Opinion
Case No. 13-11283
07-31-2013
TOM E. FARNSWORTH and PAMELA J. FARNSWORTH, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, UNKNOWN TRUSTEE, as the trustee of the asset-backed security in which the loan at issue was pooled; and UNKNOWN TRUST, the asset-backed security in which the loan at issue was pooled, Defendants.
HON. GERSHWIN A. DRAIN
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [#8]
I. INTRODUCTION
Presently before the Court is Defendants' Motion to Dismiss filed on April 19, 2013. Rather than respond, Plaintiffs' requested that the case be remanded to state court and requested a stay of proceedings. Both requests were denied. Plaintiffs filed a Response on July 12, 2013. Defendants filed a Reply on July 26, 2013. Upon review the Court concludes that oral argument will not aid in the resolution of this matter, so the pending Motions are resolved on the briefs. See E.D. Mich. L.R. 7.1(f)(2). For the reasons listed below, Defendants' Motion is GRANTED.
II. PROCEDURAL AND FACTUAL HISTORY
Plaintiffs filed the instant action in the Wayne County Circuit Court on February 20, 2013. While the action was pending in the Wayne County Circuit Court, Plaintiffs filed a Motion for Preliminary Injunction to restrain and enjoin the expiration of the redemption period, including an injunction against the eviction of Plaintiffs and/or the conveyance or other transfer of the Property to any third-party, pending a trial on the merits. A hearing was set for March 1, 2013. The court entered an order extending the redemption period to April 5, 2013 which will expire on its own terms absent injunctive relief from this Court. The Order was entered on March 22, 2013. Defendant removed this action to this Court on the same day pursuant to 28 U.S.C. § 1446(a) and 28 U.S.C. § 1332(a).
In their Complaint, Plaintiffs allege that on June 26, 2006, a mortgage was executed between Plaintiffs and Centrex Home Equity Company, LLC to secure real property located in Wyandotte, Michigan. The mortgage was recorded on July 12, 2006. Centrex subsequently changed its name to Nationstar. Plaintiffs suffered financial hardship when Plaintiff, Tom Farnsworth, lost his job. Plaintiffs thereafter contacted Nationstar and requested assistance with their mortgage payments.
Nationstar sent Plaintiffs correspondence indicating that Plaintiffs were pre-approved or eligible for a loan modification. Plaintiffs gathered and sent documents requested by Nationstar. Plaintiffs claim that Nationstar put them through "Paperwork Hell" by repeatedly requesting additional and/or different documentation. Eventually Plaintiffs received correspondence which included a loan modification agreement. The letter indicated that Nationstar could not process Plaintiffs' modification unless Plaintiffs returned a signed and notarized copy of the loan modification agreement and made a qualifying payment of $1,100.00 to Nationstar. Plaintiffs claim that they signed the agreement and sent the $1,100.00 qualifying payment to Nationstar. Thereafter, Nationstar sent another letter enclosing a copy of a loan modification agreement, as well as requiring payment of $1,100.00. Plaintiffs again signed the agreement and sent $1,100.00 to Nationstar. Plaintiffs' Complaint fails to allege the dates that Nationstar sent the purported letters, nor do they allege the date that Plaintiffs returned the signed loan modification agreements along with the $2,200.00.
On July 17, 2012, Plaintiffs received yet another letter enclosing a proposed loan modification agreement. The July 17, 2012 correspondence indicated that Nationstar could not process the modification unless Plaintiffs made a "qualifying payment" of $1,449.36. Plaintiffs did not sign the modification agreement nor remit the requested $1,449.36 to Nationstar.
Further, Plaintiffs claim that they requested a meeting pursuant to MICH. COMP. LAWS § 600.3205a, however they were never provided with a meeting. Plaintiffs' Complaint fails to allege the date upon which Plaintiff made this request. Plaintiffs assert that they qualify for a traditional or in-house modification. Notwithstanding, Nationstar denied Plaintiffs a loan modification.
A sheriff's sale was conducted on August 30, 2012. Nationstar purchased the subject property for $144,771.90. Plaintiffs raise the following claims in their Complaint: Breach of Contract, Count I; Declaratory Relief that the Foreclosure Violates Mich. Comp. Laws § 600.3204(1) & (3), Count II; Declaratory Relief that the Foreclosure Violates Mich. Comp. Laws § 600.3205a and § 600.3205c and § 600.3204(4), Count III; Intentional Fraud, Count IV; Constructive Fraud, Count V; Negligence against Nationstar, Count VI; Tortious Interference with Contractual Relations against the Trustee of the ABS, Count VII; and Civil Conspiracy, Count VIII.
III. LAW AND ANALYSIS
1. Standard of Review
Federal Rule of Civil Procedure 12(b)(6) allows the court to make an assessment as to whether the plaintiff has stated a claim upon which relief may be granted. See FED. R. CIV. P. 12(b)(6). "Federal Rule of Civil Procedure 8(a)(2) requires only 'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957). Even though the complaint need not contain "detailed" factual allegations, its "factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true." Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (quoting Bell Atlantic, 550 U.S. at 555).
The court must construe the complaint in favor of the plaintiff, accept the allegations of the complaint as true, and determine whether plaintiff's factual allegations present plausible claims. To survive a Rule 12(b)(6) motion to dismiss, plaintiff's pleading for relief must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (citations and quotations omitted). "[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 668 (2009). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. The plausibility standard requires "more than a sheer possibility that a defendant has acted unlawfully." Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'- 'that the pleader is entitled to relief.'" Id.
2. Count I
A Michigan breach of contract claim requires a party to plead "(1) that there was a contract, (2) that the other party breached the contract and, (3) that the party asserting breach of contract suffered damages as a result of the breach." Miller-Davis Co. v. Ahrens Const., Inc., 296 Mich. App. 56, 71, 817 N.W.2d 609, 619 (2012). Here, it appears unlikely that Plaintiffs can succeed on their breach of contract claim. Plaintiffs argue that they sent two signed loan modification agreements to Nationstar, along with a total of $2,200.00. While Plaintiffs submitted the July 17, 2012 letter along with their Complaint, they failed to provide the Court with copies of the prior letters sent by Nationstar. Further, Plaintiffs admit in their Complaint that they never sent the proposed July 12, 2012 loan modification agreement to Nationstar.
3. Counts II and III
Similarly, it does not appear that Plaintiffs will succeed on the merits relative to their claims that Defendants violated Michigan's loan modification statute. Plaintiffs admit in their Complaint that they never sent the July 17, 2012 loan modification agreement to Nationstar. Thus, Nationstar cannot be held accountable for violating Michigan's loan modification law when it sent Plaintiff the proposed modification agreement but Plaintiffs failed to return a signed copy of the agreement. See Mitan v. Fed. Home Loan Mortg. Corp., 703 F.3d 949, 951 (6th Cir. 2012)("If the borrower qualifies, the lender may not foreclose by advertisement unless the designated person offers the borrower a loan-modification agreement that the borrower fails to return within fourteen days of receipt.")(citing MICH. COMP. LAWS § §600.3205c(6)-(7)).
4. Counts IV and V
Additionally, Plaintiff cannot establish likelihood of success on their fraud claims, which requires Plaintiffs demonstrate: (1) that the Defendant made a material representation, (2) that was false, (3) that Defendant knew was false, or that was made recklessly, without any knowledge of its truth, (4) that Defendant made it with the intention that Plaintiff would act upon it, and (5) the Plaintiff acted in reliance upon it, and (6) suffered damages. See Hi-Way Motor Co. v. Internat'l Harvester Co., 398 Mich. 330, 336; 247 N.W. 2d 813 (1976). Here, Plaintiffs fail to allege the specific false representations made by Defendant. Nor does their pleading contain any factual allegations concerning the who, when, or any specific detail surrounding the allegedly fraudulent statements. See Fed. R. Civ. P. 9(b) ("[i]n allegations of fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.")
4. Counts VI, VII and VIII
Plaintiffs present absolutely no facts in their Complaint, nor in their briefing in support of their remaining claims of tortious interference with a contractual relationship, civil conspiracy and negligence.
IV. CONCLUSION
For the reasons stated, Defendants' Motion to Dismiss [#8] is GRANTED. SO ORDERED.
_________________
GERSHWIN A. DRAIN
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
July 31, 2013, by electronic and/or ordinary mail.