Frederick Wuori v. Wilmington Savings Fund
666 F. App'x 506
| 6th Cir. | 2016Background
- Frederick and Lori Wuori received a 20-acre parcel in fee simple (1998) and mortgaged it in 2004 to MERS for a loan; the mortgage included the correct street address but an erroneous metes-and-bounds phrase that—if read literally—described 5 acres while also saying "20 acres, more or less."
- In 2009 MERS foreclosed, purchased the sheriff’s deed, but the 2009 sheriff’s deed repeated the flawed five-acre description (with a proviso referencing prior record exceptions).
- MERS recorded a scrivener’s affidavit in 2009 (not signed by the Wuoris) purporting to correct the mortgage description to the 20-acre description; in 2011 MERS recorded an expungement affidavit setting aside the 2009 foreclosure and reinstating the 2004 mortgage.
- The mortgage was assigned through several entities and ultimately to Wilmington, which foreclosed in 2015, purchased a sheriff’s deed describing the full 20 acres, and the Wuoris failed to redeem and continued occupying the land without paying the loan.
- The Wuoris sued to quiet title, arguing (1) the 2009 foreclosure extinguished the mortgage such that the 2011 expungement affidavit could not revive it, and (2) alternatively, the erroneous legal description in the mortgage/assignments limited any title to 5 acres and rendered Wilmington’s claim defective. The district court dismissed under Rule 12(b)(6); the Sixth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the expungement affidavit validly set aside the 2009 foreclosure and revived the 2004 mortgage | Expungement cannot revive a mortgage extinguished by foreclosure; if revived, it is only a rebuttable presumption needing further proof | Michigan law permits an expungement affidavit by one with knowledge to set aside a foreclosure and revive the mortgage; affidavit’s recitals are sufficient at pleading stage | The expungement affidavit was valid under Michigan law and the complaint failed to plead facts plausibly rebutting it, so the revived mortgage stands |
| Whether the scrivener’s error in the mortgage description invalidates the mortgage or limits conveyed acreage | The extra phrase produced an incoherent five-acre description; this invalidates or limits the mortgage/assignments to 5 acres | The mortgage (and subsequent instruments) included the correct street address and “20 acres” language; Michigan law treats a correct common street address as sufficiently specific absent pleaded prejudice | The erroneous phrase did not invalidate the mortgage or prevent description of the full 20 acres; plaintiffs pleaded no prejudice, so Wilmington’s title to 20 acres stands |
| Whether adverse-possession or statute of limitations returned title to the Wuoris for the 5 acres after MERS’s 2009 sheriff’s sale | The 5-acre description at the 2009 sale meant MERS gained title to only 5 acres and time-bar may have run, giving Wuoris title | Even assuming 5 acres passed in 2009, the expungement affidavit revived the mortgage and assignments gave Wilmington rights; plaintiffs did not plead a viable chain of title to 20 acres | Even if adverse-possession might affect 5 acres, Wuoris’ sole claim seeks quiet title to all 20 acres and they cannot show superior title to Wilmington for the whole parcel |
| Pleading-standard: whether the complaint adequately alleged facts to defeat the affidavit-based record | Wuoris asserted possible contradictory evidence and contested presumptions from affidavits, requiring further proceedings | Under Iqbal/Twombly, plaintiffs must plead facts plausibly contradicting sworn affidavits; mere possibility is insufficient | Complaint failed to plead facts that plausibly rebutted the expungement or scrivener’s affidavits; dismissal under Rule 12(b)(6) proper |
Key Cases Cited
- Connolly v. Deutsche Bank Nat’l Trust Co., [citation="581 F. App'x 500"] (6th Cir.) (upholding validity/effect of expungement affidavit to revive mortgage)
- Veasley v. Fed. Nat’l Mortg. Ass’n, [citation="623 F. App'x 290"] (6th Cir.) (common street address can cure incorrect metes-and-bounds absent prejudice)
- Bazinski v. JPMorgan Chase Bank, [citation="597 F. App'x 379"] (6th Cir.) (street address sufficiently specific to ascertain mortgaged property)
- Kim v. JPMorgan Chase Bank, 825 N.W.2d 329 (Mich.) (borrower must show prejudice from defective description to invalidate mortgage)
- Residential Funding Co. v. Saurman, 805 N.W.2d 183 (Mich.) (state court reversal of prior rule on MERS’s authority to foreclose; informs analysis of expungement affidavits)
- Trademark Props. of Mich., LLC v. Fannie Mae, 863 N.W.2d 344 (Mich. Ct. App.) (expungement affidavit held ineffective under its particular facts; distinguishable)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: must plead factual content plausibly showing entitlement to relief)