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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

JOE THOMAS and

BERNICE THOMAS,

Plaintiffs,

No. 14-CV-14183

vs. Hon. Gerald E. Rosen

 Magistrate Judge Michael J. Hluchaniuk

JPMORGAN CHASE BANK, N.A.

and FEDEREAL HOME LOAN 

MORTGAGE CORPORATION,

Defendants.

___________________________________/

OPINION AND ORDER REGARDING DEFENDANTS’ MOTION TO 

DISMISS

I. INTRODUCTION

Plaintiffs Joe and Bernice Thomas commenced this suit in Wayne County 

Circuit Court on September 19, 2014, asserting claims against Defendants 

JPMorgan Chase Bank, N.A., and Federal Home Loan Mortgage Corporation, 

arising from the foreclosure sale of Plaintiffs’ home in Detroit, Michigan. 

Plaintiffs claim that Defendants conducted the foreclosure process without regard 

to Michigan’s statutory requirements -- in particular that Defendant JPMorgan 

Chase Bank, N.A. failed to include one of the mortgagor’s names in the Notice of 

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Foreclosure and that Defendant Federal Home Loan Mortgage Corporation is not a 

valid purchaser under Michigan foreclosure law. Defendants removed the case to

this Court on October 30, 2014. Defendants subsequently filed a Motion to 

Dismiss (Dkt. # 3), and the Court issued an opinion finding that Plaintiffs had 

failed to adequately allege in their Complaint the necessary prejudice to sustain 

their claim (Dkt. # 9). In that Opinion, the Court provided Plaintiffs with an 

opportunity to amend its Complaint, which Plaintiffs took, filing a First Amended 

Complaint on May 12, 2015. Dkt. # 10. Defendants subsequently filed a second 

Motion to Dismiss, and that Motion is now before the Court. Dkt. # 11.

Having reviewed and considered the parties’ briefs and supporting 

documents and the entire record of this matter, the Court has determined that the 

pertinent allegations and legal arguments are sufficiently addressed in these 

materials and that oral argument would not assist in the resolution of this motion. 

Accordingly, the Court will address the motion “on the briefs.” See L.R. 7.1(f)(2). 

II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

In its prior Opinion in this matter, the Court recounted the relevant facts:

On December 19, 2008, Plaintiffs Joe Thomas and Bernice 

Thomas, a married couple, entered into a loan agreement with 

Defendant JPMorgan Chase Bank, N.A. (“Chase”) in the amount of 

$219,000 (“the Loan”). Pl’s Compl., Dkt. # 1-2, ¶ 6. The Loan was 

secured by a mortgage (“the Mortgage”) against the property at issue 

in this case, 17381 Pontchartrain Blvd., Detroit, Michigan 48203 (“the 

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Property”). Id. ¶¶ 4, 6; See also Mortgage, Dkt. # 3-2. The Mortgage 

was recorded on December 30, 2008 in the Wayne County Records, 

with Chase acting as servicer for the Mortgage. Pl.’s Compl. ¶¶ 8, 12, 

see generally Mortgage.

Plaintiffs defaulted on the Loan at some point in 2013, and 

Chase subsequently initiated the foreclosure by advertisement process 

by mailing a Notice of Foreclosure to Plaintiffs and by publishing a 

Notice of Foreclosure in the Detroit Legal News once per week 

between October 14, 2013, and November 4, 2013. Pl’s Compl. ¶¶

12-13. Importantly for purposes of Plaintiffs’ theory, both the 

published and the mailed Notice of Foreclosure identified the 

mortgagor as “Joe Nathan Thomas, married,” but did not mention 

Bernice Thomas or identify her interest in the Loan, Mortgage, or 

Property. Id. ¶ 14.

The Loan remained in default, and accordingly a Sheriff’s Sale 

was held on March 20, 2014. Id. ¶ 17; see also Sherriff’s Deed, Dkt. 

# 3-3. Defendant Federal Home Loan Mortgage Corporation 

(“Freddie Mac”) won the auction with a bid of $109,387.43, and was 

granted a Sherriff’s Deed, which was recorded on April 3, 2014. 

Sherriff’s Deed, Dkt. # 3-3, at 1. The statutory redemption period 

was set to expire on September 20, 2014. Id. at 1, 4.

On September 19, 2014, one day prior to the expiration of the 

redemption period, Plaintiffs brought this suit in Wayne County 

Circuit Court. Plaintiffs’ complaint asserts four claims for relief:

wrongful foreclosure in violation of MCL § 600.3201 et seq. (Count 

I); quiet title (Count II); slander of title (Count III); and violation of 

the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.

(Count IV). Each claim, however, relies on the same two theories of 

relief: (1) that Chase’s failure to name Bernice Thomas as a party to 

the Mortgage renders the foreclosure proceedings invalid, and (2) that 

Freddie Mac is not a valid purchaser under MCL § 600.3228, and 

accordingly “was not authorized by statute to purchase 

the . . . Property.” See, e.g., Pl.’s Compl. ¶¶ 19-20. Defendants 

removed the action to this Court on October 30, 2014. Def.’s 

Removal, Dkt. # 1. The September 20, 2014 expiration of the 

redemption period has now passed, and Plaintiffs have not redeemed

the Property.

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Thomas v. JPMorgan Chase Bank, N.A., No. 14-CV-14183, 2015 WL 2237034, at 

*2 (E.D. Mich. May 12, 2015).

After removing the case, Defendants filed a Motion to Dismiss. Dkt. # 3. In 

their Motion, they argued that (1) Plaintiffs lost standing to challenge the 

foreclosure once they failed to redeem the Property within the statutory redemption 

period, (2) Plaintiffs failed to sufficiently allege fraud or irregularity as necessary 

to challenge the foreclosure, and (3) Plaintiffs failed to sufficiently allege prejudice 

resulting from the foreclosure. In its subsequent Opinion, the Court found, in 

relevant part, that (1) Plaintiffs have standing to bring their claim, id. at *2-4, and 

(2) Plaintiffs “failed to allege any prejudice resulting from the alleged error,” and 

accordingly the Court did not need to reach the question of whether the alleged 

error rose to the level of fraud or irregularity, id. at *6-8. Specifically, the Court 

explained,

Here, Plaintiffs’ complaint provides not a single explanation of how 

Chase’s failure to include Bernice Thomas’s name in the Notice 

harmed Plaintiffs during the foreclosure process. Plaintiffs concede 

that they defaulted on the loan, and Plaintiff Joe Thomas received 

actual notice of the default via the mailed and published Notices. 

Plaintiffs have not alleged that Bernice Thomas somehow did not 

know about the foreclosure proceedings, and given that Plaintiffs were 

both apparently residing at the Property at the time the foreclosure 

was initiated and that Plaintiffs remained married during the 

foreclosure process, it is implausible to think that Bernice Thomas 

lacked, at a minimum, constructive notice of the foreclosure. The fact 

that Chase failed to strictly comply with the notice requirements 

imposed by M.C.L. § 600.3212(a) did not appear to affect any part of 

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the foreclosure process, and accordingly, did not result in prejudice to 

Plaintiffs.

Id. at *7. Importantly, the Court further explained

Plaintiffs have made no allegation that they would have been able to 

redeem the home. They do not contest that they were in default of the 

Loan at the time the foreclosure was initiated. Plaintiffs, in their 

complaint, do make various claims of prejudice, including that the 

property was sold at the sheriff's sale for an amount below true market 

value, that the alleged errors in the foreclosure process made Plaintiffs 

“fearful of making mortgage payments,” and that the foreclosure has 

damaged their credit. Pl.'s Compl., ¶ 23. But Plaintiffs make no claim 

that remedying the alleged errors in the foreclosure process would 

have prevented any of these harms from befalling Plaintiffs. 

Critically, Plaintiffs make no allegation that, had the statutory 

foreclosure process been followed perfectly, they would have been 

able to redeem or otherwise come into compliance with the Loan and 

subsequently retain the home. Accordingly, Plaintiffs have not 

sufficiently alleged the required prejudice to set aside the foreclosure 

sale.

Id. at *7 n.2. However, the Court noted the seriousness of Plaintiffs’ allegations, 

due to the fact that proper notice to the party whose property is being foreclosed 

upon is central to the fairness of the foreclosure process:

Despite these problems, the Court recognizes that a 

mortgagee’s failure to properly list the names of all of the mortgagees 

in the notice for a foreclosure by advertisement is a potentially serious 

issue. Such an error, where it leads to a lack of actual notice to the 

mortgagors, could render the entire process unfair and undermine the 

policy intent behind the foreclosure by advertisement statutes. 

Accordingly, out of an abundance of caution, the Court invites 

Plaintiffs to amend their complaint to properly allege prejudice 

resulting from the error, if such prejudice exists. As described above, 

the Court is skeptical, as it seems likely that Joseph would have 

notified Bernice as soon as he learned of the foreclosure, rendering 

any error harmless. However, if Plaintiffs can present to the Court 

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facts articulating the harm that they incurred directly resulting from 

the error, the Court will consider those facts.

The Court further reminds Plaintiffs that mere blanket 

assertions regarding prejudice will not satisfy the requirements of 

Rule 12(b)(6). “[T]he tenet that a court must accept as true all of the 

allegations contained in a complaint is inapplicable to legal 

conclusions. Threadbare recitals of the elements of a cause of action, 

supported by mere conclusory statements, do not suffice.” Iqbal, 556 

U.S. at 678; see also Jackson, 2014 WL 7157172, at *8 (applying this 

standard to the foreclosure prejudice context). Any allegations 

regarding prejudice must also be plausible, and “[d]etermining 

whether a complaint states a plausible claim for relief will . . . be a 

context-specific task that requires the reviewing court to draw on its 

judicial experience and common sense.” Iqbal, 556 U.S. at 679. 

Increased specificity allows the Court to better evaluate the 

plausibility of Plaintiffs’ claims for relief, and the Court accordingly 

encourages Plaintiffs to clearly articulate the prejudice suffered with 

specific, supportable facts.

Id. at *7-8. 

On May 21, 2015, Plaintiffs filed a First Amended Complaint. Dkt. # 10. It 

is largely the same as the original Complaint, but contains several new assertions 

regarding prejudice. First, it alleges that “[h]ad there not been errors in the 

foreclosure notice the Subject Property would have sold at a higher price and 

would have reduced the deficiency balance owed by Plaintiffs by over 

$100,000.00.” Pl.’s First. Am. Compl., ¶ 23A. This allegation was essentially also 

in the original Complaint, though the original Complaint merely stated that the sale 

price was only $109,387.43, while the “true market value” of the Property was 

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approximately $250,000. Second, and more importantly, the First Amended 

Complaint alleges, for the first time, that

[t]he failure to include Plaintiff Bernice Thomas in the Notice of 

Foreclosure led her to believe that the foreclosure would not affect her 

interest in the Subject Property, and therefore she did not take action 

prior to the foreclosure sale to prevent the sheriffs sale. . . . Such error 

misled Plaintiff Bernice Thomas into believing that no sheriff's sale of 

her interest in the Subject Property took place.

Id. ¶ 23B. The remainder of the First Amended Complaint is materially identical 

to Plaintiffs’ original Complaint.

Shortly after Plaintiffs filed their First Amended Complaint, Defendants 

filed a Motion to Dismiss. Dkt. # 11. The motion re-raises many of the issues 

dealt with in the first Motion to Dismiss, but also asserts that the First Amended 

Complaint has failed to remedy the issues related to prejudice that the Court raised 

previously.

III. DISCUSSION

A. Rule 12(b)(6) Standard

In deciding a motion brought under Rule 12(b)(6), the Court must construe 

the complaint in the light most favorable to Plaintiffs and accept all well-pled 

factual allegations as true. League of United Latin Am. Citizens v. Bredesen, 500 

F.3d 523, 527 (6th Cir. 2007). To withstand a motion to dismiss, however, a 

complaint “requires more than labels and conclusions, and a formulaic recitation of 

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the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 555 (2007). The factual allegations in the complaint, accepted as true, 

“must be enough to raise a right to relief above the speculative level,” and must 

“state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw 

the reasonable inference that the defendant is liable for the misconduct alleged.” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court must “construe the 

complaint in the light most favorable to the plaintiff, accept its allegations as true, 

and draw all reasonable inferences in favor of the plaintiff.” DirecTV, Inc. v. 

Treesh, 487 F.3d 471, 476 (6th Cir. 2007). However, the Court “need not accept as 

true legal conclusions or unwarranted factual inferences.” Id. (quoting Gregory v. 

Shelby Cnty., 220 F.3d 433, 446 (6th Cir. 2000)).

If the well-pled facts in Plaintiffs’ Complaint -- accepted as true -- are 

insufficient for Plaintiffs to recover on a claim, that claim must be dismissed. 

Iqbal, 556 U.S. at 680 (“Because the well-pleaded fact of parallel conduct, 

accepted as true, did not plausibly suggest an unlawful agreement, the Court held 

the plaintiffs’ complaint must be dismissed.”).

B. Analysis

The First Amended Complaint is nearly identical to the original Complaint 

in this matter, and accordingly, the Court does not revisit the issues that were fully 

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settled in its original Opinion and Order Regarding Defendants’ Motion to 

Dismiss. As explained in that order, Plaintiffs have standing to bring this suit.

Thomas, 2015 WL 2237034, at *2-4. Further, Plaintiffs’ claims made pursuant to 

M.C.L. § 600.3228 -- that Freddie Mac was neither the mortgagee nor an assignee 

of the mortgage and accordingly was not authorized to purchase the property at the 

Sheriff’s Sale -- are based on a misreading of that statute. Id. at *8. Accordingly, 

the only remaining issue is whether Plaintiffs’ First Amended Complaint has now 

sufficiently alleged prejudice, and, if so, whether it has sufficiently alleged a “fraud 

or irregularity” in the foreclosure process, as must be alleged in order to set aside a 

foreclosure sale following the expiration of the statutory redemption period. ElSeblani v. IndyMac Mortg. Servs., 510 F. App’x 425, 429 (6th Cir. 2013).

The Court finds that Plaintiffs’ First Amended Complaint still fails properly 

allege prejudice, and the Court’s previously articulated analysis stands. The first 

new allegation described above -- regarding the reduction in purchase price at the 

Sheriff’s Sale that was allegedly caused by the error in notice -- was already in the 

original complaint. The amendment merely completes the arithmetic, calculating 

the difference betweeen the sale price and the market value as alleged by Plaintiffs. 

This change does nothing to resolve the problems previously articulated by the 

Court.

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The second modification is more substantial. Plaintiff Bernice Thomas now 

alleges that she assumed, based on the notice given, that the foreclosure would not 

affect her interest in the Property. This proposition is dubious -- Plaintiffs would 

have the Court believe that despite knowing that the Property was being foreclosed 

upon, and despite knowing that they were both listed as borrowers on the loan, 

they somehow believed that Bernice Thomas would retain an interest in the 

Property even after foreclosure. They have made no allegation that they ever 

inquired as to what would happen to Bernice’s interest in the Property after the 

Sheriff’s Sale, nor have they alleged that they ever participated in the foreclosure 

process in any way or sought to ensure that Bernice Thomas’s interests would be 

protected.

But even taking Plaintiffs’ allegations as true, they still do not allege

prejudice -- Plaintiffs have made no allegation that they possessed the funds to 

bring the Loan current prior to the Sheriff’s Sale, that they attempted to redeem the 

Property following the sale or would have been able to make the payment 

necessary to redeem, or that they were in any way negatively impacted by 

Defendants’ failure to include Bernice Thomas’s name on the notice of 

foreclosure. As the Michigan Supreme Court has repeatedly made clear, “[t]o 

demonstrate . . . prejudice, [a plaintiff] must show that [she] would have been in a 

better position to preserve [her] interest in the property absent defendant's 

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noncompliance with the statute.” Kim v. JPMorgan Chase Bank, N.A., 493 Mich. 

98, 115-16 (2012). Put simply, Plaintiffs have made no allegation as to how they 

would have retained an interest in the property had the Notice of Foreclosure been 

perfect, and accordingly, they have failed to demonstrate prejudice. See, e.g., 

Harrison v. Bank of Am., NA, No. 12-CV-12281, 2013 WL 440163, at *4 n.4 (E.D. 

Mich. Jan. 17, 2013) report and recommendation adopted, No. 12-12281, 2013 WL 

439978 (E.D. Mich. Feb. 5, 2013) (“Plaintiffs have not alleged that they ever 

attempted to redeem the property, and they have not alleged that they had 

sufficient funds to outbid the highest bidder at the sale, let alone pay off the entire 

loan. Thus, even if they could show some defect in notice, . . . they cannot receive 

the relief they request, i.e., a declaration that the sheriff's deed is void.”); Elson v. 

Deutsche Bank Nat. Trust Co., No. 11-14100, 2012 WL 1902916, at *6 (E.D. 

Mich. May 25, 2012) (plaintiff failed to establish prejudice because she “has not 

pled facts nor has she presented any evidence that the alleged defect in notice (1) 

prevented her from making a bid at the sale; (2) that she had the funds to outbid the 

highest bidder at the sale, let alone pay the entire unpaid balance owing on the 

loan; or (3) that she attempted to redeem the property during the redemption 

period”); Piccirilli v. Wells Fargo Bank, N.A., No. 2:11-CV-10264-GER, 2012 WL 

1094333, at *8 (E.D. Mich. Mar. 30, 2012) (“Plaintiff has not demonstrated that 

she possessed the funds to outbid the highest bidder, let alone pay the entire unpaid 

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balance owing on the loan. Plaintiff has failed to show that she attempted to 

redeem the property during the redemption period or that she was prejudiced in any 

other way.”); Caillouette v. Wells Fargo Bank N.A., No. 11-CV-10204, 2012 WL 

1033598, at *8 (E.D. Mich. Mar. 27, 2012) (same).

Because Plaintiffs have failed to properly allege prejudice as is necessary to 

establish their claims, the Court need not reach the question of whether Plaintiffs 

have alleged a fraud or irregularity in the foreclosure process.

IV. CONCLUSION

For all of the foregoing reasons, 

IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss (Dkt. # 11)

is GRANTED.

IT IS FURTHER ORDERED that Plaintiffs’ Complaint is DISMISSED 

WITH PREJUDICE.

IT IS SO ORDERED.

Dated: December 16, 2015 s/Gerald E. Rosen

Chief Judge, United States District Court

I hereby certify that a copy of the foregoing document was served upon the parties 

and/or counsel of record on December 16, 2015, by electronic and/or ordinary 

mail.

s/Julie Owens

Case Manager, (313) 234-5135

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