United States District Court, N.D. Illinois, Eastern Division
ANSARULLAH & DAPHNE DAWOUDI, on behalf of themselves and a class, Plaintiffs,
NATIONSTAR MORTGAGE, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
W. DARRAH United States District Court Judge
Ansarullah and Daphne Dawoudi (“Plaintiffs”) have
filed a Motion to Stay All Proceedings in Light of Pending
Appeal in a Related Action . For the reasons set forth
below, Plaintiffs' Motion  is granted. In addition,
the Defendant's Motion to Dismiss  is denied without
prejudice with leave to refile pending the outcome of the
brought this class action against Defendant for alleged
violations of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et.
seq. Plaintiffs contend that the Defendant violated the
FDCPA by alleging in a state-court foreclosure complaint that
Plaintiff Ansarullah Dawoudi is “claimed to be
personally liable for the deficiency, if any, ” despite
knowing that the FHA [Federal Housing Administration
(“FHA”)], which insured the Plaintiffs' loan,
had a longstanding policy of not authorizing lenders to
pursue deficiency judgments when the borrower, like
Plaintiffs, defaulted due to financial hardship.
seek to stay this matter, including briefing on the pending
motion to dismiss (Dkt. No. 19), in light of the pending
consolidated appeal in the cases of Heng v. Heavner
Beyers Mihlar, LLC, No. 16-1668 (7th Cir.) (N.D. Ill.
Case No. 1:15-cv-8454, Norgle, C.); Gierke v. Codilis and
Associates, No. 16-2051 (7th Cir.) (N.D. Ill. Case No.
1:15-cv-11618, Gettleman, J.)); and Zuniga v. Pierce and
Associates, No. 16-2052 (7th Cir.) (N.D. Ill. Case No.
1:16-cv-1897 (Shadur, J.). The issue presented in the pending
appeal involves whether plaintiffs, there, alleged that a
state-court foreclosure complaint filed against them violated
the FDCPA because it alleged that they were “claimed to
be personally liable for [a] deficiency” when the FHA,
the insurer of the loans, had not and would not as a matter
of policy request or authorize the lenders to pursue a
deficiency judgment against them. Plaintiffs in the appeal,
just as in this case, allege the statement in each
state-court foreclosure action is false, misleading, or
deceptive in violation of the FDCPA.
power to stay proceedings is incidental to the power inherent
in every court to control the disposition of the causes on
its docket with economy of time and effort for itself, for
counsel, and for litigants.” Landis v. N. Am.
Co., 299 U.S. 248, 254 (1936). In deciding whether to
enter such a stay, courts consider the following factors: (i)
whether a stay will unduly prejudice or tactically
disadvantage the non-moving party, (ii) whether a stay will
simplify the issues in question and streamline the trial, and
(iii) whether a stay will reduce the burden of litigation on
the parties and on the court. Pfizer Inc. v. Apotex
Inc., 640 F.Supp.2d 1006, 1007 (N.D. Ill. 2009) (citing
Tap Pharmaceutical Prods., Inc. v. Atrix Laboratories,
Inc., 2004 WL 422697, at *1 (N.D. Ill. Mar. 3, 2004)). A
court has broad discretion in exercising its authority to
stay. In re Groupon Derivative Litig., 882 F.Supp.2d
1043, 1045-46 (N.D. Ill. 2012) (citing Trippe Mfg. Co. v.
Am. Power Conversion Corp., 46 F.3d 624, 629 (7th Cir.
these guidelines here, the Motion is granted. A stay will
simplify the litigation. In this case, Plaintiffs complain
that the use of a complaint seeking a deficiency judgment is
false or misleading in violation of the FDCPA because the FHA
had not and would not as a matter of policy request or
authorize the lenders to pursue a deficiency judgment against
them. That is the central issue being considered in the
pending consolidated appeal. A ruling reversing and remanding
the three cases on appeal will simplify the issues in the
instant matter as the opinion of the Court of Appeals will be
instructive to the parties in focusing discovery and in
briefing and to the court in making its decisions. Because
any ruling affirming the dismissals in those cases would be
dispositive here, a stay is appropriate in this case. In
addition, a stay would preserve the resources of the parties
and reduce the burden of litigation on the court.
argues that a stay will not simplify the issues presented in
this matter and will not reduce the burden of litigation on
the parties. Defendant claims that because the cases in the
consolidated appeal were dismissed, this Court will also
dismiss the Plaintiffs' claims presented here. This
argument is without merit. Granting a dismissal in this case
would not result in any quicker resolution of this case if
the Seventh Circuit remands the pending appeal. Moreover, if
the Seventh Circuit reverses the cases, a stay will have
saved not only the parties' resources but the Court's
Defendant's argument that it may hinder its ability to
proceed with the foreclosure proceedings because “[i]t
is a well known tactic of foreclosure defendants to try and
use separate litigation to stall or delay foreclosure
proceedings” is purely speculative. Defendant has not
demonstrated how it would be prejudiced. The Court cannot say
with certainty that the Defendant would be unduly prejudiced
if a stay is entered.
a decision in the pending appeals would potentially be
entirely dispositive of this case and, at a minimum, simplify
the issues for the parties and the Court, the stay requested
by Plaintiffs is warranted in this case. The Motion to Stay
is granted. Defendant's Motion to Dismiss is denied
without prejudice with leave to refile pending the outcome of
reasons stated above, Plaintiffs' Motion to Stay  is
granted. Defendant's Motion to Dismiss  is denied
without prejudice with ...