UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

THERESA WILKERSON, 

 

Plaintiff, 

 Civil Case No. 15-11667 

v. Honorable Linda V. Parker 

 

JP MORGAN CHASE BANK NATIONAL 

ASSOCIATION and MAWAD S. KHALIL, 

 

Defendants. 

________________________________/ 

OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO 

DISMISS

Plaintiff, through counsel, initiated this action against Defendants JP Morgan 

Chase Bank, N.A. (“Chase”) and Mawad S. Khalil (“Khalil”) in state court to 

redress alleged improprieties in the foreclosure of her home. Chase timely 

removed the action to this Court on May 8, 2015, on the basis of federal question 

jurisdiction, 28 U.S.C. § 1331. This Court dismissed Khalil as a party to the action 

on October 19, 2015, as a result of Plaintiff’s failure to prosecute her case against 

him. (ECF No. 9.) Presently before the Court is Chase’s motion to dismiss 

Plaintiff’s Complaint, filed pursuant to Federal Rule of Civil Procedure 12(b)(6) on 

July 15, 2015. (ECF No. 6.) Plaintiff has failed to respond to the motion. On 

August 25, 2015, this Court issued a notice informing the parties that it is 

dispensing with oral argument with respect to Chase’s motion pursuant to Eastern 

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District of Michigan Local Rule 7.1(e). (ECF No. 8.) For the reasons that follow, 

the Court grants Chase’s motion and dismisses the action with prejudice. 

I. Governing Legal Standard 

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) allows 

the Court to assess whether the plaintiff’s complaint states a claim upon which 

relief may be granted. Fed. R. Civ. P. 12(b)(6). As the Supreme Court of the 

United States has articulated, “[t]o survive a motion to dismiss, a complaint must 

contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 

plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell 

Atl. Corp. v. Twombly, 550 U.S. 555, 570 (2007). This facial plausibility standard 

requires the plaintiff to put forth “enough fact[s] to raise a reasonable expectation 

that discovery will reveal evidence of” the requisite elements of the plaintiff’s 

claims. Twombly, 550 U.S. at 557. Although a complaint need not contain 

“detailed” factual allegations, the “factual allegations must be enough to raise a 

right to relief above the speculative level.” Ass’n of Cleveland Fire Fighters v. 

City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (citing Twombly, 550 U.S. at 

555) (internal citations omitted). 

While courts are required to accept the factual allegations in a complaint as 

true, Twombly, 550 U.S. at 556, the presumption of truth does not apply to any 

legal conclusions asserted by the plaintiff. Iqbal, 556 U.S. at 678. Therefore, to 

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survive a motion to dismiss, a plaintiff’s pleading must provide “more than labels 

and conclusions, and a formulaic recitation of the elements of a cause of action will 

not do.” Twombly, 550 U.S. at 555. 

In addition to evaluating the sufficiency of the factual allegations in the 

complaint itself, courts may consider any exhibits attached to the complaint, 

matters of public record, and exhibits attached to the defendant’s Rule 12(b)(6) 

motion, provided that the latter are referred to in the complaint and are central to 

the claims therein. Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008) (citing 

Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)). 

II. Factual and Procedural Background 

On May 16, 2007, Plaintiff accepted a $49,000.00 loan from Chase Bank 

USA, N.A. (“lender”), and, in exchange, executed a promissory note secured by a 

mortgage on real property commonly known as 8778 Bessemore Street, Detroit, 

Michigan (hereinafter, the “Property”). (Compl. ¶¶ 9, 10, Ex. 2; Def.’s Mot. Ex. 

A.) The mortgage was recorded with the Wayne County Register of Deeds on 

December 7, 2007. (Compl., Ex. 2.) 

The Lender assigned the mortgage to Chase on June 23, 2012. (Compl., Ex. 

3.) The assignment was recorded with the Wayne County Register of Deeds on 

July 16, 2012. (Id.) 

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Plaintiff subsequently defaulted on her loan obligations. She alleges that she 

began the process of attempting to modify her loan some time prior to June 1, 

2014. (Compl. ¶ 15.) According to Plaintiff, although she cooperated with Chase 

and provided Chase with all documents and/or information requested of her, Chase 

consistently stated that it had not received all of the information and/or documents 

requested and needed. (Id. ¶¶ 16-18.) 

On or about June 30, 2014, Chase initiated foreclosure by advertisement 

proceedings with respect to the Property. (Id. ¶ 20.) On July 31, 2014, the 

Property was sold at a Sheriff’s Sale to Chase. (Id. ¶ 24, Ex. 5.) The Sheriff’s 

Deed was recorded in the Wayne County Register of Deeds on August 13, 2014. 

(Id., Ex. 5.) Chase then transferred the Property to Fannie Mae (a/k/a Federal 

National Mortgage Association) via a Quit Claim Deed which was recorded in the 

Wayne County Register of Deeds on October 17, 2014. (Id. ¶ 28, Ex. 6.) Fannie 

Mae then transferred its interest in the Property to Khalil by way of a Quit Claim 

Deed which was recorded in the Wayne County Register of Deeds on January 7, 

2015. (Id. ¶ 29, Ex. 7.) 

Plaintiff had until January 31, 2015 to redeem the Property. (Compl., Ex. 5.) 

The statutory redemption period expired on that date with Plaintiff failing to 

redeem. 

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On February 3, 2015, Plaintiff filed her Complaint in state court. Plaintiff’s 

Complaint contains three counts: (I) wrongful foreclosure, (II) breach of contract, 

and (III) fraudulent misrepresentation. As indicated, Chase removed Plaintiff’s 

Complaint to federal court on May 8, 2015. The parties thereafter stipulated to an 

extension of time for Chase to respond to Plaintiff’s Complaint. (ECF Nos. 3, 5.) 

Chase responded to the Complaint on July 15, 2015 by filing the pending motion to 

dismiss. 

III. Applicable Law and Analysis 

Foreclosures by advertisement, such as the foreclosure at issue in this case, 

as well as the rights of both the mortgagor and mortgagee after a foreclosure sale 

has occurred, are governed by Michigan statutory law. See, e.g., Senters v. Ottawa 

Sav. Bank, F.S.B., 503 N.W.2d 639, 641 (Mich. 1993); Conlin v. Mortgage Elec. 

Registration Sys., Inc., 714 F.3d 355, 359 (6th Cir. 2013) (applying Michigan law) 

(citation omitted). 

Pursuant to Michigan law, a mortgagor has six months from the date of the 

sheriff’s sale to redeem foreclosed property. Mich. Comp. Laws § 600.3240(8). 

Significant consequences flow from a mortgagor’s failure to redeem prior to the 

expiration of the statutory redemption period: the mortgagor’s “right, title, and 

interest in and to the property” are extinguished, Piotrowski v. State Land Office 

Board, 4 N.W.2d 514, 517 (Mich. 1942), and the deed issued at the sheriff’s sale 

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“become[s] operative, and [ ] vest[s] in the grantee named therein . . . all the right, 

title, and interest [ ] the mortgagor had.” Michigan Compiled Laws § 600.3236. 

This rule of law‒ holding that absolute title vests in the purchaser at the foreclosure 

sale upon expiration of the redemption period‒ has been applied consistently by 

state and federal courts alike to bar former owners from making any claims with 

respect to a foreclosed property after the statutory redemption period has lapsed. 

There is one caveat to the general rule described above: after the redemption 

period has run, a court may allow “an equitable extension of the period to redeem” 

if a plaintiff-mortgagor makes “a clear showing of fraud, or irregularity[.]” 

Schulthies v. Barron, 167 N.W.2d 784, 785 (Mich. Ct. App. 1969); Freeman v. 

Wozniak, 617 N.W.2d 46, 49 (Mich. Ct. App. 2000) (“[I]n the absence of fraud, 

accident or mistake, the possibility of injustice is not enough to tamper with the 

strict statutory requirements.”) (citing Senters, 503 N.W.2d at 643). In order to 

satisfy this standard, a plaintiff-mortgagor’s pleading must allege misconduct 

related to the foreclosure procedure itself. Conlin, 714 F.3d at 360; Reid v. 

Rylander, 258 N.W. 630, 631 (Mich. 1935) (holding that only the foreclosure 

procedure may be challenged after a sale); Freeman, 617 N.W.2d at 49 (reversal of 

sheriff’s sale improper without fraud, accident, or mistake in foreclosure 

procedure). 

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If fraud or irregularity is shown in connection to the foreclosure procedure, 

the result is “a foreclosure that is voidable, not void ab initio.” Kim v. JPMorgan 

Chase Bank, N.A., 825 N.W.2d 329, 337 (Mich. 2012). In order “to set aside the 

foreclosure sale, [the] plaintiffs must show that they were prejudiced by [the] 

defendant’s failure to comply” with Michigan’s foreclosure by advertisement 

statute. Id.; Conlin, 714 F.3d at 361. “To demonstrate such prejudice, [the 

plaintiffs] must show that they would have been in a better position to preserve 

their interest in the property absent [the] defendant’s noncompliance with the 

statute.” Kim, 825 N.W.2d at 337 (footnote omitted). 

Because the redemption period with respect to the Property at issue in this 

case has expired, the Court must analyze Plaintiff’s claims within the fraud or 

irregularity framework outlined above. Thus, the Court must decide whether, 

under Michigan law, the foreclosure sale can be set aside, or is voidable, on the 

facts alleged. See Savedoff v. Access Group, Inc., 524 F.3d 754, 762 (6th Cir. 

2008) (observing that the Erie doctrine requires federal courts hearing state law 

claims to apply the decisions of the state’s highest court). 

In her Complaint, Plaintiff alleges that Chase “failed to properly notify [her] 

of the foreclosure” and engaged in wrongdoing in connection with her loss 

mitigation options. (See Compl. ¶¶ 36-41.) Any alleged fraud or irregularity with 

respect to the loan modification process, however, does not constitute a showing of 

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fraud or irregularity in the foreclosure procedure. See, e.g., Williams v. Pledged 

Property II, L.L.C., 508 F. App’x 465, 468 (6th Cir. 2012) (“Despite the fact that 

[loan] negotiations may have taken place during the foreclosure process, these 

negotiations remained separate from the foreclosure process itself.”). With respect 

to Chase’s alleged failure to provide notice of the foreclosure to Plaintiff, this 

allegation is belied by the publicly filed records reflecting that notice was posted as 

required by law. (Compl., Ex. 5 at Pg ID 51.) In any event, to set aside the 

foreclosure sale, Plaintiff must show that she was prejudiced by Chase’s alleged 

failure to provide notice of the foreclosure. Kim, 825 N.W.2d at 115. To make 

this showing, Plaintiff “must show that [she] would have been in a better position 

to preserve [her] interest in the property absent [Chase’s] noncompliance with the 

[foreclosure by advertisement statute].” Id. at 116. 

In her Complaint, Plaintiff does not allege prejudice as a result of Chase’s 

alleged violation. There is no suggestion that she would have been in a better 

position to preserve her interest in the Property had she received the notice she 

claims was not provided. Notably, Chase demonstrates that Plaintiff in fact was 

approved for a trial loan modification, but was subsequently denied a permanent 

modification because she failed to make the trial period loan payments.1

 (Def.’s 

 

1 The Court may consider the correspondence Chase sent Plaintiff with respect to 

the loan modification as it is central to the claims in Plaintiff’s Complaint, 

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Mot. at Pg ID 104 n.2, citing Ex. C.) As such, the Court cannot find that Plaintiff 

would have been able to redeem the Property or pay off the debt had she received 

notice of the foreclosure proceedings. 

For these reasons, Plaintiff is not entitled to the relief she seeks with respect 

to rescinding the foreclosure sale or subsequent transfers of the Property and her 

wrongful foreclosure claim fails to state a claim upon which relief may be granted. 

Plaintiff’s breach of contract and fraudulent misrepresentation claims fail for the 

following reasons. 

To establish a breach of contract in Michigan, Plaintiff must allege: (1) the 

existence of a valid contract, (2) establish the contract’s terms, (3) present evidence 

of a breach of those terms, and (4) show an injury causally related to that breach. 

Webster v. Edward D. Jones & Co., 197 F.3d 815, 819 (6th Cir. 1999). Plaintiff 

alleges in her Complaint that Chase breached the terms of the mortgage, 

specifically paragraph 22 requiring Chase to provide notice to Plaintiff prior to 

acceleration.2

 (Compl. ¶¶ 47-49.) Plaintiff fails to allege an injury resulting from 

 

specifically her claim that she was denied loss mitigation and was able to afford a 

reasonable payment had the loan been modified. 

2 In Count II, Plaintiff also asserts that Chase breached the implied covenant of 

good faith and fair dealing. (Compl. ¶¶ 50-51.) Michigan does not recognize such 

a claim under the circumstances of this case, however. See Jawad v. Hudson City 

Sav. Bank, FSB, No. 2014 WL 7272342, at *5 (E.D. Mich. Dec. 18, 2014) (citing 

Belle Isle Grill Corp. v. City of Detroit, 666 N.W.2d 271, 279-80 (Mich. Ct. App. 

2003)); Jarbo v. BAC Home Loan Servicing, No. 10-12632, 2010 WL 5173825, at 

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the alleged breach. Moreover, Michigan law precludes Plaintiff from maintaining 

a claim for breach of contract claim because, by her default, Plaintiff committed 

the first substantial breach of the parties’ contract. As the Sixth Circuit has stated 

with regard to Michigan law: “He who commits the first substantial breach of a 

contract cannot maintain an action against the other contracting party for failure to 

perform.” Chrysler Int’l Corp. v. Cherokee Export Co., 134 F.3d 738, 742 (6th 

Cir. 1998) (quoting Ehlinger v. Bodi Lake Lumber Co., 36 N.W.2d 311, 316 (Mich. 

1949)); see also Goodman v. CitiMortgage, Inc., No. 15-12456, 2015 WL 

6387451, at *4 (E.D. Mich. Oct. 22, 2015) (no question that plaintiffs breached the 

mortgage by failing to make the required loan payments). 

Lastly, in Count III of her Complaint, Plaintiff asserts fraudulent 

misrepresentation based on allegations that Chase told her that “it would not begin 

foreclosure proceedings while the parties were actively pursuing loan modification 

or other financial assistance options.” (Compl. ¶ 53.) Plaintiff alleges that Chase’s 

representations induced her “to refrain from defending the foreclosure of her home 

. . ..” (Id. ¶ 57.) 

Under the Federal Rules of Civil Procedure, the circumstances of a 

fraudulent misrepresentation must be pled with particularity. Fed. R. Civ. P. 9(b). 

In order to satisfy the particularity requirement, a plaintiff must: (1) specify the 

 

*14-15 (E.D. Mich. 2010) (citing Ulrich v. Fed. Land Bank of St. Paul, 480 

N.W.2d 910, 912 (Mich. Ct. App. 1991)). 

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alleged fraudulent statements; (2) identify the speaker; (3) state when and where 

the statements were made; and (4) explain why the statements were fraudulent. 

Frank v. Dana Corp., 547 F.3d 564, 570 (6th Cir. 2008). Here, Plaintiff fails to 

particularly identify the specific fraudulent statements, who made the statements, 

and when and where the statements were made. Therefore, Plaintiff fails to plead 

fraudulent misrepresentation with the level of particularity required by Rule 9(b). 

Furthermore, promises from a financial institution regarding loan 

modifications must be in writing to be enforceable under the statute of frauds. 

Michigan Compiled Laws Section 566.132(2)(b) provides that no cause of action 

can be brought against a financial institution for a promise of financial 

accommodation unless the promise is in writing and signed by an authorized 

signature. Here, there is no reference to a written instrument pertaining to a stay of 

the foreclosure proceedings during the loan modification process, therefore 

Plaintiff’s claim should be dismissed due to non-compliance with the statute of 

frauds. 

For the reasons stated above, the Court holds that Plaintiff’s wrongful 

foreclosure, breach of contract, and fraudulent misrepresentation claims are subject 

to dismissal. 

Accordingly, 

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IT IS ORDERED, that Defendant JP Morgan Chase Bank, N.A.’s motion 

to dismiss Plaintiff’s Complaint is GRANTED. 

 s/ Linda V. Parker 

 LINDA V. PARKER 

 U.S. DISTRICT JUDGE 

Dated: January 6, 2016 

I hereby certify that a copy of the foregoing document was mailed to counsel of 

record and/or pro se parties on this date, January 6, 2016, by electronic and/or U.S. 

First Class mail. 

 s/ Richard Loury 

 Case Manager 

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