Elsman v. Standard Federal Bank

46 F. App'x 792
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 5, 2002
DocketNo. 00-2293, 01-1544
StatusPublished
Cited by4 cases

This text of 46 F. App'x 792 (Elsman v. Standard Federal Bank) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elsman v. Standard Federal Bank, 46 F. App'x 792 (6th Cir. 2002).

Opinion

RYAN, Circuit Judge.

The plaintiffs, James Elsman and Janice Elsman, appeal the district court’s summary judgment for the defendants. In their complaint, the Elsmans alleged a va[794]*794riety of federal statutory and constitutional violations stemming from the defendant Standard Federal Bank’s foreclosure on mortgaged real property the Elsmans owned. In addition, James Elsman appeals the district court’s imposition of sanctions against him in the amount of $16,690.56, granted pursuant to Rule 11 of the Federal Rules of Civil Procedure.

We affirm the district court’s order granting the defendants’ motion to dismiss and/or for summary judgment. However, because the district court failed to identify the basis for the Rule 11 sanctions and failed to conduct any inquiry into the reasonableness of the award amount, we reverse the judgment awarding sanctions and remand the Rule 11 inquiry to the district court for further proceedings.

I. BACKGROUND

While the suit names both James Elsman and Janice Elsman as plaintiffs, the relevant facts concern only James Elsman. James Elsman, a practicing attorney, has served as his own counsel throughout the course of this litigation. In this opinion we address two separate appeals, which we have consolidated for hearing and decision. In appeal No. 00-2293, Elsman challenges the district court’s grant of the defendants’ motion to dismiss and/or for summary judgment, and in appeal No. 01-1544, he addresses the Rule 11 sanctions imposed against him.

Both appeals derive from Standard Federal’s foreclosure on mortgaged property owned by Elsman and subsequent state litigation. The facts of the underlying dispute can be divided into (1) the bank’s foreclosure on Elsman’s real estate and (2) the subsequent seizure of his personal property. We discuss each in turn.

A. Real Property Foreclosure

Over a period of years, Standard Federal provided Elsman a series of loans, including a $320,000 loan for which Elsman gave the bank a promissory note. To secure payment of the note, Elsman granted the bank a mortgage interest in property located in Birmingham, Michigan. When Elsman failed to make timely payments on the loans, the bank foreclosed on the Birmingham property by advertisement and exercised the power of sale contained in the mortgage agreement by holding a sheriffs sale in July 1995. From that action, the bank obtained a sheriffs deed on the property for $277,500. Immediately prior to the expiration of a six-month redemption period, Elsman filed suit in Oakland County Circuit Court claiming that the Michigan foreclosure statutes violated due process. The parties reached a settlement and negotiated a workout schedule, and the case was dismissed with prejudice.

While Elsman largely complied with the agreed workout requirements, which stipulated that he make $8,000 monthly payments, after April 1, 1997, he fell out of compliance with the agreement by failing to obtain the release of a second mortgage. The bank then filed a complaint for possession in Michigan district court. The state district court, granted Standard Federal a judgment of possession on July 31, 1997.

After issuance of the judgment of possession, Elsman filed a motion for reconsideration, which was denied. He then filed numerous appeals in the Michigan courts. During the pendency of these appeals, no writ of restitution issued and the bank was iinable to enforce its judgment of possession. Appeals to the Oakland County Circuit Court, the Michigan Court of Appeals, and the Michigan Supreme Court were unsuccessful. See Standard Fed. Bank v. Elsman, 461 Mich. 898, 607 [795]*795N.W.2d 726 (Mich.2000) (Table); Standard Fed. Bank v. Elsman, 461 Mich. 898, 603 N.W.2d 644 (Mich.1999) (Table).

His state appeals exhausted, Elsman filed suit in federal district court on May 2, 2000, contending that he was being denied his due process right to sell the Birmingham property to a party offering more than the bank’s contracted buyer. After filing his federal complaint, Elsman also filed a notice of lis pendens on the Birmingham property with the Oakland County Register of Deeds. He returned to Michigan state court on May 3, 2000, arguing that the filing of his federal suit stayed the writ of restitution set to issue on that day. The state court denied Elsman’s motion and issued the writ of restitution. Undeterred, on the same day, Elsman appeared in federal district court seeking a temporary restraining order (TRO). At the hearing, Elsman sought the return of personal property that had been seized by Standard Federal, about which more infra, and an order prohibiting further foreclosures. Without issuing an order, the district court did not grant the requested TRO. On June 20, 2000, the writ of restitution on the Birmingham property was finally executed.

B. Personal Property

The second set of facts germane to these appeals concerns Elsman’s personal property, but begins with Standard Federal’s foreclosure on another piece of real property for which Elsman was the mortgagor. The property’s identity is not made clear by the parties, but the foreclosure sale of this second parcel resulted in a deficiency. The Oakland County Circuit Court mediated the dispute and entered a $125,000 judgment in favor of Standard Federal. Elsman made payments on the judgment over two years and claims that he paid approximately $100,000. Nevertheless, Elsman failed to satisfy the judgment and the bank sought, and obtained, an execution against Elsman’s personal property for $44,542. Elsman’s motor vehicle, a van, and some personal property within the van were seized as a result of that action. Elsman alleges that the executing officer and two Birmingham police officers came “storming into” his locked office building to take possession of the property.

C. District Court Proceedings

It was with these events as background, that Elsman filed the federal complaint that is the subject of this appeal. Seeking class certification (Count I) and injunctive relief (Count IX), Elsman challenged the bank’s actions involving the real property in Counts II and III. He also argued the following, relative to the van seizure: that seizure of the van occurred in violation of due process, equal protection, and the Takings Clause (Count IV); § 1983 claims for violation of unnamed Michigan and United States constitutional provisions (Count V); violation of the Truth in Lending Act (TILA), the Consumer Credit Protection Act, and the Fair Debt Collection Act (Count VI); RICO violations (Count VII); and “lender liability” for breach of fiduciary duty, fraud, and violation of good faith and fair dealing (Count VIII).

The defendants filed a motion to dismiss and/or for summary judgment on August 7, 2000, pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 56. At a hearing on the motion, the district court first denied Elsman’s motion to adjourn the proceedings, noting that the briefing schedule had been set out far in advance. The district court then granted the defendants’ motion in cursory fashion. It stated from the bench: “For the reasons that ...

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Triantos v. Guaetta & Benson, LLC
91 F.4th 556 (First Circuit, 2024)
Budowich v. Pelosi
District of Columbia, 2022
Andrew Shirvell v. Deborah Gordon
602 F. App'x 601 (Sixth Circuit, 2015)
Elsman v. Standard Federal Bank (Michigan)
238 F. Supp. 2d 903 (E.D. Michigan, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
46 F. App'x 792, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elsman-v-standard-federal-bank-ca6-2002.