Suzanne Derbabian v. Bank of America, N.A.
587 F. App'x 949
6th Cir.2014Background
- Derbabians mortgaged their Bloomfield Hills property in 2005 with Countrywide; MERS held the deed of trust as nominee; BNYM later acquired the note and foreclosed by advertisement in 2012 after extending loan modification attempts.
- Foreclosure sale occurred on March 5, 2012; sale completed on November 6, 2012; redemption period expired; plaintiffs did not redeem.
- Plaintiffs filed suit in 2013 asserting eight claims including fraudulent misrepresentation, breach of contract, RESPA/TILA, quiet title, and slander of title.
- District court dismissed all claims with prejudice, ruling time-bar and failure to state a claim on several theories; judgment entered for defendants.
- Appellate court reviews de novo; considers pleadings and integral public-record documents without converting to summary judgment; standard requires more than mere labels and conclusory statements.
- Michigan law requires written and signed modification promises; foreclosure by advertisement requires proper notices and a redemption period; voidability rather than void ab initio per Kim v. JPMorgan Chase Bank.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud claim sufficiency | Derbabians allege misrepresentations about terms and amortization | Complaint lacked speaker, date, and specifics; no material misstatement pleaded | Dismissed for failure to plead with particularity and plausibility |
| Breach of contract due to unwritten modification promises | Defendants promised loan modification | No written, signed modification; unenforceable absent writing | Dismissed; unwritten promises to modify barred under Michigan law |
| TILA disclosure violations | Disclosures were defective; seek damages | Action time-barred; no adequately pleaded violations | Barred by statute of limitations; not salvaged by recoupment provisions |
| Michigan § 600.3204 et seq. foreclosure procedures | Foreclosure void due to notices/modify option lacking | Procedures complied; modification offer and notices discussed in deed | Dismissed; no plausible fraud/irregularity; redemption period lapsed |
| Quiet title | Plaintiffs claim superior title | Foreclosure and loan default undermine title; no pleaded superior right | Dismissed; no prima facie showing of superior title or grounds to quiet title |
Key Cases Cited
- U.S. Fid. & Guar. Co. v. Black, 313 N.W.2d 77 (Mich. 1981) (elements of fraud, with reliance and injury)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must be plausible, not just conceivable)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (conclusory statements not sufficient)
- Barany-Snyder v. Weiner, 539 F.3d 327 (6th Cir. 2008) (public records may be considered on motion to dismiss)
- Goryoka v. Quicken Loan, Inc., 519 F. App’x 926 (6th Cir. 2013) (public-records and foreclosure-related claims)
- Kim v. JPMorgan Chase Bank, N.A., 825 N.W.2d 329 (Mich. 2012) (statute of frauds; writing required for modification)
- Thompson v. JP Morgan Chase Bank, N.A., 563 F. App’x 440 (6th Cir. 2014) (modification-notice sufficiency under Michigan law)
- Vanderhoof v. Deutsche Bank Nat’l Trust, 554 F. App’x 355 (6th Cir. 2014) (foreclosure procedures; prejudice and redemption)
- Smith v. Bank of Am. Corp., 485 F. App’x 749 (6th Cir. 2012) (holdover rights and foreclosure context)
- Beulah Hoagland Appleton Qualified Pers. Residence Trust v. Emmet Cnty. Rd. Comm’n, 600 N.W.2d 698 (Mich. Ct. App. 1999) (quiet title burden and superior right)