Spadafore et al v. Aurora Loan Services, LLC

Filing 22

ORDER denying 18 Motion for Reconsideration ; denying 19 Motion to Set Aside. Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
CHARLES L. SPADAFORE and MARY
SPADAFORE,
Plaintiffs,
Case No. 12-10532
v.
Hon. John Corbett O’Meara
AURORA LOAN SERVICES, LLC,
Defendant.
__________________________________/
ORDER DENYING MOTIONS FOR
RECONSIDERATION AND FOR RELIEF FROM JUDGMENT
Before the court are Plaintiffs’ motion for reconsideration, filed January 3, 2013, and
motion to alter, amend, or other relief pursuant to Rules 59 and 60, filed January 16, 2013.
Defendant filed a response to the latter motion on January 30, 2013.
In this mortgage foreclosure case, the court granted Defendant’s motion to dismiss on
December 20, 2012. The court found that Plaintiffs were unable to challenge the foreclosure sale
because the redemption period had expired. The court further found that Plaintiffs were unable
to overcome the expiration of the redemption period because they failed to make a clear showing
of fraud or irregularity in connection with the foreclosure sale. Plaintiffs seek reconsideration,
arguing that Defendant’s alleged violation of the loan modification statute voids the foreclosure,
with the result that the redemption period never began. For this proposition, Plaintiffs rely upon
Mitan v. Federal Home Loan Mort. Corp., 703 F.3d 949 (6th Cir. 2012). Mitan has been
abrogated by Kim v. JPMorgan Chase Bank, N.A., 493 Mich. 98 (2012), however.
See Acheampong v. Bank of New York Mellon, 2013 WL 173472 (E.D. Mich. Jan. 16, 2013)
(Cohn, J.). Kim makes clear that, under Michigan law, “failure to comply with the conditions set

forth in Michigan’s foreclosure-by-advertisement statute does not render flawed foreclosures
void (i.e., void ab initio ) but merely voidable.” Conlin v. MERS, — F.3d — , 2013 WL
1442263 (6th Cir. Apr. 10, 2013).
“In order for foreclosure defects under M.C.L. 600.3204 to be actionable to set aside the
foreclosure sale, plaintiffs must show that they were prejudiced by defendant’s failure to comply
with M.C.L. 600.3204. To demonstrate such prejudice, they must show that they would have
been in a better position to preserve their interest in the property absent defendant’s
noncompliance with the statute.” Kim, 493 Mich. at 337. The same showing of prejudice must
be made where a plaintiff is alleging a violation of the loan modification statute, M.C.L.
600.3205c. Acheampong, 2013 WL 173472 at *7-8 (“[A] violation of the loan modification
statute, standing alone, is not enough to show fraud or irregularity.”). Plaintiffs have not made
such a showing of prejudice here.
Plaintiffs further argue that the Kim case supports reconsideration. In Kim, the defendant
initiated foreclosure proceedings before recording its mortgage interest, rendering the
foreclosure voidable. This case is factually distinguishable from Kim because Aurora recorded
its mortgage assignment prior to commencing foreclosure proceedings. See Def.’s Ex. K
(motion to dismiss). Accordingly, Kim does not warrant reconsideration here.
THEREFORE, IT IS HEREBY ORDERED that Plaintiffs’ motion for reconsideration
[Docket No. 18] and motion to alter, amend, or other relief [Docket No. 19] are DENIED.

s/John Corbett O'Meara
United States District Judge

Date: May 17, 2013

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I hereby certify that a copy of the foregoing document was served upon counsel of record
on this date, May 17, 2013, using the ECF system.

s/William Barkholz
Case Manager

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