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Rehman v. Pierce & Associates, P.C.

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

January 13, 2017

ATIQ U. REHMAN, et al. Plaintiffs,
PIERCE & ASSOCIATES, P.C., et al Defendants.


          SAMUEL DER-YEGHIAYAN, District Judge

         This matter is before the court on Defendant Wells Fargo Home Mortgage's (Wells Fargo) and Defendant Pierce and Associates, P.C.'s (Pierce) motions to dismiss. For the reasons stated below, Pierce's motion to dismiss the federal claims is denied and Wells Fargo's motion to dismiss is granted.


         On August 23, 2003, Plaintiff Atiq Rehman, Plaintiff Safia Rehman, and Plaintiff Shamus Rehman allegedly executed a mortgage (Mortgage) in favor of Wells Fargo to secure a promissory note. On October 1, 2014, Plaintiffs allegedly defaulted on the Mortgage. On March 30, 2015, Wells Fargo, in accordance with 735 ILCS 5/15-1502.5(c), allegedly provided grace period notice to Plaintiffs.

         Plaintiffs allege that grace period notice provided Plaintiffs with thirty days to seek housing counseling. On April 24, 2015, Wells Fargo was allegedly notified that Plaintiffs were seeking housing counseling. On May 13, 2015, Pierce, attorneys at law, filed a complaint to foreclose mortgage in the State court on behalf of Wells Fargo. Plaintiffs filed a motion to dismiss the complaint in State court, which was granted on February 9, 2016. On May 12, 2016, Plaintiffs filed the complaint in this action alleging claims under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., against Pierce (Counts I - IV) and a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), 815 ILCS 505/1 et seq., against Wells Fargo (Count V). Pierce moves to dismiss the claims in Counts I - IV pursuant to Federal Rule of Civil Procedure 12(b)(6)(Rule 12(b)(6)). Wells Fargo moves to dismiss the claims in Count V pursuant to Rule 12(b)(6) and, in the alternative, Federal Rule of Civil Procedure Rule 12(b)(1)(Rule 12(b)(1)).


         Rule 12(b)(1) requires a court to dismiss an action when it lacks subject matter jurisdiction. United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942, 946 (7th Cir. 2003)(overruled on separate grounds). If the concern of the court or party challenging subject matter jurisdiction is that “subject matter jurisdiction is not evident on the face of the complaint, the motion to dismiss pursuant to Rule 12(b)(1) would be analyzed as any other motion to dismiss, by assuming for purposes of the motion that the allegations in the complaint are true.” Id.; see also Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995)(stating that when reviewing a motion to dismiss brought under Rule 12(b)(1), the court “must accept as true all well-pleaded factual allegations, and draw reasonable inferences in favor of the plaintiff”). However, if the complaint appears on its face to indicate that the court has subject matter jurisdiction, “but the contention is that there is in fact no subject matter jurisdiction, the movant may use affidavits and other material to support the motion.” United Phosphorus, Ltd., 322 F.3d at 946. For the purpose of determining subject matter jurisdiction, the court “‘may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists.'” Ezekiel, 66 F.3d at 897 (quoting Capitol Leasing Co. v. Federal Deposit Insurance Corp., 999 F.2d 188, 191 (7th Cir. 1993)). The burden of proof in regards to a Rule 12(b)(1) motion is “on the party asserting jurisdiction.” United Phosphorus, Ltd., 322 F.3d at 946.

         In ruling on a motion to dismiss brought pursuant to Rule 12(b)(6), the court must draw all reasonable inferences that favor the plaintiff, construe the allegations of the complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 622 (7th Cir. 2012); Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). A plaintiff is required to include allegations in the complaint that “plausibly suggest that the plaintiff has a right to relief, raising that possibility above a ‘speculative level'” and “if they do not, the plaintiff pleads itself out of court.” E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007)(quoting in part Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007)); see also Morgan Stanley Dean Witter, Inc., 673 F.3d at 622 (stating that “[t]o survive a motion to dismiss, the complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face, ” and that “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged”)(quoting Ashcroft v. Iqbal, 556 U.S. 662 (2009))(internal quotations omitted).


         I. Wells Fargo Motion to Dismiss ICFA Claim

         A. Alleged Unfair Practices

         Wells Fargo argues that Plaintiffs fail to allege facts that Wells Fargo violated the ICFA. To state an ICFA claim, a plaintiff must plead “(1) a deceptive or unfair act or practice by the defendant; (2) the defendant's intent that the plaintiff rely on the deceptive or unfair practice; and (3) the unfair or deceptive practice occurred during a course of conduct involving trade or commerce.” Siegel v. Shell Oil Co., 612 F.3d 932, 934 (7th Cir.2010). Also, “a plaintiff must demonstrate that the defendant's conduct is the proximate cause of the injury.” Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 574 (7th Cir. 2012). A practice can be deemed unfair “because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.” Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663, 669 (7th Cir. 2008). Unfairness under the ICFA “depends on a case-by-case analysis.” Siegel v. Shell Oil Co., 612 F.3d 932, 935 (7th Cir. 2010).

         A plaintiff “may allege that conduct is unfair under ICFA without alleging that the conduct is deceptive.” Siegel v. Shell Oil Co., 612 F.3d 932, 935 (7th Cir. 2010). An unfair practices claim need not meet Federal Rule of Civil Procedure 9(b)'s heightened pleading standard because it is not based on fraud. Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 737 (7th Cir. 2014). Unfair conduct is that which (1) violates public policy, (2) is “so oppressive that the consumer has little choice but to submit, ” or (3) causes consumers substantial injury. Siegel, 612 F.3d at 935. Plaintiffs' complaint alleges only unfair practices against Wells Fargo.

         Plaintiffs contend the unfair practice was the filing of the lawsuit. Wells Fargo argues that the alleged improper filing of a lawsuit cannot form the basis of an ICFA cause of action. Under Illinois law, the only causes of action that can arise from the wrongful filing of a lawsuit are malicious prosecution and abuse of process. Havaco of America, Ltd. v. Hollobow, 702 F.2d 643, 646 (7th Cir. 1983). Plaintiffs argue that their claims are not based on the alleged wrongful filing of the lawsuit, but are based on Wells Fargo's “conduct outside of the foreclosure proceedings, and, in particular, the sending of the Grace Period Notice. . .” (Mot. 3). On March 30, 2015, Wells Fargo, in ...

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