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McKenney-Becker v. Safeguard Properties, LLC

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

January 13, 2015



AMY J. ST. EVE, District Judge.

Before the Court are two motions to dismiss. Defendants Safeguard Properties, LLC ("Safeguard") and ATC Real Estate Services, LLC ("ATC") filed their Motion to Dismiss Plaintiffs' Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). ( See R.21, Defs. Safeguard and ATC's Motion to Dismiss.) Defendant Bank of America, N.A. ("Bank of America") filed its Motion to Dismiss Plaintiffs' Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and requested abstention of the federal action. ( See R.19, Def. Bank of America's Motion to Dismiss.)[1] For the following reasons, the Court grants in part and denies in part Defendants Safeguard and ATC's Motion to Dismiss and grants in part and denies in part Defendant Bank of America's Motion to Dismiss. The Court also denies Bank of America's motion to dismiss on the basis of abstention under Colorado River.


Plaintiffs Ann M. McKenney-Becker ("Mrs. McKenney-Becker") and Fred Becker ("Mr. Becker") (collectively, the "Beckers" or "Plaintiffs") have filed an six-count complaint against Defendants Safeguard, ATC, and Bank of America (collectively, "all Defendants"). Specifically, Plaintiffs allege (1) violations of the Fair Debt Collection Practices Act (15 U.S.C. §1692f) against Safeguard and ATC (Count I); (2) violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. ) against all Defendants (Count II); (3) trespass against Safeguard and ATC (Counts III and IV); and (4) conversion against Safeguard and ATC (Counts V and VI). ( See generally R.1, Compl.)

I. The Parties

Plaintiffs are both natural persons and residents of McHenry County, Illinois. (R.1, ¶¶ 3, 4.)[2] Defendants Safeguard and ATC are each individual corporations that contract with mortgage lending and servicing institutions to, as a principal purpose, manage and preserve at-risk and foreclosed properties. (R.1, ¶¶ 5, 6.) Specifically, Safeguard and ATC determine the occupancy status of properties and secure vacant properties for lending and servicing institutions. (R.1, ¶ 8.) Defendant Bank of America is a National Bank, headquartered in North Carolina. (R.1, ¶ 7.)

II. The Property & Foreclosure Proceedings

Mrs. McKenney-Becker owns a personal residence located at 5713 Island Road in Chemung, McHenry County, Illinois (the "Property"). (R.1, ¶¶ 11, 12.) To finance the Property, Mrs. McKenney-Becker entered into a mortgage agreement with Bank of America, incurring a debt. (R.1, ¶ 12; R.19-2, Promissory Note between Ms. McKenney-Becker and Bank of America attached as Ex. 1 to R.19-1, Def. Bank of America's Motion to Dismiss; R.19-3, Mortgage for the Property, attached as Ex. 2 to R.19-1, Def. Bank of America's Motion to Dismiss.)[3] She made mortgage payments pursuant to the agreement until she incurred financial hardship and defaulted on her mortgage. (R.1, ¶ 13.) Bank of America subsequently filed a foreclosure lawsuit in the Circuit Court of the 22nd Judicial Circuit in McHenry, Illinois seeking deficiency judgment and possession of the Property ("State Court Foreclosure Action"). (R.1, ¶ 15.) As of June 2013, the Circuit Court had not entered any order allowing Defendants access to the Property. (R.1, ¶ 36.)

III. Defendants Safeguard and ATC Enter the Property

The Beckers temporarily left the Property for a week in June 2013, leaving it secured and locked with numerous items of their personal property inside. (R.1, ¶¶ 18-20.) During that time, no one other than the Beckers had a key or otherwise had access to the Property, nor did anyone have permission to access the Property. (R.1, ¶ 24.) Prior to the Beckers' return, Safeguard and/or ATC (at the direction of Bank of America) entered the Property and "caused dispossession and disablement" of the Property by removing all of the Beckers' personal property and changing the locks. (R.1, ¶ 21.) Safeguard and/or ATC, at the direction, authorization, and approval of Bank of America, placed a lockbox on the Property's entrance door, and placed a material substantially similar to glue into the remaining locks that rendered the locks inoperable. (R.1, ¶¶ 22, 26-29; see also R.1-1, Safeguard Work Order Update, attached as Ex. A to R.1, Compl.) According to Safeguard's Work Order Update, Safeguard entered the Property on June 18, 2013, classified the Property as "Vacant", installed a lockbox, removed "Interior Debris" (including construction materials, clothes, and furniture) and capped the gas line. ( See R.1-1.) The Beckers allege that Safeguard admits that Bank of America installed the lockbox and that Safeguard hired ATC as a subcontractor to do onsite work at the Property. (R.1, ¶¶ 26, 28.) At the time Defendants caused dispossession and disablement of the Property and the personal possessions within it, the Property was claimed as collateral by Bank of America, through an enforceable security interest, namely a mortgage. (R.1, ¶ 35.) Safeguard and ATC acted at the direction and authorization of Bank of America. (R.1, ¶ 27.)


Federal Rule of Civil Procedure 12(b)(1) allows a party to raise as a defense, by motion, a federal court's lack of subject-matter jurisdiction. Fed.R.Civ.P. 12(b)(1). As with a Rule 12(b)(6) motion, when the defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction, the district court must "accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff." St. John's United Church of Christ v. City of Chicago, 502 F.3d 616, 625 (7th Cir. 2007) (quoting Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999)); see also Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443-444 (7th Cir. 2009). The proponent of federal jurisdiction bears the burden of establishing subject matter jurisdiction. Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540 (7th Cir. 2006) ("[The] party that chooses federal court [must] set out the basis of federal jurisdiction and prove any contested factual allegation."); see also Glaser v. Wound Care Consultants, Inc., 570 F.3d 907, 913 (7th Cir. 2009) ("The burden of proof on a 12(b)(1) issue is on the party asserting jurisdiction"). If necessary, a district court may also look beyond the jurisdictional allegations to evidence outside of the pleadings to determine whether federal subject-matter jurisdiction exists. St. John's, 502 F.3d at 616.

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Under Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The short and plain statement under Rule 8(a)(2) does not need to have "detailed factual allegations' but must have more than an unadorned, the-defendant-unlawfully-harmed-me accusation.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Therefore, only a complaint "that states a plausible claim for relief survives a motion to dismiss." Iqbal, 129 S.Ct. at 1950. "In evaluating the sufficiency of the complaint, [courts] view it in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from the allegations in the plaintiff's favor." AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). This principle, however, is inapplicable to legal conclusions; "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 555).


I. Plaintiffs' Claim Under the Fair Debt Collection Practices Act (Count I)

A. Plaintiff Fred Becker Has Standing

Defendants Safeguard and ATC claim that Plaintiff Fred Becker has no standing and therefore no claim arising under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p, as no factual allegations exist demonstrating that Mr. Becker has ever been indebted to any of the Defendants. (R.22, Defs. Safeguard and ATC's Mem. in Supp., at 4.) Plaintiffs respond that even though Mr. Becker was never indebted to Defendants, he has standing to sue because the allegedly unfair actions taken against him fall within the zone of interest of section 1692f. (R.35, Pltfs. Response, at 2-3.)

The purpose of the FDCPA is to protect debtors from certain abusive debt collection practices. In re Rinaldi, 487 B.R. 516, 534 (E.D. Wis. 2013). Section 1692f of the FDCPA "generally prohibits using unfair or unconscionable means to collect or attempt to collect any debt.'" Todd v. Collecto, Inc., 731 F.3d 734, 736 (7th Cir. 2013); see also 15 U.S.C. § 1692f ("A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt"). The provision includes a non-exhaustive list of examples of specific practices that are unfair per se. Todd, 731 F.3d at 736. Mr. Becker alleges that Safeguard Properties violated section 1692f by taking nonjudicial action-breaking into his residence and taking his possessions-when there was no legal right to possession of either the Property or his personal property. (R.35, at 3; see also R.1, Compl., ¶¶ 16-43). Although the list of exemplary conduct in 15 U.S.C. § 1692f is non-exhaustive, Mr. Becker's allegations fall squarely into section 1692f(6), which proscribes:

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 ...

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