Michael Vanderhoof v. Deutsche Bank National Trust
554 F. App'x 355
6th Cir.2014Background
- Plaintiffs refinanced in Jan 2007 obtaining a $956,000 loan secured by a mortgage on property in Ann Arbor, Michigan; MERS acted as nominee for lender and successors.
- Mortgage recorded Feb 2009; MERS assigned the mortgage to Deutsche Bank in Jun 2010.
- The loan was later sold to a trust with a closing date in Apr 2007; property described with Parcel C and a right-of-way easement over Parcel B.
- Foreclosure by advertisement under Michigan law occurred; Deutsche Bank purchased the property on Jan 27, 2011; redemption expired Jan 27, 2012.
- Plaintiffs alleged foreclosure improper for including Parcel B in calculations and alleged defective assignment/standing; they asserted six counts including lack of standing and fraud.
- District court granted summary judgment for Defendants, finding no fraud or irregularity and that defendants could foreclose; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Deutsche Bank had standing to foreclose | Vanderhoof argues lack of legitimate ownership in the indebtedness | Deutsche Bank, via MERS assignment and recorded chain of title, had standing under Mich. Comp. Laws § 600.3204 | Deutsche Bank had standing; no fraud/irregularity shown |
| Whether foreclosure involved property not encumbered by the mortgage (Parcel B vs Parcel C) | Foreclosure included non-encumbered land (Parcel B) | Easement over Parcel B and mortgage on Parcel C; deed references easement only | Reference to Parcel B did not invalidate foreclosure; Parcel C was the encumbered parcel |
| Whether quiet title/other claims survive given the foreclosure | Foreclosure violated statute and title should be quiet | No fraud/irregularity; sale valid | Claims fail under the high standard for fraud/irregularity; no rescission |
| Whether the case was procedurally barred as new issues on appeal | Title slander and other issues raised on appeal | New issues forfeited on appeal | Forfeited issues are not considered on appeal |
| Whether breach of contract claim survives given foreclosure | Note–mortgage split breached contract | Claim grounded in foreclosure, barred by lack of fraud/irregularity and redemption expiration | Breach claim barred as it seeks set-aside of foreclosure absent fraud/irregularity |
Key Cases Cited
- Residential Funding Co. L.L.C. v. Saurman, 805 N.W.2d 183 (Mich. 2011) (validity of MERS as mortgagee/nominee and assignability)
- Carmack v. Bank of New York Mellon, 534 F. App’x 508 (6th Cir. 2013) (high standard for setting aside foreclosure; permissible only for fraud/irregularity in proceedings)
- Conlin v. Mortgage Elec. Registration Sys., Inc., 714 F.3d 355 (6th Cir. 2013) (foreclosure-related fraud/irregularity standard; standing not determinative)
- El-Seblani v. IndyMac Mortg. Servs, 510 F. App’x 425 (6th Cir. 2013) (fraud/irregularity standard applied; merits-based)
- Smith v. Litton Loan Servicing, LP, 517 F. App’x 395 (6th Cir. 2013) (high bar for setting aside foreclosure post-redemption)
- Williams v. Pledged Prop. II, LLC, 508 F. App’x 465 (6th Cir. 2012) (explains Michigan’s post-redemption standards)