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JP Morgan Chase Bank v. Jenkins

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

February 12, 2015

JP MORGAN CHASE BANK, Plaintiff,
v.
LINDSAY JENKINS, Defendant.

MEMORANDUM OPINION AND ORDER

ROBERT W. GETTLEMAN, District Judge.

Plaintiff JP Morgan Chase Bank brought this foreclosure action against defendant Lindsay Jenkins, the mortgagor of certain residential property. Defendant has filed the instant motion to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(1), (2), (5), and (6), arguing that plaintiff has not established that it owns the note it seeks to foreclose and that defendant was improperly served. Prior to filing her reply brief, defendant also filed a motion to stay this case pending response from the Federal Deposit Insurance Corporation ("FDIC") to a Freedom of Information Act ("FOIA") submitted by defendant. For the reasons discussed below, defendant's motion to stay and motion to dismiss are denied.

BACKGROUND[1]

Plaintiff's foreclosure complaint is a form complaint, containing the statements and requests called for by 735 ILCS § 5/15-1504. Plaintiff alleges that defendant entered into a mortgage loan with Washington Mutual Bank, FA ("WaMu") on August 19, 2005. The loan was secured by property located at 30 E. Huron Street, Unit #4406, Chicago, Illinois, 60611. Plaintiff alleges that it "is the legal holder of the indebtedness secured by the mortgage being foreclosed herein, " and that the mortgage is currently in default "due to the failure of the mortgagor to pay monthly installments... through the period [of] January 2008 through the present." The outstanding balance on the loan is currently $208, 128.28, with interest accruing. As such, plaintiff seeks to foreclose on the property. As required by 735 ILCS § 5/15-1504(a)(2), a copy of the mortgage and note are attached to the complaint as exhibits A and B.

DISCUSSION

I. Motion to Stay

Defendant's motion to stay is denied. As discussed below, plaintiff has sufficiently pled and established standing for purposes of the present motion to dismiss, making any response by the FDIC irrelevant. To the extent that defendant receives documents from the FDIC that provide her with a defense to plaintiff's claims, such evidence and arguments would be more properly presented through a motion for summary judgement, following the completion of discovery.

II. Motion to Dismiss[2]

When ruling on a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(1), (2), (5), and (6), the court accepts the complaint's well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Sprint Spectrum, L.P. v. City of Carmel, Indiana, 361 F.3d 998, 1001 (7th Cir. 2004) (Rule 12(b)(1)); Cardenas v. City of Chicago, No. 08-C-3174, 2010 WL 610621, at *2 (N.D. Ill. Feb. 15, 2010) aff'd, 646 F.3d 1001 (7th Cir. 2011) (Rule 12(b)(2) and (5)); Walker, 51 F.3d at 717 (12(b)(6)).

A. Rule 12(b)(1)

Defendant argues that plaintiff's lawsuit should be dismissed because plaintiff has not demonstrated that it has standing to foreclose defendant's mortgage. Fed.R.Civ.P. 12(b)(1) permits a defendant to move for dismissal of a claim where there is a lack of subject matter jurisdiction, including a lack of standing. See Retired Police Ass'n v. City of Chicago, 76 F.3d 856, 862 (7th Cir. 1996). The plaintiff bears the burden of establishing that the elements necessary for jurisdiction have been met. Scanlan v. Eisenberg, 669 F.3d 838, 841-42 (7th Cir. 2012). "In ruling on a 12(b)(1) motion, the court may look outside of the complaint's allegations and consider whatever evidence has been submitted on the issue of jurisdiction." Mutter v. Madigan, No. 13-CV-8580, 2014 WL 562017, at *2 (N.D. Ill. Feb. 13, 2014); see also Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995).

The question of standing is jurisdictional in nature, and there are both constitutional and prudential limitations on the jurisdiction of federal courts. HSBC Bank USA, N.A. v. Hardman, No. 12-C-00481, 2013 WL 515432, at *2 (N.D. Ill. Feb. 12, 2013). To establish Article III standing, "plaintiff must show: (1) injury in fact, meaning an invasion of a legally protectable interest that is concrete and particularized, actual or imminent, and not conjectural or hypothetical; (2) a casual connection between the injury and the conduct complained of such that the injury is fairly traceable to defendant's actions; and (3) that a favorable decision is likely to redress the injury." Tobin for Governor v. Ill. State Bd. of Elections, 268 F.3d 517, 527-28 (7th Cir. 2001). "Prudential standing requires plaintiffs to assert their own legal rights and interests, and not rest their claims on the legal rights or interests of third parties." Hardman, 2013 WL 515432 at *2.

Plaintiff has established the requirements for both constitutional and prudential standing. The complaint alleges that plaintiff is the legal holder of the note; that the mortgage is in default; that defendant's failure to make monthly payments caused the default; and that a judgment of foreclosure would redress the default. These allegations are sufficient to establish constitutional standing. See Hardman, 2013 WL 515432 at *2 (finding that plaintiff bank satisfied constitutional standing requirements where complaint made identical allegations).

As in Hardman, defendant challenges, as a factual matter, plaintiff's status as the real party in interest to bring the present foreclosure action. Id. at 3. Defendant argues that plaintiff has not established that it is the true owner of the note, and therefore cannot foreclose on the mortgage. According to defendant, "[u]nless and until the Court has evidence before it to actually document a paper trail for the transfer of ownership specifically referencing the loan in ...


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