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STATE OF MICHIGAN 

COURT OF APPEALS 

BANK OF NEW YORK MELLON, formerly 

known as BANK OF NEW YORK AS TRUSTEE, 

 Plaintiff-Appellant, 

UNPUBLISHED 

September 22, 2015 

v No. 321840 

Wayne Circuit Court 

ROBERT L. CARMACK, LC No. 13-013058-AV 

 Defendant-Appellee. 

Before: K.F. KELLY, P.J., and CAVANAGH and SAAD, JJ. 

PER CURIAM. 

 Plaintiff appeals by leave granted a circuit court order reversing the district court’s 

judgment of possession entered in favor of plaintiff, and remanding this matter to the district 

court for an eviction trial. We reverse the circuit court and reinstate the judgment of possession 

entered by the district court in plaintiff’s favor. 

 This litigation follows a foreclosure action that was challenged by defendant, Robert 

Carmack, in federal court, as explained by our Sixth Circuit Court of Appeals: 

 In October 2001, Carmack obtained a mortgage loan from Countrywide 

Home Loans (Countrywide or Lender) to finance his purchase of property in 

Woodhaven, Michigan. He executed a promissory note in the amount of 

$348,000 and granted a mortgage against the property to Mortgage Electronic 

Registration Systems (MERS) in its capacity as “nominee for Lender and 

Lender’s successors and assigns.” The mortgage granted MERS, its successors 

and assigns the power of sale as to the property for the purpose of securing the 

loan’s repayment. In January 2002, the mortgage was recorded with the Wayne 

County Register of Deeds. 

 Thereafter, the note was transferred to a securitized trust named CWALT, 

Inc. Alternative Loan Trust 2005–J12 Mortgage Pass–Through Certificates, Series 

2005–J12 (the “CWALT Trust”), which is governed by a pooling and serving 

agreement. In October 2009, MERS, in its capacity as nominee for “Lender and 

Lender’s successors and assigns,” assigned the mortgage to The Bank of New 

York Mellon (“BNYM”), which accepted the mortgage in its role as trustee for 
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the CWALT Trust. In November 2009, this assignment was recorded with the 

Wayne County Register of Deeds. 

 Meanwhile, Carmack defaulted on his loan payments. BNYM issued a 

notice of mortgage foreclosure sale by advertisement. On September 7, 2011, the 

property was sold at a sheriff’s sale, at which BNYM purchased the property with 

a credit bid of $503,456.08. Later that month, the sheriff's deed was recorded with 

the Wayne County Register of Deeds. 

 In March 2012, Carmack filed this action in Michigan state court against 

BNYM, as well as his original lender, Countrywide, and the loan servicer, Bank 

of America (collectively, Defendants). He asserted a wrongful foreclosure claim 

against BNYM, seeking a declaration that the assignment of the mortgage and 

sheriff’s deed are void ab initio, as well as an order setting aside the foreclosure 

sale and vesting title in his favor. Defendants removed the case to federal court 

on diversity grounds. In June 2012, the district court granted Defendants’ motion 

to dismiss, concluding that, because Carmack failed to redeem his property within 

the statutory redemption period and his allegations do not fall within the clear 

showing of fraud or irregularity exception under Michigan law, he failed to allege 

a plausible claim that the foreclosure sale should be set aside. Carmack v. The

Bank of N.Y. Mellon, No. 12-cv-11669, 2012 WL 2389863 (E.D. Mich. June 25, 

2012). Carmack timely appealed [to the United States Court of Appeals for the 

Sixth Circuit]. [Carmack v Bank of New York Mellon, 534 F Appx 508, 509-510 

(CA 6, 2013) (footnote omitted).] 

The Sixth Circuit affirmed the district court’s holding, reasoning that “Carmack’s claims 

challenging the mortgage assignment [to plaintiff], which are his grounds for alleging fraud or 

irregularity in the foreclosure-by-advertisement process, are without merit.” Id. at 513. 

 Thereafter, plaintiff instituted summary proceedings in the Thirty-Third District Court 

seeking a judgment of possession for the subject property. Following a hearing on the matter, 

the district court granted a judgment of possession in plaintiff’s favor, holding that plaintiff 

acquired a valid Sheriff’s Deed, the redemption period expired, and defendant fully litigated his 

challenges to the foreclosure in the federal court. 

 Defendant appealed the district court’s decision to the circuit court. Defendant argued 

that plaintiff was not the foreclosing entity; rather, Bank of America was the foreclosing entity, 

but it was never assigned the mortgage as required under MCL 600.3204(3). Plaintiff was 

assigned the mortgage, but the mandatory written notice of foreclosure served on defendant 

pursuant to MCL 600.3205a stated that the foreclosing party was “BAC Home Loans Servicing, 

L.P.,” not plaintiff. Thus, defendant argued, only BAC Home Loans Servicing, which became 

Bank of America, could complete the foreclosure and only Bank of America had standing to 

evict him from the property following the “fake foreclosure.” Defendant also argued that he had 

standing to raise these claims challenging the validity of the foreclosure sale in this summary 

proceeding even though the redemption period expired. See Reid v Rylander, 270 Mich 263, 

267; 258 NW 630 (1935). And res judicata did not bar his claims, defendant argued, because 

MCL 600.3205a(5) states that a challenge to the notice provided by the foreclosing entity must 
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be brought in the circuit court for the county where subject property is located, not in the federal 

court. 

 Plaintiff argued that, under MCL 600.3204, if there is a change in mortgagee after the 

notice was provided to defendant, there must be an assignment by the time of the sale which 

occurred in this case. Here, BAC Home Loans Servicing, which became Bank of America, was 

the loan servicer for Mortgage Electronic Registration Systems, Inc., the holder of the mortgage. 

But before the sheriff’s sale, the mortgage was assigned from MERS to plaintiff; thus, there was 

no statutory violation. In any case, plaintiff argued, res judicata applied to bar all of defendant’s 

challenges to the foreclosure because any such issues were, or could have been, litigated in the 

federal court. Moreover, plaintiff argued, the issues defendant raises on appeal were not raised 

in the court presiding over the summary proceeding; thus, they were not preserved. 

 The circuit court agreed with defendant, holding that it was unclear whether he received 

proper notice under MCL 600.3205a because the letter did not state that plaintiff was the 

foreclosing entity. Further, plaintiff failed to show the required chain of title as set forth in MCL 

600.3204. That is, there were deficits in the foreclosure proceeding. The circuit court also held 

that res judicata did not apply because these issues were not previously addressed and this was an 

eviction proceeding. Accordingly, the circuit court remanded this matter to the district court for 

an eviction trial, which was to be limited to the issue whether the foreclosure notice on behalf of 

BAC Home Loan Servicing conformed to MCL 600.3200 et seq. This appeal followed. 

 Plaintiff argues that res judicata barred defendant from challenging the validity of the 

foreclosure-by-advertisement in this summary proceeding. We agree. 

 We review de novo as a question of law the applicability of res judicata. Bryan v 

JPMorgan Chase Bank, 304 Mich App 708, 713; 848 NW2d 482 (2014). Where the original 

action occurred in federal court, “[t]his Court must apply federal law in determining whether the 

doctrine of res judicata” bars a subsequent claim. Beyer v Verizon North, Inc, 270 Mich App 

424, 428; 715 NW2d 328 (2006). But where, as here, a federal court exercises diversity 

jurisdiction over a claim, “federal law incorporates the rules of preclusion applied by the State in 

which the rendering [federal] court sits.” Taylor v Sturgell, 553 US 880, 891 n 4; 128 S Ct 2161; 

171 L Ed 2d 155 (2008). Thus, Michigan law determines the applicability of res judicata. 

 As discussed in Bryan, 304 Mich App at 715: 

 “The doctrine of res judicata is intended to relieve parties of the cost and 

vexation of multiple lawsuits, conserve judicial resources, and encourage reliance 

on adjudication, that is, to foster the finality of litigation.” Begin v Mich Bell Tel 

Co, 284 Mich App 581, 599; 773 NW2d 271 (2009), overruled on other grounds 

by Admire v Auto-Owners Ins, Co, 494 Mich 10; 831 NW2d 849 (2013). 

 Res judicata bars a subsequent action between the same 

parties when the evidence or essential facts are identical. A second 

action is barred when (1) the first action was decided on the merits, 

(2) the matter contested in the second action was or could have
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been resolved in the first, and (3) both actions involve the same 

parties or their privies. 

 Michigan courts have broadly applied the doctrine of res 

judicata. They have barred, not only claims already litigated, but 

every claim arising from the same transaction that the parties,

exercising reasonable diligence, could have raised but did not. 

[Id., quoting Dart v Dart, 460 Mich 573, 586; 597 NW2d 82 

(1999).] 

The Bryan Court further explained: 

Similarly, 

Collateral estoppel bars relitigation of an issue in a new action 

arising between the same parties or their privies when the earlier 

proceeding resulted in a valid final judgment and the issue in 

question was actually and necessarily determined in that prior 

proceeding. The doctrine bars relitigation of issues when the 

parties had a full and fair opportunity to litigate those issues in an 

earlier action. A decision is final when all appeals have been

exhausted or when the time available for an appeal has passed. [Id. 

at 715-716, quoting Leahy v Orion Twp, 269 Mich App 527, 530; 

711 NW2d 438 (2006) (citations omitted).] 

An order of summary disposition has preclusive effect under res judicata so long as it constitutes 

a final decision on the merits. See Washington v Sinai Hosp of Greater Detroit, 478 Mich 412, 

417-416; 733 NW2d 755 (2007). Likewise, in federal court, summary judgment under FRCP 

12(b)(6) can carry preclusive effect. See Heike v Central Mich Univ Bd of Trustees, 573 Fed 

Appx 476, 480 (CA 6, 2014). 

 In this case, as discussed above, defendant challenged numerous aspects of the 

foreclosure by advertisement proceeding in the federal court. In particular, defendant challenged 

whether Michigan’s foreclosure by advertisement procedure was followed, whether plaintiff was 

the proper foreclosing party, and whether the requisite chain of title existed. These challenges 

were considered in the federal courts and were deemed without merit. In this summary 

proceeding, defendant again challenged the validity of the foreclosure by advertisement 

procedure, but these issues were or could have been decided in the federal court action between 

the same parties. See Bryan, 304 Mich App at 715-716. 

 Defendant claims, however, that he could not have sought to enjoin the foreclosure under 

MCL 600.3205a(5) because the statute limited such actions to “the circuit court for the county in 

which the mortgaged property is situated.” But defendant never disputed the fact that he was 

served notice of the foreclosure. MCL 600.3205a(5) provides that a “borrower on whom notice 

is required to be served under this section who is not served” may bring an action to enjoin 

foreclosure. Thus, defendant’s reliance on this argument is without merit. Further, defendant 

never challenged removal of this action to the federal court pursuant to 28 USC 1447(c) on the 
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ground that he was entitled to injunctive relief. And while defendant is correct that the validity 

of a foreclosure by advertisement sale may generally be tested in a summary proceeding “in so 

far as invalidity thereof appears in the procedure,” in this case, the matter was already “tested” in 

the federal courts. See Reid, 270 Mich at 267. Accordingly, we conclude that res judicata and 

collateral estoppel bar defendant from challenging again the validity of the foreclosure by 

advertisement in this summary proceeding. By concluding otherwise, the circuit court erred and 

that decision is reversed. In light of our dispositive holding, we need not consider plaintiff’s 

other argument on appeal. 

 We reverse the circuit court and reinstate the district court’s judgment of possession in 

favor of plaintiff. We do not retain jurisdiction. 

/s/ Kirsten Frank Kelly 

/s/ Mark J. Cavanagh 

/s/ Henry William Saad