DeClerck et al v. Bank of New York Mellon et al

Filing 32

OPINION: The Court concludes that the Plaintiffs' claims in Counts 12, 13, 15, and 19 must be dismissed for lack of subject-matter jurisdiction pursuant to the Rooker-Feldman doctrine, and the Plaintiffs' remaining claims fail to state a cl aim upon which relief can be granted. Therefore, the Defendants' Motion to Dismiss (d/e 19 ) is GRANTED. Defendants Specialized Loan Servicing, LLC, Bank of New York Mellon, and Mortgage Electronic RegistrationSystems, Inc. are hereby TERMINATED from this suit. SEE WRITTEN OPINION. Entered by Judge Sue E. Myerscough on 8/25/2015. (MJ, ilcd)

E-FILED

Thursday, 27 August, 2015 04:54:16 PM
Clerk, U.S. District Court, ILCD

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
GEORGE DECLERCK and
BOBBIE J. DECLERCK,
Plaintiffs,
v.
BANK OF NEW YORK MELLON,
et al.,
Defendants.

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Civil No. 14-3365

OPINION
SUE E. MYERSCOUGH, U.S. District Judge:
Before the Court is the Motion to Dismiss for Lack of SubjectMatter Jurisdiction and for Failure to State a Claim (d/e 19) filed by
Defendants Specialized Loan Servicing, LLC, Bank of New York
Mellon, and Mortgage Electronic Registration Systems, Inc.
Because several of the Plaintiffs’ claims are barred by the RookerFeldman doctrine and the remaining claims fail to state a claim
upon which relief can be granted, the Defendants’ Motion is
granted.
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I. BACKGROUND
The Plaintiffs, George and Bobbie J. DeClerck, signed a
promissory note on February 5, 2007, in favor of Countrywide
Homes Loans, Inc., for a loan of $292,000. The Plaintiffs used that
money to pay off various loans and back taxes. The Plaintiffs
secured the loan with a mortgage on their home, located at 976 E
1330 North Road, Taylorville, Illinois. Four years after closing, the
Plaintiffs fell behind on their payments and became delinquent. In
July 2012, Defendant Bank of New York Mellon, which was the
assignee of the mortgage, filed a foreclosure action on the Plaintiffs’
home in the Circuit Court of Christian County, Illinois.
At some point during the foreclosure proceedings that
followed, the Plaintiffs hired Patrick Williams and his firm, Paladin
& Associates, “to determine whether the foreclosing party has legal
standing to sell the property; and, if not, whether information
ascertained in conjunction with this audit might assist in either 1)
further delay and/or 2) prevent outright the foreclosure of the
property.” See Report, d/e 2 at 8. At the conclusion of a report
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Williams prepared, Williams stated that the note and mortgage may
not have been properly transferred to the Bank of New York Mellon,
questioned whether the signature on the transfer documents was
authentic, and found that “[w]e do not show that The Bank of New
York Mellon has show [sic] indisputable standing to foreclose. The
loan may in fact have become bifurcated.” Id. at 10. Williams
prepared an affidavit, which echoed the findings of his report, that
the Plaintiffs submitted in their defense in the foreclosure case.
Williams Aff., d/e 7.
Despite these submissions, on September 26, 2014, the
Christian County Circuit Court issued a judgment of foreclosure in
favor of the Bank of New York Mellon against the Plaintiffs. See J.
of Foreclosure, d/e 25-1. The Plaintiffs appealed that ruling, and
while the state case was on appeal, they filed their Complaint in
this Court on November 25, 2014, against a long list of Defendants,
including several hundred John Doe Defendants. See Compl., d/e
1. The Plaintiffs’ main allegations in their federal Complaint are
that they never actually received the $292,000 loan for which they

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mortgaged their home1 and that the state court improperly failed to
consider Williams’s affidavit, which they claim “apparently rebuts
and controverts each and every allegation of the defendants [sic]
prior complaint.” Id. at 1, 9. The Complaint also contains almost
20 pages of allegations about impropriety within the asset-backed
securities market. Id. at 12-30. The Plaintiffs seek a reversal of the
state foreclosure judgment, a declaratory judgment that they are
the rightful owners of the foreclosed property, an injunction against
future claims on the property, and damages. Id. at 61.
The only Defendants that the Plaintiffs properly served were
Specialized Loan Servicing, LLC and the Bank of New York Mellon.
Return of Service, d/e 14, 15. On February 23, 2015, Specialized
Loan Servicing, LLC and the Bank of New York Mellon, along with
Defendant Mortgage Electronic Registration Systems, Inc., moved to
dismiss the Plaintiffs’ claims. See Defs.’ Mot. to Dismiss, d/e 19.
The Plaintiffs filed a Response on March 17, 2015. See Pls.’ Resp.
to Defs.’ Mot. to Dismiss, d/e 28. However, as the Defendants
The Court notes that documents from Paladin & Associates and from the
United States Department of Housing and Urban Development filed with the
Plaintiffs’ Complaint show that the Plaintiffs did receive the $292,000 loan.
Report, d/e 2 at 7; HUD Settlement Statement, d/e 2-2 at 35-36.
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pointed out in their Reply to the Plaintiffs’ Response (d/e 29), the
Plaintiffs’ Response does not offer substantive responses to the
Defendants’ arguments. Instead, the Response simply asserts that
the Plaintiffs have a constitutional right to a trial by jury, and that
“[t]he defendants have no right to subvert or attempt to deny
DeClercks from their exercise of trial by jury on all issues regarding
said claims.” Resp., d/e 28 at 6.2
In April 2015, the Illinois Fifth District Court of Appeals
dismissed the Plaintiffs’ appeal of the Defendants’ foreclosure
judgment against them. See Defs.’ Mem., d/e 30. The Christian
County Circuit Court entered an order dismissing the appeal on
April 29, 2015. See Bank of New York Mellon f/k/a Bank Of New
York as Trustee for Certificate Holders of CWABS Inc., AssetBacked Certificates, Series 2007-1 v. DeClerck et al., No. 12 CH 67.
II. LEGAL STANDARDS
The Defendants assert that this Court lacks subject-matter

The Plaintiffs also argue that the Defendants should not be allowed to file a
motion to dismiss because they complained that they were not served or were
improperly served. Id. at 7. However—legal questionability of that argument
aside—the moving Defendants were in fact served and did not raise complaints
about lack of service, so the Court need not address the Plaintiffs’ argument.
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jurisdiction over the Plaintiffs’ Complaint, which implicates Federal
Rule of Civil Procedure 12(b)(1). When considering a Rule 12(b)(1)
motion, the Court accepts as true all well-pleaded factual
allegations and draws all reasonable inferences in favor of the
plaintiff. Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th
Cir. 1999). The Court may view any evidence submitted on the
issue of jurisdiction to determine whether subject matter
jurisdiction exists. Id. However, the plaintiff bears the burden of
proving the jurisdictional requirements have been met. Center for
Dermatology & Skin Cancer, Ltd. v. Burwell, 770 F.3d 586, 588-89
(7th Cir. 2014).
The Defendants also move to dismiss the Plaintiffs’ claims
under Rule (12)(b)(6). A motion under Rule 12(b)(6) challenges the
sufficiency of the complaint. Christensen v. Cnty. of Boone, 483
F.3d 454, 458 (7th Cir. 2007). To state a claim for relief, a
plaintiff’s complaint need only provide a short and plain statement
of the claim showing that the pleader is entitled to relief and giving
the defendant fair notice of the claims. Tamayo v. Blagojevich, 526
F.3d 1074, 1081 (7th Cir. 2008). When considering a motion to
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dismiss under Rule 12(b)(6), the Court construes the complaint in
the light most favorable to the plaintiff, accepting all well-pleaded
allegations as true and construing all reasonable inferences in the
plaintiff’s favor. Id. The complaint must set forth facts that
plausibly demonstrate a claim for relief. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 547 (2007). Plausibility means alleging sufficient
facts for the court to reasonably infer that the defendant is liable for
the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). Merely reciting the elements of a cause of action or
supporting claims with conclusory statements is insufficient. Id.
The Defendants further argue that several of the Plaintiffs’
claims do not satisfy the heightened pleading standard imposed by
Rule 9(b) on fraud-based claims. Rule 9(b) mandates that when
“alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).
The level of detail required by Rule 9(b) will vary depending upon
the facts of a case, but courts generally hold that a plaintiff must
describe the “‘who, what, when, where, and how’ of the fraud—‘the
first paragraph of any newspaper story.’” Pirelli Armstrong Tire
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Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436,
441-42 (7th Cir. 2011) (quoting United States ex rel. Lusby v. Rolls–
Royce Corp., 570 F.3d 849, 854 (7th Cir. 2009)).
III. ANALYSIS
The Defendants move to dismiss the Plaintiffs’ entire
Complaint for lack of subject-matter jurisdiction under the RookerFeldman doctrine. The Defendants also argue that the Plaintiffs’
Complaint fails to state a claim upon which relief can be granted.
A. The Rooker-Feldman Doctrine Prevents the Court from
Exercising Jurisdiction Over the Plaintiffs’
Foreclosure-Related Claims.
The Defendants argue that under the Rooker-Feldman
doctrine, the Court lacks subject-matter jurisdiction to consider the
Plaintiffs’ Complaint. The Rooker-Feldman doctrine takes its name
from two United States Supreme Court cases in which the losing
party in state court filed a suit in federal court complaining of an
injury caused by the state court judgment rendered before the
district court proceedings commenced and seeking review and
rejection of the state court judgment. See Rooker v. Fid. Trust Co.,
263 U.S. 413 (1923); D.C. Court of Appeals v. Feldman, 460 U.S.
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462 (1983). The Supreme Court held that the district courts lacked
subject-matter jurisdiction to decide the cases because only the
Supreme Court has jurisdiction to review a state court judgment.
Rooker, 263 U.S. at 416; Feldman, 460 U.S. at 476; see also Exxon
Mobile Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 291
(2006) (citing 28 U.S.C. § 1257).
The Rooker-Feldman doctrine bars federal claims when either
(1) a plaintiff requests that the federal district court overturn an
adverse state court judgment; or (2) the claims were not raised in
state court or do not, on their face, require review of the state
court’s decision but the claims are “inextricably intertwined” with
the state court judgment. Brown v. Bowman, 668 F.3d 437, 442
(7th Cir. 2012). When determining whether a claim is inextricably
intertwined with the state court judgment, the district court
considers the cause of the alleged injury. Id. If the claim alleges
the injury was caused by the state court judgment, the claim is
inextricably intertwined. If the claim alleges an independent prior
injury that the state failed to remedy, the claim is not inextricably
intertwined and is not barred by the Rooker-Feldman doctrine. Id.;
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see also Long, 182 F.3d at 555 (finding that the plaintiff’s claims
alleging violations of the Fair Debt Collection Practices Act were
independent from the eviction proceeding litigated in state court
and were not barred by the Rooker-Feldman doctrine).
However, if the federal claim is inextricably intertwined with
the state court judgment, the claim is barred under RookerFeldman only if the plaintiff had a reasonable opportunity to raise
the issue in state court. Brown, 668 F. 3d at 442. If the plaintiff
could not have raised the claim in state court, the claim is not
barred by Rooker-Feldman. Id. Moreover, “the fact that the
plaintiff’s pursuit of his federal claims could ultimately show that
the state court judgment was erroneous [does not] automatically
render Rooker-Feldman applicable.” Long, 182 F.3d at 556.
Here, several of the Plaintiffs’ claims are barred by the RookerFeldman doctrine. Under Rooker-Feldman, the Court lacks
jurisdiction to hear the Plaintiffs’ claims to set aside the trustee sale
(Count 12), to quiet title (Count 13), for slander of title (Count 15),
and for wrongful disclosure (Count 19). For the Court to grant the
Plaintiffs’ relief on those claims, the Court would have to directly
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reverse the decision of the Illinois state courts, which is
impermissible under Rooker-Feldman. See Canen v. U.S. Bank
Nat. Ass’n, 556 F. App’x 490, 491 (7th Cir. 2014) (affirming
dismissal under Rooker-Feldman of plaintiffs’ claim seeking to quiet
title after state court entered contrary foreclosure judgment); Byrd
v. Homecomings Fin. Network, 407 F. Supp. 2d 937, 943 (N.D. Ill.
2005) (dismissing plaintiffs’ complaint seeking to overturn state
foreclosure judgment under the Rooker-Feldman doctrine).
Additionally, the Plaintiffs’ long list of allegations that center around
the invalidity of their mortgage are also barred by Rooker-Feldman.
Regarding the Plaintiffs’ argument about a right to a jury trial
raised in the Plaintiffs’ Response, the Plaintiffs cannot be entitled to
a trial by jury on the dismissed claims because the Court cannot
even exercise jurisdiction over those claims.
B. The Plaintiffs’ Remaining Claims Fail to State a Claim
upon Which Relief Can Be Granted.
The Defendants argue that the Plaintiffs’ claims that are not
barred by Rooker-Feldman all fail to state a claim upon which relief
can be granted. The Court agrees. The Court will address and
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dismiss the Plaintiffs’ claims in turn.
The Plaintiffs’ identity theft claim (Count 1) must be dismissed
because that action can only be brought against “[a] person who is
convicted of facilitating identity theft, identity theft, or aggravated
identity theft.” 720 ILCS 5/16-33. The Plaintiffs have not alleged
that any of the Defendants have been convicted of those crimes.
The Plaintiffs’ claim for loan fraud (Count 2) is subject to
dismissal because the statute under which the Plaintiffs bring the
claim, 720 ILCS 5/17-10.6, is used against parties who commit
fraud in seeking a loan, not granting a loan. The Plaintiffs do not
allege that any of the Defendants committed such a fraud.
The Plaintiffs’ claim under the Illinois RICO statute (Count 3),
720 ILCS 5/33G, must be dismissed because the Plaintiffs do not
plead that the Defendants committed a “Class 2 felony or higher,”
as required by 720 ILCS 5/33G-3(e).
The Plaintiffs’ claim for “False Fraudulent, Fictitious,
Publication of Instrument in writing” (second Count 2, Compl. at
37-38), only brings allegations against Defendant Countrywide
Home Loans, so that count is dismissed as to the moving
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Defendants.
The Plaintiffs’ claim for a violation of the Home Ownership
Equity Protection Act (HOEPA) (second Count 3, Compl. at 38-41) is
dismissed because this suit was brought outside the three-year
statute of limitations imposed by HOEPA, 15 U.S.C. § 1640(e),
which expired on February 5, 2010.
Similarly, the Plaintiffs’ claim for violations of the Real Estate
Settlement Procedures Act (Count 4) is barred by the Act’s one-year
statute of limitations in 12 U.S.C. § 2614. The Plaintiffs’ claim
under the Federal Truth in Lending Act (TILA) (Count 5) is also
dismissed because this suit was brought outside the one-year
statute of limitations imposed by TILA, 15 U.S.C. § 1635(f).
The Plaintiffs’ claim for a “Violation of Fair Credit Reporting
Act/Common Law Right of Expungement of Records at Recorder
and Rescission” (Count 6) is dismissed because the statute which
the Plaintiffs appear to claim the Defendants violated, 15 U.S.C. §
1681s-2(a)(1)(A), does not contain a private cause of action. See 15
U.S.C. § 1681s-2(c)(1); Purcell v. Bank of Am., 659 F.3d 622, 623
(7th Cir. 2011) (“[A]lthough [the plaintiff’s] claim arises under
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§ 1681s–2(a), that section does not create a private right of action.”).
The Plaintiffs also do not point to any “common law” basis for their
claim. The Plaintiffs’ second claim under the Fair Credit Report
Acting (second Count 18, Compl., d/e 1 at 59), which is based on
the same allegations as Count 6, is dismissed for the same reasons.
The Plaintiffs’ claim for “constructive fraudulent
misrepresentations” (Count 7) must be dismissed because the
Plaintiffs did not plead fraud with enough particularity to satisfy the
heightened pleading requirements of Rule 9(b). The Plaintiffs do not
name any specific parties who made the alleged misrepresentations,
nor do they allege what those parties did that was fraudulent.
The Plaintiffs’ claim for breach of fiduciary duty (Count 8)
cannot proceed against the moving Defendants, as the Plaintiffs
only allege that “the lenders” who gave the Plaintiffs their loan
breached their fiduciary duty. The Complaint alleges that
“Countrywide Home Loans and successors, principals, and agents
are and were ‘fiduciaries’ in which Claimants’ reposed trust and
confidence.” Compl., d/e 1 at 45. However, the moving Defendants
are not affiliated with Countrywide Home Loans and did not take
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part in the loan process, so this count does not state a claim
against them.
The Plaintiffs’ claims for “constructive civil conspiracy” (Count
10) and “constructive civil RICO” (Count 11), which is presumably
brought under the federal RICO statute, 18 U.S.C. § 1964(c), must
be dismissed because they do not meet Rule 9(b)’s pleading
requirements. The Plaintiffs’ allegations are very general and made
against all “Respondents,” without specifying which actions were
taken by which Defendant. The claims therefore do not satisfy the
heightened specificity required by Rule 9(b). Additionally, the
Plaintiffs’ allegations supporting their federal RICO claim do not
show the existence of an association-in-fact enterprise, as required
by the statute. Instead, the Plaintiffs simply make conclusory
statements about the existence of such an enterprise, which are
insufficient to support a RICO claim. See Rao v. BP Prods. N. Am.,
Inc., 589 F.3d 389, 400 (7th Cir. 2009).
The Plaintiffs’ claim for violations of the Business and
Professions and Occupations Code (Count 14) is dismissed because
the Plaintiffs simply reference a broad set of Illinois statutes in this
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count, without referring to any specific statutes that they believe
the Defendants violated, let alone alleging how the Defendants
violated those statutes.
The Plaintiffs’ claim for unfair debt collection practices (Count
16) must similarly be dismissed for its lack of specific allegations.
The Plaintiffs make very broad, conclusory allegations that the
Defendants violated a list of statutes. These allegations, which do
not attempt to state how the Defendants violated those statutes,
constitute the sort of recitations of claims that cannot survive Iqbal.
See Iqbal, 556 U.S. at 678.
The Plaintiffs’ usury claim (Count 17) is dismissed because the
amount of interest charged by the Defendants was authorized by
Illinois statute. See 815 ILCS 205/4(1)(l). Illinois law states that
“[i]t is lawful to charge, contract for, and receive any rate or amount
of interest or compensation with respect to . . . [l]oans secured by a
mortgage on real estate.” Id.
The Plaintiffs’ claim for predatory lending (Count 18) must be
dismissed because it is not an independent cause of action. A
plaintiff can bring several other claims that are designed to remedy
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predatory lending practices, such as claims under TILA or HOEPA,
but “predatory lending” itself is not an independent claim separate
from a statute or common-law cause of action. See Graham v.
Midland Mortgage Co., 406 F. Supp. 2d 948, 952 (N.D. Ill. 2005)
(dismissing predatory lending claim for failure to tie it to a statute
or regulation).
Lastly, the Plaintiffs’ unjust enrichment claim (Count 9) does
not constitute an independent cause of action, but rather depends
upon the success of Plaintiffs’ other claims. See Alliance
Acceptance Co. v. Yale Ins. Agency, Inc., 648 N.E.2d 971, 977 (Ill.
1995); Saletech, LLC v. E. Balt, Inc., 20 N.E.3d 796, 808 (Ill. App.
Ct. 2014). Because all of the Plaintiffs’ other claims have been
dismissed, their unjust enrichment claim must also be dismissed.
The Court notes that, regarding the argument raised in the
Plaintiffs’ Response (d/e 28) about their right to a jury trial, the
Plaintiffs have pointed to no authority showing that they are
entitled to a trial by jury on claims that do not legally state a claim
for relief. The Court finds that no constitutional right is violated by
dismissing the Plaintiffs’ claims under the Federal Rules of Civil
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Procedure.
IV. CONCLUSION
The Court concludes that the Plaintiffs’ claims in Counts 12,
13, 15, and 19 must be dismissed for lack of subject-matter
jurisdiction pursuant to the Rooker-Feldman doctrine, and the
Plaintiffs’ remaining claims fail to state a claim upon which relief
can be granted. Therefore, the Defendants’ Motion to Dismiss (d/e
19) is GRANTED. Defendants Specialized Loan Servicing, LLC,
Bank of New York Mellon, and Mortgage Electronic Registration
Systems, Inc. are hereby TERMINATED from this suit.
ENTER: August 25, 2015.
s/ Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE

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