UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

MARGIE LEE WILKES,

Plaintiff,

CASE NO. 15-CV-11389

v. HONORABLE GEORGE CARAM STEEH

NATIONAL CREDIT UNION

ADMINISTRATION BOARD, acting in its

capacity as liquidating agent for Craftsman

Credit Union,

Defendant.

 /

OPINION AND ORDER GRANTING DEFENDANT’S MOTION FOR 

SUMMARY JUDGMENT (DOC. #21) AND DISMISSING CASE, GRANTING

PLAINTIFF’S MOTION FOR LEAVE TO FILE EXCESS PAGES (DOC. #24),

DENYING PLAINTIFF’S MOTION TO STRIKE DEFENDANT’S MOTION TO DISMISS

(DOC. #25), DENYING PLAINTIFF’S MOTION TO STRIKE DEFENDANT’S

REPLY BRIEF (DOC. #30), DENYING AS MOOT DEFENDANT’S MOTION

TO STRIKE PLAINTIFF’S RESPONSE (DOC. #32), AND DISMISSING AS

IMPROVIDENTLY FILED PLAINTIFF’S MOTIONS FOR LEAVE OF COURT

(DOC. #33) AND LEAVE TO FILE A REPLY BRIEF (DOC. #34), AND DENYING

PLAINTIFF’S MOTION TO DISMISS DEFENDANT’S MOTION TO STRIKE (DOC. #35)

Now before the court are the following motions:

Defendant’s motion to dismiss (construed by the court as a motion for summary

judgment) (Doc. #21);1

1

 Defendant filed a motion to dismiss under Federal Rule of Civil Procedure Rule

12(b)(6). The court converts the motion to dismiss to a motion for summary judgment

under Federal Rule of Civil Procedure Rule 56. Both parties rely on exhibits extrinsic to

the pleadings in support of their arguments. The Sixth Circuit has explained that

“[w]hether a district court must provide actual notice that it intends to convert a motion to

dismiss into a motion for summary judgment depends on the facts and circumstances of

each case.” Shelby Cnty. Health Care Corp. v. Southern Council of Indus. Workers

Health and Welfare Trust Fund, 203 F.3d 926 (6th Cir. 2000) (citation omitted). The

Sixth Circuit explained that there is no surprise to the parties when a district court sua

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Plaintiff’s motion for leave to file excess pages (Doc. #24);

Plaintiff’s motion to strike defendant’s motion to dismiss (Doc. #25);

Plaintiff’s motion to strike defendant’s reply brief (Doc. #30);

Defendant’s motion to strike plaintiff’s response (Doc. #32);

Plaintiff’s motion for leave of court (Doc. #33);

Plaintiff’s motion for leave to file a reply brief (Doc. #34); and

Plaintiff’s motion to dismiss defendant’s motion to strike (Doc. #35).

For the reasons that follow, defendant’s motion to dismiss will be granted, plaintiff’s motion

for leave to file excess pages will be granted, plaintiff’s motion to strike defendant’s motion

to dismiss will be denied, plaintiff’s motion to strike defendant’s reply brief will be denied,

defendant’s motion to strike plaintiff’s response will be denied, plaintiff’s motions for leave

of the court and leave to file a reply brief will be dismissed as improvidently filed, and

plaintiff’s motion to dismiss defendant’s motion to strike will be denied.

I. BACKGROUND

Pro se plaintiff Margie Wilkes was the CEO for Craftsman Credit Union (“Craftsman”)

in Detroit, Michigan until September 6, 2013, when the credit union was placed into

liquidation by the defendant National Credit Union Administration. (Pl’s. Am. Compl. at ¶

sponte decides to convert a motion to dismiss to one for summary judgment if (a) both

sides submit extrinsic material as exhibits to their pleadings, (b) the parties had the

opportunity to respond to arguments and exhibits that were submitted by the other side,

and (c) the parties had the opportunity to fully address all arguments for dismissal. Id.

at 931–32. Here, “[b]ecause the parties both submitted numerous exhibits fully

addressing [defendant’s] argument for dismissal, they had sufficient notice that the . . .

court could consider this outside material when ruling on the issues presented in the . . .

motion to dismiss and could convert it into a motion for summary judgment under Fed.

R. Civ. P. 12(b).” Id. at 932.

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2). Craftsman was a state chartered, federally insured credit union under 12 U.S.C. §

1752(7). After the liquidation, defendant became the successor to Craftsman. Pursuant

to 12 U.S.C. § 1787(b)(2), defendant succeeded “all rights, titles, powers, and privileges”

of Craftsman. 

As part of her employment with Craftsman, plaintiff had a Supplemental

Compensation Benefit Agreement (dated February 17, 2004), and, as CEO, was the

beneficiary of a fully-funded Post-Retirement Healthcare Benefits plan (dated June 30,

2013). (Id. ¶ 2a). Plaintiff claims that, at the time her employment terminated, she was

entitled to supplemental compensation benefits in the amount of $138,121.89 and postretirement benefits in the amount of $80,957.00. (Id. ¶ 2c).

On September 28, 2013, plaintiff filed an administrative claim with defendant for the

above benefits, totaling $219,078.89, pursuant to 12 U.S.C. § 1787(b)(5). Under section

1787(b)(5), defendant was tasked with the duty of determining ‘whether to allow or disallow

the claim. . . .” After requesting and receiving multiple extensions from plaintiff during the

review period, on June 25, 2014, defendant informed plaintiff that $72,039.14 of her claim

would be allowed. See (Pl’s. Ex. C-6, June 25, 2014 Letter From Defendant). Specifically,

defendant stated that the approved amount was the amount of interest earned on plaintiff’s

retirement and health benefits, credited as of the date of the liquidation. (Id.). Defendant

informed plaintiff that $66,082.75 claimed under a Split-Dollar Agreement and $80,957 for

lifetime post-retirement health benefits was denied. (Id.). Plaintiff was given the option of

accepting defendant’s determination, at which time a check for $72,039.14 would be issued

to plaintiff. (Id.).

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Plaintiff rejected the determination and initiated an administrative appeal. (Pl’s. Ex.

C-7, Notice of Appeal). During the pendency of the administrative appeal, defendant

reassessed its decision. In a letter dated October 31, 2014, defendant informed plaintiff

that it was prepared to adjust its position and approve the total $138,121.89 claimed in

compensation benefits. (Pl’s. Ex. C-9, October 31, 2014 Letter From Defendant). 

However, defendant did not change its view “regarding the lifetime post-retirement health

benefits portion of [plaintiff’s] claim, in the amount of $80,957.” (Id.). That amount

remained denied. Defendant explained to plaintiff that she could accept defendant’s

determination, at which time a check would be sent to her, or continue to pursue her

appeal. (Id.).

Plaintiff again rejected defendant’s determination. After further review, on December

1, 2014, defendant communicated to plaintiff that the entirety of her claim — $219,078.89

— would be accepted. (Pl’s. Ex. C-10). However, defendant informed plaintiff that the

books and records of Craftsman evidenced a promissory note given from Craftsman to

plaintiff on September 1, 2010 in the amount of $202,561.05. (Id.). The note was secured

by a mortgage on plaintiff’s residential home. As of the date of defendant’s December 1

letter to plaintiff, the balance on the note was $200,355, including principal, accrued interest

and other fees. (Id.). Using the earlier date of when plaintiff initially filed her administrative

claim for benefits, defendant reduced the “payoff” amount of the September 1, 2010 loan

to $193,687.94. (Id.). As such, defendant stated its intention to offset the benefits granted

to plaintiff ($219,078.89) by the amount of plaintiff’s indebtedness ($193,987.94), for a total

net claim amount of $25,390.95 in plaintiff’s favor. (Id.). A check was remitted to plaintiff

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in the amount of $25,390.95, in full satisfaction of her claim, which she accepted by

cashing.

On December 17, 2014, defendant sent a letter to plaintiff informing her that the

September 1, 2010 loan was closed, and documents were sent to plaintiff for her use to

clear title to her residential property. (Pl’s. Ex. C-11, December 17, 2014 Letter From

Defendant). Because the entirety of plaintiff’s administrative claim was granted, the

administrative appeal was dismissed as moot. (Pl’s. Ex. C-12, January 15, 2015 Letter

From Defendant).

Plaintiff wrote to defendant to express her objection to the handling of her claim,

specifically the offsetting of benefits. Plaintiff then filed this action seeking a judicial

determination of her administrative claim. The court has jurisdiction under 12 U.S.C. §

1787(b)(6). Under section 1787(b)(6), a dissatisfied claimant may file an action in federal

district court challenging a denial of her claim. Plaintiff alleges: Count I- Negligence of Duty

of Care and Fraud and Count II- Breach of Contract.

This matter is now before the court on multiple motions, described above. Most

substantively, before the court is defendant’s motion to dismiss plaintiff’s first amended

complaint. (Doc. #21). Multiple related motions were subsequently filed. The court

dispensed with oral argument on defendant’s motion to dismiss, pursuant to Eastern District

of Michigan Local Rule 7.1(f)(2). The arguments raised in the subsequent motions likewise

are adequately presented in the briefs such that oral argument is unnecessary. The court’s

decision on all of the motions follows.

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II. LEGAL STANDARDS

A. Rule 56

Federal Rule of Civil Procedure 56(c) empowers the court to render summary

judgment "forthwith if the pleadings, depositions, answers to interrogatories and admissions

on file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as a matter of law." See

Redding v. St. Eward, 241 F.3d 530, 532 (6th Cir. 2001). The Supreme Court has affirmed

the court's use of summary judgment as an integral part of the fair and efficient

administration of justice. The procedure is not a disfavored procedural shortcut. Celotex

Corp. v. Catrett, 477 U.S. 317, 327 (1986); see also Cox v. Kentucky Dep’t of Transp., 53

F.3d 146, 149 (6th Cir. 1995).

The standard for determining whether summary judgment is appropriate is "'whether

the evidence presents a sufficient disagreement to require submission to a jury or whether

it is so one-sided that one party must prevail as a matter of law.'" Amway Distrib. Benefits

Ass’n v. Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 251-52 (1986)). The evidence and all reasonable inferences

must be construed in the light most favorable to the non-moving party. Matsushita Elec.

Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532

(6th Cir. 2001). "[T]he mere existence of some alleged factual dispute between the parties

will not defeat an otherwise properly supported motion for summary judgment; the

requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247-

48 (emphasis in original); see also Nat’l Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900,

907 (6th Cir. 2001).

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If the movant establishes by use of the material specified in Rule 56(c) that there is

no genuine issue of material fact and that it is entitled to judgment as a matter of law, the

opposing party must come forward with "specific facts showing that there is a genuine issue

for trial." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean

v. 988011 Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations or denials in

the non-movant's pleadings will not meet this burden, nor will a mere scintilla of evidence

supporting the non-moving party. Anderson, 477 U.S. at 248, 252. Rather, there must be

evidence from which a jury could reasonably find for the non-movant. McLean, 224 F.3d

at 800 (citing Anderson, 477 U.S. at 252).

B. Rule 12(b)(1)

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) “may either

attack the claim of jurisdiction on its face or it can attack the factual basis of jurisdiction.” 

Golden v. Gorno Bros., Inc., 410 F.3d 879, 881 (6th Cir. 2005). A facial attack “is a

challenge to the sufficiency of the pleading itself,” which requires the court to “take the

material allegations of the [complaint] as true and construed in the light most favorable to

the nonmoving party.” United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). On the

other hand, a factual attack “is not a challenge to the sufficiency of the pleading’s

allegations, but a challenge to the factual existence of subject matter jurisdiction,” and the

court “is free to weigh the evidence and satisfy itself as to the existence of its power to hear

the case.” Id.

III. DISCUSSION

A. Subject-Matter Jurisdiction - Count II

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The court first addresses a challenge to its subject-matter jurisdiction. One

argument raised by defendant is that plaintiff failed to exhaust her administrative remedies

as it relates to her negligence/fraud claim alleged in Count II because jurisdiction is

predicated on 12 U.S.C. § 1787(b)(6), permitting agency review or judicial determination

of disallowed claims. However, plaintiff’s sole claim filed with defendant was a claim for

benefits payable under two contracts entered into between plaintiff and Craftsman: (1) the

supplemental compensation benefits agreement and (2) the post-retirement agreement. 

Plaintiff never raised a negligence/fraud claim in the administrative proceedings.

Defendant points to the Financial Institutions Reform, Recovery and Enforcement

Act of 1989, for its proposition that the court lacks subject-matter jurisdiction to address

Count II. However, it is the Federal Credit Union Act that applies to this action. The

Federal Credit Union Act expressly states that agency review or a judicial determination

may be sought, without a requirement that claims first be raised in an administrative setting. 

12 U.S.C. § 1787(b)(6)(ii). Given the statute’s use of the word “or,” it is clear that there is

no exhaustion requirement. Indeed, defendant has not cited to any case that has found an

exhaustion requirement in the Federal Credit Union Act. Thus, the court has subject-matter

jurisdiction to address Count II.

B. The Merits

1. Count I- Breach of Contract

Defendant argues that, although plaintiff’s amended complaint alleges breach of

contract, negligence and fraud, “the essence of Wilkes’ appeal is that she wanted the

money from her claim and it should be her decision whether to use that money to pay her

mortgage or not.” (Def’s. Mot. at 12). The court agrees with defendant’s characterization

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of the amended complaint. Plaintiff’s amended complaint does not challenge defendant’s

actions allowing her claim. In essence, plaintiff challenges defendant’s actions in offsetting

the claim by the amount of her indebtedness to Craftsman. Thus, plaintiff’s lawsuit is

nothing more than a challenge to defendant’s action on her claim under 12 U.S.C. §

1787(b)(6).

Unfortunately for plaintiff, however, her challenge to defendant’s actions are without

merit. Defendant allowed plaintiff’s claim in full. Thus, there is nothing for plaintiff to

challenge because her claim was allowed.

Plaintiff argues that defendant was not permitted to offset the amount of the claim

that was allowed by the amount of her indebtedness to Craftsman. She is wrong. The

Federal Credit Union Act states:

Withholding of payment due to liability of credit union member

The Board may withhold payment of such portion of the insured account of

any member of a closed credit union or its liquidating agent, which is not

offset against a claim due from such credit union, pending the determination

and payment of such liability by such member or any other person liable

therefor.

12 U.S.C. § 1787(n) (emphasis added). In addition, there is a common law setoff right. 

“‘The right to setoff is a widely recognized common law right which allows entities that owe

each other money to apply their mutual debts against each other, thereby avoiding ‘the

absurdity of making A pay B when B owes A.’” In re Gordon Sel-Way, Inc., 270 F.3d 280,

290 (6th Cir. 2001) (citing Citizens Bank of Md. v. Strumpf, 516 U.S. 16, 18 (1995)). As

explained by the Michigan Court of Appeals:

Setoff is a legal or equitable remedy that may occur when two entities that

owe money to each other apply their mutual debts against each other. 

Generally, the setoff and the action must be between the same parties and

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in the same capacity or right, and the court can look through the transactions

and nominal parties to determine the real parties in interest. A setoff requires

a mutuality of debt between the same real parties in interest, where the

demands of the mutually indebted parties are set off against each other and

only the balance recovered. However, setoff rests on opposing claims that

are enforceable in their own right. A claim for set off need not arise out of the

same transaction as that sued on. If the parties are mutually indebted, there

may be a setoff regardless of whether the debt arises out of the same

contract or transaction.

Siciliano v. Mueller, No. 222258, 2001 WL 1699801, at *6 (Mich. Ct. App. Dec. 28, 2001)

(internal quotation marks and citations omitted).

Based on the above statutory and common law principles, defendant was permitted

to offset the amount of plaintiff’s claim by the amount plaintiff owed under the note. Nothing

plaintiff argues changes this result. Nothing in any of the contracts plaintiff was a party to

affects the defendant’s right to setoff. 

Moreover, plaintiff accepted and cashed the $25,390.95 check from defendant in

“full satisfaction” of her claim. Prior to accepting the check, plaintiff was informed:

A check in [the] amount [of $25,390.95] is enclosed with this letter,

representing payment to you in full satisfaction of your claim. Within the next

two weeks, the Liquidating Agent will stamp the Note “Paid” and return it to

you, and provide you with a satisfaction of mortgage that you may file in the

appropriate county records. The result will be that you will own the Harper

Woods property free and clear of any lien or interest of the Liquidating Agent. 

Since this transaction has the legal effect of granting your creditor claim

against the liquidation estate of [Craftsman] in full, the effect is that the

appeal you submitted to the [defendant] by letter of July 29, 2014, is moot

and will be dismissed by the Board.

(Pl’s. Ex. C-10). With the knowledge that accepting the check was in full satisfaction of her

claim, plaintiff accepted and cashed the check. Thus, there has been an accord and

satisfaction.

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Accord and satisfaction is defined in Mich. Comp. Laws § 440.3311. Section

440.3311 provides,

(1) If a person against whom a claim is asserted proves that (i) that person

in good faith tendered an instrument to the claimant as full satisfaction of the

claim, (ii) the amount of the claim was unliquidated or subject to a bona fide

dispute, and (iii) the claimant obtained payment of the instrument, the

following subsections apply.

(2) Unless subsection (3) applies, the claim is discharged if the person

against whom the claim is asserted proves that the instrument or an

accompanying written communication contained a conspicuous statement to

the effect that the instrument was tendered as full satisfaction of the claim. 

Here, as described above, defendant sent plaintiff a check accompanied by a written

communication containing a conspicuous statement that the check was tendered as full

satisfaction of plaintiff’s claim. Plaintiff cashed the check. There has been an accord and

satisfaction.

2. Count II- Negligence/Fraud

Next, plaintiff contends that defendant was negligent and committed fraud in

processing her administrative claim. Essentially, plaintiff contends that defendant’s

negligence/fraud arose out of defendant’s request from plaintiff for more time to process

the claim. Defendant has a statutory requirement to process claims within 180 days. 12

U.S.C. § 1787(5)(A)(I). However, as explained above, each time defendant requested an

extension of this time period, plaintiff agreed to the extension. Plaintiff cannot complain that

it took too long for defendant to reach a decision allowing or disallowing her claim when she

agreed to the extension of time. Her claim lacks merit.

C. Remaining Motions

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Plaintiff also filed multiple other motions, many due to her lack of familiarity with

court procedure and the local court rules. Plaintiff filed a motion for permission to file an

oversized brief. (Doc. #24). This motion will be granted. Plaintiff also filed the following

motions: Plaintiff’s motion to strike defendant’s motion to dismiss (Doc. #25) (wrongly

asserting that defendant exceeded the page limit); Plaintiff’s motion to strike defendant’s

reply brief (Doc. #30) (wrongly asserting that defendant’s reply brief was untimely);

Plaintiff’s motion for leave of court (Doc. #33) (apologizing to the court for a lack of

familiarity with the court rules); Plaintiff’s motion for leave to file a reply brief (Doc. #34)

(requesting the opportunity to file a sur-reply).

Defendant then filed a motion to strike plaintiff’s sur-reply. (Doc. #32). Plaintiff

responded with her own motion to dismiss defendant’s motion to strike plaintiff’s sur-reply.

(Doc. #35).

Based on the above discussion, the court will grant plaintiff’s motion for leave to file

excess pages, deny plaintiff’s motion to strike defendant’s motion to dismiss, deny plaintiff’s

motion to strike defendant’s reply brief, deny as moot defendant’s motion to strike plaintiff’s

response, dismiss as improvidently filed plaintiff’s motions for leave of the court and leave

to file a reply brief, and deny plaintiff’s motion to dismiss defendant’s motion to strike.

IV. CONCLUSION

For the reasons stated above, defendant’s motion for summary judgment is

GRANTED. This case is DISMISSED. In addition, plaintiff’s motion for leave to file excess

pages is GRANTED, plaintiff’s motion to strike defendant’s motion to dismiss is DENIED,

plaintiff’s motion to strike defendant’s reply brief is DENIED, defendant’s motion to strike

plaintiff’s response is DENIED AS MOOT, plaintiff’s motions for leave of the court and leave

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to file a reply brief are DISMISSED as improvidently filed, and plaintiff’s motion to dismiss

defendant’s motion to strike is DENIED.

IT IS SO ORDERED.

Dated: December 4, 2015

s/George Caram Steeh 

GEORGE CARAM STEEH

UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE

Copies of this Order were served upon attorneys of record on

December 4, 2015, by electronic and/or ordinary mail and also

on Margie Lee Wilkes, 41382 Llorac Lane,

Northville, MI 48167.

s/Barbara Radke

Deputy Clerk

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