Trudell v. Carrington Mortg. Servs., L.L.C.
| Decision Date | 27 September 2016 |
| Docket Number | CASE NO. 1:16-cv-10441-TLL-PTM |
| Parties | RODNEY TRUDELL, Plaintiff, v. CARRINGTON MORTGAGE SERVICES, L.L.C., Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
(Doc. 14)
For the reasons set forth below, IT IS RECOMMENDED that Defendant's motion for judgment on the pleadings (Doc. 14) be GRANTED and that Plaintiff's complaint be DISMISSED.
This mortgage foreclosure action was originally filed in the Circuit Court for the County of Midland, State of Michigan. It was removed to this Court on February 8, 2016, by Defendant Carrington Mortgage Services, L.L.C. (Doc. 1 at 1). It was referred by United States District Judge Thomas L. Ludington to the undersigned magistrate judge for all pretrial purposes on February 22, 2016. (Doc. 5). Plaintiff Rodney Trudell makes the following claims: (1) wrongful foreclosure; (2) fraudulent misrepresentation; (3) slander of title; and (4) unclean hands. (Doc. 1, Ex. A, Pl.'s Compl. at 8-17). Plaintiff seeks a preliminary injunction, equitable mortgage, extinguishment of Defendant's interest in the property, damages, and other relief. (Id. at 17-21).
On May 27, 2016, Defendant filed the present motion for judgment on the pleadings. (Doc. 14). Plaintiff responded on June 15, 2016, (Doc. 16), and Defendant filed a reply on July 1, 2016. (Doc. 17). The motion is ready for report and recommendation without oral argument. See E.D. Mich. LR 7.1(f)(1).
The property in question is commonly known as 2178 East Huckleberry Road, Sanford, Michigan 48657 ("Property"). (Doc. 1, Ex. A, Pl.'s Compl. at 2). Plaintiff alleges that he mortgaged the Property to Top Elite Financial to secure a loan of $127,228.00 ("Mortgage"). (Id. at 3). The Mortgage on the Property was assigned several times, ultimately landing in Defendant's portfolio.
Plaintiff asserts that after several years of making payments on the Mortgage, he "came upon hard economic times" and was "temporarily unable to meet the payment obligations" of the Mortgage. (Id. at 4). Plaintiff alleges that Defendants did not send a notice of default, wrongfully accelerated the debt, and "effectively nullif[ied] Plaintiff's right to cure." (Id.). Defendant began foreclosure proceedings on April 20, 2015 by way of notice in a Midland County newspaper. (Id.). Plaintiff avers that he could have paid the amount necessary to cure his pre-acceleration payment deficiency, but could not pay thefull remaining balance on the Mortgage, as would be required to cure the default post-acceleration. (Id. at 4-5).
Plaintiff further alleges that Defendant did not send him a Notice of Sale, and was not otherwise notified that Defendant had scheduled a foreclosure sale for the Property. (Id. at 5). "[H]ad he been given correct notices under the foreclosure by advertisement statute, the Mortgage and contractual standards," Plaintiff asserts that he "would have been in a much better position to preserve his interest . . . ." (Id.).
Plaintiff also asserts that Defendant "promised a permanent loan modification to Plaintiff, in exchange for various payments of money, and other actions to be undertaken by Plaintiff," and that Plaintiff "detrimentally relied upon, and fully complied with, Defendant's promises to grant him a permanent loan modification." (Id. at 7). Plaintiff alleges that he provided all requested information and documentation, and that he is "able to afford a reasonable monthly mortgage payment were Defendant to work with him in good faith to modify the loan," but that Defendant "never permanently modified Plaintiff's loan" and "instead initiated wrongful foreclosure proceedings." (Id.).
Plaintiff argues that Defendant's conduct violated several provisions of 12 U.S.C. 2605, et seq., also known as the Real Estate Settlement Procedures Act ("RESPA"), Regulation X, 12 C.F.R. 1024.41, and Regulation Z 24 C.F.R. 3500, which require mortgage servicers to provide certain types of notice to mortgagors and prohibits foreclosure without sufficient notice, as described more fully below. (Id. at 8-11). Specifically, Plaintiff alleges that Defendant engaged in impermissible "dual tracking," negotiating foreclosure relief with Plaintiff while simultaneously pursuing foreclosure onthe Property. (Id. at 10-11). Plaintiff also alleges that Defendant foreclosed on the Property "less than 120 days" following delinquency on the Mortgage. (Id. at 11).
Plaintiff then argues that Defendant violated MCLA 600.3201, et seq., by failing to calculate the amount due on the Mortgage and including amounts "not rightfully incurred" in the calculation. (Id.). Without specificity, he suggests that the violations extend further than this particular violation.
Plaintiff next asserts that Defendant violated the Truth in Lending Act ("TILA") 15 U.S.C. 1601, et seq., by failing to notify him that "the Loan and/or Mortgage was sold or transferred." (Id. at 12). Likewise, Plaintiff claims that Defendant violated RESPA by failing to inform Plaintiff that the servicing of the Mortgage had been transferred.
Plaintiff alleges that Defendants engaged in fraudulent misrepresentation, including stating that Defendants "would not begin foreclosure proceedings while the parties were actively pursuing loan modification or other financial assistance options" with knowledge that such representation was false, and with intent that Plaintiff would rely on that representation and "refrain from defending the foreclosure of his home." (Id. at 13-14).
Plaintiff alleges that Defendant engaged in slander of title, without further detail. (Id. at 15).
Finally, Plaintiff alleges that Defendant's foreclosure of the property is barred by the doctrine of unclean hands due to Defendant's bad faith conduct, that a preliminary injunction preventing foreclosure of the property should issue, and that the Court should either grant an equitable mortgage or convert the foreclosure by advertisement into a judicial foreclosure under MCL 600.3101, et seq. (Id. at 16-21).
Defendants move for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. Rule 12(c) provides that, "[a]fter the pleadings are closed - but early enough not to delay trial - a party may move for judgment on the pleadings." Judgment may be granted under Rule 12(c) where the movant clearly establishes that no material issue of fact requires resolution and that she is entitled to judgment as a matter of law. See Beal v. Missouri Pacific R.R., 312 U.S. 45 (1941); 5 C. Wright & A. Miller, Federal Practice and Procedure § 1368, p. 518. The Court of Appeals for the Sixth Circuit has stated that a district court must consider a motion under Rule 12(c) using the same standard of review as a Rule 12(b)(6) motion to dismiss. Roger Miller Music, Inc. v. Sony/ATV Publ'g, L.L.C., 477 F.3d 383, 389 (6th Cir. 2007).
When deciding a motion to dismiss, "[t]he court must construe the complaint in the light most favorable to the plaintiff, accept all the factual allegations as true, and determine whether the plaintiff can prove a set of facts in support of its claims that would entitle it to relief." Bovee v. Coopers & Lybrand C.P.A, 272 F.3d 356, 360 (6th Cir. 2001). As the Supreme Court held in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007), a complaint must be dismissed pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted if the complaint does not plead "enough facts to state a claim to relief that is plausible on its face." 550 U.S. at 570 (). Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, "a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels andconclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555 (citation omitted). Even though a complaint need not contain "detailed" factual allegations, its "[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. (citations omitted).
The Supreme Court has further explained that courts need not accept as true conclusory allegations. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (). "Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. Thus, Id.
When evaluating a motion for judgment on the pleadings, a court may consider: (1) "documents referenced in, or attached to, the complaint and central to the plaintiff's claims"; (2) "matters of which a court may properly take notice"; and (3) "public documents and records." Sampson v. Blue Cross Blue Shield of Michigan, 997 F. Supp. 2d 777, 780 (E.D. Mich. 2014) (citations omitted).
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