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Us Bank National Association v. Collins-Fuller

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

March 24, 2014



MARVIN E. ASPEN, District Court Judge:

Presently before us is a Motion for Judgment on the Pleadings filed by Defendants Cheryle A. Collins-Fuller T. and Heywood Fuller T. ("Defendants"), seeking dismissal of this foreclosure action pursuant to Federal Rule of Civil Procedure 12(c). (Dkt. No. 103.) As set forth below, we deny the motion. We also very briefly address and deny several other pending motions, including Plaintiff's motion for summary judgment.


Defendants borrowed $232, 000 on approximately August 15, 2005 from Fremont Investment and Loan. (Compl. ¶ 10.) Defendants executed an Adjustable Rate Note in favor of Fremont for the loan and a Mortgage, granting Fremont a security interest for the Note in real property located in Naperville, Illinois ("Property"). ( Id. ) Plaintiff alleges that Defendants are in default due to their failure to pay required monthly installments as of February 2011. ( Id. ¶ 10(j).) Plaintiff further alleges that it "is the legal holder of the indebtedness and the owner of the mortgage given as security" and, as such, is entitled to foreclose on the Property. ( Id. ¶ 10(n), (p), (s).) With its complaint, Plaintiff submitted copies of the pertinent Note, Mortgage, and Assignment of Mortgage. (Compl., Exs. 3-5.)

Defendants, acting pro se at the time, answered the complaint on June 3, 2013. (Dkt. No. 63.) Plaintiff subsequently moved for summary judgment and for appointment of a special commissioner on June 27, 2013. (Dkt. No. 73.) After summary judgment briefing concluded, Defendants obtained counsel, who filed an appearance on October 25, 2013. Defendants then filed the instant motion, seeking judgment on the pleadings due to purported deficiencies with Plaintiff's complaint.


Under Rule 12(c), a party may seek judgment on the pleadings "[a]fter the pleadings have closed-but early enough not to delay trial." Fed.R.Civ.P. 12(c); see Buchanan-Moore v. Cty. of Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009). When reviewing Rule 12(c) motions, we employ the same standards applicable to motions brought under Rule 12(b)(6). Buchanan-Moore, 570 F.3d at 827 (citing Pisciotta v. Old Nat'l Bancorp, 499 F.3d 629, 633 (7th Cir. 2007)); see Adams v. City of Indianapolis, 742 F.3d 720, 727-28 (7th Cir. 2014); Northern Ind. Gun & Outdoor Shows, Inc. v. South Bend, 163 F.3d 449, 452 (7th Cir. 1998). Accordingly, for purposes of this motion, we must accept all well-pleaded allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Adams, 742 F.3d at 728; Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002); Jafri v. Chandler LLC, ___ F.Supp.2d ___, 2013 WL 5513238, at *1 (N.D. Ill. Oct. 4, 2013). We may grant a motion for judgment under Rule 12(c) "[o]nly when it appears beyond a doubt that the plaintiff cannot prove any facts to support a claim for relief and the moving party demonstrates that there are no material issues of fact to be resolved." Supreme Laundry Serv., L.L.C. v. Hartford Cas. Ins. Co., 521 F.3d 743, 746 (7th Cir. 2008) (internal quotation omitted); Beiles v. City of Chi. ___ F.Supp.2d ___, 2013 WL 6571165, at *2 (N.D. Ill.Dec. 13, 2013).


Defendants argue that Plaintiff's complaint fails to state a claim for relief for two reasons. Defendants first assert that Plaintiff lacks standing to foreclose on the Property because it is not the legal holder of the Note, which was neither indorsed nor assigned to Plaintiff. (Mem. at 5-10; Reply at 4-8.) Defendants also contend that Plaintiff's complaint fails to comply with the requirements of the Illinois Mortgage Foreclosure Law ("IMFL"), necessitating judgment in their favor. We address each argument in turn.

A. Standing

"To recover on a promissory note under Illinois law, a plaintiff must show that (1) a defendant executed the promissory note; (2) the plaintiff is the holder of the note; and (3) the defendant has no viable defense." Land O'Lakes Purina Feed, LLC v. WelkCo, LLC, No. 10 C 981, 2011 WL 1465632 at *2 (S.D. Ill. Apr. 18, 2011). Defendants claim that they are entitled to judgment because Plaintiff cannot establish the second element, standing. As Defendants point out, the Note attached to the complaint evidences the debt owed to Fremont but does not include an indorsement, assignment, or proof of transfer of the Note from Fremont to Plaintiff.

In response, Plaintiff contends that its production of a copy of the unindorsed Note with the complaint demonstrates that it possesses the Note. (Resp. at 2-6.) Plaintiff argues that it obtained the Note-along with standing to enforce it as a nonholder in possession with the rights of a holder-by virtue of an assignment from Fremont and pursuant to the Illinois Uniform Commercial Code. ( Id. at 3-5 (citing 810 ILCS 5/3-203, 3-301).)

For purposes of the present motion, we agree with Plaintiff. At this stage, we accept as true Plaintiff's allegation that it "is the legal holder of the indebtedness and the owner of the mortgage given as security." ( Id. ¶ 10(n).) Although Plaintiff does not describe any transfer of the Note from Fremont in the complaint, it alleges that it is the holder of the debt, i.e. the Note.[1] Plaintiff attached a copy of the Note with its complaint, and we cannot discredit the allegation that it owns the Note. See, e.g., Land O'Lakes Purina Feed, LLC, 2011 WL 1465632, at *3 (presuming at the motion to dismiss stage that plaintiff acquired full interest in an allegedly transferred note that it attached to the complaint). Moreover, under Illinois law, "possession of a note, albeit unendorsed, can be sufficient to confer standing to enforce it." HSBC Bank USA, N.A. v. Hardman, 12 C 481, 2013 WL 515432, at *4 (N.D. Ill. Feb. 12, 2013) (further explaining how a nonholder in possession with rights of a holder may enforce an unindorsed note);

Deutsche Bank Nat'l Trust Co. v. Christian, 12 C 3613, 2013 WL 6283584, at *2-3 (N.D. Ill.Dec. 4, 2013) (same); see also Parkway Bank & Tr. Co. v. Korzen, 13-380, 2013 Ill.App. 13030, 2 N.E.3d 1052, ¶ 24 (1st Dist. Sept. 23, 2013) (noting that "the mere fact that a copy of the note is attached to the complaint is itself prima facie evidence that the plaintiff owns the note" and is sufficient to show a plaintiff's standing); Martin v. Martin, 174 Ill. 371, 374, 51 N.E. ...

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