Karmol v. Ocwen Loan Servicing, LLC
| Decision Date | 11 December 2016 |
| Docket Number | Case No. 1:16-CV-1178 |
| Parties | MICHAEL KARMOL, Plaintiff, v. OCWEN LOAN SERVICING, LLC, Defendant. |
| Court | U.S. District Court — Western District of Michigan |
HON. GORDON J. QUIST
Plaintiff, Michael Karmol, proceeding pro se, sued Defendant, Ocwen Loan Servicing, LLC, alleging claims for violation of the Michigan Consumer Protection Act (MCPA), M.C.L. §§ 445.901, et seq.; the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1962 (c) and (c); the Fair Debt Collections Practices Act, 15 U.S.C. § 1692 et seq.; unjust enrichment; fraud; and breach of contract. Karmol's claims against Ocwen arise out of Ocwen's acts or conduct as the servicer of Karmol's mortgage.
Ocwen has filed a motion to dismiss all of Karmol's claims for failure to state a claim. Karmol has failed to respond within the time allowed under Local Rule 7.2(c). For the following reasons, the Court will grant Ocwen's motion and dismiss Karmol's claims in their entirety with prejudice.
The following facts are based on the allegations in the complaint, matters of public record, and exhibits attached to Ocwen's motion that are referred to in the complaint.1
On April 22, 2004, Karmol obtained a mortgage loan from GMAC Mortgage Corporation in the amount of $116,471.00. (ECF No. 1-2.) As security for repayment of the loan, Karmol granted a mortgage (the Mortgage) to Mortgage Electronic Residential Systems (MERS), as nominee for GMAC, on real property located at 4531 Don Street, Holt, Michigan 48842. (Id.) The Mortgage was recorded in the Ingham County Register of Deeds on May 13, 2004. On December 24, 2015, MERS assigned the Mortgage to Ocwen pursuant to a Corporate Assignment of Mortgage. (Id.) The Corporate Assignment of Mortgage was recorded in the Ingham County Register of Deeds on January 15, 2016.2 (Id.)
Karmol filed his complaint in this case on September 26, 2016. It appears that Karmol used a form complaint that he obtained from some source, possibly the internet. The complaint generally alleges that Ocwen illegally charged late fees, misapplied unspecified payments, mishandled his escrow account, and charged marked-up fees for default-related services. (ECF No. 1 at PageID.2-5.)
Karmol has not responded to the instant motion within the time allowed under Western District of Michigan Local Rule 7.2(c). Accordingly, the Court may treat Karmol's failure as an abandonment or waiver of all of his claims. See Fredericks v. Allquest Home Mortg. Corp., No. 15-10429, 2015 WL 1966856, at *2 (E.D. Mich. Apr. 30, 2015) ( ); Burke v. Morgan, No. 06-CV-348-JMH, 2009 WL 514314, at *2 (E.D. Ky. Mar. 2, 2009) (). However, the Court has also reviewed Ocwen's motion on its merits under the applicable Rule 12(b)(6) motion to dismiss standard, see Abbas v. Bank of Am. N.A., No. 1:12-CV-607, 2013 WL 1340309, at *2 (W.D. Mich. Mar. 29, 2013), and concludes that all of Karmol's claims fail as a matter of law.
In Count I, Karmol alleges that Ocwen violated § 3(1) of the MCPA. This claim fails because § 4(1)(a) of the MCPA exempts from its coverage "[a] transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States." Michigan courts have specifically held that residential mortgage loan transactions fall under this exemption. Newton v. West, 262 Mich. App. 434, 438-39, 686 N.W.2d 491, 193-94 (2004). Therefore, the MCPA claim will be dismissed.
18 U.S.C. § 1962(c). Subsection (d) makes it unlawful "for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section." 18 U.S.C. § 1962(d). To state a RICO claim, a plaintiff must allege "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496, 105 S. Ct. 3275, 3285 (1985). In addition, a plaintiff must allege that "the RICO enterprise engaged in a 'pattern of racketeering activity' consisting of at least two predicate acts of racketeering activity occurring within a ten-year period." Moon v. Harrison Piping Supply, 465 F.3d 719, 723 (6th Cir. 2006).
For his predicate acts, Karmol alleges that Ocwen committed mail and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343. Predicate acts based on mail or wire fraud must satisfy Rule 9(b)'s heightened pleading standard. Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 404 (6th Cir. 2012). "This rule requires a plaintiff: (1) to specify the allegedly fraudulent statements; (2) to identify the speaker; (3) to plead when and where the statements were made; and (4) to explain what made the statements fraudulent." Republic Bank & Trust Co. v. Bear Stearns & Co., 683 F.3d 239, 247 (6th Cir. 2012). Karmol's allegations, which are nothing more than conclusory statements of fraud, fall far short of meeting the Rule 9(b) standard. Therefore, Counts II and III are subject to dismissal.
In Count IV, Karmol alleges that Ocwen violated 15 U.S.C. § 1692e, which prohibits debt collectors from "us[ing] any false, deceptive, or misleading misrepresentation or means in connection with the collection of any debt." Karmol alleges that Ocwen (ECF No. 1 at PageID.50.) Such conclusory allegations, without any supporting facts as to how Ocwen violated § 1692e—what misrepresentations were made and when they were made—are insufficient to show "more than a sheer possibility that [Ocwen] has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009). Thus, the FDCPA claim will be dismissed.
In Count V, Karmol alleges that Ocwen was unjustly enriched by charging marked-up prices for default-related services. Karmol admits that the mortgage permitted Ocwen to charge for such services, but he claims that Ocwen was unjustly enriched by overcharging Karmol. (Id. at PageID.51-52.) Karmol's unjust enrichment claim fails because "courts will not imply a contract where there is an express contract governing the same subject matter." Bowlers' Alley, Inc. v. Cincinnati Ins. Co., 32 F. Supp. 2d 824, 833 (E.D. Mich. 2014) (citing Fodale v. Waste Mgmt. of Mich., Inc., 271 Mich. App. 11, 36, 718 N.W.2d 827, 841 (2006)). Because the mortgage governs parties' rights and obligations with regard to the alleged default-related services, Karmol's unjust enrichment claim fails.
Karmol alleges a claim of fraud in Count VI, based on the same allegations that Ocwen failed to disclose that it had marked up the fees it charged Karmol for default-related services. Karmol's fraud allegations suffer from the same defect as his RICO allegations—failure to comply with Rule 9(b)'s particularity requirement. According, the fraud claim will be dismissed.
To establish a claim for breach of contract, Karmol must allege: (1) the existence of a contract; and (2) a breach of that contract by the defendant. See Stoken v. J.E.T. Elecs. & Tech.,Inc., 174 Mich. App. 457, 463, 436 N.W.2d 389, 392 (1998) (per curiam). Karmol alleges that the mortgage was his contract with Ocwen, and that Ocwen breached the mortgage agreement "by misapplying payments submitted by Plaintiff, placing such payments in suspense accounts without authorization by the mortgage agreements [sic], and assessing late fees not authorized under the mortgage agreement." (Id. at PageID.56.) Karmol's conclusory allegations, unsupported by any specific facts, such as particular payments that Ocwen misapplied, fail to properly allege a breach of contract by Ocwen. See Alshaibani v. Litton Loan Servicing, LP, 528 F. App'x 462, 465 (6th Cir. 2013) (); Rudley v. Bank of Am. Home Loans Servicing LP, No. 1:11-CV-1374, 2013 WL 2407614, at *4 (W.D. Mich. May 31, 2013) (). Thus, the breach of contract claim must be dismissed.
For the foregoing reasons, the Court will grant Ocwen's motion to dismiss and dismiss...
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