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December 2, 2004.


The opinion of the court was delivered by: JAMES ZAGEL, District Judge


In February 2001, Defendant ("Manufacturers") filed a mortgage foreclosure action in the Northern District of Illinois against Plaintiffs (the "Medinas"). On December 10, 2001, Judge Lindberg dismissed the foreclosure action by minute order. Plaintiffs filed a Complaint in this court on March 24, 2004, alleging various fraudulent actions by Defendant related to the 2001 mortgage foreclosure action.

In May 2003, a class action complaint was filed against Fairbanks Capital Corporation ("Fairbanks") in the United States District Court for the District of Massachusetts. The complaint alleged, inter alia, that Fairbanks was a servicer of residential mortgage loans and that it violated the Fair Debt Collection Practices Act by collecting fees, costs and foreclosure-related charges that were not due, and that it entered into and breached reinstatement agreements with borrowers. Fairbanks and the class action plaintiffs entered into a settlement agreement and release on November 14, 2003 (hereinafter the "Curry settlement agreement"). The Curry settlement agreement was intended to comprise a global settlement that would provide consumer redress throughout the United States. The terms of the agreement state that each settlement class member and their respective spouses would be deemed to have released and completely and forever discharged Fairbanks and Fairbanks-related parties from the released claims.

  Under the terms of the Curry settlement agreement, Fairbanks-related parties include "all persons or entities that are or have been investors, owners, trustees or beneficiaries of all or part of the legal or equitable rights for any of the Serviced Loans . . . including . . . the mortgage-backed securities trusts." Defendant asserts that it is a mortgage-backed security trust and is the owner of the loan obtained by Plaintiffs and serviced by Fairbanks. Defendant also asserts that Plaintiffs' present claim against Defendant, alleging a fraudulent foreclosure action in February 2001, falls within the definition of "Released Claims"*fn1 in the 2003 Curry settlement agreement.

  On December 8, 2003 the District Court in Massachusetts preliminarily approved the Curry settlement agreement as fair, reasonable and adequate, and conditionally certified the class for settlement purposes and with respect to notice, settlement hearing and administration. The certified class included all persons whose loans were serviced by Fairbanks during the class period and whose loans were: (i) in default or treated as being in default by Fairbanks and (A) who incurred or were assessed late fees and/or default-related fees, or (B) who were affected by default-related conduct. Defendant asserts that Fairbanks treated the Medinas' mortgage as in default by filing the mortgage foreclosure action in February 2001. Plaintiffs do not contest this fact; rather, it is the gravamen of their current complaint. As part of its preliminary approval of the Curry settlement agreement, the District Court approved class notice and claim forms, directed Fairbanks to prepare and provide the class member list to the Federal Trade Commission (the "FTC"), directed the FTC to mail the class notice and claim forms to all persons on the class member list, and ordered Fairbanks to publish a summary notice in USA Today. The District Court held that notice in compliance with its order was the "best notice practicable under the circumstances," constituting due and sufficient notice in full compliance with Rule 23 requirements as well as due process. Finally, the District Court's December 8, 2003 order contained an opt-out provision, requiring that any class member who wished to be excluded from the class was required to mail a request for exclusion to the settlement administrator; any class member who did not properly and timely request exclusion was to be included in the class and bound by the judgment in the class action lawsuit. On May 13, 2004, the District Court granted the motion approving the settlement agreement, holding that each class member was bound by the agreement, including the releases, disclaimers of liability, covenants not to sue and the injunction against further litigation contained in the agreement.

  Summary Judgment

  Manufacturers has moved for summary judgment pursuant to Fed.R.Civ.P. 56. Summary judgment is proper if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322-33 (1986). A genuine issue of material fact exists when there is evidence on the basis of which a reasonable jury could find in Plaintiffs' favor, allowing for all reasonable inferences drawn in a light most favorable to Plaintiffs. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A genuine issue of material fact exists when a reasonable jury could find for the non-movant based on the entire record. Roger v. Yellow Freight Sys., 21 F.3d 146, 149 (7th Cir. 1994). Manufacturers argues that it is entitled to summary judgment as a matter of law because there are no genuine issues of material fact regarding the effect of the Curry class action settlement on the Medinas: namely, that the Medinas are bound by the terms of the settlement and are thereby barred from filing suit against Manufacturers on the basis of the February 2001 foreclosure action.

  Plaintiffs have failed to raise a genuine issue of material fact in response to Defendant's assertions that: a) it is a mortgage-backed security trust included within the Curry settlement agreement's definition of "Fairbanks-related Parties;" and b) the Plaintiffs' present claim is a "Released Claim" as defined by the Curry settlement agreement. In response to these assertions, the Medinas merely reiterate the allegations raised in their Complaint, stressing that they are not bound by the Curry settlement agreement since Manufacturers was not a named party in that action and that they never waived any right to sue Manufacturers with respect to the 2001 foreclosure action. I find that Manufacturers is a "Fairbanks-related Party," and that Plaintiffs' present complaint constitutes a "Released Claim." The only remaining issue, therefore, is whether Plaintiffs have raised a genuine issue of material fact regarding the adequacy of the notice provided them as part of the Curry settlement.

  On February 23, 2004, the settlement administrator in the Curry class action sent a notice and claim form to the Medina household at 5200 S. Western Avenue, #2 in Chicago, Illinois. The Medinas claim that on this date they no longer lived at that address, and that furthermore, both Manufacturers and Fairbanks possessed their new address of 2419 W. 52nd Street in Chicago, Illinois. The Medinas submitted various un-authenticated letters (none of which appear to be original) in which they corresponded with officials at both Fairbanks and Manufacturers. Plaintiffs offered these letters as evidence that Manufacturers and Fairbanks knew, no later than July 2002, of the Medinas' change of address. Defendants properly challenge the sufficiency of these documents as evidence in a summary judgment motion. However, Plaintiffs also submitted copies of letters sent by Fairbanks and Manufacturers to Plaintiffs at the 2419 W. 52nd Street address. These letters, dated August 6, 2002, and September 13, 2002, appear to be on Manufacturers and Fairbanks letterhead, respectively. Both letters are dated more than one and one-half years before notice of the class action was sent to the Medinas.

  The Medinas insist that they are not bound by the decision approving the final settlement in the Curry class action because they never received notice of the settlement or of the opportunity to opt out of it. Their response to Manufacturers' Motion for Summary Judgment also raises the issue of whether they were denied due process of law when notice of the proposed settlement (and notice of the opportunity to opt out of the suit) was sent to an address Manufacturers and Fairbanks knew or should have known to be incorrect.*fn2 Manufacturers has not denied that it possessed the Medinas' new address when it provided their name to the FTC. Rather, it appears to rest its motion for summary judgment on the ground that the notice satisfied the requirements of the settlement agreement and Fed.R.Civ.P. 23(c)(2), and therefore is binding on the Medinas regardless of whether they actually received notice and regardless of whether the Defendant is responsible for this failure.*fn3

  Rule 23(c)(2), which governs notice for classes certified under Rule 23(b)(3), requires "`the best notice practicable under the circumstances' be directed to the members of the class, `including individual notice to all members who can be identified through reasonable effort.'" Breslow v. Prudential-Bache Props. Inc., 1995 U.S. Dist. LEXIS 13617 at *4-5 (N.D. Ill. Sept. 13, 1995) (citing Rule 23(c)(2)). This standard can be satisfied even though a particular class member never receives actual notice — a difficult reality for many plaintiffs to accept. See id. at *5 ("[d]ue process requires that the method of providing notice be `reasonably calculated to reach interested parties' . . . [but] does not require that each class member actually receive notice") (citations omitted). This rule ensures that when parties to a settlement provide class plaintiffs with the best notice practicable under the circumstances, those plaintiffs who fail to receive actual notice — for any number of legitimate reasons — cannot later disrupt the settlement. See In re VMS Ltd. P'ship Sec. Litig., 1995 U.S. Dist. LEXIS 8079 at *11-12 (N.D. Ill. June 9, 1995). Absent this rule, defendants would have little incentive to settle. Id.

  In this case, the Medinas have attempted to raise, as a factual matter, the issue of whether Manufacturers and Fairbanks sent notice of the settlement to an address a reasonable investigation would have shown to be incorrect. However, Plaintiffs cannot demonstrate that even if true, this issue entitles them to bring suit against Manufacturers. There simply is no relevant precedent exempting a plaintiff from a binding class action settlement because the settling party failed to verify the address of each of tens of thousands of class plaintiffs. Cf. In re VMS, 1995 U.S. Dist. LEXIS at *3-5 (holding that the plaintiff was bound by the terms of a class action settlement even when notice was sent to his former address; requiring verification of every address of each member of a "very large class" would be "considerably . . . burdensome"). See also Breslow, 1995 U.S. Dist. LEXIS at *6-7 (notice sufficient when mailed by first-class mail and affidavit states that notices were not returned as undeliverable). Although it is possible that Manufacturers and Fairbanks provided an address for the Medinas that was out-dated, I find that the size of the plaintiff class in the Curry action, Fairbank's provision of the Medinas' name to the settlement administrator, and its reliance on the National Change of Address database to update class members' addresses constituted the best practicable efforts to provide notice under the circumstances. The Plaintiffs cannot establish that there is a genuine issue of material fact regarding notice of the Curry settlement agreement.

  Alternatively, the Medinas' response to the Motion for Summary Judgment indirectly raises the possibility of relief from the binding effect of the Curry settlement agreement under Fed.R.Civ.P. 60. Rule 60(b) allows a court to grant relief from a judgment for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud . . . misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied; (6) any other reason. Granting relief under Rule 60(b) is an "extraordinary remedy and is granted only in exceptional circumstances." Harold Wash. Party v. Cook County, Ill. Democratic Party, 984 F.2d 875, 879 (7th Cir. 1993) (citation omitted). The most likely grounds for excluding the Medinas from the Curry class settlement would be Rule 60(b)(3), (4) or (6). Although Plaintiffs' motion strenuously rejects the proposition that they released Manufacturers from any liability with respect to the February 2001 foreclosure, e.g., their pointed and oft-repeated statement "we reserve the right to our claims," they have presented no admissible evidence that Defendant deliberately mailed notice of the Curry settlement to an address it knew to be incorrect. Rather, Plaintiffs at best suggest that Defendant failed to verify the address of one of many class members. Therefore, I cannot conclude that the judgment should be set aside on the basis of either Rule 60(b)(3), which requires the Plaintiffs to show misconduct by the Defendant, or under Rule 60(b)(4), which requires that I find "extraordinary circumstances" are present before granting relief. In re VMS, 1995 U.S. Dist. LEXIS at *9 (citing O'Brien v. Nat'l Prop. Analysts Partners, 739 F. Supp. 896, 902 (S.D.N.Y. June 15, 1990)). Absent admissible evidence ...

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