United States District Court, N.D. Illinois, Eastern Division
LLOYD M. HUGHES and LLOYD M. HUGHES ENTERPRISES, INC., Plaintiffs,
INLAND BANK AND TRUST, Defendant.
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge.
Hughes and his company, Lloyd M. Hughes Enterprises,
Inc.-referred to collectively here as Hughes-have filed suit
against Inland Bank and Trust, the owner of Hughes' loan.
Hughes alleges that the bank discriminated against him based
on his race when it denied his request to modify the terms of
his loan and initiated foreclosure proceedings, in violation
of 42 U.S.C. § 1981, 42 U.S.C. § 1982, the Fair
Housing Act (FHA), and the Equal Credit Opportunity Act
(ECOA). The Court previously dismissed Hughes' claim for
tortious interference with business expectancy.
March 2017, Inland filed this motion for summary judgment on
all four claims of race discrimination. After the Court set a
schedule for briefing the motion, it granted Hughes'
counsel leave to withdraw. The Court extended the deadline
for Hughes to respond to the motion. He did not file a
response by the extended deadline and has not sought an
extension of time. The Court therefore proceeds to rule on
the motion. For the reasons discussed below, the Court grants
summary judgment in favor of Inland.
failing to respond to Inland's Local Rule 56.1 submission
accompanying its motion for summary judgment, Hughes is
deemed to have admitted the facts set forth in that
submission which are properly supported by admissible
evidence. See N.D. Ill. R. 56.1(b)(3); Cracco v.
Bitran Express, Inc., 559 F.3d 625, 632 (7th Cir. 2009).
Inland has therefore established the following as true.
is an African-American business owner and a lifelong resident
of Chicago. He is the sole owner of Lloyd M. Hughes
Enterprises, Inc., an Illinois corporation. Hughes owns and
operates Laundryworld, a laundromat located at 6331 S. Martin
Luther King Drive in Chicago. In June 2010, Hughes borrowed
$625, 000 from First Choice Bank under the Small Business
Administration's loan program. The loan was secured by a
mortgage in favor of First Choice against the laundromat.
Hughes also signed a guarantee in favor of First Choice
secured by a mortgage on two other pieces of real property.
August 2011, Inland purchased out of receivership all of
First Choice's loans, deposits, and facilities. As a
result, Inland acquired ownership of Hughes' loan and the
accompanying guarantee. Inland assigned Robert O'Brien as
the loan officer for Hughes' loan. Sometime in 2011,
Hughes submitted a request to adjust the payment schedule of
the loan to allow twelve months of interest-only payments. In
December 2011, O'Brien denied the request, stating,
"Your business is unable to support the loan payments
for the amount of debt outstanding." Def.'s
Statement of Undisputed Material Facts (SUMF), Ex. J. He
further indicated that the bank believed Hughes needed
"to reduce this debt down to a more manageable
amount" and that "[t]he way to do that is to sell
at least one of the homes that are securing this loan as
then left Inland. As a result, Inland had to assign
Hughes' loan to another loan officer. O'Brien met
with other Inland employees to determine to whom the loan
should be assigned. Inland decided to transfer the loan to
Mark Reid, an employee in its special assets division. The
special assets division manages troubled loans, and officers
in this division try to rehabilitate the loans by helping the
borrowers improve business operations. Inland assigned
Hughes' loan to this division based on his earlier
statements to O'Brien that he was having difficulty
early 2012, Hughes asked Reid to adjust the loan payment
schedule to permit interest-only payments for twelve months.
On February 16, 2012, Reid informed Hughes that Inland had
approved the request and needed certain documentation from
Hughes to finalize the modification. Hughes did not provide
this paperwork until April 2012. Once finalized, the
modification permitted interest-only payments for twelve
months beginning February 24, 2012. Hughes made all of these
this interest-only period, Hughes also approached Reid about
extending the term of the loan from twelve years to
twenty-two or twenty-five years, because he anticipated not
being able to return to full payments at the end of the
twelve-month period. Once the interest-only period ended,
Hughes stopped making full payments on the loan. Reid
informed Hughes that, in order for Inland to consider the
request for the extension, he would need to provide Inland
with financial statements and try to bring the loan current
by paying as much as he could towards the overdue payments.
By September 2013, Reid had received all of Hughes'
financial statements, but Hughes still had not caught up on
his loan payments. After a review of these statements, Reid
determined that Hughes had not shown a sufficient increase in
net income to justify a modification of the loan terms. Reid
also determined that Hughes would not be able to make
payments on the loan as currently written.
loan was then assigned to Inland's SBA resources
division, which was managed by Colleen Ryan. On September 26,
2013, Inland sent Hughes a notice of default. Hughes called
Ryan on her cell phone number, which he obtained from an
Inland employee. Hughes later testified that Ryan was
unfriendly during this phone call and that this was because
she could tell from his voice that he is African-American.
Ryan testified that she was frightened because she had never
met Hughes and yet he brought up personal details about her
background and her children.
April 2014, Inland had initiated foreclosure proceedings in
the Circuit Court of Cook County.
has moved for summary judgment on the four remaining counts,
each of which involves a claim of racial discrimination. It
argues that it is entitled to summary judgment because Hughes
cannot show that ...