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Pintea v. Varan

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

November 22, 2016

Adrian Pintea and Marinela Pintea, Plaintiffs,
Joseph Varan, Matthew E. Gurvey, Law Offices of Matthew E. Gurvey, P.C., Defendants.


          Honorable Thomas M. Durkin United States District Judge.

         The complaint alleges that Plaintiffs have been discriminated against on the basis of race and national origin in violation of the Fair Housing Act, 42 U.S.C. § 3601 et seq. (“FHA”), and the Civil Rights Act of 1866, 42 U.S.C. §§ 1981 and 1982. In addition, the complaint alleges claims under state law for attorney malpractice and breach of contract. Jurisdiction in this Court is predicated on federal question jurisdiction over Plaintiffs' discrimination claims and supplemental jurisdiction over Plaintiffs' state law claims. Defendant Joseph Varan and Defendants Matthew E. Gurvey and Law Officers of Matthew E. Gurvey, P.C. (referred to collectively as “Gurvey”) have filed motions to dismiss the complaint. R. 10, 17, 18. For the reasons that follow, Defendants' motions are granted.


         In deciding a Rule 12(b)(6) motion, the Court may consider the complaint itself, “documents that are attached to the complaint, documents that are central to the complaint and are referred to in it, and information that is properly subject to judicial notice.” Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013). Courts also may take judicial notice of related court proceedings outside the pleadings without converting the motion to dismiss into a motion for summary judgment. See Quincy Mall, Inc. v. Parisian, Inc., 27 Fed. App'x 631, 636 (7th Cir. 2001) (“In reviewing a motion to dismiss, we may look to matters of public record outside of the pleadings, including . . . public court documents[.]”).

         While the complaint sets forth a number of legal theories on which Plaintiffs base their claims for relief, it provides only minimal factual details to support those legal theories. As best the Court can tell from the facts set forth in the complaint and the parties' briefs, Plaintiffs are immigrants from Romania who owned a house in Chicago and a small rental property nearby. They fell behind on their mortgage payments and the lender began foreclosure proceedings on both properties. Desperate to save their properties from foreclosure, Plaintiffs entered into the transactions with Defendants that are the subject of the complaint. The transactions are described in a conclusory manner as a fraudulent scheme to deprive Plaintiffs of their money and property by falsely promising the rendition of legal services to avoid the foreclosure of Plaintiffs' properties. Plaintiffs allege, also in a conclusory manner, that they were targeted for this fraudulent scheme because of their status as immigrants from Romania who would be susceptible to being deceived.

         A. Adequacy Of Factual Details Alleged In Complaint To Put Defendants On Notice Of The Conduct For Which They Are Allegedly Liable

         1. Defendant Varden

         Plaintiffs allege they were introduced to Defendant Varden through a Romanian realtor they knew. Varden convinced Plaintiffs that he could save their properties from foreclosure if they executed quit claim deeds in favor of companies he controlled. Plaintiffs executed at least one deed (apparently on the rental property) as directed by Varden. Although the complaint does not say specifically, it suggests that Varden's advice to Plaintiffs also involved having them enter into an arrangement for “group legal services.” See R. 20 at 5 (¶ 21) (alleging that Defendants Varden and Gurvey “charged a set monthly fee [for legal services] whether any service was rendered or what services were rendered”). The “Group Legal Services” contract attached to the complaint, however, is between Plaintiffs and a company called Con Praedia LLC. The latter company is not named as a defendant, and its relationship, if any, to Varden is not disclosed. Under the contract, Plaintiffs were to pay an “initiation fee” of $1, 247.22 and a monthly “membership fee” of $1, 135.25 to Con Praedia. In return, Con Praedia would provide legal services through a licensed attorney to defend the foreclosure proceedings on Plaintiffs' behalf.[1] The contract was for a term of two years.

         Plaintiffs had already made two payments under the Group Services Contract (the initiation fee and the first monthly membership fee) when they allegedly “found out that Varan and others were perpetuating a fraudulent scheme.” R. 20 at 4. Plaintiffs advised Varden they would not continue his services. He responded that he would “close” their files. But he did not return any money to Plaintiffs. In addition, the complaint alleges, Varden failed to cancel the quit claim deed he had convinced Plaintiffs to execute. But the complaint goes on to suggest that the property subject to the quit claim deed ultimately has in fact been re-conveyed to Plaintiffs. Further factual details regarding the quit claim deed and how Plaintiffs recovered the property subject to that deed are missing from the complaint.

         Neither the complaint on its face, nor Plaintiffs' response to Varden's motion to dismiss, offers a factual explanation of the conduct by Varden that might raise a right to relief under the federal statutes on which Plaintiffs rely beyond a speculative level. The only non-conclusory facts alleged as to Varden are (1) that he persuaded Plaintiffs “that he could save their home if they executed quit claim deeds in favor of companies he controlled, ” and, believing him, Plaintiffs “executed at least some of the deeds, ” R. 20 at 4 (¶ 13); and (2) that, when Plaintiffs complained about what they had come to believe was a “fraudulent scheme” engaged in by Varan and others not specifically identified, Varan “immediately responded he would ‘close' their files” but failed to return the money Plaintiffs paid or to execute a quit-claim deed conveying their property back to them, id. (¶ 14). Insofar as Varen's alleged failure to return any money to Plaintiffs is concerned, that claim fails for lack of specificity because Plaintiffs do not allege that they gave any money to Varen. The money they paid under the Group Legal Services contract was paid to Con Praedia, and Plaintiffs do not allege what connection, if any, Varen had to that company. Plaintiffs' allegation in paragraph 21 that Varan “charged a set monthly fee whether any service were [sic] rendered or what services were rendered” fails for the same reason. The only parties to the Group Legal Services contract are Plaintiffs and Con Praedia, and Plaintiffs have not alleged a factual basis for saying that Varan “charged a set monthly fee” or otherwise is liable for Con Praedia's charging of that fee.

         Plaintiffs do allege specific conduct of Varan regarding the quit claim deed, namely, that he convinced them to execute the deed in favor of certain “non-defendant companies” controlled by him. Further, Plaintiffs allege that when they told Varan they did not want his services anymore, they expected him to convey the quit-claimed property back to them but he failed to do so. At the same time, however, Plaintiffs also allege that the “non-defendant companies” in whose favor Plaintiffs executed the quit-claim deed have “agreed to execute the deeds [returning the property back to Plaintiffs] within a time certain.” R. 20 (¶ 14). Therefore, Plaintiffs' own allegations show that they did not suffer any harm as a result of the quit claim deed because it appears that they ultimately got the property back. Without any factual allegations to suggest otherwise, [2] the Court cannot say that Plaintiffs have alleged a factual basis for a claim against Varan based on the quit claim deed.

         Finally, Plaintiffs' general and conclusory allegation that Varan targeted them to be a victim of a fraudulent scheme to take their money with false promises of helping them avoid foreclosure on their properties also is not sufficient to put Varan on notice of their claim against him. The money they lost from the alleged scheme, according to the facts alleged in the complaint, was paid not to Varen but to a non-defendant company with no alleged connection to Varan, and Plaintiffs do not explain how the mere allegation that Varen suggested to them that they enter into the transaction provides a basis for holding Varen liable for their payment of money to that company. While the Court suspects Plaintiffs could provide more specific facts regarding Varan's connection to the alleged scheme to defraud, they have, for some unexplained reason, not done so. Without those additional facts, however, the complaint falls short of alleging a right to recover against Varan for his role in the alleged fraudulent scheme. The threadbare allegation that Varan acted as an advisor to Plaintiffs as to how to proceed in the foreclosure proceedings simply is not enough to hold Varan legally liable for Plaintiffs' losses.

         2. The Gurvey Defendants

         Plaintiffs' factual allegations against Gurvey are somewhat more detailed than those against Varan. According to the complaint, Con Praedia hired Gurvey to provide the legal services promised to Plaintiffs in the Group Legal Services contract. Plaintiffs signed a retainer agreement with Gurvey acknowledging that his fees were being paid by a third party. Instead of providing adequate legal services to defend against the foreclosure proceeding, Plaintiffs allege that Gurvey entered an appearance on their behalf and then did almost nothing else. Gurvey disputes that characterization of the services he rendered, setting forth in his motion to dismiss the steps he took in the foreclosure proceedings on Plaintiffs' behalf. In any event, the complaint does not provide sufficient facts to understand exactly what happened in the foreclosure proceedings. At most, the Court infers that Gurvey withdrew from his representation of Plaintiffs after they notified Varden of their desire to terminate his services, and the foreclosure proceedings continued with Plaintiffs being represented by their current attorney. ...

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