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NATIONSCREDIT HOME EQUITY v. CITY OF CHICAGO

March 22, 2001

NATIONSCREDIT HOME EQUITY SERVICES CORPORATION,
v.
CITY OF CHICAGO, PLAINTIFF, DEFENDANT.



The opinion of the court was delivered by: James H. Alesia, United States District Judge.

MEMORANDUM OPINION AND ORDER

Currently before the court is defendant's motion to dismiss plaintiff's second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, the court dismisses plaintiff's second amended complaint with prejudice for lack of subject-matter jurisdiction.

I. BACKGROUND

Plaintiff's second amended complaint makes the following allegations which, for purposes of ruling on this motion, the court accepts as true. On November 21, 1997, the owner of record of 6146 South Carpenter, Chicago, Illinois ("the property") obtained from JVS Financial Group ("JVS") a loan secured by a mortgage to the property. On the same day, JVS sold and assigned this mortgage to Nationscredit ("plaintiff"). The mortgage was recorded on December 1, 1997, and the assignment of mortgage to plaintiff was recorded on March 23, 1998, at the Office of Recorder of Deeds of Cook County, Illinois.

On or about April 17, 1998, pursuant to the Illinois Municipal Code, 65 ILL. COMP. STAT. 5/11-31-1 et seq., and City Ordinance 13-9-010 ("Fast Track"), the City of Chicago ("defendant") filed a complaint for alleged building code violations pertaining to the property. On or about June 30, 1998, the Circuit Court of Cook County ("the circuit court") entered an emergency order for demolition of the building and premises, stating that "the subject building poses an immediate dangerous and hazardous threat to public health, safety and welfare, and must be demolished immediately." (Def.'s Mem., Ex. E.) On July 17, 1998, the property was demolished pursuant to the circuit court's order. Plaintiff was not named as a defendant in the building-violation case, and it alleges that it never received notice of the existence of the case.*fn1

On August 22, 2000, plaintiff filed the second amended complaint now at issue, alleging that defendant acted pursuant to the Fast Track demolition procedures, which "constituted either an express municipal policy or a clearly established municipal custom of the defendant which deprived the plaintiff of its property without due process of law." (Pl.'s Second Am. Compl. at ¶ 15.) Again, plaintiff alleged that the demolition violated its due process rights under § 1983 because defendant failed to give it notice of the building-violation case prior to the demolition, in violation of 65 ILL. COMP. STAT. 5/11-31-1(e). Plaintiff asks the court to award it $68,000, the alleged value of the property at the time it was demolished.

Currently before the court is defendant's motion to dismiss plaintiff's second amended complaint. In its motion, defendant argues that plaintiff alleges neither an express municipal policy nor a widespread practice so permanent and well-settled as to constitute custom or usage with the force of law, and that plaintiff, therefore, still fails to allege municipal liability under § 1983. In the alternative, defendant argues that plaintiff's second amended complaint should be dismissed because the demolition was not carried out under defendant's fast-track demolition program but rather pursuant to court order.

After the parties fully briefed defendant's motion to dismiss, this court ordered the parties to file supplemental memoranda of law addressing the court's jurisdiction in light of the Rooker-Feldman doctrine.*fn3 (Ct. Order dated Jan. 16, 2001.) Before addressing the merits of plaintiff's second amended complaint, the court must address whether it has subject-matter jurisdiction over the present suit.

II. DISCUSSION

A. Standard for Deciding a Rule 12(b)(6) Motion to Dismiss

When deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)"), the court must accept all well-pleaded allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Midwest Grinding Co. v. Spitz, 976 F.2d 1016, 1019 (7th Cir. 1992); Cromley v. Bd. of Educ. of Lockport, 699 F. Supp. 1283, 1285 (N.D. Ill. 1988). If, when viewed in a light most favorable to the plaintiff, the complaint fails to state a claim upon which relief can be granted, the court must dismiss the case. Gomez v. Illinois State Bd of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). The court may dismiss the complaint only if it appears beyond a doubt that the plaintiff can prove no set of facts in support of its claim that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

However, the Supreme Court has explained that "`[w]ithout jurisdiction the court cannot proceed at all in any cause.' . . . The requirement that jurisdiction be established as a threshold matter . . . is `inflexible and without exception.'" Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998) (emphasis added) (citations omitted). Objections to subject-matter jurisdiction cannot be waived, and parties are free to question the court's subject-matter jurisdiction at any time. See United States v. County of Cook, 167 F.3d 381, 387-88 (7th Cir. 1999). If the parties neglect the subject, a court must raise jurisdictional questions itself. Id. A federal court may not resolve the merits of a case until it is certain that it has proper subject-matter jurisdiction over the controversy. Christianson v. Colt Indus. Op. Corp., 486 U.S. 800, 818 (1988). See also Cook v. Winfrey, 141 F.3d 322, 325 (7th Cir. 1998) ("a federal court must assure itself that it possesses jurisdiction over the subject matter . ...


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