Brimm v. Wells Fargo Bank, N.A., CIV. NO. 15-11327

ROBERT T. BRIMM, Plaintiff, v. WELLS FARGO BANK, N.A., and U.S. BANK NATIONAL ASSOCIATION,as Trustee for SASCO Mortgage Loan Trust 2006-WF3, Defendants.

CIV. NO. 15-11327

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

June 28, 2016

HON. TERRENCE G. BERG

OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS OR FOR SUMMARY JUDGMENT (DKT. 8)

This is a consumer lending action in which Plaintiff Robert Brimm ("Plaintiff") seeks to set aside a completed sheriff's sale due to alleged improprieties during the mortgage foreclosure process and Defendants' alleged refusal to grant Plaintiff a mortgage loan modification. Plaintiff's Complaint alleges six claims: (1) bad faith, premised on Defendants' refusal to modify Plaintiff's mortgage; (2) violation of the Real Estate Settlement Procedures Act (RESPA); (3) negligence, based upon Defendants' alleged breach of a duty of modify Plaintiff's mortgage; (4) wrongful foreclosure, premised upon Defendants' alleged failure to properly post and publish the foreclosure notice and improper calculation of Plaintiff's past due balance; (5) breach of contract and breach of implied covenant of good faith and fair dealing, based again upon Defendants' refusal to modify Plaintiff's mortgage; and (6) fraudulent misrepresentation, premised upon Defendants' allegedly unfulfilled promises to modify Plaintiff's mortgage and suspend foreclosure proceedings.

Defendants have filed a motion to dismiss or for summary judgment (Dkt. 8). Plaintiff filed a response brief (Dkt. 11), and Defendants filed a reply (Dkt. 12). The Court heard oral argument on December 16, 2015. Following the hearing, Plaintiff filed a supplemental brief with additional exhibits (Dkt. 14). Having considered the parties' arguments and the exhibits presented to the Court, Defendants' motion (Dkt. 8) is GRANTED and Plaintiff's Complaint is DISMISSED WITH PREJUDICE.

BACKGROUND

On June 28, 2006, Plaintiff obtained a $275,000 mortgage loan from Wells Fargo (the "Loan") (Dkt. 1; Compl. at ¶ 6). The Loan refinanced two existing loans, and Plaintiff also received $3,516.22 "cash-out" at the closing (Dkt. 8, Ex. 1). The Loan was secured by a mortgage on the Property (the "Mortgage"). Id. The Mortgage was recorded. Id. The Mortgage was later assigned to US Bank, in its capacity as trustee of the SASCO Mortgage Loan Trust 2006-WF3. Id. at ¶ 7.

In July 2008, Plaintiff fell behind in making his mortgage payments (Dkt. 8, Ex. 3). Plaintiff remained in default into 2009 (Dkt. 8, Ex. 4). In April 2009, Defendant Wells Fargo agreed to a payment plan in an attempt to allow Plaintiff to catch up on his payments (Dkt. 8, Ex. 5). Despite this accommodation, Plaintiff remained behind in his mortgage payments into July 2009 (Dkt. 8, Ex. 6).

Defendant Wells Fargo continued to work with Plaintiff and, on or about July 23, 2009, agreed to modify the Loan (Dkt. 8, Ex. 7). Despite this modification, Plaintiff continued to default in making his payments.

Defendant continued to work with Plaintiff to assist him to become current on the Loan. For example, on April 22, 2010, Defendant agreed to modify the Loan a second time to capitalize past due interest and approximately $10,000 that Defendant had advanced on Plaintiff's behalf (Dkt. 8, Ex. 8). Despite this second modification, Plaintiff continued to default on making payments. In October 2010, Plaintiff filed for Chapter 7 bankruptcy (Dkt. 8, Ex. 9).

By June 2012, Plaintiff had again defaulted on the Loan, and his past due balance exceeded $39,000 (Dkt. 8, Ex. 15). Plaintiff then sought a Home Affordable Modification Program (HAMP) loan modification, but that request was denied as Plaintiff failed to provide all the required documentation (Dkt. 8, Ex. 16). Later, after a full review, Plaintiff's request for a HAMP modification was denied because the modified payment would be less than 25% of Plaintiff's monthly income (Dkt. 8, Ex. 17). Because Plaintiff's request for a loan modification was denied, Defendant declared the Loan in default (Dkt. 8, Exs. 18, 19).

Approximately six months later, on or about January 10, 2013, Plaintiff again requested a loan modification. Plaintiff was informed in writing at various times through 2013 that he simply did not qualify for either a HAMP or a non-HAMP modification because of HAMP limitations on income and because the Loanhad already been modified twice before (Dkt. 8, Exs. 20, 21, 22 and 23). Defendant did, however, agree to another repayment plan, during which Defendant was working with Plaintiff to obtain "Step Forward" assistance from the State of Michigan (Dkt. 8, Ex. 24). By August 2013, Plaintiff's Step Forward application was denied because the Loan's past due balance exceeded state limits. Id. However, Defendant offered to continue working with Plaintiff regarding further Loan assistance (Dkt. 8, Ex. 25). On September 30, 2013, filed for Chapter 13 bankruptcy protection (Dkt. 8, Ex. 26). Plaintiff's bankruptcy case was later dismissed, on December 18, 2013, when Plaintiff failed to appear for a meeting of creditors. Id.

On February 10, 2014, Plaintiff again requested mortgage assistance from Defendant (Dkt. 8, Ex. 27). Plaintiff was again sent paperwork to apply for HAMP assistance (Dkt. 8, Ex. 28). By April 1, 2014, Plaintiff's Mortgage was again referred to counsel for foreclosure (Dkt. 8, Ex. 29). On April 7, 2014, Defendant sought updated financial information for Plaintiff's request for a loan modification (Dkt. 8, Ex. 30). Once the requested documents were received, Plaintiff was told "there may be additional documents required before we can determine if you're eligible for mortgage assistance" (Dkt. 8, Ex. 31). However, the foreclosure process continued, and on April 16, 2014, US Bank, in its role as trustee, began a judicial foreclosure action, due in part to questions concerning one of the junior liens on the Property (Dkt. 8, Ex. 32).

On May 7, 2014, Plaintiff was informed in writing that he did not qualify for a HAMP modification (Dkt. 8, Ex. 33). The same day Plaintiff was informed that hedid not qualify for a non-HAMP modification or for any other repayment plan (Dkt. 8, Ex. 34). Plaintiff was also told that he could appeal those decisions. Id. On June 13, 2014, Plaintiff appealed of his mortgage assistance denial (Dkt. 8, Ex. 35). Plaintiff was also told that normal collection processes would continue (Dkt. 8, Ex. 36). On July 16, 2014, Plaintiff was informed of the options, in lieu of foreclosure, of agreeing to a surrender the deed to the lien holder or conducting a short-sale (a sale of the home for less than the outstanding amount of the mortgage indebtedness) in which the proceeds of the sale would be provided to the lender in payment of the loan. (Dkt. 8, Ex. 37). The record submitted by the parties does not indicate that Plaintiff availed himself of either of these options. Thus, on August 20, 2014, Plaintiff was told that the foreclosure sale had been scheduled for September 23, 2014 (Dkt. 8, Ex. 38). Two days earlier, on August 18, 2014, Plaintiff filed for Chapter 13 bankruptcy protection for a second time (Dkt. 8, Ex. 39).

On November 22, 2014, Plaintiff's bankruptcy case was dismissed (Dkt. 8, Ex. 42). On December 30, 2014, Plaintiff was informed that the Property would go to a sheriff's sale on January 6, 2015 (Dkt. 8, Ex. 43). That sale occurred as scheduled (Dkt. 8, Ex. 44).¹ The redemption period expired July 6, 2015. On March 30, 2015, Plaintiff filed this case challenging the foreclosure in the Oakland County Circuit Court (Dkt. 1). On April 10, 2015, Defendants removed the case to this Court. Id. The Court referred this matter to facilitation with Richard Hurford (Dkt. 5), afacilitator specifically trained in settling mortgage foreclosure litigation. However, facilitation did not result in a settlement.

STANDARD OF REVIEW

A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the plaintiff's complaint. Accepting all factual allegations as true, the Court reviews the Complaint in the light most favorable to the plaintiff. See Eidson v. Tennessee Dep't of Children's Servs. 510 F.3d 631, 634 (6th Cir. 2007). To survive a motion to dismiss, the Complaint must state sufficient "facts to state a claim to relief that is plausible on its face." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The Complaint must demonstrate more than a sheer possibility that the defendant's conduct was unlawful. Id. at 556. Claims comprised of "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. Rather, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

To the extent that a plaintiff alleges fraudulent conduct on the part of the defendants, such allegations also must satisfy the heightened pleading requirements of Rule 9(b), which provides that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." See Fed. R. Civ. P. 9(b). To satisfy Rule 9(b), a complaint must "(1)specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Frank v. Dana Corp., 547 F.3d 564, 569-70 (6th Cir. 2008) (internal quotation marks and citation omitted). At a minimum, the plaintiff must allege the time, place and contents of the misrepresentations upon which he or she relies. Id. (citing Bender v. Southland Corp., 749 F.2d 1205, 1216 (6th Cir. 1984)).

In ruling on a motion to dismiss, the Court primarily considers the allegations in the Complaint; although matters of public record, orders, items appearing in the...