Nance et al v. Bank of America, N.A.

Filing 9

OPINION and ORDER Granting Defendant's 4 MOTION to Dismiss - Signed by District Judge Judith E. Levy. (FMos)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Kenyatta and Kimberly Nance,
Plaintiffs,
v.

Case No. 14-cv-13645
Hon. Judith E. Levy
Mag. Judge Mona K. Majzoub

Bank of America, N.A.,
Defendant.
________________________________/
OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO
DISMISS [4]
This action arises from the foreclosure and sheriff’s sale of a
residential property owned by plaintiffs Kenyatta Nance and Kimberly
Nance.

Plaintiffs bring claims for quiet title and for violation of

Michigan’s loan modification statute, Mich. Comp. Laws § 600.3205,
against defendant Bank of America, N.A. (“Bank of America”), the
assignee of the mortgage on the property.

Before the Court is

defendant’s Motion to Dismiss plaintiffs’ complaint for failure to state a
claim under Fed. R. Civ. P. 12(b)(6). The Court will decide the motion

without oral argument. See E.D. Mich. LR 7.1(f). For the reasons set
forth below, the Court will grant the motion.
I.

Factual background
On July 24, 2003, plaintiffs entered into a mortgage loan

transaction with non-party Universal Home Lending, Inc. (“Universal”)
for property located at 24212 Petersburg Ave., Eastpointe, Michigan
48021 (“the Property”). (See Dkt. 1, Ex. 2 & 3 to Notice of Removal.)
Plaintiffs executed a promissory note in the amount of $109,118.00 and
a mortgage on the Property, both in favor of Universal.

(Id.)

The

mortgage was ultimately assigned to defendant on October 24, 2012 and
recorded on November 15, 2012. (Dkt. 1, Ex. 4 to Notice of Removal.)
Defendant initiated non-judicial foreclosure proceedings sometime
in 2013, and the Property was sold at sheriff’s sale on November 1,
2013. (Dkt. 1, Ex. 4 to Notice of Removal.) The redemption period
expired on May 1, 2014. Plaintiffs filed suit in Macomb County Circuit
Court on August 11, 2014, and Bank of America timely removed to this
Court on September 19, 2014.
II.

Analysis
2

A.

Standard of review
A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) tests the

sufficiency of a complaint.

When deciding such a motion, the court

must “construe the complaint in the light most favorable to the plaintiff
and accept all allegations as true.” Keys v. Humana, Inc., 684 F.3d 605,
608 (6th Cir. 2012). The court need not, however, accept as true “legal
conclusions or unwarranted factual inferences.”

Morgan v. Church’s

Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987). “To survive a motion to
dismiss, a complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). A plausible claim need not contain
“detailed factual allegations,” but it must contain more than “labels and
conclusions” or “a formulaic recitation of the elements of a cause of
action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

The

“factual allegations must be enough to raise the right of relief above the
speculative level.” Id.
Determining whether a complaint states a plausible claim
for relief will . . . be a context-specific task that requires the
reviewing court to draw on its judicial experience and
common sense. But where the well-pleaded facts do not
permit the court to infer more than the mere possibility of
3

misconduct, the complaint has alleged – but it has not shown
– that the pleader is entitled to relief.
Iqbal, 556 U.S. at 679 (citations and internal quotation marks
omitted).
B.

Plaintiffs’ ability to challenge the foreclosure and sale
It is well-established under Michigan law that a plaintiff cannot

challenge a foreclosure and sale after the expiration of the 6-month
redemption period, absent a clear showing of fraud or irregularity in the
foreclosure proceedings themselves.

E.g., Bryan v. JPMorgan Chase

Bank, N.A., 304 Mich. App. 708, 713-14 (2014). A plaintiff must further
allege prejudice – that he would have been in a better position to keep
the property, absent the fraud or irregularity – in order to void the
foreclosure and sale. Kim v. JPMorgan Chase Bank, N.A., 493 Mich. 98,
115-16 (2012). Allegations that a defendant failed to follow statutory
loan modification procedures cannot support a claim of prejudice, as the
statute does not require a defendant to grant a loan modification.
Wargelin v. Bank of America, N.A., No. 12-15003, 2013 WL 5587817, at
*5 (E.D. Mich. Oct. 10, 2013).

Plaintiffs thus cannot void the

foreclosure and sale.

4

C.

Quiet title (Count I)
Plaintiffs have the burden of proof and must make out a prima

facie case of quiet title. Beulah Hoagland Appleton Qualified Personal
Residence Trust v. Emmet Cty. Rd. Comm’n, 236 Mich. App. 546, 550
(1999). To properly assert a claim for quiet title under Michigan law,
“[t]he complaint 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.”
Court Rules § 3.411(B)(2).

Mich.

Plaintiffs allege they hold a fee simple

interest in the Property, obtained by warranty deed. (Dkt. 1, Ex. 1 to
Notice of Removal, Compl. ¶ 5.) Plaintiffs also acknowledge defendant
acquired its interest in the Property by the sheriff’s sale of November 1,
2013. (Id. ¶ 6.)
Upon expiration of the redemption period after May 1, 2014,
whatever interest plaintiffs had in the Property vested in defendant.
Mich. Comp. Laws § 600.3236.

Plaintiffs have not alleged facts

indicating they attempted to redeem the Property within the
redemption period. See Snell v. Wells Fargo Bank, N.A., No. 11-12018,
2012 U.S. Dist. LEXIS 42828, at *3 (E.D. Mich. Mar. 28, 2012). Nor
5

have Plaintiffs alleged any facts establishing the superiority of their
claim to the Property. Count I will therefore be dismissed.
D.

Violation of Michigan loan modification statute (Counts
II and III)
Plaintiffs allege defendant violated Michigan’s loan modification

statute, Mich. Comp. Laws § 600.3205, by (1) incorrectly determining
plaintiffs were not eligible for a modification; (2) failing to determine
whether plaintiffs were eligible for certain other modifications; and (3)
not sending plaintiffs a denial letter with the relevant calculations.1
(Compl. ¶ 23.) Count III is redundant, as it merely states a request for
relief for the violation alleged in Count II.
Michigan courts, as well as the Sixth Circuit and courts in this
district, have consistently held that the only remedy for violation of the
loan modification statute is conversion of a non-judicial foreclosure to a
judicial foreclosure. E.g., Elsheick v. Select Portfolio Servicing, Inc., 566
F. App’x 492, 499 (6th Cir. 2014) (citing Mich. Comp. Laws §
600.3205c(8)); Jones v. Nationstar Mortg., LLC, No. 14-11642, 2014 WL

1

Mich. Comp. Laws § 600.3205 was repealed effective June 2014.

6

5307168, at *3 (E.D. Mich. Oct. 16, 2014); Hill v. US Bank, N.A., No.
319502, 2015 WL 1122922, at *3 (Mich. Ct. App. Mar. 12, 2015). This
includes more than one case brought by plaintiffs’ counsel here. E.g.,
Wargelin v. Bank of America, N.A., No. 12-15003, 2013 WL 5587817, at
*5 (E.D. Mich. Oct. 10, 2013); Thompson v. JPMorgan Chase Bank, No.
13-11990, 2013 WL 3936499, at *3 (E.D. Mich. July 30, 2013). Those
courts have likewise consistently held that once the redemption period
has expired, this remedy is no longer available, and have dismissed
claims on that basis. E.g., Thompson, 2013 WL 3936499, at *3 (holding
that § 600.3205 “does not provide a plaintiff with a cause of action to
seek the reversal of a sheriff's sale that has already occurred”). Even if
plaintiffs have alleged a violation of the loan modification statute, they
cannot obtain any relief. Counts II and III will therefore be dismissed.
III. Conclusion
Accordingly, defendant’s Motion to Dismiss (Dkt. 4) is GRANTED;
and
Plaintiffs’ Complaint is DISMISSED with prejudice.
IT IS SO ORDERED.
Dated: March 30, 2015
Ann Arbor, Michigan

s/Judith E. Levy
JUDITH E. LEVY
7

United States District Judge
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on March 30, 2015.
s/ Felicia M. Moses
FELICIA M. MOSES
Case Manager

8