Dickinson et al v. Countrywide Home Loans, Inc. et al

Filing 40

OPINION; signed by Judge Gordon J. Quist (Judge Gordon J. Quist, jmt)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

MICHELLE DICKINSON and
ROBERT DICKINSON,
Plaintiffs,

Case No. 1:10-CV-688

v.

HON. GORDON J. QUIST

COUNTRYWIDE HOME LOANS, INC.,
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC. (a/k/a MERS), THE BANK
OF NEW YORK MELLON FKA THE BANK
OF NEW YORK, as Trustee for the
Certificateholders, CWABS, INC.,
ASSET-BACKED CERTIFICATES,
Series 2006-7, BANK OF AMERICA,
BAC HOME LOANS SERVICING, LP,
a subsidiary of Bank of America, N.A.,
Defendants.
/

OPINION
Plaintiffs, Michelle Dickinson and Robert Dickinson (the “Dickinsons”), filed a complaint
against Defendants, Countrywide Home Loans, Inc. (“Countrywide”), Mortgage Electronic
Registration Systems, Inc. (“MERS”), Bank of New York Mellon, f/k/a Bank of New York, as
Trustee for the Certificateholders, CWABS, Inc. Asset-Backed Certificates, Series 2006-7
(“BNYM”), Bank of America, BAC Home Loans Servicing, LP (“BAC”), and Fiserv Lending
Solutions (“Fiserv”), in the Benzie County Circuit Court alleging various state law claims arising
out of a nonjudicial foreclosure on their vacation home. Defendants removed the case to this Court
on the basis of diversity of citizenship under 28 U.S.C. § 1332. Following removal, the Court

dismissed Fiserv without prejudice.1 (Dkt. #16.)
Defendants now move for summary judgment on all claims, and the Dickinsons have filed
a response. Although the Dickinsons and Defendants request oral argument, the Court finds that
oral argument is unnecessary to an informed resolution of the issues. For the reasons set forth
below, the Court will grant Defendants’ motion in its entirety and dismiss the Dickinsons’ claims
with prejudice.
I. BACKGROUND
The Dickinsons assert the following claims under three counts in their complaint: (1) a claim
for injunctive relief (Count I); (2) a claim for trespass (Count II); and (3) a claim for breach of
contract and rescission (Count III), which incorporates a claim for violation of the Michigan
Consumer Mortgage Protection Act, M.C.L. § 445.1631, et seq. The facts material to the instant
motion are largely undisputed, as set forth below.
On May 25, 2006, the Dickinsons obtained a refinance loan from Countrywide in the amount
of $295,000. (Dkt. # 31-4, Loan Application; dkt. # 31-3, Michelle Dickinson Dep. (“MD Dep.”)
at 12-13; dkt. #32-1, Robert Dickinson Dep. (“RD Dep.”) at 9-10.) As security for the loan, the
Dickinsons granted a mortgage on their property located at 4335 Crystal Dr., Beulah, MI 496179460 (the “Property”) to MERS, solely as nominee for Countrywide.2 (Dkt. # 32-1, Mortgage; MD
Dep. at 26-27; RD Dep. at 16.) The Property, which the Dickinsons used for a vacation home during
the summer for about four weeks each year, (MD Dep. at 10, RD Dep. at 9), is legally described as:

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The Court also continued the temporary restraining order issued by the state court as a preliminary injunction
until January 30, 2011. (Dkt. #16.) Thereafter, the Court entered an order granting Defendants’ motion for escrow
payments and approving Defendants’ proposed order requiring the Dickinsons to make monthly payments of $2,455.37,
into escrow with the Court during the pendency of this case. (Dkt. #23.)
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Defendant BAC serviced the loan.

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“Lots 8, 8A, 9 and 9A of the plat of ‘Holiday Beach’, according to the recorded plat thereof as
recorded in liber 3 of plats, page 40, Benzie County Records.” (Dkt. #33-3, Sheriff’s Deed.) MERS
and/or Countrywide’s representatives handled the preparation and recording of the mortgage in a
less-than-competent manner. The original mortgage lacked a legal description and was lost and
never recorded. An affidavit of lost mortgage, attaching a copy of the mortgage and the legal
description for the Property, was later recorded in August of 2008. (Dkt. #32-3, Affidavit of Lost
Mortgage.) The information in the affidavit was not entirely accurate, however, as the affidavit that
MERS was acting as the nominee Fremont Investment and Loan, rather than Countrywide.
Nonetheless, the mortgage accurately stated that MERS was acting as the nominee of Countrywide,
and the Dickinsons do not dispute that they actually granted a mortgage on the Property to MERS.
(Dkt. #31-2, Plaintiffs’ Answers to Defendants’ Discovery Requests ¶ 7.)
The Dickinsons defaulted on the loan soon after obtaining it. Within the first year, the
Dickinsons failed to make two monthly payments. (MD Dep. at 71; dkt. #32-4, Payment History.)
In addition, in the summer of 2007, they defaulted by failing to pay the property taxes. The
Adjustable Rate Note that the Dickinsons signed called for monthly interest and principal payments
of $2,012.42. (Dkt. #31-5, Adjustable Rate Note ¶ 3.) Although the Dickinsons claim that they told
a Countrywide representative that their payments should include an amount for property taxes, it is
undisputed that the payments covered only principal and interest and that the Dickinsons were
responsible for paying the property taxes themselves. (Dkt. # 32-5, New Loan Payment Form.)
Regardless, in June and August of 2007, Countrywide sent the Dickinsons correspondence regarding
the delinquent taxes, which instructed the Dickinsons to submit proof that the taxes had been paid.
(Dkt. #33-1.) However, the Dickinsons never provided any such proof to Countrywide. (MD Dep.
at 43.) Finally, the Dickinsons fell further behind in their payments in 2008 when they separated.
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(MD Dep. at 70-71.) After the Dickinsons reconciled, they made one payment, but Countrywide
rejected it because they were in default. (Id. at 83.)
In February 2008, after the Dickinsons were in default, Countrywide retained Integrity
Preservation to inspect and secure the Property. The Dickinsons allege that “on or about February
28, 2008, Countrywide hired someone to break into our residence on Crystal Drive, causing
significant physical damage to the structure and posting a sticker on the door prohibiting entry to
‘unauthorized persons.’” (Dkt. #1-2, Michelle Dickinson Aff. ¶ 14.) The Dickinsons first
discovered that Integrity Preservation had entered the Property in June 2008, when they arrived at
the Property, found a padlock on the door, and noticed that the front door had been damaged. (MD
Dep. at 101.) The Dickinsons cut the padlock off the door but did not contact Countrywide at that
time. (Id. at 104.) Integrity Preservation subsequently returned to the Property and re-secured the
Property. The Dickinsons allege that when they returned to the Property on July 20, 2008, they
discovered that Countrywide had entered the Property a second time and that “hundreds of dollars
worth of personal property was missing, [and] the power was shut off, leaving food in the freezer
to rot.” (Michelle Dickinson Aff. ¶ 17.) At that point the Dickinsons notified Countrywide that they
were still occupying the Property. (MD Dep. at 109.)
On September 29, 2009, MERS assigned the mortgage to BNYM. (Dkt. #33-2, Assignment.)
Prior to that time, Countrywide had sold or assigned the loan to BNYM. (Dkt. #39-2.) On or about
October 7, 2009, BNYM initiated foreclosure proceedings. On December 2, 2009, BNYM
purchased the Property at a sheriff’s sale. (Dkt. #33-3, Sheriffs Deed.) The redemption period
expired on June 2, 2010. Instead of redeeming the Property, the Dickinsons elected to file the
instant lawsuit in state court.

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II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate if there is no genuine issue as to any material fact and the
moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56. Material facts are facts
which are defined by substantive law and are necessary to apply the law. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986). A dispute is genuine if a reasonable
jury could return judgment for the non-moving party. Id.
The court must draw all inferences in a light most favorable to the non-moving party, but
may grant summary judgment when "the record taken as a whole could not lead a rational trier of
fact to find for the non-moving party." Agristor Fin. Corp. v. Van Sickle, 967 F.2d 233, 236 (6th
Cir. 1992) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106
S. Ct. 1348, 1356 (1986)).
III. DISCUSSION
A.

Breach of Contract and Rescission
In Count III of their complaint, the Dickinsons allege that:
Defendants breached their contract, if any, with Plaintiffs by failing to create an
escrow account, by trespassing on and damaging and/or removing Plaintiffs’
property, and by creating a purported loan obligation that was unconscionable in its
terms, and, therefore void, and in failing to provide Plaintiffs with signed documents.

(Compl. ¶ 38.) The Dickinsons further allege that Defendants “breached any purported contract by
foreclosing on Plaintiff’s real estate, a description of which does not appear in the purported
mortgage documents or modification thereof.” (Id. ¶ 39.) The Dickinsons have abandoned these
allegations by failing to offer any evidence, argument, or law showing that Defendants breached a
contract in the ways alleged in the complaint. See White Oak Prop. Dev., LLC v. Washington Twp.,
606 F.3d 842, 854 (6th Cir. 2010) (holding that the plaintiff “waived its appeal of the district court’s
dismissal of its claim on the basis of the Tax injunction Act” by failing to raise the issue in its brief);
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Ramos v. Patnaude, 640 F.3d 485, 489 (1st Cir. 2011) (stating that the plaintiff waived his argument
on appeal that he did not fail to exhaust his state law claims for emotional distress by failing to
address the merits of those claims in his appellate brief); Warner v. Pioneer Auto Sales & Leasing,
Inc., No. 3:10-CV-023, 2011 WL 1438322, at *10 (N.D. Ind. Apr. 14, 2011) (“Because Warner has
failed to present any argument attempting to establish her ADEA claim through either of these
methods, she has waived her ADEA claim.”).
The Dickinsons’ only argument is that Defendants (they do not specify which one) breached
the contract by attempting to foreclose by advertisement. But even as to this claim the Dickinsons
fail to explain how Countrywide/BNYM breached a contract (presumably the mortgage) by
foreclosing. They admit that they granted a mortgage on the Property to secure the loan from
Countrywide and that they defaulted on the loan.
Citing Residential Funding Co. v. Saurman, Nos. 290248, 291443, 2011 WL 1516819 (Mich.
Ct. App. Apr. 21, 2011), the Dickinsons argue that the foreclosure was invalid because BNYM did
not own the indebtedness. In Saurman, as in the instant case, MERS held the mortgages solely as
the nominee of the lender. Also as in the instant case, MERS did not own the indebtedness. Id. at
*1. When the borrowers defaulted, MERS foreclosed by advertisement pursuant to M.C.L. §
600.3201, et seq. The borrowers argued that MERS lacked authority to foreclose because it was not
one of the parties authorized by M.C.L. § 600.3204(1)(d) to foreclose, which include (1) the owner
of the indebtedness; (2) the owner of an interest in the indebtedness secured by the mortgage; and
(3) the servicing agent of the mortgage. Because MERS neither owned the indebtedness nor was
the servicing agent, MERS could foreclose only if it owned an interest in indebtedness. Id. at *3.
The Michigan Court of Appeals concluded that MERS did not own an interest in the indebtedness
because it did not make the loans. Id.
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Saurman is of no help to the Dickinsons; it is no longer good law. The Michigan Supreme
Court reversed the decision shortly after the Dickinsons filed their response to Defendants’ motion
in this case. See Residential Funding Co. v. Saurman, 490 Mich. 909, 805 N.W.2d 183 (2011). The
Michigan Supreme Court explained that
MERS owned a security lien on the properties, the continued existence of which was
contingent upon the satisfaction of the indebtedness. This interest in the
indebtedness–i.e., the ownership of legal title to a security lien whose existence is
wholly contingent on the satisfaction of the indebtedness–authorized MERS to
foreclose by advertisement under MCL 600.3204(1)(d).
Id. at 909, 805 N.W.2d at 183.
In the instant case, MERS, as the mortgagee, owned an interest in the indebtedness and
assigned that interest to BNYM. Under the Michigan Supreme Court’s decision in Saurman,
BNYM was thus authorized to foreclose under M.C.L. § 600.3204(1)(d). Moreover, as noted, supra,
Defendants have submitted evidence showing that Countrywide previously sold or assigned the
indebtedness to BNYM.

Consequently, at the time it foreclosed, BNYM also owned the

indebtedness. Therefore, the foreclosure was valid.
B.

Violation of the Consumer Mortgage Protection Act
The Dickinsons allege in Count III that “Defendants have committed prohibited acts barred

by MCL 445.1634, including MCL 445.1634(3), (4), (5), as well as other Michigan statutory
violations.” (Compl. ¶ 40.) The cited provisions state:
(3) A person, appraiser, or real estate agent shall not make, directly or indirectly,
any false, deceptive, or misleading statement or representation in connection with a
mortgage loan including, but not limited to, the borrower’s ability to qualify for a
mortgage loan or the value of the dwelling that will secure repayment of the
mortgage loan.
(4) A lender shall not insert or change information on an application for a mortgage
loan if the lender knows that the information is false and misleading and intended to
deceive a third party that the borrower is qualified for the loan when in fact the third
party would not approve the loan without the insertion or change.
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(5) A statement or representation is deceptive or misleading if it has the capacity to
deceive or mislead a borrower or potential borrower. The commissioner shall
consider any of the following factors in deciding whether a statement or
misrepresentation is deceptive or misleading:
(a)
(b)
(c)

The overall impression that the statement or representation reasonably
creates.
The particular type of audience to which the statement is directed.
Whether it may be reasonably comprehended by the segment of the public
to which the statement is directed.

M.C.L. § 445.1634(3)-(5).
The Dickinsons’ claim for violation of the Consumer Mortgage Protection Act fails because
the Act “does not provide a private cause of action.” Chowdhury v. Aegis Mortg. Corp., No. 2:09cv-11221, 2009 WL 3270090, at *5 (E.D. Mich. Oct. 9, 2009) (citing Strickfaden v. Park Place
Mortg. Corp., No. 07-15347, 2008 WL 3540079 (E.D. Mich. Aug. 12, 2008) (same) and Greene v.
Benefit Mort. Corp., No. 08-12968, 2009 WL 56056 (E.D. Mich. Jan. 8, 2009) (same)). Moreover,
even if the Consumer Mortgage Protection Act provided a private cause of action, the Dickinsons
have failed to show that any Defendant committed any act or made any statement that violated the
above-cited provisions.
C.

Trespass
In Count II, the Dickinsons allege that Defendants or their agents trespassed on the Property

on at least three occasions. (Compl. ¶ 29.) They further allege that as a result of the entry,
Defendants damaged the Property and several items of personal property were taken and never
returned. (Id. ¶ 30.)
“Recovery for trespass to land in Michigan is available only upon proof of an unauthorized
direct or immediate intrusion of a physical, tangible object onto land over which the plaintiff has a
right of exclusive possession.” Adams v. Cleveland-Cliffs Iron Co., 237 Mich. App. 51, 67, 602

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N.W.2d 215, 222 (1999). An unauthorized entry onto the private lands of another constitutes a
trespass. Id. at 60, 602 N.W.2d at 219 (quoting Giddings v. Rogalewski, 192 Mich. 319, 326, 158
N.W. 951, 953 (1916)). Consent to enter upon private property, however, is an affirmative and
absolute defense to a trespass claim. Am. Transmission, Inc. v. Channel 7 of Detroit, Inc., 239 Mich.
App. 695, 705-06, 609 N.W.2d 607, 613 (2000).
Paragraph 9 of the mortgage provides, in pertinent part:
Protection of Lender’s Interest in the Property and Rights Under this Security
Instrument. If (a) Borrower fails to perform the covenants and agreements contained
in this Security Instrument . . . or (c) Borrower has abandoned the Property, then
Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s
interest in the Property and rights under this Security Instrument, including
protecting and/or assessing the value of the Property, and securing and/or repairing
the Property. . . . Securing the Property includes, but is not limited to, entering the
Property to make repairs, change locks, replace or board up doors and windows,
drain water from pipes, eliminate building or other code violations or dangerous
conditions, and have utilities turned on or off.
(Mortgage ¶ 9.) At the time Countrywide retained Integrity Preservation to secure the Property, the
Dickinsons had defaulted under both the note and the mortgage by failing to make loan payments
when due and failing to pay the property taxes. Thus, the conditions authorizing Countrywide to
enter the Property had occurred. It appears that Integrity Preservation actually entered the Property
to ensure that it was properly winterized, which required it to break into the house. Moreover,
Integrity Preservation could have reasonably assumed that the Dickinsons had abandoned the
Property because they were not occupying it at the time, the electricity was turned off, and there was
no indication that it was occupied. The Dickinsons argue that it should have been apparent to
Defendants that the Property was a summer cottage that would have normally been vacant during
the month of February and that Defendants should have contacted them before entering to ascertain
the true circumstances. These arguments fail, however, because paragraph 9 grants the mortgagee
the unconditional right to enter the premises if the mortgagor defaults, and nothing therein requires
that mortgagee to contact the mortgagor before entering the premises.
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Regarding the Dickinsons’ claim that items of personal property were stolen, they have failed
to present any evidence tending to show that agents of Integrity Preservation were responsible for
the stolen property. Even with such evidence, however, the Dickinsons cite no legal authority for
holding Defendants liable for the intentional acts of Integrity Preservation. In the context of
employer and employee, the general rule is that an employer is not liable for the employee’s
intentional tort committed within the scope of his employment if the employee acts for his own
purpose rather than that of the employer. See Bryant v. Brannen, 180 Mich. App. 87, 98, 446
N.W.2d 847, 852-53 (1989). There is no indication that the representative of Integrity Preservation
was Defendant’s employee. Rather, it appears that Integrity Preservation was an independent
contractor. The rule regarding intentional acts of independent contractors, such as Integrity
Preservation, is that a person cannot be held liable for an independent contractor’s acts unless the
contractor’s acts were foreseeable. See Lulanaj v. Multi-Building Co., No. 230422, 2002 WL
988578, at *3 (Mich. Ct. App. May 10, 2002). In the instant case, the Dickinsons fail to present any
evidence showing that Defendants knew or should have known that Integrity Preservation would
remove the Dickinsons’ personal property. Moreover, there is no indication that Defendants had
control over the acts of Integrity Preservation’s agents or employees. See Burks v. Wash. Mut. Bank,
F.A., No. 07-13693, 2008 WL 4966656, at *8 (E.D. Mich. Nov. 17, 2008) (noting that Michigan
courts decline to hold defendants liable for the acts of independent contractors because they lack
control over the independent contractor).
D.

Injunctive Relief
The Dickinsons final claim is for injunctive relief. Because injunctive relief is a remedy, the

Dickinsons’ request for an injunction fails to state an independent claim. See Terlecki v. Stewart,
278 Mich. App. 644, 663, 754 N.W.2d 899, 912 (2008) (“It is well settled that an injunction is an

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equitable remedy, not an independent cause of action.”). The Dickinsons have failed to show that
they are entitled to relief on any of their claims. Thus, the Court lacks any basis to award the
Dickinsons an injunction.
IV. CONCLUSION
For the foregoing reasons, the Court will grant Defendants’ motion for summary judgment
and dismiss the Dickinsons’ complaint with prejudice.
An Order consistent with this Opinion will be entered.

Dated: January 19, 2012

/s/ Gordon J. Quist
GORDON J. QUIST
UNITED STATES DISTRICT JUDGE

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