Hartland Fellowship Church et al v. Bank of America, NA et al

Filing 23

MEMORANDUM OPINION and ORDER Granting Defendants' 11 MOTION to Dismiss Wells Fargo Bank, N.A.'s Motion to Dismiss, Brief in Support, Certificate of Service, 16 MOTION to Dismiss - Signed by District Judge Judith E. Levy. (FMos)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Jeremy Gibbs, Tonya Gibbs, and
Hartland Fellowship,
Plaintiffs,

Case No. 15-cv-10688
Hon. Judith E. Levy
Mag. Judge David R. Grand

v.
Bank of America, N.A. and Wells
Fargo Bank, N.A.,
Defendants.
________________________________/
OPINION AND ORDER GRANTING
DEFENDANTS’ MOTIONS TO DISMISS [11, 16]
Pending in the above-captioned matter are defendants Wells
Fargo Bank, N.A. (“Wells Fargo”) and Bank of America, N.A.’s (“BoA”)
motions to dismiss.

(Dkts. 11, 16.)

Pursuant to E.D. Mich. L.R.

7.1(f)(2), the Court will determine the motions without oral argument.
I.

Background
On October 10, 2007, Elias Mikhael obtained an $884,800 loan on

residential property located in Howell, Michigan, from Bank of America

(“BoA”), secured by a mortgage in favor of BoA.

In 2008, plaintiffs

leased the property from Mikhael and began using it as a church.
On February 5, 2010, BoA assigned the mortgage to Wells Fargo,
and that assignment was recorded with Livingston County, Michigan,
on February 11, 2010. At some point in 2010, Mikhael defaulted on the
loan, and Wells Fargo commenced foreclosure proceedings. On August
4, 2010, Wells Fargo purchased the property for $570,600 at a sheriff’s
sale.

On August 16, 2010, Wells Fargo recorded the deed with

Livingston County. No party redeemed the mortgage during Michigan’s
one-year statutory redemption period.
Plaintiffs allege that, since 2008, they have engaged in certain
activities to improve the value of the property, “including engaging in
preventative maintenance, repairs, and other improvements,” and have
taken responsibility for things such as “repairing the buildings, mowing
the lawns, plowing roads and drives, and the replacing of the decaying
wood in and around the structures on the property.” (Dkt. 1 at 3.) They
also allege that they have made multiple attempts to contact Wells
Fargo and BoA to attempt to resolve the foreclosure proceedings and
purchase the property, but that their attempts to do so have been met
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“with either silence or disrespectful responses that clearly refuse to
recognize that the current occupants are bona fide purchasers of the
property.” (Id.)
Plaintiffs filed suit on February 26, 2015, asserting a single claim
of unjust enrichment against defendants, and seeking damages in the
amount of the monetary value of the property, as well as quiet title in
their favor. Wells Fargo filed a motion to dismiss that claim on June
12, 2015. (Dkt. 11.) On July 10, 2015, BoA filed a motion to dismiss on
the grounds that it does not own the property, and therefore cannot be
sued for unjust enrichment. (Dkt. 16.) The motions are now ripe for
adjudication.
II.

Legal Standard
When deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(6),

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). “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
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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).
III.

Analysis

“In order to sustain the claim of unjust enrichment, plaintiff must
establish (1) the receipt of a benefit by defendant from plaintiff, and (2)
an inequity resulting to plaintiff because of the retention of the benefit
by defendant. If this is established, the law will imply a contract in
order to prevent unjust enrichment.” Belle Isle Grill Corp. v. City of
Detroit, 256 Mich. App. 463, 478 (2003) (further citation omitted).
Plaintiffs allege that defendant was unjustly enriched in two
ways: first, by the maintenance and unspecified improvements plaintiffs
performed on the property, and second, by engaging in “fraudulent
transactions with no intent to allow the Plaintiffs to enter into
negotiations to retain the property.” (Dkt. 1 at 4.)
In the light most favorable to plaintiffs, they have alleged that
defendants received a benefit from their repairs and maintenance of the
property, as they have alleged that the property is in better shape than
it otherwise would have been without their efforts. However, plaintiffs
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have not pleaded facts that would support their claim that retention of
that benefit, if any, by defendants would be unjust.
As previously held in Gibbs v. Bank of America, NA, Case No. 13cv-14242, Dkt. 11, in addressing a virtually identical unjust enrichment
claim brought by these plaintiffs against these defendants, routine
maintenance and repair of property does not rise to the level of unjust
enrichment, particularly given that plaintiffs have continued to use the
property first as apparent tenants, then as holdover tenants after
foreclosure. See also Sweet Air Inv., Inc. v. Kenney, 275 Mich. App. 492,
504 (2007) (holding that unjust enrichment based on maintenance of
property was not a viable theory where the party asserting the claim
has “had the use and enjoyment of the property during the time that
they had maintained it.”).
Unlike the virtually identical unjust enrichment claim referenced
above, plaintiffs reference “other improvements” in this complaint.
However, plaintiffs do not allege that they took any other actions
beyond the ones already termed “maintenance” in their prior

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complaint.1

Even in the light most favorable to plaintiffs, the

unspecified “improvements” cannot suffice to make this claim survive.
Under Michigan law,
[a] third party is not unjustly enriched when it receives a
benefit from a contract between two other parties, where the
party benefited has not requested the benefit or misled the
other parties. . . . Otherwise stated, the mere fact that a
third person benefits from a contract between two other
persons does not make such third person liable in quasicontract, unjust enrichment, or restitution.
Morris Pumps v. Centerline Piping, Inc., 273 Mich. App. 187, 196 (2006)
(quoting 66 Am. Jur. 2d, Restitution and Implied Contracts, § 32, p.
628). Importantly, “not all enrichment is necessarily unjust in nature.”
Id. at 196.

In the first complaint, plaintiffs stated that they had “maintained the
property including routine maintenance and repairing the buildings on
the property, mowing the lawns, plowing roads and drives, repairing
decaying wood and all manner of repairs to the land and buildings.”
Gibbs, Case No. 13-cv-14242, Dkt. 1 at 5.

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In this complaint, plaintiffs state that they “have worked hard to
improve the value of the property in question, including engaging in
preventative maintenance, repairs, and other improvements,” and that
“[t]hese actions include repairing the buildings, mowing the lawns,
plowing roads and drives, and the replacing of the decaying wood in and
around the structures of the property.” (Dkt. 1 at 4.) Plaintiffs have
not alleged any act that differs from the maintenance alleged in the
first complaint to serve as an “improvement” of the property.
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Plaintiffs are currently using a property zoned for residential
purposes as a church. They are doing so pursuant to a lease entered
into with the then-owner of that property in 2008. Although plaintiffs
have not provided the lease to the Court, their use, maintenance, and
“improvement” of the property began and continue pursuant to that
contract.
Plaintiffs do not allege in their complaint that defendants
requested the alleged benefit conferred by plaintiffs’ actions, or misled
either party to the lease to acquire that benefit, or even that defendants
knew of the benefit at all before the filing of this lawsuit.2 See, e.g., Fed.
Home Loan Mortg. Corp. v. Guntzviller, Case No. 12-000568, 2014 WL
1383555, at *9 (Mich. Ct. App. April 8, 2014) (holding that a plaintiff
was not entitled to relief under a theory of unjust enrichment where it
presented no evidence that the defendant requested a benefit or misled
others to acquire the benefit).
Plaintiffs have, according to their complaint, utilized a residential
property owned by Wells Fargo for non-residential purposes for nearly

Plaintiffs state in their response to Wells Fargo’s motion to dismiss
that defendant knew of the maintenance and repair, and cite to an
unattached exhibit as evidence of that knowledge. (Dkt. 13 at 7.)
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2

five years without authorization from Wells Fargo. They do not allege
that defendants knew of, requested, or misled plaintiffs into providing
the maintenance and upkeep of the property during that time.
Accordingly, it would not be inequitable to permit defendant to retain
the benefit of that maintenance, to the extent it confers a benefit on
defendant at all.
Plaintiffs’ second theory of unjust enrichment is that the
defendants were unjustly enriched by allegedly fraudulent transactions
that prevented plaintiffs from negotiating with defendant to purchase
the property. An unjust enrichment claim requires, at a minimum, the
receipt of a benefit by defendants from plaintiffs. Plaintiffs have not
alleged that defendants received any benefit from plaintiffs in the
course of the above-referenced transactions.

Instead, plaintiffs have

alleged that they were denied the benefit of an opportunity to purchase
the property by the transactions.
In the light most favorable to plaintiffs, they allege that one of the
two defendants has refused to sell the property it owns to plaintiffs.
Plaintiffs have provided no authority to support the argument that a
claim for unjust enrichment exists where one party refuses to sell
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property it owns to another absent any obligation or promise to do so.
Accordingly, plaintiffs have failed to plead a claim for unjust
enrichment.
To the extent that plaintiffs allege the February 5, 2010
assignment of the mortgage was fraudulent, they have stated no legal
or factual basis in support of that argument. Further, under Michigan
law, plaintiffs lack standing to challenge the assignment as nonparties
to the assignment. Bowles v. Oakman, 246 Mich. 674, 678 (1929).
The Court must also dismiss the claim against BoA on the
independent ground that it is not the owner of the property and cannot
be unjustly enriched by plaintiffs’ maintenance. Plaintiffs allege that
BoA was the highest bidder at the August 4, 2010 sheriff’s sale, and
that BoA is actually the record owner of the property. BoA argues that
Wells Fargo is actually the owner of the property, and provides the
August 4, 2010 sheriff’s deed showing the sale of the property to Wells
Fargo. (Dkt. 16-2.)
At the motion to dismiss stage, the Court may consider documents
either referenced in the plaintiffs’ complaint or central to plaintiffs’
claims in a motion to dismiss without converting the motion into one for
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summary judgment. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551
U.S. 308, 322 (2007); see also Greenberg v. Life Ins. Co. of Virginia, 177
F.3d 507, 514 (6th Cir. 1999). Here, the central document to plaintiffs’
claims against BoA is the sheriff’s deed, which plaintiffs contend show
that the property was sold to BoA instead of Wells Fargo.
At this stage, the Court must also accept plaintiffs’ allegations, if
not contradicted by the documents central to their claim, as true.
However, the Court will not accept plaintiffs’ allegations as true when
they are contradicted by the actual documents central to plaintiffs’
claims. Cf. Moody v. CitiMortgage, Inc., 32 F. Supp. 3d 869, 874 (W.D.
Mich. 2014) (holding that when a written instrument attached to a
complaint contradicts the allegations in the complaint, the exhibit
controls) (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend,
163 F.3d 449, 454 (7th Cir. 1998)); Banaszak v. CitiMortgage, Inc., Case
No. 13-cv-13710, 2014 WL 4489497, at *8 n.6.

The deed has been

provided and is properly considered by the Court at this stage.
The sheriff’s deed at issue in this case unequivocally shows that
Wells Fargo was the purchaser listed on the sheriff’s deed. (Dkt. 16-2 at
2.)

Wells Fargo also provided an affidavit when it purchased the
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property, listing Wells Fargo as the purchaser.

(Id. at 8.)

Under

Michigan law, affidavits recorded with a deed “shall be presumptive
evidence of the facts therein contained.” M.C.L. § 600.3264. Plaintiffs’
allegation that BoA owned the property is contradicted by the document
plaintiffs claim shows BoA’s ownership. The document controls.
Accordingly, plaintiffs’ claim against BoA is dismissed for the
additional reason that BoA does not own the property and would not
receive any benefit from the alleged unjust enrichment.
Because this is the second lawsuit these plaintiffs have brought
alleging unjust enrichment against these defendants, and plaintiffs
have again failed to state a claim for relief, this case is dismissed with
prejudice.
IV.

Conclusion

For the reasons set forth above, it is hereby ordered that:
Defendants’ motions to dismiss (Dkts. 11, 16) are GRANTED; and
Plaintiff’s complaint is DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.
Dated: August 5, 2015
Ann Arbor, Michigan

s/Judith E. Levy
JUDITH E. LEVY
United States District Judge
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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 August 5, 2015.

s/Felicia M. Moses
FELICIA M. MOSES
Case Manager

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