Elson v. Deutsche Bank Nat'l Trust Co.
| Decision Date | 25 May 2012 |
| Docket Number | Case No. 11-14100 |
| Parties | DARLENE ELSON, Plaintiff, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, Trustee, Argent Securities Inc., AMERICAN HOME MORTGAGE SERVICING, INC., ARGENT MORTGAGE COMPANY, LLC, Person who bought property "JOHN DOE," Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Hon. Gerald E. Rosen
Chief Judge, United States District Court
This matter is presently before the Court on the Fed. R Civ. P. 12(b)(6) Motion to Dismiss filed by Defendants Deutsche Bank National Trust Company and American HomeMortgage Company.1 Plaintiff Darlene Elson, proceeding pro se, has responded. Having reviewed the parties' briefs and supporting evidence, the Court has determined that oral argument is not necessary. Therefore, pursuant to Eastern District of Michigan Local Rule 7.1(f)(2), this matter will be decided on the briefs. This Opinion and Order sets forth the Court's ruling.
On March 9, 2006, Plaintiff Darlene Elson borrowed $196,000.00 from Argent Mortgage Company, LLC ("Argent"). To secure her indebtedness, Plaintiff executed a mortgage in favor of Argent on real property located at 23756 Philip Drive in Southfield, Michigan. Effective February 11, 2009, Argent, through its attorney-in-fact, Citi Residential Lending, Inc., assigned the mortgage to Defendant Deutsche Bank National Trust Company, as Trustee for Argent Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2006-W5, under the Pooling and Servicing Agreement Dated May 1, 2006. On October 29, 2010, the mortgage was assigned to Deutsche Bank National Trust Company, Trustee for Argent Securities, Inc. ("DBNTC").
Plaintiff defaulted on the mortgage and, as a consequence, DBNTC foreclosed on the property by advertisement, pursuant to Michigan law. On March 8, 2011, the property was sold at a sheriff's sale to DBNTC for $48,750.00. A sheriff's deed was executed and recorded, along with the sheriff's affidavit of the sale. The sheriff's affidavit noted that the six-month redemption period provided under M.C.L. § 600.3240(8) would end on September 8, 2011.
On August 23, 2011, shortly before the redemption period expired, Plaintiff instituted this action in Oakland County Circuit Court. Defendants DBNTC and American Home MortgageServicing, Inc. ("AHMS") removed the case to this Court on September 20, 2011 on both federal question and diversity of citizenship grounds.
In her Complaint, Plaintiff makes various allegations regarding the mortgage loan origination and the procedures involved in the foreclosure process. In Count I, which is captioned "Breach of Contract," Plaintiff alleges that Defendants DBNTC and Argent Mortgage Company, LLC failed to provide her with foreclosure-related notices as required by the mortgage agreement.
Although titled "Gross Negligence," in Count II Plaintiff alleges a claim of breach of duty to act in good faith and fair dealing. Count III contains further allegations that Defendants breached the implied contractual duty of good faith and fair dealing. In Count IV, Plaintiff alleges that the foreclosure sale was wrongful because she did not receive a notice of the pending foreclosure. There is no Count V in the Complaint.
Counts VI and VII are captioned "Abuse of Process and Malicious Prosecution." However no process nor prosecution are pled. Rather, in these Counts, Plaintiff alleges that Defendants' conduct during the loan origination violated the Truth-In-Lending-Act ("TILA"). In Count IX [the Complaint does not have a Count VIII], Plaintiff alleges violations of the Real Estate Settlement Procedures Act ("RESPA").
In Counts X-XIII, captioned "Fraudulent Concealment, Fraudulent Misrepresentation, Negligent Misrepresentation," Plaintiff asserts that Defendants made a variety of misrepresentations during the loan closing. In Count XIV Plaintiff claims that Defendants conspired to commit the fraud alleged in Counts X-XIII. Finally, in Count XV, Plaintiff claims that she is entitled to relief under the Racketeer Influenced and Corrupt Organization Act("RICO") because Defendants used the interstate mail and wire systems to commit the fraud alleged in Counts X-XIII.
Fed. R. Civ. P. 12(b)(6) authorizes the Court to dismiss a complaint if it "fail[s] to state a claim upon which relief can be granted ..." In evaluating a Rule 12(b)(6) motion, the Court must view the complaint in the light most favorable to the plaintiff and accept all well-pled factual allegations as true. League of United Latin American Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). However, a plaintiff's factual allegations must rise above the speculative level and be more than legal conclusions or formulaic recitations of the elements of a cause of action. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Association of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007). This standard of pleading does not require "pleading of specifics, but only enough to state a claim for relief that is plausible on its face." Twombly at 570; see also Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009).
Under Iqbal, this Court must consider the plausibility of pleaded facts before making a determination as to whether those facts, if true, give rise to a cause of action. Iqbal, 129 S. Ct. at 1949. As such, a complaint must surpass the realm of mere possibility and into that of plausibility. Id. Accordingly, the Court may consider surrounding context to distinguish plausible claims from possible claims. Id.
If in a Rule 12(b)(6) motion, matters outside of the pleadings are presented to the court, under Rule 12(d), the motion must be treated as a Rule 56 motion for summary judgment. However, documents attached to a motion to dismiss that are referred to in the complaint and central to the claims are deemed to form part of the pleadings. Greenberg v. Life Ins. Co. of Virginia, 177 F.3d 507, 514 (6th Cir. 1999); Armengau v. Cline, 7 Fed. Appx. 336, 344 (6th Cir.2001). Further, "[a] court may consider matters of public record in deciding a motion to dismiss without converting the motion to one for summary judgment." Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 336 (6th Cir. 2007).
In the present case, Defendants have attached to their motion copies of the mortgage, assignments of the mortgage, and the sheriff's deed and attachments thereto, all of which have been duly recorded with the Oakland County Register of Deeds. All of these documents, and the information within, are referenced in the Plaintiff's Complaint, and are central to Plaintiff's claims. These exhibits, therefore, may be deemed to form part of the original Complaint and, accordingly, may be considered in deciding Defendants' Rule 12(b)(6) motion without converting it to a Rule 56 motion. See Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir. 1999).
The Bank Defendants assert that Plaintiff lacks standing and no longer has an interest in the Property, which is required to challenge foreclosure proceedings, including the sheriff's sale. The Court agrees. Once the redemption period following the foreclosure of a property expired, Plaintiff's rights in, and title to, the property were extinguished, and she lost all standing to bring claims with respect to the property. This principle is well established in Michigan law.
In Piotrowski v. State Land Office Board, 302 Mich. 179, 4 N.W.2d 514 (1942), the Michigan Supreme Court held that the mortgagors in that case had "lost all their rights, title, and interest in and to the property at the expiration of their right of redemption." Id. 302 Mich. at 185, 4 N.W.2d at 516. The Piotrowski standard has been consistently applied by Michigan state and federal courts to bar former owners from making any claims with respect to foreclosedproperty after the end of the redemption period. See e.g., Stein v. U.S. Bancorp, 2011 WL 740537 (E.D.Mich. Feb.24, 2011); Overton v. Mortg. Elec. Registration Sys., 2009 WL 1507342 (); Kama v. Wells Fargo Bank, 2010 WL 4386974, *2 (E.D.Mich., Oct.29, 2010) (); Moriarty v. BNC Mortg., Inc., 2010 WL 5173830 (E.D.Mich. Dec.15, 2010) ().
Here, the redemption period expired on September 8, 2011. Plaintiff has not alleged or pled any facts that indicate that she timely attempted to redeem the property. Because Plaintiff failed to redeem the property before the redemption period expired, DBNTC became vested with "all right, title and interest" in the property by operation of law. At that point, Plaintiff, the former owner, lost standing to assert claims with respect to the property. Overton v. Mortgage Electronic Registration Sys., Inc., supra; Kama v. Wells Fargo Bank, supra.
This outcome is not altered by Plaintiff's filing of this lawsuit on August 23, 2011, two weeks before the expiration of the redemption period. Overton, supra, 2009 WL 1507342 at * 1 (). As the Michigan Court of Appeals explained in Overton:
Plaintiff's suit did not toll the redemption period. Plaintiff is simply trying to wage a...
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