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Gephart v. The Wirbicki Law Group, LLC

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

June 2, 2017

Geoffrey L. Gephart and Janelle M. Gephart, Plaintiffs,
The Wirbicki Law Group, LLC, Defendant.



         Defendant's motion to dismiss, [9], is granted. The complaint is dismissed without prejudice. Plaintiffs have leave to file an amended complaint by June 23, 2017. If an amended complaint is not filed, this dismissal will convert to a dismissal with prejudice and final judgment will be entered.


         Plaintiffs, Geoffrey and Janelle Gephart, bring this action against defendant, The Wirbicki Law Group, LLC, for violating the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. Defendant moves to dismiss the complaint.

         Legal Standard

         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); see also Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). When the complaint fails to state a claim upon which relief may be granted, a motion to dismiss should be granted. Fed.R.Civ.P. 12(b)(6); see also Avila v. CitiMortgage, Inc., 801 F.3d 777, 781 (7th Cir. 2015). To survive a motion to dismiss, the complaint must provide the defendant with fair notice of a claim's basis and it must be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Iqbal, 556 U.S. at 678.

         Courts may only consider “allegations set forth in 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). Filings and decisions in cases that are related to this action may be judicially noticed. Fed.R.Evid. 201(b); see White v. Keely, 814 F.3d 883, 886 n.2 (7th Cir. 2016) (public court documents may be considered with a Rule 12(b)(6) motion). In reviewing the pleadings and any related documents, courts must construe all factual allegations as true and draw all reasonable inferences in the plaintiffs' favor. Iqbal, 556 U.S. at 678; Virnich v. Vorwald, 664 F.3d 206, 212 (7th Cir. 2011), as amended (Jan. 3, 2012). Legal conclusions and conclusory allegations do not receive that same treatment. Id.


         The Gepharts executed a mortgage to secure a promissory note for $236, 600.00. [1] ¶ 7.[1] Within a few years, the Gepharts had defaulted on that mortgage loan. Id. ¶ 8. In December 2015, the Gepharts filed for bankruptcy. Id. ¶ 9; see also In re Geoffrey Laurence Gephart a/k/a Geoffrey L. Gephart and Janelle Marie Gephart a/k/a Janelle M. Gephart, No. 15-BK-42604 (Bankr. N.D.Ill. 2015).

         In the related bankruptcy case, defendant's client, Ocwen Loan Servicing, LLC, moved for relief from the automatic stay under 11 U.S.C. § 362(d). [9-1] at 1-3. That motion for relief stated, in relevant part: “Should the Automatic Stay be lifted and/or set aside by Order of this Court or if this case is dismissed or if the debtor obtains a discharge and a foreclosure action is commenced or recommended, said foreclosure action will be conducted in the name of Ocwen Loan Servicing, LLC (the noteholder).” Id. at 2, ¶ 7. On April 14, 2016, Judge Baer granted that relief and ordered: “Ocwen Loan Servicing, LLC and its principals, agents, successors, and/or assigns are granted relief from the automatic stay provisions of 11 U.S.C. section 362(a) by modifying said stay to permit them to pursue all non-bankruptcy remedies to the property commonly known as 36 Woodridge Lane, Streamwood, IL 60107.” [9-2] at 1. The order granting relief from the automatic stay was “immediately enforce[able].” Id.

         Thereafter, Ocwen filed a complaint to foreclose the Gepharts' mortgage in the Chancery Division of the Circuit Court of Cook County, Illinois. [13-2] at 2; see also Ocwen Loan Servicing, LLC v. Gepharts et al., No. 16-CH-09208 (Ch. Ct. 2016). Judge Simko entered a Judgment of Foreclosure on November 21, 2016, holding: “[Ocwen] is entitled to the relief prayed for in the complaint including foreclosure of said mortgage upon the real estate described therein.”[2] [13-2] at 5.

         On December 8, 2016, defendant sent the Gepharts correspondence, which stated, in relevant part: “This office is attempting to collect a debt for Ocwen Loan Servicing, LLC. [. . .] As of the date of this letter, you owe $228, 893.30.”[3] [1] ¶ 11. The Gepharts allege that defendant violated the United States Bankruptcy Code by falsely representing in the correspondence that the mortgage loan was due, when in fact, it could not be collected at that time pursuant to 11 U.S.C. § 362(a)(6).[4] Id. ¶¶ 19 (citing 15 U.S.C. § 1692e(2)), 22 (citing 15 U.S.C. § 1692e(10)), 25 (citing 15 U.S.C. § 1692f(1).


         Defendant moves to dismiss the complaint for three reasons: (1) the pleadings are deficient; (2) the district court is not the proper forum for this lawsuit; and (3) no violation of § ...

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