Walker v. Michael W. Colton Trust
| Decision Date | 13 January 1999 |
| Docket Number | No. CIV. 98-40315.,CIV. 98-40315. |
| Citation | 33 F.Supp.2d 585 |
| Parties | Jacqueline R. WALKER and Kevin R. Franklyn, Plaintiff, v. MICHAEL W. COLTON TRUST, Michael W. Colton, P.C., Michael W. Colton, Melvin Rosen, and Edy's Carpet Heating & Cooling, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Jacqueline R. Walker, Detroit, MI, pro se, Carl L. Collins, III, Detroit, MI, for Kevin R. Franklyn, plaintiff.
Michael W. Colton, Farmington Hills, MI, pro se, Melvin Rosen, Southfield, MI, pro se.
On October 14, 1998, defendants Michael W. Colton Trust, Michael W. Colton, P.C., and Michael W. Colton (hereinafter "Colton defendants" or "moving defendants") filed a motion to dismiss plaintiffs' complaint. Previously, on September 14, 1998, this Court granted plaintiffs' motion for preliminary injunction, enjoining the foreclosure or sheriff's sale of the residential property known as 15435 Ashton, Detroit, Michigan 48223.1 The preliminary injunction was issued following a hearing conducted on the same day, September 14, 1998. On October 22, 1998, plaintiff Kevin R. Franklyn filed an affidavit wherein he objects to the instant motion to dismiss. In addition, on November 4, 1998, plaintiff Franklyn filed a response to defendants' motion. On November 18, 1998, plaintiff Franklyn filed a brief in support of his response to defendants' motion. On December 3, 1998, defendants filed a reply brief in support of their motion to dismiss.
Plaintiffs' complaint contains seven counts, which may be summarized as follows:
Since this Court's jurisdiction in the instant case is based upon a federal question, pursuant to 28 U.S.C. § 1331, the Court, in its discretion, may decline to hear plaintiffs' state law claims. As a consequence, this Court will dismiss Count VI (fraud) and Count VII (intentional infliction of emotional distress), as well as the various state law claims interspersed throughout the remaining counts, through exercise of its discretionary pendent jurisdiction. See Section III.H. infra. The analysis which follows will thus focus upon plaintiffs' federal law claims in Counts I though V, as well as defendants' responses to those claims.
The Court will dismiss all counts, with the exeception of Count I and Count II. With respect to plaintiff's claim under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601, et seq., contained in Count I, plaintiff Franklyn will be directed to submit, within 10 days, a more definite statement of his RESPA claim pursuant to Federal Rule of Civil Procedure 12(e). Furthermore, defendants will be allowed to file a renewed motion to dismiss with respect to Counts I and II within 10 days following plaintiff's submission of a more definite statement of his RESPA claim. Oral argument previously scheduled for hearing on January 13, 1999 will be adjourned until further notice.
According to defendants, plaintiff Kevin R. Franklyn initiated contact with Mr. Rosen, the manager of Edy's Carpet, Heating & Cooling (hereinafter "Edy's") on June 5, 1997. Mr. Franklyn allegedly telephoned Rosen and asked about buying carpet for his home located at 15435 Ashton, Detroit, Michigan. Thereafter, Rosen purportedly went to the property to discuss the transaction with Franklyn. Franklyn then allegedly decided to purchase premium carpeting for his approximately 4,000 square foot home. Defendants maintain that Franklyn was unable to pay for the installation of the carpeting immediately, and therefore requested available financing.
After requesting financing, Rosen allegedly quoted a price of $12,000 for the carpeting and installation, with $2,000 as a down payment, resulting in $10,000 to be financed. According to defendants, Rosen provided Franklyn with the following documents, allegedly explaining each one to plaintiff:
(1) a Mortgage Financing Application (Exh. A to Motion to Dismiss);
(2) a Home Improvement Installment Contract (Exh. B to Motion to Dismiss);
(3) a written Notice of Right to Cancel (Exh. C to Motion to Dismiss); and
(4) a Mortgage (Second) as security, providing an installment payment plan (Exh. D to Motion to Dismiss).
According to defendants, Franklyn acknowledged receipt of these documents and executed each document where required, and in front of witnesses and a notary public. Franklyn never canceled the Home Improvement Installment Contract. On July 2, 1997, plaintiff Jacqueline Walker signed a Certificate of Completion, on Franklyn's behalf, acknowledging satisfactory completion of the installation of the carpet. See Exh. E to Motion to Dismiss. Defendant maintains that Walker was not the buyer in the above-described transaction, nor does she have any legal ownership in the property in question.
Defendant further alleges that Franklyn understood that he was offering a second mortgage for his purchase of the carpeting and installation because, in order to obtain the financing, Franklyn provided Rosen with the following documents:
(1) a Bill of Sale with respect to his purchase of the Ashton property (Exh. F to Motion to Dismiss);
(2) a confirming letter from attorneys to Ms. Walker verifying settlement monies given to her to prove her ability to pay (Exh. G to Motion to Dismiss);
(3) a Homestead Exemption Certificate (Exh. H to Motion to Dismiss);
(4) a Property Transfer Affidavit (Exh. I to Motion to Dismiss);
(5) a gift letter evidencing Ms. Walker's gift to Franklyn of money for the purchase of his home (Exh. J to Motion to Dismiss); and
(6) excerpts from Franklyn's 1996 federal income tax return (Exh. K to Motion to Dismiss);
Ten days after completion of the above-described transaction, on June 17, 1997, Rosen allegedly contacted defendant Michael W. Colton Trust and offered to sell the Franklyn debt along with the mortgage. Defendant Colton, as trustee, then purchased the Home Improvement Installment Contract and the mortgage for valuable consideration. The debt was not in default at that time.
On June 18, 1997, Colton allegedly sent a letter to Franklyn, introducing the Colton Trust as the assignee of the debt. See Exh. L to Motion to Dismiss. According to defendants, having received no payments from Franklyn, Colton Trust sent letters of default to Franklyn on October 9, 1997. See Exhs. M and N to Motion to Dismiss. By April 15, 1998, no payments having been made to Colton Trust, a non-judicial foreclosure action was initiated and the foreclosure sale scheduled for May 22, 1998.
According to defendants, on May 15 and 19, 1998, Mr. Colton was allegedly contacted by telephone by Mr. Lee Scott of Ideal Mortgage. Mr. Lee represented himself as an authorized contact person for Franklyn, and offered a partial payment in exchange for a one week adjournment of the May 22, 1998 foreclosure. According to defendant, on May 20, 1998, Scott guaranteed payment of $250.00 to Colton Trust if Franklyn also paid $250.00 in consideration for Colton Trust's agreement to subordinate its lien on the Ashton Property to Ideal Mortgage's lien. On May 20, 1998, those payments were made, and the May 22, 1998 foreclosure was adjourned for one week. On May 28, 1998, Franklyn allegedly called Colton and requested that the foreclosure be adjourned for an additional week. Colton, acting on behalf of Colton Trust, agreed and adjourned the foreclosure until June 5, 1998.
On June 3, 1998, Colton, acting on behalf of Colton Trust, purportedly signed an agreement subordinating Colton Trust's rights to those of Ideal Mortgage. Thereafter, Colton allegedly received a check from Ideal Mortgage in the amount of $4,500. Colton then paid $1,400 of that sum to Edy's Carpet, Heating & Cooling because Edy's had a lien on the Ashton property due to the fact that Franklyn allegedly only paid $600 out of the $2,000 down payment. See Exh. O to Motion to Dismiss. Despite the foregoing, defendants contend that it was specifically agreed that payments would continue on the debt as a condition for Colton Trust's agreement to subordinate its lien to Ideal Mortgage. See Exh. p to Motion to Dismiss. Defendants further maintain that by July 2, 1998, Franklyn had again defaulted and further notice of default was sent to him. See Exh. Q to Motion to Dismiss. Subsequently, defendants initiated another foreclosure action. Thereafter, plaintiff filed the instant law suit.
Defendant Colton allegedly telephoned the Ashton property as more than five times during the time period in question. According to defendants, on one or two of those occasions, Ms. Walker answered the telephone and allegedly informed Colton that she knew about the mortgage and debt, and that she would be making payment in the near future on Franklyn's behalf. According to defendants, all calls were brief and amicable. Defendant lastly maintains that all encumbrances...
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