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Stacey Fletcher, On Behalf of Herself and All Others Similarly v. Onewest Bank

October 22, 2012

STACEY FLETCHER, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
ONEWEST BANK, FSB, DEFENDANT.



The opinion of the court was delivered by: Judge Sharon Johnson Coleman

MEMORANDUM OPINION AND ORDER

On July 27, 2010, plaintiff Stacey Fletcher ("Fletcher") filed a putative class action complaint alleging that the defendant OneWest Bank ("OneWest") mishandled her application for a mortgage loan modification pursuant to the Home Affordable Modification Program ("HAMP").*fn1 On April 24, 2012, Fletcher filed an amended complaint alleging breach of contract, promissory estoppel, and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"). OneWest now moves to dismiss Fletcher's amended complaint and to strike Fletcher's class allegations. OneWest's motions to dismiss and to strike are denied.

Background

The following facts are taken from the pleadings and all inferences are drawn in favor of Fletcher as the non-movant. On July 7, 2006, Fletcher took out a $276,000 mortgage loan with Quicken Loans, which was transferred to IndyMac, and is presently serviced by OneWest. After encountering financial difficulties, Fletcher made several requests for loan modifications in 2009. Fletcher's second request was denied in June 2009, after which a customer representative advised her that she should miss her loan payments in order to qualify for the loan modification program. In November and December 2009, Fletcher fell behind on her loan payments and applied a third time for a loan modification pursuant to HAMP.

In January 2010, Fletcher was approved for a three-month Temporary Payment Plan ("TPP"). Fletcher was informed that any proceedings against her for default regarding her loan payments would be put on hold during the trial period and that if she was approved, after making three trial payments, her loan would be permanently modified. Throughout January, Fletcher continued to receive letters from OneWest acknowledging her approval for modified loan payments, but indicating that her loan was still in default. On February 15, 2010 Fletcher was officially offered a TPP agreement under HAMP. Fletcher was required to make modified loan payments for the months of March, April, and May with her first payment due on March 1st. On February 21, 2010, Fletcher signed the TPP agreement and mailed her first modified loan payment to OneWest. Initially, OneWest informed Fletcher that it had not received her payment. Later, OneWest found Fletcher's payment and corrected its error. This pattern repeated for the next three months with Fletcher making timely payments and OneWest having trouble crediting her account properly for payments. OneWest reported Fletcher to credit bureaus regarding the delinquent status of her account and Fletcher was charged miscellaneous fees in the total amount of $10,766.93. As of sixty days following the end of the three-month TPP period, OneWest had not given Fletcher a decision regarding her loan modification request. Thereafter Fletcher initiated this action.

Judge Hibbler originally presided over this case and on January 18, 2011, OneWest moved to dismiss Fletcher's original complaint. The original complaint alleged breach of contract, promissory estoppel, and violations of ICFA. Judge Hibbler denied OneWest's motion to dismiss Fletcher's breach of contract claim, promissory estoppel claim, and claims based on conduct volative of HAMP guidelines. Judge Hibbler granted OneWest's motion to dismiss claims that it violated ICFA through its servicing practices and procedures, but allowed all other claims under ICFA to continue. After this case was reassigned on March 21, 2012, Fletcher filed her amended complaint alleging breach of contract, promissory estoppel, and violations of ICFA. OneWest now moves to dismiss Fletcher's amended complaint pursuant to Fed. R. Civ. P. 12(b)(6) and 12(b)(1) and to strike Fletcher's class allegations.

Legal Standard

OneWest cites two bases for its current motion to dismiss, Fed. R. Civ. P. 12(b)(6) and Fed. R. Civ. P. 12(b)(1). In order to survive a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), a complaint must contain sufficient factual allegations to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662 (2009). This standard is met when the plaintiff pleads factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. A motion to dismiss is decided solely on the face of the complaint and any attachments that accompanied its filing. Miller v. Herman, 600 F.3d 726, 733 (7th Cir. 2010). Accordingly, the court must accept all well-pleaded factual allegations in the complaint as true, and draw all reasonable inferences in the plaintiff's favor. Erickson v. Pardus, 551 U.S. 89, 94 (2007).

A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) seeks to dismiss a case for lack of subject matter jurisdiction, including a lack of standing. A.H. Emple. Co. v. Fifth Third Bank, No. 11 C 4586, 2012 U.S. Dist. LEXIS 27666 (N.D. Ill. Mar. 1, 2012). Similar to a 12(b)(6) motion, all reasonable inferences are drawn in favor of the plaintiff; however, when ruling on a 12(b)(1) motion the court may look beyond the allegations of the complaint and consider other submitted evidence. Thrasher-Lyon v. Ill. Farmers Ins. Co., No. 11 C 04473, 2012 U.S. Dist. LEXIS 50560 (N.D. Ill. Mar. 20, 2012).

Discussion

1. Law of the Case Doctrine

As a threshold matter, the parties dispute whether this Court can rule on OneWest's motion to dismiss Fletcher's amended complaint. OneWest argues that the issues raised in its current motion are new and were not ruled on by Judge Hibbler. Fletcher argues that the current issues are the same, thus barred by the law of the case doctrine.

The law of the case doctrine provides that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages of the same case. Redfield v. Continental Casualty Corp., 818 F.2d 596, 604-605 (7th Cir. 1987). However, the law of the case doctrine is a discretionary doctrine which "merely expresses the practice of courts generally to refuse to open what has been decided, not a limit to their power." Id. To determine whether the law of the case doctrine applies to a current issue, it is critical to determine what issues were actually decided in the prior ruling. Aleman v. Dart, No. 09-cv- 6049, 2010 U.S. Dist. LEXIS 124088 (N.D. Ill. Nov. 23, 2010). A judge should not reconsider a preceding judge's rulings when presented with "precisely the same question in precisely the same way" as the preceding judge. Brengettcy v. Horton, 423 F.3d 674, 680 (7th Cir. 2005).

Fletcher alleges in her amended complaint that OneWest breached their TPP agreement by delaying and failing to timely respond to Fletcher's application for a loan modification. The amended complaint supersedes the original complaint and renders the original complaint void. Flannery v. Recording Indus. Ass'n of Am., 354 F.3d 632, 638 (7th Cir. 2004); McClendon v. Ill. DOT, No. 12 C 2021, 2012 U.S. Dist. LEXIS 142866 (N.D. Ill. Oct. 3, 2012). While a ruling on an unopposed amended complaint would be inappropriate, the parties are free to file additional motions based specifically on the amended complaint should they so desire. Morkoetter v. Sonoco Prods. Co., No. 11-CV-485, 2012 U.S. Dist. LEXIS 49387 (N.D. Ind. Apr. 6, 2012). Whereas here, Fletcher filed an amended complaint which ...


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