Boluch v. J.P. Morgan Chase Band, Case Number 14-14705

• Decision Date: 29 April 2015
• Docket Number: Case Number 14-14705
• Court: U.S. District Court — Eastern District of Michigan
• Parties: KIRK AND RITA BOLUCH, Plaintiff, v. J.P. MORGAN CHASE BAND and CALIBER HOME LOANS, INC., Defendants.

KIRK AND RITA BOLUCH, Plaintiff, v. J.P. MORGAN CHASE BAND and CALIBER HOME LOANS, INC., Defendants.

Case Number 14-14705

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

April 29, 2015

Honorable David M. Lawson

OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND DISMISSING COMPLAINT WITH PREJUDICE

The plaintiffs filed a complaint in state court alleging that the defendants committed fraud, breach of contract, and violated Michigan's foreclosure by advertisement statute when they foreclosed on the plaintiffs' residential home mortgage, despite promises to modify their loan. It is a familiar story, although this version lacks the detail that is necessary to justify relief under existing law. The defendants removed the case to this Court and filed a motion to dismiss. The plaintiffs have not responded to the motion, and plaintiffs' counsel failed to appear at the motion hearing today. The Court finds that the plaintiffs' complaint fails to state claims for which relief can be granted under Michigan or federal law. Therefore, the motion will be granted.

I.

The plaintiffs' home is located on Lancaster Court in Woodhaven, Michigan. Plaintiffs Kirk and Rita Boluch obtained a loan in the amount of $152,000 from defendant Chase Home Finance, LLC (Chase) on July 25, 2005. As security for the loan, they granted a mortgage on their home to Chase and its successors and assigns. On June 25, 2013, Chase assigned the mortgage to defendantCaliber Home Loans, Inc. (Caliber). The assignment was duly recorded in the office of the Wayne County, Michigan register of deeds.

The plaintiffs allege that, after falling behind on their payments in 2012, they contacted Caliber about the possibility of a loan modification. They contend that they submitted documents in support of a loan modification on multiple occasions; however, the defendants repeatedly told them that they were never received. On October 30, 2014, the plaintiffs allege that the defendants told them to mail their pay stubs. The plaintiffs did so. However, Caliber told the plaintiffs that "it was too late" when the plaintiffs called to verify receipt.

The plaintiffs allege that on November 3, 2014, they "were told to pay $5,000 and that monthly payments would increase over $2,000 per month." Compl. ¶ 18. Shortly thereafter, Caliber commenced foreclosure by advertisement proceedings.

The sheriff's sale occurred on November 13, 2014. Caliber purchased the property at the sheriff's sale for $125,000 and was given a sheriff's deed in exchange. The sheriff's deed was recorded on November 21, 2014. The six-month statutory redemption period expires on May 13, 2015. To date, the plaintiffs have not redeemed the property.

The plaintiffs' complaint contains counts labeled wrongful foreclosure (count I), breach of contract (count II), and fraudulent misrepresentation (count III). The defendants contend in their motion that none of the counts are viable, and they seek dismissal under Federal Rule of Civil Procedure 12(b)(6).

II.

The purpose of Rule 12(b)(6) is to assess whether the complaint is legally sufficient to allow the case to proceed further, even if all the allegations in the complaint are taken as true. Rippy exrel. Rippy v. Hattaway, 270 F.3d 416, 419 (6th Cir. 2001) (citing Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993)). Under Rule 12(b)(6), the third-party complaint is viewed in the light most favorable to the plaintiffs, the allegations in the complaint are accepted as true, and all reasonable inferences are drawn in favor of the plaintiffs. Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). "[A] judge may not grant a Rule 12(b)(6) motion based on a disbelief of a complaint's factual allegations." Saglioccolo v. Eagle Ins. Co., 112 F.3d 226, 228-29 (6th Cir. 1997) (quoting Columbia Nat'l Res., Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir. 1995)). "However, while liberal, this standard of review does require more than the bare assertion of legal conclusions." Tatum, 58 F.3d at 1109; Tackett v. M & G Polymers, USA, L.L.C., 561 F.3d 478, 488 (6th Cir. 2009). "To survive a motion to dismiss, a plaintiff must plead 'enough factual matter' that, when taken as true, 'state[s] a claim to relief that is plausible on its face.' Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 570 (2007). Plausibility requires showing more than the 'sheer possibility' of relief but less than a 'probab[le]' entitlement to relief. Ashcroft v. Iqbal, (2009)." Fabian v. Fulmer Helmets, Inc., 628 F.3d 278, 280 (6th Cir. 2010). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). Under the new regime ushered in by Twombly and Iqbal, pleaded facts must be accepted by the reviewing court but conclusions may not be accepted unless they are plausibly supported by the pleaded facts. "[B]are assertions," such as those that "amount to nothing more than a 'formulaic recitation of the elements'" of a claim, can provide context to the factual allegations, but are insufficient to state a claim for relief and must be disregarded. Iqbal, 556 U.S. at 681 (quoting Twombly, 550 U.S. at 555). However, as long as a court can "'draw the reasonable inference thatthe defendant is liable for the misconduct alleged,' a plaintiff's claims must survive a motion to dismiss." Fabian, 628 F.3d at 281 (quoting Iqbal, 556 U.S. at 678).

Although the plaintiffs have not responded to the defendants' motion, the Court may not dismiss the case based solely on the plaintiffs' defalcation. Bangura v. Hansen, 434 F.3d 487, 497 (6th Cir. 2006) (holding that "the Federal Rules of Civil Procedure place the burden on the moving party to demonstrate that the plaintiff[s] failed to state a claim for relief"). Instead, the court must make its own assessment of the complaint to determine whether it states a viable claim. Carver v. Bunch, 946 F.2d 451, 454 (6th Cir. 1991) (quoting Haines v. Kerner, 404 U.S. 519, 521 (1972) (per curiam)).

A.

The defendants contend that the Court should dismiss the allegations against Chase because the complaint does not contain any allegations against it. The defendants are correct. The complaint contains only two factual allegations against Chase: that it is a foreign corporation doing business in the State of Michigan, and the plaintiffs obtained a mortgage from Chase on July 25, 2005. Those allegations are insufficient to plead any causes of action against Chase because no wrongful conduct by Chase is alleged.

B.

In count I of the complaint, the plaintiffs contend that the defendants violated Michigan Compiled Laws § 600.3201 because they engaged in dual tracking. "Dual tracking refers to a common tactic by banks that institute foreclosure proceedings at the same time that a borrower in default seeks a loan modification." Kloss v. RBS Citizens, N.A., 996 F. Supp. 2d 574, 585 (E.D. Mich. 2014) (citing Jolley v. Chase Home Finance, LLC, 213 Cal. App. 4th 872, 153 Cal. Rptr. 3d546 (2013)). "The result is that the borrower does not know where he or she stands, and by the time foreclosure becomes the lender's clear choice, it is too late for the borrower to find options to avoid it." Jolley, 153 Cal. Rptr. 3d at 572. Michigan's response to remediate that practice is a statute that requires a lender to wait 90 days before commencing foreclosure proceedings against a borrower who has requested a meeting with the lender. Mich. Comp. Laws § 600.3205a(e). Nevertheless, "alleged dual tracking violations relate to the loan modification process rather than the foreclosure process . . . [and] the only remedy for a violation of the loan modification process is a conversion of the foreclosure by advertisement into a judicial foreclosure, which must have occurred before the foreclosure by advertisement was completed." Kloss, 996 F. Supp. 2d at 585; see also Conlin v. Mortgage Elec. Registration Sys., Inc., 714 F.3d 355, 360 (6th Cir. 2013) (a court may only set aside a foreclosure if the violation relates to the foreclosure procedure itself). The plaintiffs have not requested the Court to convert the foreclosure to a judicial foreclosure and, in any event, the foreclosure by advertisement has been completed. The Court therefore will dismiss count one of the plaintiffs' complaint.

The plaintiffs also allege in count I that the defendants failed to calculate the amount due on the foreclosure notice properly. The defendants argue that the Court should dismiss count one because those allegations are conclusory. Again, the defendants are correct. Following Twombly and Iqbal,

a plaintiff cannot overcome a Rule 12(b)(6) motion to dismiss simply by referring to conclusory allegations in the complaint that the defendant violated the law. Instead, the sufficiency of a complaint turns on its 'factual content,' requiring the plaintiff to plead enough 'factual matter' to raise a 'plausible' inference of wrongdoing. The plausibility of an inference depends on a host of considerations, including common sense and the strength of competing explanations for the defendant's conduct.

16630 Southfield Ltd. P'ship v. Flagstar Bank, F.S.B., 727 F.3d 502, 504 (6th Cir. 2013) (internal citations omitted).

The plaintiffs do not state in their complaint why they believe the amount on the foreclosure notice was miscalculated or what the amount should have been. However, the affidavit attached to the sheriff's deed stated that the plaintiffs owed $166,052 on their mortgage as of October 16, 2014. An affidavit attached to a sheriff's deed is presumptive evidence of the facts contained in the affidavit. Mich. Comp. Laws § 600.3264; see also Farnsworth v. Nationstar Mortgage, LLC, 569 F. App'x 421, 429 (6th Cir. 2014) (noting that an affidavit attached to a sheriff's deed is "entitled to a presumption of validity")...