               NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 12a1287n.06

                                          No. 12-1056                                  FILED
                                                                                   Dec 13, 2012
                          UNITED STATES COURT OF APPEALS                     DEBORAH S. HUNT, Clerk
                               FOR THE SIXTH CIRCUIT


CEDRIC M. WILLIAMS,                             )
                                                )           ON APPEAL FROM THE UNITED
               Plaintiff-Appellant,             )           STATES DISTRICT COURT FOR
                                                )           THE EASTERN DISTRICT OF
       v.                                       )           MICHIGAN
                                                )
PLEDGED PROPERTY II, LLC,                       )
and LITTON LOAN SERVICING LP,                   )
                                                )
               Defendants-Appellees.            )


BEFORE: CLAY and STRANCH, Circuit Judges; BELL, District Judge.*

       BELL, District Judge. Plaintiff-Appellant Cedric M. Williams (“Williams”) appeals an

order granting summary judgment to Defendant-Appellees, Pledged Property II, LLC (“Pledged

Property”) and Litton Loan Servicing, LP (“Litton”). For the following reasons, we AFFIRM.

                                       BACKGROUND

       This case arose out of a dispute over the foreclosure and subsequent sale of a home in Wayne

County, Michigan. Williams purchased the home on March 23, 2007, and financed the purchase

with a mortgage. Litton contracted to service the loan beginning March 30, 2007. Williams became

past due on the mortgage in September of 2007, and received Notice of Default in December of

2007. At Williams’s request, Litton agreed to a loan modification on January 2, 2008. Williams did


       *
        The Honorable Robert Holmes Bell, United States District Judge for the Western District
of Michigan, sitting by designation.
No. 12-1056
Williams v. Pledged Property II, LLC, et al.

not make his first three payments under the modified loan and filed for bankruptcy in July of 2008.

The automatic bankruptcy stay was lifted to allow for the foreclosure to continue in March of 2009.

       Notice of Foreclosure Sale was first published in the Detroit Legal News on June 8, 2009.

Prior to the scheduled foreclosure sale, Williams requested a second loan modification from Litton.

Litton adjourned the foreclosure sale to review the request. On October 2, 2009, Litton denied the

loan modification request and proceeded with the foreclosure. Mortgage Electronic Registration

Systems, Inc. (MERS) purchased the home at the foreclosure sale on October 14, 2009, and recorded

its Sheriff’s Deed on October 26, 2009. Thereafter, MERS conveyed its interest to Pledged Property

by quit claim deed the same month. After the sale, Litton continued to discuss potential options with

Williams until the lender released Litton from servicing the loan on March 1, 2010.

       On June 9, 2010, after the redemption period had run, Williams filed this action in Wayne

County Circuit Court, bringing the following claims: (1) quiet title, (2) unjust enrichment, (3) breach

of implied agreement, (4) misrepresentation, (5) fraud, (6) constructive trust, and (7) breach of Mich.

Comp. Laws § 600.3205. Defendants removed the case to district court on July 12, 2010, on the

basis of diversity jurisdiction. On December 17, 2010, Defendants filed a motion for summary

judgment. On the same day, Williams filed a motion to amend the complaint to add a claim of

“Deceptive Act and/or Unfair Trade Practice.” The motion to amend was denied on February 17,

2011, without prejudice. Williams did not file a response to the motion for summary judgment, and




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Williams v. Pledged Property II, LLC, et al.

the motion was granted by the district court on March 9, 2011. Williams filed a motion for

reconsideration, which was granted on June 9, 2011.

       After oral argument on November 22, 2011, the district court again granted Defendants’

motion for summary judgment. The court explained in its oral opinion that it was granting the

motion on two grounds: (1) lack of standing and (2) the Statute of Frauds. Williams appeals this

ruling, claiming that Litton made an oral promise that it would not go forward with the foreclosure

sale and would come to terms to let Williams keep the home. Williams argues that Litton breached

its promise and acted fraudulently when it sold the house at the foreclosure sale. Williams also

appeals the denial of his motion to amend.

                                   STANDARD OF REVIEW

       This Court reviews a district court’s grant of summary judgment de novo. Bowling Green

v. Martin Land Dev. Co., 561 F.3d 556, 558 (6th Cir. 2009). “The court shall grant summary

judgment if the movant shows that there is no genuine dispute as to any material fact and the movant

is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In deciding a motion for summary

judgment, the court examines all evidence in the light most favorable to the non-moving party.

Tingle v. Arbors at Hillard, 692 F.3d 523, 529 (6th Cir. 2012).

       This Court reviews the denial of a motion to amend for abuse of discretion. Rose v. Hartford

Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000).




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Williams v. Pledged Property II, LLC, et al.

                                           DISCUSSION

       The district court, in its oral decision, did not specify which claims failed due to lack of

standing and which claims failed due to the Statute of Frauds. This opinion will address each of

these issues separately.

I. Standing under Michigan Law

       Under Michigan law1, a party must have “a legal or equitable right, title, or interest in the

subject matter of the controversy” to establish standing.2 MOSES, Inc. v. Se. Mich. Council of

Gov’ts, 716 N.W.2d 278, 286 (Mich Ct. App. 2006) (internal quotation marks omitted); Awad v.

Gen. Motors Acceptance Corp., No. 302692, 2012 WL 1415166, at *2 (Mich. Ct. App. Apr. 24,

2012) (per curiam). Upon foreclosure, the rights of both the mortgagor and mortgagee are controlled

by statute. Senters v. Ottawa Sav. Bank, FSB, 503 N.W.2d 639, 642 (Mich. 1993). Michigan’s

foreclosure statute provides that, once the redemption period is expired, all of the mortgagor’s rights

in the property are extinguished by operation of law. Mich. Comp. Laws § 600.3236; Piotrowski v.



       1
         This Court is exercising diversity jurisdiction, thus it “must apply the same substantive law
as would have been applied if the action had been brought in a state court of the jurisdiction where
the federal court is located.” Corrigan v. U.S. Steel Corp., 478 F.3d 718, 723 (6th Cir. 2007).
       2
         In this case, the arguments brought by the parties and the conclusion stated by the district
court are based on standing under Michigan state law, not Article III. Although not addressed, this
Court is satisfied that Williams has standing under Article III to raise his claims. Therefore, the
discussion is limited to Williams’s standing under Michigan law. See Morell v. Star Taxi, 343 F.
App’x 54, 57 (6th Cir. 2009) (“When jurisdiction is premised on diversity of citizenship, a plaintiff
must have standing under both Article III and state law in order to maintain a cause of action.”); see
also Owen of Ga., Inc. v. Shelby Cnty., 648 F.2d 1084, 1088-90 (6th Cir. 1981).

                                                  4
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Williams v. Pledged Property II, LLC, et al.

State Land Office Bd., 4 N.W.2d 514, 517 (Mich. 1942). This includes any rights arising under

equity. Senters, 503 N.W.2d at 644 (“Where, as in the present case, a statute is applicable to the

circumstances and dictates the requirements for relief by one party, equity will not interfere.”).

       The redemption period following a foreclosure is six months after the date of the sale, Mich.

Comp. Laws § 600.3240, and Michigan law does not allow for an extension of the statutory

redemption period absent a clear showing of fraud or irregularity. Schulthies v. Barron, 167 N.W.2d

784, 785 (Mich. Ct. App. 1969). The Michigan courts have determined that, after the expiration of

the redemption period, a mortgagor does not have standing to bring an action to quiet title or

challenge the foreclosure proceedings. See Overton v. Mortg. Elec. Registration Sys., No. 284950,

2009 WL 1507342, at *1 (Mich. Ct. App. May 28, 2009) (per curiam); Sagmani v. Lending Assocs.

LLC, No. 302865, 2012 WL 3193940, at *1 (Mich. Ct. App. Aug. 7, 2012) (per curiam); Awad, 2012

WL 1415166, at *4.

       In this case, the district court held that Williams lacked standing to bring this case because,

after the redemption period expired, Williams did not have a legal interest in the house. The

foreclosure sale occurred on October 26, 2009, and the case was filed on June 9, 2010, nearly eight

months after the sale and well after the end of the statutory redemption period. Thus, absent a clear

showing of fraud or irregularity, Williams’s rights to the property were extinguished, and he lacked

standing under Michigan law to challenge the foreclosure proceedings or the foreclosure sale. See

Overton, 2009 WL 1507342, at *1 (citing Mich. Comp. Laws § 600.3236).


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Williams v. Pledged Property II, LLC, et al.

       Williams attempts to invoke the fraud or irregularity exception to extend the redemption

period. In order to qualify for the exception and extend the redemption period, the fraud or

irregularity must be in “conducting the legal measures.” Heimerdinger v. Heimerdinger, 299 N.W.

844, 846 (Mich. 1941). This requires that the fraud or irregularity be present in the foreclosure

procedure itself. Sagmani, 2012 WL 3193940, at *1 (“A party can challenge the foreclosure after

the redemption period only if there is clear evidence of fraud or irregularity in the foreclosure

proceedings.”). However, Williams’s claim of fraud relies on oral assurances during a negotiation

to change the terms of the contract. Despite the fact that the negotiations may have taken place

during the foreclosure process, these negotiations remained separate from the foreclosure process

itself. As such, even if assumed to be true, Williams’s allegations of fraud would not qualify him

for the fraud exception because they are not fraud or irregularity in “the legal measures” of the

foreclosure process.

       Consequently, Williams did not have standing to assert any claim to legal or equitable title

in the home because the redemption period had expired and he did not allege any fraud or irregularity

in the foreclosure process. Without any legal or equitable title in the home, Williams cannot receive

injunctive relief restoring him to title in the home. Therefore, Williams’s claims for quiet title and

constructive trust were properly dismissed.




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Williams v. Pledged Property II, LLC, et al.

II. Michigan Statute of Frauds

        Williams also seeks relief for breach of implied agreement, misrepresentation, and fraud on

account of an oral promise allegedly made by Litton to delay the foreclosure sale. However, the

Michigan Statute of Frauds expressly states that “[a]n action shall not be brought against a financial

institution to enforce [a promise or commitment to waive a provision of a loan or make any other

financial accommodation] unless the promise or commitment is in writing and signed.” Mich.

Comp. Laws § 566.132(2). The language of this statute is unambiguous and should be read as an

“unqualified and broad ban” of any claim – “no matter its label” – against a financial institution to

enforce the terms of an oral promise waiving a loan provision. Crown Tech. Park v. D&N Bank,

FSB, 619 N.W.2d 66, 72 (Mich. Ct. App. 2000).

       Williams, relying on Schering-Plough Healthcare Products, Inc. v. NBD Bank, N.A., 98 F.3d

904 (6th Cir. 1996), argues that the meaning of “financial accommodation” in § 566.132(2) requires

that the financial institution be exposed to some sort of risk of loss before there would be a writing

requirement. Williams’s argument is misplaced. In the period between Schering-Plough and this

case, the Michigan Court of Appeals has clearly interpreted § 566.132(2) to include promises to

delay foreclosure sales, holding that “an agreement to delay a foreclosure sale is an agreement to

make a ‘financial accommodation.’” FEI Co. v. Republic Bank, S.E., No. 268700, 2006 WL

2313612, at *2 (Mich. Ct. App. Aug. 10, 2006) (quoting Mich. Comp. Laws § 566.132(2)(a)).




                                                  7
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Williams v. Pledged Property II, LLC, et al.

        Here, Williams’s claims relied on an alleged promise or agreement by Litton to delay the

foreclosure sale. Although Williams does not specify whether these assurances happened before,

after, or both before and after the foreclosure sale, this uncertainty does not affect the outcome of this

case. Williams did not support his allegations with a writing. He relied solely on oral assurances

allegedly made by Litton. The courts cannot enforce such a promise without evidence that would

satisfy the Statute of Frauds. Because Williams did not come forward with a writing, his claims of

breach of implied agreement, misrepresentation, and fraud were properly dismissed.

III. Unjust Enrichment

        Williams’s claim of unjust enrichment was also properly dismissed, because this transaction

was governed by contract. Upon establishing the elements of unjust enrichment, the law will imply

a contract, but only if there is no express contract governing the same subject matter. Belle Isle Grill

Corp. v. Detroit, 666 N.W.2d 271, 280 (Mich Ct. App. 2003). In this case, there was a contract

which controlled the foreclosure, so a claim for unjust enrichment cannot succeed.

IV. Violation of M.C.L. § 600.3205

        Williams also claims that Defendants were in violation of § 600.3205. This statute applies

only to proceedings in which the first notice was published after July 5, 2009, and before December

31, 2012. Mich. Comp. Laws § 600.3204(5). First notice of the foreclosure was published on June

9, 2009, before the effective date of the statute. Therefore, this statute could not have been violated,

and this claim was also properly dismissed.


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Williams v. Pledged Property II, LLC, et al.

V. Amended Complaint

       Finally, the district court did not abuse its discretion in denying, without prejudice,

Williams’s motion to amend his complaint to add a claim of “Deceptive Act and/or Unfair Trade

Practice.” The district court applied the correct standard in its determination and cited both the

untimely nature of the motion and also the prejudice that would have been suffered by the

Defendants had it allowed the motion. Furthermore, any amendment would have been futile because

Williams’s vague and speculative assertions were insufficient to state a plausible claim of fraud or

irregularity. See Ashroft v. Iqbal, 556 U.S. 662 (2009).

                                         CONCLUSION

       For these reasons, we AFFIRM the judgment of the district court.




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