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The Bank of New York Mellon v. Holmes

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

March 31, 2018



          Andrea R Wood United States District Judge

         Plaintiff Bank of New York Mellon, formerly known as Bank of New York, as Trustee for the Certificate Holders of CWABS Inc., Asset-Backed Certificates, Series 2007-7 (“BONYM”) claims that it is the owner of a mortgage loan note entered into with Defendant Milton Holmes in 2007. In April 2012, a third party attempted to discharge Holmes's debt with a personal check in the amount of $97, 756.53. Before the check cleared, the loan servicer unwisely credited the payment to Holmes's loan account and issued a release. The loan servicer subsequently discovered that the check had bounced and attempted to stop the recording of the release but was unable to stop the recording in time. The release was ultimately rescinded and the rescission was recorded. BONYM now asserts that Holmes is in default and that BONYM is entitled to foreclose on the mortgage. In response, Holmes, proceeding pro se, claims that he has paid off the mortgage. He has filed a counterclaim seeking to quiet title on the mortgaged property. Presently before this Court are BONYM's motion for summary judgment on its foreclosure claim (Dkt. No. 92) and BONYM's motion for summary judgment on the remaining portion of Holmes's counterclaim (Dkt. No. 93). Holmes has opposed the motions. For the reasons explained below, both summary judgment motions are granted.


         On May 14, 2014, BONYM brought a complaint for foreclosure and other relief against Holmes in Illinois state court. (Dkt. No. 1 at 5-9). Holmes removed the action to federal court. (Dkt. No. 1 at 1-3). Subsequently, on October 15, 2014, Holmes filed a pro se answer to the complaint with affirmative defenses and a counterclaim. (Dkt. No. 9). On November 25, 2014, the prior judge in this action remanded the action to state court based on a lack of jurisdiction. (Dkt. No. 15). On December 24, 2014, Holmes moved to vacate the remand order. (Dkt. No. 20). On January 27, 2015, the instant action was reassigned to the undersigned judge. (Dkt. No. 28). On September 30, 2015, this Court granted Holmes's motion to vacate the remand order and reinstated the instant action. (Dkt. No. 35). BONYM moved to dismiss the counterclaim for failure to state a claim. (Dkt. No. 42). The Court in reviewing the counterclaim construed it to include both fraud claims and a claim seeking to quiet title. (Dkt. No. 61). On August 29, 2016, the Court granted the motion to dismiss the fraud claims, and denied the motion to dismiss the quiet-title claim. (Dkt. No. 61). With respect to the latter, Court concluded that because Holmes had a written release indicating that he owed no more money, whether Holmes still owed the amounts claimed by BONYM was an evidentiary issue beyond the scope of the pleadings. After discovery, BONYM filed the instant summary judgment motions. Unless otherwise noted, the following facts are either undisputed or deemed to be undisputed for the purposes of those motions pursuant to Local Rule 56.1.

         On March 30, 2007, America's Wholesale Lender (“AWL”) loaned Holmes $103, 500.00 (“Loan”). (Pl.'s Statement of Material Facts in Support of Motion for Summary Judgment on the Foreclosure Claim (“F. SOF.”) ¶ 4, Dkt. No. 92-2). The Loan was secured by a property (“Property”) located at 8825 S. Morgan Street, Chicago, Illinois 60620. (F. SOF. ¶ 4). In exchange for the Loan, Holmes executed a promissory note (“Note”) in favor of AWL and its successor Note holders. (F. SOF. ¶ 5); (Pl.'s Statement of Material Facts in Support of Motion for Summary Judgment on the Counterclaim (“CC. SOF”) ¶ 2, Dkt. No. 95); (Milton Holmes Deposition (“Homes Dep.”) at 4). To provide security for the Note, Holmes granted a mortgage lien against the Property (“Mortgage”) to Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for AWL and its successors and assigns. (F. SOF. ¶ 6); (CC. SOF. ¶ 3); (Holmes Dep. at 5).

         Bank of America, N.A. (“BANA”) and/or its predecessors serviced the Loan from its origination until April 15, 2015. (Tiffany Barnfield Affidavit (“Barn. Aff.”) ¶ 9, Dkt. No. 95-2). On March 29, 2012, Holmes sent BANA correspondence, indicating that a third party named Shawn L. Dorsey was given permission to discharge Holmes's debt in the amount of $97, 756.53. (Id. ¶ 10); (Dkt. No. 95-2 at 10). On April 3, 2012, BANA received a personal check (“Check”) with check number 0807 that was executed by Dorsey in the amount of $97, 756.53 and dated March 29, 2012. (Barn. Aff. ¶ 11); (CC. SOF. ¶ 7); (Dkt. No. 95-2 at 13). In accordance with its practices at that time, BANA promptly processed the payment and posted it to Holmes' Loan account on April 4, 2012. (Barn. Aff. ¶ 12); (CC. SOF. ¶ 8). Holmes was also provided with a release (“Release”). (Dkt. No. 101 at 3). In light of the processed payment, BANA submitted a request to its e-recording agent to record the Release. (Barn. Aff. ¶ 13); (CC. SOF. ¶ 9). But then, on April 9, 2012, the Check was returned by the remitter's bank because it was associated with a closed account. (Barn. Aff. ¶ 14); (CC. SOF. ¶ 10). On April 13, 2012, BANA reversed the payoff and the Loan was reinstated as active. (Barn. Aff. ¶ 20); (CC. SOF. ¶ 17). BANA attempted to halt the recording of the Release, but it had already been recorded on April 11, 2012. (Barn. Aff. ¶ 21); (CC. SOF. ¶ 18-19); (Dkt. No. 101 at 3). On June 1, 2012, Holmes did not make a scheduled payment on the Loan and did not make any scheduled payment thereafter. (CC. SOF. ¶ 27); (Holmes Dep. at 27). Holmes contends that he made no further payments because he believed that the Loan had been paid off. (Holmes Dep. at 27). BONYM contends that the Release was rescinded and that the rescission was recorded on July 5, 2012. (Barn. Aff. ¶ 24); (CC. SOF. ¶ 22). On October 29, 2012, MERS assigned the Mortgage to BONYM. (F. SOF. ¶ 7).

         BONYM asserts that Holmes is in default and therefore it is entitled to foreclose on the Mortgage. (F. SOF. ¶ 8). According to BONYM, the amount due and owing as of March 7, 2017 is $158, 051.83. (Tracy A. Sirmans Affidavit (“Sirmans Aff.”) Dkt. No. 92-2 Exhibit A). BONYM has filed a motion for summary judgment on its foreclosure claim and a motion for summary judgment on the remaining counterclaim. Holmes has filed only one opposition brief. (Dkt. No. 100). It is not clear whether he intended the opposition brief to respond to one or both of the summary judgment motions. Since he is proceeding pro se, the Court will liberally construe the arguments in his opposition brief and apply them equally to both motions.


         Under Federal Rule of Civil Procedure 56, “a party may move for summary judgment, identifying each claim or defense-or part of each claim or defense-on which summary judgment is sought.” Fed.R.Civ.P. 56(a). “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Id. While inferences drawn from the underlying facts “must be viewed in the light most favorable to the party opposing the motion, ” those inferences must be supported by more than just “speculation or conjecture.” Matsushita Elec. Indus. Co., Ltd. v. Zenish Radio Corp, 475 U.S. 574, 587 (1986); see also Herzog v. Graphic Packaging Intern., Inc., 742 F.3d 802, 806 (7th Cir. 2014) (citing Tubergen v. St. Vincent Hosp. & Health Care Ctr., Inc., 517 F.3d 470, 473 (7th Cir. 2008)). The party opposing summary judgment “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 587.

         I. Local Rule 56.1

         As an initial matter, neither of the parties has fully complied with Local Rule 56.1. When a motion for summary judgment is filed, the parties are required to comply with Local Rule 56.1. See Boss v. Castro, 816 F.3d 910, 914 (7th Cir. 2016) (stating that ”[t]he district court's discretion to require strict compliance with Local Rule 56.1 has been upheld time and again”); Raymond v. Ameritech Corp., 442 F.3d 600, 604 (7th Cir. 2006) (indicating that “district courts are entitled to expect strict compliance with Local Rule 56.1”); Ammons v. Aramark Unif. Servs., Inc., 368 F.3d 809, 817 (7th Cir. 2004) (stating that the court has “repeatedly held that a district court is entitled to expect strict compliance with Rule 56.1”). Although Holmes is proceeding pro se, he is still required to comply with Local Rule 56.1. See Pearle Vision, Inc. v. Romm, 541 F.3d 751, 758 (7th Cir. 2008) (stating that although “courts are required to give liberal construction to pro se pleadings[, ] . . it is also well established that pro se litigants are not excused from compliance with procedural rules”); Stanton v. Dart, 2018 WL 1240479, at *1 (N.D. Ill. 2018) (stating that “the requirements of LR 56.1 apply equally to pro se plaintiffs”); Green v. Ibarra, 2018 WL 894567, at *1 (N.D. Ill. 2018) (stating that “[a]lthough courts construe pro se pleadings liberally, . . . a plaintiff's pro se status does not excuse him from complying with federal and local procedural rules” such as Local Rule 56.1). The record also reflects that, in accordance with Local Rule 56.2, Holmes was sent a “Notice to Pro Se Litigant Opposing Motion for Summary Judgment, ” which explained to him Local Rule 56.1 and the need to comply with the rule. (Dkt. No. 94).

         A. Incorporation of Facts

         Among the parties' violations of Local Rule 56.1, they have improperly incorporated into their Local Rule 56.1 filings facts from other documents and responses. In Paragraph 11 of BONYM's statement of facts in support of its motion for summary judgment on the foreclosure claim, BONYM states the following: “Those factual statements set forth in Plaintiff's Complaint, pursuant to 735 ILCS 5/15-1504(c) as well as the factual background recited in Plaintiff's Motion for Summary Judgment are incorporated herein by reference.” (F. SOF . ¶ 11). Local Rule 56.1 does not authorize parties to cross reference facts in other documents or responses. To allow such a process would effectively nullify the requirement in Local Rule 56.1 that paragraphs must consist of “short numbered paragraphs, ” and render ineffectual the provision stating that there cannot be “more than 80 separately-numbered statements of undisputed material fact.” LR 56.1. In addition, to allow BONYM to generally incorporate all the facts from entire documents would defeat the purpose of Local Rule 56.1, which is to provide clarity at the summary judgment stage regarding what facts are genuinely disputed. The judicial economy promoted by Local Rule 56.1 would be lost if a court and opponents were required to sift through additional documents or responses beyond the statement of facts and attempt to discern the relevant facts. See Stevo v. Frasor, 662 F.3d 880, 886-87 (7th Cir. 2011) (explaining that “[b]ecause of the high volume of summary judgment motions and the benefits of clear presentation of relevant evidence and law, [the court has] repeatedly held that district judges are entitled to insist on strict compliance with local rules designed to promote the clarity of summary judgment filings”). To allow BONYM to incorporate allegations from a pleading would also defeat the requirement that a movant pursuing a motion for summary judgment must point to evidence to support the motion. Therefore, Paragraph 11 of BONYM's statement of facts in support of its motion for summary judgment on the foreclosure claim is stricken.

         Holmes also improperly attempts to incorporate into his statement of additional facts information from other documents and his responses to BONYM's statement of facts. Instead of providing a statement of additional facts as required in Local Rule 56.1, Holmes states that he “reincorporates [his] objections to Plaintiffs' Statement of Facts” and states that his “disputed facts are attached in [a] separate affidavit.” (Dkt. No. 102 at 3). The Court has considered Holmes' affidavit as evidence in this matter presented in opposition to the motions for summary judgment, but the affidavit is not a Local Rule 56.1 filing. ...

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