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HSBC Bank USA, N.A. v. Garcia

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

August 6, 2014

HSBC BANK USA, N.A., as Trustee on behalf of ACE Securities Corp. Home Equity Loan Trust and for the registered holders of ACE Securities Corp. Home Equity Loan Trust, Series 2007-HE2, Asset-Backed Pass-Through Certificates, Plaintiff,
v.
DAVID GARCIA; AQUA FINANCE, INC.; LVNV FUNDING, LLC; MIDLAND FUNDING, LLC; MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC., as a nominee for People's Choice Home Loan, Inc.; UNITED STATES OF AMERICA, INTERNAL REVENUE SERVICE, Defendants.

MEMORANDUM OPINION & ORDER

JOAN B. GOTTSCHALL, District Judge.

Plaintiff HSBC Bank USA, N.A. filed a complaint to foreclose a mortgage on August 17, 2012, against defendants David Garcia, the Mortgage Electronic Registration System, Inc. (MERS); Aqua Finance, Inc.; LVNV Funding, LLC; Midland Funding, LLC; and the United States, Internal Revenue Service. After the defendants failed to appear, the court granted default judgment in favor of HSBC and ordered that The Judicial Sales Corporation be appointed as special commissioner to sell the mortgaged property at auction. Defendant David Garcia then successfully moved the court to vacate the default judgment entered against him. Now before the court are HSBC's motions for summary judgment and to appoint a special commissioner. The motions are granted.

I. BACKGROUND FACTS

The following facts are not disputed unless otherwise stated. Around August 28, 2006, Garcia executed a note in favor of People's Choice Home Loan, Inc. in exchange for a loan of $198, 400 at an annual interest rate of 7.75%. Garcia agreed to make monthly payments on the first day of every month. The loan was secured by a mortgage for property at 9311 South Troy Street, Evergreen Park, Illinois, [1] with MERS as the mortgagee. An assignment of mortgage document dated February 27, 2007 indicates that MERS, as nominee for People's Choice, assigned the loan to HSBC.

HSBC submitted an affidavit from Denise V. Lundquist, a contract management coordinator at Ocwen Loan Servicing, LLC, which is responsible for servicing Garcia's mortgage account. Based on a review of Ocwen's servicing records, Lundquist attests that HSBC owns Garcia's note and mortgage. Garcia denies that HSBC owns Garcia's note and mortgage, but identified no supporting affidavit or evidence to contradict Lundquist's affidavit or the assignment of mortgage document.

Lundquist's affidavit indicates that Garcia has defaulted on the loan, which had an outstanding balance of $238, 011.43 as of December 26, 2012. HSBC states that Garcia stopped making monthly payments in December 2011, and that no payments have been made on the note since that date. Garcia denies these statements.

The complaint seeks, among other things, a judgment of foreclosure and sale of the Troy Street property by public auction. The complaint also asks that the court terminate the "interest in or lien on the mortgaged real estate" of defendants MERS, Aqua Finance, LVNV, Midland Funding, and the IRS. (Compl. 3, ECF No. 1.)

Julia Bochnowski, attorney for HSBC, submitted an affidavit stating that HSBC has incurred $2, 446 in attorney's fees and costs in connection with this litigation, consisting of a $490 process server expense; a $56 recording expense; $350 in court costs; and $1, 550 in attorney's fees.

II. LEGAL STANDARD

Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a court must dismiss a claim if it lacks subject-matter jurisdiction over it. Illinois v. City of Chicago, 137 F.3d 474, 478 (7th Cir. 1998) ("Subject-matter jurisdiction is the first question in every case, and if the court concludes that it lacks jurisdiction it must proceed no further."). When deciding a motion to dismiss pursuant to Rule 12(b)(1), the court accepts "as true all facts alleged in the well-pleaded complaint and draw[s] all reasonable inferences in favor of the plaintiff." Scanlan v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012).

Summary judgment is appropriate when the movant shows there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Smith v. Hope Sch., 560 F.3d 694, 699 (7th Cir. 2009). "[A] factual dispute is genuine' only if a reasonable jury could find for either party." SMS Demag Aktiengesellschaft v. Material Scis. Corp., 565 F.3d 365, 368 (7th Cir. 2009). The court ruling on the motion construes all facts and makes all reasonable inferences in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment is warranted when the nonmoving party cannot establish an essential element of its case on which it will bear the burden of proof at trial. Kidwell v. Eisenhauer, 679 F.3d 957, 964 (7th Cir. 2012).

III. ANALYSIS

A. Jurisdiction

Garcia's statement of material facts in opposition to summary judgment alleges: "Plaintiff has failed to establish diversity jurisdiction exists pursuant to 28 U.S.C. ยง 1332."[2] (ECF No. 41, at 3.) Although Garcia does not explain how HSBC's complaint was jurisdictionally deficient, "the court has an independent duty to satisfy itself that it has ...


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