The opinion of the court was delivered by: Judge Robert W. Gettleman
MEMORANDUM OPINION AND ORDER
Plaintiff First Place Bank filed an nine-count second amended complaint ("complaint") against a variety of defendants, based on six loans that defendant Skyline Funding, Inc. ("Skyline") originated and subsequently sold to plaintiff. The complaint alleges claims for: breach of contract (against Skyline, Count I, and its president, Michael Klein, Count VI); express contractual indemnification (against Skyline,*fn2 Count II); negligent misrepresentation (against Skyline, Count III); fraud in the inducement (against Skyline and Klein, Count IV); and fraudulent representations and concealment (against Skyline and Klein, Count V). The complaint also alleges claims for negligent misrepresentation (Count VII) and fraudulent misrepresentation (Count VIII) against defendants Randall Coleman and Lefteri Pope, both of whom plaintiff has voluntarily dismissed, and Krystal Thompson. Finally, the complaint alleges a claim for fraudulent misrepresentation against the borrowers for whom the six loans were originated: Mariya Rymaruk, Louis Burks, Lester Tally, Ramone Patterson, Serhiy Kudin, and Terry McMichales and Arrelia Gardner.
Skyline and Klein have filed the instant motion to dismiss the claims against them-Counts I-VI-pursuant to Fed. R. Civ. P. 12(b)(6) and 9(b).*fn3 For the following reasons, the court grants Skyline and Klein's motion in part and denies it in part.
The following facts come from the complaint, and for purposes of evaluating defendants' motion to dismiss, the court accepts them as true.Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (citations omitted). In May 2004, plaintiff and Skyline entered into a broker agreement ("Agreement"), which required that all loans Skyline sold to plaintiff were to conform to Fannie Mae guidelines.
Section 5 of the Agreement required Skyline to maintain an errors and omissions insurance policy and a Fidelity Bond covering personnel who originate loans purchased by plaintiff, with per claim limits of at least $100,000. Section 9 provided that Skyline "represent[ed] and warrant[ed] with respect to each Mortgage Loan" that, among other things: Skyline was the sole owner of and had indefeasible title to each mortgage loan (9.1); the loan was current as to payment of principal, interest and escrow items, and not in default (9.6); an appraiser had performed an appraisal of the property in accordance with all federal and state laws (9.7); the mortgage created a valid and enforceable first lien (9.10); the mortgage complied with "all underwriting requirements and warranties issued by Fannie Mae, as amended (and Freddie Mac, if applicable) and [plaintiff's] Procedure Guide" (9.12); and the note and security instrument delivered to plaintiff were genuine and unaltered (9.13). Section 3.2 required Skyline to submit credit packages complying with plaintiff's Procedure Guide and Broker Wholesale Lending Manual. Section 11 provided that if any loans failed to conform to any of the applicable guidelines, Skyline would either repurchase them, or if Skyline "refused or was unable to" do so, plaintiff could service the loan for Skyline and bill it for costs and expenses, and Skyline would be required to "indemnify [plaintiff] for all costs, expenses and losses incurred in servicing the loan and/or in repossessing and disposing of the mortgaged property." Finally, the Agreement's indemnification provision (section 10) required Skyline to indemnify plaintiff against "any and all loss, cost, damage, injury or expense," including attorneys fees, that plaintiff incurred as a result of "the untruthfulness of any of the warranties or representations of [Skyline] made in or pursuant to this Agreement" or Skyline's "failure to perform or observe any of the covenants or provisions of this Agreement."
Under the Agreement, plaintiff purchased six mortgage loans that Skyline had originated for Mariya Rymaruk, Louis Burks, Lester Tally, Ramone Patterson, Serhiy Kudin, and Terry McMichales and Arrelia Gardner. Plaintiff subsequently sold each of the six loans to Fannie Mae. After selling the loans to Fannie Mae, plaintiff "was notified," ostensibly by Fannie Mae although the complaint does not say so, that the loans failed to conform to its guidelines, in violation of section 9.12 of the Agreement. Fannie Mae demanded that plaintiff repurchase the Rymaruk, Burks, Tally, Kudin, and McMichales/Garder loans, and plaintiff complied. Plaintiff does not, however, specifically allege that it repurchased the Patterson loan or that Fannie Mae demanded that it do so; nor does plaintiff attach, as it does for the other loans, a demand letter from Fannie Mae to plaintiff regarding repurchase of the Patterson loan. Plaintiff does allege that "[d]ue to its [initial] purchase of the Patterson note and mortgage, First Place Bank has suffered losses including administrative charges associated with the failure to comply to [sic] the Fannie Mae guidelines."
Plaintiff alleges that, in turn, it wrote to Skyline and demanded that Skyline repurchase the loans. Specifically, plaintiff alleges that "[o]n or about December 11, 2009, due to Skyline's material breach of the Agreement, First Place Bank submitted a written demand letter to Skyline that it repurchase the non-conforming loans." Plaintiff is apparently alleging that in this letter it demanded repurchase of all six of the subject loans, but plaintiff must know this allegation is disingenuous; the letter (which plaintiff attached as Exhibit 3 to its amended first amended complaint, but did not attach to the instant second amended complaint) demanded repurchase of only the Rymaruk, Burks, Tally, and Patterson loans. In the December 11 letter, plaintiff did not demand that Skyline repurchase the McMichales/Gardner loan or the Kudin loan.
The court considers this December 11 letter as part of the complaint. Guaranty Residential Lending, Inc. v. Int'l Mortg. Center, Inc., 305 F.Supp.2d 846, 852 (N.D. Ill. 2004) (citing Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 661 (7th Cir. 2002) ("[D]ocuments that are referred to in the complaint and that are central to a claim that is made may be considered to be part of the complaint even if not actually attached to the complaint.");
Menominee Indian Tribe of Wisconsin v. Thompson, 161 F.3d 449, 456 (7th Cir. 1998) ("[J]udicial notice of . . . documents contained in the public record . . . is proper."); see also Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994) (court may take judicial notice of public court documents filed in earlier state court case without converting a motion to dismiss into a summary judgment motion); Brown v. Ghosh, No. 09 CV 02542, 2010 WL 3893939, at *4 n.3 (N.D. Ill. Sept. 28, 2010) (court may take judicial notice of administrative grievances attached to plaintiff's initial pro se complaint, but not attached to his amended complaint, when considering a motion to dismiss the amended complaint); Granger v. Kayira, No. 08-CV-39, 2009 WL 3824710, at *2 n.3 (N.D. Ill. Nov. 12, 2009) (same). Further, "[w]here the document may properly be considered . . . the actual document will override inconsistent descriptions of the document alleged in the body of the complaint." Guaranty Residential Lending, Inc., 305 F.Supp.2d at 852 (citing Rosenblum, 299 F.3d at 661). The court therefore construes the complaint as alleging that plaintiff asked Skyline to repurchase the Rymaruk, Burks, Tally, and Patterson loans.
Plaintiff initially received no response to that demand for repurchase. Section 11 of the Agreement required that if any of the Agreement's warranties were breached, Skyline would "repurchase the affected loan or loans within fifteen (15) days of written demand by [plaintiff]." After the 15-day deadline had passed, Klein wrote to plaintiff. He explained that Skyline had just dissolved and had been winding down over the preceding several months, and informed plaintiff that no company was to succeed Skyline.
Plaintiff incorrectly urges the court to consider that "[d]ismissal would only be appropriate if 'it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations,'" Petri v. Gatlin, 997 F.Supp. 956, 963 (N.D. Ill. 1997) (citing Ledford v. Sullivan, 105 F.3d 354, 356) (7th Cir. 1997)), and that a "'suit should not be dismissed if it is possible to hypothesize facts, consistent with the complaint, that would make out a claim.'" Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7th Cir. 1995). This "no set of facts" standard, based on language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), is no longer good law. See Twombly, 550 U.S. at 563 ("[T]he phrase is best ...