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Zachary Boyd v. U.S. Bank

April 12, 2011


The opinion of the court was delivered by: Judge Feinerman


Plaintiff Zachary Boyd brought this putative class action against U.S. Bank, N.A., as trustee for Sasco Aames Mortgage Loan Trust, Series 2003-1, and Wilshire Credit Corporation n/k/a Bank of America, N.A., seeking redress under the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq. ("ECOA"), the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 502/1 et seq. ("ICFA"), and Illinois common law. Defendants have moved to dismiss Counts I-IV of Boyd's amended complaint. The motion is granted in part and denied in part.


The facts alleged in the Boyd's amended complaint are assumed true on a Rule 12(b)(6) motion. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). Also pertinent at the Rule 12(b)(6) stage are exhibits attached to the amended complaint, see Fed. R. Civ. P. 10(c); Witzke v. Femal, 376 F.3d 744, 749 (7th Cir. 2004), and documents "referred to" in the amended complaint and "central to [Boyd's] claim" that are attached as exhibits to Defendants' motion to dismiss, Wright v. Associated Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir. 1994). To the extent an exhibit contradicts the amended complaint's allegations, the exhibit takes precedence. See Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007). In addition, orders entered and filings made in this and other courts are properly subject to judicial notice. See United States v. Stevens, 500 F.3d 625, 628 n.4 (7th Cir. 2007).

Boyd took out two home loans in July 2003. Through a series of transactions, Boyd's mortgage debt came to be owned by a trust of which U.S. Bank acts as trustee. The loans were serviced by Wilshire Credit, and then by Bank of America.

In October 2005, a prior holder of the mortgage debt filed a foreclosure action against Boyd in the Circuit Court of Cook County, Illinois. See Deutsche Bank Nat'l Trust v. Boyd, 05 CH 18536 (Cir. Ct. Cook Cnty.). Boyd filed for bankruptcy in November 2005, but the bankruptcy action was dismissed in December 2006 because he failed to make payments under the bankruptcy plan. See In re Zachary Boyd, 05 B 63283 (Bankr. N.D. Ill.). Boyd again filed for bankruptcy in March 2007, but that case was dismissed in January 2008, again because Boyd failed to make plan payments. See In re Zachary Boyd, 07 B 4545 (Bankr. N.D. Ill.). Boyd filed for bankruptcy yet again in January 2009, and again failed to make plan payments, resulting in dismissal in June 2009. See In re Zachary Boyd, 09 B 2366 (Bankr. N.D. Ill.).

In August 2009, five months after Boyd made his last mortgage payment, Defendants-who in the interim had become the mortgage holder and servicer-initiated another foreclosure action against Boyd. See U.S. Bank Nat'l Ass'n, as Trustee v. Boyd, 09 CH 29647 (Cir. Ct. Cook Cnty.). One month later, Boyd asked Greenpath, Inc., a certified HUD housing counselor, for assistance in obtaining a loan modification under the Home Affordable Modification Program ("HAMP"). A federal program established by the Treasury Department under the Emergency Economic Stabilization Act of 2008, 12 U.S.C. § 5201 et seq., HAMP seeks to prevent unnecessary foreclosures by encouraging banks to restructure and refinance certain mortgages in default or in imminent risk of default. See Williams v. Geithner, 2009 WL 3757380, at *1-3 (D. Minn. Nov. 9, 2009) (summarizing HAMP). U.S. Bank, Bank of America, and Wilshire Credit participate in HAMP; their participation is governed by separate Servicer Participation Agreements ("SPA") entered into with Fannie Mae in its role as a financial agent of the United States. Docs. 37-2, 37-3, 37-4.

On September 29, 2009, Boyd and his Greenpath counselor called Wilshire Credit, U.S. Bank's servicing agent at the time, and requested a HAMP loan modification. During the call, Boyd "provided[] the financial information that was required to determine [his] eligibility for a HAMP loan modification," and was left with the impression that Defendants soon would inform him of his eligibility for a modification. Doc. 37 at ¶ 46. Wilshire Credit never informed Boyd of his eligibility. Instead, on September 30, 2009, the day after the call, Defendants "sent their agents to break into Plaintiff's home and padlock his front door," dispossessing Boyd of his property without notice and absent court approval. Id. at ¶¶ 47, 49-50.

Boyd brought this action on June 2, 2010. His amended complaint has six counts. Count I alleges that Defendants violated the ICFA by failing to provide Boyd with notice that he could receive pre-foreclosure counseling and a grace period during which no legal action would be taken against him, as required by the Illinois Homeowner Protection Act, 735 ILCS 5/15-1502.5 ("IHPA"); by failing to evaluate Boyd's eligibility for a HAMP loan modification; and by failing to abide by their duties under Illinois common law. Count II alleges that Defendants violated the ICFA by dispossessing Boyd of his home without notice and absent a foreclosure order, contrary to the Illinois Mortgage Foreclosure Law ("IMFL"), 735 ILCS 5/15-1101 et seq. Count III claims that Wilshire Credit and Bank of America breached their SPAs with Fannie Mae. Count IV alleges that Defendants violated the ECOA by failing to inform Boyd in writing why they denied his request for a HAMP modification. Boyd purports to bring Counts I-IV on behalf of four different putative classes. Counts V and VI advance trespass and invasion of privacy claims under Illinois common law. Boyd seeks compensatory and punitive damages, costs, fees, and injunctive relief.


Defendants seek to dismiss Counts I-IV, and U.S. Bank as a party defendant, under Rule 12(b)(6). To survive a Rule 12(b)(6) motion, a complaint must overcome "two easy-to-clear hurdles": (1) "the complaint must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds on which it rests"; and (2) "its allegations must plausibly suggest that the plaintiff has the right to relief, raising that possibility above a speculative level." Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008) (internal quotation marks omitted). Where the well-pleaded facts "do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (internal quotation marks omitted). The court must "take the complaint's well-pleaded factual allegations as true and draw all reasonable inferences in [plaintiff's] favor from those allegations." Abcarian v. McDonald, 617 F.3d 931, 933 (7th Cir. 2010).

I. Counts I and II: ICFA Claims

The ICFA is a "regulatory and remedial statute intended to protect consumers, borrowers, and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices." Robinson v. Toyota Motor Credit Corp., 775 N.E.2d 951, 960 (Ill. 2002). The statute provides redress not only for deceptive business practices, but also for business practices that, while not deceptive, are unfair. See ibid. To determine whether a business practice is unfair, the court considers "(1) whether the practice offends public policy; (2) whether it is immoral, unethical, oppressive, or unscrupulous; [and] (3) whether it causes substantial injury to consumers." Id. at 961 (citing FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 244 n.5 (1972)). "All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." Ibid.; see also Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663, 669 (7th Cir. 2008). Unfairness under the ICFA "depends on a case-by-case analysis." Siegel v. Shell Oil Co., 612 F.3d 932, 935 (7th Cir. 2010). "Because neither fraud nor mistake is an element of unfair conduct under [the ICFA], a cause of action for unfair practices under the [ICFA] need only meet the notice pleading standard of Rule 8(a), not the particularity requirement in Rule 9(b)." Windy City Metal, 536 F.3d at 670.

A. Count I: Alleged Unfair Practices Regarding IHPA Notice Requirements, HAMP Modification, and the Common Law Count I alleges that Defendants engaged in "unfair conduct" by violating "the public policy of [Illinois], federal guidelines enacted by Congress, and common law" in the following respects: (a) failing to provide Boyd, prior to filing the August 2009 foreclosure action, with notice of his eligibility for pre-foreclosure counseling and a possible grace period, contrary to the requirements of IHPA; (b) failing to evaluate Boyd for a home loan modification under HAMP, contrary to the requirements of that program; (c) failing to abide by their common law duty of good faith and fair dealing by foreclosing on Boyd's home without informing him about the HAMP program and by failing to suspend foreclosure proceedings pending a HAMP evaluation; and (d) taking action that further depressed Boyd's home price, in violation of their common law duty to mitigate Boyd's damages. Doc. 37 at ΒΆΒΆ 67, 76, 80. Defendants do not seek to dismiss Count I to the extent it rests on their alleged ...

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