United States District Court, N.D. Illinois, Eastern Division
THOMAS H. KANE, Plaintiff,
BANK OF AMERICA, NATIONAL ASSOCIATION and WELLS FARGO BANK, N.A., Defendants.
MEMORANDUM OPINION AND ORDER
Kane alleges in this suit that Bank of America and Wells
Fargo Bank (together, the “Banks”) committed
common law fraud and violated the Illinois Consumer Fraud Act
(“ICFA”) in connection with their processing and
denial of his requests for a mortgage modification. Doc. 55.
The Banks have moved the court to stay and abstain from
hearing this case under the doctrine set forth in
Colorado River Water Conservation District v. United
States, 424 U.S. 800 (1976), pending resolution of
earlier filed foreclosure proceedings in Illinois state
court. Doc. 123. The motion is granted.
2006, Kane took out a $470, 000 loan from Wells Fargo and
secured it with a mortgage on his home. Doc. 55 at
¶¶ 86, 88, 90. Wells Fargo transferred the mortgage
to Bank of America, but continued to service it. Id.
at ¶¶ 66-67. When Kane was laid off in 2009, he
sought a loan modification. Id. at ¶¶
92-93. Thus began a multi-year back-and-forth between Kane
and the Banks over whether and how they might modify his
repayment terms. Id. at ¶ 76. In the end, the
Banks denied all of Kane's requests and proceeded with
foreclosure. Id. at ¶ 85.
commenced on March 24, 2011, when Bank of America filed a
foreclosure action against Kane in the Circuit Court of Cook
County, Illinois. Bank of Am., N.A. v. Kane, No.
2011 CH 11338 (Cir. Ct. Cook Cnty., Ill.) (complaint
reproduced at Doc. 124-1 at 6-40). Well over two years later,
on November 9, 2013, Kane brought this suit against the Banks
in federal court, alleging common law fraud and violations of
the ICFA, the Racketeer and Corrupt Organizations Act
(“RICO”), and the Fair Debt Collection Practices
Act (“FDCPA”). Doc. 1. The gist of Kane's
suit is that the Banks strung him along without intending to
modify his loans and violated federal guidelines, in order to
milk extra late fees and interest from him.
case was originally assigned to Judge Marovich, who in August
2014 granted the Banks' motion to dismiss. Doc. 23
(reported at 2014 WL 4198295 (N.D. Ill. Aug. 25, 2014)). Kane
then sought and, in June 2015, obtained permission from Judge
Marovich to file an amended complaint that did not include
the RICO claims, the FDCPA claims, and some of the originally
pleaded fraud claims. Doc. 40 (reported at 2015 WL 3798142
(N.D. Ill. June 17, 2015)). The following day, the case was
reassigned to the undersigned judge. Doc. 41. Kane then moved
for reconsideration of Judge Marovich's rulings insofar
as they precluded him from re-pleading his RICO claims. Doc.
44. The court denied that motion in September 2015, Doc. 54,
and Kane filed a second amended complaint, Doc. 55, which the
Banks answered in November 2015, Doc. 60. The court then
urged the parties to get moving on discovery, which had only
recently begun, and the parties engaged in unsuccessful
settlement negotiations before Magistrate Judge Kim. Docs.
46, 61-68. The discovery deadline has been extended three
times, most recently to November 18, 2016. Docs. 73, 87, 101,
on July 29, 2014, Kane in the foreclosure action asserted as
affirmative defenses the same fraud-based theories underlying
his claims in this federal suit. Doc. 124-1 at 55-122. Bank
of America twice moved to strike those defenses, prompting
Kane to amend twice more. Id. at 124; Doc. 124-2 at
2-113, 115, 117-183. Kane's third and final amended
affirmative defenses sounded in common law promissory fraud
and violations of the ICFA, closely tracking the allegations
of his federal complaint. Doc. 124-2 at 117-183. The state
court struck those defenses with prejudice on June 2, 2016,
and then denied Kane's motion for reconsideration on
October 5, 2016. Id. at 185, 187. On October 11,
2016, Bank of America moved for summary judgment in the
foreclosure action, id. at 189, and after briefing
and oral argument, the state court granted the motion on
December 15, 2016, Doc. 133-1 at 5. The state court also
issued a judgment for foreclosure and sale and appointed a
sale officer to auction the property. Id. at 9-13,
Colorado River doctrine provides that “a
federal court may stay or dismiss a suit in federal court
when a concurrent state court case is underway, but only
under exceptional circumstances and only if it would promote
‘wise judicial administration.'” Freed v.
JPMorgan Chase Bank, N.A., 756 F.3d 1013, 1018 (7th Cir.
2014) (quoting Colorado River, 424 U.S. at 818);
see also Caminiti & Iatarola, Ltd. v. Behnke
Warehousing, Inc., 962 F.2d 698, 700 (7th Cir. 1992).
The Supreme Court “has cautioned that abstention is
appropriate only in ‘exceptional circumstances, '
and has also emphasized that federal courts have a
‘virtually unflagging obligation … to exercise
the jurisdiction given them.'” AXA Corporate
Solutions v. Underwriters Reins. Corp., 347 F.3d 272,
278 (7th Cir. 2003) (alteration in original) (citation
omitted) (quoting Colorado River, 424 U.S. at 813,
817). In determining whether to abstain, the court's task
is “not to find some substantial reason for the
exercise of federal jurisdiction by the district court;
rather, the task is to ascertain whether there exist
exceptional circumstances, the clearest of justifications,
that can suffice under Colorado River to justify the
surrender of that jurisdiction.” Moses H. Cone
Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
25-26 (1983) (internal quotation marks and emphases omitted).
Colorado River analysis has two steps. First, the
court asks “whether the state and federal court actions
are parallel.” Freed, 756 F.3d at 1018;
see also Caminiti, 962 F.2d at 700. If the
proceedings are not parallel, Colorado River
abstention must be denied. Freed, 756 F.3d at 1018.
If the proceedings are parallel, the court then must weigh
ten non-exclusive factors to determine whether abstention is
concedes in his opposition brief that this federal suit and
the state court foreclosure action are parallel. Doc. 128 at
13. This concession is a waiver. See Mays v. BNSF Ry.
Co., 974 F.Supp.2d 1166, 1177-78 (N.D. Ill. 2013)
(holding that the plaintiff “affirmatively
waived” an argument by conceding the point).
second step in the Colorado River analysis requires
examining and balancing these ten non-exclusive factors:
1) whether the state has assumed jurisdiction over property;
2) the inconvenience of the federal forum;
3) the desirability of avoiding piecemeal litigation;
4) the order in which jurisdiction was obtained by the