Opinion
CASE NO. 00-CV-74811-DT
November 27, 2000.
OPINION AND ORDER
I. INTRODUCTION
This matter is before the Court on Defendants' Motion to Dismiss Plaintiff's claims alleging violations of the United States Constitution, 42 U.S.C. § 1985, and the Fair Debt Collection Practices Act ( 15 U.S.C. § 1692) pursuant to FED. R. Civ. P. 12(b)(6). Defendants' also move pursuant to FED. R. Civ. P. 12(b)(1) to dismiss Plaintiff's state law claims of intentional infliction of emotional and financial harm and violation of Michigan Rule of Professional Conduct 8.4. Plaintiff has filed a response to Defendants' motion. The Court heard oral argument at a preliminary injunction hearing concerning the issues involved in this case on November 20, 2000. For the reasons stated below, Defendants' Motion to Dismiss is GRANTED and the Court's injunction is LIFTED.
II. BACKGROUND
On November 13, 2000, this Court granted Plaintiffs request for a preliminary injunction enjoining Defendant Standard Federal Bank from proceeding with an advertised foreclosure sale on Plaintiff's property located in Farmington Hills, Michigan. The mortgage being foreclosed upon by Standard Federal is an Equity Line Mortgage in the amount of $21,920.55 that was obtained by Plaintiff on February 11, 1999. On July 16, 1999, Standard Federal assigned the mortgage to ABN-AMRO Group, Inc. The Equity Line Mortgage is secondary to Plaintiff's first mortgage on the property in the amount of $147,150.00. Payments on the first mortgage have been paid to date. The foreclosure on the Equity Line Mortgage was scheduled for November 21, 2000 at 10:00 a.m. at the Oakland County Building in Pontiac, Michigan.
Plaintiff alleges in her complaint that the acceleration clause contained in her mortgage, under which Defendants are calling the mortgage due, violates Plaintiff's Due Process rights under the Fifth and Fourteenth Amendments (Count I), is an unconstitutional conspiracy to violate her civil rights under 42 U.S.C. § 1985 (Count II), violates the Fair Debt Collection [Practices] Act ( 15 U.S.C. § 1692) and Michigan Rule of Professional Conduct 8.4 (Count III), and is an intentional infliction of emotional and financial harm (Count IV).
On November 8, 2000, Defendant Spiros filed an answer to Plaintiff's Application for Preliminary Injunction and a separate answer to Plaintiff's complaint. On November 8, 2000, Defendants Standard Federal Bank and ABN-AMRO Group, Inc. filed a Motion to Dismiss Plaintiff's complaint. Defendants had failed to describe the "Termination Event" that must occur under the mortgage contract before Defendants are permitted to accelerate payment on Plaintiff's Equity Line Mortgage. On November 13, Plaintiff responded to Standard Federal and ABN-AMRO's Motion to Dismiss. At the preliminary injunction hearing on November 20, 2000, Defendants clarified that the "Termination Event" under which they were calling Plaintiff's Equity Line Mortgage due was non-payment.
III. LEGAL STANDARD
A motion brought pursuant to FED. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted tests the legal sufficiency of Plaintiff's claims. The Court must accept as true all factual allegations in the pleadings, and any ambiguities must be resolved in Plaintiff's favor. See Jackson v. Richards Medical Co., 961 F.2d 575, 577-78 (6th Cir. 1992). However, acourt need not accept as true legal conclusions or unwarranted factual inferences. See Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987). A district court may properly grant a motion to dismiss when no set of facts exists which would allow Plaintiff to recover. See Carter by Carter v. Cornwall, 983 F.2d 52, 54 (6th Cir. 1993).
IV. ANALYSIS
In Count I, Plaintiff alleges that the acceleration clause contained in the Equity Line Mortgage, under which Defendants are calling the mortgage due, violates her right to due process under the Fifth and Fourteenth Amendments to the United States Constitution. Plaintiff specifically complains of Defendants foreclosure by advertised sale as a result of her non-payment on the mortgage.
It is abundantly clear in the Sixth Circuit that foreclosure by advertised sale does not involve the requisite state action to bring a prima facie constitutional claim. See Northrip v. Fed. Nat'l Mortgage Assoc., 527 F.2d 23, 25-26 (6th Cir. 1975). "[T]here is not a `sufficiently close nexus' between the state and the challenged act of foreclosure. As we have already determined, the power of sale foreclosure is not imbued with state action; it is a privately created contractual remedy analogous to the self-help repossession remedy afforded secured creditors under § 9-503 of the Uniform Commercial Code." Id. Therefore, Count I of Plaintiff's complaint is DISMISSED.
In Count II, Plaintiff asserts that the acceleration clause and subsequent foreclosure was a conspiracy to violate her civil rights in violation of 42 U.S.C. § 1985. Again, Plaintiff's allegations are devoid of the requisite state action to bring a prima facie claim under 42 U.S.C. § 1985. See Sykes v. California, 497 F.2d 197, 202 (9th Cir. 1974); see also Dennis v. Sparks, 449 U.S. 24, 27-28 (1980). Therefore, Count II of Plaintiff's complaint is DISMISSED.
In a portion of Count III, Plaintiff alleges that Defendants' actions in foreclosing on her property violate the Fair Debt Collection Practices Act ( 15 U.S.C. § 1692). However, Defendants' are not "debt collectors" as that term is defined in the statute. See KPMG Peat Marwick v. Texas Commerce Bank, 976 F. Supp. 623, 632 (S.D. Tex. 1997); Oldroyd v. Assoc. Consumer Discount Co., 863 F. Supp. 237, 241-42 (E.D. Pa. 1994). Therefore, that portion of Count III of Plaintiff's complaint is dismissed.
Counts III and IV of Plaintiff's complaint allege state law claims of intentional infliction of emotional and financial harm and violation of Michigan Rule of Professional Conduct 8.4. However, this Court lacks subject matter jurisdiction over these state law claims as there exist no valid federal claims to form a basis for supplemental jurisdiction under 28 U.S.C. § 1367 (a). Therefore, Plaintiff's state law claims in Count III and IV are DISMISSED.
Having dismissed Plaintiff's complaint in its entirety for want of federal jurisdiction, the granting of a preliminary injunction is outside the jurisdictional discretion of this Court. See generally Anderson v. Kelley, No. 92-6663, 1993 U.S. App. LEXIS 32963 (6th Cir. Dec. 15, 1993). Therefore, the preliminary injunction issued by this Court on November 13, 2000 is hereby LIFTED.
V. CONCLUSION
Accordingly, for the reasons stated above, Defendants' Motion to Dismiss is GRANTED and the Courts preliminary injunction issued on November 13, 2000 is LIFTED.
IT IS SO ORDERED.