United States District Court, N.D. Illinois, Eastern Division
ROBIN ZAHRAN and KAREN ZAHRAN, ABBAS ZAHRAN, as Trustee, 5457 Bay Shore Drive Trust, Plaintiffs,
BANK OF AMERICA, MBNA, LASALLE BANK, and CORELOGIC TAX SERVICES LLC, Defendants.
MEMORANDUM OPINION AND ORDER
JORGE L. ALONSO, District Judge.
Plaintiffs Robin Zahran, Karen Zahran and Abbas Zahran sue defendants Bank of America, N.A. (as successor in interest to MBNA America, N.A., ("MBNA") and LaSalle Bank, N.A. ("LaSalle")) ("BANA"), and Corelogic Tax Services LLC ("Corelogic") asserting various claims of fraud, breach of contract and defamation as well as violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. Defendant BANA moves to dismiss all counts. This Court grants the motion in part and denies it in part.
Although the issues in the Zahrans' sprawling, prolix complaint are difficult to define, it appears that this case stems from a number of transactions involving the Zahrans and BANA or its predecessors-in-interest and how these transactions were reported to credit reporting agencies.
A. Mortgage on Wisconsin Property
In February 2003, plaintiffs sought to purchase property in Door County, Wisconsin, located at 5457 Bay Shore Drive, Sturgeon Bay. In connection with the purchase, they borrowed $506, 000 from ABN/AMRO Mortgage Group., Inc., as evidenced by a promissory note secured by a mortgage on the property. The note changed hands in a number of transactions, and BANA has held it since 2008.
1. Credit reporting of note and mortgage on Wisconsin property
Robin Zahran ("Robin"), individually, and Abbas Zahran as trustee of the 5457 Bay Shore Drive Trust, signed the note as borrowers. Karen Zahran did not sign the note, but she initialed each page, as did Robin. Only Abbas Zahran signed the mortgage. (Compl. Ex. 1.)
Plaintiffs allege that, a few months after the transaction took place, Robin Zahran noticed that the lender had erroneously reported the debt as Robin and Karen Zahrans' personally, not the Trust's. The Zahrans complained to the lender, and the lender corrected the reporting accordingly. (Id. ¶ 12.) Sometime in or before 2011, after BANA had obtained the note, BANA began to report the debt as a personal obligation of Robin Zahran's again. (Id. ¶ 20.)
2. Escrow Dispute
After a dispute arose between Robin Zahran and BANA concerning the monthly mortgage payments, a lawyer for BANA wrote the following in a December 5, 2012 letter to Robin:
The Bank agrees to allow the Borrower to pay the real estate taxes directly to the appropriate governmental agency, provided that (1) the Borrower timely pays the required amounts in full, (2) the Borrower promptly provides to me or the Bank evidence of such payment, (3) if Borrower fails to timely pay the full amounts when due, the Bank may pay such amounts and the Borrower shall be obligated to repay the same in accordance with Section 9 of the Mortgage or other applicable provisions of the Note or the Mortgage, and (4) the Bank may revoke such consent or waiver at any time by notice given in accordance with the Mortgage.
(Compl., Ex. 19, December 5, 2012 Letter from Lawrence M. Benjamin to Robin Zahran.) This agreement is consistent with the terms of the mortgage, which require the borrower to pay to the lender all amounts due for certain "escrow items" such as taxes and insurance, unless the lender waives the escrow obligation. ( Id., Ex. 1 at Section 3, pp. 912-13.) However, the lender may revoke waiver of escrow "at any time" by giving notice in accordance with the terms of the mortgage. (Id. )
Robin paid for escrow items directly for a time, but he received a notice from BANA, dated September 24, 2014, notifying him that it had learned that the real estate taxes on the 5457 Bay Shore Drive property were in arrears and it was revoking its waiver of escrow. (Compl. ¶ 44.) Robin attempted to continue paying taxes directly, but he learned that defendant Corelogic had paid the taxes at BANA's direction. (Id. ¶ 47.) The Zahrans claim that they were ...