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Damaris Walker v. Wells Fargo Bank

September 5, 2012


The opinion of the court was delivered by: Judge Virginia M. Kendall


Plaintiff Damaris Walker brings this suit against Defendants Wells Fargo Bank, U.S. Bank, and Mortgage Electronic Registration Systems (hereafter "MERS") for Wells Fargo's alleged violation of the Fair Debt Collection Practices Act (hereafter "FDCPA"), 15 U.S.C. § 1692, et seq. (Count I); unjust enrichment (Count III); violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (hereafter "ICFA"), 815 ILCS 505/1, et seq., and the Uniform Deceptive Trade Practices Act (hereafter "DTPA"), 815 ILCS 510/1, et seq. (Count IV); and to quiet title against Wells Fargo, U.S. Bank, and MERS (Count II). Walker attempts to assert an additional claim for "Violation of Illinois Fair Debt Collection Act," but Illinois has no such act on record. Walker's claim in Count V of her Complaint alleges wilful, malicious, and egregious violations of the ICFA and DTPA on the part of Wells Fargo.

This suit arises out of the securitization of a Mortgage and Note on Walker's property, which were deposited into a securitized trust called CSFB Mortgage‐Backed Pass‐ Through Certificates, Series 2005‐10. Wells Fargo was the servicer for Walker's loan, along with other loans in the Trust. Walker alleges that the Trust was terminated and dissolved on March 30, 2006, based on a document entitled "Form 15 Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934" (hereafter "Form 15"), a copy of which Walker attached as an Exhibit to her Complaint. Walker argues that as a result of the alleged dissolution, the Trust no longer owns the Note and Wells Fargo, as servicer for the Trust, is no longer Walker's servicer and lost all rights to collect payments under the Note. As a result, Walker alleges that the Defendants' subsequent activities with respect to the Note and Mortgage were illegal.

The Defendants argue that Form 15, which is attached to the Complaint, flatly establishes that the Trust was not terminated or dissolved. Thus, according to the Defendants, Walker's claims under the FDCPA, the ICFA, the DTPA, as well as her claims for unjust enrichment and to quiet title are scotched because all of her claims rely on the presumption that the Trust was terminated. Accordingly, the Defendants' move to dismiss Walker's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons set forth herein, the Defendants' Motion is granted and Walker's Complaint is dismissed with prejudice.

I. Background

In deciding the instant Motion, the Court assumes the veracity of the well‐pleaded facts in the Complaint and construes all reasonable inferences in favor of Walker, the nonmoving party. See Killingsworth v. HSBC Bank, 507 F.3d 614, 619 (7th Cir. 2007) (citing Savory v. Lyons, 469 F.3d 667, 670 (7th Cir. 2006)); accord Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). Although the well‐pleaded facts are entitled to the presumption of truth, documents attached to the Complaint control over contrary pleadings and where an Exhibit conflicts with the allegations of the Complaint the Exhibit controls. See Massey v. Merrill Lynch & Co., Inc., 464 F.3d 642, 645 (7th Cir. 2006) (citing Centers v. Centennial Mortg., Inc., 398 F.3d 930, 933 (7th Cir. 2005)); see, e.g., McClinton El v. Potter, Nos. 06 C 5329 and 06 C 6839, 2008 WL 5111182, *4 (N.D. Ill. Dec. 4, 2008). Therefore a plaintiff may plead herself out of court by attaching documents to her complaint that indicate that she is not entitled to relief. See Massey, 464 F.3d at 645.

Walker owns and possesses the Subject Property, which is identified by its PIN 20‐ 10‐110‐006‐0000, in Cook County, Illinois. On July 5, 2005, Walker signed a mortgage Note in favor of RBC Mortgage Company (hereafter "RBC"), the original mortgagee of the Subject Property. On the same date, to secure this loan Walker signed the Mortgage that conveyed a security interest in the Subject Property to RBC, as lender, with MERS "as a nominee." Soon thereafter, RBC endorsed, sold, and transferred the Note and the Mortgage to Credit Suisse First Boston Mortgage Securities Corporation (hereafter "Credit Suisse").

On or about September 1, 2005, Credit Suisse securitized and transferred the Note and the Mortgage to CSFB Mortgage‐Backed Pass‐Through Certificates, Series 2005‐10 (hereafter "Trust 2005‐10"), a mortgage‐backed‐securities trust settled under the laws of the State of New York and registered with the Securities and Exchange Commission (hereafter "the SEC"). The SEC publishes Trust 2005‐10's founding agreement and its Rule 424(b)(5) Registration Prospectus online through its EDGAR system. The 424(b)(5) Registration Prospectus identifies the servicer of the loan as Wells Fargo, the Trustee as U.S. Bank, and the date on which the Note and the Mortgage were transferred to Trust 2005‐10. Thus, Wells Fargo was the servicer for loans secutitized in the Trust, including Walker's loan.

On January 26, 2006, Trust 2005‐10 allegedly filed its Form 15‐15D, "Notice and Certification of Termination" with the SEC. Walker alleges that on March 20, 2006, Trust 2005‐10 filed its final 10‐K Annual Report and was terminated and dissolved. The final Form 10‐K states that, as of the alleged date of termination, the Trust allegedly had no business, no public trading market, no select financial date, no disclosures, no financial statements and supplementary date, no directors and executive officers, no relationships and related transactions, and no account services. Walker alleges that therefore, on information and belief, Trust 2005‐10 was dissolved on or before January 26, 2006.

On the same date, under the laws of the State of New York, all of the assets of Trust 2005‐10 were allegedly distributed to the certificateholders of the Trust, and they allegedly became the only mortgagees-the only legal holders of the Note and Mortgage. After the Trust was allegedly terminated, Wells Fargo, allegedly without any interest in the Note or the Mortgage, and without any privity of contract with the mortgagees, held itself out as the servicer of the Note and Mortgage and sent purported mortgage bills to Walker each month. Walker, relying on Wells Fargo's allegedly false representation that it was the servicer of the Note, paid many of these bills.

On December 30, 2006, Wells Fargo, through its America's Servicing Company division, sent a Form 1098 to the IRS showing the amount Walker paid to it in 2006. On February 28, 2012, Wells Fargo, through its America's Servicing Company division, sent a letter to Walker and enclosed a "Payment History/Customer Account Activity Statement" showing all amounts paid by Walker to Wells Fargo since March 1, 2009.

Walker alleges that there is no evidence that MERS was ever a "holder" of either the Note or the Mortgage in this case. According to Walker, MERS exists-in accordance with its name-simply as an electronic registration system to track the transfer of notes and mortgages. Walker claims that MERS, pursuant to its standard practices and procedures, does not exercise physical control or custody over actual notes or mortgages. Walker alleges that there is no recorded or other evidence that Trust 2005‐10 ever sold the Note or the Mortgage to any other entity.

Walker alleges that beginning on or about March 30, 2006, Wells Fargo knowingly and intentionally communicated, and continued to communicate, deceptive, false, fraudulent, and misleading statements to Walker representing or implying that it was and is the servicer of the Note and the Mortgage. At this time, Walker alleges that Wells Fargo in its communications with her falsely represented that the mortgage debt payments were owed to it. Furthermore, Walker alleges that Wells Fargo falsely represented that it had standing and authority to foreclose on the Mortgage. She also alleges that Wells Fargo used false, deceptive, and misleading representations in connection with the collection of the alleged debt and falsely represented to Walker the character, amount, and legal status of the alleged debt. Walker alleges that Wells Fargo falsely represented to her that nonpayment of the alleged debt would result in the sale of the Subject Property. Walker alleges that Wells Fargo has used false representations and deceptive means to collect or attempt to collect the alleged debt from her in an amount not expressly authorized by the agreement creating the debt and not permitted by law. Walker further alleges that Wells Fargo has failed to validate her alleged debt as required by 15 U.S.C. § 1692g.

Defendants Wells Fargo, U.S. Bank, and MERS are joined as they are allegedly claimants to an interest in the Subject Property adverse to that of Mr. and Mrs. Pirard. MERS's name appears on the title as "nominee," and Walker alleges that its interest has never been properly and formally released. Walker alleges that the claim of MERS, as "nominee," and the claims of Wells Fargo and U.S. Bank, as servicer and former holder of the Note, constitute a cloud ...

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