United States District Court, N.D. Illinois, Eastern Division
THERESA B. FOX, Plaintiff,
MANLEY, DEAS, & KOCHALSKI, LLC and SETERUS, INC, Defendants.
MEMORANDUM OPINION AND ORDER
B. Zagel United States District Judge
Theresa B. Fox brings claims under the Real Estate Settlement
Procedures Act, and Illinois state law against Defendant
Seterus, Inc., and she brings a claim under the Fair Debt
Collection Practices Act against Defendant Manley, Deas, &
Defendants' Motions to Dismiss are before me. For the
following reasons, Seterus's motion is granted in part
and denied in part, and MDK's motion is granted.
following facts are taken from the Plaintiff's Complaint
and are accepted as true for purposes of resolving these
motions to dismiss. Fox owns a home in Chicago on 1854 North
Kedzie Ave. She alleges that she has maintained this home as
her primary residence. This case arises out of the
foreclosure proceedings that were initiated against Fox in
Illinois state court in November 2011. The court entered
judgment against Fox in those foreclosure proceedings in
The Trial Period Plan
January 2014, Fox submitted a loss mitigation application to
her mortgage loan servicer at the time, Bank of America, N.A.
(“BANA”). In February 2015, BANA approved Fox for
a trial period plan (TPP) under the federal Home Affordable
Modification Program (HAMP).
the TPP offer, Fox would be required to make three monthly
payments of $1, 229.54 to BANA. If she made these payments,
her mortgage servicer would permanently modify her mortgage.
The TPP also ensured that BANA would not sell the home at a
foreclosure sale if Fox complied with the TPP terms. BANA
could go forward with a sale if it informed Fox of the sale
in writing or if Fox did not qualify for a permanent loan
sent Fox this TPP offer on February 3, 2015, instructing Fox
that she could accept the offer by making her first monthly
payment in a timely manner. Fox sent her first payment to
BANA on March 9, 2015. She sent her second payment under the
TPP to BANA on March 25, 2015. At some point in March 2015,
BANA transferred the servicing rights on Fox's loan to
Defendant Seterus. On April 27, 2015, Fox sent her the third
TPP payment by check to Seterus.
completing the three months payment required under the TPP,
Fox continued to send a monthly check to Seterus up until she
filed this complaint in May 2016. Despite making these
payments, she never received a permanent modification of the
loan. In September 2015, Fox hired an attorney to follow up
with Seterus about the status of her permanent modifications.
On September 16, 2015, a Seterus representative said that the
final modification process was delayed because of the
transfer from BANA. When Fox's attorney called again in
October 2015, a Seterus representative said that no notes had
been entered on Fox's loan record. During this October
call, the Seterus representative told Fox's attorney that
her matter was being “escalated” and that there
should be enough time to cancel or postpone the scheduled
November 23, 2015 foreclosure on Fox's home. On November
9, a Seterus representative requested a copy of the TPP
because the company did not have enough information about the
TPP in their system. Between November and the filing of this
Complaint in May 2016, Fox's attorney contacted Seterus
at least 16 times. The attorney was continually advised that
Fox's matter was escalated, and the file was in the
process of converting the TPP to a permanent modification.
February 2016, Seterus stopped accepting the monthly payments
from Fox. The company returned Fox's check for $1230
uncashed, saying “the funds are insufficient to bring
the loan current, and the item must be certified.” This
happened again in March 2016. In April 2016, Seterus notified
Fox that the loan was being transferred to a new servicer,
Selene. At the time of Seterus's transfer to Selene, no
permanent modification of the loan had taken place.
The Foreclosure Sale
of her inability to receive a permanent loan modification,
Fox took steps to prevent her home from being sold in a
foreclosure sale. A sale was scheduled for November 23, 2015.
Fox's attorney contacted Seterus's attorney,
Defendant MDK, to request a stay or continuance of the
foreclosure prior to the November 23 sale. MDK refused to
voluntarily cancel the sale. When Fox's attorney said he
would need to file an emergency motion to stay the
foreclosure, the MDK attorney said that he would seek
sanctions if such a motion were filed.
November 12, 2015, Fox filed an emergency motion in Illinois
state court seeking a stay of the November foreclosure. MDK
did not follow through on the threat to seek sanctions. The
court granted Fox's motion to stay for a period of 60
foreclosure sale of the home was scheduled to occur on May 2,
2016. At no point did Defendants Seterus or MDK take steps to
cancel or stay the sale. Fox alleges that Seterus and MDK
caused notice of the sale to be published on March 30, 2016,
April 6, 2016, and April 13, 2016. On April 27, 2016, Fox
filed another emergency motion to avoid having the house
sold. The court granted Fox's motion to stay the May
parties have also cited documents in the public record, which
I can consider when ruling on a motion to dismiss. Fox has
filed for bankruptcy and documents filed in those bankruptcy
proceedings show a tenant residing at the Kedzie home as of
April 2014. Filings in that bankruptcy from January 2015 list
the same tenant residing at the Kedzie home. Furthermore, the
bankruptcy filings show that Fox owns up to ten properties,
all rented out to tenants. Fox states in her briefs that she
listed the Kedzie home as her address on her bankruptcy
filing and claimed it as exempt, but she has not filed these
bankruptcy records with this Court.
motion to dismiss under Fed.R.Civ.P. 12(b)(6) does not test
the merits of a claim, but rather the sufficiency of the
complaint. Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In deciding a 12(b)(6) motion, the
Court accepts all well-pleaded facts as true and draws all
reasonable inferences in favor of the plaintiff. Id.
at 1521. To survive a 12(b)(6) motion, “a complaint
must contain sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
deciding a Rule 12(b)(6) motion, the Court may also consider
documents attached to the pleading without converting the
motion into one for summary judgment. Wigod v. Wells
Fargo Bank, N.A., 673 F.3d 547, 556 (7th Cir. 2012). Fox
has attached the TPP approval form that BANA sent her, proof
of payments to her mortgage servicers, and other documents
produced in the course of her relationship with the
defendants. The Court may also consider public documents that
are proper subjects for judicial notice, though
“caution is necessary, of course.” Id.
the allegations against MDK arise out of Fox's dispute
with Seterus, I consider Fox's claims against Seterus
before turning to the claims against MDK.
Fox's Claims Against Seterus
asserts causes of action against Seterus for (1) breach of
contract under Illinois law; (2) promissory estoppel under
Illinois law; (3) violations of the Real Estate Settlement
Procedures Acts, 12 U.S.C. § 2601 et seq.
(“RESPA”); and (4) violations of the Illinois