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Horton v. National City Mortgage Services Co.

March 24, 2010


The opinion of the court was delivered by: Michael M. Mihm United States District Judge


Now before the Court is Defendant eAppraiseIT, LLC's ("eAppraiseIT") Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b). For the reasons set forth below, eAppraiseIT's motion [#9] is DENIED.


Plaintiff Nancy K. Horton ("Horton") filed her Complaint against Defendants National City Mortgage Services and National City Mortgage Co. in the Circuit Court for the Tenth Judicial Circuit, Peoria County, in October 2006. In early October 2009, Horton filed an Amendment to her Amended Complaint naming defendant eAppraiseIT for the first time. eAppraiseIT removed the case to federal court based on diversity on November 13, 2009. Horton was a certified residential real estate appraiser in Illinois and had been acting as an appraiser for National City Mortgage Services Co. ("NCMSC") for eleven years. Horton performed an appraisal on a "rush" basis for NCMSC in October 2002, and NCMSC's John Abraham ("Abraham"), Vice President, Producing Manager, and Mortgage Loan Originator for NCMSC, apparently communicated to Horton that she would get all the work she wanted from NCMSC as a result. Between October 1, 2002, and October 28, 2005, Horton continued to do appraisals for NCMSC, ultimately doing several hundred of them. Horton alleges that Abraham as well as several other NCMSC employees directly assigned her appraisals over that period of years, and that Abraham communicated to Horton that he would assign her additional appraisals any time she needed or requested them.

In September 2005, National City Mortgage, Inc., ("NCMI") had John Doe, a licensed Illinois real estate appraiser, review a handful of appraisals Horton had done in 2001 and 2003. Doe's review of the appraisals led to a November 14, 2005, letter to Horton from NCMI stating that the review had been done randomly, there were inaccuracies in the appraisals, and Horton should respond to the discrepancies. Allegedly, NCMI did not have Doe perform reviews of any other appraisals, and therefore, the review of Horton's appraisals was not random.

NCMSC maintains a "Black List"*fn1 which includes the names of banned appraisers who are prohibited from performing appraisals for NCMSC. NCMSC and NCMI have procedures and guidelines in place that they must follow, pursuant to federal law, for adding names of appraisers to the Black List. Horton alleges that the National City defendants improperly published her name on their Ineligible Appraiser List on October, 21, 2005, to other agents and employees of the Defendants. Plaintiff separately alleges she was informed by the National City defendants of being put on the Black List on or about October 28, 2006, as a result of the conclusions reached by John Doe and National City with respect to her reviewed appraisals. eAppraiseIT connects mortgage lenders with area appraisers to make appraisals for loans, and was used by National City. The National City defendants reported to eAppraiseIT that Plaintiff was on National City Mortage's "do not use list." eAppraiseIT's Appraisal Order Form states that "Network Appraisal Services is not responsible for adding and/or removing specific appraisers from this list; National City Mortgage's underwriting group retains that responsibility. Please do not contact us with inquiries regarding National City Mortgage's 'do not use' list." Plf's Amendment to the Amended Complaint, ¶ 138. The Appraisal Order Form further stated "Please be aware that Nancy Horton is currently on National City Mortgage's 'do not use' list. Due to this fact, WE WILL NOT ACCEPT COMPLETED APPRAISAL REPORTS FROM THE AFOREMENTIONED APPRAISER." The date on the form containing these statements has been redacted. Horton further alleges on information and belief that eAppraiseIT has not published similar information about other appraisers in the central Illinois area who have also been placed on the National City defendants' Black List.

Horton alleges counts against eAppraiseIT for 1) tortious interference with prospective economic advantage (Count VII), 2) defamation per se (Count VIII), and 3) defamation per quod (Count IX)as a result of the statements that appear on its Appraisal Order Form regarding Horton's placement on National City Mortgage's "do not use" list. The matter is fully briefed and this Order follows.


A complaint must provide a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). That statement must be sufficient to provide the defendant with "fair notice" of the claim and its basis. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). This means that (1) the complaint must describe the claim in sufficient detail to give the defendant "fair notice of what the ... claim is and the grounds upon which it rests" and (2) its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a "speculative level." EEOC v. Concentra Health Services, Inc. 496 F.3d 773, 776 (7th Cir. 2007). Conclusory allegations are "not entitled to be assumed true." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1951 (2009) (citing Twombly, 550 U.S. 544 (2007)).

For purposes of a motion to dismiss, a complaint is construed in the light most favorable to the plaintiff, its well-pleaded factual allegations are taken as true, and all reasonably-drawn inferences are drawn in favor of the plaintiff. See Albright v. Oliver, 510 U.S. 266, 268 (1994); Hishon v. King & Spalding, 467 U.S. 69 (1984); Lanigan v. Village of East Hazel Crest, 110 F.3d 467 (7th Cir. 1997); M.C.M. Partners, Inc. v. Andrews-Bartlett & Assoc., Inc., 62 F.3d 967, 969 (7th Cir. 1995); Early v. Bankers Life & Cas. Co., 959 F.2d 75 (7th Cir. 1992).

I. Horton's Tortious Interference Claim (Count VII)

eAppraiseIT moves to dismiss Horton's tortious interference with prospective economic advantage claim, contending that Horton has failed to plead a prima facie case. Recovery for tortious interference with prospective economic advantage requires the plaintiff to show: 1) the existence of a valid business relationship or expectancy, 2) defendant's knowledge of the expectancy, 3) defendant's intentional and unjustified interference that prevents the expectancy from developing into a valid business relationship, and 4) damages resulting from the interference. Chicago's Pizza, Inc. v. Chicago's Pizza Franchise Ltd. USA, 893 N.E.2d 981, 993 (Ill. App. 1st Dist. 2008). eAppraiseIT argues that Horton's Complaint is deficient for failing to allege that eAppraiseIT aimed to injure her, instead only alleging eAppraiseIT acted "intentionally and unjustifiably." See id. at 994 (quoting Romanek v. Connelly, 753 N.E.2d 1062 (Ill. App. 1st Dist. 2001)) (explaining that the third element of the tortious interference claim refers to some impropriety committed by the defendant and so plaintiffs must prove defendants acted "intentionally with the aim of injuring" the plaintiff's expectancy). Horton points to her Amendment to the Amended Complaint wherein she alleges that "Upon information and belief, the Defendant [eAppraiseIT] has not published similar information about other appraisers in the central Illinois area who have also been placed on the Defendant NCMI's and the Defendant NCMSC's Black List." ¶ 158. She argues that it can be inferred from that allegation that eAppraiseIT intentionally aimed to harm her reputation.

In Count VII, Horton alleges, among other things, that she has devoted substantial resources toward developing her appraisal business in the Central Illinois area and developing her good professional reputation in the area, that due to her good professional reputation she had a valid expectancy of receiving referrals in the area, that eAppraiseIT knew she received referrals from colleagues and knew she had an expectation that the business relationship between her colleagues and her would continue, that eAppraiseIT intentionally and unjustifiably published to her central Illinois colleagues that she had been placed on the Black List, and that she has been damaged as a result. Horton's allegations are sufficiently specific to give eAppraiseIT notice of the claim and do suggest a plausible tortious interference with prospective economic advantage claim. eAppraiseIT is demanding a level of specificity that is not required in federal notice pleading. A complaint need not plead legal theory, nor need it match facts to every element of a legal theory. Bennett v. Schmidt, 153 F.3d 516, 518 (7th Cir. 1998). General allegations of elements consistent with a claim, unsupported by factual ...

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