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Christopher Bilek and Mary Bilek v. Bank of America

January 21, 2011

CHRISTOPHER BILEK AND MARY BILEK, PLAINTIFFS,
v.
BANK OF AMERICA, N.A., FOR ITSELF AND AS SUCCESSOR TO COUNTRYWIDE BANK FSP
AND COUNTRYWIDE HOME LOANS SERVICING, L.P.,
REAL TIME RESOLUTIONS, INC., AND AMERICAN HOME MORTGAGE SERVICING, INC., DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:

MEMORANDUM OPINION AND ORDER

On February 25, 2010, Plaintiffs Christopher and Mary Bilek (the "Bileks") filed the present eight-count Second Amended Complaint against various Defendants, including Bank of America, N.A. ("BOA"), on its own and as the successor-in-interest to Countrywide Bank FSB and Countrywide Home Loans Servicing LP (collectively "Countrywide"),*fn1 for violating the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq. (Count I). Based on the Court's supplemental jurisdiction, the Bileks also allege state law claims of breach of contract (Count II) and gross negligence (Count III) against BOA and Countrywide. See 28 U.S.C. § 1367(a). Before the Court is BOA's Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56.*fn2 For the following reasons, the Court grants in part and denies in part BOA's motion. Specifically, the Court grants BOA's motion as to the Bileks' breach of contract and gross negligence claims as alleged in Counts II and III of the Second Amended Complaint, but denies BOA's motion in regard to the Bileks' RESPA claim as alleged in Count I.

BACKGROUND

I. Northern District of Illinois Local Rule 56.1

Northern District of Illinois Local Rule 56.1 assists the Court by "organizing the evidence, identifying undisputed facts, and demonstrating precisely how each side propose[s] to prove a disputed fact with admissible evidence." Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir. 2000). Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to which the moving party contends there is no genuine issue." Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009). "The opposing party is required to file 'a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon." Id. (citing N.D. Ill. R. 56.1(b)(3)(B)). Also, Local Rule 56.1(b)(3)(C) requires the nonmoving party to present a separate statement of additional facts that require the denial of summary judgment. See Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643-44 (7th Cir. 2008).

Accordingly, pursuant to the Local Rules, the Court will not consider any additional facts proposed by the Bileks in their Local Rule 56.1(b)(3)(B) Response, but instead must rely on their Local Rule 56.1(b)(3)(C) Statement of Additional Facts when making factual determinations. See id. at 643; see also Cichon v. Exelon Generation Co., L.L.C., 401 F.3d 803, 809 (7th Cir. 2005) ("Local Rule 56.1 requires specifically that a litigant seeking to oppose a motion for summary judgment file a response that contains a separate 'statement ... of any additional facts that require the denial of summary judgment.'") (emphasis in original). Likewise, the Court will not consider any additional facts BOA sets forth in its responses to the Bileks' Local Rule 56.1(b)(3)(C) Statement of Additional Facts, especially because the Bileks have had no opportunity to respond. See Ciomber, 527 F.3d at 643 ("court does not abuse its discretion when it opts to disregard facts presented in a manner that does follow the Rule's instructions").

Meanwhile, the purpose of Rule 56.1 statements is to identify the relevant admissible evidence supporting the material facts, not to make factual or legal arguments. See Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006) ("statement of material facts did [] not comply with Rule 56.1 as it failed to adequately cite the record and was filled with irrelevant information, legal arguments, and conjecture"). Also, the Court may disregard statements and responses that do not properly cite to the record. See Cichon, 401 F.3d at 809-10; see also Raymond v. Ameritech Corp., 442 F.3d 600, 604 (7th Cir. 2006) ("district courts are entitled to expect strict compliance with Local Rule 56.1"). With these standards in mind, the Court turns to the relevant facts of this case.

II. Relevant Facts

In 2004, the Bileks purchased real property located on West Victory Lane in Watseka, Illinois ("Watseka Property"). (R. 158, Defs.' Rule 56.1 Stmt. Facts ¶ 5.) On or about December 21, 2005, the Bileks obtained a mortgage loan from American Home Mortgage Acceptance ("Loan") secured by the Watseka Property. (Id. ¶ 17.) According to the mortgage instrument securing the Loan ("Mortgage"), the Bileks had the responsibility to maintain insurance on the Watseka Property as to certain hazards in amounts required by the Lender. (Id. ¶ 18.) The Mortgage further provided that "[i]f Borrower fails to maintain [insurance coverage], Lender may obtain insurance coverage, at Lender's option and borrower expense." (Id. ¶ 19.)

Subsequent to the origination of their Loan, the Bileks claim that they experienced a variety of mortgage servicing errors at the hands of American Home Mortgage Servicing, Inc. ("AHMSI"), including a dispute between AHMSI and the Bileks as to who was responsible for making flood insurance payments. (Id. ¶ 20; R. 164, Pls.' Rule 56.1 Stmt. Add'l Facts. ¶ 13.) The parties do not dispute that the Watseka Property's flood insurance lapsed in October 2007. (Defs.' Stmt. Facts ¶ 21.) Also, Mary Bilek contends that it was AHMSI, not Countrywide or BOA, that was responsible for the lapsing of the flood insurance. (Id. ¶ 26.) Meanwhile, on January 1, 2008, Countrywide began servicing the Loan and Mary Bilek admitted that there was no flood insurance on the Watseka Property at that time. (Id. ¶¶ 22, 23.)

On January 8, 2008, Countrywide sent a letter to the Bileks that it intended to force place flood insurance on the Watseka Property. (Pls.' Stmt. Add'l Facts. ¶ 13.) In response, on January 10, 2008, Christopher Bilek sent a letter to Countrywide explaining that AHMSI had established an insurance escrow account. (Id. ¶ 14.) On January 15, 2008, Christopher Bilek sent another letter to Countrywide attaching checks cashed by AHMSI. (Id. ¶ 15.) Also, on August 17, 2009, after BOA started servicing the Loan, Christopher Bilek sent BOA a letter asking BOA to fix his loan status as not delinquent explaining that AHMSI had made numerous servicing errors on the loan. (Id. ¶ 40.)

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c)(2). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In determining summary judgment motions, "facts must be viewed in the light most favorable to the nonmoving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007).

The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). After "a properly supported motion for summary judgment is made, the adverse party 'must set forth specific facts showing that there is a genuine issue for trial.'" Anderson, 477 U.S. at 255 ...


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