United States District Court, N.D. Illinois, Eastern Division
TRACY A. STARKE, Plaintiff,
SELECT PORTFOLIO SERVICING, INC., Defendant.
OPINION AND ORDER
L.ELLIS, United States District Judge
Plaintiff Tracy A. Starke entered into a deed-in-lieu of
foreclosure agreement in May 2015 with Defendant Select
Portfolio Servicing, Inc. (“SPS”) to satisfy her
outstanding mortgage payments, SPS refuses to honor that
agreement and has called her over 1, 200 times since that
time to collect on the debt. In response, Starke brings this
action against SPS, claiming breach of contract and
violations of the Illinois Consumer Fraud and Deceptive
Business Practices Act (“ICFA”), 815 Ill. Comp.
Stat. 505/1 et seq., the Telephone Consumer
Protection Act (“TCPA”), 47 U.S.C. § 227
et seq., and Regulation X of the Real Estate
Settlement Procedures Act (“RESPA”), 12 C.F.R.
§ 1024 et seq. SPS has filed a motion to
dismiss Starke's complaint. The Court finds that Starke
has sufficiently alleged the elements for a breach of
contract claim and damages for her ICFA claim. She also has
sufficiently pleaded revocation of consent for her TCPA
claim, particularly in light of the fact that consent is an
affirmative defense. Finally, the Court concludes that §
1024.35 of Regulation X provides a private right of action,
allowing Starke to seek recovery against SPS for its alleged
violation of that section.
February 24, 2006, Starke executed a mortgage in favor of
Nationpoint to secure a promissory note in the amount of
$135, 200. In December 2013, SPS took over the servicing of
Starke's mortgage. Suffering financial hardship, Starke
defaulted on her payments. Between April 2014 and February
2015, she sought home retention alternatives to foreclosure
from SPS to no avail.
18, 2015, SPS offered Starke the opportunity to participate
in the federal government's Home Affordable Foreclosure
Alternatives Program. Starke accepted, executing a
deed-in-lieu of foreclosure agreement, which assigned,
conveyed, and transferred all of her interest in and to the
subject property to SPS. In exchange, SPS agreed to accept
the property in full satisfaction of Starke's obligation
to SPS. SPS was to prepare and record a lien release in full
satisfaction of the mortgage, foregoing all rights to a
after executing the agreement, Starke received a call placed
by SPS on her cellular telephone, in which SPS attempted to
collect Starke's obligation to SPS. SPS obtained
Starke's cellular number from her Uniform Residential
Loan Application. Starke told SPS that she had executed the
deed-in-lieu of foreclosure agreement and asked SPS to stop
placing collection calls to her. Despite this request, Starke
received no less than 1, 200 collection calls from SPS
between May 2015 and May 2017.
October 15, 2015, SPS notified Starke that it needed a final
meter reading and clearance letter from the Village of
Romeoville to proceed with the deed-in-lieu of foreclosure
process. Starke received the requested information from the
Village on October 19, 2015 and forwarded it to SPS. SPS then
advised Starke on both October 26 and 29, 2015 that it did
not need anything more from her. But on November 9, 2015, SPS
told Starke that it needed an assignment of mortgage to
proceed, repeating this claim on November 17, 2015, December
29, 2015, January 20, 2016, February 17, 2016, and February
April 13, 2016, SPS told Starke that her mortgage was being
referred to an attorney to initiate mortgage foreclosure
proceedings. On November 7, 2016, Starke, through her
attorneys, sent a Notice of Error pursuant to 12 C.F.R.
§ 1024.35(d) and a Request for Information pursuant to
12 C.F.R. § 1024.36 to SPS, indicating that she had
executed a deed-in-lieu of foreclosure agreement. But SPS
continued to treat her loan as if it was in default,
reporting on November 10, 2016 an amount past due of $17, 784
and a balance of $121, 743 to consumer reporting agencies. On
November 16, 2016, SPS acknowledged receipt of Starke's
letters, but it continued reporting her allegedly past due
amounts to the consumer reporting agencies. On December 14,
2016, SPS provided Starke a written response to her Notice of
Error and Request for Information, stating that the
deed-in-lieu of foreclosure remained pending because the
Village of Romeoville would not issue a clearance letter to
proceed until it performed a walk-thru appraisal on
Starke's property. SPS also responded that Starke had
fallen behind on her account by twenty-two payments.
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (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.
Breach of Contract (Count I)
argues that the Court should dismiss Starke's breach of
contract claim because Starke has not sufficiently alleged
the material terms of the contract. To state a breach of
contract claim under Illinois law, Starke must allege
“(1) offer and acceptance, (2) consideration, (3)
definite and certain terms, (4) performance by the plaintiff
of all required conditions, (5) breach, and (6)
damages.” Ass'n Benefit Servs., Inc. v.
Caremark Rx, Inc., 493 F.3d 841, 849 (7th Cir. 2007)
(citation omitted). Neither party has produced a written
contract governing the agreement between SPS and Starke, but
SPS does not deny the existence of the agreement. And
although SPS claims Starke has not set forth the terms of the
deed-in-lieu of foreclosure agreement, Starke has alleged
that the parties agreed that she would convey all of her
interest in and to the property to SPS in exchange for SPS
providing a lien release in full satisfaction of the mortgage
with SPS foregoing all rights to a deficiency judgment.
Starke further alleges that she has performed all conditions
necessary, assigning the property to SPS, surrendering
possession of the property, and obtaining clearance from the
Village of Romeoville as requested. She claims that SPS
breached the agreement by failing to prepare and record the
lien release and continuing to treat the mortgage as if it is
in default. These allegations sufficiently state a breach of
contract claim, putting SPS on fair notice of its alleged
breaches. See Peerless Network, Inc. v. MCI
Commc'n Servs., Inc., No. 14 C 7417, 2015 WL
2455128, at *5-7 (N.D. Ill. May 21, 2015) (siding with those
courts finding that a plaintiff is not required to cite
specific contract provision that have been breached but must
at least place the defendant “on fair notice of the
‘contractual duty' it breached”).
also argues that, to the extent the Court allows the breach
of contract claim to proceed, Starke's request for
attorneys' fees and costs arising from the breach should
be dismissed because Starke does not allege the agreement
allows for such damages nor is there statutory authority
allowing her to collect attorneys' fees and costs for a
breach of contract. Starke acknowledges that, under the
American Rule, recognized in Illinois, “absent a
statute or contractual provision, a successful litigant must
bear the burden of his or her own attorney's fees.”
Champion Parts, Inc. v. Oppenheimer & Co., 878
F.2d 1003, 1006 (7th Cir. 1989). In recognition ...