the mortgage. (See id.)
Instead, Wypych argues only that “Defendants breached their duties under the
Mortgage in bad faith and his claim should be allowed to proceed.” (Id. at Pg. ID
394.) Wypych insists that Defendants’ misconduct under the mortgage violates
Michigan’s “implied covenant or good faith and fair dealing.”
This Court has repeatedly rejected this same “implied covenant/breach of
contract” argument because Michigan does not recognize a claim for such a breach.
See, e.g., Upshaw v. Green Tree Servicing LLC, 2015 WL 9269136, at *4 (E.D.
Mich. Dec. 21, 2015) (“Michigan does not recognize a cause of action for breach of
the implied covenant of good faith and fair dealing”); Radske, 2016 WL 3667957,
at *5 (“Plaintiff's claim that Defendants violated the implied covenant of good faith
and fair dealing must be dismissed as a matter of law” because Michigan does not
recognize that cause of action). Wypych provides no basis for the Court to rule
differently here. Accordingly, because Michigan does not recognize a standalone
claim for the implied covenant of good faith and fair dealing, and because Wypych
has not sufficiently responded to Defendants’ arguments that they did not breach any
provision of the mortgage, he fails to state a viable breach of contract claim.
In Count XIII of the Complaint, Wypych alleges that Defendants committed
fraud with respect to his foreclosure and the negotiations he had regarding a
modification to his mortgage. (See Compl. at ¶161, ECF #1-2 at Pg. ID 40.)
In Michigan, fraudulent misrepresentation consists of the following elements:
(1) the defendant made a material representation; (2) the
representation was false; (3) when the defendant made the
representation, it knew that it was false, or made the
representation recklessly, without any knowledge of its
truth, and as a positive assertion; (4) the defendant made
the representation with the intention that it should be acted
on by the plaintiff; (5) the plaintiff acted in reliance on the
representation; and (6) the plaintiff suffered injury due to
his reliance on the representation.
MacDonald v. Thomas M. Cooley Law Sch., 724 F.3d 654, 662 (6th Cir. 2013).
a party must state “with particularity” the circumstances
constituting the fraud. Fed. R. Civ. P. 9(b). That means
that the complaint must (1) specify the statements that the
plaintiff contends were fraudulent, (2) identify the
speaker, (3) state where and when the statements were
made, and (4) explain why the statements were fraudulent.
Cruz, 192 F.Supp.3d at 839-40 (internal quotation marks and citations omitted)
Here, as in numerous other cases brought by Wypych’s counsel, Wypych has
“not identified the specific statements that were made, by whom they were made, or
where and when they were uttered.” Id. at 940 (dismissing fraud claim brought by
Wypych’s counsel on behalf of different borrower). Thus, he has not satisfied his
obligation under Rule 9(b) and has done nothing more than present “bare assertions”
that “amount to nothing more than a formulaic recitation of [the elements of
fraudulent misrepresentation].’” Id. (quoting Iqbal, 556 U.S. at 681) (internal
quotation marks omitted). Because Wypych has failed to plead his fraud claim with
the required particularity, it fails to state a viable claim. See, e.g., Frank v. Mortgage
Electronic Registration Sys., Inc., 2014 WL 6886589, at *5 (E.D. Mich. Dec. 4,
2014) (dismissing fraud claim brought on behalf of borrower by Wypych’s counsel
due to failure to plead fraud with required particularity); Fredericks, 2015 WL
3473972, at * 7 (same); Caggins v. Bank of New York Mellon, 2015 WL 4041350,
at *3 (same).
Finally, in response to the Motion to Dismiss, Wypych appears to request that
the Court “use its inherent authority to require the foreclosure to proceed judicially
… under the Michigan judicial foreclosure statute.” (Resp. to Mot. to Dismiss, ECF
#6 at Pg. ID 399.) Wypych does not identify any authority under which the Court
could exercise such power nor does he explain how the Court could enter such an
order given that the redemption period has expired. Moreover, Wpych has not
identified a single case in which a court has exercised its “inherent authority” to
grant the relief that Wypych seeks. Given that the Court has concluded that Wypych
has failed to state any viable claims against the Defendants, it will deny Wypych’s
request to convert his foreclosure to a judicial foreclosure.
For all of the reasons stated above, IT IS HEREBY ORDERED that the
Motion to Dismiss (ECF #6) is GRANTED and Wypych’s claims against the
Defendants are DISMISSED WITH PREJUDICE.
Dated: April 10, 2017
s/Matthew F. Leitman
MATTHEW F. LEITMAN
UNITED STATES DISTRICT JUDGE
I hereby certify that a copy of the foregoing document was served upon the
parties and/or counsel of record on April 10, 2017, by electronic means and/or
s/Holly A. Monda
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