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Rodriguez v. Codilis & Associates, P.C.

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

March 30, 2018




         Patricia Rodriguez filed a Fair Debt Collection Practices Act (FDCPA) case against Codilis & Associates, P.C. and BSI Financial Services.[1] Both Defendants move to dismiss the Amended Complaint, arguing that Rodriguez lacks standing and fails to state a claim under the FDCPA. See R. 20, Codilis Mot. to Dismiss ¶¶ 4-5; R. 28, BSI Mot. to Dismiss at 1. For the reasons explained below, the Defendants' motions to dismiss are denied.

         I. Background

         For the purposes of this motion, the Court accepts as true the allegations in the Amended Complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007). In addition to the allegations in the pleading itself, documents attached to a complaint are considered part of the complaint. Fed.R.Civ.P. 10(c). Rodriguez brings a claim under the FDCPA for actions taken by Codilis and BSI in their attempt to foreclose on a home mortgage taken out by Rodriguez. R. 19, Am. Compl. ¶¶ 3-4. After Rodriguez bought her home, the mortgage was transferred to a trustee servicer, an entity known as Christiana Trust. Id. ¶ 12. The loan went into default, and BSI began servicing the loan on behalf of Christiana Trust. Id. ¶ 14. BSI then assigned the debt to Codilis (which is a law firm) to collect, with Codilis allegedly acting as a representative of BSI. Id. ¶¶ 15-19. Sometime after the loan default, Christiana Trust, through BSI and Codilis, filed a motion for default and foreclosure (for convenience's sake, “the Motion”) in the Circuit Court of Cook County to try to collect the debt. Id. ¶¶ 20-21.

         In filing the Motion, the Defendants included several documents to support the foreclosure judgment requested from the state court, including: (1) an affidavit from the servicer's signing officer attesting to the amounts owed and expenses incurred based on her review of BSI's records (Affidavit of Amounts Due and Owing); (2) a Payoff Statement letter that BSI purportedly sent to Rodriguez describing the total amount due (Payoff Statement); and (3) a Codilis attorney certificate outlining the various attorney's fees and costs expended in the litigation (Certificate of Prove-up of Attorney Fees and Costs). R. 19-1, Am. Compl. Exh. 1.2 Rodriguez alleges that various conflicting representations that the Defendants made in the Motion violated the FDCPA.

         Specifically, the servicer Affidavit showed that the “Total Amount Due through 4/14/2016” was $198, 765.76, while the Payoff Statement stated that the “Total Amount to Pay Loan in Full on 4/14/16” was $201, 781.65. Am. Compl. ¶¶ 23, 26; Affidavit at 6-8; Payoff Statement at 9-11.[3] Rodriguez claims the Certificate introduced another inconsistency in the amounts owed, because it claimed that the total court costs Codilis expended were $3, 246.00. Am. Compl. ¶ 29; Certificate at 33-34. Those costs described a total of $1, 960 listed as three different types of attorney's fees, including “Foreclosure Attorney Fees, ” “Amended Complaint Attorney Fees, ” and “Case Management Attorney Fees.” Am. Compl. ¶¶ 30-31; Certificate at 33-34. In contrast, the Affidavit contains a line item for “Prior Attorney Fees, ”-but only for $765.00. Am. Compl. ¶ 25; Affidavit at 7. There were also additional line items for late charges on the Affidavit and the Payoff Statement that did not match one another. See Affidavit at 6-8; Payoff Statement at 9-11. The Affidavit stated that the “Late Charges Accrued Prior to the Acceleration of the of the subject loan” were $268.84, Affidavit at 7, while the Payoff Statement stated that the “Unpaid Late Charge” was $873.73 with “Unpaid Fees” totaling $3, 294.68. Payoff Statement at 9.

         Finally, the Payoff Statement listed March 1, 2015 as the due date for the next payment on the loan-but the letter itself was dated March 16, 2016. Am. Compl. ¶ 27. And though the bottom of the Payoff Statement explains, “This is an attempt to collect a debt, ” Payoff Statement at 11, Rodriguez alleges that BSI failed to identify itself as a debt collector. Am. Compl. ¶ 27.

         Based on these inconsistencies, Rodriguez alleges that the Defendants' communications exposed her to a substantial risk of harm. Am. Compl. ¶ 10. Throughout the Amended Complaint, Rodriguez alleges that the conflicts would have confused an unsophisticated consumer. See Am. Compl. ¶¶ 34, 36, 37. And Rodriguez also alleges that receiving the false and conflicting information distressed, confused, and irritated her. Am. Compl. ¶ 55.

         II. Standard of Review

         Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This short and plain statement must “give the defendant fair notice of what the … claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (cleaned up).[4] The Seventh Circuit has explained that this rule “reflects a liberal notice pleading regime, which is intended to ‘focus litigation on the merits of a claim' rather than on technicalities that might keep plaintiffs out of court.” Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002)).

         “A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted.” Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). These allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678-79.

         III. Analysis

         A. Injury in Fact

         Codilis first argues that Rodriguez lacks standing because she fails to articulate a concrete injury. Codilis Mot. to Dismiss ¶ 5. To have standing, plaintiffs “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Diedrich v. Ocwen Loan Servicing, LLC, 839 F.3d 583, 588 (7th Cir. 2016) (quoting Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016)). Mere procedural violations, without the concrete harm required by Article III, do not satisfy the requirements of Article III. See Spokeo, 136 U.S. at 1549. For an injury to be concrete, it “must be ‘de facto'; that is, it must actually exist.” Meyers v. Nicolet Restaurant of De Pere, LLC, 843 F.3d 724, 727 (7th Cir. ...

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