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Colella v. First Securities Trust and Savings Bank

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

February 3, 2016




         Before the Court are Defendants First Securities Trust and Savings Bank's and Forman Real Property, LLC's motion to dismiss [10] and motion to strike Plaintiff's amended complaint [16]. For the reasons set forth below, Defendants' motion to strike [16] is denied and the motion to dismiss [10] is granted. Plaintiff is given until March 3, 2017, to file an amended complaint.

         I. Background

         This case stems from the foreclosure of a property located on North Cumberland Avenue in Chicago, Illinois (the “Property”). On September 9, 2003, Defendant First Securities Trust and Savings Bank (“First Securities”) made a residential loan of $119, 200 to Plaintiff Rocco Colella and Giuseppe A. Verzillo that was secured by the Property. [1, at 3; 10-1, at 12.] It is unclear if Plaintiff resides at the Property. His driver's license and mail-both of which were attached as exhibits to the complaint-list a home address in Bartlett, Illinois. Id. at 28, 39, 63- 66. To complicate matters, his complaint alleges that he has resided “for all times material to this complaint” in Naperville, Illinois (id. at 13, 23) as well as at the Property (id. at 1, 7, 18). Under “purpose of loan” on his mortgage application for the Property, Plaintiff checked the box “investment” instead of primary or secondary residence. [10-1, at 12.]

         Plaintiff became delinquent on his mortgage in March 2009. [1, at 28.] On July 26, 2011, First Securities commenced foreclosure proceedings in the Circuit Court of Cook County. [1, at 51.] That foreclosure action remained pending for several years. On March 29, 2015, First Securities assigned the mortgage on the Property to Forman Real Property LLC (“Forman, ” collectively with First Securities, “Defendants”). [10-1, at 16-18.]

         On December 30, 2015, Plaintiff filed a pro se complaint asserting claims under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (“FDCPA”), the Truth In Lending Act, 15 U.S.C. § 1601 et seq. (“TILA”), as well as claims for identity theft. The complaint alleges that Forman and First Securities attempted to collect a debt from Plaintiff at an unspecified time but refused to provide certain information that Plaintiff requested and made unspecified false representations. The core of Plaintiff's allegations seem to be that Defendants falsely represented that they have a right to foreclose on the Property and are now “utilizing the statutory foreclosure process for this state for the purpose of engaging in a scheme that aims to conceal the identity, source, and destination of illicitly-obtained money.” [1, at 4-5.] He claims that Defendants tricked him into giving up his personal information by “sending out what looks like official communications from banks * * * asking to confirm private personal information.” Id. at 14. He also alleges that Defendants refused “to provide verification” of who they were when attempting to collect on Plaintiff's mortgage. Id. at 3. Furthermore, Plaintiff claims that he served a “notice to rescind” on First Securities on May 14, 2015. Because Defendant allegedly failed to respond within twenty days, Plaintiff claims that his mortgage obligations are void and Defendant violated TILA by not returning the Property and his money. Id. at 24-25.

         Defendants filed a motion to dismiss on March 28, 2016 [10]. Plaintiff then amended his complaint on May 27, 2016 [15], but did not seek leave from Defendant or the Court before doing so. Plaintiff's new complaint is identical to the original, except that he changed the title of his “identify theft” claims to “conversion.” Otherwise, his substantive allegations are unchanged. Nevertheless, Defendants filed a motion to strike the amended complaint [16].

         On June 9, 2016, the Circuit Court of Cook County entered a judgment of foreclosure on the Property. On October 25, 2016, the Property was sold and the Sheriff's sale was approved.

         II. Legal Standard

         To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint first must comply with Rule 8(a) by providing “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), such that the defendant is given “fair notice of what the * * * claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) (alteration in original). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the “speculative level.” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or a ‘formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). Dismissal for failure to state a claim under Rule 12(b)(6) is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558. In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court accepts as true all of Plaintiff's well-pleaded factual allegations and draws all reasonable inferences in Plaintiff's favor. Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir. 2007). The “documents attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to his claim” and “may be considered by the district court in ruling on the motion to dismiss * * * without converting [it] to a motion for summary judgment.” Wright v. Associated Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir. 1994).

         III. Analysis

         A. Motion to Strike

         Before reaching Defendants' motion to dismiss, the Court first addresses Defendants' motion to strike the amended complaint [16]. Federal Rule of Civil Procedure 15 permits a party to amend its complaint once as a matter of course either within 21 days after serving it or 21 days after service of responsive pleading. Fed.R.Civ.P. 15(a)(1). “In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Here, Plaintiff waited until May 27, 2016-sixty days after being served with Defendants' motion to dismiss-to file an amended complaint [15]. Plaintiff did not seek the Court's leave or Defendants' consent before doing so. For these reasons, Defendant moves to strike the amended complaint [16].

         Rule 15 also directs that courts “should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “This liberal policy of granting amendments is based in part on the belief that decisions on the merits should be made whenever possible, absent countervailing considerations.” Olech v. Vill. of Willowbrook, 138 F.Supp.2d 1036, 1040 (N.D. Ill. 2000) (citation omitted). A court should give leave to amend “‘[i]n the absence of any apparent or declared reason-such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of the allowance of the amendment, [or] futility of amendment.'” Barry Aviation, Inc. v. Land O'Lakes Mun. Airport Comm'n, 377 F.3d 682, 687 (7th Cir. 2004) (citation omitted). Courts also hold pro se submissions to a less stringent standard than formal pleadings drafted by lawyers, and liberally grant pro se plaintiffs the opportunity to amend their complaint. Bridges v. Gilbert, 557 F.3d 541, 546 (7th Cir. 2009); Grady v. Ocwen Loan Servicing, LLC, ...

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