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Placek v. U.S. Bank, National Association

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

March 20, 2018

U.S. BANK, NATIONAL ASSOCIATION, et al., Defendants.


          Joan B. Gottschall United States District Judge.

         Renata Placek brought this action under the Fair Debt Collection Practices Act “FDCPA”, 15 U.S.C. § 1692 et seq., against Fidelity National Law Group (“Fidelity”), U.S. Bank, N.A. (“U.S. Bank”), and Select Portfolio Servicing, Inc. (“SPS”). SPS and U.S. Bank answered her amended complaint (“AC”, ECF No. 9) on July 3, 2017. ECF Nos. 23, 24. Fidelity filed a motion to stay this action, contending that the court should abstain from hearing this case under Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), because a parallel proceeding is pending in state court. For the following reasons, the court concludes that a parallel proceeding is pending but finds that the ten factors the court must consider under Colorado River do not, on balance, favor abstention now.

         I. BACKGROUND

         Placek alleges that she is the victim of identity theft and mortgage fraud. In her amended complaint she pleads that an acquaintance impersonated her while she was out of the country in 2007. See ECF No. 9 ¶¶ 16-22. The imposter allegedly forged Placek's signature and obtained a $720, 000 loan in her name secured by a mortgage on her home in Morton Grove, Illinois. See Id. Placek first learned of the loan, which was structured as a refinancing transaction, in October 2008 when she received a notice of underpayment, id. ¶ 25, and she has since maintained that the loan was the result of fraud.

         On March 5, 2009, one of U.S. Bank's predecessors brought a foreclosure action against Placek (the “state court action”). See Id. ¶ 39; Compl., Bank of Am., N.A. v. Placek, No. 09 CH 10076, ECF No. 9-4 Ex. D. The complaint was amended to assert a foreclosure count and a count for an equitable lien on the property. AC ¶ 43. The state court dismissed both counts with prejudice in an order entered July 22, 2013. Id. ¶ 47; see also Dismissal Order, ECF No. 9-1 Ex. A. U.S. Bank appealed, and the Illinois Court of Appeals affirmed the dismissal order in part and reversed it in part (the “appellate order”). AC ¶¶ 50-51; ECF No. 9-2 Ex. B, 2015 IL App (1st) 133696-U. The court of appeals held that U.S. Bank forfeited any challenge to the dismissal of the foreclosure count by failing to brief the issue. 2015 IL App (1st) 133696-U ¶ 16.

         Placek's FDCPA claims here stem ultimately from that ruling. She alleges that the decision of the Appellate Court became final on June 5, 2015, AC ¶ 53, and that “the claim of foreclosure was dismissed with prejudice” and “the holder of the Fraudulent Mortgage no longer had a valid or enforceable legal claim against Plaintiff for payment on the related note or mortgage” as a result. AC ¶¶ 54, 55.

         Placek generally contends that defendants violated the FDCPA by continuing to litigate the mortgage's validity on remand. See AC ¶¶ 103, 110, 117. Fidelity substituted as U.S. Bank's counsel on remand and filed a Second Amended Complaint (“SAC”) on March 30, 2016, and a Third Amended Complaint (“TAC”) on November 14, 2016. AC ¶¶ 56, 58, 59, 77; see also SAC, ECF No. 9-3 Ex. C. Both amended complaints incorporated the original state-court complaint and pleaded a foreclosure count and a count seeking a declaratory judgment that the mortgage was valid. See AC ¶¶ 60, 63, 78; SAC ¶¶ 12, 28. Placek names SPS, which she alleges U.S. Bank hired to collect the disputed mortgage loan, AC ¶ 91, as a defendant here based on a mortgage statement dated February 15, 2017. See AC ¶¶ 85, 87, 89, 117; Mortgage Statement, ECF No. 9-5 Ex. E.

         Placek commenced this FDCPA suit in this court on March 29, 2017. ECF No. 1. While the instant motion was being briefed, the state trial court entered an order disposing of all claims and defenses in the case. ECF No. 29-1 Ex. A. The parties have appealed, and the appeal remains pending as far as this court can tell. Reply 1, ECF No. 33, Ex. A.

         II. ANALYSIS

         Ordinarily, “the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court.” Colorado River, 424 U.S. at 817 (quoting McClellan v. Carland, 217 U.S. 268, 282 (1910) (other citation omitted). But Colorado River and its progeny teach that “federal courts in some exceptional cases . . . [may] defer to a concurrent state-court case as a matter of ‘wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'” Huon v. Johnson & Bell, Ltd., 657 F.3d 641, 645 (7th Cir. 2011) (quoting Colorado River, 424 U.S. at 817); see also Freed v. J.P. Morgan Chase Bank, N.A., 756 F.3d 1013, 1018 (7th Cir. 2014) (citations omitted) (stating that conserving resources and preventing inconsistent results is the “primary purpose” of the Colorado River doctrine).

         Determining whether abstention under Colorado River is appropriate involves a two-step inquiry. Deb v. SIRVA, Inc., 832 F.3d 800, 814-15 (7th Cir. 2016) (quoting Adkins v. VIM Recycling, Inc., 644 F.3d 483, 498 (7th Cir. 2011). The court first determines whether the concurrent state and federal actions are “actually parallel.” Id. at 814 (quoting Adkins, 644 F.3d at 498); Tyrer v. City of S. Beloit, 456 F.3d 744, 751 (7th Cir. 2006). If the two actions are parallel, the court assesses whether “exceptional circumstances” justify abstention. Adkins, 644 F.3d at 498.

         A. The Suits Are Parallel

         To decide whether two suits are parallel, the court considers whether “substantially the same parties are contemporaneously litigating substantially the same issues” in another forum, Deb, 832 F.3d at 814, 815 (quoting Adkins, 644 F.3d at 498-99), and if “both cases would be resolved by examining largely the same evidence.” Huon, 657 F.3d at 647. “Any doubt” about whether the two suits are parallel “should be resolved in favor of exercising jurisdiction.” Deb, 832 F.3d at 815 (quoting Adkins, 644 F.3d at 498-99).

         The federal and state suits here involve substantially the same parties with the exception of two defendants named only in the foreclosure action. Placek and U.S. Bank are parties in both cases. Fidelity and SPS have been made defendants in federal court only, but Placek bases her claims against them on actions they allegedly took as representatives of U.S. Bank, AC ¶¶ 56, 58, 91. See, e.g., Nieves v. Bank of Am., N.A., No. 14-CV-2300, 2015 WL 753977, at *2, 4 (N.D. Ill. Feb. 20, 2015) (finding federal FDCPA action paralleled bank's foreclosure suit even though the loan servicer was not a party in state court); Smith v. Bank of Am., N.A., No. 14 C 1041, 2014 WL 3938547, at *3 (N.D. Ill. Aug. 12, 2014) (holding federal FDCPA and state foreclosure action involved substantially similar parties because, “[a]lthough [the law firm] is [the bank]'s counsel-not a party-in the state court case, it is a defendant here only because of acts in furtherance of its representation of [the bank pursuing foreclosure in state court]”). Three defendants in the foreclosure action are not parties here: Krzysztof Placek, Irena Patyk, and Irena Richardson. Placek acknowledges that the last two may well be the same person going by different names. Resp. to Mot. to Stay 4 n.2, ECF No. 29.

         Perfect symmetry “is unnecessary.” Deb, 832 F.3d at 814 (quoting Adkins, 644 F.3d at 499). To determine whether the asymmetries here defeat parallelism, the court must turn to whether substantially the same legal and factual issues are being litigated ...

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