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Jacqueline Fowler v. Bank of America Corp

January 28, 2011


The opinion of the court was delivered by: Judge George M. Marovich


Plaintiff Jacqueline Fowler ("Fowler") has filed a complaint containing dozens of claims against defendants Bank of America Corp., BAC Mortgage Corp., First American Title Corp., Village of Crete, Sandra Drolet (the Crete Township Assessor), Will County Board of Review, Illinois Property Tax Appeal Board (incorrectly named as Illinois State Board of Review), MemberSelect (incorrectly named as AAA Homeowners Ins.) and AAA Credit Card Co. Before the Court are the six separate motions to dismiss filed by: (1) Bank of America Corp. and BAC Mortgage Corp.; (2) MemberSelect; (3) Will County Board of Review; (4) Illinois Property Tax Appeal Board; (5) First American Title Corp.; and (6) Village of Crete.*fn1 For the reasons set forth below, the Court grants the motions.

I. Background

For purposes of the motions to dismiss, the Court takes as true the allegations in plaintiff's complaint. It is not always clear what plaintiff, who is proceeding pro se, is alleging.

In July 2008, Fowler purchased a home in the Village of Crete in Will County, Illinois. To help pay for the purchase of her home, Fowler took out a mortgage, which was later obtained by Bank of America Corp., now BAC Mortgage Corp. (together "B of A" or "Bank of America"). The purchase closed at First American Title Corp. ("First American"). The claims in this case arise out of two problems Fowler faced after she purchased her home.

Fowler encountered the first problem on or about August 31, 2008. That is the date Fowler received a tax reassessment of her home. The tax assessor considered her home "remodeled" due to the addition of a stamped patio, which had been added to the property before Fowler purchased it. Under the reassessment, the taxes on Fowler's home increased by $300.00 per year. According to Fowler's complaint, she misunderstood the deadline for appealing the reassessment. The Court takes judicial notice of the fact that Fowler filed a tax objection case in the Circuit Court of Will County. The Court also takes judicial notice of the fact that in her order dismissing Fowler's tax objection case, the Judge stated:

The Plaintiff filed a Tax Objection in this case, but failed to appear before the Board of Review as required by 35 ILCS 200/23-10, to review the year in question. As such, this Court does not have jurisdiction to hear the Tax Objection. Because this Court does not have jurisdiction over this case, this matter must be dismissed.

Finally, the Court takes judicial notice of the fact that Fowler appealed the decision dismissing her tax objection case and that the appeal is still pending.

Fowler's second problem started in June 2009. Bank of America notified Fowler that her tax escrow account was "short." Fowler asserts that the reason the account was short is that after the closing, Bank of America failed to put the money designated for tax escrow into the escrow account. Since June 2009, Fowler has disputed the amount of her monthly mortgage payment in that she has disputed the amount of the escrow portion of her mortgage payment. Fowler believes Bank of America has retaliated against her by (1) returning to her a check for a mortgage payment which was $100 lower than it should have been; and (2) increasing her homeowner's insurance by $300 in July 2010. Fowler alleges that her insurance carrier is a subsidiary of Bank of America.

II. Standard on a motion to dismiss

The Court may dismiss a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure if the plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In considering a motion to dismiss, the Court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor. McCullah v. Gadert, 344 F.3d 655, 657 (7th Cir. 2003). Under the notice-pleading requirements of the Federal Rules of Civil Procedure, a complaint must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not provide detailed factual allegations, but mere conclusions and a "formulaic recitation of the elements of a cause of action" will not suffice. Bell Atlantic, 127 S.Ct. at 1964-1965. A complaint must include enough factual allegations to "raise a right to relief above a speculative level." Bell Atlantic, 127 S.Ct. at 1965. "After Bell Atlantic, it is no longer sufficient for a complaint 'to avoid foreclosing possible bases for relief; it must actually suggest that the plaintiff has a right to relief, by providing allegations that raise a right to relief above the speculative level.'" Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008) (quoting Equal Employment Opportunity Comm'n v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007)). To survive a motion to dismiss, a claim must be plausible. Iqbal, 129 S.Ct. at 1950. Allegations that are as consistent with lawful conduct as they are with unlawful conduct are not sufficient; rather, a plaintiff must include allegations that "nudg[e] their claims across the line from conceivable to plausible." Bell Atlantic, 127 S.Ct. at 1974.

III. Discussion

Before considering the merits of a case, a federal court must always assure itself that it has jurisdiction over the case. Scott Air Force Base Prop., LLC v. County of St. Clair, 548 F.3d 516, 520 (7th Cir. 2008). A federal district court has original jurisdiction over "all civil actions arising under the Constitutions, laws, or treaties of the United States." 28 U.S.C. § 1331. In a civil action over which a federal district court has original jurisdiction, the court has supplemental jurisdiction "over all other claims that are so related" that they "form part of the same case or controversy." 28 U.S.C. § 1367(a). That is, a court has supplemental jurisdiction over state-law claims that "derive from" the same "common nucleus of operative fact" as do the claims over which the court has original jurisdiction. Hansen v. Board of Trustees of Hamilton SE School Corp., 551 F.3d 599, 607 (7th Cir. 2008) (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966)). If "the district court has dismissed all claims over which it has original jurisdiction[,]" then the Court "may decline to exercise supplemental jurisdiction[.]" 28 U.S.C. § 1367(c)(3).

Here, it appears from plaintiff's complaint that she is asserting several federal claims. MemberSelect argues that these claims are frivolous and, therefore, do not confer jurisdiction. "When the federal theories are insubstantial in the sense that 'prior decisions inescapably render the claims frivolous', there is no federal jurisdiction." Avila v. Pappas, 591 F.3d 552, 553 (7th Cir. 2010). Accordingly, as the Court considers plaintiff's claims, it will consider not just whether plaintiff has stated a claim but also whether each is frivolous. If each of plaintiff's federal claims is frivolous, the Court will have to dismiss the suit for want of jurisdiction.

The Court also notes that not all of plaintiff's claims derive from the same nucleus of operative fact. Rather, some of the claims arise from one nucleus of operative fact, namely plaintiff's dispute with Bank of America over a tax escrow and the consequences of Bank of America's having reported her as 30-days late on her mortgage. The other claims arise out of a separate nucleus of operative fact, namely the tax assessment increase due to the stamped patio at plaintiff's home. Thus, the Court concludes that the complaint presents two separate cases or controversies. The Court will, accordingly, consider its supplemental jurisdiction separately for each case or controversy.

A. Claims arising out of Fowler's escrow dispute with Bank of America

Plaintiff's claims against Bank of America, MemberSelect and AAA Credit Card Company derive from plaintiff's escrow dispute with Bank of America. The Court has original jurisdiction over the escrow dispute, because, as is explained below, Fowler's Count II against Bank of America is a non-frivolous federal claim.

1. Bank of America's motion to dismiss

In her complaint, Fowler asserts ten counts against Bank of America. Bank of America moves to dismiss all ten.

In Count I, Fowler asserts that Bank of America violated the Illinois Mortgage Escrow Account Act. That Act states that, "[i]n lieu of the mortgage lender establishing an escrow account or an escrow-like arrangement, a borrower may pledge an interest bearing time deposit with the mortgage lender in an amount sufficient to secure the payment of anticipated taxes." 765 ILCS 910/6. The Act also requires that the borrower be informed of these rights at the closing. 765 ILCS 910/11 ("Notice of the requirements of the Act shall be furnished in writing to the borrower at the date of closing."). If the mortgage lender fails to comply, the borrower is entitled to "actual damages." 765 ILCS 910/9. In Count I, Fowler asserts that Bank of America violated the Act in that she "was not told about an interest bearing account in lieu of an escrow account." Defendant argues that Fowler has failed to state a claim, because she has not alleged that, had she known of her right to do so, she would have pledged an account instead of paying into an escrow account for taxes. The Court agrees. Unless Fowler can allege that she would have taken advantage of the option had she known about it, she has no actual damages and, hence, no claim. 765 ILCS 910/9. Accordingly, Count I is dismissed without prejudice for failure to state a claim.

In Count II, Fowler asserts that Bank of America violated the "Consumer Credit Protection Title 15 Section 1601 et seq." by first returning to her a check she made out for less than the total amount of her mortgage payment and then reporting her to credit agencies for being 30 days late on her mortgage payment. Although the Court is not sure what claim plaintiff is attempting to make out, defendant interprets this as a claim to correct a billing error under the Fair Credit Billing Act, 15 U.S.C. § 1666(a), and plaintiff seems to agree. Bank of America moves to dismiss the claim on the grounds that to state a claim, plaintiff must allege that she provided Bank of America written notice about the billing error. See 15 U.S.C. § 1666(a). The Court agrees that plaintiff has not alleged in her complaint that she provided written notice. Therefore, the Court dismisses Count II without prejudice. The Court notes, however, that this claim is not frivolous, so the Court has original jurisdiction over this claim.

In Count III (which is really two counts), Fowler asserts that Bank of America violated the Real Estate Settlement Procedures Act and the Illinois Consumer Fraud Act. Bank of America argues that Fowler's claim under the Illinois Consumer Fraud Act should be dismissed because Fowler failed to plead the claim with the specificity required of a fraud claim by Rule 9(b) of the Federal Rules of Civil Procedure. See Windy City Metal Fab. & Supply, Inc. v. CIT Tech. Fin. Serv., Inc., 536 F.3d 663, 668 (7th Cir. 2008). The Court disagrees. To plead fraud with particularity, a plaintiff must say who made the fraudulent statement, when it was made and how it was made. Windy City, 536 F.3d at 668. Fowler has done this. She alleges that Bank of America stated on the closing settlement document at the closing that a certain amount of money was being put into the escrow fund for taxes but that Bank of America did not, in fact, put that money into the escrow account. Accordingly, the Court rejects Bank of America's argument that Fowler's Illinois Consumer Fraud Act claim should be dismissed for failure to comply with Rule 9(b) of the Federal Rules of Civil Procedure.*fn2

Plaintiff also attempts to turn the allegations in Count III into a federal claim by asserting that the alleged conduct also violates "15 Section 2060 et seq." The Court assumes the plaintiff means the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2060. Among other things, RESPA prohibits kickbacks from mortgage settlements and sets limits on the amount a mortgage servicer can require borrowers to deposit into tax escrow accounts. See 12 U.S.C. §§ 2607, 2609. The Court does not see any provision in RESPA (and the plaintiff fails to point any out) that makes it a violation of federal law for a mortgage servicer to fail to put into an escrow account the amount it stated would be put into an escrow account. Accordingly, the RESPA portion of Count III is dismissed with prejudice.

In Counts IV and V, Fowler asserts that after she complained about the escrow dispute, Bank of America retaliated against her by changing the terms of her credit card (Count IV) and causing AAA Homeowners Insurance (which plaintiff alleges is "affiliated" with Bank of America) to increase her annual insurance premium (Count V). In response to defendant's motion to dismiss, in which it stated that it was not sure what cause of action Fowler was asserting, Fowler stated that these are race discrimination claims. Fowler has not plead a plausible race discrimination claim. In fact, in her complaint, Fowler alleges that the actions were taken due to her escrow dispute and makes no mention of her race. Accordingly, the Court dismisses without prejudice Counts IV and V.

In Count VI, Fowler asserts that Bank of America violated the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. Fowler alleges that during the time when she was disputing the amount she owed monthly for the tax escrow, she sent Bank of America a mortgage payment that was smaller (by about $100--the amount of the disputed escrow payment) than what Bank of America expected it to be. Fowler alleges that Bank of America returned the check to her and reported to credit agencies that Fowler was 30-days late on her mortgage payment. Defendant assumes (and the Court agrees) that Fowler is attempting to state a claim under 15 U.S.C. § 1681s-2(a)(1)(A), which states, "[a] person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate." 15 U.S.C. § 1681s-2(a)(1)(A). The problem with this claim, as defendant points out, is that there is no private right of action under §1681s-2(a). See 15 U.S.C. § 1681s-1(c)(1); Rollins v. Peoples Gas Light and Coke Co. 379 F. Supp.2d 964, 967 (N.D. Ill. 2005). Accordingly, Count VI is dismissed with prejudice.

In Count VII, plaintiff asserts against Bank of America a "[v]violation of [her] constitutional rights of life, liberty and pursuit of happiness." In Count IX, plaintiff asserts a "[v]violation of [her] property rights to [her] money under the 14th amendment. And [sic] equal protectionj [sic]." Section 1983 provides a private right of action for constitutional violations. That statute states, in relevant part, "[e]very person who, under color of any statute, ordinance, regulation, custom or usage, of any State . . . subjects . . . any citizen of the United States . . . to the deprivation of any rights, privileges, or immunities secured by the Constitution . . . shall be liable to the party injured in an action at law." 42 U.S.C. § 1983 (emphasis added). Because of the requirement that an action be taken under color of law, § 1983 is generally used against government actors, not private actors. Private actors can be liable as state actors only: (1) "where the state effectively directs or controls the actions of the private party"; or (2) "when the state delegates a public function to a private entity." Payton v. Rush-Presbyterian-St. Luke's Med. Ctr., 184 F.3d 623, 628 (7th Cir. 1999). Here, Fowler has not and cannot allege any state action on the part of Bank of America. Counts VII and IX are frivolous and are hereby dismissed with prejudice.

In Count VIII, Fowlers asserts, "[v]iolations of the Mortgage Fraud Act." Because the Court has not found any evidence of the existence of such an act and because plaintiff does not include any allegations in support of this claim, the Court dismisses this claim without prejudice.

For these reasons, the Court grants defendants Bank of America Corp. and BAC Mortgage Corp.'s motion [45] to dismiss. Counts I, II, III, IV, V and VIII are dismissed without prejudice, and Fowler is granted leave to amend these claims. Counts VI, VII and IX are dismissed with prejudice, and Fowler is not granted leave to amend these claims. The Court ...

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