Donald-Coleman v. Nationstar Mortgage LLC et al

Filing 11

OPINION AND ORDER DENYING 6 Plaintiff's Emergency MOTION for Temporary Restraining Order and for Preliminary Injunction to Stay and Toll the Expiration of the Redemption Period. Signed by District Judge Terrence G. Berg. (AChu)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FELECIA ROCHELLE
DONALD-COLEMAN,
Plaintiff,
Case No. 17-11915
Hon. Terrence G. Berg

v.
NATIONSTAR MORTAGE
LLC and U.S. BANK
NATIONAL ASSOCATION,
Defendants.

OPINION AND ORDER DENYING PLAINTIFF’S
EMERGENCY MOTION FOR TEMPORARY RESTRAINING
ORDER AND FOR PRELIMINARY INJUNCTION TO STAY
AND TOLL THE EXPIRATION OF THE REDEMPTION
PERIOD (DKT. 6)
I.

Introduction

In this lawsuit Plaintiff Felecia Donald-Coleman seeks to quiet
the title to a property that Defendant Nationstar Mortgage has
foreclosed upon and Defendant U.S. Bank has purchased at a
sheriff’s sale. Plaintiff filed the lawsuit in state court, and
Defendants recently removed the case to this Court. Plaintiff has
filed a motion seeking a temporary restraining order (TRO) and a
preliminary injunction to stay the redemption period for the
property. Defendants oppose the motion. For the reasons outlined

below, Plaintiff’s motion with respect to her request for a TRO is
DENIED AS MOOT and Plaintiff’s motion with respect to her
request for a preliminary motion is DENIED.
II.

Background

In 2005, Plaintiff purchased with her former husband, Alex Coleman, property located at 21401 Eastlawn St., Saint Clair Shores,
MI 48080. Dkt. 6-2, Pg. ID 211. They obtained a mortgage from
FMC Capital, LLC. Dkt. 6-2, Pg. ID 228. This mortgage was then
assigned and re-assigned to various entities, and ultimately belonged to U.S. Bank. Dkt. 6-2, Pg. ID 221. Nationstar is the servicer
of U.S. Bank, meaning Nationstar was responsible for conducting
and supervising the foreclosure process. Dkt. 6-2, Pg. ID 214.
Plaintiff and Coleman separated in February of 2013 and divorced in August of 2016. Dkt. 6, Pg. ID 171. They stopped making
payments on the mortgage in November, 2013. Dkt. 1-2, Pg. ID 25.1
On November 4, 2016—three years after Plaintiff and Coleman
stopped paying their mortgage—Nationstar sent Plaintiff a letter
stating that she and Coleman were in foreclosure and that a sheriff’s sale was scheduled for December 2, 2016. Dkt. 6-2, Pg. ID 256.
Plaintiff responded (presumably by mail, as that is how the other
The cited evidence is a notification-of-default letter that Nationstar addressed only to Coleman. But neither Plaintiff nor Defendants dispute that Plaintiff and Coleman were both on the mortgage,
meaning Plaintiff was also obligated to pay the mortgage.
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communications between the parties took place, but the record is
unclear on this fact) that she was unable to prevent the sheriff’s
sale by satisfying her mortgage obligations because of the divorce
litigation. Dkt. 6, Pg. IDs 171-72. Nationstar went ahead with the
foreclosure anyway, and the sheriff’s sale took place on December
2, 2016. Dkt. 6, Pg. IDs 171-72.
Nationstar notified Plaintiff by mail that the redemption period—six months during which the property owner can prevent loss
of title to the property by paying the purchaser (in this case,
U.S. Bank) the foreclosure sale price in addition to any interest,
taxes, and insurance costs that accumulated during the window—
would end on June 2, 2017. Dkt. 6-2, Pg. ID 258; see also Mich.
Comp. Law § 600.3240 (creating six-month redemption period).
Halfway through the redemption period (on March 3, 2017),
Plaintiff entered into a Consent Judgment of Divorce in which
Plaintiff and Coleman agreed that he would receive title to the
property (subject to the outstanding mortgage that was in foreclosure) while she would receive the right to redeem the property.2

It is unclear how Coleman derived any benefit from this agreement because the redemption period had already started to run.
Thus it would seem that there were only two possible outcomes:
(1) if Plaintiff did not redeem the property, U.S. Bank would receive
title to the property once the redemption period expired, or (2) if
Plaintiff did redeem the property, Coleman would be required to
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3

Dkt. 6-2, Pg. ID 236. Thus if Plaintiff redeemed the property, Coleman would be legally obligated to file a Quit Claim Deed assigning
the property to Plaintiff. Dkt. 6-2, Pg. ID 238.
One day before the end of the redemption period, Plaintiff filed
suit in Macomb County Circuit Court, seeking to be awarded title
to the property and also seeking an equitable extension of the redemption period. Dkt. 1-2, Pg. ID 12. Plaintiff also filed an ex parte
motion for a TRO and a preliminary injunction, Dkt. 6-1,
Pg. ID 188, arguing that the redemption period should have started
on March 3, 2017 (the date the Consent Judgment of Divorce was
filed), not December 2, 2016 (the date of the sheriff’s sale). Dkt. 62, Pg. ID 193-94. The state court issued a TRO and scheduled a
hearing so Defendants could appear and contest Plaintiff’s request
for a preliminary injunction. Dkt. 6-1, Pg. ID 200.
Defendants then removed the case to this Court, three days before the hearing would have taken place. Dkt. 1-4, Pg. ID 75.
And upon removal, Plaintiff filed a new motion for a TRO and a
preliminary injunction. Dkt. 6, Pg. ID 161.
The Court concludes that oral argument would not help resolve
Plaintiff’s motion. So the Court will decide the motion based solely
on the parties' written submissions. See E.D. Mich. LR 7.1(f).
assign her the title. Under either outcome, Coleman would obtain
nothing.
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III. Standard of Review
A court may issue a TRO or a preliminary injunction pursuant
to Federal Rule of Civil Procedure 65. The purpose of a TRO is to
maintain

current

circumstances

between

parties—to

press

“pause”—until the Court has an opportunity to determine whether
it will issue a preliminary injunction. See First Tech. Safety Sys.
Inc. v. Depinet, 11 F.3d 641, 650 (6th Cir. 1993).
When determining whether to issue a preliminary injunction,
the Court considers and balances four factors: “(1) whether the movant has a strong likelihood of success on the merits; (2) whether
the movant would otherwise suffer irreparable injury; (3) whether
issuance of a preliminary injunction would cause substantial harm
to others; and (4) whether public interest would be served by issuance of a preliminary injunction.” Summit County Democratic Central and Executive Committee v. Blackwell, 388 F.3d 547, 550
(6th Cir. 2004) (internal quotations omitted).
The Court must make a finding on each of the four factors unless
consideration of fewer factors so clearly resolves the motion that
additional findings would not change the outcome. Six Clinics Holding Corp., II v. Cafcomp Systems, Inc., 119 F.3d 393, 399
(6th Cir. 1997). For example, a finding that there is “simply no likelihood of success on the merits” is generally sufficient to end the
inquiry. O’Toole v. O’Connor, 802 F.3d 783, 788 (6th Cir. 2015).
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IV.

Analysis

Plaintiff has requested both a TRO and a preliminary injunction.
Dkt. 6, Pg. ID 161. The Court will address each request separately,
starting with the request for a TRO.
a. Temporary Restraining Order
Defendants take the position that the state court’s TRO expired
by its own terms on June 16, 2017, which was 14 days after the date
it was entered by Macomb County Circuit Judge Kathryn Viviano,
on June 2, 2017. Dkt. 6-1, Pg. ID 200-01. Under Michigan Court
Rule 3.310(B)(3), a TRO endures for only 14 days unless it is
extended by the court. But the problem with Defendants’ position
is that they removed the case to federal court on June 16, 2017—
the 14th day of the state court-issued TRO, the last day when it was
still in effect. Once a case has been removed to federal court, federal
procedural law takes the place of state procedural law. See Granny
Goose Food Inc. v. Brotherhood of Teamsters and Auto Truck
Drivers Local No. 70 of Alameda County, 415 U.S. 423 (1974).
And under federal procedural law, “[a]ll injunctions, orders, and
other proceedings had in such action prior to its removal shall
remain in full force and effect until dissolved or modified by the
district court.” 28 U.S.C. § 1450. Defendants elected to remove the
case before the TRO expired, and before the state court could hold
a hearing on Plaintiff’s request for a preliminary injunction and
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then determine whether to dissolve the TRO or to convert it into a
preliminary injunction. So the state court’s TRO remains in effect.
Consequently, Plaintiff’s motion seeking the issuance of a TRO is
DENIED AS MOOT.
b. Preliminary Injunction
To determine whether Plaintiff is entitled to a preliminary injunction, the Court will apply the four-factor test outlined above.
Because that test requires the Court to deny Plaintiff’s motion with
respect to her request for a preliminary injunction, the Court need
not address whether Plaintiff has satisfied additional requirements
of securing a preliminary injunction, such as posting a security for
the duration of the injunction. See Fed.R.Civ.P. 65(c).
i. Likelihood of Success on the Merits
To begin, the Court must examine Plaintiff’s claims and evaluate
the likelihood that Plaintiff will succeed on each of them.
See Six Clinics, 119 F.3d at 400. Here, Plaintiff has brought three
claims: (1) “Quiet Title,” (2) “Equitable Estoppel,” and (3) “Injunction and Other Relief.” Dkt. 1-2, Pg. IDs 15-17.
As a preliminary manner, none of these claims are independent
causes of action. Jarbo v. Bank of N.Y. Mellon, 587 Fed.Appx. 287,
290 (6th Cir. 2014) (“[Q]uiet title is a remedy, not a freestanding
claim. Like a request for an injunction or disgorgement, a request
for quiet title is only cognizable when paired with some recognized
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cause of action”); Casey v. Auto Owners Ins. Co., 729 N.W.2d 277,
285 (Mich. App. Ct. 2006) (“It is well established under Michigan
law that equitable estoppel is not a cause of action unto itself, it is
available only as a defense”); Terlecki v. Stewart, 754 N.W.2d 899,
912 (Mich. App. Ct. 2008) (“It is well settled that an injunction is
an equitable remedy, not an independent cause of action”).
And as suggested by its very name, “other relief” (the second half of
Plaintiff’s third claim) is likewise not an independent cause of action. A remedy cannot itself support a cause of action; a plaintiff
must bring a viable cause of action in order to be entitled to a remedy. And Plaintiff has not paired her claims with a standalone cause
of action, such as a claim for wrongful foreclosure, so she has no
likelihood of success on the merits of her case.
Michigan law does provide a statutory mechanism for quiet title
actions: any person who claims any right or interest in the possession of land can bring an action to quiet title against any other person who claims an inconsistent interest. Mich. Comp. Laws
§ 600.2932(1). A plaintiff may bring a cause of action for quiet title,
but, as the Sixth Circuit recognized in Jarbo, only if she also brings
an independent cause of action. On these facts, however, even if
Plaintiff had paired her quiet-title claim with a standalone claim,
she would still have no likelihood of success on the merits of her
quiet-title claim.
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To state a claim under Mich. Comp. Laws § 600.2932(1), a plaintiff must allege “(a) the interest the plaintiff claims in the premises;
(b) the interest the defendant claims in the premises; and (c) the
facts establishing the superiority of the plaintiff’s claim.”
Mich. Ct. Rule 3.411(B)(2). And to succeed on that claim, a plaintiff
must prove that her interest is superior to the defendant’s interest.
Plaintiff’s argument that this factor weighs in her favor is contained in a single statement: “Since the redemption period will expire in violation of Equitable Estoppel the Plaintiff has a great likelihood of success on the merit [sic] of the case.” Dkt. 6, Pg. ID 175
(bold-face emphasis removed). This argument does not carry the
day for Plaintiff for several reasons. First, this statement does not
show that there is a strong likelihood of success on the merits of
establishing the elements of a quiet title claim, it merely incants
the magic words of Plaintiff’s second claim (“equitable estoppel”) as
if doing so blocks the inferior spell of an “expired redemption period.” Second, equitable estoppel is a defense to a lawsuit, not a
cause of action and not a law that may be “violated” by the expiration of a redemption period. And third, Plaintiff fails to provide any
legal support for this argument.3 Thus Plaintiff has not shown that
this factor weighs in her favor.
Defendants also address this factor in their response, and argue
that Plaintiff’s claim for quiet title fails as a matter of law because
3

9

Apart from these flaws in Plaintiff’s position, this factor weighs
in Defendants’ favor because Plaintiff has failed to state a claim for
quiet title. As noted above, Plaintiff must allege “(a) the interest the
plaintiff claims in the premises; (b) the interest the defendant
claims in the premises; and (c) the facts establishing the superiority
of the plaintiff’s claim.” Mich. Ct. Rule 3.411(B)(2). Plaintiff alleges
the interest she claims in the property and the interest Defendants
claim in the property, Dkt 1-2, Pg. ID 14, but she does not allege
facts establishing that her interest is superior to Defendants’.
Instead, she alleges that:
 She could not redeem the property during her divorce
proceedings;
 She informed Defendants of this;
 Defendants knew or should have known that she
could not stop the sheriff’s sale because of her divorce
litigation;
 Nationstar continued with the foreclosure proceedings; and
 Therefore, Defendants’ actions were “intentionally,
unintentionally, [or] negligently” designed to deprive
Plaintiff of her property.
Dkt. 1-2, Pg. ID 15. None of these allegations state that Plaintiff’s
interest is superior to Defendants’ interests in the property—indeed
they do not relate in any way to the nature of Plaintiff’s interest in
Plaintiff has failed to establish a legal interest in the property, let
alone a superior claim to the property. Dkt. 9, Pg. ID 278. This is
also correct.
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the property. Plaintiff offers no explanation of why her divorce litigation prevented her from stopping the sheriff’s sale, and fails to
explain how any such sheriff’s-sale prevention would then render
her interest in the property superior to Defendants’. Without such
explanation, Plaintiff has failed to state a claim for quiet title.4
Thus the “likelihood of success on the merits” factor weighs in Defendants’ favor because Plaintiff has not stated a claim, much less
one she could succeed on.
The Court need go no further in its factor-balancing analysis;
Plaintiff’s motion with respect to her request for a preliminary injunction must be DENIED. Nevertheless, the Court will address
the remaining three factors.
ii. Irreparable Harm
In order to make a finding of irreparable harm, the Court must
find that the injury is both certain and great and that the injury is
actual, not merely theoretical. See Merrill Lynch, Pierce, Fenner &
Smith Inc. v. E. F. Hutton & Co., Inc., 403 F.Supp. 366, 343
(E.D. Mich. 1975).
The Court could try to guess the reasons why the divorce litigation
prevented Plaintiff from stopping the Sheriff’s sale—perhaps it was
due to a lack of funds or because of the complexity of coordinating
with a co-mortgagor-spouse during divorce proceedings—but the
reasons themselves are not necessarily relevant unless they state
facts that suggest Plaintiff had a legal interest in the property that
is superior to Defendants’. Here, there is no such suggestion.
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Plaintiff argues that “the irreparable harm is obvious” because
Plaintiff will lose the ability to redeem the property if the redemption period expires. Dkt. 6, Pg. ID 175.
Defendants respond that Plaintiff has failed to demonstrate irreparable harm because the redemption period has already expired.
Dkt. 9, Pg. ID 281. Defendants base this argument on a Michigan
state-court procedural rule, which provides that a TRO granted in
state court will not last longer than fourteen days. Mich. Ct. R.
3.310(B)(3). Defendants also argue that Plaintiff has alternative
housing pursuant to her Judgment of Divorce. Dkt. 9, Pg. IDs 28182. Finally, Defendants argue that any harm Plaintiff is experiencing is a result of Coleman not paying the mortgage and is not attributable to Defendants. Dkt. 9, Pg. ID 282.
This factor weighs in Defendants’ favor because, as explained
above, the state court’s TRO had not yet expired when the case was
removed, so it is still in effect, meaning the redemption period will
not suddenly come to an end if the Court declines to issue a preliminary injunction. Because “[a]ll injunctions, orders, and other proceedings had in such action prior to its removal shall remain in full
force and effect until dissolved or modified by the district court,”
28 U.S.C. § 1450, Defendants will need to move to dissolve or modify the TRO, or to dismiss the case, in order for the redemption period to begin running again.
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iii. Substantial Harm to Others
This factor analyzes whether the granting of a preliminary injunction will harm the non-movant or a third party. See Overstreet
v. Lexington-Fayette Urban County Government, 305 F.3d 566, 579
(6th Cir. 2002) (defining the third factor as “substantial harm to
others” and analyzing only whether others would have suffered
harm if the injunction had issued).
The entirety of Plaintiff’s argument that this factor weighs in her
favor is that “[t]he harm to the Defendant is considerably less if the
Temporary Restraining Order is issued than the harm to the Plaintiff if the Temporary Restraining Order does not issue for the reason that if Plaintiff is evicted from her home the subject property
will most probably be vandalized and the value of the property will
be greatly diminished.” Dkt. 6, Pg. ID 175.
Defendants respond that granting the preliminary injunction
will substantially harm U.S. Bank because it has legal title and a
right to possession of the property. Dkt. 9, Pg. ID 283.
This factor weighs in Defendants’ favor. Rather than arguing
that others will be free from harm if the Court grants a preliminary
injunction, Plaintiff argues that she will suffer more harm if the
Court denies her motion than Defendants will suffer if the Court
grants it. But this factor does not involve balancing competing

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harms; that happens in the overarching balancing analysis, and occurs only if there will be both harm to Plaintiff if the Court does not
issue the injunction (factor two) and harm to others if the Court
issues it (factor three). Instead, the only question that the Court
must answer is whether issuing the injunction will harm others.
See Overstreet, 305 F.3d at 579.
Here, although the redemption period has not yet ended, a preliminary injunction would harm both Defendants. U.S. Bank would
have to wait longer to assert its right to possess the property to
which it has legal title. And Nationstar would have to wait longer
to see finality in the foreclosure process that it started last year.
Consequently this factor weighs in Defendants’ favor.
iv. Service of Public Interest
In arguing that this factor weighs in her favor, Plaintiff states in
conclusory terms that “the granting of this Temporary Restraining
Order will further the public interest,” and offers no further explanation of why that is so. Dkt. 6, Pg. ID 175.
Defendants respond that Plaintiff’s lawsuit is one of many meritless lawsuits filed to stall eviction, and that this large-scale issue
runs contrary to the public interest by clogging court dockets and
generating needless legal fees. Dkt. 9, Pg. ID 283.
This factor weighs in Defendants’ favor. As explained above,
none of Plaintiff’s causes of action are cognizable, standalone
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claims. And the argument Plaintiff submitted in support of her
emergency motion consists of six mostly conclusory sentences, no
legal authority, and no analysis of case or statutory law. Dkt. 1-2,
Pg. ID 15.
Further, Plaintiff’s case seems based on the premise that her divorce somehow overrode Mich. Comp. Law § 600.3240 and caused
the redemption period to start on the date that she signed the Consent Judgment of Divorce rather than on the date of the sheriff’s
sale, and that the override then somehow elevated her interest in
the property to make it superior to Defendants’. The Court knows
of no legal authority that supports such a proposition. Plaintiff and
Coleman had an obligation to pay their mortgage regardless of
whether they were married, separated, or divorced. And when they
stopped making those payments, Nationstar was entitled to foreclose on the property; a change in the legal status of Plaintiff’s and
Coleman’s marital relationship does not alter their obligation to pay
their mortgage, or the Defendants’ right to foreclose if they did not.
As Defendants have correctly noted, the public interest favors
the efficient operation of court dockets and the prevention of needless legal fees. An injunction in this case would likely extend this
litigation, and would therefore both cause the case to remain on the
Court’s docket longer than it should and continue to generate needless legal fees in the defense of a case which lacks merit.
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The public interest also favors preventing those who fail to pay
their mortgages from remaining in financed homes, without cost, at
the lenders’ expense. An injunction in this case would allow Plaintiff to continue living in the property without paying to be there,
which it appears she has been doing for more than three years.
This factor also weighs in Defendants’ favor.
*

*

*

To summarize, the second, third, and fourth factors all weigh in
Defendants’ favor. Thus, although analysis of the likelihood of
Plaintiff’s success on the merits of her case is sufficient for the
Court to deny Plaintiff’s motion with respect to her request for a
preliminary injunction, reaching and then balancing the remaining
factors does not change the outcome of the Court’s analysis.
V.

Conclusion

For the foregoing reasons, Plaintiff’s motion with respect to her
request for a TRO is DENIED AS MOOT and Plaintiff’s motion
with respect to her request for a preliminary injunction is
DENIED.
SO ORDERED.
Dated: July 12, 2017

s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
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Certificate of Service
I hereby certify that this Order was electronically filed, and
the parties and/or counsel of record were served on July 12,
2017.
s/A. Chubb
Case Manager

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