Phelan v. Twin Lakes Homeowners Association Condominium (Obligator) et al

Filing 45

ORDER denying 40 Motion to Reopen Case; denying 41 Motion for Reconsideration. Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

MARY PHELAN,
Case No. 11-15103
Plaintiff/Counter-Defendant,
Honorable John Corbett O’Meara
v.
GMAC MORTGAGE, L.L.C.,
Defendant/Counter-Plaintiff,
v.
TWIN LAKES HOMEOWNERS ASSOCIATION
CONDOMINIUM, et. al.,
Defendants.
/
ORDER DENYING PLAINTIFF’S MOTION TO REOPEN CASE,
MOTION FOR LEAVE TO AMEND COMPLAINT AND
MOTION FOR RELIEF FROM JUDGMENT
This matter came before the court on plaintiff Mary Phelan’s May 30, 2013 Motion to Reopen
Case Against GMAC Mortgage ("GMACM") and Motion to Grant Leave to File an Amended
Complaint and Plaintiff’s May 24, 2013 Motion for Relief from Judgment as to Defendant Federal
Home Loan Mortgage Corporation ("Freddie Mac"). Defendants filed responses June 6 and 10,
2013, respectively. No reply briefs were filed, and no oral argument was heard.
BACKGROUND FACTS
Plaintiff Mary Phelan filed this action October 18, 2011; and defendants, including GMACM
and Freddie Mac, filed timely notice of removal. The complaint alleged a single cause of action for
quiet title to certain real property, relying on Residential Funding Co., L.L.C. v. Saurman, 292 Mich.

App. 321 (2011), a case that was later reversed by the Michigan Supreme Court in Residential
Funding Co., L.L.C. v. Saurman, 490 Mich. 909 (2011).
On February 24, 2012, Plaintiff filed a motion for preliminary injunction to prevent a
foreclosure sale of the property. The court denied that motion from the bench March 8, 2012; and
the sheriff’s sale went forward March 13, 2012.
On June 18, 2012, three days before the court was to hear oral argument on defendants Freddie
Mac and Mortgage Electronic Registration Systems' motion for judgment, defendant GMACM filed
for bankruptcy. The court then granted Defendants’ motion for judgment and stayed the action
against GMACM. In her first motion plaintiff Phelan seeks to reopen the case against defendant
GMACM.
In her second motion Plaintiff seeks relief from the judgment awarded to Freddie Mac,
asserting that if she ultimately prevails against GMACM, the judgment in favor of Freddie Mac
would have to be reversed.
LAW AND ANALYSIS
GMACM filed an amended notice of bankruptcy appending the Final Supplemental Order
("FSO") on August 22, 2012. Plaintiff took no action to reopen the case against GMACM or to seek
relief from this court's stay until May 20, 2013. After this case was terminated and Plaintiff failed
to redeem the property, Freddie Mac filed an action for possession in state district court. Plaintiff
appeared in that case through the same counsel that filed the instant motion. In state court Plaintiff
presented the same defenses that have presented to this court, and the state court judge rejected those
arguments and entered a Judgment of Possession in favor of Freddie Mac. Plaintiff filed an appeal
of that judgment; however, it was dismissed after she failed to file a brief.

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Pursuant to Paragraph 23 of GMACM's FSO, any dispute regarding the automatic stay must
be heard and determined by the United States Bankruptcy Court. The express terms of the FSO
exclude relief from the stay where a "final judgment" permitting eviction has been entered. In this
case such a judgment has been entered in state district court, and Plaintiff's appeal of that judgment
has been dismissed. Furthermore, because GMACM does not claim any current interest in title to
the property, a claim for relief against GMACM would remain subject to the stay. Therefore, the
court will deny Plaintiff's motion to reopen the case against GMACM..
In addition, the court will deny Plaintiff's motion to the extent it seeks leave to file an amended
complaint. This is a matter previously ruled upon by this court. The proposed, amended complaint
failed to state any plausible claim for relief; therefore, amendment would be futile.
Plaintiff''s second motion seeks relief from this court's judgment in favor of Freddie Mac.
Plaintiff contends that if she ultimately prevails against GMACM, Freddie Mac's judgment would
necessarily be reversed. A motion for relief from judgment under Rule 6(b) of the Federal Rules
of Civil Procedure should be applied only in "unusual and extreme situations where principles of
equity mandate relief." See Blue Diamond Coal Co. v. Trustees of UMWA Combined Benefit Fund,
249 F.3d 519 (6th Cir. 2001). Plaintiff has previously presented to this court the identical issues she
raises in the instant motion. All that has transpired in the interim is that a state court entered
Judgment of Possession in favor of Freddie Mac. Plaintiff cannot reopen this case against Freddie
Mac after litigating and losing identical issues in the eviction action. See Lawrence v. Welch, 531
F.3d 368-69 (6th Cir. 2008).

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ORDER
It is hereby ORDERED that plaintiff Phelan's May 30, 2013 Motion to Reopen Case Against
GMAC Mortgage and Motion to Grant Leave to File an Amended Complaint is DENIED.
It is further ORDERED that plaintiff Phelan's May 24, 2013 Motion for Relief from
Judgment as to Defendant Federal Home Loan Mortgage Corporation is DENIED.

s/John Corbett O'Meara
United States District Judge

Date: August 7, 2013

I hereby certify that a copy of the foregoing document was served upon counsel of record on
this date, August 7, 2013, using the ECF system.

s/William Barkholz
Case Manager

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