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Alqaq v. Citimortgage, Inc.

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

April 29, 2014

BASEM ALQAQ, on behalf of himself and all others similarly situated, Plaintiff,


WILLIAM T. HART, District Judge.

Basem Alqaq, on behalf of himself and four other groups of mortgagors, brings this putative class action against his mortgagee, CitiMortgage, Inc. ("CitiMortgage"), Safeguard Properties, LLC ("Safeguard"), and A&D Property Services, Inc. ("A&D"), defendants. Plaintiff alleges that he and the class member mortgagors were subjected to threats of dispossession or disablement of their homes and dispossessed before court orders awarded possession to the mortgagee in foreclosure actions.

In Count I of the First Amended Class Action Complaint ("FCA"), plaintiff claims violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., on the part of Safeguard. Count II of he FCA charges violations of the FDCPA by Safeguard and A&D. Deception and unfair conduct in violation of the Illinois Consumer Fraud Act, 815 ILCS 505/2 ("ICFA"), on the part of all defendants is charged in Count III. Count IV charges trespass against all defendants, and Count V charges invasion of privacy against all defendants. Plaintiff seeks actual and punitive damages, injunctive relief, and declaratory relief on behalf of the classes.

Federal question jurisdiction is alleged pursuant to 28 U.S.C. § 1331 because claims are made under the FDCPA. Class action jurisdiction is alleged pursuant to 28 U.S.C. § 1332(d). It is stated that the aggregate amount in controversy exceeds the sum or value of $5, 000, 000 and plaintiff's Illinois citizenship is different from the citizenship of CitiMortgage, a Delaware corporation, and Safeguard, a Delaware corporation with its principal place of business in Ohio. A&D has Illinois citizenship. Alternatively, supplemental jurisdiction over the state law claims is alleged pursuant to 28 U.S.C. § 1367(a).

The case is now before the court on motions of the parties to strike and dismiss. CitiMortgage has moved to strike the class allegations and answered the remaining allegations. Safeguard and A&D have moved to dismiss Counts I and II. A&D has moved to dismiss Count III. A&D has moved to strike the requests for punitive damages, declaratory relief, and injunctive relief. Plaintiff has moved to strike affirmative defenses of CitiMortgage and A&D and has moved to stay consideration of the class allegations until after discovery.

On motions to dismiss, the court assumes the truth of the FCA's factual allegations, but not its legal conclusions. Munson v. Gaetz , 673 F.3d 630, 632 (7th Cir. 2012). The court may consider certain documents attached to the pleadings and information that is subject to proper judicial notice. Cohen v. Am. Sec. Ins. Co. , 735 F.3d 601 (7th Cir. 2013) (quoting Geinosky v. City of Chicago , 675 F.3d 743, 745-46 n.1 (7th Cir. 2012)). Plaintiff must allege facts that establish a claim for relief that is plausible on its face and which allows the court to draw a reasonable inference that defendants are liable for the misconduct alleged. Ashcroft v. Iqbal , 556 U.S. 662, 678. (2009). Allegations of ICFA fraud or deception and the circumstances constituting the same must be pled with particularity. Fed.R.Civ.P. 9(b); Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co. , 631 F.3d 436, 441 (7th Cir. 2011); Bywater v. Wells Fargo Bank, N.A. , 2014 WL 1256103 *2 (N.D. Ill. March 24, 2014). Unfair conduct violating the ICFA, however, need not be pleaded with particularity. Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., Inc. , 536 F.3d 663, 670 (7th Cir. 2008); Bywater , 2014 WL 1256103 at *2.

The FCA alleges that CitiMortgage filed a foreclosure proceeding in the Circuit Court of Cook County, Illinois in July 2010. Plaintiff did not oppose a judgment of foreclosure entered on April 12, 2012. A foreclosure sale took place on August 16, 2012. On August 30, 2012, CitiMortgage mailed a notice to plaintiff setting October 30, 2012 as the date for confirmation of the sale and entry of an order of possession. The notice indicated that plaintiff had a right to remain in possession for 30 days after an order of possession in accordance with the Illinois Mortgage Foreclosure Law ("IMFL"), 735 ILCS 5/15-1701(c).

On October 2, 2012 plaintiff discovered a notice on his front door from Safeguard which read: "We found this property to be vacant/abandoned. This information will be reported to the mortgage holder. The mortgage holder has the right and duty to protect this property. The property will be rekeyed and/or winterized within 3 days. If this property is NOT VACANT, please contact Safeguard Properties at 877-340-8482." Plaintiff notified a Safeguard representative that the property was not vacant. He was told to ignore the notice.

On October 12, 2012, despite the home being locked and secured, Safeguard broke into the house and "winterized" the property, stealing personal possessions including three vacuum cleaners, a refrigerator, three ladders, two flat wheelers, a tool box filled with tools, a drill, a lawn mower, carpet, clothes, and photographs. A sticker with the following notice was left at the house.

"WARNING: A winterization was performed at this property pursuant to a work order issued by your mortgage company. The sole purpose of a winterization is to prevent damage from freezing pipes. The winterization completed at this property was a system shut-down only: the plumbing system was not tested for damage or leaks. This procedure is not a guaranty or warranty of any kind with respect to the HVAC, plumbing, or any other mechanical systems at this property. The plumbing system should be dewinterized by a licensed contractor or plumber before the water is turned back on, to assure that the system is operational. SAFEGUARD PROPERTIES WINTERIZATION TAG SPI-012/09-09."

At the October 30, 2012 state court foreclosure hearing, plaintiff informed the judge of what had happened. The court entered an order confirming the sale which also provided, in part, as follows: "1)Basem Alqaq shall remain in possession of 7730 S. Ferdinand, Bridgeview, Illinois until November 29, 2012. 2) Plaintiff & its agents shall not enter the subject premises until after November 29, 2012. 3) Basem Alqaq shall be entitled to enter & remove any of his personal possessions until 11/29/12."

On November 2, 2012, A&D broke into the house to "winterize" the property. A&D left a sticker on the house which advised that the hot water was disconnected. The notice stated in part: "We also Trash Out & Provide all Property Preservation & Maintenance Services." A&D changed the front door lock, locking plaintiff out of the house. Plaintiff was unable to retrieve personal property and found some property to be missing.

Turning first to the application of the FDCPA, the provisions cited by the parties are as follows: "The term debt collector' means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests." 15 U.S.C. § 1692a(6). "A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:... (6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if-(A) there is no present right to possession of the property claimed as collateral through an enforceable security interest;...." 15 U.S.C. § 1692f(6)(A).

Plaintiff contends that Safeguard and A&D are debt collectors within the meaning of the FDCPA because the action taken by them was "dispossession or disablement" in "enforcement of security interests." Although the conduct complained of appears to have been improper and even tortious as performed, it was, as stated in notices, to secure and winterize foreclosed property. CitiMortgage's security interest was recognized and foreclosed in proceedings under the IMFL. Plaintiff then had a 30-day possessory interest in the property. No facts alleged ...

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