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Miller v. First Bank

United States District Court, S.D. Illinois

September 26, 2014

KEVIN MILLER, PAMELA MILLER, WAYNE MILLER, and ELSIE MILLER, Plaintiffs,
v.
FIRST BANK, Defendant.

MEMORANDUM and ORDER

DAVID R. HERNDON, Chief District Judge.

I. Introduction and Background

Now before the Court is defendant First Bank's motion for summary judgment (Doc. 14). Plaintiff opposes the motion (Doc. 24). Based on the record and the applicable law, the Court grants the motion for summary judgment.

On May 21, 2013, plaintiffs Kevin Miller, Pamela Miller, Wayne Miller and Elsie Miller filed a two-count complaint for breach of contract (Count I) and for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS § 505/1 et seq. (Count II) against First Bank in the Saint Clair County, Illinois Circuit Court (Doc. 2-2). On June 18, 2013, First Bank timely removed the case to this Court based on diversity jurisdiction, 28 U.S.C. § 1332 (Doc. 2-1).

This case arises out of the alleged wrongful foreclosure of real estate mortgages and the alleged detention of personal property during a foreclosure case in which First Bank prevailed against the plaintiffs.[1] Plaintiffs allege that First Bank breached these contracts because it did not act in good faith or in fair dealing in the foreclosure and sale of the real estate that secured the notes and mortgages and in withholding plaintiffs' personal property from their possession. Further, plaintiffs allege that First Bank's conduct in seizing the real estate mortgaged to First Bank by plaintiffs and taking no action to reasonably dispose of the properties for nearly two years was unfair and/or deceptive and in violation of 815 ILCS 505/1 et seq.

II. Facts

On June 30, 2004, the Kevin and Pamela Miller ("Millers") bought property at 1200 South Main Street, Red Bud Illinois ("convenience store"). To finance the purchase of the convenience store, the Millers took out the following:

(a) Mortgage loans from First Bank aggregating $367, 398.00 ("First Bank Loans"). The First Bank Loans were evidenced by promissory notes in the amount of $287, 398.00 and $80, 000.00. The Millers granted first and second mortgages against the convenience store along with other collateral. In addition, Wayne and Elsie Miller ("parents") granted First Bank a mortgage against their property located at 1524 South Main Street, Red Bud, Illinois ("meat market") to secure payment of the First Bank Loans.
(b) a loan from the United States Small Business Administration in the amount of $239, 000.00 ("SBA loan"). The Millers granted a third mortgage against the convenience store to secure payment of the SBA loan.
(c) a loan in the amount of $250, 000 from Edward C. and Patricia A. Wagner ("Wagners"), the sellers of the convenience store, to pay part of the purchase price ("Wagner Loan"). The Millers granted a fourth mortgage against the convenience store to secure payment of the Wagner loan, and the parents granted a second mortgage against the meat market to secure payment of the Wagner loan.

The Millers occupied the meat market when the parents granted the mortgage against this property to First Bank. The Millers were purchasing the meat market from the parents pursuant to a contract for deed. The Millers defaulted in payments due under the contract in April 2009 and quit claimed their interest to the parents on July 17, 2009.

The Millers owned an Illinois corporation, Millers Countryside, Inc. ("Millers Countryside"). Millers Countryside operated the convenience store. On June 30, 2009, Millers Countryside stopped operating the convenience store because the business was not making enough money. In July 2009, the Millers surrendered possession of the convenience store to First Bank. At this time, the contents consisted of equipment and inventory owned by Millers Countryside. When the Millers surrendered possession of the convenience store to First Bank, they were in default of the First Bank Loans, the SBA loan, and the Wagner loan. These defaults were never cured.

On August 19, 2009, the Millers filed a voluntary petition under Chapter 13 of the Bankruptcy Code. The Millers' schedules list the First Bank loans as fully secured, unliquidated and undisputed.

On August 31, 2009, Millers Countryside filed a voluntary petition under Chapter 7 of the Bankruptcy Code. The Millers executed the bankruptcy petition and schedules on behalf of Millers Countryside as its owners and operators. The bankruptcy case was closed on November 30, 2009, after the ...


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