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Banks v. Loancare LLC

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

October 7, 2019



          John J. Tharp, Jr., United States District Judge.

         Plaintiffs Doretha Banks and Antoine Massie bring this action complaining of the circumstances surrounding their eviction in 2017 and the alleged conversion of their personal property during their eviction. They assert claims against the defendants, LoanCare LLC and First Allegiance Property Services, Inc., premised on a variety of legal theories including breach of contract, fraud, conversion, intentional infliction of emotional distress, and violations of the Fair Housing Act (“FHA”) and the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”). Both defendants have filed motions to dismiss for failure to state a claim upon which relief can be granted. The Court agrees that the plaintiffs have failed to state a plausible claim for relief, and therefore defendants' motions are granted.

         BACKGROUND [1]

         At issue is the plaintiffs' eviction from 5214 Southwind Drive, Richton Park, Illinois. In 2009, the plaintiffs, who are married, entered into a mortgage loan agreement related to the property. GMAC Mortgage LLC, the lender, foreclosed on the mortgage in 2011. First Am. Compl. ¶¶ 1-2, [2] ECF No. 6. The Cook County Circuit Court entered an order on January 4, 2013 approving the report of sale and distribution, confirming the sale of the property, and approving an order of possession. Mem. Supp. LoanCare's Mot. Dismiss Ex. D, ECF No. 25. Ms. Banks' appeal from the foreclosure action was dismissed on February 29, 2017. First Am. Compl. ¶ 2, ECF No. 6. The order of possession was not enforced during the pendency of the appeal and the plaintiffs remained in possession of the property when their appeal of the foreclosure proceedings was denied.

         In April 2017, a man came to take photographs of the property. He said that he was working on behalf of LoanCare and told the plaintiffs that they should contact LoanCare regarding the property. Id. ¶¶ 4-5. When Ms. Banks telephoned LoanCare, she was advised that she could modify the loan related to the property. She received and completed a loss mitigation package from LoanCare and was later informed by telephone that she had been approved for loss mitigation through a loan modification. Id. ¶¶ 9-13. The representative she spoke with informed Ms. Banks that the first payment under the loan modification would constitute her acceptance of the modification. Ms. Banks returned a signed FHA Trial Plan Agreement to LoanCare and made the first of three payments in June 2017. Id. ¶¶ 19-20.

         On August 10, 2017, the Sheriff of Cook County evicted the plaintiffs from the property. According to the Amended Complaint, the possessory order that the Sheriff displayed was over a year old. Id. ¶ 27. The Sheriff stated that he would not remove any items from the property but had orders to lock the plaintiffs out of the property; however, the Sheriff did not lock the property, and Mr. Massie reentered. Id. ¶¶ 25, 28. On August 16, 2017, two Richton Park police officers arrested Mr. Massie for trespassing. While Mr. Massie was being arrested, six individuals removed the plaintiffs' personal property from the home to the front yard and the garage. The Amended Complaint alleges that these individuals were “from Allegiance.” Id. ¶ 34. In removing the plaintiffs' property, the First Allegiance workers damaged and destroyed the plaintiffs' furnishings. The plaintiffs later discovered, while packing their belongings into a rental truck, that several items of their personal property were missing, including $4, 600 in cash, several watches and jewelry items, and four of their children's iPads. Id. ¶ 38.

         After relocating to a hotel, the plaintiffs contacted both defendants. A LoanCare representative informed the plaintiffs that LoanCare was not honoring the loan modification agreement, id. ¶ 42, and First Allegiance informed the plaintiffs that it had “hired Maurice Johnson to evict the Plaintiffs from the Property at the direction of Defendant LoanCare, ” id. ¶ 44. The First Allegiance representative told Ms. Banks that she “had no knowledge of the other people who evicted the Plaintiffs and their person[al] property from the Property” and that “she did not know if she could help because Allegiance did not know the workers.” Id. ¶¶ 45-46.

         Plaintiffs bring a variety of claims (including for breach of contract, racial and sex discrimination in violation of the FHA, intentional infliction of emotional distress, and conversion) against LoanCare regarding the loan modification process and their subsequent eviction, and conversion claims against First Allegiance, which allegedly hired the individuals who removed the plaintiffs' personal property from the home, regarding their damaged and missing personal property. Defendants each filed a motion to dismiss for failure to state a claim.


         A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) should be granted if the complaint fails to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In ruling on a motion to dismiss under Rule 12(b)(6), a court must construe all factual allegations as true and draw all reasonable inferences in the plaintiffs' favor, but the court need not accept legal conclusions or conclusory allegations. Id. at 680-82. When resolving a Rule 12(b)(6) motion, a court may consider only allegations in the complaint, documents attached to the complaint, and documents that are both referred to in the complaint and central to its claims. Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998).

         In this case, the plaintiffs' claims are all premised on the same core set of facts relating to their August 2017 eviction from the property, as evidenced by the integration of all of the factual allegations into every count of the Amended Complaint. Ultimately, the injuries complained of derive from the plaintiffs' eviction from the home, both by the Cook County Sheriff on August 10 and by Richton Park police on August 16, and the subsequent damage to their personal property by Maurice Johnson and several other individuals. But because the fact of the eviction was lawful, and because the plaintiffs do not allege sufficient facts to show an agency relationship between the individuals that removed their belongings and the defendants that would make the manner of eviction unlawful with respect to the defendants, none of the plaintiffs' legal theories give rise to a plausible claim for relief.

         The plaintiffs' principal argument with respect to the injuries caused by the eviction is that the eviction was wrongful because they had entered into a loan modification agreement with LoanCare in mid-2017. According to the plaintiffs, the loan modification process led them to believe that they would not be evicted from their home, giving rise to a variety of claims for breach of contract, violation of the duty of good faith and fair dealing, common law fraud, specific performance, procedural and substantive unconscionability, and violations of the ICFA. See, e.g., First Am. Compl. Count I ¶ 9, ECF No. 6 (“The LoanCare Defendants misled the Plaintiffs to believe Plaintiffs would not lose the Property and certainly would not be evicted from the Property if Banks entered into and complied with the Agreement.”). Defendant LoanCare spills much ink in its motion to dismiss averring that the loan modification agreement was not a valid and enforceable contract. Even assuming that the agreement was an enforceable contract, see e.g., Khan v. OneWest Bank, No. 16-CV-8074, 2017 WL 1344535 (N.D. Ill. Apr. 12, 2017) (finding that, though a permanent modification was never executed, a loan modification agreement was itself a binding contract), the plaintiffs' eviction would still be lawful under its terms.

         Contrary to the plaintiffs' assertions, the loan modification agreement provided no right to continued possession of the property. Nowhere in the agreement are the plaintiffs told that their eviction would be forestalled or their foreclosure vacated, and they do not represent that they were ever told as much in various telephone conversations with LoanCare representatives. To the contrary, the materials that the plaintiffs received from LoanCare state that foreclosure may proceed notwithstanding the agreement, [3] and in this case the plaintiffs' mortgage had already been foreclosed upon. While offering a modification for a loan that no longer exists is perplexing- LoanCare refers to the provision of these documents to Ms. Banks as “a mistake, ” Mem. Supp. Mot. Dismiss at 3, ECF No. 25-the injury complained of here, the eviction, was nevertheless proper. A claim “has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, ” Iqbal, 556 U.S. at 678, but here (so far as the Amended Complaint alleges) the eviction was carried out pursuant to a valid judicial process separate and apart from LoanCare's proffer of a loan modification agreement. Plaintiffs' misunderstanding of the loan modification agreement does not render an otherwise lawful eviction wrongful.

         Put another way, the plaintiffs have not demonstrated that the loan modification agreement proximately caused the damages arising from the eviction, because the eviction would have occurred even in the absence of the loan modification agreement. Cf. Bastian v. Petren Res. Corp., 892 F.2d 680, 684-85 (7th Cir. 1990) (if same losses would have occurred despite fraud, the claim fails to establish loss causation). Though the plaintiffs allege that defendant LoanCare's conduct was unfair or deceptive in entering into a loan modification program for a loan that had already been foreclosed upon, the only damages traceable to breach of the loan modification agreement would be payments the plaintiffs made pursuant to that agreement, not the losses caused by an eviction that was lawful notwithstanding the loan modification agreement. The plaintiffs do not complain about the three payments that they made under the modified payment plan, however; their complaint is that they relied on the modification agreement as an indication that they had a current interest in the home and would not be evicted from it, see First Am. Compl. ¶ 28, ECF No. 6 (“Massie reentered the Property, believing he and his family still had rights and interest in the Property pursuant to the Agreement and considering at that time two TPP payments were made.”). Being misled about ...

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