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Firstmerit Bank, N.A. v. Ferrari

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

October 16, 2014

FIRSTMERIT BANK, N.A., Plaintiff/Counter-Defendant,
v.
MARIA FERRARI, JUAN SALGADO, ROBERT FERRARI, and 2425 W. CORTLAND PROPERTIES, INC., Defendants/Counter-Plaintiffs

Page 752

For FirstMerit Bank, N.A., a national banking association, as successor in interest to the FDIC, as receiver for Midwest Bank and Trust Company, Plaintiff, Counter Defendant: David F Standa, Locke Lord LLP, Chicago, IL.

For Robert Ferrari, Maria Ferrari, Juan Salgado, 2425 W Cortland Properties, Inc., Defendants, Counter Claimants: Michael S. Pomerantz, LEAD ATTORNEY, Brown, Udell & Pomerantz, Ltd., Chicago, IL; Andrew Allen Jacobson, Brown, Udell, Pomerantz & Delrahim, Ltd., Chicago, IL.

Page 753

Memorandum Opinion and Order

Gary Feinerman, United States District Judge.

FirstMerit Bank, N.A., brought this suit for mortgage foreclosure and breach of promissory note against Maria Ferrari, Juan Salgado, Robert Ferrari, and 2425 W. Cortland Properties, Inc. (" Cortland Properties" ), a corporation of which Robert and Maria are officers. Doc. 1. Defendants answered and counterclaimed, alleging violations of 42 U.S.C. § 1981 and

Page 754

the Equal Credit Opportunities Act (" ECOA" ), 15 U.S.C. § 1691 et seq. Doc. 41. FirstMerit has moved to dismiss the counterclaims under Federal Rule of Civil Procedure 12(b)(6). Doc. 45. The motion is granted in part and denied in part.

Background

In resolving the motion to dismiss, the court assumes the truth of the counterclaims' factual allegations, though not their legal conclusions. See Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir. 2012). The court must also consider " documents attached to the [counterclaims], documents that are critical to the [counterclaims] and referred to in [them], and information that is subject to proper judicial notice," along with additional facts set forth in Defendants' brief opposing dismissal, so long as those facts " are consistent with the pleadings." Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). The facts are set forth as favorably to Defendants as these materials allow. See Gomez v. Randle, 680 F.3d 859, 864 (7th Cir. 2012).

This suit arises out of a promissory note executed by Cortland Properties in favor of Midwest Bank and Trust Company on April 30, 2010. Doc. 1 at ¶ 8; Doc. 1-1 at 1-4. The note is secured by personal guarantees from Robert and Maria, and also by a mortgage signed by Maria and Salgado on property located in Lombard, Illinois (" Lombard property" ). Doc. 1 at ¶ 10; Doc. 1-1 at 16-28; Doc. 1-2 at 1-10. When regulators closed Midwest Bank and Trust, FirstMerit obtained the note pursuant to a purchase and assumption agreement with the Federal Deposit Insurance Corporation (" FDIC" ). Doc. 1 at ¶ 11.

Cortland Properties failed to make timely payments on the note when it came due in June 2012. On June 5, 2012, FirstMerit entered into a forbearance agreement with Cortland Properties, Robert, and Maria to extend the note's maturity date by one year. Id. at ¶ 9; Doc. 1-1 at 6-14. At the end of the extended period, Cortland Properties again failed to make the required payments. Doc. 1 at ¶ ¶ 13-16. FirstMerit then brought this suit to foreclose on the Lombard property, id. at ¶ ¶ 17-19, and to hold Robert and Maria Ferrari liable for breaching their guarantees, id. at ¶ ¶ 20-35.

Defendants' counterclaims allege the following. Between December 2013 and February 2014, FirstMerit and Defendants engaged in settlement discussions concerning the Cortland Properties debt. Doc. 41 at p. 11, ¶ 10. The parties agreed that Robert would give FirstMerit the proceeds from the sale of condominium units that were the subject of another mortgage dispute, and that in return FirstMerit would release Defendants from any liability under the note, mortgage, and the two personal guarantees. Ibid. FirstMerit, however, refused to consummate the settlement because Salgado, one of the mortgagors, is Hispanic. Id. at pp. 12-13, ¶ ¶ 11, 17, 25. To support their submission that FirstMerit's decision was based on Salgado's race, Defendants allege that on April 5, 2012, a FirstMerit loan officer told a Hispanic business partner of Robert's: " We normally don't give loans to Hispanics." Id. at p. 11, ¶ 9.

Defendants claim that FirstMerit's conduct violates the ECOA, which makes it " unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction ... on the basis of race," 15 U.S.C. § 1691(a)(1), and 42 U.S.C. § 1981(a), which gives to " all persons within the jurisdiction of the United States ... the same right ...


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