Barbara CAMPBELL, Plaintiff-Appellant, v. NATIONSTAR MORTGAGE and Federal National Mortgage Association, Defendants-Appellees.
No. 14-1751.
United States Court of Appeals, Sixth Circuit.
May 6, 2015.
611 Fed.Appx. 288
IV
Plaintiffs-Appellants have failed to plausibly allege that their constitutional rights were violated during the government‘s investigation of the Hutaree or that they are entitled to a remedy under Bivens. Therefore, we AFFIRM the district court‘s decision dismissing their complaint.
BENITA Y. PEARSON, District Judge.
Plaintiff-Appellant Barbara Campbell sought to have the foreclosure sale of her house in Detroit, Michigan set aside due to alleged defects in the loan modification and foreclosure proceedings initiated by Defendants-Appellees Nationstar Mortgage, LLC (“Nationstar“) and Federal National
I. FACTUAL AND PROCEDURAL BACKGROUND
Campbell obtained a $165,000 loan from Flagstar Bank on July 25, 2006. As security for the loan, Campbell granted Mortgage Electronic Registration Systems, Inc. (“MERS“), acting solely as nominee for the lender and the lender‘s successors and assigns, a mortgage against her house. MERS assigned Campbell‘s mortgage to Nationstar on April 23, 2010.
Campbell defaulted on her mortgage. She alleges that financial hardship resulting from extensive medical treatment for both herself and close family members caused the default. Seeking relief, Campbell applied for a loan modification from Nationstar in January 2013. Nationstar assigned a Single Point of Contact (“SPOC“) to assist Campbell with the process. Campbell also applied for assistance with the Detroit Non-Profit Housing Corporation, which prepared and submitted a loan modification application on her behalf.
Nationstar mailed a letter to Campbell on March 6, 2013, informing her that Nationstar had received her application for the “FNMA Apollo Trial Period” (Fannie Mae‘s loan modification program) and that it was under review. The letter states, in pertinent part: “Please note that during this evaluation period your home will not be referred to foreclosure or be sold at a foreclosure sale if the foreclosure period has already been initiated.” R. 1-2 at Page ID #54. It is undisputed that Campbell‘s house had not yet been referred to foreclosure at the time Nationstar sent this letter. The record is ambiguous, however, on whether the FNMA Apollo Trial Period is an independent loss mitigation program separate and apart from the obligations of Nationstar and Fannie Mae under
Campbell received a letter on March 14, 2013 from Trott & Trott, P.C., Nationstar‘s designee. The letter informed Campbell of her right, pursuant to
Meanwhile, Nationstar proceeded with foreclosure by advertisement. Starting on May 27, 2013, Nationstar published notice in the Detroit Legal News. The following day, Nationstar posted a copy of the foreclosure notice on Campbell‘s property. Nationstar purchased Campbell‘s house at a Sheriff‘s Sale on July 11, 2013. Pursuant to
Campbell filed her complaint in Wayne County Circuit Court on January 13, 2014, alleging four causes of action: (1) Violation of
II. STANDARD OF REVIEW
We review de novo a district court‘s decision to grant a motion to dismiss under
When considering a motion to dismiss, we must “‘accept all well-pleaded factual allegations of the complaint as true and construe the complaint in the light most favorable to the plaintiff.‘” Reilly v. Vadlamudi, 680 F.3d 617, 622 (6th Cir.2012) (quoting Dubay v. Wells, 506 F.3d 422, 426 (6th Cir.2007)). We do not, however, need to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “In addition to the allegations in the complaint, [we] may also consider other materials that are integral to the complaint, are public records, or are otherwise appropriate for the taking of judicial notice.” Ashland, Inc. v. Oppenheimer & Co., 648 F.3d 461, 467 (6th Cir.2011).
III. ANALYSIS
A. Nationstar and Fannie Mae‘s Motion to Dismiss
Campbell argues that the district court improperly considered a motion for summary judgment that Nationstar and Fannie Mae disguised as a motion to dismiss
“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”
Campbell attached a letter from Nationstar‘s designee, Trott & Trott, P.C. (R. 1-2 at Page ID #55-57), the letter confirming receipt of Campbell‘s request for a loan modification (id. at #58-59), and the affidavit of notice pursuant to
Campbell contends that Nationstar and Fannie Mae improperly relied on documents that are outside the pleadings in their motion to dismiss: (1) income documentation supporting Campbell‘s loan modification application and (2) a letter sent by Nationstar that informed Campbell that she had failed to provide financial documents necessary to conduct a loan modification meeting. Neither argument is availing. “[W]e can affirm on any basis supported by the record.” EA Mgmt. v. JP Morgan Chase Bank, N.A., 655 F.3d 573, 575 (6th Cir.2011). Because the record reflects that the case was dismissed for
The district court‘s holdings relied on documents that
B. Campbell‘s Foreclosure Claims
Campbell challenges the district court‘s dismissal of her two mortgage-foreclosure claims. Count I of her complaint alleges that Nationstar violated
Michigan law vests the purchaser of the deed at a foreclosure sale with “all the right, title, and interest that the mortgagor had” in the property unless the mortgagor redeems the property within the sixth-month statutory period for redemption.
In order to successfully set aside a foreclosure sale after the expiration of the redemption period, the mortgagor must first make “a clear showing of fraud, or irregularity.” Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 361 (6th Cir.2013) (quoting Schulthies v. Barron, 16 Mich.App. 246, 167 N.W.2d 784, 785 (1969)). The indicated irregularity, however, must have occurred in the foreclosure process itself. Williams v. Pledged Property II, LLC, 508 F. App‘x 465, 468 (6th Cir.2012) (citing Heimerdinger v. Heimerdinger, 299 Mich. 149, 299 N.W. 844, 846 (1941)). “[D]efects or irregularities in a foreclosure proceeding result in a foreclosure that is voidable, not void ab initio.” Kim v. JPMorgan Chase Bank, N.A., 493 Mich. 98, 825 N.W.2d 329, 337 (2012). In order to have the foreclosure sale set aside, the mortgagor must also demonstrate that she was prejudiced by the irregularity. Conlin, 714 F.3d at 361 (quoting Kim, 825 N.W.2d at 337). A mortgagor demonstrates prejudice by showing that she would have been in a better position to preserve her interest in the property absent the defendant‘s noncompliance with Michigan‘s foreclosure laws. Conlin, 714 F.3d at 361 (quoting Kim, 825 N.W.2d at 337).
Campbell has failed to plead an irregularity in the foreclosure process. In her complaint, Campbell alleges that Nationstar failed to have a meeting with her before commencing foreclosure, and that Nationstar proceeded with foreclosure without determining whether Campbell qualified for a loan modification after Nationstar had sent a letter that stated Campbell‘s home would not be referred to foreclosure during the evaluation of her application to participate in the FNMA Apollo Trial Period.3 At most, Campbell alleges irregularities with the loan modification process that occurred contemporaneously with the foreclosure. An alleged irregularity in the loan modification process, however, does not constitute an irregularity in the foreclosure proceeding. See Williams, 508 F. App‘x at 468 (“Williams‘s claim of fraud relies on oral assurances during a negotiation to change the terms of the contract. Despite the fact that the negotiations may have taken place during the foreclosure process, these negotiations remained separate from the foreclosure process itself.” (emphasis added)); Ashford v. Bank of Am., N.A., No. 13-12153, 2013 WL 5913411, at *3 (E.D.Mich. Oct. 31, 2013) (concluding that the manner
in which the defendant “handled potential loss mitigation or modification ... has no bearing on the foreclosure procedure itself“); Shamoun v. Fed. Nat‘l Mortg. Assoc., No. 12-15608, 2013 WL 2237906, at *4 (E.D.Mich. May 21, 2013) (concluding that allegations that Defendants “preclude[d] the Plaintiff from entering into a Loan Modification” were insufficient to justify setting aside the foreclosure sale). Campbell‘s allegations about irregularities with the process by which Nationstar evaluated Campbell for a loan modification do not constitute irregularities with how Nationstar implemented the foreclosure process against Campbell.
Campbell has also failed to sufficiently allege that she has been prejudiced by an irregularity that occurred during the foreclosure process. Campbell argues that she was prejudiced by not receiving a loan modification because she would have been in a better position to avoid foreclosure had she received a loan modification from Nationstar. Campbell‘s argument is flawed. Even setting aside the fact that the loan modification process is not a part of the foreclosure, Campbell has not demonstrated how she has been prejudiced by not receiving a loan modification meeting. Implicit in Campbell‘s claim that she would have been in a better position to preserve her interest in her property is the contention that the loan modification meeting would have prevented the foreclosure. Otherwise, Campbell would have been in the exact same position even with the benefit of the meeting: in default on her (now modified) loan with her property subject to foreclosure. Cf. Derbabian v. Bank of Am., N.A., 587 F. App‘x 949, 955-57 (6th Cir.2014) (concluding that the plaintiffs did not adequately plead prejudice where the complaint does not allege that they could have either redeemed the property at the sheriff‘s sale or paid off the debt owed). As the district court noted,
Finally, even if Campbell had successfully pleaded irregularity and prejudice, Michigan law does not provide her with the remedy she seeks.
The district court properly concluded that Campbell could not show an irregularity in the foreclosure process that caused her prejudice, and that Campbell had missed her opportunity to obtain the remedy for violations of
C. Campbell‘s RESPA Claim
Campbell argues that the district court erred in concluding that she did not adequately plead a claim under
The Supreme Court has reconciled “two seemingly contradictory statements found in decisions concerning the effect of intervening changes of the law.” Landgraf v. USI Film Prods., 511 U.S. 244, 263-64, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994). Usually, “a court is to apply the law in effect at the time it renders its decision.” Id. at 264 (quoting Bradley v. School Bd. of City of Richmond, 416 U.S. 696, 711, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974)). “Retroactivity is not favored in the law,” however, and courts should not construe laws to have retroactive effect “unless their language expressly requires this result.” Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988). Therefore, courts should apply the law in effect at the time they decide a case unless the law has a retroactive effect on the parties. BellSouth Telecomms., Inc. v. Se. Tel., Inc., 462 F.3d 650, 657 (6th Cir.2006); Patel v. Gonzales, 432 F.3d 685, 691 (6th Cir.2005). The Supreme Court has adopted a two-part test for determining whether a statute or regulation should retroactively apply to conduct which preceded the law‘s enactment:
We first look to whether Congress has expressly prescribed the statute‘s proper reach, and in the absence of language as helpful as that we try to draw a comparably firm conclusion about the temporal reach specifically intended by applying our normal rules of construction. If that effort fails, we ask whether applying the statute to the person objecting would have a retroactive consequence in the disfavored sense of affecting substantive rights, liabilities, or duties [on the basis of] conduct arising before [its] enactment. If the answer is yes, we then apply the presumption against retroactivity by construing the statute as inapplicable to the event or act in question owing to the absen[ce of] a clear indication from Congress that it intended such a result.
Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37-38, 126 S.Ct. 2422, 165 L.Ed.2d 323 (2006) (citations and quotation marks omit-
As to the first inquiry, Nationstar argues that the regulation‘s January 10, 2014 effective date reflects an intent not to apply it to conduct occurring prior to that date. We agree. The CFPB promulgated a final rule on February 14, 2013, which amended Regulation X to include the procedures for evaluating and responding to loss mitigation applications that are now codified at
The CFPB also found that the January 10, 2014 effective date brought the amended Regulation X‘s effective date in line with the effective dates of other regulations that the CFPB issued to implement provisions of the Dodd-Frank Act. The CFPB issued these regulations, referred to collectively as the Title XIV Final Rules, over a span of ten days in January 2013. Amendments to the 2013 Mortgage Rules Under the Equal Credit Opportunity Act (Regulation B), Real Estate Settlement Procedures Act (Regulation X), and the Truth in Lending Act (Regulation Z), 78 Fed.Reg. 60382-01, 60384 (October 1, 2013) (“Amendments to the 2013 Mortgage Rules“). For many of these Title XIV Final Rules, the CFPB specified that “the new regulations would apply to transactions for which applications were received on or after January 10, 2014,” expressly disclaiming any retroactive application of the rules. Id. at 60385 (emphasis added). Despite the different issuance dates, the CFPB instead decided to establish a consistent effective date of January 10, 2014, believing that doing so would facilitate compliance. Id. When the CFPB issued the new Mortgage Servicing Rules in February, it expressly stated that the January 10, 2014 effective date allowed the CFPB to adopt “a coordinated approach to facilitate implementation” of both the Mortgage Servicing Rules and the Title XIV Final Rules. Mortgage Servicing Rules, 78 Fed. Reg. at 10842. It makes sense, therefore, that if the CFPB believed that it could facilitate implementation by setting the same effective date for both the Mortgage Servicing Rules and the Title XIV Final Rules, it also would choose to align the two sets of rules with respect to prospective
The second step of the Fernandez-Vargas analysis supports our conclusion that
The two-part test from Fernandez-Vargas weighs against applying
D. Campbell‘s Negligence Claim
Finally, Campbell argues that Fannie Mae owed her a duty “of full participation in HAMP, including its adherence to all HAMP requirements and adhering to the terms of the modification agreement.” R. 1-2 at Page ID # 21. HAMP is an acronym for the federal Home Affordable Modification Program created pursuant to the Emergency Economic Stabilization Act,
Under Michigan law, the prima facie case of tortious negligence has four elements: (1) a duty owed by the defendant to the plaintiff, (2) a breach of that duty, (3) the plaintiff suffered damages, and (4) the breach of duty caused the damages. Haliw v. Sterling Heights, 464 Mich. 297, 627 N.W.2d 581, 588 (2001); Schultz v. Consumers Power Co., 443 Mich. 445, 506 N.W.2d 175, 177 (1993). In order to satis-
Campbell alleges that Fannie Mae breached a duty owed to her under the regulations that establish the HAMP program. While the allegations that Fannie Mae failed to comply with HAMP regulations may provide evidence of negligent conduct under Michigan law, Campbell must still show that the HAMP regulations impose on servicers a duty of care owed to borrowers. See Kennedy, 737 N.W.2d at 186 (“Plaintiff contends that defendants breached the duty to provide a safe workplace as required by § 9 of MIOSHA,
Moreover, even if Fannie Mae owed Campbell a duty of care under the HAMP guidelines, Campbell cannot show that a breach of that duty caused her injury. When a plaintiff seeks to use the violation of a law to establish negligence, Michigan law requires the plaintiff to show that (1) the law was intended to protect against the result of the violation, (2) the plaintiff is a member of the class intended to be protected by the law, and (3) the violation proximately caused the plaintiff‘s injury. Klanseck v. Anderson Sales & Serv., Inc., 426 Mich. 78, 393 N.W.2d 356, 360 (1986); Vasilakis v. Trott & Trott, P.C., No. 306122, 2012 WL 5854363, at *6 (Mich.Ct.App. Nov. 15, 2012), leave to appeal denied, 495 Mich. 852, 836 N.W.2d 165 (2013). Campbell‘s complaint alleges that she was harmed by “[t]he negligent actions of Defendant Fannie Mae in proceeding with foreclosure publication and the Sheriff‘s Sale without completing a proper investigation and complying with the federal guidelines of Plaintiff‘s modification evaluation.” R. 1-2 at Page ID # 21-22. As
HAMP does not provide plaintiffs with a private right of action, and Campbell has failed to plead essential elements of a negligence claim against Fannie Mae. Accordingly, the district court properly dismissed Campbell‘s negligence claim.
IV. CONCLUSION
For these reasons, we AFFIRM the judgment of the district court.
BENITA Y. PEARSON
UNITED STATES DISTRICT JUDGE
BOGGS
UNITED STATES CIRCUIT JUDGE
McKEAGUE
UNITED STATES CIRCUIT JUDGE
Ralph ROBINSON, Plaintiff-Appellee, v. SHERMAN FINANCIAL GROUP, LLC, Defendant, and Hosto & Buchan, Defendant-Appellant.
No. 14-5334.
United States Court of Appeals, Sixth Circuit.
May 7, 2015.
Before: KETHLEDGE and WHITE, Circuit Judges; LUDINGTON, District Judge.
Notes
Nationstar and Fannie Mae argued that Nationstar‘s letter proves that Campbell failed to provide documentation requested by Nationstar, a precondition to obtaining a loan modification meeting under