NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0608n.06
No. 11-1908
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Jun 12, 2012
KELI MURILLO, )
LEONARD GREEN, Clerk
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
WASHINGTON MUTUAL BANK, F.A., their ) DISTRICT OF MICHIGAN
Successor and Assigns, including but not limited to, JP )
Morgan Chase Bank, National Association, doing )
business as Washington Mutual, )
)
Defendant-Appellee. )
)
BEFORE: MOORE, ROGERS, and GRIFFIN, Circuit Judges.
GRIFFIN, Circuit Judge.
Plaintiff Keli Murillo filed suit against defendant Washington Mutual Bank, F.A.
(“Washington Mutual” or “defendant”) alleging state-law claims for breach of contract and
negligence. Murillo appeals the district court’s grant of judgment on the pleadings. Upon review,
we affirm in part, reverse in part, and remand.
I.
The facts alleged in Murillo’s complaint, as summarized by the district court, are as follows:
Murillo is “in the business of investing in real property.” On November 30, 2007,
Murillo executed a promissory note (“the November 30 loan”) with [Washington
Mutual] in the amount of $87,750.00, secured by a mortgage on a property in
Farmington Hills, Michigan. This was Murillo’s third investment property secured
by a [Washington Mutual] mortgage. She owned other properties in Garden City and
No. 11-1908
Murillo v. Washington Mutual Bank, F.A.
Detroit. The first monthly payment for the new loan, in the amount of $613.56, was
due on January 1, 2008.
Murillo concedes that she missed her very first payment on the November 30 loan.
According to the complaint, she claims that her failure to pay was a result of
[Washington Mutual]’s incompetence. Murillo resides in Pinckney, Michigan, where
residential mail-delivery does not take place. Instead, she has to pick up all her mail
from a P.O. Box in Lakeland, Michigan. [Washington Mutual] erroneously mailed
payment statements and the signed closing package to Murillo’s home address, and
she therefore failed to receive them.
She did not attempt to make her first payment on the November 30 loan until
March 11, 2008, when she sent a check in the amount of $1,392.40 to [Washington
Mutual]. Murillo attempted to stay current on all three of her loans by submitting
one check to [Washington Mutual] that listed the tracking numbers of the loans on
the check in the bottom lefthand corner. The individual at [Washington Mutual]
responsible for check processing could not understand from the check how Murillo
wanted the funds disbursed, and credited the payment to only one of Murillo’s three
loans, considering it a payment of both interest and principal. But even if the entire
sum had been applied to the November 30 loan, the check would not have been
sufficient to bring it current. By the time she mailed the check, Murillo owed three
monthly payments to [Washington Mutual], totaling $1,840.68, not including late
fees and penalties.
[Washington Mutual] began sending notices to collection agencies about the default
on the November 30 loan in April of 2008. Murillo’s loan payments in April and
May of 2008 were returned to her. Washington Mutual acknowledged the mistake
[with Murillo’s first payment check] and corrected the allocation of payments in July
of 2008, but Murillo haggled with them for the next six months over the assessment
of added interest, late fees, and costs due to her late payments.
In January of 2009, Murillo entered a trial forbearance agreement with Chase (which,
at this point, had succeeded Washington Mutual as the holder of the note) to prevent
foreclosure. The parties never entered a formal forbearance agreement, and the
temporary forbearance expired in April of 2009. Finally, in November of 2009,
Chase initiated foreclosure proceedings, with a Sheriff’s sale taking place on
February 9, 2010. Murillo was not sent formal notice that she failed to qualify for a
permanent modification until after the completion of the foreclosure sale.
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Murillo v. Washington Mutual Bank, F.A.
Murillo v. Wash. Mut. Bank, F.A., No. 10-cv-13100, slip op. at 3-4 (E.D. Mich. June 28, 2011)
(citations omitted).
On the basis of diversity jurisdiction, Murillo filed the present action on August 5, 2010,
alleging state-law claims for breach of contract and negligence. Thereafter, defendant moved for
judgment on the pleadings, which was granted. This timely appeal followed.
II.
We review a district court’s grant of judgment on the pleadings under Federal Rule of Civil
Procedure 12(c) using the same de novo standard of review applicable to orders of dismissal under
Rule 12(b)(6). Tucker v. Middleburg-Legacy Place, LLC, 539 F.3d 545, 549 (6th Cir. 2008). “For
purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the
pleadings of the opposing party must be taken as true, and the motion may be granted only if the
moving party is nevertheless clearly entitled to judgment.” Id. (internal quotation marks and citation
omitted). Documents outside of the pleadings may be considered to the extent they are “incorporated
by reference into the complaint.” Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir. 1997).
III.
On appeal, Murillo does not address the dismissal of her negligence claim. Accordingly, any
such argument is waived. Miller v. Admin. Office of the Courts, 448 F.3d 887, 893 (6th Cir. 2006)
(holding that issues not raised in appellant’s brief are waived on appeal).
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Murillo v. Washington Mutual Bank, F.A.
IV.
This leaves Murillo’s breach of contract claim.1 “In interpreting a contract, our obligation
is to determine the intent of the contracting parties.” Quality Prods. & Concepts Co. v. Nagel
Precision, Inc., 666 N.W.2d 251, 259 (Mich. 2003). The construction of clear and unambiguous
language is a question of law for the court. Id. Unambiguous language shall be enforced unless
contrary to public policy. Id.
Murillo alleges that Washington Mutual breached the mortgage and note by: (1) failing to
apply her payments to the correct loans; (2) preventing her from making timely mortgage payments;
and (3) failing to send her closing package and other documents to the correct address. We address
each argument in turn.
First, Washington Mutual did not breach any contractual provision in its processing of
Murillo’s late loan payments. With regard to payment processing, the mortgage provides in relevant
part:
Lender may return any payment or partial payment if the payment or partial payments
are insufficient to bring the Loan current. Lender may accept any payment or partial
payment insufficient to bring the Loan current, without waiver of any rights
hereunder or prejudice to its rights to refuse such payment or partial payments in the
future, but Lender is not obligated to apply such payments at the time such payments
1
The mortgage and note are “governed by federal law and the law of the jurisdiction in which
the Property is located.” The property at issue is located in Michigan and the parties do not dispute
that Michigan law applies. While Murillo refers to the Real Estate Settlement Procedures Act
(“RESPA”), 12 U.S.C. § 2605, et seq., in her briefs on appeal, no RESPA claim is asserted in the
complaint. Indeed, while Murillo does claim that she failed to receive required information
regarding her loan, it appears she did not make a “qualified written request” for information as
required under RESPA. 12 U.S.C. § 2605(e)(1).
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Murillo v. Washington Mutual Bank, F.A.
are accepted.
Accordingly, because none of Murillo’s payments were sufficient to bring her loan current,
Washington Mutual retained the discretion to apply the payments, hold the payments, or return them
just as it did. Rory v. Cont’l Ins. Co., 703 N.W.2d 23, 30 (Mich. 2005) (“A fundamental tenet of our
jurisprudence is that unambiguous contracts are not open to judicial construction and must be
enforced as written.”).
Murillo asserts that her first two payments, if combined, were enough to bring her loan
current. This argument fails. First, because Murillo failed to make this argument before the district
court, it is forfeited on appeal. United States v. Ellison, 462 F.3d 557, 560 (6th Cir. 2006) (“[T]his
court generally will not consider an argument not raised in the district court and presented for the
first time on appeal.”). Second, the pleadings and the documents incorporated therein clearly
demonstrate that Murillo instructed the March 11 check to be disbursed amongst all three of her
Washington Mutual loans. Murillo admits this fact. Accordingly, Washington Mutual did not
breach the mortgage and note in applying Murillo’s loan payments.
Next, Murillo asserts that Washington Mutual breached the mortgage and note by preventing
her from making payments. Specifically, Murillo asserts that she was unable to make timely
payments because she never received payment statements or a copy of the closing documents. A
“negative duty is imposed upon a promisor not to prevent performance of any condition qualifying
its promise, and a contract is breached when one party’s performance is hindered or rendered
impossible by the other.” 23 Williston on Contracts § 63:26 (4th ed. 2011); see also Kiff
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Murillo v. Washington Mutual Bank, F.A.
Contractors, Inc. v. Beeman, 159 N.W.2d 144, 146 (Mich. Ct. App. 1968) (“The general rule is that
a party to a contract cannot prevent, or render impossible, performance by the other party and still
recover damages for nonperformance.”).
Murillo asserts that she contacted Washington Mutual on several occasions to obtain her
closing package, but was unsuccessful. Nevertheless, she admits that she was able to obtain the
information she needed to make payments from the title company. Moreover, Murillo had two other
loans with Washington Mutual, and thus had actual knowledge of where to send payments. Indeed,
it is undisputed that the payments on all three loans were to be sent to the same address. Finally,
Murillo signed the mortgage and note, acknowledging her responsibility to make periodic payments
at certain times to a certain address. Watts v. Polaczyk, 619 N.W.2d 714, 717 (Mich. Ct. App. 2000)
(“Michigan law presumes that one who signs a written agreement knows the nature of the instrument
so executed and understands its contents.”); Stopczynski v. Ford Motor Co., 503 N.W.2d 912, 913
(Mich. Ct. App. 1993) (per curiam) (“[O]ne who signs a contract cannot seek to avoid it on the
[basis] that he did not read it or that he supposed that it was different in its terms.”). Accordingly,
Washington Mutual did not prevent Murillo from making timely payments.
Finally, Murillo asserts that Washington Mutual breached the mortgage contract by failing
to provide her with the closing documents. Such a failure would amount to breach. The mortgage
provides that “Borrower shall be given one copy of the Note and of this Security Instrument.”
Accordingly, if Washington Mutual failed to provide Murillo with such documents, Washington
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Murillo v. Washington Mutual Bank, F.A.
Mutual breached this express and unambiguous requirement of the mortgage contract.2
In addition, Murillo asserts that she did not receive other notices as required under the
mortgage. With regard to notice, the mortgage provides:
All notices given by Borrower or Lender in connection with this Security Instrument
must be in writing. Any notice to Borrower in connection with this Security
Instrument shall be deemed to have been given to Borrower when mailed by first
class mail or when actually delivered to Borrower’s notice address if sent by other
means.
As a result of insufficient notice, Murillo asserts that she was not informed of the method in which
her late loan payments were being processed, and that as a result, she continued to unknowingly be
in default.3
Whether Washington Mutual failed to provide required notices and closing documents, and
the ramifications of such failure, are questions of fact to be addressed at a later stage of this
litigation. McManamom v. Redford Twp., 730 N.W.2d 757, 763-64 (Mich. Ct. App. 2006)
(“Damages are an issue of fact, and questions of fact are, of course, generally decided by the trier of
fact--in this case, the jury.”); Lansing Pavilion, L.L.C. v. Eastwood, L.L.C., No. 265970, 2006 WL
2271348, at *2 (Mich. Ct. App. Aug. 8, 2006) (per curiam) (“[T]he issue of causation is a question
2
The mortgage did not provide a time by which the mortgage and note documents were to
be provided to Murillo. Accordingly, it is presumed that such documents were to be provided within
a reasonable period of time. Kiff, 159 N.W.2d at 146. The pleadings do not indicate when, if ever,
Murillo received a copy of the mortgage and note from defendant.
3
In making her arguments regarding notice, Murillo relies in substantial part on Wanger v.
EMC Mortgage Corp., 103 Cal. App. 4th 1125 (Cal. Ct. App. 2002). That case, however, involves
the failure of a mortgage servicer to provide notice of a transfer as required under RESPA. Id. at
1133-37. As noted above, Murillo asserts no RESPA claim in her complaint.
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Murillo v. Washington Mutual Bank, F.A.
of fact for the jury.”). Accordingly, we reverse the dismissal of Murillo’s breach of contract claim
based upon defendant’s alleged failure to provide her with various documents.
V.
For the foregoing reasons, we affirm in part, reverse in part, and remand for further
proceedings consistent with this opinion.
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