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Skibbe v. U.S. Bank Trust, N.A.

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

February 15, 2018

DWAYNE SKIBBE and DEBORAH SKIBBE, Plaintiffs,
v.
U.S. BANK TRUST, N.A., As Trustee for LSF9 MASTER PARTICIPATION TRUST; and LAW OFFICES OF IRA T. NEVEL, Defendants.

          MEMORANDUM OPINION AND ORDER

          Harry D. Leinenweber, Judge United States District Court.

         This case involves an improperly-filed foreclosure in Illinois state court and the homeowners' claim that this improper foreclosure constitutes a violation of the Fair Debt Collection Practice Act, see, 15 U.S.C. § 1692 et seq. (the “FDCPA”), and the Illinois Consumer Fraud and Deceptive Business Practices Act, 810 ILCS 505/1 et seq. (the “ICPA”). Before the Court are Cross-Motions for Summary Judgment [ECF Nos. 126, 131, 142]. For the reasons stated herein, the Court grants U.S. Bank and Nevel's Motions for Summary Judgment [ECF Nos. 126, 131] and denies the Skibbes' Motion for Partial Summary Judgment [ECF No. 142].

         I. FACTUAL BACKGROUND

         Most of the facts are undisputed between the parties. The parties before the Court are the foreclosed-upon homeowners (the “Skibbes”), the bank (“U.S. Bank”), and the bank's law firm that filed the foreclosure actions (“Nevel”). There have been four foreclosures in this case. Each will be described here, although only the latter three are relevant.

         A. The Mortgage Loan

         In October 2004, Dwayne and Deborah Skibbe (the “Skibbes”) refinanced their home mortgage loan with Household Finance Corporation (“HFC”) in the amount of $271, 132.11 and secured the loan with their home. (U.S. Bank and Nevel's Resps. to Skibbes' Facts ¶ 18 (U.S. Bank and Nevel filed separate responses to the Skibbes' Statement of Facts, but where no difference is apparent, the responses will be cited together).) Eventually, the Skibbes stopped making regular payments on their mortgage. (Skibbes' Resp. to U.S. Bank ¶ 9.) A foreclosure action was filed in 2007 and later voluntarily dismissed. (Id. ¶ 10; HFC v. Deborah Skibbe et al., No. 07 CH 1562 (Ill. Cir. Ct.).) This initial foreclosure is not relevant to the issues here.

         B. Foreclosure I

         The Skibbes defaulted on their monthly mortgage payments again in 2010. (U.S. Bank and Nevel's Resps. to Skibbes' Facts ¶ 20.) In December 2010, HFC filed a foreclosure suit against the Skibbes in Kane County seeking a judgment of foreclosure and sale of the Skibbes' home (“Foreclosure I”). (Id. ¶ 21; HFC v. Skibbe, 10 CH 5758 (Ill. Cir. Ct.)). The Skibbes filed for bankruptcy on December 23, 2011. (Skibbes' Resp. to U.S. Bank ¶ 19.) During the bankruptcy proceedings, the Skibbes filed a statement of intention to surrender the property. (Id. ¶ 20.) Plaintiffs' Chapter 13 Plan was confirmed on May 21, 2012, and HFC afterwards voluntarily dismissed Foreclosure I. (Id. ¶¶ 21-22.)

         C. Foreclosure II

         A little over a year later, in June 2013, Nevel, on behalf of HFC, filed a second foreclosure against the Skibbes in Kane County seeking foreclosure and sale of Skibbes' home (“Foreclosure II”). (See, U.S. Bank and Nevel's Resps. to Skibbes' Facts ¶ 23; HFC v. Skibbe, 13 CH 1418 (Ill. Cir. Ct.)). Unfortunately for the Defendants, HFC voluntarily dismissed Foreclosure II five months later. (Id. ¶ 24.) It seems a mystery even to the parties why Foreclosure II was voluntarily dismissed. (Skibbes' Resp. to U.S. Bank ¶ 26.) The Skibbes converted their bankruptcy to Chapter 7 and subsequently received a bankruptcy discharge on January 6, 2014. (Id. ¶¶ 27-28.) The mortgage loan was later assigned from HFC to U.S. Bank Trust N.A. (“U.S. Bank”) after having already been in default. (Skibbes' Resp. to U.S. Bank's Add'l Facts ¶ 2; U.S. Bank's Resp. to Skibbes' Facts ¶ 25.) U.S. Bank retained Defendant Law Offices of Ira T. Nevel (“Nevel”) to collect the debt through foreclosure on the property. (Nevel's Resp. to Skibbes' Facts ¶¶ 14-15.)

         D. Foreclosure III

         In its ill-fated third attempt, Nevel, on behalf of U.S. Bank, filed a third foreclosure against the Skibbes in Kane County on January 8, 2015, seeking foreclosure and sale of the Skibbes' home to satisfy their mortgage obligation (“Foreclosure III”). (See, U.S. Bank and Nevel's Resps. to Skibbes' Facts ¶ 30; U.S. Bank v. Skibbe, 15 CH 22 (Ill. Cir. Ct.)). Foreclosure III is at the heart of the Skibbes' FDCPA claim.

         The propriety of Foreclosure III was (and still is) heavily disputed between the parties. The crux of the dispute was whether Foreclosure III was procedurally barred under Illinois law. The Skibbes argued (successfully) that Foreclosure III was barred by Illinois' single refiling rule, which allows a litigant to dismiss voluntarily a lawsuit and then refile that same lawsuit only once. The Skibbes argue that Foreclosure III was a second refiling and thus barred by the Illinois Code of Civil Procedure. See, 735 ILCS 5/13-217; Timberlake v. Illini Hosp., 676 N.E.2d 634, 635 (Ill. 1997). The Defendants argued that Foreclosure I and Foreclosures II and III were different cases because Foreclosure I was based on an April 2010 default date whereas Foreclosures II and III were based on an August 2010 default date. (Skibbes' Resp. to Nevel ¶¶ 8, 16, 22.) Thus, according to the Defendants, Foreclosure III was proper under the single refiling rule because it was just the first refiling of Foreclosure II, not the second refiling of Foreclosure I. Now in federal court, the Defendants buttress their position by pointing to the fact that the foreclosure complaints allege different default dates because the Skibbes made additional payments in 2011, after Foreclosure I was filed. (U.S. Bank's Facts ¶ 16; Nevel's Facts ¶ 11.) The Defendants rely on the Skibbes' bank statements to support its assertion. Id. The Skibbes do not dispute that these payments were made to HFC from their bank account, but they dispute characterizing them as mortgage payments, notably without any indication about what else those payments could possibly be. (Skibbes' Resp. to U.S. Bank's Facts ¶ 16.)

         The parties continued to argue about whether Foreclosure III was proper, both in letter correspondence prior to Foreclosure III's filing and then throughout the state court litigation, including on appeal. (Skibbes' Resp. to U.S. Bank ¶¶ 29-32.)

         E. Prior State Court Litigation

         The Skibbes won that argument in state court. On June 24, 2015, the circuit court dismissed Foreclosure III with prejudice, holding it was barred by the single-refiling rule. (U.S. Bank and Nevel's Resps. to Skibbes' Facts ¶ 34.) Nevel moved to reconsider. The court denied the motion, at least partially based on the court's understanding that no payments had been made after April 2010. (Id. ¶ 38; Skibbes' Resp. to U.S. Bank ¶¶ 42-43.) The court found that “both sides agreed and reaffirmed this morning that no payments were made after April 2010” and denied reconsideration, stating in its ruling that “[b]ased on the representations that were made on the date of our first hearing and today that no additional payments were made . . . what's been presented is that nothing has changed in terms of the payments since [Foreclosure I]” and “[t]he fact of the matter is . . . the Plaintiff alleged the same breach in [Foreclosure I], [Foreclosure II], and [Foreclosure III].” (Transcript of Mot. to Recon. Hearing 8:4-6, 17:17-19:14, Ex. F to U.S. Bank ¶ 45; Skibbes' Resp. to U.S. Bank ¶ 45.) The Defendants now state that additional payments were, in fact, made by the Skibbes in 2011, and that counsel for both parties incorrectly stated otherwise at the hearing. (Skibbes' Resp. to U.S. Bank ¶ 46.) Neither party disputes that the state court denied the motion to reconsider, but the parties do dispute why. The Skibbes ...


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