Fairchild v. BNC Mortgage, Inc. et al

Filing 97

OPINION re 88 and 91 ; Order to issue; signed by Judge Janet T. Neff (Judge Janet T. Neff, clb)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

JOSEPH E. FAIRCHILD,
Plaintiff,

Case No. 1:12-cv-723

v.

HON. JANET T. NEFF

CHASE HOME FINANCE, LLC, et al.,
Defendants.
____________________________________/

OPINION
Pending before the Court in this removed case are the motions for judgment on the pleadings
filed by Defendants Chase Home Finance, LLC (Chase) and Ocwen Loan Servicing LLC (Ocwen)
(Dkts 88 & 91). Plaintiff filed a collective response to the motions (Dkt 96), to which Ocwen (Dkt
92) and Chase (Dkt 94) each filed a reply. Having reviewed the parties’ written submissions and
accompanying exhibits, the Court finds that the relevant facts and arguments are adequately
presented in these materials and that oral argument would not aid the decisional process. See W.D.
Mich. LCivR 7.2(d). For the reasons discussed herein, the Court grants both motions.
I. BACKGROUND
As recounted in the pleadings, Plaintiff resides in Delton, Michigan (Dkt 29, 2d Amend.
Compl. at 2). Since 1979, Plaintiff and his wife (Patty Fairchild) owned their Delton home (“the
home”) as tenants by the entirety (id.). Patty Fairchild died in March 2011 (id.). Plaintiff alleges
that at that time, he believed that the balance on their mortgage loan was approximately $30,000
(id.). However, not more than a few weeks after his wife passed away, Plaintiff noticed that Chase

was drawing money from his bank account (id.). Going through some of his wife’s old mail,
Plaintiff discovered that Chase was claiming his deceased wife took out a loan for approximately
$80,000 and that Chase claimed a mortgage on the home for that amount (id.). According to
Plaintiff, any corresponding loan that Patty Fairchild entered into does not bear his signature and
accordingly, any mortgage that Chase placed on his home is void ab initio under Michigan law (id.).
Plaintiff alleges that he sent letters to Chase indicating that his wife had died, that he had no
knowledge of the alleged loan and had never authorized the mortgage on his home, and demanding
that Chase remove the mortgage (id.). Chase allegedly responded by sending more letters addressed
to the decedent, threatening default and foreclosure, and demanding that Plaintiff assume the
mortgage loan with the threat of losing his home if he did not (id. at 3).
In April 2012, Plaintiff filed a Complaint in state court against the following four defendants:
1.

BNC Mortgage, Inc. (BNC), which Plaintiff alleges “claims a mortgage interest” in
the home (Compl., Dkt 1-1 at ¶ 2);

2.

Mortgage Electronic Registration Systems, Inc. (MERS), which Plaintiff alleges is
acting as “a nominee for Lender and Lender’s successors and assigns” (id. at ¶ 3);

3.

Chase, which Plaintiff alleges either “claims an interest” in the home or “at all
relevant times to this lawsuit was acting as servicer for BNC or its successors or
assigns” (id. at ¶ 4); and

4.

Ocwen Loan Servicing, LLC (Ocwen), which Plaintiff alleges was “assigned the
servicing rights to BNC’s alleged mortgage loan” (id. at ¶ 5).

Plaintiff presented the following eight claims:
I.

Invalid Mortgage Pursuant to Michigan Law, MICH. COMP. LAWS § 600.2907a;

II.

Slander of Title, MICH. COMP. LAWS § 600.2907a;

III.

Quiet Title, MICH. COMP. LAWS § 600.2932(1);

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IV.

Negligent Infliction Emotional Distress;

V.

Chase’s Violation of the Michigan Occupational Code, MICH. COMP. LAWS
§ 339.915(e) & (n);

VI.

Chase’s Violation of the Michigan Regulation Collection Practices Act, MICH. COMP.
LAWS § 445.252(e) & (n);

VII.

Ocwen’s Violation of the Michigan Occupational Code, MICH. COMP. LAWS
§ 339.915(e) & (n); and

VIII.

Ocwen’s Violation of the Michigan Regulation of Collection Practices Act, MICH.
COMP. LAWS § 445.252(e) & (n).

On July 11, 2012, MERS removed the case to this Court based on diversity jurisdiction, 28
U.S.C. § 1332 (Dkt 1, Notice of Removal ¶ 4). On August 8, 2012, Plaintiff filed a First Amended
Complaint (Dkt 14), apparently only to alter Count IV from “Negligent” Infliction of Emotional
Distress to “Intentional” Infliction of Emotional Distress.
With leave of Court, Plaintiff filed a Second Amended Complaint on October 24, 2012 (Dkt
29). In his Second Amended Complaint, Plaintiff eliminated BNC as a defendant but added U.S.
Bank National Association (U.S. Bank) as “Trustee for Structured Asset Investment Loan Trust,”
which Plaintiff alleges claims a mortgage interest in the home (id. ¶ 2). U.S. Bank answered the
Second Amended Complaint (Dkt 40) and asserted a counterclaim against Plaintiff, alleging:
I.

Declaratory Judgment Regarding Validity of Mortgage;

II.

Imposition of an Equitable Mortgage; and

III.

Unjust Enrichment

(Dkt 41). According to U.S. Bank, Plaintiff duly executed the mortgage on February 10, 2005 and
has benefitted, directly and indirectly, from the loan proceeds (id.). The parties stipulated to

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dismissing MERS on March 11, 2013 (Dkt 56), leaving Chase, Ocwen and U.S. Bank as the named
party defendants in this case.
The Court conducted a pre-motion conference with counsel in March 2014, at which time
Plaintiff’s counsel clarified on the record that Plaintiff alleges Counts I through III against U.S.
Bank, alleges Counts II through VI against Chase, and alleges Counts VII and VIII against Ocwen
(Dkts 81 & 82). Following the pre-motion conference, this Court issued an Order permitting the
parties to brief the dispositive motions proposed by Chase and Ocwen (Dkt 82). On June 23, 2014,
Chase filed its “Motion for Judgment on the Pleadings” (Dkt 88). On June 24, 2014, Ocwen filed
its “Motion to Dismiss pursuant to FED. R. CIV. P. 12(c)” (Dkt 91). Plaintiff filed a collective
response to the motions (Dkt 96), to which Ocwen (Dkt 92) and Chase (Dkt 94) each filed a reply.
II. ANALYSIS
A. Motion Standard
“After the pleadings are closed—but early enough not to delay trial—a party may move for
judgment on the pleadings.” FED. R. CIV. P. 12(c). On a Rule 12(c) motion, the court must take “all
well-pleaded material allegations of the pleadings of the opposing party ... as true, and the motion
may be granted only if the moving party is nevertheless clearly entitled to judgment.” Wurzelbacher
v. Jones-Kelley, 675 F.3d 580, 583 (6th Cir. 2012).

To survive dismissal, a complaint must contain

enough facts to establish a “plausible,” as opposed to merely a “possible,” entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
557, 570 (2007)). However, “the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions.” Id. “[W]hen a document is referred
to in the pleadings and is integral to the claims, it may be considered without converting a motion
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to dismiss into one for summary judgment.” Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508
F.3d 327, 335-36 (6th Cir. 2007).
This Court applies state law in accordance with the controlling decisions of the state supreme
court. See Allstate Ins. Co. v. Thrifty Rent-A-Car Sys., Inc., 249 F.3d 450, 454 (6th Cir. 2001) (citing
Prestige Cas. Co. v. Mich. Mut. Ins. Co., 99 F.3d 1340, 1348 (6th Cir. 1996)). If the state supreme
court has not yet addressed the issue presented, then the Court must predict how the court would rule
by looking to all the available data. See id. “Relevant data include decisions of the state appellate
courts, and those decisions should not be disregarded unless we are presented with persuasive data
that the Michigan supreme court would decide otherwise.” Id. (quoting Kingsley Assoc. v. Moll
PlastiCrafters, Inc., 65 F.3d 498, 507 (6th Cir. 1995)).
B. Discussion
Defendant Chase moves for judgment on the pleadings under FED. R. CIV. P. 12(c) on Counts
II through VI, the counts in which it is named. Defendant Ocwen seeks judgment on the pleadings
under Rule 12(c) for dismissal of Counts VII and VIII, the two counts in which it is named. The
Court will examine the parties’ respective arguments relative to each count.
1.

Slander of Title (Count II)
In Count II, Plaintiff alleges that BNC recorded a mortgage on his property with the Barry

County Register of Deeds on February 2005; that the alleged mortgage was assigned to U.S. Bank
on or about March 23, 2012; and that Chase acted as servicer of the loan (Dkt 29, 2d Amend. Compl.
¶¶ 54-57). Plaintiff alleges that he never consented, in writing or otherwise, to the placement of the
mortgage on his property, and that the mortgage rendered his property unmarketable (id. ¶¶ 58-59).
Plaintiff alleges that Chase “filed the mortgage falsely, with the intent to harass and/or intimidate,”
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ignored his correspondence, threatened to hold him in default and foreclose on the mortgage, and
failed to disclose the assignment of the alleged mortgage (id. ¶ 62).
To prove slander of title under the common law, a claimant must show “falsity, malice, and
special damages, i.e., that the defendant maliciously published false statements that disparaged a
plaintiff’s right in property, causing special damages.” Fed. Nat. Mortgage Ass’n v. Lagoons Forest
Condo. Ass’n, 852 N.W.2d 217, 223 (Mich. Ct. App. 2014) (quoting B & B Investment Group v.
Gitler, 581 N.W.2d 17, 20 (Mich. Ct. App. 1998)). “The same three elements are required in slander
of title actions brought under MICH. COMP. LAWS § 565.108.” Id. See MICH. COMP. LAWS

§ 565.108 (providing that “[n]o person shall use the privilege of filing notices hereunder for the
purpose of slandering the title to land”).
“[T]he crucial element is malice.” Lagoons Forest, supra (quoting Gehrke v. Janowitz, 223
N.W.2d 107, 109 (Mich. Ct. App. 1974)). A slander-of-title claimant is required to show some act
of express malice by the defendant, which “implies a desire or intention to injure.” Id. (quoting
Glieberman v. Fine, 226 N.W. 669, 670 (Mich. 1929)). “Malice may not be inferred merely from
the filing of an invalid lien; the plaintiff must show that the defendant knowingly filed an invalid lien
with the intent to cause the plaintiff injury.” Id. (quoting Stanton v. Dachille, 463 N.W.2d 479, 486
(Mich. Ct. App. 1990) (Neff, P.J.)).
In support of judgment on the pleadings in its favor, Chase asserts that the only “fact”
Plaintiff alleges in support of his slander-of-title claim is the recording of the mortgage (Dkt 89 at
9). Chase emphasizes that the recorded mortgage does not mention Chase or any related entity, only
BNC, MERS and Michigan Title Company (id.). Chase also argues that Plaintiff’s references to
letters or threats that were not recorded cannot be considered a “slander on title” (id. at 10).
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Plaintiff responds that he has stated a claim for slander of title where Chase “had knowledge
as of April 11, 2011 that Mrs. Fairchild had passed away, yet continued to send letters addressed to
the deceased Mrs. Fairchild for almost a year” (Dkt 96 at 11). Plaintiff asserts that Chase “cannot
provide any explanation for its misconduct and should be given an adverse inference it acted with
malice” (id. at 12, relying on Gipson v. Belvedere Const., Inc., No. 296765, 2011 WL 2651866
(Mich. Ct. App. July 7, 2011), and Colyer v. Fed. Home Loan Mortgage Corp., No. 13-10425, 2014
WL 1048009 (E.D. Mich. Mar. 18, 2014)).
In Gipson, 2011 WL 2651866, at *4, the Michigan court of appeals determined that the trial
court did not clearly err in finding malice where the evidence presented at trial demonstrated that the
defendants were “repeatedly informed that the mortgage was paid off, yet continued their collection
efforts, contributed to the showing of malice.” In Colyer, 2014 WL 1048009, at *7, relying on
Gipson, the district court observed that in the mortgage foreclosure context, the elements of a slander
of title claim are met “where defendants falsely represented that the plaintiff defaulted when the
plaintiff had never defaulted and where the trial court drew an adverse inference that the defendants
acted with malice where the defendants did not testify or come forward with any explanation for
their actions.” The district court nonetheless determined that dismissal of the claim in Colyer was
appropriate because the plaintiff had not pleaded facts sufficient to support either the falsity or
malice elements. Id.
Here, too, the Court agrees with Chase that Plaintiff has not pleaded facts sufficient to
support either the falsity or malice elements of a slander of title claim. Taking all well-pleaded
material allegations of Plaintiff’s pleadings as true, the allegations do not support Plaintiff’s claim
that Chase knowingly recorded a document or published a false matter with the intent to harass or
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intimidate. Specifically, even assuming that Plaintiff’s wife forged his signature to the mortgage
upon which Chase’s claim depends, Plaintiff’s allegations do not demonstrate that Chase acted out
of malice in recording or publishing matters relative to the mortgage. A plaintiff may not prevail on
a slander-of-title claim if the defendant’s “claim under the mortgage [or lien] was asserted in good
faith upon probable cause or was prompted by a reasonable belief that [the defendant] had rights in
the real estate in question.” Lagoons Forest Condo. Ass’n, 852 N.W.2d at 223 (quoting Glieberman,
226 N.W. at 670). Hence, dismissal of Count II against Chase is warranted.
2.

Quiet Title (Count III)
In Count III, Plaintiff alleges that he is the fee owner of the home; that U.S. Bank claims an

improper ownership interest in the home as evidenced by an Assignment of Mortgage recorded in
the Barry County Register of Deeds; that Chase and Ocwen, as servicers for the lender claim an
interest in the mortgage; and that the mortgage was executed “in violation of the laws identified in
this Complaint, and is therefore invalid” (Dkt 29, 2d Amend. Compl. ¶¶ 66-70). Plaintiff alleges that
this Court should, in pertinent part, adjudge that Plaintiff owns the home in fee simple and is entitled
to the quiet and peaceful possession of the home (id. ¶ 71).
Michigan law allows any person who claims any right, title, or interest in land—whether the
person is in possession or not—to bring an action to quiet title. Derbabian v. Bank of Am., N.A., 587
F. App’x 949, 958 (6th Cir. 2014) (citing MICH. COMP. LAWS § 600.2932); see also MICH. CT. R.
3.411 (Civil Action to Determine Interests in Land). The plaintiff bears the burden of proof and
must make a prima facie case that he has superior title or right to the property. Derbabian, supra
(citing Beulah Hoagland Appleton Qualified Pers. Residence Trust v. Emmet Cnty. Rd. Comm’n, 600
N.W.2d 698, 700 (Mich. Ct. App. 1999); Stinebaugh v. Bristol, 347 N.W.2d 219, 221 (Mich. Ct.
8

App. 1984)). If the plaintiff makes such a showing, then the burden shifts to the defendant to prove
superior right or title. Id. (citing Stinebaugh, 347 N.W.2d at 221).
In support of judgment on the pleadings in its favor, Chase points out that Plaintiff’s Count
III alleges only that “Chase is a servicer and (thus) claims an interest in the mortgage” (Dkt 89 at 11).
Chase argues that its rights as a servicer are only a right to foreclose on the mortgage, that it does not
have an interest in the land by virtue of being a servicer, even if it does have an interest in the
mortgage (id.) (emphasis in original). Further, Chase points out that its servicing rights were
transferred to Ocwen in April 2012, more than two months before this lawsuit was filed in June 2012
(id.)
Plaintiff’s brief in opposition to Chase’s motion includes no response to Chase’s argument
on the quiet title claim. Accordingly, dismissal of Count III against Chase is warranted. See Gomery
v. Continental Cas. Co., No. 1:13-cv-947, 2014 WL 4209648, at *4 (W.D. Mich. Aug. 25, 2014)
(Neff, J.) (collecting cases from the Sixth Circuit holding that a failure to respond to an argument
deems any argument on that issue waived).
3.

Intentional Infliction of Emotional Distress (Count IV)
In Count IV, Plaintiff alleges, in pertinent part, that Chase “misrepresented the status of the

Mortgage and loan, neglected Joseph Fairchild’s letters contesting the validity of the Mortgage, but
continued to send letters wrongfully addressed to his deceased wife, when Joseph Fairchild
expressed his wife’s death in writing, attaching her death certificate, threatening to hold her in
default, foreclose on the Home, and demand Joseph Fairchild assume the alleged loan, failed to
disclose to Plaintiff the Assignment of Mortgage and otherwise unlawfully threatened foreclosure
and deliberately failed to remedy the mistakes when they were addressed” (Dkt 29, 2d Amend.
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Compl. ¶ 74). Plaintiff alleges that the actions of Chase and its agents were “intentional or made
recklessly,” “extreme and outrageous,” and “proximately caused Joseph Fairchild to suffer damages”
(id. ¶¶ 75-77).
In Michigan, a plaintiff claiming intentional infliction of emotional distress (IIED) must
allege (1) extreme and outrageous conduct, (2) intent or recklessness, (3) causation, and (4) severe
emotional distress. Chungag v. Wells Fargo Bank, N.A., 489 F. App’x 820, 824-25 (6th Cir. 2012)
(citing Dalley v. Dykema Gossett PLLC, 788 N.W.2d 679, 694 (Mich. Ct. App. 2010)). The
defendant’s conduct must be “so outrageous in character, and so extreme in degree, as to go beyond
all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized
community.” Id. (quoting Walsh v. Taylor, 689 N.W.2d 506, 517 (Mich. Ct. App. 2004)).
In Michigan, this standard is not satisfied when the plaintiff essentially claims that the
defendant “breached contracts with him in various ways and foreclosed on his property.” Chungag,
supra (quoting Ursery v. Option One Mortgage Corp., No. 271560, 2007 WL 2192657, at *16
(Mich. Ct. App. July 31, 2007)). “In a contractual setting, a tort claim must be based instead on the
breach of a duty distinct from the contract.” Id. (quoting Hayley v. Allstate Ins. Co., 686 N.W.2d
273, 277 (Mich. Ct. App. 2004)).
In support of judgment on the pleadings in its favor, Chase emphasizes that Plaintiff does not
dispute either the existence of the mortgage or that no payments were made after his wife’s death
(Dkt 89 at 13). Chase argues that given the admitted existence of the mortgage and the default in
payments, “none of the [alleged] actions or inactions rises to the level of conduct which is so
outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency,
and to be regarded as atrocious, and utterly intolerable in a civilized society” (id.).
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In response, Plaintiff opines that there is “no good reason why Chase acted the way that it
did for a year in its threats to Mr. Fairchild” and that Chase’s actions, “taken together over a year,
in totality, certainly arise to the level of outrageous treatment to Plaintiff” (Dkt 96 at 13). Plaintiff
emphasizes that where reasonable minds may differ, whether a defendant’s conduct is so extreme
and outrageous as to impose liability is a question of fact for the jury (id. at 12).
Plaintiff’s stated opposition to dismissal of Count IV overlooks that “the extent of the distress
does not matter unless the conduct itself was actionable under IIED.” See Chungag, 489 F. App’x
at 825.1 Taking all well-pleaded material allegations of Plaintiff’s pleadings as true, the allegations
do not support a claim for IIED. The Court agrees that Plaintiff alleges no facts that suggest any
extreme or outrageous conduct by Chase that would impose a duty on Chase that is distinct from its
contractual obligations. Hence, dismissal of Count IV against Chase is warranted.
4.

Chase’s Violation of the Michigan Occupational Code and the Michigan Regulation of
Collection Practices Act (Counts V & VI)
In Count V, Plaintiff alleges that Chase willfully violated the Occupational Code by “(a)

making inaccurate, misleading, untrue, or deceptive statements and claims in communications to
collect the debt (MCL 339.915(e)), by virtue of the March 7, 2012 Letter from Schneiderman &
Sherman P.C., indicating it is attempting to collect a debt, and further indicating both Joseph
Fairchild and Patty Fairchild were debtors. (See Exhibit 12);” and “(b) using harassing, oppressive,
or abusive methods to collect the debt (MCL 339.915(n)) by virtue of the fact that Joseph Fairchild

1

The Court also points out that Plaintiff’s response brief incorrectly referenced the standard
for resolving a motion for summary judgment filed under FED. R. CIV. P. 56 (Dkt 96 at 9-10), which
is dependent on determining whether the movant shows that there is no genuine dispute as to any
material fact, rather than an examination of the pleadings as required by a motion brought under Rule
12(c).
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sent seven correspondence to Chase and its agents indicating that his wife had passed away, yet it
ignored his substantive issues and continued to send letters to her, and demanded Joseph Fairchild
assume the loan” (Dkt 29, 2d Amend. Compl. ¶ 83). In Count VI, Plaintiff alleges, verbatim, the
same allegations from Count V as supporting his claim that Chase also willfully violated the
MRCPA (id. ¶ 88).
Michigan has at least two statutes governing collection practices: Michigan’s Occupational
Code (MOC), MICH. COMP. LAWS § 339.901 et seq., and Michigan’s Regulation of Collection
Practices Act (MRCPA), MICH. COMP. LAWS § 445.251 et seq. Voydanoff v. Select Portfolio
Servicing, Inc., No. 298098, 2011 WL 6757841, at *10 (Mich. Ct. App. Dec. 22, 2011). Both acts
contain nearly identical sections delineating prohibited acts to collect a debt, which include, in
pertinent part, prohibiting a licensed collection agency from “[u]sing a harassing, oppressive, or
abusive method to collect a debt,” MICH. COMP. LAWS § 339.915 (MOC), and prohibiting a
“regulated person” from “[m]aking an inaccurate, misleading, untrue or deceptive statement or claim
in a communication to collect a debt,” MICH. COMP. LAWS § 445.252 (MRCPA). The Michigan
court of appeals has “generally observed that ‘the[se] provisions ... clearly attempt to protect the
debtor and the creditor from the potentially improper acts of a third-party collection agency.’” Id.
(quoting Asset Acceptance Corp. v. Robinson, 625 N.W.2d 804, 806 (Mich. Ct. App. 2001)).
In support of judgment on the pleadings in its favor on Count V, Chase asserts, as a threshold
matter, that its activities are not governed by the MOC inasmuch as the debt was not in default at the
time Chase began servicing the loan (Dkt 89 at 16). Further, Chase points out that Michigan’s
statute is based upon the federal Fair Debt Collections Practices Act, 15 U.S.C. § 1692 et seq., which
has been construed to allow debt collectors to communicate with the spouses of a decedent debtor
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(id. at 15, citing “Statement of Policy Regarding Communications in Connection With the Collection
of Decedents’ Debts,” 76 FR 44915-01). Last, Chase argues that given that Plaintiff acknowledges
that his name appears on the mortgage, one is left to speculate why he thinks the letter is “inaccurate,
misleading, untrue or deceptive” (id. at 14). Chase asserts that Plaintiff has failed to show how the
correspondence constitutes “harassing, oppressive or abusive methods to collect the debt”(id.).
Chase relies on the same arguments in support of judgment on the pleadings in its favor on Count
VI (id. at 17).
Plaintiff responds that he has stated a valid claim under the MOC inasmuch as Chase
“misrepresented the legal responsibility of Joseph Fairchild” and sent correspondence that falsely
indicated that “Joseph Fairchild was a debtor” (Dkt 96 at 14). Similarly, under the MRCPA, Plaintiff
argues that Chase’s correspondence to him “is a violation since it is wrongfully claiming that
Plaintiff owes a debt to Defendant Chase and therefore is a violation” (id. at 15-16).
Even assuming arguendo that these acts apply to Chase and taking Plaintiff’s well-pleaded
material allegations as true, Plaintiff’s allegations do not support his claims. The March 7, 2012
letter, addressed to both Joseph and Patty Fairchild, indicates, in pertinent part, that the loan is “in
default and has been referred to our office by the mortgagee or servicer of your mortgage to institute
foreclosure proceedings” and that the Fairchilds have “the right to dispute the validity of the debt,”
and delineates the time frame and manner for disputing the debt (Ex. 12, Dkt 29-2 at 33-34). Courts,
including this one, have held that actions taken pursuant to statutorily authorized foreclosure
proceedings are not harassing, oppressive, or abusive collection methods under the MRCPA. See
McDonald v. Green Tree Servicing, LLC, No. 13-12993, 2014 WL 1260708, at *7 (E.D. Mich. Mar.
27, 2014), appeal dismissed (Sept. 11, 2014); Frost v. Wells Fargo Bank, N.A., 901 F. Supp. 2d 999,
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1012 (W.D. Mich. 2012) (Neff, J.); Bolone v. Wells Fargo Home Mortgage, Inc., 858 F. Supp. 2d
825, 837-38 (E.D. Mich.2012). Similarly, the actions alleged do not establish a plausible entitlement
to relief under the MOC. Hence, dismissal of Counts V and VI against Chase is warranted.
5.

Ocwen’s Violation of the Michigan Occupational Code and the Michigan Regulation of
Collection Practices Act (Counts VII & VIII)
In Count VII, Plaintiff alleges that Ocwen willfully violated the MOC by “(a) making

inaccurate, misleading, untrue, or deceptive statements and claims in communications to collect the
debt, including neglecting to disclose the Assignment of Mortgage (Exhibit 15) (MCL 339.915(e)
(See Exhibit 1);” and “(b) using harassing, oppressive, or abusive methods to collect the debt (MCL
339.915(n)) by virtue of the fact that Joseph Fairchild sent correspondence to Ocwen indicating that
his wife had passed away (See Exhibit 16), yet it still continued to send letters, and refused to
remove the Mortgage” (Dkt 29, 2d Amend. Compl. ¶ 93). In Count VIII, Plaintiff alleges, verbatim,
the same allegations from Count VII as supporting his claim that Ocwen also willfully violated
provisions of the MRCPA, MICH. COMP. LAWS § 445.252(e) and (n) (id. ¶ 98).
Again, the MOC prohibits, in pertinent part, “[m]aking an inaccurate, misleading, untrue, or
deceptive statement or claim in a communication to collect a debt or concealing or not revealing the
purpose of a communication when it is made in connection with collecting a debt.” MICH. COMP.
LAWS § 339.915(e). Also referenced in Plaintiff’s Count VII is subsection (n), which prohibits
“[u]sing a harassing, oppressive, or abusive method to collect a debt.” Id. § 339.915(n).
Similarly, the MRCPA prohibits, in pertinent part, “[m]aking an inaccurate, misleading,
untrue, or deceptive statement or claim in a communication to collect a debt or concealing or not
revealing the purpose of a communication when it is made in connection with collecting a debt,”

14

MICH. COMP. LAWS § 445.252(e), and “[u]sing a harassing, oppressive, or abusive method to collect
a debt,” id. § 445.252(n).
In support of judgment on the pleadings in its favor, Ocwen argues that even assuming its
correspondence is governed by statute, Plaintiff fails to establish with any degree of specificity how
any statements from Ocwen were inaccurate, misleading, untrue or deceptive (Dkt 91 at 11). Ocwen
points out that although Plaintiff’s allegations reference “statements” in the plural, Plaintiff identifies
only Ocwen’s April 26, 2012 correspondence to Patty Fairchild and makes no allegations as to why
that correspondence violates any statutory prohibition (id.; Dkt 29, 2d Amend. Compl. ¶ 39; Ex. 17,
Dkt 29-2 at 45). Further, Ocwen argues that Plaintiff’s Second Amended Complaint contains no
facts that establish that the recording of an assignment of a mortgage constitutes a statutory violation
and/or that establish any legal duty on behalf of a loan servicer to advise a borrower of an assignment
of a mortgage (id. at 11-12). Ocwen incorporates its same arguments in support of judgment on the
pleadings in its favor on Count VIII (id. at 14).
Plaintiff responds that he has stated a valid claim under the MOC against Ocwen inasmuch
as “[t]he knowledge of Defendant Chase’s prior mishandling of Plaintiff’s claims should be imputed
to Ocwen” and “[i]t should not have been Plaintiff’s obligation to reeducate Defendant Ocwen on
all of the misconduct conducted by Chase” (Dkt 96 at 17). Similarly, under the MRCPA, Plaintiff
argues that “Ocwen should be responsible for the imputed knowledge of Defendant Chase’s
misconduct while handling Joseph Fairchild’s case” (id. at 18).
As Ocwen points out in Reply (Dkt 92 at 3), Plaintiff’s response is wholly dependent on the
proposition of “imputing” knowledge between servicers, a proposition for which Plaintiff has
provided no authority. Further, as Plaintiff has failed to state claims against Chase under these acts,
15

Plaintiff’s dependent claims against Ocwen concomitantly fail. Taking all well-pleaded material
allegations of the pleadings of Plaintiff as true, the allegations do not support claims against Chase
under either the MOC or the MRCPA. Hence, dismissal of Counts VII and VIII against Ocwen is
warranted.
III. CONCLUSION
For the foregoing reasons, the Court grants Chase’s “Motion for Judgment on the Pleadings”
(Dkt 88) and grants Ocwen’s “Motion to Dismiss pursuant to FED. R. CIV. P. 12(c)” (Dkt 91).
Counts I through III of Plaintiff’s Second Amended Complaint against U.S. Bank (Dkt 29) and U.S.
Bank’s Counterclaim (Dkt 41) will proceed. An Order consistent with this Opinion will enter.

DATED: February 19, 2015

/s/ Janet T. Neff
JANET T. NEFF
United States District Judge

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