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Bilek v. American Home Mortgage Servicing

July 15, 2010


Name of Assigned Judge Sitting Judge if Other or Magistrate Judge Amy J. St. Eve than Assigned Judge


Bank of America's motion to dismiss [51] is denied. Bank of America must answer the complaint on or before7/30/10.

O[ For further details see text below.] Notices mailed by Judicial staff.


On February 25, 2010, Plaintiffs Christopher and Mary Bilek ("Plaintiffs") filed the present Second Amended Complaint against various Defendants, including Bank of America, N.A. ("BOA"), in violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq., and state law. See 28 U.S.C. § 1367(a). Before the Court is BOA's motion to dismiss Plaintiffs' breach of contract and negligence claims as alleged in Counts II and III of the Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court denies BOA's motion to dismiss.


"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Pursuant to Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). This short and plain statement must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Rule 8(a)(2) "reflects a liberal notice pleading regime, which is intended to 'focus litigation on the merits of a claim' rather than on technicalities that might keep plaintiffs out of court." Brooks v. Ross, 578F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002)).

Under the federal notice pleading standards, a plaintiff's "factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Put differently, a "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007); Justice v. Town of Cicero, 577 F.3d 768, 771 (7th Cir. 2009) (court construes complaint in light most favorable to plaintiff drawing all reasonable inferences in his favor). In determining a Rule 12(b)(6) motion, courts may consider exhibits attached to the pleadings if the complaint refers to the document at issue or if the document is central to the plaintiff's claims. See McCready v. eBay, Inc., 453 F.3d 882, 891 (7th Cir. 2006); Fed.R.Civ.P. 10(c).


On December 21, 2005, Plaintiffs took out an adjustable rate note and mortgage (hereinafter "Mortgage") secured by the property located on West Victory Lane, Watseka, Illinois (the "Property") with American Home Mortgage Acceptance, Inc. ("American Home"), who is no longer a Defendant in this lawsuit. (R. 49-1, Second Am. Compl. ¶ 14.) Plaintiffs maintain that shortly after American Home started servicing the Mortgage, Plaintiffs experienced a variety of servicing errors. (Id. ¶ 17.) More specifically, Plaintiffs allege that American Home sent them notices that they had failed to pay their property hazard insurance even though the Mortgage had an insurance escrow so that American Home would pay the insurance premiums. (Id. ¶¶ 16, 25-31.) In addition, Plaintiffs allege that American Home erroneously charged them late fees and misreported the Mortgage as delinquent. (Id. ¶¶ 19, 20.)

On January 4, 2008, Countrywide, another named Defendant to this lawsuit, started servicing the Mortgage. (Id. ¶ 49.) Plaintiffs allege that "[w]hen the loan relating to the Watseka property was sold to Countrywide, Countrywide informed plaintiffs that the principal balanced increased by $10,000.00 and Countrywide had force placed insurance on the property." (Id. ¶ 82.) Countrywide also sent Plaintiffs a letter dated January 7, 2008 declaring that the Mortgage was in default. (Id. ¶ 50.) Plaintiffs allege that "Countrywide breached the contract by not correcting the loan to allow plaintiffs to make their monthly payments, increasing the principal balance and forced place insurance on the property." (Id. ¶ 83.)

Sometime after 2008, BOA notified Plaintiffs that it would be taking over the servicing of the Mortgage. (Id. ¶ 54.) On September 17, 2009, Plaintiffs sent BOA a letter requesting that it correct the amount of the Mortgage and also sent BOA a copy of their original complaint in this lawsuit to illustrate the servicing errors that caused the default. (Id. ¶ 55.) On September 25, 2009, Plaintiffs sent BOA a facsimile stating that they had sold the Property's taxes. (Id. ¶ 56.) Plaintiffs allege that BOA did not substantively respond to their letters and faxes. (Id. ¶ 57.) Furthermore, Plaintiffs allege that BOA had a duty to act reasonably in servicing the Mortgage, yet failed to do so by not correcting the loan, allowing payments to resume, and removing the force placed insurance. (Id. ¶¶ 87, 88.)


I. Breach of Contract Claim -- ...

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