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July 15, 2004.

Robert C. Thomas, Plaintiff,
CitiMortgage, Inc., Defendant.

The opinion of the court was delivered by: GEORGE MAROVICH, Senior District Judge


Robert Thomas ("Thomas"), a citizen of Illinois, filed a five-count Complaint against CitiMortgage, Inc. ("CitiMortgage"), a Delaware corporation, seeking damages for negligent credit reporting (Count I); breach of contract (Count II); a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("Consumer Fraud Act"), 815 Ill. Comp. Stat. 505/1, (Count III); tortuous interference (Count IV); and defamation (Count V). Jurisdiction is based on diversity of citizenship. 28 U.S.C. § 1441 and 1446. CitiMortgage moves to dismiss the Complaint pursuant to 12(b)(6). For the reasons set forth below, CitiMortgage's Motion to Dismiss is granted in part and denied in part.


  The Complaint alleges the following relevant facts which, for the purposes of deciding this motion, are taken as true. Hishon v. King & Spaulding, 467 U.S. 63, 73 (1984). In 1979, Thomas entered into a mortgage agreement with CitiMortgage. In November 1996, when Thomas attempted to refinance the mortgage, he realized that CitiMortgage's records stated that Thomas failed to make payments on three different occasions. Thomas claimed that CitiMortgage's records were incorrect and forwarded copies of payment checks to CitiMortgage. Thomas informed CitiMortgage that the discrepancy in its records could prevent Thomas from refinancing his home. In December 1996, Thomas sent a letter to CitiMortgage and again informed them of the error. On December 9, 1996, Thomas received a letter from CitiMortgage requesting from him front and back copies of checks for the mortgage for the months of March, April and May 1996 to prove that he did pay the rent for the three months. On December 16, 1996 Thomas sent a letter and copies of canceled checks for the months of March and April 1996. Since he did not have a copy of the check for May, Thomas also included his check register, claiming that this provided proof that the check was sent to CitiMortgage in May 1996. In his letter, Thomas stated that, although his bank was searching for the check, he had enclosed a second check to be applied to the May payment. Thomas stated that he would cancel the prior check or, in the event it had already been processed, he would accept a credit to his account. CitiMortgage cashed the check, but failed to change the status of Thomas's credit report. Thomas brought action against CitiMortgage for violating the terms set forth in his letter of December 16, 1996.

  Thomas filed the original five-count Complaint in this Court on April 12, 2000 alleging negligent credit reporting, violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, tortious interference with prospective economic advantage, and defamation. On July 26, 2002, this Court dismissed Thomas's FCRA claims with prejudice, stating that Thomas had failed to state a cause of action. This Court declined to exercise supplemental jurisdiction over the state claims and dismissed them without prejudice. Thomas filed a motion on July 29, 2002, seeking leave to file a proposed amended complaint and to remand the case to state court. This Court denied the motion as untimely.

  Thomas filed his Amended Complaint in the Circuit Court of DuPage County on June 26, 2003. CitiMortgage removed the case to this Court pursuant to 28 U.S.C. § 1441 and 1446.


  I. Standard for a Motion to Dismiss

  When considering a motion to dismiss, a court must view the complaint's allegations in the light most favorable to the plaintiff, and all well-pleaded facts in the complaint must be accepted as true. Wilson v. Formigoni, 42 F.3d 1060, 1062 (7th Cir. 1994). To withstand a motion to dismiss, a complaint must allege facts which sufficiently set forth the essential elements of the cause of action. Gray v. County of Dane, 854 F.2d 179, 182 (7th Cir. 1988). Dismissal is proper only if it appears beyond a doubt that a plaintiff can prove no set of facts in support of a claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

  II. Statute of Limitations

  CitiMortgage contends that Thomas's claims of defamation and violation of the Consumer Fraud Act, 815 Ill. Comp. Stat. 505/1 ("505/1") are barred by the statute of limitations. A plaintiff filing a claim pursuant to the Consumer Fraud Act must file the complaint within three years of the date the cause of action accrues. Highsmith v. Chrysler Credit Corp., 18 F.3d 434, 441 (7th Cir. 1994). The cause of action accrues when the plaintiff knows or reasonably should know of his injury and that it was wrongfully caused. Id.

  Thomas's claim pursuant to the Consumer Fraud Act is barred by the statute of limitations. Thomas knew of the alleged injury in November 1996. Therefore, the statute of limitations expired in November 1999. Thomas filed the Amended Complaint on June 26, 2003. Thus, Thomas's Consumer Fraud Act claim must be dismissed as untimely.

  Thomas's defamation claim is also barred by the statute of limitations. "Illinois imposes a one-year statute of limitations on all defamation actions that begins to run when the defamatory statement was published." Muzikowski v. Paramount Pictures Corp., 322 F.3d 918, 923 (7th Cir. 2003). Furthermore, "a cause of action accrues at the time a plaintiff knew or should have known of the allegedly defamatory or false report." Dornhecker v. Ameritech Corp., 99 F. Supp.2d 918, 932 (N.D. Ill. 2000). Thomas knew of the false report in November 1996. ...

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