NOT RECOMMENDED F OR F ULL-TEXT PUBLICATION F ile Nam e: 12a0538n.06 No. 11-1484 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT

KA RMON R. SHAYA, e t al., P laintif fs-App ellants,

v. COUNTRYWIDE HOME LOANS, INC., Defendan t-Appellee. ) ) ) ) ) ) ) ) ) ON AP P EAL FR OM THE UNITED STAT ES DIS TRICT COURT F OR THE E ASTERN DISTRICT OF MICHIG AN AMENDED OP INION

BEFORE: BATCHEL DER, Chief Ju dge; Mc KEAG UE, Circuit Judge and Q UIST,

Senior DistrictJudge. * QUIST, Dis tric t Judge. B A C K G R O U N D On April 12, 2004, Plaintiff Samira M an s o r o b t ained a mortg ag e from Def endant, Country wide Home L oans, I nc. (Country wi d e) t o p u rc hase a house. Plaintiff Kar mon Shay a was ad d ed to the t itle of t he house in 2007 and became personally liable for the not e as a co-borr o we r afte r executing an assumption ag ree ment. Plaintiffs stopped making pay ments on their loan in 2009. On Aug ust 25, 2010, Plaintiffs filed a complaint ag ainst only Country wide, but alleg ed the following

seven counts ag ainst Co u n t ry wide and non-par

ties: fra udulent misrepre sentation (De fenda nt Country wide) (Count I ); fra

udulent misrepre sentation (De fenda nt L ehman) (Count I I ); violation of

Honora ble Gordon J

. Quist, United States Senior District J udg e for the Western District of * Michig an, sitting by

desig nation.Michig an’s Mortg ag e Br oker Act (Count I I I ); brea ch of contra ct (Count I V); quiet title ( Count V) ;

violation of Michig an’s fore closure statute, M.C.L .A. § 600.3204, et seq. (Count VI ); and, injunctive relief (Count VI I ). Subsequently , Country wide fore closed upon Plaintiffs’ house and eventua lly a Sheriff’ s sale took place on September 24, 2010. The district court dismiss ed Plaintiffs’ seven- count complaint for failure to state a claim. See Fe d. R. Civ. P. 12(b)( 6). Plaintiffs timely appea l ed s o m e o f the district court’s finding s. For the

rea sons set for t h below, we aff irm the district court and awa rd Country

wide sanctions ag ainst Plaintiffs’ counsel. A N A L Y S I S This Court conducts a de novo revie w of a district court’s order g ranting a motion to dismiss under Fede ral Rul e of Civil P roce dure 12(b). Miller v. Currie , 50 F.3d 373, 377 (6th Cir. 1991). Whil e a complaint need not contain detailed fac tual alleg ations, a plaintiff’s alleg ations must include

more than labels and conclusions. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007); Ashcroft

v. Iqbal , 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (“Thr eadba re rec itals of the elements of a cause

o f action, supported by mere conclusory statements, do not suffice .”). A complaint mus t co n t ai n “enoug h fac ts to state a claim to re lief that is plausible on its face .” Twombly , 550 U.S. at 570. I. F ailure to perm it leave t o am end On Aug ust 25, 2010, Plaintiffs filed their complaint in Ma comb County Circuit Court. On September 29, 2010, Count ry wi d e re m o ved the case to Easter n District of Michig an based on diversity jurisdiction. On October 6, 2010, County wide filed its motion to dismiss. I n the motion to dismiss , Country

wide notifi ed P l ai n t i ffs of numerous eg reg ious err ors in the complaint. For example, the complaint ref ere nced “De fenda

nt L ehman” and “De fenda nt Fe dera l”–two non-par

ties

2to the lawsuit. I n addition, the complaint cited authority that does not exis t. Plaintiffs di d not

initially respond to the motion to dismiss

. I n turn, on Dec ember 30, 2010, the district court order ed the Plaintiffs to show cause why Country wide’s motion should not be g rante d. Plaintiffs finally responde d on J anuar

y 7, 2011. Plaintiffs did not addre ss many of the “ty pog raphic al” err ors in the complaint. The district court fi l ed i t s o p i nion and order dismiss ing the complaint on Marc h 22, 2011. Plaintiffs never move d to amend their c omplaint at any point. Now, Plaintiffs state that they “neve r had the opportunity to amend their pleading s to comply with the United State[s] Court Ru l es befor e responding to the motion.” (Pl.’s Br

. at 1.) Had Plaintiffs had the opportunity , they alleg e, “they would have amende d their pleading s to ref lect that MERS [Mortgag e Electronic Reg istration Sy stems, Inc.] had no standing t o b ri ng fore closure by adver tisement under Michig an’s For eclosure by Ad vertisement statute.” ( Id. at 1-2.) Moreove r, Plaintiffs contend that even if their pleading s wer e insufficient, the district court was bound by law to permit amendment. (

Id. at 2-3.) A party may amend its pleading once as a ma t t er of course wit hin 21 day s afte r serving it,

o r 21 day s afte r service of a mot ion under Fede ral Rul e of Civil Procedur e 12(b). Fe d. R. C i v . P

. 15(a) (1). Plaintiffs fa iled to amend their c omplaint as a matter of course . Despite Plaintiffs’ failur e t o am en d as a matter of course , under Fe dera l Rule of Civil Procedur e 15(a) (2), “a party may amend its pleading only with the opposing party ’s written consent

or the court’s leave .” Fe d. R. Civ. P. 15(a) (2) (empha sis added)

. Plaintiffs never s o u g ht Country wide’s c onsent to amend nor did Plaintiffs ever move the district c ourt for leave to amend their complaint. So, even though Plaintiffs alleg e that they “would have amende d their pleading s,” they did not. Moreove r, even though leave must be fre ely g iven, a motion must first be made to the

3d i s t ri ct court. See Fe d. R. Civ. P. 15(a) (2). We have noted in the past that “the party reques t i n g

leave to amend must act with due diligenc e if it wa nts to take advanta g e of [R ule 38' s] libera lity .” Parry v. Mohawk Motors of Mich., Inc. , 236 F.3d 299, 306 (6th Cir. 2000) (interna l quotation marks omitted). Neve r filing a reque st for leave to amend at all, despite a plethora of chanc es to do so, is the ver y antitheses of due diligenc e. There fore , Plaintiffs’ alleg ation that t h ey d i d not have the opportunity to amend their complaint and that they should have been entitled to amend it as a matter of law is disinge nuous and is thus rejecte d. II. New claim against MERS Plaintiffs arg

ue that “MERS did not have standing to bring fore closure by adver tisement.” First, MERS is not a party to this lawsuit. Second, Plaintiffs di d n ot make this argument to the district court. Since Plaintiffs did not raise the issue befor e the district court, they “have waived their rig ht to arg ue the point on appea l.” United States v. Universal Mgmt. Servs., Inc. , 191 F.3d 750, 758 (6th Cir. 1999); W

hite v. Anchor Motor Freight, Inc. , 899 F.2d 555, 559 (6th Cir. 1990) (“This court will not decide issues or claims not litig ated befor e the district court.” ). There fore , Plaintiffs’ new claim ag ainst MERS i s dismis sed. III. Violation of

M.C.L.A. § 600.3204, et seq. (Count VI) Plaintiffs contend that the d i s t rict court err ed by dismiss ing Count VI of their complaint, which alleg es violations of Michig an’s fore closure statute, M.C.L .A. § 600.3204, et seq. Plaintiffs arg ue that no offe r wa s m ad e to them to enter into a loan modification as required by M.C.L .A. § 600.3205a. Plaintiffs state t h at they wer e in the proce ss of modification discussions when the

4Sheriff’ s sale was held. (Compl. ¶ 45.) Plaintiffs also alleg e that the fore closure notice failed to

comply with M.C.L .A. § 600.3205a. ( Compl. ¶ 46.) Count VI only

makes a lleg ations ag ainst “De fenda nt L ehman.” Country

wide, howe ver, is the onl y defe ndant i n this case . The dist rict court noted t his error, and on appea l Plaintiffs do not addre ss it. See United States v. Johnson , 440 F.3d 832, 846 (6th Cir. 2006) (noting that issues not

1 raised by an appell an t in his opening brief are deeme d waived)

. Even if “De fenda nt L ehman” somehow v io la

te d M ic h ig a

n ’ s f orec losure statute that infring ed on Plaintiffs’ rig hts, the district court could not have provided relief since De fe n d ant L ehman was not a party befor e the district court. There fore , Count VI does not state a c laim for which r elief c an be g rante d. To the extent t h at P l ai n t iffs intended the alleg ations to apply to Country wide, the district court would still b e af

fi rmed. As the district court said, Plaintiffs failed to support any of their conclusory statements that Country wide’s fore closure failed to c omply with M.C.L .A. § 600.3205 with fac tual alleg ations. Moreove r, Plaintiffs do not dispute that Plaintiffs and Country wide had not y et enter ed into a loan modification ag ree ment. Thus, the district court’s dismissal of Count VIis affirme d. IV. F raudul ent Misre presentat ion Claims C o u n t I alleg es that Country wide made sever al fra

udulent misrepre sentations to Plaintif fs when Pl aintiffs’ loan was originate d. Count I I alleg es t hat “Defe ndant L ehman” mad e fra udulent misrepre sentati o n s. On appea l, Plaintiffs contend that other misrepre sentations are contained in Count I I I , which, ver

y g ener ally , alleg es violations of the Truth in L ending Act (TI L A), 15 U.S.C.

Country wi d e’ s m o t ion to dismiss also pointed out this mistake to Plaintiffs. L ikewise, 1 Plaintiffs did not address the mistake in their r esponse to Country wide’s motion. 5§ 1601 et seq. , the Real Estate Settlement Procedur es Act (RESPA), 12 U.S.C. § 2601 et. seq. , and

Michig an’s Consumer Mor tga g e Protec tion Act (CMPA), M.C.L .A. § 445.1631 et seq

. The district court said that, pursuant to M.C.L .A. § 600.5813, Plai n t i ff s ’ fra udulent misrepre sentation claims wer e barr ed by Michig an’s six -y ear sta t u te of limit ations. See Boyle v. Gen. Motors Corp. , 468 Mich. 22 6 , 2 3 2, 661 N.W.2d 557, 560 (2003) (holding that the six -y ear statute of limit ations period beg ins when the fra ud is done). The district court also found that Count I I I ’s alleg ations of TI L A violations wer e t i m e b ar re d b eca use TI L A has a one-y ear statute of limit ations. 15 U.S.C. § 1640(e). Plaintiffs contend that “the statute of limit ations applicable to the instant ma tter is 12 CFR 108 & 130, which provides that there is no time limit on willful violations of RESP A or TI L A” that

wer e intended to mislead a consumer. This Court, like the district court, was unable to find the Code of Fe dera l Reg ulation sections that Plaintiffs cite and also could not find any case law to support Plaintiffs’ contention. Plaintiffs’ frivolous argument has no merit or basis. There fore , the district 2 court’s dismiss al of Count I and Count I I I ’s alleg ations of TI L A violations is aff irmed beca

use these claims are time barre d.

The district court noted that Plaintiffs’ counsel previously had made this argument without 2 providing any

support for it. Plain tiffs’ counsel, J ulian L evant, had a simil ar case befor e this Court ( Koczara v. IndyM ac Bank , Case no. 10-14065). Mr. L evant cited these same CFRs in Koczara

. I n that case , the Court could not locate the CFRs and reque sted th at M r. L ev ant s u b m i t a n y authority to support his asser tion that there is no statute of limit ations applicable to willful violations. He did not submit the CFRs that he cited in his brief or any case law to support his asser t i o n . I n s t ead, Mr. L evant submitt ed [t he] 133 pag e Comptroller’s Handbook o n t h e Truth in L ending Act, with no citation ref ere nces. (R. 11 at 8 n.1.) 6The district cour t list ed seve ral other rea sons to dism iss Count s I Iand I I I , but Plainti ffs do

n o t addre ss any of these rea sons. Finding no err or in the district court’s rea soning, and s i n ce Plaintiffs have waived any argument that the district court err ed in the se reg ards, see Johnson , 440 F.3d at 846, the di strict court’s dismi ssal of C ounts I I and I I I is also aff irmed fo r t h e u n ad d ressed

rea sons. V. Quiet title c laim (Count V) Plaintiffs argue that the district court err ed in dismiss ing Count V, which reque sts the court to quiet titl e in favor of Plaintiffs. On a ppeal, Plaintiffs’ e ntire ar g ument is: Plaintiffs-Appellants have soug ht relief to Qu i et Title pursuant to MCL § 600.2932(5). See Richard s v. T i b aldi , 272 Mich. App. 522, 528-29, 726 N.W.2d 770 (2006). Fr aud, dece it and intentional violation of statutory duties are sufficie nt to permit the court to exerc ise its equitable power s. (Pl.’s Br . at 7.) As the district court noted, “qui et t i t l e” i s n o t a separ ate cause of action, but rathe r, it is a

reme dy

. Fur

thermore , Richards does not provide any support for Plaintiffs’ claim. Richards has no rela tion whatsoever to Plaintiffs’ claim. Thus, since the district c ourt did not err by dismiss ing a ll of Plaintiffs’ claims for failing to state a claim, the district court is aff irmed for dismiss ing Plaintiffs’ reque st to quiet ti tle in their favor

. Mo reover, Plaintiffs do not attempt to explain their alleg ations in Count V. For one, like

o ther claims in the complaint, Count V ref ere nces two defe ndants who are not a party to t h i s action–“D efe ndant Fe dera l” and “De fenda nt L ehman.” I n addition, Plaintiffs’ complaint ref ere nces the Sheriff’ s sale of their proper ty as if it alre ady had occur red, even though it did not occur until one month after

Plaintiffs filed their complaint.

7VI. Attor neys F ees

On Aug ust 11, 2011, Country wide filed a s ep arate motion for damag es and costs under Federa l Rule of Appellate Procedur e 38. “Unde r Rule 38 of the Fe dera l Rules o f Ap p el l at e Procedur e this Court may ‘aw ard just damag es and

. . . costs to the appellee ’ if it deter mines that an appea l is frivolous.” W

SM, Inc. v. T

enn. Sales Co. , 709 F.2d 1084, 1088 (6th Cir. 1983) (quoting Fe d. R. A pp. P. 38)

. “Rule 38 should doubtless be more often enfor ced than ignor ed in the fac e of

a frivolous appea l.” Id. Her e, the appea l is so lacking in leg al and fac tual basis that it is frivolous. “I n W ilton Corp. v. Ashland Castings Corp. , 188 F.3d 670 (6th Cir. 1999), we held t hat sanc tions under FRAP 38 wer e appropr iate when an appea l is ‘wholly without merit’ and when the appellant’ s ‘ar g uments essentially had no rea sonable expectation of altering the district court’s judgme nt based

on law or fac t.’” B & H Med., L.L.C

. v. ABP Admin., Inc. , 526 F.3d 257, 270 (6th Cir. 2008) (also stating that this Court does not require a finding of bad faith). Her e, Plaintiffs’ arguments are wholly without merit and had no rea sonable expectation of altering the district court’s judgme nt. There fore , Country wide will be aw arde d sanctions for de fending this appeal. The sanctions will be awa

rded ag ainst Pl a in

ti f f s ’ counsel beca

use the blame sits on Plaintiffs’ counsel’s shoulders. Plaintiffs’ counsel has made eg reg ious err ors in filing Plain tiffs’ complaint which have g one uncorr ecte d and unaddre ssed over a leng thy period of time. Moreove r, Plaintiffs’ counsel’s citation to “12 C FR 1 0 8 & 1 30"–a citation that was made in two separ ate district court

case s and now on appea l, an d which does not exist– is frivolous, unrea sonable, and without foundation. Plaintiffs’ counse l’s other arguments on appea l are not any better. The arguments do not addre ss many of the rea sons that the district court provided for dismiss ing eac h count and do not addre ss any of the egr egi o u s er ro rs made in the complaint. To make matters worse, on appea l,

8Plaintiffs’ counsel m ad e an argument direc ted at another nonparty , MERS –the third nonparty 3 Plaintiffs’ counsel advanc ed claims ag ainst–and also argued that he did not have the opportunity to amend Pl aintiffs’ complaint, a dis inge n u o u s argument considering Plaintiffs’ counsel had sever al months to do so. There fore , Country

wide will be awa

rded s anctions ag ainst Plaintiffs’ counsel. See Royal Food Prods., Inc. v. Buck eye Union Ins. Co. , 1993 WL 5907, at *3 (6th Cir. J an. 13, 1993) (stating that, pursuant to Rule 38, “this court, sua sponte, is awa rding sanctions to all defe ndants ag ainst plaintiff’s counsel” ). Acc ording ly , Country wide will have fiftee n day s from the filing of this opinion to file an aff

i d av i t setting forth the hourly rate s of its counsel and the number of hours spent in defe nding this appea l, and whateve r documentation and argument in support there of Country wide’s counsel deems appropr iate. Plaintiffs’ counsel may then file a response to this documentation within ten day s. See B & H Med., 526 F.3d at 272; W ilton Corp. , 188 F.3d at 678 (Gilman, J ., concur ring ). C O N C L U S I O N T h e r e f o r e, the district court is AF F IRMED and we AWARD Country wide sanctions ag ai n s t Plaintiffs’ counsel.

This alleg ation is also direc tly contra ry to the entire complaint. Plainti ffs alleg e that 3 Country wide, the de fenda

nt, not MERS , fore closed upon their house

.

9