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Bert A. Friello v. Bank of New York

October 15, 2012

BERT A. FRIELLO, PLAINTIFF,
v.
BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF CWALT 2004-ECC1; BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, L.P., AND CODILIS & ASSOCIATES, P.C., DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER

On May 1, 2012, Plaintiff Bert A. Friello ("Friello") filed a Complaint against Bank of New York ("BONY") and Bank of America, N.A. ("BANA"), the "the Banks," and Codilis & Associates, P.C. ("Codilis") (collectively, "the Defendants"), alleging (1) violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq.; (2) violations of the Illinois Consumer Fraud Act ("ICFA"), 815 ILCS 505/2; (3) Abuse of Legal Process;*fn1 and (4) Conversion. This Court has jurisdiction under the FDCPA, 15 U.S.C. § 1692k, and pursuant to supplemental jurisdiction, 28 U.S.C. § 1367, because the state claims arise from a common nucleus of operative facts. Codilis and the Banks have separately moved to dismiss Friello's claims pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6).*fn2 For the following reasons, the Court grants the Banks' motion to dismiss in its entirety and Codilis' motion to dismiss in part, and grants Friello leave to amend his Complaint on or before November 5, 2012.

RELEVANT FACTS

Plaintiff Bert A. Friello alleges the following facts in support of his claims, which the Court accepts as true for the purpose of this motion. Friello is 87 years old and was a resident of the State of Illinois during the relevant period. (R. 1, Compl. ¶ 3.) Friello took out a mortgage on a piece of real estate located at 300 N. State Street, Unit 4708, Chicago, IL 60610 ("the Property"). (Id. ¶ 4.) On May 22, 2007, BONY, a federally chartered banking institution and Trustee for the certificate holders of CWALT 2004-ECC1, filed a mortgage foreclosure action against Friello relating to the Property in the Circuit Court of Cook County, Illinois under docket number 2007-CH-13610 ("the Foreclosure Action"). (Id. ¶¶ 4, 9.) BONY filed the Foreclosure Action through its agents, BANA and Codilis. (Id. ¶ 9.) BANA is a bank that services mortgage loans on behalf of lenders. (Id. ¶ 5.) Codilis & Associates, P.C. is a law firm operating in Illinois. (Id. ¶ 6.)

On August 14, 2007, the Circuit Court of Cook County entered a Judgment of Foreclosure against Friello. (Id. ¶ 10.) On or about August 18, 2008, BONY voluntarily dismissed the Foreclosure Action. (Id. ¶ 11.) The Circuit Court of Cook County dismissed the case with leave to reinstate. (R. 26, Codilis' Reply, Ex. 1.) In 2010, BONY filed multiple motions to reinstate the Foreclosure Action. (Compl. ¶¶ 12-18.) The Circuit Court of Cook County did not grant any of these motions to reinstate and on November 23, 2010 denied the motion to reinstate filed on November 12, 2010. (Id.)

At some point after November 23, 2010, BONY caused a Notice of Sale to be published stating that The Judicial Sales Corporation would sell the Property at 10:30 A.M. on November 21, 2011. (Id. ¶ 19, Exhibit A.) Defendants mailed a copy of the Notice of Sale to Friello. (Id. ¶ 21.) Based on the language of the Notice of Sale, Friello believed he needed to move out of the Property within 30 days of receipt of the Notice of Sale. (Id. ¶ 22.) To facilitate his move, Friello gave away all of his furniture and furnishings. (Id. ¶ 23.) The Judicial Sales Corporation sold the Property at a public auction on November 21, 2011. (Id. ¶ 19, Exhibit A.)

On December 9, 2011, BONY filed a Motion to Approve Sale, with a purported Report of Sale and Distribution. (Id. ¶ 24.) On January 20, 2011, the date set for hearing on the Motion to Approval Sale, BONY withdrew its Motion to Approve Sale. (Id. ¶ 25.)

BONY took possession of the Property at some time subsequent to December 18, 2011 and remains in possession of the Property. (Id. ¶ 26.)

LEGAL STANDARD

I. Rule 12(b)(6)

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2007) (internal quotation and citation omitted). Pursuant to Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957)).

"In evaluating the sufficiency of the complaint, [courts] view it in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from the allegations in the plaintiff's favor." AnchorBank, 649 F.3d at 614. "To survive a motion to dismiss, the complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face . . . A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 934-35 (7th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (internal quotation marks omitted)). "The complaint 'must actually suggest that the plaintiff has a right to relief, by providing allegations that raise a right to relief above the speculative level.'" Id. at 935 (citing Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., 536 F.3d 663, 668 (7th Cir. 2008)). "[A] plaintiff's claim need not be probable, only plausible: 'a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.'" Id.(citing Twombly, 550 U.S. at 556 (internal quotation omitted)). "To meet this plausibility standard, the complaint must supply 'enough fact[s] to raise a reasonable expectation that discovery will reveal evidence' supporting the plaintiff's allegations." Id.(citing Twombly, 550 U.S. at 556).

II. Rule 9(b)

In pleading fraud in federal court, Rule 9(b) imposes a higher pleading standard than that required under Rule 8. See Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 446 (7th Cir. 2011). Specifically, Rule 9(b) requires a pleading to state with particularity the circumstances constituting the alleged fraud. See Fed. R. Civ. P. 9(b); Pirelli, 631 F.3d at 441-42.This "ordinarily requires describing the 'who, what, when, where, and how' of the fraud, although the exact level of particularity that is required will necessarily differ based on the facts of the case." AnchorBank, 649 F.3d at 615(citation omitted); see also Pirelli, 631 F.3d at 441-42. "Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally," however. Fed. R. Civ. P. 9(b). "[T]he particularity requirement of Rule 9(b) is designed to discourage a 'sue first, ask questions later' philosophy." Pirelli, 631 F.3d at 441 (citation omitted).

ANALYSIS

I. The Court Can Consider Certain Matters Outside of the Pleadings Before reaching the merits of the arguments, the Court briefly addresses the scope of its review. A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the pleadings, and as such, the Court's "consideration of matters outside the pleadings is not generally permitted," unless the Court converts the motion into one for summary judgment pursuant to Rule 12(d). See Mclntyre v. McCaslin, No. 11 C 50119, 2011 WL 6102047, at *4 (N.D. Ill. Dec. 7, 2011) (citing Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998)). An exception to this general rule exists where the parties present records "to which the Complaint . . . refer[s]" and that are "concededly authentic," and "central" to the claims presented. See Hecker v. Deere & Co., 556 F.3d 575, 582 (7th Cir. 2009); Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 661--62 (7th Cir. 2002). Another exception includes documents that are attached to the Complaint. See Fed. R. Civ. P. 10(c) ("A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes."); Tierney v. Vahle, 304 F.3d 734, 738 (7th Cir. 2002) ("Because the letter was attached to the complaint, it became a part of it for all purposes, and so the judge could consider it in deciding the motion to dismiss without having to convert the motion to one for summary judgment.") (internal citations omitted). Additionally, courts may take judicial notice of documents filed in another court "as long as that document is offered to show what was stated to the court rather [than] for the truth of the matter asserted." Sledge v. Bellwood Sch. Dist. 88, No. 09--CV--4186, 2010 WL 1579920, at *4 (N.D. Ill. Apr. 20, 2010) (citing Opoka v. I.N.S., 94 F.3d 392, 395 (7th Cir. 1996)).

In addition to providing the Court with unpublished case law, Friello attached one exhibit to the Complaint, 12 exhibits to Plaintiff's Memorandum of Law in Opposition to Codilis' Motion to Dismiss ("Response to Codilis") (R. 24), and three exhibits to Plaintiff's Response in Opposition to Bank Defendants' Motion to Dismiss ("Response to the Banks") (R. 25). Codilis also attached numerous exhibits both to its Motion to Dismiss ("Codilis Motion to Dismiss") (R. 15) and to the Reply Memorandum of Law in Support of Codilis' Rule 12(b)(6) Motion to Dismiss Plaintiff's Complaint ("Codilis' Reply") (R. 26). For purposes of ruling on Defendants' motions to dismiss, this Court has considered (1) Exhibit A, the Notice of Sale, attached to the Complaint, as it is part of the Complaint, and (2) Exhibit 1, the August 19, 2008 Order Dismissing Case With Leave to Reinstate, attached to Codilis' Reply, as this Court can take judicial notice of the contents of other courts' records. See, e.g., Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080--81 (7th Cir. 1997) (further observing that judicially noticeable facts provide a "narrow exception" to the rule that a district judge may not consider extrinsic materials in deciding a Rule 12(b)(6) motion unless ...


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