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Hunte v. Safeguard Properties Management, LLC

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

November 27, 2017

JEREMY HUNTE, Plaintiff,


          Gary Feinerman, United States District Judge.

         Jeremy Hunte sued Safeguard Properties Management, LLC and JPMorgan Chase Bank, N.A., alleging that Safeguard violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and that both defendants violated state law. Doc. 1. Defendants moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). Docs. 19, 22. The court granted the motion and allowed Hunte to replead. Docs. 48-49 (reported at 255 F.Supp.3d 722 (N.D. Ill. 2017)). Hunte filed an amended complaint, Doc. 58, and rather than respond to Defendants' motions to dismiss, Docs. 60, 63, he sought and was granted leave to file a second amended complaint, Docs. 71-73. Defendants again move to dismiss. Docs. 75, 78. The motions are granted; the FDCPA claims are dismissed with prejudice, and the state law claims are dismissed for want of subject matter jurisdiction.


         In resolving a Rule 12(b)(6) motion, the court assumes the truth of the operative complaint's well-pleaded factual allegations, though not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016). The court must also consider “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice, ” along with additional facts set forth in Hunte's brief opposing dismissal, so long as those additional facts “are consistent with the pleadings.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1019-20 (7th Cir. 2013). The facts are set forth as favorably to Hunte as those materials allow. See Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016). In setting forth those facts at the pleading stage, the court does not vouch for their accuracy. See Jay E. Hayden Found. v. First Neighbor Bank, N.A., 610 F.3d 382, 384 (7th Cir. 2010).

         A. Factual Background

         Hunte owns real property in Momence, Illinois. Doc. 73 at ¶ 11. He entered into a mortgage agreement with Chase secured by the property. Id. at ¶ 12. After falling behind on his payments, Hunte decided to execute a short sale of the property and retained an attorney to help him negotiate such a sale. Id. at ¶¶ 16-17, 21-22. Chase ordered an appraisal of the property in connection with its approval of Hunte for “pre-foreclosure.” Id. at ¶¶ 26-27.

         On July 28, 2016, an agent of Hunte's attorney visited the property to check the mail while Hunte was out of town for work. Id. at ¶ 30. The mail included a letter from Chase, which Hunte's attorney also received directly, stating: “We've been notified that your property is vacant. If this is incorrect and you're still living in or maintaining the property, please contact us … . If we don't receive your response [by August 3, 2016], we'll secure the property, which may include changing the locks and winterizing it.” Id. at ¶¶ 31-32. The letter listed “Property.” as the contact e-mail and warned Hunte that Chase would “assess any costs related to securing and maintaining the property to [his] loan.” Doc. 73-1 at 20. The letter further instructed Hunte that “[i]f the property is vacant, [Hunte] should contact [his] insurance company to find out how this may affect … coverage.” Ibid.

         Hunte's attorney made several unsuccessful attempts to inform Chase that Hunte had not abandoned the property. Doc. 73 at ¶¶ 33-36. After returning home on August 24, 2016, Hunte, too, attempted to inform Chase that he still lived on the property. Id. at ¶¶ 38-39.

         Sometime after September 8, 2016, Hunte again left town for work. Id. at ¶ 42. On September 14, Hunte learned from a neighbor that Safeguard employees or agents had spoken with the neighbor about Hunte's property. Id. at ¶¶ 44-45. Safeguard is a corporation that “markets its services to mortgage companies with delinquent and defaulted borrowers.” Id. at ¶ 5. Safeguard “advertises field services that it provides to its client, and among these services are communicating with delinquent borrowers on behalf of mortgage companies, contacting mortgagors to request that they call mortgage companies, and reporting back to mortgage companies whether it has made contact with mortgagors and regarding the condition of mortgaged properties.” Ibid.

         The neighbor told Hunte that Safeguard “had told the neighbor about the foreclosure action and to stop cutting [Hunte's] lawn because the house was being seized from [Hunte].” Id. at ¶ 47. Hunte returned home to discover that, at some point between September 9 and September 14, Safeguard (through its agents or employees) had, at Chase's direction, unlawfully accessed the property. Id. at ¶¶ 43, 58-59. Safeguard also had thrown Hunte's personal belongings into dumpsters, changed the locks on his home, winterized the plumbing, and placed signs on the property indicating that it was vacant. Id. at ¶¶ 49-50, 61-66. The signs read: “Notice: This property has been determined to be vacant or abandoned. This information will be reported to the mortgage servicer … If this property is NOT VACANT or ABANDONED, please call your mortgage servicer, JPMorgan Chase Bank, N.A.” Doc. 73-1 at 31.

         B. Procedural History

         Hunte's initial complaint, which like the operative complaint brought FDCPA claims only against Safeguard, alleged that “Safeguard's principal purpose is the enforcement of security interests via the use of instrumentalities of interstate commerce.” Doc. 1 at ¶ 5. But the complaint also alleged that Safeguard's “principal purpose [was to] manage and preserve at-risk and foreclosed properties.” Id. at ¶ 4. As explained in the court's opinion dismissing the initial complaint, familiarity with which is assumed, the complaint did not adequately allege that Safeguard was a “debt collector” as defined by 15 U.S.C. § 1692a(6), and therefore stated no viable FDCPA claim, because the statute “does not cover … dual-principal purpose entities.” 255 F.Supp.3d at 726. And while acknowledging that the initial complaint further alleged that “Safeguard regularly collects or attempts to collect defaulted consumer debts using the mails and the telephone, ” Doc. 1 at ¶ 6, the court held that Hunte had forfeited any argument that Safeguard was a debt collector based on that allegation by failing to press it in his opposition briefs. 255 F.Supp.3d at 726-27.

         With the initial complaint not having adequately alleged that Safeguard, the only FDCPA defendant, was a “debt collector” within the meaning of § 1692a(6), the court dismissed Hunte's FDCPA claim. Then, noting that the complaint neither alleged Hunte's or Safeguard's citizenship nor invoked the diversity jurisdiction under 28 U.S.C. § 1332, and that Hunte had instead premised jurisdiction over his state law claims on the supplemental jurisdiction under 28 U.S.C. § 1367(a), Doc. 1 at ¶¶ 1, 3, the court exercised its discretion under 28 U.S.C. § 1367(c)(3) to relinquish jurisdiction over those claims. 255 F.Supp.3d at 724, 727. Because this was the first dismissal, the court gave Hunte an opportunity to replead. Id. at 727.

         Hunte's amended complaint alleged that Safeguard was a “debt collector” within the meaning of § 1692a(6) on two grounds: (1) “Safeguard regularly collects or attempts to collect defaulted consumer debts using the mails and telephone, ” Doc. 58 at ¶ 5; and (2) “Safeguard's principal purpose is the enforcement of security interests, ” id. at ¶ 7. Defendants again moved to dismiss. Docs. 60, 63. When at the presentment hearing Hunte's counsel could not say in response to the court's questions whether Safeguard communicated with affected homeowners exclusively by posting physical notices on their properties, as opposed to through the mails or instrumentalities of interstate commerce, the court expressed concern that the amended complaint's allegation that “Safeguard regularly collects or attempts to collect defaulted consumer debts using the mails and telephone” was not properly founded. In lieu of responding to Defendants' motions to dismiss, and ...

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