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Davis v. Fenton

United States District Court, N.D. Illinois, Eastern Division

February 7, 2014

TONYA DAVIS, Plaintiff,
v.
ERNEST B. FENTON, LAW OFFICE OF ERNEST B. FENTON, P.C., and LEGAL SERVICES, INC., Defendant

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For Tonya Davis, Plaintiff: Kelli A Dudley, LEAD ATTORNEY, Law Office of Kelli Dudley, Chicago, IL; Andrew V. Sidea, Law Office of Andrew Sidea, Chicago, IL; Robert Brand Newman, Newman & Meeks, Cincinnati, OH.

For Ernest Fenton, Law Office of Ernest B. Fenton, P.C., Legal Services, Inc., Defendants: Scott P. Clair, LEAD ATTORNEY, Chicago, IL; Brandon Loggins, Law Office of Ernest B. Fenton, Homewood, IL.

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MEMORANDUM OPINION AND ORDER

Ruben Castillo, Chief United States District Judge.

Tonya Davis (" Plaintiff" ) brings this action against Ernest B. Fenton, the Law Office of Ernest B. Fenton, P.C. (the " Law Office" ), and Legal Services, Inc. (collectively, " Defendants" ) alleging violations of the Fair Housing Act, 42 U.S.C. § 3601 et seq., and the Civil Rights Act of 1866, 42 U.S.C. § § 1981, 1982; attorney malpractice; and breach of contract. Presently before the Court are Defendants' motion to stay this action pending arbitration pursuant to Section 3 of the Federal Arbitration Act (" FAA" ), 9 U.S.C. § 3, and Plaintiff's motion to consolidate cases pursuant to Federal Rule of Civil Procedure 42. For the reasons set forth below, the Court grants Defendants' motion to stay this action and denies as moot Plaintiff's motion to consolidate cases.

RELEVANT FACTS

Plaintiff is an African American female and a resident of Cook County, Illinois. (R. 1, Compl. ¶ ¶ 3, 10.) Fenton is an attorney admitted to practice in Illinois and the president of the Law Office and Legal Services, Inc., which are Illinois domestic corporations. ( Id. ¶ ¶ 1, 4.) Legal

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Services, Inc. is an independent client management company, and Fenton directs clients to remit payments owed to him to Legal Services, Inc. (R. 1-1, Ex. A, Retainer Agreement at 3.)

Plaintiff alleges that Fenton, through various advertisements, holds himself out to defend mortgage foreclosure actions on behalf of consumers. ( Id. ¶ 1.) On or about September 25, 2010, Plaintiff consulted with Defendants about a mortgage foreclosure proceeding related to Plaintiff's residential property. ( Id. ¶ 11.) Plaintiff alleges that Defendants advised her that she had good and complete defenses to the mortgage foreclosure action. ( Id. ¶ 12.) On or about September 25, 2010, Plaintiff signed a retainer agreement that required Defendants to represent her in her mortgage foreclosure case in state court. ( Id. ¶ 14.) The retainer agreement outlined the scope and representation to be provided by Defendants to Plaintiff, including: initial consultation and information gathering; consultation with Plaintiff regarding the foreclosure process; review of the foreclosure complaint or the acquisition of a loan status report, review of the loan documents; production of a written analysis or assessment of case issues; negotiation of a resolution with the mortgagee, be it forbearance, reinstatement, or a deed in lieu; and legal representation in court and with regards to redemption with private funding sources, an open market sale, a closed sale, or a sale-leaseback. ( Id. ¶ 13; R. 1-1, Ex. A, Retainer Agreement at 1-2.) The retainer agreement also contains an arbitration clause that states:

In the event that there is a dispute between ATTORNEY(S) and CLIENT regarding any provision in this agreement, or the outcome of the matter for which CLIENT retained ATTORNEY(S), ATTORNEY(S) and CLIENT agree to submit the dispute to binding arbitration at the American Arbitration Association for resolution. As such, CLIENT understands that in the event of such a dispute, CLIENT acknowledges and understands that CLIENT waives all rights to a trial by jury.

(R. 1-1, Ex. A, Retainer Agreement at 5-6.)

Plaintiff alleges that the Law Office filed its appearance on or about November 1, 2010, but " filed nothing else on [her] behalf for almost one year." (R. 1, Compl. ¶ 18.) Plaintiff alleges that Defendants filed no answer or other substantive pleadings on her behalf. ( Id. ) Consequently, a judgment of foreclosure and sale was entered in January 2011. ( Id. ¶ 20.) Defendants filed an emergency motion to stay the sale in October 2011, and an order was entered on October 4, 2011, staying the sale through November 4, 2011. ( Id. ¶ ¶ 19, 21). Defendants filed another motion to stay the sale on or about November 2011, which was denied as moot on November 18, 2011, because the bank stayed the sale on its own accord. ( Id. ¶ 19.) Plaintiff alleges that as a direct and proximate cause of Defendants' failure to act on her behalf, an order confirming sale and possession was entered, depriving Plaintiff of legal title to her home and causing her to face eviction. ( Id. ¶ 22.)

Plaintiff alleges that Defendants failed to exercise reasonable care in fulfilling the retainer agreement. ( Id. ¶ 30.) Plaintiff further alleges that during the course of her representation, Defendants failed to exercise reasonable care, skill, and diligence as ordinarily exercised by other attorneys in the community. ( Id. ¶ 24.) Additionally, Plaintiff alleges that at all relevant times, Defendants discriminatorily recruited clients on the basis of race by targeting its advertising at African Americans. ( Id. ¶ 28.)

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PROCEDURAL HISTORY

Plaintiff initiated this action on April 4, 2013, by filing a four-count complaint. ( Id. ) In Count I, Plaintiff alleges that Defendants violated the Fair Housing Act (" FHA" ) by targeting Plaintiff for inferior services relating to real estate transactions because of her race and by generally engaging in advertising that is designed to target African Americans. ( Id. ¶ ¶ 36-46.) In Count II, Plaintiff alleges that Defendants violated sections 1981 and 1982 of the Civil Rights Act of 1866 by denying Plaintiff her right to hold real property based on her race and by offering her a contract that was different in its performance, making, and conditions from contracts offered to white individuals. ( Id. ¶ ¶ 47-50.) In Count III, Plaintiff alleges attorney malpractice, claiming that Defendants breached their fiduciary duty of care. ( Id. ¶ ¶ 51-62.) In Count IV, Plaintiff alleges breach of contract, claiming that Defendants failed to fulfill the terms of the retainer agreement. ( Id. ¶ ¶ 63-77.)

On July 3, 2013, Defendants filed a motion to stay this action as referable to arbitration. (R. 14, Defs.' Mot. Stay.) Plaintiff filed her response to Defendants' motion to stay on July 24, 2013, (R. 17, Pl.'s Resp.), and Defendants filed a reply on July 30, 2013, (R. 18, Defs.' Reply).

Also on July 3, 2013, Fenton and the Law Office filed a lawsuit in the Circuit Court of Cook County against Plaintiff's attorneys, Kelli Dudley and Andrew Sidea, alleging conversion, tortious interference with a business relationship, and defamation and slander. Fenton v. Dudley, No. 13 L 066047. Dudley and Sidea removed the case to this District on July 14, 2013. On August 27, 2013, Plaintiff filed a motion, asking the Court to consolidate this case with Fenton v. Dudley, which was then pending before Judge Rebecca Pallmeyer. (R. 20, Pl.'s Mot. Consolidate.) On January 3, 2014, Judge Pallmeyer granted ...


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