810 F.3d 429
6th Cir.2016Background
- Burniac and spouse mortgaged their Plymouth home to Washington Mutual (WaMu) in 2003; Wells Fargo served as mortgage servicer and received statements after WaMu assigned the loan to Wells Fargo in 2007; WaMu filed for bankruptcy in 2008; Burniac ceased payments leading to foreclosure; state court suit was filed May 20, 2013 to enjoin foreclosure and challenge the assignment; the state court issued a preliminary injunction June 18, 2013, and Burniac sought a default judgment against Wells Fargo on June 20, 2013, which was not entered as a default by the court, and the case was removed to federal court on that same day, with the district court later denying remand and granting Wells Fargo summary judgment in January 2015; Burniac appeals challenging procedural and substantive rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was a default judgment ever entered against Wells Fargo in state court? | Burniac contends a default judgment was entered and foreclosed Wells Fargo’s defenses. | Wells Fargo argues no default judgment was entered because the default form merely requested entry and left the date and clerk lines blank. | No default judgment was entered; thus removal and subsequent summary judgment were proper. |
| Does a state court preliminary injunction pre-removal preclude federal summary judgment or remand? | Burniac maintains the injunction prevented the district court from acting and required remand. | Wells Fargo argues federal rules govern post-removal proceedings and injunctions do not bar summary judgment or removal. | Preliminary injunction did not bar summary judgment or remand; final judgment extinguished the injunction. |
| Did Wells Fargo’s alleged violation of Mich. Comp. Laws § 600.3204 prejudice Burniac or render relief improper? | Burniac claims assignment deficiencies could cause prejudice (e.g., double liability) and defeat foreclosure. | Wells Fargo argues any violation was not shown to prejudice Burniac; Michigan law requires prejudice for § 3204 claims to prevail. | Burniac failed to show prejudice; violation, if any, did not preclude summary judgment under Michigan law. |
| Did the district court properly apply Michigan foreclosure law in a diversity case and uphold summary judgment? | Burniac contends misapplication of state foreclosure law invalidates foreclosures. | Wells Fargo argues Michigan law governs due to diversity and decisions binding under Kim and Conlin. | Court applied Michigan law and affirmed district court’s summary judgment. |
Key Cases Cited
- Butner v. Neustadter, 324 F.2d 783 (9th Cir. 1963) (case law on case posture after removal)
- Granny Goose Foods, Inc. v. Bhd. of Teamsters and Auto Truck Drivers Local No. 70 of Alameda Cnty., 415 U.S. 423 (1974) (pre-removal orders remain effective; federal rules govern after removal)
- U.S. Philips Corp. v. KBC Bank N.V., 590 F.3d 1091 (9th Cir. 2010) (preliminary injunction dissolves after final judgment; constraints on pre-removal orders)
- Kim v. JPMorgan Chase Bank, N.A., 825 N.W.2d 329 (Mich. 2012) (prejudice required for § 600.3204 violations; voidable not void ab initio)
- Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355 (6th Cir. 2013) (prejudice required for § 600.3204 claims; harm not demonstrated here)
- LoCoco v. Med. Sav. Ins. Co., 530 F.3d 442 (6th Cir. 2008) (reaffirms prejudice/abatement principles in state-law foreclosure context)
- Anderson v. CareSource, 576 F.3d 551 (6th Cir. 2009) (summary judgment standard; evidence and inferences in movant’s favor to resolve disputes)
- Village of Oakwood v. State Bank and Trust Co., 539 F.3d 373 (6th Cir. 2008) (remand standard and post-removal proceedings guidance)