Derbabian v. Bank of America, N.A., 101714 FED6, 14-1253

Docket Nº:14-1253
Opinion Judge:COLE, Chief Judge.
Party Name:SUZANNE A. DERBABIAN; EDWARD DERBABIAN, Plaintiffs-Appellants, v. BANK OF AMERICA, N.A., Successor to BAC Home Loans Servicing, LP, formerly known as Countrywide Home Loan Servicing, LP; COUNTRYWIDE HOME LOANS, INC., Defendants-Appellees.
Judge Panel:BEFORE: COLE, Chief Judge; KEITH and BATCHELDER, Circuit Judges.
Case Date:October 17, 2014
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit



BANK OF AMERICA, N.A., Successor to BAC Home Loans Servicing, LP, formerly known as Countrywide Home Loan Servicing, LP; COUNTRYWIDE HOME LOANS, INC., Defendants-Appellees.

No. 14-1253

United States Court of Appeals, Sixth Circuit

October 17, 2014



BEFORE: COLE, Chief Judge; KEITH and BATCHELDER, Circuit Judges.


COLE, Chief Judge.

Suzanne and Edward Derbabian sued Bank of America, N.A., and Countrywide Home Loans, Inc., after their house was foreclosed. The district court dismissed all of the Derbabians' causes of action with prejudice, concluding that they either failed to state a claim or were barred by the applicable statute of limitations, and entered judgment accordingly. We agree with the district court's decision and affirm its judgment.


The Derbabians lived in a house located at 4572 Brightmore Road, Bloomfield Hills, Michigan (the "property"). On February 23, 2005, they entered into a mortgage loan transaction for the property with Countrywide. Suzanne Derbabian executed a promissory note for $633, 750.00 as part of the transaction; Edward Derbabian was not a party to the note. As security for the loan, both Suzanne and Edward Derbabian granted a mortgage on the property to Mortgage Electronic Registration Systems, Inc. ("MERS")—the nominee for America's Wholesale Lender. The Derbabians also executed an Adjustable Rate Rider, which stated, "THE NOTE CONTAINS PROVISIONS THAT WILL CHANGE THE INTEREST RATE AND THE MONTHLY PAYMENT." On March 23, 2005, the mortgage was recorded with the Oakland County Register of Deeds.

On October 18, 2011, MERS assigned the mortgage to non-party The Bank of New York Mellon ("BNYM") and the assignment was recorded on November 14, 2011, with the Oakland County Register of Deeds.1

At some point, the Derbabians defaulted on the loan. BNYM, the mortgagee, initiated foreclosure-by-advertisement proceedings. On November 4, 2011, BNYM served the Derbabians with notice of the proceedings as required by Michigan Compiled Laws § 600.3205a. The Derbabians responded to the notice and requested a meeting pursuant to Michigan Compiled Laws § 600.3205b, which allows a mortgagor to attempt to modify the loan after receiving notice. No agreement was reached, however, and BNYM determined that the Derbabians were not eligible for a loan modification. BNYM published notice of the foreclosure in Oakland County Legal News—a newspaper circulated in Oakland County—on February 29, March 7, March 14, and March 21, 2012. It also posted notice of the foreclosure sale on the front door of the property on March 5, 2012. BNYM then purchased the property at the foreclosure sale on November 6, 2012. Under Michigan law, the Derbabians could have redeemed the property within six months of the sale, but did not do so. Mich. Comp. Laws § 600.3240(8).

On May 21, 2013, the Derbabians filed this suit in Michigan state court. On June 28, 2013, the defendants removed the action to the United States District Court for the Eastern District of Michigan. The Derbabians asserted eight causes of action: (1) fraudulent misrepresentations; (2) breach of contract; (3) violation of the federal Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601, et seq., and the federal Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601, et seq.; (4) violation of 15 U.S.C. § 1639; (5) violation of Michigan Compiled Laws §§ 600.3204, et seq.; (6) quiet title; (7) slander of title; and (8) injunctive relief.

The defendants moved to dismiss the complaint and the district court granted the motion on all causes of action, dismissing the action with prejudice and entering judgment simultaneously. The court concluded that the Derbabians failed to state a claim for fraudulent misrepresentation, breach of contract, violation of RESPA, quiet title, and slander of title. The court also concluded that the TILA, Section 1639, and Michigan state law claims were barred by the relevant statute of limitations. The Derbabians now appeal the district court's rulings with respect to the claims concerning fraudulent misrepresentation, breach of contract, TILA, Michigan Compiled Laws §§ 600.3204, et seq., quiet title, and slander of title.


A. Standard of Review

We review a district court's dismissal of a complaint de novo. Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 608–9 (6th Cir. 2009). Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). Naked assertions "without some further factual enhancement . . . stop[] short of the line between possibility and plausibility of entitlement to relief." Id. at 557 (internal punctuation omitted). Although a complaint "does not need detailed factual allegations, " it still must provide "more than labels and conclusions, " id. at 555, because "the 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, 678 (2009). In particular, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.

Generally, a court's consideration of a motion to dismiss under Federal Rule 12(b)(6) is limited to the pleadings, and reference outside the pleadings may convert the motion into one for summary judgment. Jones v. City of Cincinnati, 521 F.3d 555, 562 (6th Cir. 2008). However, "when a document is referred to in the pleadings and is integral to the claims, it may be considered without converting a motion 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). Such documents include public records that are not attached to the pleadings. Barany-Snyder v. Weiner, 539 F.3d 327, 332 (6th Cir. 2008); see also Goryoka v. Quicken Loan, Inc., 519 F.App'x 926, 927 (6th Cir. 2013) ("Matters of public record may be considered on a motion to dismiss.").

B. Discussion

1. Fraudulent Misrepresentation

The Derbabians contend that the district court improperly concluded that they failed to state a claim for fraudulent misrepresentation. Under Michigan law, a plaintiff charging fraudulent misrepresentation must plead:

(1) [t]hat defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly, without any...

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