The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge
This matter is before the court on Defendant Fremont Investment & Loan's ("Fremont") motion to dismiss the claims brought against it in Counts I-IV and on Defendant Mortgage Electronic Registration Systems, Inc.'s ("MERS") motion to dismiss the claim in Count IV brought against MERS. For the reasons stated below, we deny in part and grant in part Fremont's motion to dismiss and we deny MERS' motion to dismiss in its entirety.
Plaintiff Jerome Newman ("Newman") alleges that sometime before November 2006, he contacted Defendant Trevor York ("York"), a mortgage broker, to obtain refinancing. York is allegedly employed by Defendant Apex Financial Group, Inc. ("Apex"). Newman contends that Apex filled out and submitted a loan application on behalf of Newman to Fremont, which is allegedly in the business of originating mortgages. Fremont allegedly originated a loan ("Loan") to Newman and his mother in the amount of $205,000. According to Newman, some of the Loan proceeds were withheld to pay back taxes. Four days after the closing on the mortgage, York allegedly sent Newman a check for loan proceeds in the amount of $3,385.66. Newman allegedly complained to York that Newman had not received the correct amount and $6,908.73 was subsequently refunded to Newman. Newman claims that despite the explanations for the diversion of Loan funds, Apex did not account for $42,701.06 that was directed to York. When Newman questioned York about the $42,701.06, York allegedly claimed that the amount was his payment for "cleaning up" Newman's credit and Newman's wife's credit. (A. Compl. Par 28). Newman claims that York actually provided no services other than acting as a mortgage broker. Newman also claims that there are other sums from the Loan proceeds that are not properly accounted for in the loan statements from Apex. Newman alleges that the sums received by Apex for brokerage services was more than reasonable compensation for such services. Newman also claims that Apex targets minority borrowers and assigns higher rates to minority borrowers than non- minority borrowers, regardless of the borrowers' qualifications.
Newman brought the instant action and includes in the amended complaint a claim alleging unlawful discrimination in regard to residential real estate-related transactions in violation of the Fair Housing Act ("FHA"), 42 U.S.C. § 3601 et seq., brought against Fremont and Apex (Count I), a claim alleging unlawful discrimination in violation of the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691 et seq., brought against Fremont and Apex (Count II), an Illinois Consumer Fraud and Deceptive Business Practices Act, ("Consumer Fraud Act"), 815 ILCS 505/1 et seq., claim brought against Apex, Fremont, and York (Count III), a Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., claim brought against Fremont, Defendant Wells Fargo Bank, N.A. ("Wells") and MERS, (Count IV), a Credit Repair Organizations Act, 15 U.S.C. § 1679 et seq., claim brought against York and Apex (Count V), a breach of fiduciary duty claim brought against Apex, York and Defendant Tristar Title, LLC (Count VI), and a common law fraud claim brought against Apex and York (Count VII). Fremont now moves to dismiss the claims brought against it in Counts I-IV and MERS moves to dismiss the claim in Count IV brought against it.
In ruling on a motion to dismiss, brought pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must draw all reasonable inferences that favor the plaintiff, construe the allegations of the complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). In order to withstand a motion to dismiss, a complaint must allege the "operative facts" upon which each claim is based. Kyle v. Morton High Sch., 144 F.3d 448, 454-55 (7th Cir. 1998); Lucien v. Preiner, 967 F.2d 1166, 1168 (7th Cir. 1992). A plaintiff is required to include allegations in the complaint that "plausibly suggest that the plaintiff has a right to relief, raising that possibility above a 'speculative level'" and "if they do not, the plaintiff pleads itself out of court." E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007)(quoting in part Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007)). Under current notice pleading standard in federal courts a plaintiff need not "plead facts that, if true, establish each element of a 'cause of action. . . .'" See Sanjuan v. Amer. Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994)(stating that "[a]t this stage the plaintiff receives the benefit of imagination, so long as the hypotheses are consistent with the complaint" and that "[m]atching facts against legal elements comes later"). The plaintiff need not allege all of the facts involved in the claim and can plead conclusions. Higgs v. Carver, 286 F.3d 437, 439 (7th Cir. 2002); Kyle, 144 F.3d at 455. However, any conclusions pled must "'provide the defendant with at least minimal notice of the claim,'" Kyle, 144 F.3d at 455(quoting Jackson v. Marion County, 66 F.3d 151, 153-54 (7th Cir. 1995)), and the plaintiff cannot satisfy federal pleading requirements merely "by attaching bare legal conclusions to narrated facts which fail to outline the bases of [his] claims." Perkins, 939 F.2d at 466-67. The Seventh Circuit has explained that "[o]ne pleads a 'claim for relief' by briefly describing the events." Sanjuan, 40 F.3d at 251; Nance v. Vieregge, 147 F.3d 589, 590 (7th Cir. 1998)(stating that "[p]laintiffs need not plead facts or legal theories; it is enough to set out a claim for relief").
Fremont and MERS (collectively referred to as "Defendants") argue that Newman has not alleged sufficient facts to state an ECOA or a FHA claim under the notice pleading standard (Counts I and II). Defendants also argue that Newman has not pled the Consumer Fraud Act with particularity (Count III). Finally, Defendants argue that Newman cannot proceed on the TILA claim since the Loan was not made for personal, family, or household use and that MERS is not a proper Defendant for the TILA claim (Count IV).
I. Fair Housing Act Claims (Count I)
Defendants argue that Newman has not pled sufficient factual details to state a FHA claim. Pursuant to 42 U.S.C. § 3605 of the FHA, "[i]t shall be unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin." 42 U.S.C. § 3605(a).
Defendants argue that in pleading the FHA claim Newman "leaps to . . . unsupported conclusions. . . ."(Mem. Dis. 7)(emphasis omitted). However, in pleading a claim at the motion to dismiss stage Newman is not required to support his facts with evidence. Newman unequivocally states in the amended complaint that Fremont's payment and Apex's receipt of yield spread premiums ("YSP") "disproportionately adversely effects minority borrowers such as plaintiff." (A. Compl. Par. 46). Newman further alleges that Apex, "on average, subjected plaintiff and other minority borrowers to more frequent and/or larger YSPs due to their race."
(A. Compl. Par. 46). We are required to interpret the allegations in favor of Newman at this juncture. Newman has alleged that Defendants discriminate against borrowers because of their race. Newman also includes other allegations such as that the resulting disproportionate impact on minorities "was known and intended by [D]efendants." (A. Compl. Par. 48). Newman alleges that Defendants "assign higher interest rates to minorities, including [Newman], than to whites, regardless of qualifications." (A. Compl. Par. 46). Newman further alleges that Defendants "intentionally and disproportionately target African-Americans and other minorities for higher cost loans, regardless of their qualifications." (A. Compl. Par. 54). Newman contends that Defendants are able to target minorities since Apex "knows who its likely customers are, including where they live, their general credit profile and their race or ethnicity" and Fremont "knows who brokers are, including the geographical communities in which they conduct marketing and broker loans as well as the racial or ethnic composition of the pool of brokers' customers." (A. Compl. Par. 53).
Defendants, deny the truth of Newman's allegations and explain how they did not engage in unlawful discrimination and how the YSPs that Apex utilizes actually "foster home ownership." (Reply 12). However, we cannot resolve such factual issues at the motion to dismiss stage. Such arguments are more appropriate at the summary judgment stage. Defendants argue that the recent ruling in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007) requires Newman to substantiate his claims. (Mem. Dis. 6-7). However, in neither Twombly or E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773 (7th Cir. 2007), in which the Seventh Circuit interpreted Twombly, id. at 776, did the Courts overturn the rule that the allegations that are included in the complaint must still be accepted as true and that all well pled facts are construed in favor of the plaintiff. In Concentra, the Court held that a plaintiff fails to state a claim if the allegations are so vague that they appear to be based on pure speculation. 496 F.3d at 776. The Seventh Circuit has not held, as Defendants propose, that a court can speculate at the ...