Linda Layton v. Volt Participation Trust 2011-Npl2

CourtMichigan Court of Appeals
DecidedDecember 29, 2016
Docket328878
StatusUnpublished

This text of Linda Layton v. Volt Participation Trust 2011-Npl2 (Linda Layton v. Volt Participation Trust 2011-Npl2) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Linda Layton v. Volt Participation Trust 2011-Npl2, (Mich. Ct. App. 2016).

Opinion

STATE OF MICHIGAN

COURT OF APPEALS

LINDA LAYTON, UNPUBLISHED December 29, 2016 Plaintiff-Appellant,

v No. 328878 Oakland Circuit Court U.S. BANK AND TRUST N.A., AS TRUSTEE LC No. 2015-146395-CH FOR VOLT PARTICIPATION TRUST 2011- NPL2,

Defendant-Appellee.

Before: GADIOLA, P.J., and FORT HOOD and RIORDAN, JJ.

PER CURIAM.

Plaintiff Linda Layton appeals as of right the trial court’s opinion and order granting the motion for summary disposition filed by defendant U.S. Bank and Trust N.A., as Trustee for Volt Participation Trust 2011-NPL2, in this mortgage foreclosure case. We affirm.

I. FACTUAL BACKGROUND

In February 2007, plaintiff executed a $560,000 promissory note in favor of Flagstar Bank, FSB, and a mortgage1 in favor of Mortgage Electronic Registration Systems, Inc., the nominee for Flagstar Bank, FSB, at the time The mortgage granted a security interest in 1722 Pine, Birmingham, MI 48009. Subsequently, the note and mortgage were assigned to multiple other parties. Both are now held by defendant. The mortgage and promissory note have been in default since January 2010, at which time plaintiff stopped making payments.

In 2012, defendant’s predecessor in interest filed a civil action to judicially foreclose on the mortgage (hereinafter “the 2012 case”). After holding a trial, the lower court entered an order in October 2013, which found that defendant’s predecessor in interest had failed to provide sufficient evidentiary support for its case and dismissed the case in favor of plaintiff (who was

1 More than one mortgage encumbered plaintiff’s property during the previous cases referenced in this appeal. However, because only one mortgage is at issue in this appeal, we will refer to that mortgage singularly.

-1- the defendant in that case). Defendant’s predecessor in interest appealed this decision, but voluntarily withdrew its appeal. Vericrest Opportunity Loan Trust 2011-NPL2 v Linda Layton, unpublished order of the Court of Appeals, entered September 16, 2014 (Docket No. 318717). While the appeal was pending, plaintiff filed a post-judgment motion, arguing that the trial court should strike the mortgage because the doctrine of res judicata barred a future foreclosure of the mortgage in light of the trial court’s October 2013 order dismissing the judicial foreclosure action in favor of plaintiff. The trial court disagreed and denied plaintiff’s motion.

In December 2013, plaintiff initiated a new action to quiet title (hereinafter “the 2013 case”), through which she sought to extinguish the mortgage based on the trial court’s ruling in the 2012 case. In particular, she contended that the mortgage was no longer enforceable, yet continued to encumber her property. Defendant2 filed a motion for summary disposition under MCR 2.116(C)(8) and (C)(10), arguing that (1) the trial court could not discharge the mortgages because plaintiff had not satisfied the debt and the statutory requirements to discharge a debt had not been met in that case; (2) plaintiff was barred from seeking equitable relief because she had unclean hands; (3) the trial court never ruled in the 2012 action that the mortgage was invalid or that defendant was precluded from pursuing other remedies, including a foreclosure by advertisement; and (4) plaintiff’s claims were barred under the doctrines of res judicata and judicial estoppel. In response, plaintiff argued that summary disposition in her favor was proper pursuant to MCR 2.116(I)(2) and MCR 2.116(C)(10), contending, for a variety of reasons, that the mortgage should be discharged because the dismissal of the 2012 case prevented defendant from initiating another foreclosure or otherwise enforcing the mortgage. In reply, defendant reiterated its arguments that “the law does not provide that a mortgage is automatically unenforceable if a mortgagee is unsuccessful in a judicial foreclosure action,” and that it remained entitled to other remedies after the 2012 case was dismissed.

In July 2014, the trial court granted summary disposition in defendant’s favor. Most relevant to the instant appeal, the court specifically recognized that “[d]efendant has other remedies available even though judicial foreclosure may now be unavailable,” and that “[d]efendant’s authorities additionally reflect that foreclosure by advertisement may be pursued notwithstanding dismissal of the prior judicial foreclosure action in the circumstances of this case.” The court also noted that “foreclosures by advertisement are governed by a different

2 The defendant in the 2013 case was Volt Participation Trust 2011-NPL2, not U.S. Bank and Trust N.A., as Trustee for Volt Participation Trust 2011-NPL2. Based on the assignment documents in the record, it appears that Volt Participation Trust 2011-NPL2 may technically be a predecessor in interest to U.S. Bank and Trust N.A., as Trustee for Volt Participation Trust 2011- NPL2, with regard to this mortgage. However, defendant refers to itself as being a party in both the 2013 case and the instant case, and the distinction has no effect for purposes of the res judicata issues addressed in this appeal. See Peterson Novelties, Inc v City of Berkley, 259 Mich App 1, 11-13, 13 n 9; 672 NW2d 351 (2003) (describing the role of a privy in the context of res judicata). Thus, we will refer to defendant as being a party to both the 2013 case and the instant case.

-2- statute than the judicial foreclosure statute, may proceed outside the court system, and are not prohibited merely because there was a defect or irregularity in a prior attempt to foreclose.”

In March 2015, defendant initiated a foreclosure by advertisement. In April 2015, plaintiff filed a complaint against defendant, which initiated the action giving rise to the instant appeal. Plaintiff alleged that defendant was improperly seeking to foreclose by advertisement on plaintiff’s property, thereby “seek[ing] money already determined by [the trial court] that Plaintiff did not owe Defendant because Defendant did not prove Plaintiff had defaulted on her mortgage.” Accordingly, plaintiff alleged that defendant’s foreclosure by advertisement was barred by Michigan law for various reasons, including, among other things, the fact that “an action or proceeding has been instituted, at law, to recover the debt secured by the mortgage, and, therefore, a foreclosure by advertisement is no longer available under the statute.” Therefore, plaintiff requested that the trial court “nullify any attempt to foreclosure by advertisement” and enter an order “compel[ling] Defendant to comply with MCL 600.3204 and[/]or compel any foreclosure to come before [the trial court].”

A sheriff’s sale was held on April 7, 2015, and defendant was the highest bidder. Accordingly, defendant was entitled to acquire ownership of the property when the redemption period expired on October 7, 2015.

On June 17, 2015, defendant filed a motion for summary disposition pursuant to MCR 2.116(C)(7), (C)(8), and (C)(10). Defendant first argued that it was entitled to summary disposition under MCR 2.116(C)(7) because plaintiff’s claims were barred under the doctrines of res judicata and collateral estoppel, as the issues of whether defendant could enforce the mortgage and pursue a foreclosure by advertisement were adjudicated by the trial court in the 2013 case. Defendant also argued that plaintiff had failed to state a claim on which relief can be granted, as plaintiff failed to plead allegations providing any factual or legal basis for concluding that defendant’s foreclosure by advertisement violated MCL 600.3204(1) and, instead, solely relied on the 2012 case, which did not affect defendant’s right to initiate a foreclosure by advertisement.

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Bluebook (online)
Linda Layton v. Volt Participation Trust 2011-Npl2, Counsel Stack Legal Research, https://law.counselstack.com/opinion/linda-layton-v-volt-participation-trust-2011-npl2-michctapp-2016.