Garland v. Wells Fargo Home Mortgage et al

Filing 10

ORDER Granting Orlan PC's Motion to Dismiss 4 and Wells Fargo Motion to Dismiss and/or for Summary Judgment 5 . Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FREDDIE GARLAND,
Plaintiff,
Case No. 17-12246
HON. DENISE PAGE HOOD

v.
WELLS FARGO HOME
MORTGAGE INC., U.S.
BANK, N.A., and ORLANS PC,
Defendants.
__________________________________/

ORDER GRANTING ORLAN PC’s MOTION TO
DISMISS [#4] and WELLS FARGO MOTION TO
DISMISS AND/OR FOR SUMMARY JUDGMENT [#5]
I.

BACKGROUND
A. Procedural Background
On June 19, 2017, Plaintiff Freddie Garland (“Garland”) commenced this

action in the Circuit Court of Wayne County, Michigan against Defendants U.S.
Bank, N.A. (“U.S. Bank”), Wells Fargo Home Mortgage Inc. (“Wells Fargo”) and
Orlans PC (“Orlans”) (collectively “Defendants”), alleging that Defendants U.S.
Bank and Wells Fargo fraudulently claims an interest in his property (Count 1) and
wrongfully initiated foreclosure proceedings against him (Count 2), requesting that
the Court issue a stay on the non-judicial foreclosure of his home. Garland also
1

alleges that Defendant Orlans Violated the Fair Debt Collection Practices Act
(Count 3). (Doc # 1-1, Pg ID 4-7) Garland also makes several other references to
statutes and legal theories that do not form the basis of a cognizable claim
throughout the complaint.
On July 11, 2017, Defendant Orlans filed a Notice of Removal in this
Court. (Doc # 1) This matter is currently before the Court on Defendant Orlans’
Motion to Dismiss (Doc # 4) (pursuant to Fed. R. Civ. P. 12(b)(1) or 12(b)(6)) and
Defendant Wells Fargo’s Motion to Dismiss or, alternatively, for Summary
Judgment. (Doc # 5)
B. Factual Background
Garland owns certain real property located at 15307 Stout, Detroit, Michigan
48223 (the “Property”). (Doc # 5) In 2004, Plaintiff obtained an $89,000 loan
from BNC Mortgage Inc. (the “Loan”) (Id.) Plaintiff and his then wife, Linda
Garland, gave a Mortgage against the Property as security for repayment of the
Loan. (Id.) The Loan and Mortgage were assigned to U.S. Bank in its capacity as
trustee of a securitized trust. (Id.) Wells Fargo services the Loan for the bank.
Garland was incarcerated in the Milan Federal Penitentiary from June 8,
2008 until his release on February 17, 2017. (Doc # 7; Pg ID 5) Sometime in July
2008, Garland also indicated that his then wife would “take care of the mortgage
account.” (Doc # 5-6) Garland kept up communication with Wells Fargo while
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incarcerated. (See Doc # 5-8; Doc # 5-9; Doc # 5-10) On February 3, 2011,
Garland named his the wife as his general “power of attorney” to conduct his
affairs during his incarceration. The change was acknowledged by Wells Fargo on
March 15, 2011. (Doc # 5-12)
In June 2011, Plaintiff requested assistance from the Wayne County
Mortgage Foreclosure Prevention Program. (Doc # 5-13)

Wells Fargo

acknowledged Garland’s request for third-party assistance by letter on June 20,
2011, however, Garland did not default on the Loan. (Doc # 5-14)
In June 2013, Garland changed his power of attorney to Alfreda Garland,
which was acknowledged by Wells Fargo. (Doc # 5-15; Doc # 5-16) In October
2014, at a time when his mortgage obligation was past due, Garland sought
mortgage assistance from Wells Fargo, but he did not default on the Loan. (Doc #
5-17; Doc # 5-18; Doc # 5-19)
Garland and his wife Linda Garland were divorced on September 22, 2015.
(Doc # 7, Pg ID 12) Linda remained as Garland’s power of attorney under the
terms of the Separation Agreement (the “Agreement”). (Id., Pg ID 13) The
Agreement stated that Linda Garland would relinquish power of attorney no later
than seven days after Garland’s release from prison. (Id.) The agreement also
specified that Linda and Plaintiff would “hold the real property located at 15307
Stout, Detroit, MI 48223 . . . as joint tenants with rights of survivorship until
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Defendant husband is released from incarceration.” (Id.) Linda Garland was to
pay the monthly mortgage payments on Plaintiff Garland’s behalf while he was
incarcerated. (Id.) The Agreement specified that Plaintiff was to be awarded sole
ownership of the Property upon his release, and hold his ex-wife free from all
expenses associated with the Property. (Id.) After his release from prison, Garland
became the sole owner of the Property.
Garland was past due on his monthly obligation on the Loan once again in
February 2017. (Doc # 5-20; Doc # 5-21) On March 18, 2017, on behalf of Wells
Fargo, Orlans mailed Garland correspondence (the “Letter”) that detailed
Garland’s default on the Loan obligations and explained that the matter was
referred to Orlans for further action. (Doc # 4, Pg ID 10) The Letter directed
Garland’s attention to the “Notice of Debt Pursuant to 15 U.S.C. § 1692” and
relevant portions indicated:
You may have the rights to reinstate the Mortgage Loan by paying all
past due installments, late charges, delinquent taxes, insurance
premiums, and cost and fees incurred in the foreclosure. To request
reinstatement information, contact our Loan Resolution Department at
[phone].
The attached Notice of Debt provided:
1. The amount of debt as of May 16, 2017 is $76,575.84.
2. Because of interest fees, and costs, and other charges that may vary
from day to day, the amount you owe at a later date may be greater
than the amount state above. Please contact Wells Fargo Home

4

Mortgage Inc. or Orlans PC at [phone] to obtain an updated
payoff amount.
3. The name of the creditor to whom the debt is owed is U.S. Bank
National Association, as Trustee, successor in interest to Bank of
America, National Association, as Trustee, Successor by Merger to
LaSalle Bank National Association, as Trustee for Structure Asset
Securities Corporation, Amortizing Residential Collateral Trust,
Mortgage Pass-Through Certificates, Series 2004-1.
4. Unless you, within thirty days after receipt of t[sic] notice, dispute the
validity of the debt, or any portion thereof, the debt will be assumed to
be valid by Orlans PC.
5. If you notify Orlans PC in writing with the thirty date period that the
debt, or any portion thereof is disputed, Orlans PC will obtain
verification of the debt or a copy of a judgment against the consumer
and a copy of such verification or judgment will be mailed to you by
Orlans PC; and
6. Upon your written request within the thirty day period, Orlans PC will
provide you with the name and address of the original creditor, if
different from the current creditor.
Id. at 10-11.
Wells Fargo sent Garland a letter to notify him that he had to pay $2,318.50
by March 22, 2017 to avoid the possibility of acceleration. Id. By May 2017,
Wells Fargo and Garland had not reached an agreement concerning mortgage
assistance. (Doc # 5-22)

Wells Fargo referred Garland’s Mortgage Loan to

Defendant Orlans to initiate foreclosure proceedings. (Doc # 5-23) On May 19,
2017, Wells Fargo sent a letter to Garland to discuss an offer for a Short Sale of the
Property, with a deadline of June 2, 2017. (Doc # 5-24) The foreclosure notice set

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a sale date for June 22, 2017. (Doc # 5-25) At some point, Orlans contacted the
Detroit Legal News to publish the foreclosure sale by advertisement. (Doc # 4,
PgId 11)
II.

ANALYSIS
A. Standards of Review
1. Rule 12(b)(1)
Fed. R. Civ. P. 12(b)(1) provides for the dismissal of an action for lack of

subject matter jurisdiction. A Rule 12(b)(1) motion for lack of subject matter
jurisdiction can challenge the sufficiency of the pleading itself (facial attack) or the
factual existence of subject matter jurisdiction (factual attack). Cartwright v.
Garner, 751 F.3d 752, 759-60 (6th Cir. 2014) (citing United States v. Ritchie, 15
F.3d 592, 598 (6th Cir. 1994). In the case of a facial attack, and the court takes the
allegations of the complaint as true to determine whether the plaintiff has alleged a
basis for subject matter jurisdiction. Id.
In the case of a factual attack, a court has broad discretion with respect to
what evidence to consider in deciding whether subject matter jurisdiction exists,
including evidence outside of the pleadings, and has the power to weigh the
evidence and determine the effect of that evidence on the court’s authority to hear
the case. Id.

Plaintiff bears the burden of establishing that subject matter

6

jurisdiction exists. DLX, Inc. v. Commonwealth of Kentucky, 381 F.3d 511, 516
(6th Cir. 2004).
2. Rule 12(b)(6)
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for a motion
to dismiss for failure to state a claim upon which relief can be granted. Fed. R.
Civ. P. 12(b)(6). This type of motion tests the legal sufficiency of the plaintiff’s
complaint. Davey v. Tomlinson, 627 F. Supp. 1458, 1463 (E.D. Mich. 1986).
When reviewing a motion to dismiss under Rule 12(b)(6), a court must “construe
the complaint in the light most favorable to the plaintiff, accept its allegations as
true, and draw all reasonable inferences in favor of the plaintiff.” Directv Inc. v.
Treesh, 487 F.3d 471, 476 (6th Cir. 2007). A court, however, need not accept as
true legal conclusions or unwarranted factual inferences.” Id. (quoting Gregory v.
Shelby Cnty., 220 F.3d 443, 446 (6th Cir. 2000)).

“[L]egal conclusions

masquerading as factual allegations will not suffice.” Edison v. State of Tenn.
Dep’t of Children’s Servs., 510 F.3d 631, 634 (6th Cir. 2007).
As the Supreme Court has explained, “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 . .
..” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted);
7

see LULAC v. Bresdesen, 500 F.3d 523, 527 (6th Cir. 2007). To survive dismissal,
the plaintiff must offer sufficient factual allegations to make the asserted claim
plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). “A claim has
facial plausibility when the pleaded factual content allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id.
3. Motion for Summary Judgment
The Court will grant summary judgment if “the movant shows that there is
no genuine dispute as to any material fact and the movant is entitled to judgment as
a matter of law.” Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 250-57 (1986). A fact is material if it could affect the outcome of the case
based on the governing substantive law. Id. at 248. A dispute about a material fact
is genuine if, on review of the evidence, a reasonable jury could find in favor of the
nonmoving party. Id.
The moving party bears the initial burden to demonstrate the absence of a
genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
If the movant meets this burden, the nonmoving party must “go beyond the
pleadings and … designate specific facts showing that there is a genuine issue for
trial.” Id. at 324. The Court may grant a motion for summary judgment if the
nonmoving party who has the burden of proof at trial fails to make a showing
sufficient to establish the existence of an element that is essential to that party’s
8

case. See Muncie Power Prods., Inc. v. United Tech. Auto., Inc., 328 F.3d 870, 873
(6th Cir. 2003). “The mere existence of a scintilla of evidence in support of the
plaintiff's position will be insufficient; there must be evidence on which the jury
could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. “Conclusory
allegations do not create a genuine issue of material fact which precludes summary
judgment.” Johari v. Big Easy Restaurants, Inc., 78 F. App’x 546, 548 (6th Cir.
2003).
When reviewing a summary judgment motion, the Court must view the
evidence and all inferences drawn from it in the light most favorable to the
nonmoving party. Kochins v. Linden-Alimak, Inc., 799 F.2d 1128, 1133 (6th Cir.
1986). The Court “need consider only the cited materials, but it may consider
other materials in the record.” Fed. R. Civ. P. 56(c)(3). The Court’s function at
the summary judgment stage “is not to weigh the evidence and determine the truth
of the matter but to determine whether there is a genuine issue for trial.”
Anderson, 477 U.S. at 249.
4. Pro Se Litigants
Federal courts hold pro se complaints to “less stringent standards” than those
drafted by attorneys. Haines v. Kerner, 404 U.S. 519, 520 (1972). However, pro
se litigants are not excused from failing to follow basic procedural requirements.
Jourdan v. Jabe, 951 F.2d 108, 110 (6th Cir. 1991); Brock v. Hendershott, 840
9

F.2d 339, 343 (6th Cir. 1988).

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).
A. Orlan’s Motion to Dismiss
Orlans moves to have Garland’s FDCPA claim dismissed with prejudice for
lack of standing pursuant to Rule 12(b)(1) because Garland has not alleged any
injury-in-fact related to the purported FDCPA violation. Orlans makes a facial
challenge to the complaint, arguing that Garland has failed to allege that he has
suffered actual damages, and lacks standing, relying on the recent Supreme Court
decision Spokeo, Inc. v. Robbins, 136 S. Ct. 1540 (2016).

Orlans’ standing

argument fails.
Standing is a “jurisdictional” matter, and a lack of standing deprives a court
of subject matter jurisdiction. Ward v. Alternative Heather Delivery Systems, Inc.,
261 F.3d 624, 626 (6th Cir. 2001). Article III limits federal courts to hearing
“actual ‘cases’ and ‘controversies.’” Allen v. Wright, 468 U.S. 737, 750 (1984).
Article III mandates that parties have standing. See Lujan v. Defenders of Wildlife,
504 U.S. 555, 560 (1992). In order to satisfy the requirements of Article III
standing, a Plaintiff must have suffered (1) an injury-in-fact. Id. The injury must
be “concrete and particularized” and “actual or imminent.” Id. There must also be
(2) a “casual connection” (causation) between the injury and the conduct giving
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rise to the claim. Id. Finally, the court must be able to provide (3) redress for the
injury (redressability). Id.
In Spokeo, the Supreme Court addressed whether particular procedural
violations of the Fair Credit Reporting Act (FCRA) could satisfy the injury-in-fact
requirement of Article III standing. Spokeo, 136 S. Ct at 1550 (holding that
particular procedural violations alleged did not meet the concreteness standard to
satisfy the injury-in-fact requirement). The Court did reiterate that the plaintiff’s
injury must “actually exist.” Id. at 1549. The Court, however, also noted that an
injury may not be tangible and “Congress may ‘elevat[e] the status of legally
cognizable injuries concrete, de facto injuries that were previously inadequate at
law.’” Id. at 1549. The “violation of a procedural right granted by statute can be
sufficient in some circumstance to constitute injury in fact.” Id.
The Sixth Circuit has held that an alleged violation of the FDCPA confers
standing. Stratton v. Portfolio Recovery Associates, LLC, 770 F.3d 443, 448-49
(6th Cir. 2014) (“[FDCPA] is a strict liability statute: A plaintiff does not need to
prove…actual damages.”); Kistner v. Law Offices of Michael P. Margelefsky, LLC,
518 F.3d 433, 438 (6th Cir. 2008) (“The statute imposes strict liability for
violations.”). Courts have consistently held that proof of actual damages is not
required to recover statutory damages under that FDCPA. See, e.g., Tourgeman v.
Collins Fin. Servs., Inc., 755 F.3d 1109, 1118 (9th Cir. 2014) (holding that the
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plaintiff has both Article III standing and a statutory cause of action under the
FDCPA). Other courts that have ruled on the issue following Spokeo have agreed
that an alleged violation of the FDCPA confers standing. See, e.g., Church v.
Accretive Health, Inc., 654 Fed.Appx. 990, 994 (11th Cir. 2016) (“[T]hrough the
FDCPA, Congress has created a new right—the right to receive the required
disclosures in communications governed by the FDCPA–and a new injury–not
receiving such disclosure.”); but cf. Lyshe v. Levy, 854 F.3d 855, 859 (6th Cir.
2017) (“[T]hough Spokeo allows for a bare procedural violation to create a
concrete harm, the procedural violation alleged here—a violation of a state law
procedure not required under FDCPA—is not the type contemplated by Spokeo….
The goal of the FDCPA is to eliminate abusive debt collection practices.”)
Garland has alleged that Orlans violated the FDCPA by demanding an
undocumented and unverified sum of money from him that was different from and
greater than the sum he owed. (Doc # 1-1, Pg ID 7) The alleged harm is of the
kind the FDCPA is intended to prevent. This Court follows the law of the Sixth
Circuit, and other circuit courts, and finds that Garland has standing to bring his
claim for the alleged statutory violation of the FDCPA. Orlans’ Motion to Dismiss
Garland’s claim pursuant to Fed. R. Civ. P. 12(b)(1) is denied.
Orlans also moves to have Garland’s claims dismissed pursuant to Rule
12(b)(6) for failure to state a claim upon which relief can granted. Garland alleges
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that Orlans made false and misleading representations, in violation of 15 U.S.C. §
1692e, in connection with the collection of Garland’s alleged debt on the Loan
because the amount owed on the Letter Orlans sent to Garland was undocumented,
unverified, and much higher than what Garland could possibly owe under any
lawful theory. Defendant argues that Garland’s claim is erroneous.
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. Id. at § 1692(e); Grden v. Leikin Inger & Winters, PC, 643 F.3d 169, 172
(6th Cir. 2011). Violators of the FDCPA are subject to actual damages, statutory
damages and attorneys’ fees. 15 U.S.C. § 1692k.
A debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt, and may not
falsely represent “the character, amount, or legal status of any debt.” 15 U.S.C. §
1692e(2)(A). Section 1692g of the FDCPA provides that notice must effectively
convey “th[e] amount of the debt. 15 U.S.C. § 1692g(a)(1). A court uses the
perspective of the “least sophisticated consumer” to determine whether notice was
effectively conveyed under the FDCPA. Fed. Home Loan Mortg. Corp. v. Lamar,
503 F.3d 504 (6th Cir. 2007). The standard assumes that a notice is read “in its

13

entirety, carefully and with some elementary level of understanding.” Id. at 510.
Section 1692g further states:
If the consumer notifies the debt collector in writing within the thirtyday period . . . that the debt, or any portion thereof, is disputed . . . the
debt collector shall cease collection of the debt, or any disputed
portion thereof, until the debt collector obtains verification of the debt
or a copy of a judgment . . . and a copy of such verification or
judgment . . . is mailed to the consumer by the debt collector.
Id. at § 1692g(b).
Neither party disputes that (1) Garland is a consumer as defined by the
FDCPA, (2) the Loan was the result of a personal transaction, or (3) whether
Orlans is a debt collector within the meaning established under the FDCPA. See
Wallace v. Washing Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012) (listing the
elements required to establish FDCPA claim under § 1692e). The only issue
before the Court is whether Garland has sufficiently alleged that Orlans violated §
1692e by stating an incorrect amount owed in the March 18, 2017 debt collection
Letter sent to Garland. The Sixth Circuit has not decided the issue of whether a
debt collector violates § 1692e by stating an imprecise amount on a debt that can
vary day to day.
The Seventh Circuit case Miller v. McCalla, et al, 214 F.3d 872 (7th Cir.
2000), is instructive. In Miller, the plaintiff argued that the defendants violated the
FDCPA because they sent a letter to plaintiff which purported to state the “amount
of debt” but only included the unpaid principal balance owed, without unpaid
14

interest, late fees, or any other additional charges applied to the debt. Id. at 875.
The Miller court determined that the unpaid principal balance was not the debt
owed, and acknowledged the difficulty in correctly stating the amount owed on
debt that is likely to change daily. Id. Judge Richard Posner of the Court of
Appeals for the Seventh Circuit explained: “The [imprecise] statement does not
comply with the Act. . . . [But] [w]hat they certainly could do was to state the total
amount due-interest and other charges as well as principal-on the date the [] letter
was sent.” Id. at 875. The Miller court held that the following statement satisfies a
debt collector’s duty to state the amount of debt in a case where the amount can
vary from day to day:
As of the date of this letter, you owe $___ [the exact number
due]. Because of interest, late charges, and other charges that may
vary from day to day, the amount due on the day you pay may be
greater. Hence, if you pay the amount shown above, an adjustment
may be necessary after we receive your check, in which event we will
inform you before depositing the check for collection. For further
information, write the undersigned or call 1-800-[phone number].
Id. at 876.
In the present case, there are two factors to note. First, this Court considers
the language Orlans used in the Letter sent to Garland. Orlans stated, “Because of
interest fees, and costs, and other charges that may vary from day to day, the
amount you owe at a later date may be greater than the amount state above. Please
contact Wells Fargo Home Mortgage Inc. or Orlans PC at [phone] to
15

obtain an updated payoff amount.” (Doc # 4, Pg Id 10) This language is clearly
different from the language authorized by the Seventh Circuit. The Miller court
added, however, “we do not hold that a debt collector must use this form of words
to avoid violating the statute. But if he does, and does not add other [confusing]
words . . . he will as a matter of law have discharged his duty to state clearly the
amount due.” Miller, 214 F.3d at 876. While Orlans did not use the specific
language validated by the Seventh Circuit, the language used was substantially the
same. Second, Garland never attempted to verify the amount he owed on the Loan
before filing this action. Garland has not provided any information regarding his
debt obligation on the Loan.
Taking the allegations in Garland’s complaint as true, it is not clear that the
amount Orlans indicated to Garland was incorrect, or that Garland sought to
correct any mistakes. Garland presents only a conclusory statement that Orlans
violated the FDCPA because the amount Orlans stated was significantly higher
than what Garland expected. Garland did not provide any further details regarding
the actual amount owed or his expectations regarding the debt on the Loan. Orlans
also indicated that the amount stated was the current amount due on March 18,
2017, that the actual amount owed might be different from what was stated in the
Letter, and that Garland could inquire about the amount owed. Garland has not

16

presented any other facts or presented other evidence regarding the debt on the
Loan.
This Court grants Orlans’ Motion and dismisses Garland’s claim FDCPA
claim (Count 3) against Orlans without prejudice.
B. Wells Fargo’s Motion to Dismiss
Wells Fargo moves to have Garland’s claims against them dismissed for
failure to state a claim upon which relief can be granted. Plaintiff makes various
claims against Wells Fargo and request that this Court stay the non-judicial
foreclosure sale on his home.
1. Wrongful Foreclosure Claim
Garland alleges that Wells Fargo wrongfully seeks to foreclose on his
property. (Doc # 1-1, Pg ID 4) Wells Fargo argues that the facts plainly show that
Garland defaulted on the Loan, and that foreclosure is lawful under the laws of
Michigan. (Doc # 5, Pg ID 10)
Michigan law provides that:
(1) A party may foreclose a mortgage by advertisement if all of the following
circumstances exist:
(a) A default in a condition of the mortgage has occurred, by which the
power to sell became operative.
(b) An action or proceeding has not been instituted, at law, to recover the
debt secured by the mortgage or any part of the mortgage or, if an
action or proceeding has been instituted, either the action or
proceeding has been discontinued or an execution on a judgment
rendered in the action or proceeding has been returned unsatisfied, in
whole or in part.
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(c) The mortgage containing the power of sale has been property
recorded.
(d) The party foreclosing the mortgage is either the owner of the
indebtedness or of an interest in the indebtedness secured by the
mortgage or the servicing agent of the mortgage.
See, M.C.L. 600.3204(1).
The following facts are uncontested: (1) Garland defaulted on his obligations
under the Loan (Doc # 5-21); (2) there is no action or proceeding instituted to
recover the debt secured by the Mortgage; (3) the Mortgage contains a power of
sale (Doc # 5-5, Pg ID 15 at ¶ 22), and that U.S. Bank, the foreclosing party, was
an owner of an interest in the indebtedness secured by the mortgage. (Doc # 5, Pg
ID 13-14) The requirements of M.C.L. 600.3204(1) are met.
Subsection (3) of §3204 also states: “If the party foreclosing a mortgage by
advertisement is not the original mortgagee, a record chain of title must exist
before the date of sale under section 3216 evidencing the assignment of the
mortgage to the party foreclosing the mortgage.” There was also a record chain of
title at the time of the foreclosure. (Doc # 5, Pg ID 14)
Garland does not dispute the facts above. Garland does, however, argue that
neither U.S. Bank nor Wells Fargo is the “owner or holder of any purported note to
which [Garland] may or may not be bound to make payment.” (Doc # 1-1; Pg ID
5)

Under M.C.L. 600.3204(1)(d), U.S. Bank as the Mortgage assignee, can

complete a foreclosure by advertisement because it is the owner of an interest in

18

the “indebtedness secured by the mortgage.” See Residential Funding Co. v.
Saurman, 490 Mich. 909, 910 (2011) (“[T]he Legislature’s use of the phrase
‘interest in the indebtedness’ to denote a category of parties entitled to foreclose by
advertisement indicates the intent to include mortgagees of record . . . along with
parties who ‘own[ ] the indebtedness’ and parties who act as “the servicing agent
of the mortgage.”)
Garland also argues that foreclosure would be improper based on a number
of theories under the contract.
Garland argues that ¶ 6 of the Mortgage imposes a duty on Defendants to
investigate and document the changes in his economic standing following his
release from prison, and the failure to do so prohibits foreclosure on the Property.
(Doc # 7, Pg ID 6) Garland’s argument fails for two reasons. First, ¶ 6 of the
Mortgage deals with borrower occupancy of the home. (Doc # 5-5, Pg ID 9) The
extenuating circumstances clause that Garland relies on does not address remedies
for financial hardship nor does it impose any additional duty on Wells Fargo to
investigate borrower financial hardship.

Second, nothing in ¶ 6 affects the

requirements to initiate foreclosure by advertisement established in M.C.L.
600.3204.
Garland argues that he has a right to loan modification due to his financial
hardship. (Doc # 7, Pg ID 6) Garland has not plead facts sufficient to establish
19

that such a duty existed. Garland also alleges that the attempted foreclosure of his
home is a violation of the federal Home Affordable Modification Program
(HAMP), but there is no private right of action under HAMP.
Garland further alleges that Wells Fargo was negligent in initiating
foreclosure proceedings against him because Wells Fargo owed him a duty to help
ascertain a solution to extenuating circumstances. Garland’s negligence claim fails
because of the well-established Michigan rule that parties are precluded from
pursuing a tort remedy when the parties’ relationship is governed by the terms of a
contract. See, e.g., Sherman v. Sea Ray Boats, Inc., 251 Mich. App. 41, 52 (2002)
(“Michigan case law expressly provides that an action in tort may not be
maintained where a contractual agreement exists, unless a duty, separate and
distinct from the contractual obligation, is established.”); Garden City Osteopathic
Hosp. v. HBE Corp., 55 F.3d 1126, 1134 (6th Cir. 1995) (“Michigan law ‘is wellsettled that an action in tort requires a breach of duty separate and distinct from a
breach of contract.’ ”).
Under the section of Garland’s complaint titled “SECOND CAUSE OF
ACTION,” Garland requests that this Court set “aside or vacate the alleged
promissory note or mortgage” based on his belief that he “may or may not” have
signed the promissory note on the mortgage. (Doc # 1-1, Pg ID 5) Several
documents and years of correspondence indicate that Garland did sign the note,
20

and intended to be bound by the terms of the Mortgage and Loan. Garland signed
and initialed the original Mortgage document in several places.

(Doc # 5-5)

Garland signed the Adjustable Rate Note. (Doc # 5-3) Garland communicated
with Wells Fargo, in its capacity as servicer of the Loan, on several occasions to
inquire about payments and to establish power of attorney over him during his term
of imprisonment. (see Doc # 5-7; Doc # 5-15; Doc # 5-21; Doc # 5-24) Garland
has not presented facts or offered evidence that U.S. Bank did not own the Loan or
that he was not aware of his commitments under the terms of the Loan.
This Court dismisses Garland’s wrongful foreclosure claim with prejudice
(Count 2).
1. Garland’s Other Claims
This Court dismisses Garland’s claim for fraudulent foreclosure (Count 1)
because Garland has not provided sufficient facts or case law to support his fraud
claim.
This Court disregards Garland’s references to other statutes and legal
theories throughout his complaint. Under Fed. R. Civ. P. 8(a), a claim for relief
must contain a short and plain statement showing, (1) the grounds for the court’s
jurisdiction; (2) that the pleader is entitled to relief; and (3) a demand for the relief
sought. The other statutes and legal theories referenced by Garland are incoherent,
unrelated to the foreclosure of his property, and do not state a claim for relief.
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This Court need not address Wells Fargo’s Motion for Summary Judgment
because all claims against Wells Fargo have been dismissed.
III.

CONCLUSION
Accordingly,
IT IS ORDERED that Defendant Orlans’ Motion to Dismiss (Doc # 4) is

DISMISSED.
IT IS FURTHER ORDERED that Defendant Wells Fargo’s Motion to
Dismiss (Doc # 5) is DISMISSED.
IT IS ORDERED.

s/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court
Dated: March 29, 2018
I hereby certify that a copy of the foregoing document was served upon counsel of
record on March 29, 2018, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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