Austin v. CitiMortgage, Inc.
| Decision Date | 30 August 2012 |
| Docket Number | Case No. 10-cv-13185 |
| Parties | BRANDI AUSTIN, and CENTER FOR COMMUNITY JUSTICE AND ADVOCACY, Plaintiffs, v. CITIMORTGAGE, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
Paul D. Borman
United States District Judge
Plaintiffs Brandi Austin and Center for Community Justice & Advocacy ("CCJA") filed this case on August 11, 2010, alleging claims arising out of the Fair Housing Amendments Act of 1988 ("FHA"), 42 U.S.C. § 3601, et seq.; the Civil Rights Act of 1866 and 1870, 42 U.S.C. §§ 1981 and 1982; the Consumer Credit Protection Act, 15 U.S.C. § 1601 et seq.; and the Elliot-Larsen Civil Rights Act, M.C.L. § 37.2501, et seq. Plaintiffs allege that Defendant CitiMortgage, Inc., violated these laws by discriminating on the basis of race, as evidenced by its denial of Plaintiff Austin's request to refinance her home mortgage. (Compl., Dkt. No. 1.)
On March 30, 2012, Defendant filed a Motion to Dismiss Plaintiff CCJA for Lack of Standing, and for Judgment on the Pleadings. (Dkt. No. 66.) CCJA filed a Response on April 30,2012. (Dkt. No. 73.) Defendant filed a Reply on May 21, 2012. (Dkt. No. 77.) The Courtheld a hearing on August 1, 2012.
For the reasons stated below, the Court will GRANT Defendant's motion and DISMISS Plaintiff CCJA for lack of standing.
On a motion to dismiss, the Court views the factual content in the Complaint as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
CCJA is a nonprofit corporation located in Detroit, Michigan, that provides housing counseling and assistance to low- and moderate-income residents in Southeast Michigan. Specifically, CCJA assists individuals in foreclosure prevention "by assessing their qualifications to obtain loan modifications." (Compl. ¶ 20.) In addition, CCJA conducts activities aimed at detecting discriminatory and predatory practices in lending. CCJA alleges that it is an approved counseling agency by the United States Department of Housing and Urban Development ("HUD"), and is therefore "expected to help remedy discrimination in housing and promote fair housing rights and fair housing choice." (Compl. ¶ 22.)
Plaintiff Austin is African American. On March 30,2006, Plaintiff Austin purchased a condominium in a development in Detroit, known as the Lofts at Rivertown, financed by a $117,300 mortgage. Plaintiff Austin's condominium was located in a predominantly African-American neighborhood.
In January 2009, Plaintiff Austin lost her job and, subsequently, sought a modification ofher mortgage from Defendant.1 Plaintiffs allege that Austin first began receiving unemployment benefits in April 2009. (Compl. ¶ 38.) On April 15, 2009, Plaintiff Austin's request for a modification was denied due to "insufficient income." (Compl. ¶ 39.)
In June 2009, counsel for Defendant, Trott & Trott, P.C., informed Plaintiff Austin that it had commenced foreclosure proceedings. On August 5,2009, Defendant sold Plaintiff Austin's condominium to Freddie Mac at a sheriff's sale.
On January 5, 2010 - five months after the home had been sold at a foreclosure sale - Plaintiff Austin contacted Plaintiff CCJA. CCJA calculated Plaintiff Austin's unemployment income and determined that she qualified for a loan modification under the Home Affordable Modification Program ("HAMP"). On January 25,2010, CCJA sent Trott & Trott, P.C., a letter disputing the August 5, 2009 foreclosure sale, and requesting that Plaintiff Austin's mortgage loan be reinstated and reviewed for a modification under HAMP. (Compl. ¶ 54.) CCJA then contacted Trott & Trott, P.C. on February 1,2010, regarding Plaintiff Austin's mortgage. A representative from Trott & Trott, P.C. informed CCJA that there was no assistance available to Plaintiff Austin.
Plaintiffs allege that modification applicants who were receiving unemployment benefits but were white, and lived in areas that were not predominantly African-American neighborhoods, were given modifications.
Plaintiffs allege that a CCJA client with the initial J.E., a white male whose sole source of income was unemployment insurance, sought a modification of his mortgage from Defendant on or before January 7, 2010. J.E.'s property was located in Fife Lake, Michigan, in Grand Traverse County, approximately 25 miles outside of Traverse City and over 230 miles away from Detroit. Fife Lake, according to the Complaint, is not an area where the majority of residents are of African-American descent. After submitting his request for a modification, Defendant granted J.E. a modification under HAMP and did not proceed with a foreclosure sale of the property. Plaintiffs do not allege what J.E.'s monthly unemployment income was or how much J.E. owed on his mortgage. Thus, in J.E.'s case, CCJA was assisting a client prior to foreclosure.
In June 2009, CCJA assisted two white individuals whose initials were C.G. and K.G., and who contacted CCJA while seeking a loan modification from Defendant. C.G. and K.G. owned a home in New Boston, Michigan, which is approximately 30 miles outside of Detroit and, according to the Complaint, is not a predominantly African-American area. The Complaint fails to allege whether K.G. had any income, but it does state that C.G.'s sole source of income was unemployment insurance. (Compl. ¶ 75.) Plaintiffs allege that C.G. and K.G. were given a forbearance agreement after requesting a modification, and that their modification request was eventually granted. Plaintiffs do not allege how much C.G.'s monthly unemployment payments were, or how much C.G. and K.G. owed on their mortgage. Again, in the case of C.G. and K.G., CCJA was assisting a client prior to foreclosure.
The Court notes that Plaintiffs' Complaint sets forth a portion of Defendant's Subsequent Certification with Fannie Mae, that includes the following:
(Compl. ¶ 4 (emphasis in original).) In the instant case, Plaintiff Austin did not contact Plaintiff CCJA until after the foreclosure. (Compl. ¶ 46,49.) Thus, Plaintiff CCJA's activity in the instant case does not fit under the portion of Defendant's certification set forth in the Complaint. Plaintiffs do not allege that any of the other loan modification applicants cited in the Complaint were post-foreclosure.
In Plaintiff Austin's case, CCJA was faced with the task of invalidating a foreclosure sale that had already taken place. Plaintiffs have not alleged facts showing that clients J.E., C.G. and K.G., who fit within the HAMP certification, were in a similar situation with co-Plaintiff Austin.
CCJA alleges that Defendant's decision to deny Plaintiff Austin's modification request was based on Austin's race or ethnicity. As a result, CCJA alleges that Defendant "has directly obstructed, frustrated and damaged CCJA's mission to assist and counsel borrowers in foreclosure prevention and mitigation, and residents in all communities served by CCJA, without regard to race or color." (Compl. ¶ 83.) CCJA further alleges that "the ongoing intentional discriminatory practices of CitiMortgage ... [have] also diverted scarce resources from other CCJA activities in order to counteract CitiMortgage's unlawful actions." (Compl. ¶ 84.)
Defendant argues that Plaintiff CCJA should be dismissed pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(c).
A Rule 12(b)(1) motion challenges the jurisdictional allegations in the complaint. Themotion may facially attack the allegations as insufficient to confer subject-matter jurisdiction, in which case the allegations are taken as true, or it may attack the factual predicates for subject-matter jurisdiction, in which case the Court may weigh the evidence. Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430,440 (6th Cir. 2012).
Under Rule 12(b)(6), the Court may dismiss an action for failure to state a claim upon which relief can be granted. To survive a 12(b)(6) motion, the complaint must contain sufficient factual matter, which the Court takes as true and construes in a light most favorable to the plaintiff, to state a plausible claim for relief. Courie v. Alcoa Wheel & Forged Products, 577 F.3d 625, 629 (6th Cir. 2009).
Under Rule 12(c), "all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment." Tucker v. Middleburg-Legacy Place, 539 F.3d 545, 549 (6th Cir. 2008) (citation omitted). The motion is granted only if "no material issue of fact exists and the party making the motion is entitled to judgment as a matter of law." Id.
Defendant argues that Plaintiff CCJA lacks Article III standing and prudential standing to bring the claims alleged in the Complaint. An organization can have standing to sue under the FHA for racial "steering" practices. See generally Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (1979). Article III standing requires the Plaintiff to show "some actual or threatened injury due to the alleged illegal conduct of the defendant; the injury must be 'fairly traceable' to the challenged action; and there must be a substantial likelihood that the relief requested will redress or prevent plaintiff's injury." Coal Operators and Associates, Inc. v. Babbitt, 291 F.3d912, 916 (6th Cir. 2002). Even when the Article III standing requirements are met, a plaintiff must satisfy prudential standing, which considers whether ''the plaintiff [is] a proper proponent, and the action a proper vehicle, to vindicate the rights...
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