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Tirado v. Bank of America, N.A.

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

September 26, 2019

GLORIA A. TIRADO, individually and as the representative of a call of similarly-situated persons, Plaintiff,


          Robert M. Dow, Jr. United States District Judge.

         Plaintiff Gloria Tirado filed this putative class action against Defendant Bank of America, N.A alleging that Defendant (1) violated the parties’ contract (Count I); or, in the alternative, unjustly enriched itself at Plaintiff’s expense (Count II); and (2) violated the Illinois Consumer Fraud Act, 815 ILCS 505/2 (Count III). Currently before the Court is Defendant’s motion to dismiss Plaintiff’s complaint [21] pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). For the reasons explained below, Defendant’s motion [21] is granted under Rule 12(b)(6) for failure to state a claim. Plaintiff’s complaint is dismissed without prejudice and with leave to file an amended complaint consistent with this opinion no later than October 25, 2019. The motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction is denied without prejudice to reraising the argument in response to any amended complaint. The case is set for further status on November 6, 2019 at 9:00 a.m.

         I. Background [1]

         On October 26, 2010, Plaintiff Tirado entered into a mortgage with Envoy Mortgage, Ltd for her home in Chicago. [1-2, ¶ 16.] The mortgage was insured through the Federal Housing Administration (FHA), which rendered it subject to certain regulations of the U.S. Department of Housing and Urban Development. [Id. ¶¶ 5, 16.] The mortgage was assigned to Defendant Bank of America in June 2012. [Id. ¶ 17.]

         On May 3, 2017, Defendant served Plaintiff (through her son) with a complaint of foreclosure alleging that she had defaulted on her mortgage on November 1, 2016. [Id. ¶ 19.] Throughout the foreclosure proceedings, Plaintiff continued to live at the mortgaged residence. [Id. ¶ 18.] After foreclosure proceedings had been initiated, Defendant conducted seven inspections of the property. [Id. ¶ 21.] Defendant charged Plaintiff for each of these inspections; altogether Plaintiff was charged $155.00 in inspection fees.[2] [Id. ¶¶ 20–21]; [id. at 27].

         Plaintiff’s complaint asserts two (and in the alternative a third) claims on behalf of Plaintiff and a nationwide class: common law breach of contract (Count I) [Id. ¶¶ 31–42]-or, in the alternative, unjust enrichment (Count II) [Id. ¶¶ 43–49]-and a violation of the Illinois Consumer Fraud Act, 815 ILCS 505/2 (“the ICFA”) (Count III) [Id. ¶¶ 50–61]. Plaintiff alleges that after conducting its first inspection on or about July 18, 2017, Defendant knew or should have known that Plaintiff had not abandoned her home. [Id. ¶¶ 22.] Nonetheless, Plaintiff alleges, Defendant continued to inspect the home-and charge for the inspection fees. [Id. ¶ 23.] As of the date of the complaint, these fees totaled $155.00. [Id. ¶¶ 20–21; [id., at 27.] Plaintiff alleges that the assessment of these fees violated certain HUD regulations that were incorporated into her mortgage and seeks to represent a nationwide class of similarly aggrieved mortgagees. See generally [1-2].

         Plaintiff originally filed this claim as a class-action counterclaim in the Foreclosure Action; however, the Circuit Court of Cook County severed the counterclaim and granted her leave to file it as a separate action, which she did. [28, at 1 n.1]; see also [1-2, at 1–14]. Defendant subsequently removed the case to this Court. See generally [1]. Following removal, the Circuit Court granted summary judgment to Defendant in the Foreclosure Action on August 24, 2018. See generally [30-1]. As part of the final judgment, the “[j]udgment total [was] modified to subtract $155.00 in property inspection fees.” [Id. at 6.]

         II. Legal Standard

         When personal jurisdiction over a defendant is challenged by way of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of proving that jurisdiction exists and must make a prima facie showing of jurisdiction. See Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). When a court decides a motion on the basis of paper submissions (as is the case here), a court accepts as true the plaintiff’s undisputed allegations and resolves any disputes in the evidence in favor of jurisdiction. See Purdue Research Found. v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003).[3]

         To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint first must comply with Rule 8(a) by providing “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), such that the defendant is given “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) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) (alteration in original). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the “speculative level.” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions’ or a ‘formulaic recitation of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). Dismissal for failure to state a claim under Rule 12(b)(6) is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558. In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court accepts as true all of Plaintiff’s well-pleaded factual allegations and draws all reasonable inferences in Plaintiff’s favor. Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir. 2007). Evaluating whether a claim is sufficiently plausible to survive a motion to dismiss is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.’” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 679).

         III. Analysis

         Defendant seeks dismissal of Plaintiff’s complaint on the basis of several pleading deficiencies. Additionally, Defendant asserts that Plaintiff may not simultaneously pursue a claim for breach of contract and unjust enrichment under Illinois law. However, before addressing either of those arguments, the Court must address Defendant’s argument that the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Sup. Ct. of California, 137 S.Ct. 1773, 1780 (2017) (“BMS”), requires dismissal of the purported class action claims of all non-Illinois residents under Rule 12(b)(2).

         A. The Court denies Defendant’s Rule 12(b)(2) motion without prejudice subject to renewal should Plaintiff file an amended complaint

         Defendant argues that BMS forecloses this Court from exercising personal jurisdiction over Defendant to resolve the purported class action claims of non-Illinois residents. [22, § 3.] Plaintiff retorts that BMS does not apply to unnamed class members in a purported class action, and that in any event, this Court may exercise general jurisdiction over Defendant. [28, at 19–22.]

         Because Plaintiff brings claims based in state common law and statutes, “a federal court sitting in Illinois may exercise jurisdiction over [Defendant] in this case only if authorized both by Illinois law and by the United States Constitution.” be2 LLC v. Ivanov, 642 F.3d 555, 558 (7th Cir. 2011). To that end, the Illinois Long Arm Statute provides that courts may exercise jurisdiction on any basis allowed by the due process provisions of the Illinois and federal constitutions. See 735 ILCS 5/2-209(c). Thus, the Court may only exercise personal jurisdiction over Defendant if both constitutions’ due process requirements are met. Illinois v. Hemi Group LLC, 622 F.3d 754, 756 (7th Cir. 2010). Where, as here, the parties do not suggest that the due process analysis differs in any respect between state and federal law, the Seventh Circuit has only considered the requirements of federal due process. Matlin v. Spin Master Corp., 921 F.3d 701, 705 (7th Cir. 2019) (observing that “no Illinois case has provided a definitive explanation of the differences between federal and Illinois due process”). The key question then, is whether Defendant has sufficient “minimum contacts” with ...

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