UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

BRUCE H. YUILLE,

CIVIL ACTION NO. 09-11203

Plaintiff,

DISTRICT JUDGE BERNARD A. FRIEDMAN

v.

MAGISTRATE JUDGE DONALD A. SCHEER

AMERICAN HOME MORTGAGE

SERVICING, INC., et al.,

Defendants.

_________________________________/ 

REPORT AND RECOMMENDATION

I. RECOMMENDATION:

I recommend that Plaintiff’s Motion for Summary Judgment be DENIED; that

Defendants’ Motion for Summary Judgment be GRANTED; that Judgment be entered

for Defendants on Counts II, III, IV and V of the Amended Complaint, and that this case

be closed.

II. REPORT:

A. Procedural History

Plaintiff filed this action in the Oakland County Circuit Court on March 4, 2009. 

Defendants exercised their right of removal under 28 U.S.C. §1332 et seq. on March 31,

2009 (Docket No. 1). Plaintiff filed an Amended Complaint on April 13, 2009 (Docket No.

4). Defendants filed their Answers on March 23, 2009 (Docket Nos. 7-9). Plaintiff’s effort

to secure remand failed (Docket Nos. 11, 18, 25), and a Scheduling Order issued (Docket

No. 27). The parties stipulated to dismissal of all class action claims on September 23,

2009 (Docket No. 38). Discovery and extensive motion practice followed. The parties
stipulated to further amendment of the Complaint on February 4, 2010 (Docket No. 100)

and May 20, 2010 (Docket No. 125). 

Defendants filed their Motion for Summary Judgment on June 11, 2010 (Docket No.

127). Plaintiff’s Response was filed on July 2, 2010 (Docket No. 130), and Defendants’

Reply was filed on July 16, 2010 (Docket No. 131). Plaintiff filed his Motion for Summary

Judgment on June 11, 2010 (Docket No. 128). Defendants filed their Response Brief on

July 2, 2010 (Docket No. 129), and Plaintiff’s Reply was filed on July 16, 2010 (Docket No.

132).

B. Applicable Law and Standard of Review

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment

“shall be rendered 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.” 

Fed.R.Civ.P. 56(c). Summary judgment is appropriate if the moving party demonstrates

that there is no genuine issue of material fact regarding the existence of an essential

element of the nonmoving party’s case on which the nonmoving party would bear the

burden of proof at trial. Celotex Corp. V. Catrett, 477 U.S. 317, 322 (1986); Martin v. Ohio

Turnpike Comm’n, 968 F.2d 606, 608 (6th Cir. 1992).

In considering a motion for summary judgment, the court must view the facts and

draw all reasonable inferences in a light most favorable to the nonmoving party. 60 Ivy St.

Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir. 1987). The court is not required or

permitted, however, to judge the evidence or make findings of fact. Id. at 1435-36. The 

2
moving party has the burden of showing conclusively that no genuine issue of material fact

exists. Id. At 1435.

A fact is “material” for purposes of summary judgment if proof of that fact would have

the effect of establishing or refuting an essential element of the cause of action or a

defense advanced by the parties. Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir. 1984). 

A dispute over a material fact is genuine “if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248 (1986). Accordingly, when a reasonable jury could not find that the nonmoving

party is entitled to a verdict, there is no genuine issue for trial and summary judgment is

appropriate. Id.; Feliciano v. City of Cleveland, 988 F.2d 649, 654 (6th Cir. 1993).

Once the moving party carries the initial burden of demonstrating that there are no

genuine issues of material fact in dispute, the burden shifts to the nonmoving party to

present specific facts to prove that there is a genuine issue for trial. Anderson, 477 U.S.

at 256. To create a genuine issue of material fact, the nonmoving party must present more

than just some evidence of a disputed issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith

Radio Corp., 475 U.S. 574, 586-87 (1986). As the United States Supreme Court has

stated, “there is no issue for trial unless there is sufficient evidence favoring the nonmoving

party for a jury to return a verdict for that party. If the [nonmoving party’s] evidence is

merely colorable, or is not significantly probative, summary judgment may be granted.” 

Anderson, 477 U.S. at 249-50 (citations omitted); see Celotex, 477 U.S. at 322-23;

Matsushita, 475 U.S. at 586-87.

Consequently, the nonmoving party must do more than raise some doubt as to the

existence of a fact; the nonmoving party must produce evidence that would be sufficient

3
to require submission of the issue to the jury. Lucas v. Leaseway Multi Transp. Serv., Inc.,

738 F.Supp. 214, 217 (E.D. Mich. 1990) (Gadola, J.), aff’d 929 F.2d 701 (6th Cir. 1991). 

“The mere existence of a scintilla of evidence in support of the plaintiff’s position will be

insufficient; there must be evidence on which the jury could reasonably find the plaintiff.” 

Anderson, 477 U.S. at 252; see Cox v. Ky. Dep’t of Transp., 53 F.3d 146, 150 (6th Cir.

1995).

C. Factual History

On April 5, 2006, Plaintiff re-financed real property commonly known as 4424

Newcastle Drive, Clarkston, Michigan, 48348 (the “Property”). In the refinance transaction,

Plaintiff obtained a loan in the amount of $3,600,000 (the “Loan”) from American Brokers

Conduit (“ABC”), and executed a promissory note (the “Note”). See Docket #127, Exhibit

1,1

 Adjustable Rate Note. ABC is named as the “Lender” in the Note. Plaintiff does not

dispute that he received the $3.6 million and used it to pay off a prior mortgage held on the

Property. See Exhibit 3, Dep. Tr. of Plaintiff, p. 47-49. Plaintiff claims that he did not

decide on the loan amount; that he never considered how much his monthly payment would

be; and that he instead simply signed all documents without reading them or considering

their ramifications. Exhibit 3, p. 44-45.

Paragraph 1 of the Note specifically allows it to be transferred, or sold:

I understand that Lender may transfer this Note. “The lender

or anyone who takes this Note by transfer and who is entitled

to receive payments under this Note is called the ‘Note

Holder.’” See Exhibit 1, ¶ 1.

1

 Unless otherwise specified, all exhibits referenced herein will be those attached

to Defendants’ Motion for Summary Judgment (Docket #127, filed June 11, 2010).

4
The Loan was secured by a mortgage on the Property granted by Plaintiff and his

spouse to MERS (Mortgage Electronic Registration Systems, Inc.), solely as nominee for

the Lender (ABC) and its successor and assigns (the “ABC Mortgage”). See Exhibit 2,

ABC Mortgage. The ABC Mortgage and Note were recorded on April 19, 2006, in Liber

37505, pp. 302-23, Oakland County Records. Plaintiff admits that he signed the ABC

Mortgage, as well as the Note. See Exhibit 3, Dep. Tr. of Plaintiff, pp. 47-48, 51-52. 

Plaintiff testified that he did not read any of the documents presented to him at closing,

although he admits that he was not denied the opportunity. Id. at pp. 33, 52.

MERS is a corporate entity which is widely employed in mortgage transactions. 

Typically, MERS is part of a contractual agreement under which a lender makes a loan to

a borrower/mortgagor, and the mortgagor and lender, in turn, agree to name MERS as the

mortgagee in the security instrument that secures the loan on the behalf of the lender and

its successors and assigns. In this case, MERS was named as the original mortgagee in

the Mortgage solely as the nominee of the Lender. In that capacity, according to the terms

of the Mortgage, MERS exercises the same general rights and powers possessed by any

mortgagee, such as the right to foreclose and sue the Property upon a borrowers’ default,

or to assign its lien interests and release its lien interests in county land records. MERS

is designed to eliminate the need to prepare and record assignments with the county

register of deeds when a residential loan is sold or transferred, because MERS always

remains the named mortgagee for the lender and its assigns.

Plaintiff claims that he does not know whom he should pay to satisfy his obligations

pursuant to the Loan and Mortgage (see Exhibit 3, p. 64). He has sued MERS, American

Home Mortgage Servicing, Inc. (“AHMSI”), Deutsche Bank National Trust Company

5
(“Deutsche Bank”), and GSR Mortgage Loan Trust 2006-OA1 (“Trust”), seeking to quiet his

title to the Property, free of the lien of the Mortgage.

AHMSI was designated by ABC as the servicing agent on the Note and Mortgage. 

As a servicer, AHMSI’s functions include collecting monthly payments, and ensuring that

things such as hazard insurance and taxes are timely paid. AHMSI has no ownership

interest in the Note, but has serviced the loan for the lender since its inception in 2006, as

evidenced by the Monthly Payment Information Letter, that was initialed by Plaintiff at the

closing of this loan. See Exhibit 4, Payment Information Letter. There is no evidence that

any entity other than AHMSI has serviced Plaintiff’s Loan.

Deutsche Bank National Trust Company is Trustee of the GSR Mortgage Loan Trust

2006-OA1 pursuant to a Master Servicing and Trust Agreement. Defendants maintain that

GRS Mortgage Loan Trust 2006-OA1 (“GSR”) is the current owner of the Note. Plaintiff did

not serve GSR with a copy of his Amended Complaint in this matter. He testified that he

decided not to serve them with process because he “didn’t figure he needed them in as a

party.” See Exhibit 3, p. 78.

The Mortgage signed by Plaintiff provides that:

 MERS is a separate corporation that is acting solely as nominee for Lender

and Lender’s successors and assigns. MERS is the mortgagee under this

Security Instrument. MERS is organized and existing under the laws of

Delaware, and has an address and telephone number of P.O. Box 2026,

Flint, MI 48501-2026, tel. (888) 679-MERS. (emphasis in original).

See Exhibit 2, p. 2, ¶ (C):

6
Moreover, Plaintiff expressly granted MERS enumerated powers in the Mortgage,

as follows:

This Security Instrument secures to Lender: (I) the repayment of the Loan,

and all renewals, extensions and modifications of the Note; and (ii) the

performance of Borrower’s covenants and agreements under this Security

Instrument and the Note. For this purpose, Borrower does hereby mortgage,

warrant, grant and convey to MERS (solely as nominee for Lender and

Lender’s successors and assigns) and to the successors and assigns of

MERS, with power of sale, the following described property . . .

***

Borrower understands and agrees that MERS holds only legal title to the

interests granted by Borrower in this Security Instrument, but if necessary to

comply with law or custom, MERS (as nominee for Lender and Lender’s

successor and assigns) has the right: to exercise any or all of those interests,

including, but not limited to, the right to foreclose and sell the Property, and

to take any action required of Lender including, but not limited, to, releasing

and canceling this Security Instrument.

Exhibit 2, p. 3, ¶ (Q).

The Mortgage requires that payments be made in accordance with the Note. See

Exhibit 2, p. 4. The Note requires that Plaintiff make monthly payments on the 1st day of

each month beginning June 1, 2006. Exhibit 1, ¶ 3. From the outset, Plaintiff was late on

his payments and, over the course of 16 months, only made one payment on a timely basis

pursuant to the requirements of the Note and ABC Mortgage. See Exhibit 5, payment

history. He does not contest the fact of his default. Plaintiff stated that he did not make

payments on the Loan because he “decided he needed the money for other purposes.” 

Exhibit 3, p. 32. Default notices were sent to Plaintiff by AHMSI, as servicer of Plaintiff’s

Note. Plaintiff admits that he received the notices of default and, when questioned about

several notices that were sent to his residence, did not contest having received them. See

Exhibit 3, pp. 56-57; 59-62.

7
An Assignment of Mortgage (see Exhibit 8), purporting to be effective as of February

13, 2009, and was executed on February 19, 2009, from MERS, as nominee for ABC to

Defendant Deutsche Bank National Trust Company (“Deutsche”), not in its individual

capacity, but solely as trustee on behalf of Defendant GSR Mortgage Loan Trust 2006

OA1, and was recorded on February 25, 2009, in Liber 29670, pages 323-24, Oakland

County Records.

Foreclosure proceedings were commenced in February 2009, by an Affidavit of

Posting at the Property. (See Exhibit 6). A sheriff’s sale was scheduled to take place on

March 17, 2009. (See Exhibit 7.) 

 On March 4, 2009, Plaintiff filed this suit in Oakland County Circuit Court. On March

31, 2009, Defendants exercised their right of removal pursuant to 28 U.S.C. §1332, et seq. 

On April 13, 2009, Plaintiff filed his First Amended Complaint. Plaintiff later agreed, through

two different stipulations, to withdraw several of his claims. A copy of the current (i.e., most

recent redacted) Amended Complaint is attached as Exhibit 10. At this time, no sheriff’s

sale is pending, as the parties have agreed to postpone a sheriff’s sale during the

pendency of this suit.

On February 10, 2010, a Corrective Assignment of Mortgage was executed, which

states that it replaces the February 19, 2009 Assignment of Mortgage. The Corrective

Assignment was executed by MERS, as nominee for ABC to Deutsche Bank, and was

recorded on February 16, 2010, in Liber 26350, p. 531, Oakland County Records. See

Exhibit 9, Corrective Assignment of Mortgage.

8
D. Analysis

1. Quiet Title Claim

In Count II of his Amended Complaint, Plaintiff seeks the equitable remedy of a court

declaration that the mortgage is void and unenforceable, and thus subject to removal as

a cloud on his title to the property. Defendants do not dispute that Yuille is the record title

holder, but they contest his right to a Quiet Title decree. The doctrine of unclean hands

bars equitable relief from plaintiffs who have acted improperly. “The clean hands maxim

is a self-imposed ordinance that closes the doors of a court of equity to one tainted with

inequitableness or bad faith relative to the matter in which he seeks relief, however

improper may have been the behavior of the defendant.” Mudge v. Macomb County, 458

Mich. 87 (1998). The unfair or overreaching conduct of a plaintiff need not be actionable

to bar equitable relief. Royce v. Duthler, 209 Mich.App. 682, 688-89 (1995). Rather, the

“cardinal principal that equity will not aid a party in doing that which is not equitable” will

govern a court’s disposition of an equitable claim.

Here, Plaintiff admits receiving $3.6 million in exchange for the note and mortgage. 

He further admits his failure to pay his debt, and yet he seeks this court’s support in

avoiding enforcement of the security interest. Plaintiff relies upon a legal argument that the

note and mortgage signed by him became separated, such that the mortgage never was,

or ceased to be, a valid claim against the real property. He offers no Michigan case

authority for the proposition that a MERS style mortgage transaction is invalid in this State. 

Rather, he pursues this action as an effort to establish the very proposition upon which he

relies. In doing so, Yuille ignores the fact that the interests he seeks to invalidate were

9
specifically created by written contract to which he was a party. This court has held that

a Plaintiff who expressly grants to MERS a mortgage as a nominee of a lender, and confers

the right to foreclose in that capacity, cannot later contend that the right to foreclose did not

exist. See Hilmon v. Mortgage Electronic Registration System, 2007 WL 1218718 (E.D.

Mich.) at *3. The U.S. District Court for the Western District of Michigan has adopted the

same reasoning. Corgan v. Deutsche Bank, 2010 WL 2854421 (W.D. Mich.) at *3. I am

satisfied that Yuille’s effort to avoid enforcement of contract rights expressly granted by him

in exchange for valuable consideration is a breach of equity which forecloses relief on his

Quiet Title claim.

Defendants further maintain that Plaintiff did not sue all proper parties. They argue

that Plaintiff’s Quiet Title claim must fail because he has not joined GSR Mortgage Loan

Trust 2006-OA1 as a Defendant. They note that Plaintiff was aware of the trust by reason

of the public notice posted on the real estate on February 18, 2009, and published on

February 13, 2010. See Exhibit 6. Plaintiff named GSR as a Defendant in this action, but

neglected to serve the trust with Summons and Complaint. He acknowledged that failure

in his Deposition testimony (Exhibit 3, at page 78). 

Yuille admits actual notice of GSR’s interests. See Amended Complaint,

Paragraphs 11, 12. He maintains, however, that naming Deutsche Bank is sufficient to

assert his claim against GSR, because Deutsche Bank is the trustee of the trust. Nothing

in his Amended Complaint, however, signifies that Plaintiff was suing Deutsche Bank in its

capacity as trustee. The trust should have been served with Summons and Complaint. As

Plaintiff has failed to pursue his Quiet Title claim against all parties who claim an 

10
interest in the real estate, his Count II claim must fail. See Scott v. Saupe, 32 Mich.App.

503, 507 (1971).

Defendants also argue that Plaintiff has failed to establish a prima facie case for

Quiet Title relief. Under Michigan law, a plaintiff in a Quiet Title action must make a prima

facie case that his title is superior to the claims of all others whom may claim an interest

in the property. Stinebaugh v. Bristol, 132 Mich.App. 311, 316 (1984).

Plaintiff argues that he met his burden by producing a certified copy of his warranty

deed (Plaintiff’s Motion for Summary Judgment, Page 4), and that the burden thus shifts

to Defendants to prove superior right or title in themselves. See Beulah Hoagland Appleton

Qualified Personal Resident’s Trust v. Emmet Co. Road Comm., 236 Mich.App. 546 (1998). 

Defendants, however, contend that Plaintiff must do more than merely producing a

warranty deed. 

Defendants have presented unchallenged evidence that: a) Plaintiff signed the note

and mortgage; b) Plaintiff did not make the payments as provided in the note; c) Plaintiff

agreed to convey the mortgage to MERS as nominee of the lender (ABC) and its

“successors and assigns;” and d) Defendants currently hold the original note, endorsed in 

blank by ABC. Defendants have also submitted excerpts of a “Master Servicing and Trust

Agreement” under which GS Mortgage Security Corp. purported to convey various

“mortgage loans” to Deutsche Bank as trustee for the GSR Mortgage Loan Trust 2006-

AO1. Defendants maintain that ABC’s interest in the Plaintiff’s mortgage loan was among

those. Finally, Defendants have produced an “assignment of mortgage,” dated February

19, 2009, from MERS to Deutsche Bank as trustee of the trust. They also have produced

a “corrective assignment,” dated February 10, 2010, between the same parties and

11
regarding the same mortgage. The corrective assignment purports to replace the February

19, 2009 document.

Plaintiff argues that the chain of ownership of the note underlying his mortgage loan

from ABC to GS Mortgage Security Corp. is not established in the record. I agree that the

transfer from ABC to GS Mortgage Security Corp. and then to the Trust is not clearly

demonstrated. My difficulty with Defendants’ trust agreement is the lack of evidence that

ABC transferred all its right in the mortgage loan to GS Mortgage Securities Corp. 

Nonetheless, Defendants are in possession of the original note, endorsed in blank by ABC. 

I also agree with Plaintiff that the GSR Mortgage Loan Trust Agreement confers no express

right upon the trustee to institute mortgage foreclosure proceedings, although the Note and

Mortgage Plaintiff signed do expressly confer such rights upon the Note Holder and

Mortgagee. The use of the term “mortgage loan” in the Trust Agreement indicates an intent

to transfer both the debt (note) and any security interest of the note holder. In a MERS

transaction, the lender holds a beneficial interest in the mortgage as the entity on whose

behalf the nominee (MERS) is appointed to act. The trust agreement does not call for

transfer of the actual mortgage, because the lender is not the mortgagee. The trust

agreement does manifest the intent to transfer to the trustee such rights in the mortgage

as the transferor possessed. See Allardyce v. Dart, 291 Mich. 642, 645 (1934). 

Accepting Plaintiff’s argument, for purposes of analysis, and assuming that the

transfer of the Note to the trust was invalid, there would be no evidence that any party other

than ABC owns the note. The evidence is clear that the debt remains unpaid. Yet Plaintiff

did not name ABC in his Amended Complaint, or serve ABC with Summons and 

12
Complaint. His Quiet Title claim should not be countenanced under this scenario because

Plaintiff has failed to name all parties known to have claims against the property.

A similar analysis would apply to the Mortgage. Assuming, for purposes of

discussion, that the two assignments from MERS to Deutsche Bank were invalid, MERS

would continue to be the Mortgagee, solely as nominee for ABC and its successors and

assigns. The original mortgage transaction to which Yuille agreed would remain intact. 

There would be no separation of the Note and Mortgage, and the clear evidence of

Plaintiff’s default would defeat his quiet title claim. 

Despite the alleged defects in the two assignments, however, the evidence is

undisputed that MERS made two unequivocal attempts to transfer the mortgage to

Deutsche Bank. Defendants cite case law for the proposition that a poorly drafted

instrument creates an assignment if it clearly reflects an intent to assign “the thing” to the

assignee. Burkhardt v. Bailey, 260 Mich.App. 606 (2009). Both assignments in this case,

reflect the clear intent of MERS to convey its rights under the Plaintiff’s mortgage to

Deutsche Bank, as trustee. Neither party to the assignments has disavowed them. In fact,

both parties have ratified the written assignments by their subsequent conduct. “[W]here

a corporation has authorized or ratified the signature of its name in such manner as to bind

the corporation itself, whether such authority or ratification were express and formal or

arose from acquiescence and inaction, the signature cannot be disputed by any third party

for the purpose of invalidating the [document] which the corporation itself cannot or does

not attack. Long v. City of Monroe, 265 Mich. 425, 441 (1933) (emphasis added). Plaintiff,

being a stranger to the transaction, is without standing to challenge its validity. An 

13
assignee “stands in the position of the assignor, possessing the same rights and being

subject to the same defenses.” Burkhardt, 260 Mich.App. at 653.

Even accepting Plaintiff’s position that the two assignments are invalid, the result

would be that MERS remains the mortgagee as nominee of ABC or its successor’s or

assignees. The mortgage specifically confers the right to take such actions as any

mortgagee could perform. On the other hand, if Defendants are correct and one or the

other of the assignments of mortgage is valid, then Deutsche Bank succeeded to the

interests of MERS which, as stated, are those of the mortgagee as nominee for ABC, its

successors and assignees, with the same rights that MERS enjoyed. In any event, I am

satisfied that any defect in the assignment documents has been overcome by reason of

their ratification by the subsequent conduct of the parties in honoring the terms.

The case law in Michigan supports the legal conclusion that a MERS style (i.e.

nominee) mortgage does not create an impermissible separation of ownership of the

mortgage from the underlying debt so as to render the lien a nullity. Corrigan v. Deutsche

Bank, 2010 WL 2854421 at * (W.D. Mich.) (citing Hilmon v. MERS, 2007 WL 1218718 at

*3 (E.D. Mich.). (“Plaintiff, having expressly given MERS the right to foreclose as nominee

for the lender, cannot now contend that MERS did not have the right to institute foreclosure

proceedings.”)). Such a separation is essential to Plaintiff’s position that the mortgage in

this case lacks validity. 

The central issue in Count II of the Amended Complaint is whether the evidence

establishes the superiority of Plaintiff’s title to all other conflicting interests. Even if Yuille

could escape the operation of the clean hands doctrine, the record here establishes the

existence of a legally valid note and mortgage lien which have not been redeemed by the

14
payment or by operation of law. Both the Note and the Mortgage have been assigned to

Deutsche Bank as Trustee for the GSR Mortgage Loan Trust 2006 OA1. Plaintiff’s

obligations under the Note are in default, and he has no valid ground for a judgment

invalidating the Mortgage as a lien on his property.

Plaintiff contends that MCL 600.3204 bars MERS from foreclosing the mortgage. 

Section 22 of the Mortgage authorizes the “lender” to institute foreclosure proceedings after

appropriate notice to the borrower. Plaintiff argues that MERS “is clearly not the lender,”

and that MCL 600.3204(1)(d) requires that the foreclosing party be “either the owner of the

indebtedness or of an interest in the indebtedness secured by the mortgage or the

servicing agent of the mortgage.” MERS is none of those.2

Defendants respond that MERS was not a party which instituted foreclosure

proceedings against Plaintiff. That entity was Deutsche Bank. They maintain that

Deutsche Bank does have an interest in the indebtedness secured by the mortgage, by

reason of the transfer of Plaintiff’s note by GS Mortgage Security Corp. under the GSR

Mortgage Loan Trust 2006-AO1 agreement. As stated above, I agree with Plaintiff that the

record does not establish a clear chain of transfer of the note from the original lender (ABC)

to the GS Mortgage Security Corp. The evidence is undisputed, however, that the trust

does possess the original note, signed by Plaintiff and endorsed in blank, by ABC.

In the final analysis, I conclude that the issue of who may, or may not, institute

foreclosure proceedings against Plaintiff is not before this court. The foreclosure action

2

 Plaintiff makes a similar argument as to Defendants AHMSI and Deutsche

Bank. AHMSI, however, was duly designated as the servicing agent of the mortgage

(see Exhibit 4). 

15
was filed in state court, and remains there. The question before this court is simply

whether Plaintiff is entitled to a judgment that his title to the property is free of any

conflicting claim or cloud. I conclude that Defendant Deutsche Bank, as trustee for the

GSR Trust, holds a valid security interest under the assignments executed by MERS of the 

mortgage executed by Yuille. Deutsche Bank, again as trustee, is also the holder of the

Note Plaintiff executed in connection with the $3.6 million from ABC. Defendant AHMSI,

was appointed by the lender (ABC) to act as servicer of the mortgage, and there is no

evidence that its responsibilities as such were ever modified or terminated. Because the

evidence does not negate all competing interests in the real property, Plaintiff has not

established his right under MCL 600.3204 to summary judgment on his Quiet Title claim.

Plaintiff makes a similar argument under the Restatement of Law Third, Property

(mortgages). He cites the language of Section 5.4(c) that “[a] mortgage may be enforced

only by, or on behalf of, a person who is entitled to enforce the obligation of the mortgage

secures.” Under the facts of this case, however, MERS was expressly empowered to

foreclose the mortgage it received as nominee of ABC. These powers were validly

assigned to Deutsche Bank as trustee for the GSR Mortgage Loan Trust. Deutsche Bank

holds the underlying Note in the same capacity.

Defendants further observe that the commentary following Section 5.4(c) provides

that one with responsibility to enforce a mortgage at the direction of another may properly

do so. “The trust or agency relationship may arise from the terms of the agreement, or

from other circumstances. Court should be vigorous in seeking to find a relationship, since

the result is otherwise likely to be a windfall for the mortgagors . . ..” See Exhibit 11. 

Plaintiff here seeks precisely the type of windfall against which the Restatement cautions. 

16
The uncontested evidence establishes an unpaid note held by the GSR Mortgage Loan

Trust 2006 AO1 and secured by the mortgage assigned by MERS, solely as nominee of

the note holder, to the Trustee, Deutsche Bank. AHMSI’s rights as servicing agent have

not been terminated. For the same reasons expressed in the previous section of this

Report, I find that Plaintiff has failed to establish his right to equitable relief on his Quiet

Title claim. 

In various arguments at Pages 12-19 of his Brief in Support of his Motion for

Summary Judgment, Plaintiff offers his analysis of the terms of the GSR Trust. While he

is entitled to interpret the trust as he wishes, Yuille has failed to offer admissible evidence

to support his factual assertions. Ultimately, he argues that the “note holder” as defined

in the note does not actually exist. I disagree. The note defines the “note holder” as “[t]he

lender or anyone who takes this note by transfer and who is entitled to receive payments

under this note . . ..” (Exhibit 1, Note).

ABC is the lender under the terms of the note. The mortgage declares that the

lender is a corporation organized and existing under the laws of the State of New York. 

Plaintiff offers the certification of the New York Department of State that it holds no

certificate of incorporation for ABC (see Exhibit B to Plaintiff’s Motion for Summary

Judgment, Docket No. 128). Defendants, however, have produced documentary evidence

reflecting that ABC was a d/b/a name for American Home Mortgage Corp., which

surrendered its license to engage in the business of a mortgage banker on September 17,

2007 (see Exhibit 16, Page 10). I am therefore satisfied that ABC did exist on April 6, 2006

when Plaintiff executed the Note, and on August 6, 2006, the date of the GSR Mortgage

Loan Trust 2006-AO1 agreement. While I agree with Plaintiff that Defendants have not

17
produced clear evidence of a transfer of the Note from ABC (American Home Mortgage

Corp.) to GS Mortgage Security Corp., such failure does not compel the conclusion that no

Note holder exists. Plaintiff admits that he signed and delivered the Note, and that he has

not paid it. ABC, or its valid successor or assign would remain holder of the Note, and

AHMSI remains the duly appointed servicing agent in the absence of contrary evidence. 

Plaintiff has not established that his title to the property is free of valid liens, and his Quiet

Title claim must fail.

Plaintiff’s Motion for Summary Judgment offers no argument or evidence in support

of the claims stated in his Amended Counts III (Defamation); IV (Mortgage Brokers,

Lenders, and Servicers Licensing Act); or V (Michigan Consumer Protection Act). Thus,

he has failed to establish that no genuine issue of material fact exists, and that he is entitled

to judgment as a matter of law on those claims. Accordingly, I recommend that Plaintiff’s

Motion for Summary Judgment be in all respects denied. Defendants’ arguments in

support of their Motion for Summary Judgment on Counts III, IV and V are addressed

below.

2. Defamation Claim

Count III of Plaintiff’s Amended Complaint seeks damages for defamation based

upon declarations contained in the various foreclosure notices published by Defendants. 

The content of those notices was as follows:

MORTGAGE SALE - Default has been made in the conditions

of a mortgage made by Bruce H. Yuille, a married man and

Susan L. Yuille, his wife, original mortgagor(s), to Mortgage

Electric Registration Systems, Inc. as nominee for lender and

lender’s successors and/or assignees. Mortgage dated, April

5, 2006, and recorded on May 3, 2006 in Liber 37505 on Page

302, in Oakland County Records, Michigan, and assigned by

18
said mortgagee to Deutsche Bank National Trust Company,

not in its individual capacity but solely as trustee on behalf of

GSR Mortgage Loan Trust 2006-OA1 as assignee, on which

mortgage there is claimed to be due at the date hereof the sum

of 4 million, 800 thousand, 828 and 96 one hundred’s dollars

($4,800,828.96), including interest at 4.222% per annum . . ..

See Exhibit 6.

A compensable claim for defamation requires that a plaintiff demonstrate: 1) that the

defendant made a false and defamatory statement concerning the plaintiff; 2) that the

statement was an unprivileged communication to a third party; 3) that the defendant was

at least negligent in making the statement; and 4) that the statement damaged the plaintiff

in some manner. Hawkins v. Mercy Health Services, Inc., 230 Mich.App. 315, 325 (1998). 

MCL 600.2911 codifies those elements.

To be defamatory, a statement must be “provable as false.” Ireland v. Edwards, 230

Mich.App. 607, 617 (1998). Further, the statement must damage the reputation of an

individual in the community, or deter other from associating with that individual. Oak Grove

Cremation Center, Inc. v. Peterson, 2007 WL 1452235 at *1 (see Exhibit 14). A plaintiff

must prove fault amounting to at least negligence on the part of the publishing party. MCL

600.2911(7); Rouch v. Inquirer and News of Battle Creek, 427 Mich. 157, 202 (1986).

In the case at bar, the only statement concerning Plaintiff which appeared in

Defendants’ publication was that the conditions of the mortgage executed by him and his

spouse were in default. Yuille alleges in his Complaint that he was not in default of the

ABC Mortgage (see Exhibit 10, Paragraph 68). In his deposition testimony, however, Yuille

admitted under oath that he did not make the loan payments (Exhibit 3, Page 67). There

is no contrary evidence in the record. Defendants have submitted record evidence that

19
Yuille’s loan obligation, secured by the mortgage executed by him and his spouse was

seriously in default at the time the foreclosure notices issued. 

In his deposition testimony, Yuille further claimed that the statement in the

Defendant’s publications that the mortgage had been assigned by MERS to Deutsche Bank

was also false. Presumably, that statement is based upon his position, discussed above,

that the mortgage assignments were invalid. I am satisfied, however, that the published

declarations were not statements concerning Plaintiff, and that, for the reasons discussed

above, they were not false. In any event, a declaration regarding an assignment of a

mortgage, even if false, would not damage Plaintiff’s reputation or association in the

community. Finally, Plaintiff testified that the Defendants’ publications misstated the

redemption period applicable to Plaintiff’s mortgage. Once again, to the extent that the

publication was inaccurate, it was not a statement “concerning Plaintiff” and was not

defamatory.

Plaintiff’s Response Brief asserts that Defendants representations that: (a) the

mortgage had been assigned by MERS to Deutsche Bank; (b) Plaintiff was in default of the

terms of the mortgage; and (c) Plaintiff owed Deutsche Bank $4,800,828.96 were all issues

of fact in dispute, such that summary judgment for Defendants would be inappropriate. I

am satisfied, however, that the evidence in the case regarding Plaintiff’s default, the

assignment of the mortgage to Deutsche Bank and the payments made and received on

the underlying loan is undisputed, and sufficient to warrant a judgment. The exact amount

due and owing on the underlying note is subject to precise mathematical calculation based

on the evidence in the record. I am satisfied, therefore, that Defendants are entitled to

summary judgment on Count III.

20
3. Mortgage Brokers, Lenders and Servicers Licensing Act Claim

Count IV of Plaintiff’s Amended Complaint alleges that Defendant American Home

Mortgage Servicing, Inc. has engaged in “fraud, false pretenses and conduct that

constitutes false pretenses” in violation of the State of Michigan’s Mortgage Brokers,

Lenders, and Servicers Licensing Act, MCL 445.1651 et seq. Plaintiff alleges in Paragraph

78g of the Amended Complaint that AHMSI engaged in fraud, false pretenses and conduct

that constitutes false pretenses (Amended Complaint, Paragraph 82b and g). The pleading

does not describe the acts which constituted the alleged fraud or false pretenses. 

Nonetheless, Plaintiff seeks a declaratory judgment “that each method, act or practice

defined in Paragraph 823

 . . . is unlawful under Section 22 of the Act.” He seeks an

injunction precluding AHMSI from engaging in such methods, acts or practices, and a

judicial declaration that foreclosures of mortgages containing the language employed in

Plaintiff’s mortgage are unlawful.

Defendant AHMSI seeks dismissal of Count IV for failure to state a claim upon which

relief may be granted. Defendant correctly maintains that a Complaint must conform to the

pleading requirements set forth in the Federal Rules of Civil Procedure. Rule 8(a)(2)

requires “a short and plain statement of the claim showing that the pleader is entitled to

relief.” Fed.R.Civ.P. 8(a)(2). The Supreme Court has held that the pleading standard of

the rule demands more than “an unadorned, the-defendant-unlawfully-harmed-me

accusation.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955 (2007). A Complaint does not “suffice if it

3

 The original paragraph 82 is paragraph 78 in the current Amended Complaint. 

The current paragraph 82 is no longer part of Count IV.

21
tenders ‘naked assertions’ devoid of further factual enhancement.” Our Circuit has “further

interpreted Rule 9(b) to require that a plaintiff alleged the time, place and content of the

alleged misrepresentations on which he or she relied; the fraudulent scheme; the fraudulent

intent of the defendants; and the injury resulting from the fraud.” Sanderson v. HCA-The

Health Care Co., 447 F.3d 873, 877 (6th Cir. 2006). Complaints that do not conform to the

requirements of the rule are subject to dismissal. Id. at 877. Defendant argues that

Plaintiff has failed in Count IV of his Complaint to adequately describe the alleged conduct

giving rise to the “fraud, false pretenses, and conduct that constitutes false pretenses.

In his Response Brief, Yuille argues that the Defendant has erroneously interpreted

his use of the word fraud as signifying acts giving rise to a legal action for fraud. He

maintains that MCL 445.1601 et seq. employs the word fraud “to describe dishonest

conduct.” So used, the work “means something that is intended to deceive people.” 

(Docket No. 129, Page 18). He asserts in his Brief that AHMSI had no right to service

Plaintiff’s mortgage, and that it retained foreclosure counsel and vested them with authority

to draft fraudulent assignments of Plaintiff’s mortgage and instructed them to commence

foreclosure proceedings to deprive Plaintiff of his title. He further asserts that AHMSI

drafted the foreclosure notices with intent to cause him to believe that the note holder had

declared a default and accelerated the debt, when the “Note Holder” did not exist. Finally,

he argues that AHMSI “falsely represented that it represented such nonexistent Note

Holder.” (Docket No. 129, Pages 18-19). Not only are those allegations omitted from the

Amended Complaint, Plaintiff points to no evidence in the record tending to establish the

dishonest acts which he belatedly alleges. Based upon my review of the record, I am

satisfied that Plaintiff has failed to establish a claim of conduct violative of MCL 445.1651

22
et seq. The evidence confirms that AHMSI was the duly appointed servicing agent for

Plaintiff’s mortgage. There is no evidence that its right to act as such was ever terminated

or modified. The record clearly reflects that Plaintiff executed the Note and Mortgage and

failed to pay the debt. The Amended Complaint fails to allege any discrete act by AHMSI

in violation of the statute, and Plaintiff has failed to identify any evidence in the record which

might establish such a violation. No reasonable juror could find otherwise. I recommend

that the Court enter judgment for Defendant AHMSI on Count IV of the Complaint.

4. Michigan Consumer Protection Act (“MCPA”) Claim

Count V of the Amended Complaint is based upon the Michigan Consumer

Protection Act. Plaintiff claims that the mortgage language employed by MERS is

“ambiguous, inconsistent and violates subsections (n), (m) and (bb) of Section 3 of the

statute (MCL Section 445.903). He seeks an injunction against the use of the MERS

mortgage in Michigan, and a declaration that his mortgage is “voidable, null, void and of no

effect and otherwise unenforceable” against him.

Defendants counter that the Michigan Supreme Court has held the MCPA

inapplicable where “the general transaction is specifically authorized by law, regardless of

whether the specific misconduct is prohibited.” Smith v. Globe Life Ins. Co., 460 Mich. 446,

465-66 (1999). Subsequent cases in both state and federal courts have held that the

MCPA does not apply to claims arising from residential mortgage loan transactions. 

Newton v. Bank West, 262 Mich.App. 434 (2004); Mills v. Equcredit Corp., 294 F.Supp. 2nd

23
903, 910 (E.D. Mich. 2003); Dyer v. Flagstar Bank FSB, 2005 WL 177215 at *1

(unpublished, Mich. Ct. of App. Jan. 29, 2005). 

Plaintiff maintains that the MERS mortgage language violates the MCPA “because

the ‘nominee’ language and MERS’ interpretation of the mortgage language causes a

probability of confusion or of misunderstanding as to the legal rights, obligations or

remedies of a party to a transaction, or as to the terms or conditions of credit if credit is

extended in a transaction.” He asserts that Count V is directed solely at the conduct of

MERS, which is “not licensed under any state of (sic) federal law, nor subject to any

regulatory scheme.” Plaintiff, however, received his loan from ABC, and granted the

security interest to MERS solely as the nominee of ABC. As discussed earlier in this report,

ABC was a d/b/a name for American Home Mortgage Corp., a licensed and regulated

entity. Plaintiff has offered no case law in support of his position that MERS’ participation

as nominee rendered the transaction subject to the terms of the Michigan Consumer

Protection Act. I am satisfied that the mortgage loan at issue in this case falls within the

exception provided in the statute. I recommend that Judgment be rendered for the

Defendants on Count V.

III. NOTICE TO PARTIES REGARDING OBJECTIONS:

The parties to this action may object to and seek review of this Report and

Recommendation, but are required to act within fourteen (14) days of service of a copy

hereof as provided for in 28 U.S.C. Section 636(b)(1) and E.D. Mich. LR 72.1(d)(2). Failure

to file specific objections constitutes a waiver of any further right of appeal. United States

v. Walters, 638 F.2d 947 (6th Cir. 1981), Thomas v. Arn, 474 U.S. 140 (1985), Howard v.

Secretary of HHS, 932 F.2d 505 (6th Cir. 1991). Filing of objections that raise some issues

24
but fail to raise others with specificity, will not preserve all the objections a party might have

to this Report and Recommendation. Smith v. Detroit Federation of Teachers Local 231,

829 F.2d 1370, 1373 (6th Cir. 1987), Willis v. Secretary of HHS, 931 F.2d 390, 401 (6th Cir.

1991). Pursuant to E.D. Mich. LR 72.1(d)(2), a copy of any objections is to be served upon

this Magistrate Judge.

Within fourteen (14) days of service of any objecting party's timely filed objections,

the opposing party may file a response. The response shall not be more than five (5)

pages in length unless by motion and order such page limit is extended by the Court. The

response shall address specifically, and in the same order raised, each issue contained

within the objections.

s/Donald A. Scheer

DONALD A. SCHEER

UNITED STATES MAGISTRATE JUDGE

DATED: September 22, 2010

______________________________________________________________________

CERTIFICATE OF SERVICE

I hereby certify on September 22, 2010 that I electronically filed the foregoing paper

with the Clerk of the Court sending notification of such filing to all counsel registered

electronically. I hereby certify that a copy of this paper was mailed to the following nonregistered ECF participants on September 22, 2010: Bruce Yuille.

s/Michael E. Lang 

Deputy Clerk to 

Magistrate Judge Donald A. Scheer

(313) 234-5217 

25