Battah v. Resmae Mortgage Corp..

• Decision Date: 28 October 2010
• Docket Number: No. 10–cv–11033.,10–cv–11033.
• Citation: 746 F.Supp.2d 869
• Parties: Kassan BATTAH, Plaintiff,v.RESMAE MORTGAGE CORPORATION, a foreign corporation, Mortgage Electronic Registration Systems, a foreign corporation, Safa Etta, Kenny Etta, and Andy Etta, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

746 F.Supp.2d 869

Kassan BATTAH, Plaintiff,

v.RESMAE MORTGAGE CORPORATION, a foreign corporation, Mortgage Electronic Registration Systems, a foreign corporation, Safa Etta, Kenny Etta, and Andy Etta, Defendants.

No. 10–cv–11033.

United States District Court, E.D. Michigan, Southern Division.

Oct. 28, 2010.

Ziyad P. Kased, Troy, MI, for Plaintiff.Jong–Ju Chang, Joseph A. Doerr, Joseph H. Hickey, Dykema Gossett, Bloomfield Hills, MI, Scott S. Yaldo, Yaldo & Domstein, Bingham Farms, MI, for Defendants.

ORDER GRANTING IN PART DEFENDANTS BRIDGEFIELD MORTGAGE CORPORATION'S AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S MOTION TO DISMISS

GERALD E. ROSEN, District Judge.

I. INTRODUCTION

The matter is presently before the Court on Defendants Bridgefield Mortgage Corporation's, f/k/a ResMAE Mortgage Corporation, and Mortgage Electronic Registration Systems, Inc.'s (collectively referred to as “the Bank Defendants”) motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 9(b). Plaintiff commenced this action on February 24, 2010 in the Oakland County Circuit Court asserting both federal and state law claims against Defendants related to the financing and foreclosure of his property. The Bank Defendants timely removed the case to this district on March 15, 2010. Plaintiff's complaint includes the following claims:

Count I: Request for temporary injunction of the state law claims

Count II: Violation of Michigan's Foreclosure by Advertisement Statute–MCL 600.3212

Count III: Declaratory relief that the named Defendants are not holders of the mortgage note and therefore the debt and mortgage are null and void

Count IV: Quiet title relief as to Defendants.

Count V: Civil conspiracy

Count VI: Fraudulent misrepresentation

Count VII: Fraudulent conversion

Count VIII: Promissory estoppel

Count IX: Breach of contract

Count X: Violation of the Real Estate Settlement Procedures Act 12 U.S.C. § 2605

Count XI: Violation of the Fair Housing Act 42 U.S.C. § 3601

The Bank Defendants' motion to dismiss has been fully briefed by the parties. Having reviewed the parties' written submissions in support of and opposition to the Bank Defendants' motion, as well as the remainder of the record, the Court finds that the pertinent allegations and legal arguments are sufficiently addressed in these materials, and that oral argument would not assist in the resolution of these motions. Accordingly, the Court will decide the Bank Defendants' motion “on the briefs.” See Local Rule 7.1(f)(2), U.S. District Court, Eastern District of Michigan. The Court's order and opinion is set forth below.

II. FACTUAL BACKGROUND

This case arises out of a mortgage loan for $289,750, which Plaintiff obtained from the Bank Defendants on May 22, 2007. The Bank Defendants executed a note evidencing the loan and took a mortgage interest in the property located on 7073 Timberview Trail, West Bloomfield, Michigan. When Plaintiff defaulted on his loan payment obligations, a foreclosure sale was held on April 28, 2009, and the Bank Defendants placed the highest bid on the property. After a sheriff's deed was signed and recorded, Plaintiff made no attempt to pay the redemption amount nor challenged the foreclosure sale during the redemption period, and on November 16, 2009, the Bank Defendants executed a covenant deed, transferring the property to the Etta Defendants.

Plaintiff commenced an action in the Oakland County Circuit Court on December 18, 2009, seeking injunctive relief and a restraining order against any attempt to evict Plaintiff by Defendant Andy Etta. On March 22, 2010, the Honorable Edward Sosnick denied Plaintiff's request for a preliminary injunction, and on March 30, 2010, the entire case was dismissed.

On March 2, 2010, the Ettas commenced an action in the 48th District Court in Oakland County, Michigan, for possession of the property, naming Plaintiff and “all other occupants” as defendants. On April 13, 2010, the 48th District Court entered a default judgment of possession in favor of the Ettas. On August 6, 2010, the 48th District Court denied Battah's motion for relief of judgment, granted the Ettas' motion for an issuance of an order of eviction, and confirmed the nonexistence of a bankruptcy stay as to Battah.¹ The 48th District Court allowed Battah seven days to appeal the decision, but Battah failed to file an appeal.

III. ANALYSIS

A. Standards Governing Defendants' Motion

Fed.R.Civ.P. 12(b)(1) authorizes this Court to dismiss a complaint for lack of subject matter jurisdiction. In District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), the Supreme Court held that federal district courts lack subject matter jurisdiction to review state court proceedings, as such review is limited to the Supreme Court of the United States. See Rooker v. Fid. Trust Co., 263 U.S. 413, 417, 44 S.Ct. 149, 150, 68 L.Ed. 362 (1923). Prohibition of federal action pursuant to the Rooker–Feldman doctrine is limited to “cases brought by state court losers complaining of injuries caused by state court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 281, 125 S.Ct. 1517, 1520, 161 L.Ed.2d 454 (2005). The doctrine only applies if the federal claim is “inextricably intertwined” with the state court judgment, meaning the federal claim only succeeds by declaring that the state court wrongly decided the issues before it. Loriz v. Connaughton, 233 Fed.Appx. 469, 474 (6th Cir.2007). If, however, a plaintiff brings a claim independent of the state court's judgment, even though such a claim denies the state court's legal conclusion, then there is jurisdiction in the district court. McCormick v. Braverman, 451 F.3d 382, 392 (6th Cir.2006). Thus, Rooker–Feldman only applies when the cause of the plaintiff's complaints is the state court judgment itself. Id. at 393.

Fed.R.Civ.P. 12(b)(6) authorizes this Court to dismiss a complaint if it “fail[s] to state a claim upon which relief can be granted.” In deciding a motion brought under Rule 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded factual allegations as true. League of United Latin American Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir.2007). To withstand a motion to dismiss, however, a complaint “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964–65, 167 L.Ed.2d 929 (2007). The factual allegations, accepted as true, in the complaint “must be enough to raise a right to relief above the speculative level,” and “state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. at 1974. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, –––U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).

Fed.R.Civ.P. 9(b) requires that a party alleging fraud or mistake “state with particularity the circumstances constituting fraud or mistake.” A plaintiff must “allege the time, place, and content of the alleged misrepresentations on which he or she relied; the fraudulent scheme; the fraudulent intent of the defendants; and the injury resulting from the fraud.” Sanderson v. HCA–The Healthcare Co., 447 F.3d 873, 877 (6th Cir.2006). Failure to comply with Rule 9(b) is grounds for the district court to dismiss the claim. U.S. ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493, 524 (6th Cir.2007).

B. Counts I–IV Must be Remanded Pursuant to Rooker–Feldman

Here, Plaintiff lost a state court foreclosure and possession action, and the state court entered an order of eviction against him. Any of Plaintiff's current claims which seek to disturb the state court judgments of foreclosure, possession, or eviction, are subject to the Rooker–Feldman doctrine. Plaintiff's comparison of Rooker–Feldman to the required elements of res judicata and conclusion that Rooker–Feldman can only be applied to state court decisions on the merits is incorrect. See Kafele v. Lerner, Sampson & Rothfuss, L.P.A., 161 Fed.Appx. 487, 490 (6th Cir.2005) (upholding the application of Rooker–Feldman in cases involving state default judgments of foreclosure). The 8th Circuit has also explicitly stated that “ Rooker–Feldman is broader than claim and issue preclusion because it does not depend on a final judgment on the merits.” Charchenko v. City of Stillwater, 47 F.3d 981, 985 n. 1 (8th Cir.1995).

Plaintiff's claim for a temporary injunction (Count I) specifically seeks to undo the sheriff's sale of the property to the Etta Defendants and prevent the eviction proceedings which took place in the 48th District Court. Such a claim is exactly the type for which dismissal pursuant to the Rooker–Feldman doctrine is appropriate. Givens v. Homecomings Fin., 278 Fed.Appx. 607, 609 (6th Cir.2008). Similarly, Plaintiff's claims regarding MCL 600.3212, declaratory relief, quiet title, (Counts II–IV) all challenge the validity of the foreclosure and sheriff's sale and are thus inextricably intertwined with the 48th District Court's decision and subject to Rooker–Feldman.

Although the Bank Defendants seek dismissal of these claims, which the Court agrees are without merit, dismissal is unfortunately not within the discretion of this Court. The Bank Defendants cite several cases, including binding precedent from the 6th Circuit as well as previous foreclosure cases brought by Plaintiff's counsel in this District, which were all dismissed pursuant to the Rooker–Feldman doctrine. All of these cases, however, involved complaints initially filed in federal court by plaintiffs...