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Ford v. Specialized Loan Servicing, LLC

United States District Court, W.D. Tennessee, Western Division

March 31, 2017

KELVIN FORD and TASHA FORD, Plaintiffs,
v.
SPECIALIZED LOAN SERVICING, LLC, CHASE MORTGAGE COMPANY, SHAPIRO & INGLE, LLP; MARATHON MANAGEMENT, LLC; MARVIN'S GARDEN, LLC, and AUCTION.COM, INC., Defendants.

          ORDER ADOPTING IN PART REPORT AND RECOMMENDATION

          JON P. McCALLA U.S. DISTRICT COURT JUDGE.

         Before the Court is the Magistrate Judge's Report and Recommendation on Plaintiffs' Motion to Amend Amended Complaint (ECF No. 72) and on Defendants' Motions to Dismiss (ECF Nos. 30, 32, 33, 35, and 47), filed on January 24, 2017. (ECF No. 78.) In the Report and Recommendation, the Magistrate Judge recommends that “the motion to amend be granted in part and denied in part, and that the motions to dismiss be granted in part and denied in part.” (Id. at PageID 639.) For the reasons stated below, the Court ADOPTS IN PART the Report and Recommendation.

         I. BACKGROUND

         This pro se case arises out of a foreclosure sale of Plaintiffs' home at 7421 Iris Cove, Memphis, Tennessee. (ECF No. 18.) Plaintiffs allege that Defendants were involved in a wrongful foreclosure of Plaintiffs' home in the following capacities: Defendant Specialized Loan Servicing, LLC (“SLS”) was the alleged servicer of the wrongfully foreclosed loan and acted as an agent of the holder/owner of the loan. (Id. at PageID 100.) Defendant JPMorgan Chase Bank, N.A. (“Chase”) was the alleged holder/owner of the wrongfully foreclosed loan. (Id.) Defendant Shapiro & Ingle, LLP (“SAI”) was the alleged substitute trustee that conducted foreclosure proceedings and functioned as a debt collector for Chase and SLS. (Id.) Defendant Marathon Management, LLC was the alleged agent of Marvin's Garden, LLC, and allegedly evicted Plaintiffs through a proceeding in Shelby County Court. Defendant Marvin's Garden, LLC was the alleged purchaser at the foreclosure sale of the property. Auction.com, Inc. was allegedly employed by SAI to conduct foreclosure proceedings as an auctioneer. The foreclosure sale occurred on June 2, 2016. (ECF No. 18 at PageID 106.)

         Plaintiffs requested an injunction from the Shelby County Chancery Court but no relief was granted. (ECF No. 1-2.) The case was removed to this Court on June 13, 2016. (ECF No. 1.) With leave of the Court, Plaintiffs filed an Amended Complaint on July 13, 2016. (ECF No. 18.) The Amended Complaint asserts the following claims: (1) breach of contract against Chase, SLS, and SAI; (2) breach of the covenant of good faith and fair dealing against Chase, SLS, SAI, and Auction.com; (3) fraud and deceit against Chase, SLS, SAI, and Auction.com; (4) violation of RESPA against Chase and SLS; (5) violation of escrow waving against Chase; (6) quiet title / set aside sale; (7) declaratory judgment that Plaintiffs are the owners of the property and are entitled to its possession. (ECF No. 18.) Plaintiffs request compensatory damages, exemplary and/or punitive damages for fraud and deceit, and are also seeking to quiet title to the property. (ECF No. 18 at PageIDs 114-15.) Defendants filed motions to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12 (b) (6). (ECF Nos. 30, 32, 33, 35, and 47.) Plaintiffs were granted until September 28, 2016 to respond to the motions to dismiss (ECF No. 49); however, Plaintiffs failed to respond by the deadline and Defendants Chase and SLS filed a motion to dismiss for failure to comply with the court's order (ECF No. 78). Plaintiffs filed untimely responses to the motions to dismiss on October 12, 2016 and October 13, 2016 (ECF Nos. 52, 53, 54, 56, and 57), and explained that the responses were untimely due to personal circumstances of “extreme hardship, ” including “death in the family, illness, and an accident resulting in the totaling of a car” (ECF No. 55).

         On November 30, 2017, Plaintiffs filed a motion to amend the Amended Complaint. (ECF No. 72-1.) Defendants Chase, SLS, Marathon, Marvin's, and Auction.com have filed responses in opposition to the motion to amend. (ECF Nos. 73, 74, and 75.)

         On January 24, 2017, the Magistrate Judge issued a Report and Recommendation on Defendants' motions to dismiss the Amended Complaint (ECF Nos. 30, 32, 33, 35, 47), Defendants Chase and SLS's Motion to Dismiss for Failure to Comply with Court Order (ECF No. 50), and Plaintiffs' Motion to Amend the Amended Complaint. (ECF No. 78.) Defendant SAI timely filed objections to the Report and Recommendation on February 6, 2017, asserting the following three objections: (1) the Magistrate erred in disregarding the affidavit of Nicholas Raab (ECF No. 36-1); (2) the Magistrate erred in not analyzing whether SAI's allegedly conduct prejudiced Plaintiff's in some manner; and (3) the Magistrate erred in not analyzing whether SAI was privileged to conduct a foreclosure sale. (ECF No. 79.) No other parties have filed objections to the Report and Recommendation to date.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 72(b)(2) provides that “[w]ithin 14 days after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations.” Fed R. Civ. P. 72(b)(2). “The 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 portions of the Report and Recommendation as to which no specific objections were timely filed are reviewed for clear error. See Fed.R.Civ.P. 72(b) advisory committee notes; Howard v. Sec'y of Health and Human Servs., 932 F.2d 505, 509 (6th Cir. 1991) (noting that when a party makes a general objection, “[t]he district court's attention is not focused on any specific issues for review, thereby making the initial reference to the magistrate useless.”). “A general objection to the entirety of the magistrate's report has the same effects as would a failure to object.” Howard, 932 F.2d at 509. Moreover, the “failure to properly file objections constitutes a waiver of appeal.” See Howard, 932 F.2d at 508 (citing United States v. Walters, 638 F.2d 947, 950 (6th Cir. 1981)).

         III. ANALYSIS

         A. Plaintiffs' Motion to Amend the Amended Complaint

         1. Count 1 - Breach of Contract

         As to Count 1 - Breach of Contract, the Magistrate Judge finds that “the Fords have adequately alleged a violation of the notice requirements contained in the DOT, as well as the statutory requirements.” (ECF No. 78 at PageID 650.) The Magistrate Judge also finds that “the Proposed Complaint plausibly alleges a claim for breach of the DOT against Chase, Shapiro, and Specialized on the grounds that the Fords were not in default.” (Id. at PageID 652.) Lastly, the Magistrate Judge finds that the Proposed Complaint fails to state any claim for a breach of the DOT resulting from either of the following: the initiation of ...


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