UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

GAIL S. PANNY,

No. 2:14-cv-13866

Plaintiffs, Hon. Arthur J. Tarnow

Magistrate: David R. Grand

v Lower Court No. 14-142723-CH

Hon. Denise Langford Morris

BANK OF AMERICA, NA; PENNYMAC LOAN SERVICES, 

LLC; and CITI INVESTMENT GROUP CORP; 

Defendants.

__________________________________________________________________

GANTZ ASSOCIATES DICKINSON WRIGHT PLLC

By: Adam J. Gantz (P58558) By: KJ Miller (P62014)

Attorneys for Plaintiff Attorneys for PennyMac 

31275 Northwestern Highway, Suite 208 350 S. Main Street, Suite 300

Farmington Hills, MI 48334 Ann Arbor, MI 48104-2131

Tel: (248) 987-6505 Tel: (734) 623-7075

agantz@gantzassociates.com kjmiller@dickinsonwright.com

 

DICKINSON WRIGHT PLLC

By: Amy Sabbota Gottlieb (P67020) PLAINTIFF’S BRIEF IN 

 Farayha J. Arrine (P73535) RESPONSE TO PENNYMAC

Attorneys for Bank of America LOAN SERVICES, LLC’S

2600 West Big Beaver Road, Suite 300 MOTION TO DISMISS 

Troy, MI 48084 AMENDED COMPLAINT

Tel: (248) 433-7286

agottlieb@dickinsonwright.com

farrine@dickingsonwright.com

__________________________________________________________________

Plaintiff, Gail S. Panny, through her attorneys, Gantz Associates, hereby 

submits the following Brief in Response to the Motion for Summary Judgment 

filed by Defendant, Pennymac Loan Services, LLC (“Pennymac”). 

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TABLE OF CONTENTS

I. STATEMENT OF ISSUES PRESENTED........................................ii

II. STATEMENT OF CONTROLLING AUTHORITY..........................iii-iv

III. STATEMENT OF FACTS........................................................1-3

IV. LAW AND ANALYSIS.........................................................3-23

A. Pennymac is a necessary party to Plaintiff’s claims for 

declaratory relief requesting that the court set aside a sale in 

which Pennymac was the seller, and compel Pennymac to 

refund the sale proceeds to the purchaser.........................3-5

1. The Sheriff’s Deed is void ab initio, because it was 

issued in direct violation of the TRO................5-7

2. The Sheriff’s Deed is void ab initio, because the 

purchaser had previously surrendered its authority 

to transact business in Michigan....................7-8

3. The Sheriff’s Deed should be voided in the 

interests of justice.....................................8-10

4. Citi is violating the redemption statute.........10-11

B. Pennymac is not entitled to judgment on the pleadings..12-23

C. Plaintiff has suffered prejudice by the issuance of a sheriff’s 

deed in violation of a TRO.....................................23-25

V. CONCLUSION AND REQUEST FOR RELIEF.............................25

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STATEMENT OF ISSUES PRESENTED

1. Is Pennymac a necessary party to Plaintiff’s claims for declaratory 

relief seeking the Court to force Pennymac to cancel a sheriff’s sale in which 

Pennymac was the seller, and to compel Pennymac to refund over a half million 

dollars in sheriff’s sale proceeds to Citi? 

Plaintiff’s answer is “yes”.

The Mortgagee/Servicer Defendants’ answer is presumably “no”.

Citi’s answer is presumably “no”.

The Court’ answer should be “yes”.

2. Is a Sheriff’s Deed issued in violation of a TRO void ab initio, due to 

a structural defect that goes to the heart of the foreclosure? 

Plaintiff’s answer is “yes”.

The Mortgagee/Servicer Defendants’ answer is presumably “no”.

Citi’s answer is presumably “no”.

The Court’ answer should be “yes”.

3. Does the issuance of a Sheriff’s Deed in favor of a company that 

previously surrendered its authority to transact business in Michigan constitute a 

structural defect that goes to the heart of the foreclosure, rendering the Sheriff’s 

Deed void? 

Plaintiff’s answer is “yes”.

The Mortgagee/Servicer Defendants’ answer is presumably “no”.

Citi’s answer is presumably “no”.

The Court’ answer should be “yes”.

4. To the extent that a Sheriff’s Deed issued in violation of a TRO is 

voidable as opposed to void, does this case present any of the limited equitable 

circumstances which would authorize the Court to refuse to void the Sheriff’s 

Deed? 

Plaintiff’s answer is “no”.

The Mortgagee/Servicer Defendants’ answer is presumably “yes”.

Citi’s answer is presumably “yes”.

The Court’ answer should be “no”.

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STATEMENT OF CONTROLLING AUTHORITY

Plaintiff relies upon Fed. R. Civ. P. 12(b)(6), which tests the legal 

sufficiency of a complaint. Memphis, Tenn. Area Local, Am. Postal Workers Union 

v. City of Memphis, 361 F.3d 898, 902 (6th Cir. 2004.) In deciding a Fed. R. Civ. 

P. 12(b)(6) motion, a district court must view the complaint in the light most 

favorable to the plaintiff, and take all well-pleaded factual allegations as true, as 

the moving party has the burden of proving that no claim exists. Erickson v. 

Pardus, 550 U.S. 89 (2007). 

Fed. R. Civ. P. 8(a)(2) requires only “a short and plain statement of the 

claim showing that the pleader is entitled to relief. Specific facts are not necessary; 

the statement need only give the defendant fair notice of what the ... claim is and 

the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 

555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In addition, “[A] plaintiff will not be 

thrown out of court on a Fed. R. Civ. P. 12(b)(6) motion for lack of detailed facts.” 

In re Tower Air, Inc., 416 F.3d 229, 237 (3d Cir. 2005).

Plaintiff further relies upon Fed. R. Civ. P. 19(a)(1), which absolutely 

required Plaintiff to name Pennymac as a Defendant to its claims for declaratory 

relief seeking to either set aside or effectuate a redemption of a sheriff’s deed 

wherein Pennymac is the seller, and Plaintiff’s claims include the request that the 

Court forcibly compel Pennymac to refund the sheriff’s sale purchase price to Citi. 

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Plaintiff further relies upon Davenport v. HSBC, 275 Mich. App. 344, 739 

N.W.2d 383 (2007), which was applied in Federal Court in this Circuit in Mitan v 

Fed Home Loan Mortgage Corp, 703 F.3d 949 (CA6, Dec 12, 2012), and requires 

that the Sheriff’s Deed at issue is absolutely void, ab initio, because it was 

conducted in violation of a TRO, which constitutes a structural defect going to the 

heart of the foreclosure process.

Plaintiff next relies upon Davenport v. HSBC, 275 Mich. App. 344, 739 

N.W.2d 383 (2007), once again, in support of her claim that the Sheriff’s Deed is 

void ab initio, because Citi had surrendered its authority to transact business in the 

State of Michigan several months before Citi transacted business in the State of 

Michigan by purchasing the Property at sheriff’ sale. 

Plaintiff next relies upon Easley v. Pettibone Michigan Corporation, 990 

F.2d 905 (Cir 6, 1993), given that, to the extent the Sheriff’s Deed is voidable as 

opposed to merely void, the limited equitable circumstances which would justify 

the Court in refusing to void the Sheriff’s Deed simply are not present in this case.

Finally, Plaintiff relies upon MCL 600.3248, which governs the 

requirements of the parties with respect to the redemption of mortgages from 

sheriff’s sale.

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STATEMENT OF FACTS

Plaintiff owns and resides in the real property at issue in this action, which is 

located in the City of West Bloomfield, County of Oakland, State of Michigan, and 

is legally described as follows:

T2N, R9E, Sec. 11, Lot 2, Supervisor’s Plat #17, according to the Plat 

thereof as recorded in Liber 71, Page 16 of Plats, Oakland County 

Records,

Tax I.D. No. 18-11-451-020, commonly known as 3700 Orchard Lake Road, 

Orchard lake, MI 48324-1642 (the “Property”).

The Property has been Plaintiff’s home for almost 30 years, and she intends 

to spend her golden years in this beautiful, Pine Lake front condominium. 

Unfortunately, Plaintiff, who is a prison chaplain, suffered a financial 

hardship last year, causing her to fall behind in her Mortgage. She attempted to 

work with her lender, but the lender insisted on foreclosing, presumably because 

the property is such a valuable piece of lakefront land.

As such, Plaintiff filed suit in the Oakland County Circuit Court, on 

September 4, 2014, seeking a Temporary Restraining Order (“TRO”), restraining 

and enjoining the sheriff’s sale of the Property until a show cause hearing on the 

merits. (See TRO – Ex. “A”.)

Counsel for Plaintiff sent the TRO to the foreclosing law firm, via facsimile, 

and attempted to follow up with a telephone call, to ensure that sheriff’s sale 

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scheduled for but the foreclosing law firm was having serious technical difficulties 

with all of their communications, i.e. no phone lines, no fax lines, no internet, no 

email, etc.

As a result of the technical difficulties at the foreclosing law firm, the 

foreclosing law firm was unaware of the entry of the TRO, and innocently sold the 

Property at sheriff’s sale to third party, Citi Investment Group Corp. (“Citi”), on 

September 9, 2014, i.e. during the 14 day window that the TRO was in full effect, 

and strictly barred the sheriff’s sale. (See TRO – Ex. “A”; and Sheriff’s Deed –

Ex. “B”.)

Immediately upon learning of the Sheriff’s Deed, counsel for Plaintiff 

contacted the foreclosing law firm, and spoke to counsel for Defendant in this 

litigation, as well, and it was agreed by Plaintiff, the foreclosing law firm, Bank 

of America, and PennyMac, that the Sheriff’s Deed was issued in error, in an 

unintentional violation of the TRO, and that the same is required to be set 

aside, with the purchase price and interest refunded to Citi.

Accordingly, since approximately October 1, 2014, counsel for Defendant 

has been attempting to negotiate the refund amount with Citi, to no avail. Put 

plainly, Citi was illegally attempting to take advantage of this innocent mistake by 

the foreclosing law firm, to obtain a windfall profit as a result of its attempt to 

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purchase the Property in circumvention of the TRO issued by Judge Langford 

Morris. 

However, at some point in 2015, something changed. Apparently with dollar 

signs in their eyes for their clients, and having lost any feelings of concern for the 

fact that a sheriff’s sale has been conducted in violation of a TRO, counsel for 

Pennymac and Bank of America ceased attempting to comply with the law, ceased 

attempting to void the sheriff’s sale, and instead cut off communications with 

counsel for Citi and counsel for Plaintiff, seemingly pulling all previous offers of 

settlement off the table, in an apparent new strategy of running out the clock and 

obtaining an Opinion from this Court on their Motions to Dismiss on the pleadings, 

in an attempt to allow the void transaction to go through, so their clients could 

keep the substantial sheriff’s sale proceeds of over half a million dollars, thus 

prompting the Plaintiff’s requirement to file this Brief. 

LAW AND ANALYSIS

A. PENNYMAC IS A NECESSARY PARTY TO PLAINTIFF’S CLAIMS

FOR DECLARATORY RELIEF REQUESTING THAT THE COURT 

SET ASIDE A SALE IN WHICH PENNYMAC WAS THE SELLER, 

AND COMPEL PENNYMAC TO REFUND THE SALE PROCEEDS 

TO THE PURCHASER.

Pennymac claims that it is entitled to judgment on the pleadings against 

Plaintiff’s claims for declaratory relief to set aside the sheriff’s deed and/or allow 

Plaintiff to effectuate a redemption of the same, because “Plaintiff does not – and 

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cannot – allege that Pennymac violated any laws by foreclosing.” See Pennymac’s 

Motion, Doc. #21, at pgs. 19-20.) 

Pennymac misses the point entirely! Pennymac is not being sued for 

intentional misconduct. Pennymac is being sued because, as the seller at sheriff’s 

sale, it is a necessary party to claims seeking to set aside and/or redeem that very 

same sheriff’s sale. 

In fact, had Plaintiff not named Pennymac as a Defendant in this case, it 

would have been a violation of the Federal Rules of Civil Procedure!

Fed. R. Civ. P. 19(a)(1) states as follows:

(a) Persons Required to Be Joined if Feasible.

(1) Required Party. A person who is subject to service of 

process and whose joinder will not deprive the court of 

subject-matter jurisdiction must be joined as a party if:

(A) in that person's absence, the court cannot 

accord complete relief among existing parties; or

(B) that person claims an interest relating to the 

subject of the action and is so situated that 

disposing of the action in the person's absence 

may:

(i) as a practical matter impair or 

impede the person's ability to protect 

the interest; or

(ii) leave an existing party subject to a 

substantial risk of incurring double, 

multiple, or otherwise inconsistent 

obligations because of the interest.

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(2) Joinder by Court Order. If a person has not been 

joined as required, the court must order that the person be 

made a party. A person who refuses to join as a plaintiff 

may be made either a defendant or, in a proper case, an 

involuntary plaintiff.

The Sheriff’s Deed at issue, which Plaintiff has sued to set aside or 

effectuate the redemption of, specifically lists Pennymac as the assignee mortgagee 

conducting the sheriff’s sale, and receiving the proceeds of the same. See Sheriff’s 

Deed, at Ex. 6 to Pennymac’s Motion, Doc. #21, Pages 2-7. 

As such, Pennymac’s own exhibits to its Motion for Judgment on the 

Pleadings prove that Pennymac is a necessary party to this litigation, and 

Pennymac’s Motion must be denied pursuant to the above-quoted provisions of 

Fed. R. Civ. P 19(a)(1). 

Moreover, for the reasons stated below, Plaintiff has clearly stated claims for 

which relief can be granted for declaratory relief to either void, or allow Plaintiff to 

effectuate the redemption of, the property. 

1. The Sheriff’s Deed is void ab initio, because it was issued in 

direct violation of the TRO.

In Davenport v. HSBC, 275 Mich. App. 344, 739 N.W.2d 383 (2007), in 

voiding a sheriff’s deed, the Michigan Court of Appeals held as follows:

We recognize that a defect in fulfilling the statutory notice 

requirements attendant to a foreclosure by advertisement 

renders the resulting sale voidable rather than absolutely void. 

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Jackson Investment Corp. v. Pittsfield Products, Inc., 162 

Mich.App. 750, 755-756, 413 N.W.2d 99 (1987).

However, what is at issue in the present case is not a mere 

notice defect. Instead, it is a structural defect that goes to the 

very heart of defendant's ability to foreclose by advertisement 

in the first instance. 

The instant action is analogous to Davenport, in that the defect at issue is not 

merely related to a typographical error in the advertisement for foreclosure, but is 

in fact a structural defect that goes to the very heart of Defendants’ ability to 

foreclose by advertisement in the first place. 

Specifically, there was a TRO in effect, which “preserves the status quo”, by 

“restraining and enjoining the sheriff’s sale of the Property, commonly known as 

3700 Orchard Lake Road, Orchard Lake, MI 48324-1642, pending a show cause 

hearing on the merits”. The TRO further stated on its face that TRO would remain 

in effect until the Show Cause hearing on Wednesday, September 17, 2014, at 8:30 

a.m. (See TRO – Ex. “A”.)

The sale occurred during the specific time the TRO was in effect, barring 

Defendants from conducting the same, i.e. between September 4, 2014 and 

September 17, 2014, on September 9, 2014. 

In other words, Defendants did not have a legal right to foreclose at the time 

they conducted the sheriff’s sale, and the violation of the TRO therefore 

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constituted a “structural defect, which goes to the very heart of defendant's ability 

to foreclose by advertisement in the first instance.”

Based on the foregoing, the sheriff’s sale must be set aside as void ab initio, 

in accordance with Michigan law, with the purchase price to be refunded to Citi. 

See Davenport. See also Mitan v Fed Home Loan Mortgage Corp, 703 F.3d 949 

(CA6, Dec 12, 2012) – citing Davenport’s state court ruling in a 6th Circuit case.

2. The Sheriff’s Deed is void ab initio, because the purchaser 

had previously surrendered its authority to transact 

business in Michigan.

On April 22, 2014, Citi filed an Application for Certificate of Withdrawal 

with the State of Michigan Department of Licensing and Regulatory Affairs, in 

which Citi surrendered “its authority to transact business or conduct business 

affairs in Michigan”. (See Application for Certificate of Withdrawal – Ex. “C”.)

Although it had surrendered its authority to engage in business transactions 

in Michigan, such as purchasing properties at sheriff’s sale, in April, 2014, Citi 

illegally transacted business in Michigan by purchasing the Property at sheriff’s 

sale in September, 2014. (See Sheriff’s Deed – Ex. “B”.)

The sheriff’s sale to Citi, at a time in which Citi was not authorized to 

transact business in the State of Michigan, constituted a structural defect going to 

the heart of the sheriff’s sale, and the Sheriff’s Deed must therefore be set aside as 

void ab initio, with the purchase price refunded to Citi, in accordance with 

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Michigan law. See Davenport. See also Mitan v Fed Home Loan Mortgage Corp,

703 F.3d 949 (CA6, Dec 12, 2012) – citing Davenport’s state court ruling in a 6th

Circuit case.

3. The Sheriff’s Deed should be voided in the interests of 

justice.

This argument is pled in the alternative to Arguments I & II above. 

Assuming arguendo that a sheriff’s deed issued in violation of a TRO is not 

absolutely void ab initio, which Plaintiff vehemently insists, then the same would

at least be voidable. See Davenport and Mitan.

Although the instant action does not involve an action in violation of the 

automatic stay in bankruptcy, the issues are analogous – an action taken in 

violation of an injunction issued by a court of competent jurisdiction. 

In Easley v. Pettibone Michigan Corporation, 990 F.2d 905 (Cir 6, 1993), 

the 6th Circuit made it clear that actions taken without knowledge of the automatic 

stay are “invalid and voidable and shall be voided absent limited equitable 

circumstances.” The Court further held that those limited equitable circumstances 

generally arise “only where the debtor unreasonably withholds notice of the stay 

and the creditor would be prejudiced if the debtor is able to raise the stay as a 

defense, or where the debtor is attempting to use the stay unfairly as a shield to 

avoid an unfavorable result”. Id.

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In the instant action, Plaintiff sent the TRO to the foreclosing law firm, and 

the only reason the foreclosing law firm did not receive it on time is that it was 

admittedly suffering a complete shutdown of all phone, fax and internet lines, and 

was incapable of receiving the TRO. 

Moreover, there is no prejudice to Defendants, and in fact, Defendants 

concur with the relief requested within this Motion. There is not even any 

prejudice to Citi, because it will receive a full refund of its purchase price (which it 

could have had all the way back in October, 2014, if it had not illegally attempted 

to blackmail Plaintiff by demanding $35,000 more than required by the redemption 

statute, as discussed below). 

Finally, it is clear that Plaintiff is not attempting to enforce the TRO 

unfairly, or as a shield to avoid an unfavorable result. In reality, Plaintiff is seeking 

to enforce the TRO simply to save her home, and there is nothing unfair about 

requesting a TRO from a Judge, obtaining one, and enforcing its terms. The 

purpose of the TRO was to provide Plaintiff with time to reinstate her loan, and 

Plaintiff will reinstate her mortgage and begin making payments to Defendants on 

the same, as soon as the Court sets aside the Sheriff’s Deed issued in violation of 

the TRO. 

Plaintiff is currently in active negotiations with Defendant, PennyMac, on 

loss mitigation alternatives to save her home, and she is confident that the loan will 

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be reinstated by stipulation of the parties once the Sheriff’s Deed is set aside. 

Moreover, in the event the parties are unable to agree on a resolution, Plaintiff will

dismiss this lawsuit and file a Chapter 13 bankruptcy, to get caught up on her 

arrearage over a five year period. 

4. Citi is violating the redemption statute.

This argument, seeking to enforce Plaintiff’s right to redeem the Property 

from sheriff’s sale, is pled in the alternative to the arguments set forth above, 

which seek to void the sheriff’s sale entirely, and refund the purchase price.

MCR 600.3240 governs redemption from a sheriff’s sale, and requires that 

once a redemption is requested, the purchaser is only entitled to a refund of the 

purchase price, plus interest at the rate stated in the mortgage from the date of sale 

to the date of redemption, as well as the amount of the sheriff’s fee, and finally a 

fee of $5.00 for the care and custody of the redemption money. See MCL 

600.3240(2.)

In this case, Defendants advised Citi that the sale was conducted illegally, in 

violation of the TRO, and that Defendants intended to redeem the Property on 

behalf of Plaintiff, on or about October 1, 2014, but Citi has steadfastly refused 

since that date to accept the tender of payment. 

MCL 600.3248 provides as follows:

If any person entitled to receive such redemption moneys, shall, upon 

payment or tender thereof to him, refuse to make and acknowledge 

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such certificate of payment, he shall be liable to the person aggrieved 

thereby, in the sum of $100.00 damages, over and above all the actual 

damages sustained, to be recovered in a civil action, except that no 

damages of any kind may be recovered from any register of deeds 

who shall refuse to accept tender of payment after the time indorsed 

upon the deed when the same shall become operative in case the 

premises are not redeemed, and the officer or person making the sale 

shall be entitled to rely conclusively upon the recital of the length of 

the redemption period contained in the notice of foreclosure in making 

such indorsement upon the deed.

Citi is in violation of the above-quoted statute. As PennyMac will testify, 

PennyMac has tendered the redemption funds, plus interest and fees required by 

MCL 600.3240, but Citi refuses to accept the funds and/or acknowledge 

redemption, and instead insists that it will not allow redemption unless it is paid 

$35,000 more than the redemption amount required by the above-referenced 

statute.

Based upon the foregoing, the Court should set aside the Sheriff’s Deed, and 

issue an Opinion and Order stating the amount required for Plaintiff to effectuate a 

redemption of the Property as of October 1, 2014. Plaintiff further requests that the 

Court make a determination of the amount that Citi should be penalized, pursuant 

to the above-quoted statutes, and order that the same be set-off the amount required 

to redeem. 

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B. PENNYMAC IS NOT ENTITLED TO JUDGMENT ON THE 

PLEADINGS. 

 

For more than the first year of litigation, the parties were seemingly 

negotiating the amount required to set aside the Sheriff’s Deed in good faith, 

and it appeared that the matter would settle. However, Pennymac has just 

recently cut off settlement communications, pulled prior offers off the table, 

and attempted to run the clock out on Plaintiff by seeking a ruling on its Motion 

to Dismiss. As such, Plaintiff has not really had sufficient time to develop facts 

to oppose Defendant’’ Motion.

Regardless, Plaintiff has clearly fashioned a Verified 1st Amended 

Complaint which states claims upon which relief can be granted against 

Pennymac, as the seller in a transaction that Plaintiff seeks to void, and 

otherwise puts Pennymac on notice of its claims, which is all she was required 

to do by the Federal Rules of Civil Procedure in the first place.

Fed. R. Civ. P. 8(a)(2) requires only “a short and plain statement of the 

claim showing that the pleader is entitled to relief. Specific facts are not necessary; 

the statement need only give the defendant fair notice of what the ... claim is and 

the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 

555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In addition, “[A] plaintiff will not be 

thrown out of court on a Fed. R. Civ. P. 12(b)(6) motion for lack of detailed facts.” 

In re Tower Air, Inc., 416 F.3d 229, 237 (3d Cir. 2005).

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Plaintiff’s Verified 1st Amended Complaint specifically alleges that 

Pennymac conducted a sheriff’s sale in violation of a TRO, and that Plaintiff 

has sued Pennymac in an attempt to get the Court to compel Pennymac to 

cancel the sheriff’s sale and refund the purchase price to Citi, as follows:

22. Plaintiff attempted to work with the Servicer, but 

the Servicer insisted on foreclosing, presumably 

because Plaintiff’s property is such a valuable piece of 

lakefront land.

23. However, the Property is more than just a piece 

of land to Plaintiff – it is her home.

24. In the summer of 2014, the Servicer retained a 

local foreclosing law firm to conduct a sheriff’s sale of 

Plaintiff’s home.

25. Plaintiff filed suit in the Oakland County Circuit 

Court, on September 4, 2014, requesting and obtaining 

a Temporary Restraining Order (“TRO”), restraining 

and enjoining the sheriff’s sale of the Property until a 

show cause hearing on the merits. (See TRO – Ex. 

“E”.)

26. Counsel for Plaintiff sent the TRO to the 

foreclosing law firm, via facsimile, and attempted to 

follow up with a telephone call, to ensure that sheriff’s 

sale was canceled, but the foreclosing law firm was 

having serious technical difficulties with all of its 

communications, i.e. no phone lines, no fax lines, no 

internet, no email, etc.

27. As a result of the technical difficulties at the 

foreclosing law firm, the foreclosing law firm was 

unaware of the entry of the TRO, and innocently sold 

the Property at sheriff’s sale to Citi, on September 9, 

2014, i.e. during the 14 day window in which the TRO 

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was in full effect. (See TRO – Ex. “E”; and Sheriff’s 

Deed – Ex. “F”.)

28. Not only was the sale to Citi in violation of the 

TRO, it was also illegal under Michigan law, because 

Citi had voluntarily withdrew and otherwise 

surrendered its ability to transact business in the State 

of Michigan several months prior to the sheriff’s sale. 

(See Application for Certificate of Withdrawal and 

LARA Corporate Entity Details – Ex. “G”.)

29. Immediately upon learning of the Sheriff’s 

Deed, counsel for Plaintiff contacted the foreclosing 

law firm, and spoke to counsel for Defendant in this 

litigation, as well, and it was agreed by all parties to 

this litigation that the Sheriff’s Deed was issued in 

error, in an unintentional violation of the TRO, and 

that the Sheriff’s Deed should be set aside, with the 

purchase price refunded to Citi.

(See Verified 1st Amended Complaint, Doc. #17, at pgs. 5-6.)

Based on the foregoing, Plaintiff’s Verified 1st Amended Complaint put 

Pennymac on notice that Plaintiff is suing Pennymac because Pennymac sold 

Plaintiff’s home, which she loves and wants to continue residing in, out from 

underneath her, in violation of an injunction that she had obtained in a court of 

competent jurisdiction. (See Verified 1st Amended Complaint, Doc. #17, at 

pgs. 5-6.)

For Pennymac’s counsel to read the above-quoted allegations and 

respond that they have absolutely no clue why their clients are being sued in 

this case is beyond reason, and is indeed frivolous. 

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In addition to the foregoing, Plaintiff alleges as follows:

COUNT 3 — DECLARATORY RELIEF: SET 

ASIDE SHERIFF’S SALE CONDUCTED IN 

VIOLATION OF INJUNCTION

54. Plaintiff hereby adopts and incorporates by 

reference each and every allegation contained in the 

above Paragraphs, as if fully set forth herein.

55. As more fully set forth in the Common 

Allegations above, the sheriff’s sale was conducted 

while the TRO was in full force and effect, which 

specifically “preserves the status quo”, by “restraining 

and enjoining the sheriff’s sale of the Property, 

commonly known as 3700 Orchard Lake Road, 

Orchard Lake, MI 48324-1642, pending a show cause 

hearing on the merits”, which the TRO stated on its 

face was to occur on Wednesday, September 17, 2014, 

at 8:30 a.m. (See TRO – Ex. “E”.)

56. The sale occurred during the specific time-frame 

in which the TRO was in effect and barred the sale, i.e. 

between September 4, 2014 and September 17, 2014, 

on September 9, 2014. 

57. In other words, Defendants did not have a legal 

right to foreclose at the time they conducted the 

sheriff’s sale, and the violation of the TRO therefore 

constituted a structural defect, which goes to the very

heart of defendant's ability to foreclose by 

advertisement in the first instance.

58. Based on the foregoing, the sheriff’s sale must 

be set aside as void ab initio, in accordance with 

Michigan law. 

WHEREFORE, Plaintiff respectfully requests that this 

Honorable Court enter a Judgment in her favor and 

against Defendants, granting the following relief: 

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A. Enter a Temporary Restraining Order preserving 

the status quo, by restraining and enjoining the 

eviction of Plaintiff and/or the conveyance of the 

Property to any third party, pending a hearing relative 

to Plaintiff’s request for a Preliminary Injunction;

B. After a hearing on the merits, enter an Order 

setting aside the Sheriff’s Deed and ordering the 

refund of the purchase price, only, from the Servicer to 

Citi;

C. In the alternative to Request for Relief B above, 

after a hearing on the merits, enter a Preliminary 

Injunction preserving the status quo, by restraining and 

enjoining the eviction of Plaintiff and/or the 

conveyance of the Property to any third party, pending 

Plaintiff’s request for the Sheriff’s Deed to be set aside 

after a trial on the merits; 

D. Order that the Sheriff’s Deed be set aside upon 

the payment of the purchase price, only, from the 

Servicer to Citi;

E. Order Defendant, Citi, to pay any/all damages 

incurred by Plaintiff, as a proximate result of its 

above-referenced misconduct in refusing to voluntarily 

set aside a knowingly illegal Sheriff’s Deed;

F. An award of actual costs, including reasonable 

attorney fees, so wrongfully incurred, against 

Defendant, Citi; and

G. Grant Plaintiff any such other and further relief 

as the Court deems just and fair.

COUNT 4 — DECLARATORY RELIEF: SET 

ASIDE SHERIFF’S SALE TO COMPANY NOT 

AUTHORIZED TO CONDUCT BUSINESS IN 

MICHIGAN

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59. Plaintiff hereby adopts and incorporates by 

reference each and every allegation contained in the 

above Paragraphs, as if fully set forth herein.

60. April 22, 2014, Citi filed an Application for 

Certificate of Withdrawal with the State of Michigan 

Department of Licensing and Regulatory Affairs, 

Corporations, Securities and Commercial Licensing 

Bureau, in which Citi surrendered “its authority to 

transact business or conduct business affairs in 

Michigan”. (See Application for Certificate of 

Withdrawal and LARA Corporate Entity Details – Ex. 

“G”.)

61. As more fully set forth in the Common 

Allegations above, Citi appeared at the sheriff’s sale, 

participated in the auction, and purchased the Property 

on September 9, 2014, i.e. nearly five months after it 

surrendered the authority to conduct such transactions 

within the State of Michigan. (See Sheriff’s Deed –

Ex. “F”; and Application for Certificate of Withdrawal 

and LARA Corporate Entity Details – Ex. “G”.)

62. Based on the foregoing, Citi did not have the 

legal authority to purchase the Property at sheriff’s 

sale, and certainly does not have the legal authority to 

challenge the parties to this litigation, who have all 

consented to set aside the Sheriff’s Deed. 

63. The sale to Citi constituted a structural defect 

going to the heart of the sheriff’s sale, and the 

Sheriff’s Deed must be set aside as void ab initio, in 

accordance with Michigan law.

WHEREFORE, Plaintiff respectfully requests that this 

Honorable Court enter a Judgment in her favor and 

against Defendants, granting the following relief: 

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A. Enter a Temporary Restraining Order preserving 

the status quo, by restraining and enjoining the 

eviction of Plaintiff and/or the conveyance of the 

Property to any third party, pending a hearing relative 

to Plaintiff’s request for a Preliminary Injunction;

B. After a hearing on the merits, enter an Order 

setting aside the Sheriff’s Deed and ordering the 

refund of the purchase price from the Servicer to Citi;

C. In the alternative to Request for Relief B above,

after a hearing on the merits, enter a Preliminary 

Injunction preserving the status quo, by restraining and 

enjoining the eviction of Plaintiff and/or the 

conveyance of the Property to any third party, pending 

Plaintiff’s request for the Sheriff’s Deed to be set aside 

after a trial on the merits; 

D. Order that the Sheriff’s Deed be set aside upon 

the payment of the purchase price, only, to Citi, by the 

Servicer;

E. Order Defendant, Citi, to pay any/all damages 

incurred by Plaintiff, as a proximate result of its 

above-referenced misconduct in refusing to voluntarily 

set aside a knowingly illegal Sheriff’s Deed;

F. An award of actual costs, including reasonable 

attorney fees, so wrongfully incurred, against 

Defendant, Citi; and

G. Grant Plaintiff any such other and further relief 

as the Court deems just and fair.

COUNT 5 — DECLARATORY RELEF RE: 

REDEMPTION

64. Plaintiff hereby adopts and incorporates by 

reference each and every allegation contained in the 

above Paragraphs, as if fully set forth herein.

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65. This Count is pled in the alternative to Counts 3 

and 4 above.

66. MCR 600.3240 governs redemption from a 

sheriff’s sale, and requires that once a redemption is 

requested, the purchaser is only entitled to a refund of 

the purchase price, plus interest at the rate stated in the 

mortgage from the date of sale to the date of 

redemption, as well as the amount of the sheriff’s fee, 

and finally a fee of $5.00 for the care and custody of 

the redemption money. See MCL 600.3240(2.)

67. In this case, both Plaintiff and Defendants 

advised Citi that the sale was conducted illegally, in 

violation of the TRO, and that Defendants intended to 

redeem the Property on behalf of Plaintiff, on or about 

October 1, 2014, but Citi has steadfastly refused since 

that date to accept the tender of payment. 

68. MCL 600.3248 provides as follows:

If any person entitled to receive such redemption 

moneys, shall, upon payment or tender thereof to him, 

refuse to make and acknowledge such certificate of 

payment, he shall be liable to the person aggrieved 

thereby, in the sum of $100.00 damages, over and 

above all the actual damages sustained, to be recovered 

in a civil action, except that no damages of any kind 

may be recovered from any register of deeds who shall 

refuse to accept tender of payment after the time 

indorsed upon the deed when the same shall become 

operative in case the premises are not redeemed, and 

the officer or person making the sale shall be entitled 

to rely conclusively upon the recital of the length of 

the redemption period contained in the notice of 

foreclosure in making such indorsement upon the deed.

69. Citi is in violation of the above-quoted statute. 

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70. Specifically, the Servicer has tendered the 

redemption funds, plus interest and fees required by 

MCL 600.3240, but Citi refuses to accept the funds 

and/or acknowledge payment or redemption, and 

instead insists upon being paid far more money than it 

is entitled to by statute, i.e. a whopping $35,000.

71. Plaintiff has suffered damages as a result of 

Citi’s stubborn refusal to accept the tender of 

redemption funds from the Servicer. 

WHEREFORE, Plaintiff respectfully requests that this 

Honorable Court enter a Judgment in her favor and 

against Defendants, granting the following relief: 

A. Enter a Temporary Restraining Order preserving 

the status quo, by restraining and enjoining the 

eviction of Plaintiff and/or the conveyance of the 

Property to any third party, pending a hearing relative 

to Plaintiff’s request for a Preliminary Injunction;

B. After a hearing on the merits, enter an Order 

declaring that the Servicer shall tender redemption 

funds in an amount required to redeem the Property 

from sheriff’s sale as of October 1, 2014, and upon 

tender of payment, a Redemption Certificate shall be 

recorded in the offices of the Oakland County Register 

of Deeds;

C. In the alternative to Request for Relief B above, 

after a hearing on the merits, enter a Preliminary 

Injunction preserving the status quo, by restraining and 

enjoining the eviction of Plaintiff and/or the 

conveyance of the Property to any third party, pending 

Plaintiff’s request for redemption after a trial on the 

merits; 

D. Order Defendant, Citi, to pay any/all damages 

incurred by Plaintiff, as a proximate result of its 

above-referenced misconduct in refusing to voluntarily 

set aside a knowingly illegal Sheriff’s Deed;

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E. An award of actual costs, including reasonable 

attorney fees, so wrongfully incurred, against 

Defendant, Citi; and

F. Grant Plaintiff any such other and further relief 

as the Court deems just and fair.

(See Verified 1st Amended Complaint, Doc. #17, at pgs. 

Based on the foregoing quoted allegations from Plaintiff’s Verified 1st

Amended Complaint, Plaintiff is suing Pennymac in Counts 3, 4 and 5, as a 

necessary party to Plaintiff’s claims for declaratory and injunctive relief 

seeking a Court Order compelling Pennymac to cancel the sheriff’s sale and 

refund the purchase price to Citi, or in the alternative, to effectuate a 

redemption as of October 1, 2014, with interest paid to Citi only to that date. 

Again, for Pennymac’s counsel to read the above-quoted allegations and 

respond that they have absolutely no clue why their clients are being sued in 

this case is beyond reason, and is indeed frivolous. Put plainly, Pennymac’s 

Motion on Counts 3-5 should be denied, and Plaintiff should be awarded costs 

and reasonable attorney fees for being forced to respond thereto. 

In fact, motions such as Defendants have been routinely denied in cases 

similar to this case. For example, in Mott v. Bank of America, N.A., No. 1:12-cv00462 (W.D. Mich. 2012), the Honorable Robert J. Jonker held:

The fundamental dispute between the parties is whether the 

foreclosure process in this case was lawful on the verified facts 

articulated by plaintiff.... The mortgagor plaintiff has pleaded –

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actually sworn – facts sufficient to put defendants on notice of the 

factual and legal bases for her claims. Those claims may or may not 

ultimately survive a Rule 56 motion, but the best time to address 

them all is after each side has had a full opportunity to develop the 

record. Even defendants’ motion papers tacitly recognize the need 

for material outside the four corners of plaintiffs complaint to 

resolve the merits because at least one of defendants’ 29 exhibits 

includes a transactional document (the original promissory note) that 

was not part of plaintiff’s original filing. Moreover, the briefing of 

the parties is replete with factual assertions or assumptions that both 

should have the opportunity to test and support in plenary discovery. 

Under these circumstances, denial of a motion to dismiss is 

appropriate. See Fed. R.Civ. P. 12(d).

Moreover, in this case, as in many similar cases, there are eminently 

practical reasons to deny a Rule 12 motion without prejudice and 

permit the parties to develop relevant facts.... it behooves the parties 

and this Court to take full account of [any potential settlements with 

the Department of Justice which could lead to a modification] before 

proceeding to final adjudication....

(See Mott Order – Ex. “D” hereto.)

The previously quoted Mitan case, as well as the above-quoted Mott, are 

applicable to this case. Pennymac is on notice of Plaintiff’s claims challenging a 

sheriff’s sale conducted in violation of an injunction, and requesting that the Court 

compel Pennymac to cancel the sale and refund the purchase price or otherwise 

effectuate a redemption to a date certain, and for that reason alone, Pennymac’s 

Motion should be denied. 

Moreover, Pennymac filed a Motion under Fed. R. Civ. P 12(b)(6), which 

raises conflicting factual allegations, thereby creating a question of fact, which also 

requires that Pennymac’s Motion be denied.

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Finally, Pennymac attaches the Note from outside the record, proving that 

judgment on the pleadings per Fed. R. Civ. P. 12(b)(6), which it has requested, is 

inappropriate, and that Pennymac is really seeking extraordinary relief pursuant to 

Fed. R. Civ. P. 56, prior to the conduct of discovery by any party. 

Like any other party, Plaintiff is entitled to develop a record, and Pennymac

may file a motion under Fed. R. Civ. P. 56 at its completion. In the interim, 

Pennymac should comply with its obligation under Michigan law to terminate the 

void sheriff’s sale, and refund the over a half million dollar windfall it is illegally 

hoarding. 

C. PLAINTIFF HAS SUFFERED PREJUDICE AS A RESULT OF 

THE ISSUANCE OF A SHERIFF’S DEED IN VIOLATION OF A

TRO.

Perhaps Pennymac’s weakest, most nonsensical, frivolous, and truly 

insulting argument is its dubious claim that Plaintiff did not suffer prejudice when 

Pennymac sold her beloved home of over 30 years out from underneath her feet, 

illegally, after she paid an attorney thousands of dollars to file a lawsuit and obtain 

the TRO specifically to save her home from sale. See Pennymac’s Motion, Doc. 

#21, at pgs 8-21.)

It is simply not fathomable that Pennymac’s lawyers in this case do not 

understand the difference between “reinstatement” and “redemption”. That is the 

prejudice Plaintiff suffered in this case. She paid a lawyer thousands of dollars to 

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ensure that her legal rights did not shift from the ability to reinstate her mortgage 

by merely paying the past due payments, to an ability only to redeem her mortgage 

from sheriff’s sale, requiring her to pay not just the past due payments, but the 

entire amount of sale.

In this case, Mrs. Panny only needed to pay approximately $100,000 to 

reinstate the property from default and a pending sheriff’s sale, and she had an 

indefinite amount of time to do so, as long as the sale did not commence. One of 

the easiest ways for her to reinstate at this point would have been to modify her 

loan, refinance and payoff Pennymac given that there was equity in the Property, 

or file a Chapter 13 bankruptcy, which would have guaranteed her the absolute 

right under federal law to spread the $100,000 arrears over 60 months, i.e. $1,666 

per month, at which point her home would have been saved. 

However, once Pennymac illegally sold Plaintiff’s home out from 

underneath her, in violation of the TRO, Plaintiff’s ability to save her home 

drastically changed from an indefinite amount of time to repay $100,000, 

including by modification or filing a Chapter 13 bankruptcy, to a mere six month 

window to pay the sheriff’s sale purchase price of $561,150.64, plus interest at the 

rate specified in the mortgage, as specifically set forth in the Sheriff’s Deed that 

Pennymac has attached as Exhibit “6” to its Motion. See Pennymac’s Motion, Doc. 

#21-7.

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Clearly, Plaintiff’s position of having an indefinite amount of time to pay 

$100,000 to having six months to pay $561,150.64, as a result of Pennymac’s 

illegal sale of Plaintiff’s home, constitutes “prejudice” to Plaintiff, and any 

suggestion otherwise by Pennymac is simply frivolous. As a result, Pennymac’s 

Motion should be denied as entirely frivolous, and Plaintiff should be awarded 

costs and reasonable attorney fees for being forced to respond thereto. 

CONCLUSION

Pursuant to the foregoing, the Court should issue an Opinion and Order

denying Pennymac’s Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6), and 

awarding costs and reasonable attorney fees to Plaintiff for being compelled to 

respond thereto.

Respectfully submitted: GANTZ ASSOCIATES

Dated: February 28, 2016 By: /s/ Adam J. Gantz

Adam J. Gantz (P58558)

Attorneys for Plaintiff

31275 Northwestern Highway, Suite 208

Farmington Hills, MI 48334

(248) 987-6505

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CERTIFICATE OF SERVICE

I hereby certify that on February 28, 2016, I electronically filed the instant 

Brief using the Court’s ECF system, which will automatically send notice of such 

filing to all attorneys of record. 

Respectfully submitted: GANTZ ASSOCIATES

Dated: February 28, 2016 By: /s/ Adam J. Gantz

Adam J. Gantz (P58558)

Attorneys for Plaintiff

31275 Northwestern Highway, Suite 208

Farmington Hills, MI 48334

(248) 987-6505

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