United States District Court, W.D. Tennessee, Eastern Division
ORDER ADOPTING IN PART AND REJECTING IN PART REPORT AND RECOMMENDATION
J. DANIEL BREEN, Chief District Judge.
Before the Court are the February 10, 2015, motion of Plaintiffs, Baron and Kimberly Jimmerson, for a temporary injunction, (D.E. 7); the February 5, 2015, motion of Wilson & Associates, PLLC (Wilson & Associates), to dismiss for failure to state a claim, (D.E. 8; D.E. 8-1); and the February 11, 2015, motion of Nationstar Mortgage, LLC (Nationstar), to dismiss for failure to state a claim, (D.E. 10). United States Magistrate Judge Edward G. Bryant entered a report and recommendation on March 27, 2015, advising the undersigned that, in his opinion, the motion for a temporary injunction should be denied and the motions to dismiss should be granted. (D.E. 17.) No objections have been filed, and, upon review of the briefs, the report and recommendation is hereby ADOPTED IN PART and REJECTED IN PART.
By enacting 28 U.S.C. § 636, Congress intended "to relieve some of the burden on the federal courts by permitting the assignment of certain district court duties to [magistrate judges.]" United States v. Curtis, 237 F.3d 598, 602 (6th Cir. 2001). When a report and recommendation prepared by a magistrate judge concerns a dispositive motion, upon the filing of objections, "[t]he district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to." Fed.R.Civ.P. 72(b)(3). "The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Id. Where no objections have been filed, "the statute does not require the judge to review an issue de novo, " yet "it does not preclude further review by the district judge, sua sponte or at the request of a party, under a de novo or any other standard." Thomas v. Arn, 474 U.S. 140, 154 (1985); see also Arora v. Life Ins. Co. of N. Am., No. 12-CV-13773, 2015 WL 1510397, at *1 (E.D. Mich. Mar. 31, 2015) ("[A]s a district judge always retains jurisdiction over a motion after referring it to a magistrate judge, a district judge is entitled to review the magistrate judge's findings of fact and conclusions of law." (citing Thomas, 474 U.S. at 154)). To clarify an important point of procedural law, the Court will exercise its discretion to review the report and recommendation absent an objection. See Kaufman v. Carter, 952 F.Supp. 520, 525 (W.D. Mich. 1996).
On January 21, 2015, the Jimmersons filed a petition in the Madison County, Tennessee, Chancery Court to set aside a foreclosure sale of their Jackson, Tennessee, property and requested a temporary restraining order against Defendants preventing them from beginning eviction proceedings. Plaintiffs argued that they did not receive notice of the sale and that the public notice was made only in Memphis's Daily News, which, according to Plaintiffs was not in general circulation in Jackson. The chancery court granted the temporary restraining order. Wilson & Associates filed a motion to dismiss the petition, and, on February 4, 2015, Nationstar filed a notice of removal in this Court. On February 10, 2015, Plaintiffs moved this Court to grant a preliminary injunction. The next day, Nationstar joined the motion to dismiss and filed a memorandum providing further support. The Court referred the pending motions to the magistrate judge for a report and recommendation on February 18, 2015.
As an initial matter, the Court adopts the portion of the report and recommendation concerning the motion for a preliminary injunction. The magistrate judge applied the correct standard and properly denied the motion because Plaintiffs could not show a likelihood of success on the merits. See Child Evangelism Fellowship of Ohio, Inc. v. Cleveland Metro. Sch., ___ F.Appx. ___, 2015 WL 1261402, at *4 (6th Cir. 2015) ("Because [the plaintiff] cannot demonstrate a likelihood of success on the merits of its claim, we need not consider the other preliminary injunction factors.").
Regarding the motion to dismiss, Rule 12 permits a court to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss for failure to state a claim, a district court should "construe [the] complaint in the light most favorable" to the non-moving party and accept all "well-pled allegations as true." Terry v. Tyson Farms, Inc., 604 F.3d 272, 274 (6th Cir. 2010) (citing Jones v. City of Cincinnati, 521 F.3d 555, 559 (6th Cir. 2008)). A claim is well-pled when "it contains either direct or inferential allegations respecting all material elements' necessary for recovery under a viable legal theory." Phil. Indem. Ins. Co. v. Youth Alive, Inc., 732 F.3d 645, 649 (6th Cir. 2013) (quoting Terry, 604 F.3d at 275-76). The complaint must also "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Reilly v. Vadlamudi, 680 F.3d 617, 622-23 (6th Cir. 2012) (quoting Iqbal, 556 U.S. at 678).
In considering a Rule 12(b)(6) motion, however, a court must generally only consider matters within the pleadings. Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 487 (6th Cir. 2009). "If... matters outside the pleadings are presented to and not excluded by the [C]ourt, the motion must be treated as one for summary judgment under Rule 56." Fed.R.Civ.P. 12(d) (emphasis added). When the parties present extrinsic evidence, therefore, the Court has discretion over whether to consider it. Ky. State Dist. Council of Carpenters, AFL-CIO v. Wehr Const., Inc., No. 92-5931, 1993 WL 288277, at *4 n.2 (6th Cir. 1993) (per curiam). "Only when such consideration is actually made, however, is an initial motion to dismiss for failure to state a claim upon which relief can be granted to be treated as a motion for summary judgment." Id.
The report and recommendation relied, in part, on information submitted in an affidavit in denying the motion to dismiss. As stated above, this reliance would convert the motion to dismiss to one for summary judgment, making the Rule 56 standard applicable. Therefore, to the extent the report and recommendation considered the affidavit in connection with the motion to dismiss, it is rejected.
Even without the affidavit, however, the motion to dismiss should still be granted. In their chancery court petition,  The Jimmersons state that they are entitled to have the foreclosure set aside because "one of the Plaintiffs did not receive actual notice of the sale" and that the sale was not properly advertised under the terms of the deed of trust. (D.E. 1-2 at 7.)
Section 22 of the deed of trust provides that,
[i]f Lender invokes the power of sale, Trustee shall give notice of sale by public advertisement in the county in which the Property is located for the time and in the manner provided by Applicable Law, and Lender or Trustee shall mail a copy of the notice of sale to Borrower in the manner provided in Section 15.
(Id. at 20.) In turn, Section 15 states that
[a]ll notices... must be made in writing. Any notice... shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise.
(Id. at 18.) The agreement defines "Applicable Law" as "all controlling applicable federal, state[, ] and local statutes, regulations, ordinances[, ] and administrative rules and orders (that have the force of law)[, ] as well as all ...