United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
L. Alonso, Judge
Andrew and Heather Hahn, bring this case under the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§ 1692 et seq, and the Illinois Consumer Fraud
and Deceptive Practices Act (“ICFA”), 815 ILCS
505/c, against defendants Wells Fargo Bank, N.A.
(“Wells Fargo”) and Anselmo Lindberg Oliver LLC
(“ALO”). Defendants separately move to dismiss.
For the following reasons, their motions are granted.
January 3, 2002, plaintiff Heather Hahn, then unmarried and
known by her maiden name, Heather Johnson, executed a
mortgage secured by her home, located at 305 North Street in
Mazon, Illinois (“the Mazon property”). On
February 10, 2012, after Ms. Hahn fell behind in her
payments, defendant Wells Fargo filed a Complaint for
Foreclosure in the Circuit Court of Grundy County, Illinois,
naming Ms. Hahn and her husband, plaintiff Andrew Hahn, as
defendants. Among the relief sought was foreclosure of the
mortgage and “a personal deficiency judgment against .
. . Heather Johnson only, if sought.” (Wells Fargo Mot.
to Dismiss, Ex. 1 at 3.) On July 20, 2012, Ms. Hahn filed for
Chapter 13 bankruptcy. ALO, a law firm, filed an appearance
for Wells Fargo in the bankruptcy court. On October 25, 2012,
the bankruptcy court confirmed the Chapter 13 plan of
reorganization. However, in 2014 Ms. Hahn began to fall
behind in her payments again, and on March 17, 2015, Wells
Fargo moved for relief from the automatic stay. Mot. for
Relief from Automatic Stay, In re Heather D. Hahn,
No. 12-28760 (Bankr. N.D.Ill. March 17, 2015), ECF No. 58.
The motion was granted on March 27, 2015. On October 6, 2015,
the trustee moved to dismiss the case because Ms. Hahn had
missed plan payments. The bankruptcy court granted the motion
on October 23, 2015. In November 2015, Wells Fargo resumed
litigating the foreclosure case against Ms. Hahn.
September 2, 2015, Ms. Hahn purportedly transferred her
interest in the Mazon property to herself and Mr. Hahn by
quitclaim deed. A week later, on September 9, 2015, Mr. Hahn
filed a Chapter 13 bankruptcy petition (Case No. 15-30730),
listing defendants as creditors. He filed a proposed plan of
reorganization that included monthly payments to Wells Fargo
to make up the mortgage arrearage. On February 5, 2016, the
bankruptcy court approved Mr. Hahn's Chapter 13 plan.
had notice of Mr. Hahn's bankruptcy, but even so, they
proceeded with the foreclosure action, with ALO representing
Wells Fargo in that case throughout the remainder of 2015 and
early 2016. On February 10, 2016, the Illinois court granted
summary judgment for Wells Fargo.
30, 2016, plaintiffs filed this action. Their complaint
consists of two counts. In Count I, they assert violations of
the FDCPA against ALO for making misrepresentations
concerning uncollectible debts and unfairly attempt to
collect a legally uncollectible debt, pursuant to 15 U.S.C.
§§ 1692e(2), 1692e(1), and 1692f, by litigating the
foreclosure action. In Count II, they assert violations of
the ICFA against Wells Fargo for its unfair or deceptive
conduct in proceeding with the foreclosure action even after
Mr. Hahn filed his bankruptcy petition.
motion under Rule 12(b)(6) tests whether the complaint states
a claim on which relief may be granted.” Richards
v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012). Under
Rule 8(a)(2), a complaint must include “a short and
plain statement of the claim showing that the pleader is
entitled to relief.” Fed.R.Civ.P. 8(a)(2). The short
and plain statement under Rule 8(a)(2) must “give the
defendant 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) (ellipsis omitted).
federal notice-pleading standards, a complaint's
“[f]actual allegations must be enough to raise a right
to relief above the speculative level.”
Twombly, 550 U.S. at 555. Stated differently,
“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) (quoting
Twombly, 550 U.S. at 570). “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.”
Id. (citing Twombly, 550 U.S. at 556).
“In reviewing the sufficiency of a complaint under the
plausibility standard, [courts must] accept the well-pleaded
facts in the complaint as true, but [they] ‘need[ ] not
accept as true legal conclusions, or threadbare recitals of
the elements of a cause of action, supported by mere
conclusory statements.'” Alam v. Miller Brewing
Co., 709 F.3d 662, 665-66 (7th Cir. 2013) (quoting
Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009)).
FDCPA CLAIM AGAINST ALO
FDCPA was enacted “to eliminate abusive debt collection
practices, to ensure that debt collectors who abstain from
such practices are not competitively disadvantaged, and to
promote consistent state action to protect consumers.”
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich
LPA, 559 U.S. 573, 577 (2010) (citing 15 U.S.C. §
1692(e)). Under the FDCPA, “[a] debt collector may not
use any false, deceptive, or misleading representation or
means in connection with the collection of any debt.”
15 U.S.C. § 1692e. In particular, 15 U.S.C. §
1692e(2) prohibits the “false representation of . . .
the character, amount or legal status of any debt, ”
and section 1692e(10) prohibits “[t]he use of any false
representation or deceptive means to collect or attempt to
collect any debt.” Further, 15 U.S.C. § 1692f
prohibits a debt collector from using “unfair or
unconscionable means to collect or attempt to collect a
contend that ALO violated the above provisions by litigating
the foreclosure case even after Mr. Hahn filed his bankruptcy
petition, at which point ALO should have known that the
foreclosure action was automatically stayed under sections
362 and 1301 of the Bankruptcy Code. ALO responds that the
foreclosure action was not an attempt to collect a debt from
Mr. Hahn at all, so ALO did not violate the FDCPA by
litigating the foreclosure action while Mr. Hahn's
bankruptcy was pending.
FDCPA defines debt as an “obligation . . . of a
consumer to pay money, ” § 1692a(5), and it
imposes liability only when an entity is attempting to
collect “debt, ” see §§ 1692e,
1692f; Ho v. ReconTrust Co., NA, 840 F.3d 618, 621
(9th Cir. 2016). Courts across the nation are split on the
issue of whether an attempt to enforce a security interest is
an attempt to collect a debt to which the FDCPA applies.
“It appears that the majority view is that mortgage
foreclosure is not debt collection within the meaning of the
FDCPA.” Aurora Loan Servs., LLC v. Kmiecik,
992 N.E.2d 125, 133 (Ill.App.Ct. 2013) (collecting cases);
see Boyd v. J.E. Robert Co., No. 05-CV-2455, 2013 WL
5436969, at *9-11 (E.D.N.Y. Sept. 27, 2013) (citing cases),
aff'd on other grounds, 765 F.3d 123 (2d Cir.
2014). The minority view-but the view of the majority of
federal appellate courts that have considered the question-is
that “the act ...