Haddad v. Randall S. Miller Associates, PC

Summarized by J. Debbeler , Bricker Graydon LLP
11 years 4 months ago

Citation:

14a0791n.06; Case No. 13-2492; Not recommended for full-text publication

Tag(s):

Ruling:

Sixth Circuit affirmed District Court's grant of a Fed. R. Civ. P. 12(b)(6) motion by mortgagee's counsel to dismiss an action filed by mortgagors against mortgagee's counsel under the Fair Debt Collection Practices Act (FDCPA). Mortgagors alleged mortgagee's counsel improperly completed a foreclosure against them by advertisement under Michigan law.

Procedural context:

Mortgagee filed foreclosure against mortgagors in Michigan state court. Mortgagors filed an answer with defenses and counterclaims. Mortgagors then filed a Chapter 7 bankruptcy. The state foreclosure case was closed for administrative purposes. The mortgagors did not dispute the debt in their schedules and indicated they wanted to reaffirm the debt. Post- discharge the mortgagee filed a foreclosure by advertisement and mortgagee bought property in a credit bid. Mortgagors then sued the mortgagee's counsel for FDCPA violations. Counsel removed the action to District Court and filed the Rule 12(b)(6) motion which was granted.

Facts:

Husband and wife wanted to refinance two residential mortgage loans. At closing husband signed wife's name on the loan documents. Foreclosure was filed then stayed by mortgagors Chapter 7. The debtors did not claim any invalidity of the mortgage in the bankruptcy. After the bankruptcy the mortgagee filed a foreclosure by advertisement on the grounds the first case had been discontinued- a requirement for foreclosure by advertisement. Mortgagee acquired title. Mortgagors then filed the FDCPA suit in state court which was removed to District Court. District Court granted the Rule 12(b)(6) motion filed by mortgagee's counsel. Sixth Circuit found that mortgagors were estopped to claim invalidity of mortgage due to failure to indicate mortgage was invalid in the Chapter 7 schedules. Further, the first case was administratively discontinued under Michigan law.

Judge(s):

Siler, Batchelder and Donald, Circuit Judges

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