Tom Farnsworth v. Nationstar Mortgage, LLC

569 F. App'x 421
CourtCourt of Appeals for the Sixth Circuit
DecidedJune 17, 2014
Docket13-2157
StatusUnpublished
Cited by19 cases

This text of 569 F. App'x 421 (Tom Farnsworth v. Nationstar Mortgage, LLC) 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
Tom Farnsworth v. Nationstar Mortgage, LLC, 569 F. App'x 421 (6th Cir. 2014).

Opinion

BERNICE B. DONALD, Circuit Judge.

In what is becoming an increasingly common issue for us, this appeal focuses on an alleged wrongful foreclosure by advertisement under Michigan law, Mich. Comp. Laws §§ 600.3201-600.3285. See, e.g., Elsheick v. Select Portfolio Servicing Inc., 566 Fed.Appx. 492, 2014 WL 2139140 (6th Cir.2014); Rishoi v. Deutsche Bank Nat’l Trust Co., 552 Fed.Appx. 417 (6th Cir.2013). Here, Tom and Pamela Farnsworth appeal essentially every order from the district court, arguing: (1) that this Court does not properly have jurisdiction and that the district court erred in denying the Farnsworths’ motion to remand the case to state court; (2) that the district *423 court erred in denying the Farnsworths’ motion for a temporary injunction to prevent the expiration of the statutory redemption period for their property; (3) that the district court erred in refusing to set aside the sheriffs sale of their property; and (4) that the district court erred in dismissing all of their claims with prejudice. As explained below, we AFFIRM.

I.

On June 26, 2006, the Farnsworths executed a $118,000 mortgage with Centex Home Equity Company to secure real property in Wyandotte, Michigan. Shortly thereafter, Centex changed its name to Nationstar Mortgage LLC. After Tom Farnsworth lost his job, the Fransworths requested help with their mortgage payments. They purportedly received information indicating that they were eligible for a loan modification, so the Farnsworths sent in the necessary information.- -According to the Farnsworths, they were then relegated to “Paperwork Hell,” which they define as a well-known deceptive process that loan servicers use to ensure that mortgagors cannot pay and thereby ensure a foreclosure. The Farnsworths allege that throughout this process they were eligible for a traditional or in-house loan modification but that Nationstar wanted to reap the “windfall” of a foreclosure and thus failed to work with them.

As the Farnsworths describe their version of paperwork hell, they kept submitting the information Nationstar requested, but Nationstar would keep requesting new or different documents and additional “qualifying payments.” The Farnsworths allege that on two separate occasions they submitted the necessary paperwork and a $1,100 qualifying payment to secure a permanent loan modification. The Farnsworths do not offer any details regarding when they received the information indicating that they were preapproved for a loan modification or when they submitted their information and qualifying payments. On July 17, 2012, the Farnsworths received another letter, which indicated that Nationstar could not process their modification until they submitted a signed and notarized copy of the Loan Modification Agreement and made another qualifying payment of $1,449.36. 1 The Farnsworths did not sign or return this agreement and did not tender the $1,449.36 qualifying payment. The Fransworths were not granted a modification and defaulted on their obligations under the loan.

On June 18, 2012, pursuant to Mich. Comp. Laws § 600.3205a, Nationstar sent notice to the Farnsworths and commenced foreclosure by advertisement. At some unspecified point, the Farnsworths claim that they requested a meeting under Mich. Comp. Laws § 600.3205b but that they were never provided with a meeting. For four consecutive weeks beginning on August 2, 2012, Nationstar published Notices of Foreclosure in the Detroit Legal News, and on August 6, 2012, Nationstar posted the Notice of Foreclosure on the property itself. On August 30, 2012, Nationstar purchased the property at a sheriffs sale. The redemption period was set to expire on March 2, 2013.

*424 On February 20, 2013—ten days before the expiration of the statutory redemption period—the Farnsworths filed suit in Wayne County, Michigan Circuit Court against Nationstar, as well as the unknown trustee for the unknown asset-backed security in which their mortgage was pooled and the trust for the asset-backed security in which their loan was pooled. The Farnsworths brought eight claims: (I) Breach of Contract; (II) Declaratory Relief that the Foreclosure Violates Mich. Comp. Laws § 600.3204(1) & (3); (III) Declaratory Relief that the Foreclosure Violates Mich. Comp. Laws § 600.3205a and § 600.3205c and § 600.3204(4); (IV) Intentional Fraud; (V) Constructive Fraud; (VI) Negligence against Nationstar; (VII) Tortious Interference with Contractual Relations against the Trustee of the asset-backed security; and (VIII) Civil Conspiracy. The complaint contained several allegations regarding the alleged securitization or transfer of the Farnsworths’ loan and claimed that the foreclosure was improper because it involved violations of a pooling-and-service agreement made with an unknown trust.

The same day, the Farnsworths also sought to stay the redemption period by filing a Motion for Preliminary Injunctive Relief. After a hearing, the Wayne County Circuit Court entered an order adjourning the motion and extending the redemption period until April 5, 2013. On March 22, 2013, Nationstar removed the case to the United States District Court for the Eastern District of Michigan on the basis of diversity of citizenship under 28 U.S.C. § 1332(a). On April 2, 2013, in an attempt to stay the running of the redemption period, the Farnsworths filed an Emergency Motion for Temporary Restraining Order (“TRO”) and Renewed Motion for Preliminary Injunctive Relief. The district court denied these motions the next day, finding that the Farnsworths had failed to establish a strong likelihood that their claims would succeed on their merits. On April 19, 2013, Nationstar moved to dismiss the complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6).

On April 22, 2013, the Farnsworths moved to remand and stay dispositive motion practice pending the adjudication of their motion to remand. The district court denied these two motions on June 19, 2013, ruling that the summonses for the unknown defendants were not properly served, that Nationstar was not required to file the summonses of the unknown defendants with its Notice of Removal, that Nationstar was not required to seek the consent of the unknown and improperly served defendants before filing its Notice of Removal, and that there was diversity jurisdiction because the Farnsworths do not dispute diversity between themselves as citizens of Michigan and Nations-tar as a citizen of Delaware and Texas.

On July 12, 2013, the Farnsworths voluntarily dismissed Counts II, VI, VII, and VIII of their complaint. On July 31, 2013, the district court granted Nationstar’s motion to dismiss the Farnsworths’ remaining claims. This appeal ensued.

II.

We first address the Farnsworths’ argument that the district court did not have subject-matter jurisdiction over this case because it erred in refusing to remand the case to Michigan state court. We review the denial of a motion to remand de novo. See, e.g., Caudill v. North Am. Media Corp., 200 F.3d 914, 916 (6th Cir.2000). On appeal, the Farnsworths do not renew their argument from below that there is not diversity of citizenship between the parties.

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569 F. App'x 421, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tom-farnsworth-v-nationstar-mortgage-llc-ca6-2014.