United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
MATTHEW F KENNELLY United States District Judge
Minter filed suit against five defendants, alleging that they
engaged in a fraudulent home equity-stripping scheme in which
they unfairly and misleadingly induced her to obtain a
reverse mortgage on her home and then deprived her of the
proceeds. Minter claims the defendants violated the Civil
Rights Act, 42 U.S.C. § 1981; the Fair Housing Act, 42
U.S.C. § 3605; and the Illinois Consumer Fraud Act
(ICFA), 815 ILCS 505. She also asserts state-law claims for
conversion, civil conspiracy, and breach of fiduciary duty.
One of the defendants, Dennis Both, has moved for summary
judgment on all of the claims asserted against him. For the
reasons stated below, the Court denies Both's motion.
Court takes the facts in the light most favorable to Minter,
the non-moving party. Minter is an elderly African-American
woman who owns a home on the west side of Chicago. She lives
there with her granddaughter, LaShon Minter Williams, and her
granddaughter's husband, Arik Williams. Minter acquired
title to the home in 1992 and included LaShon Williams's
name on the deed, because Minter wants her to own the home
when she passes away. (The Court will refer to LaShon Minter
Williams as "Williams" for the remainder of this
opinion.) In January 2011, Minter allowed Williams and Arik
to take out a mortgage on the home in order to make
improvements to the property.
March 2013, Mark Diamond came to Minter's door and
offered his remodeling services. He explained to her that
there was a free government program for senior citizens that
would allow her to remodel her home. He described possible
improvements to her property, including removing her bathtub
and adding a shower with a sliding door, building a new
porch, and upgrading the kitchen and bedroom. He told her
that she could apply for the program and that these
improvements would not cost her any money.
after this initial conversation, Diamond contacted Williams
to discuss the fact that her name was on the title to the
house. He told her that she would need to sign her interest
over to Minter in order for Minter to be eligible for the
free home repairs. Diamond told Williams that he would
restore her name to the title after Minter had been approved.
An employee at Primary Title Services, LLC prepared a
quitclaim deed. Minter was unaware of this conversation
after the initial conversation in March 2013, Diamond
returned to Minter's home with Gary Bohn, an employee of
American Fidelity Financial Mortgage Services, Inc., and
Jaclyn Unger, an insurance agent with AXA Advisors. Diamond
told Minter to sign several documents so that he could begin
the home improvements. She believed that these documents were
an application for the free program that Diamond had told her
about. In fact, the documents were a loan application for a
reverse mortgage that Bohn later submitted in Minter's
name. Minter was unaware that the defendants were applying
for a reverse mortgage on her behalf. Unger also submitted an
application for life insurance in Minter's name.
regulations require an applicant for a reverse mortgage to
receive counseling to ensure that she understands the nature
and consequences of the loan. A borrower who completes the
counseling receives a certificate of home equity conversion
mortgage (HECM) counseling during the loan application
process. Minter does not recall ever receiving any type of
counseling regarding a reverse mortgage. But in March 2013,
someone from Diamond's office faxed to the reverse
mortgage lender a certificate of HECM counseling bearing
April 2013, both Williams and Arik signed the quitclaim deed,
though not at the same time. The deed was later notarized by
Dennis Both, a notary and licensed attorney. Mr. Both
notarized the deed, although Minter alleges that he was not
present when either Williams or Arik signed the document.
2013, Diamond again called Both to request his notary
services. He and Diamond returned to Minter's home, where
Diamond asked her to sign more documents. Mr. Both told
Minter and Williams that he was there so that Minter
"could sign the documents for Mark to start the repairs
on the house." See Def.'s Statement of
Uncontested Facts Submitted in Supp. of Summ. J. (SUCF), Ex.
Q (LaShon Williams Dep.) at 244:21-245:4. Unbeknownst to
Minter, she had been approved for a reverse mortgage and was
signing documents to finalize the loan. She did not know that
she was borrowing money. Mr. Both notarized the mortgage
agreement, which was later recorded in June 2013. Neither
Both nor Diamond informed Minter that she had three days in
which she could change her mind and reverse the transaction.
Further, neither told Minter that she would receive a payout
of the loan proceeds, nor did they discuss with her whether
she would like to have those funds deposited electronically
instead of distributed via check. Mr. Both did tell Minter
and Williams that they were not obligated to make any
payments under this agreement. Diamond paid Both $250 for
notarizing the documents.
same time, Diamond also had Minter sign a construction
contract for home improvements with a total estimated cost of
$46, 500. The contract listed a number of repairs, including
modifications to the bathroom and rebuilding the front and
23, 2013, the lender for the reverse mortgage wired the loan
proceeds in the amount of $45, 292.07 to Primary Title, which
deposited them in an escrow account. Primary Title then
issued a check payable to Minter for this amount. Primary
Title gave the check to Bohn, who gave it to Diamond. Diamond
again visited Minter at her home and told her she needed to
sign another document in order for Diamond to start the work.
In fact, Diamond had Minter endorse the check without knowing
what she was doing. Diamond deposited the check into his
to Minter, the home repairs did not begin immediately after
this transaction. Although one of Diamond's
subcontractors eventually came to perform some work in the
bathroom, it was shoddy and incomplete. Minter and Williams
repeatedly called Diamond to ask when his men would be
returning to complete the work. Diamond promised that work
would resume, but it did not for many weeks. Around July
2013, Diamond's subcontractors began work on the kitchen
by removing all of the appliances and cabinets but then
failed to return for over a month. In September 2013, Diamond
claimed the work had been completed, but Minter found
numerous issues with the construction and places where the
house remained unfinished. Minter and Williams tried to get
Diamond to come back to finish the job and fix the house, but
he would not. Eventually, Minter had to hire another
contractor to complete the repairs.
December 2013, Diamond came to Minter's house and asked
her to sign a completion certificate stating that she was
completely satisfied with the work he performed. Minter
these events, Minter and Williams contend they were unaware
that Minter had taken out a reverse mortgage or of the effect
this loan would have. The defendants did not tell Minter and
Williams that, by taking out a reverse mortgage, they paid
off the mortgage they took out in 2011. The defendants did
not tell them that when the borrower of a reverse mortgage
dies or moves out, the entire loan must be repaid in order to
keep the lender from taking possession. Although Minter was
aware of the life insurance policy, the defendants did not
tell her that they took out the life insurance policy so
that, in the event of her death, Williams would receive a
payout that she could use to pay off the reverse mortgage.
For this reason, Williams and Minter were unaware that they
needed to keep up with payments on the life insurance policy
in order to keep the house.
result of these events, Minter lost the equity in her house.
The house is now encumbered by a lien of over $116, 300 that
accrues interest and charges each month. And Williams no
longer has any ownership interest in the property.
and Williams later learned that defendants had engaged in
similar behavior in the past. Between 2000 and 2013, Diamond
was sued by twelve homeowners who made similar allegations of
fraud based on mortgage and home repair transactions. Diamond
was sued in 2003 by the Federal Trade Commission and the
Illinois Attorney General. In 2009, the Illinois Attorney
General again sued him on behalf of homeowners. In many of
these proceedings, Both represented Diamond as his attorney.
As of May 2013, eighty-four individuals had filed complaints
with the Illinois Attorney General about Diamond's
practices. In over half of these cases, Both had provided the
notarization services for the mortgage transactions. In 2016,
a circuit court in Cook County entered a permanent injunction
against Diamond and his companies and ordered him to pay
restitution of over $2 million.
filed this suit in May 2015, bringing claims against Diamond,
United Residential Services and Real Estate, Inc.
(Diamond's company), Both, Bohn, and Primary Title. In
count 1, Minter alleges that Diamond, United, and Bohn
violated the Civil Rights Act by intentionally targeting
individuals on the basis of race for their fraudulent scheme.
Minter alleges in count 2 that Diamond and Bohn violated the
Fair Housing Act by intentionally discriminating against
Minter on the basis of her race during a real estate
transaction. In count 3, Minter alleges that Diamond and Bohn
violated the Fair Housing Act because their loan scheme had a
disparate impact on African Americans. Minter alleges in
count 4 that Diamond, United, and Bohn are liable for
conversion for taking possession of Minter's loan
disbursement. In count 5, Minter alleges that Diamond,
United, Both, and Bohn engaged in deceptive conduct in
violation of the ICFA. Minter alleges in count 6 that
Diamond, United, Both, and Bohn engaged in unfair conduct in
violation of the ICFA. In count 7, Minter alleges that
Diamond, United, Both, and Bohn engaged in a civil conspiracy
to unlawfully deprive Minter of the equity in her home.
Minter alleges in count 8 that Primary Title breached its
fiduciary duty as the closing agent for the lender.
April 2016, Minter stipulated to a dismissal of all her
claims against Bohn. In November 2016, Minter voluntarily
dismissed count 8 with prejudice pursuant to a settlement
with Primary Title.
order, the Court considers Both's motion for summary
judgment. The Court therefore addresses only counts ...