Carthan-Ragland et al v. Standard Bank and Trust et al

Filing 41

MEMORANDUM Opinion and Order Written by the Honorable Gary Feinerman on 5/11/2012.Mailed notice.(jlj)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MAXINE CARTHAN-RAGLAND and WARREN G.
RAGLAND,
Plaintiffs,
vs.
STANDARD BANK AND TRUST, GMAC
MORTGAGE, LLC, and MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

11 C 5864
Judge Feinerman

MEMORANDUM OPINION AND ORDER
Plaintiffs Maxine Carthan-Ragland and Warren G. Ragland executed a note and
mortgage on their home in August 2008 to secure a loan from Defendant Standard Bank & Trust.
Standard assigned its interest in the mortgage to Defendant Mortgage Electronic Registration
Systems, Inc. (“MERS”) and endorsed the note to Defendant GMAC Mortgage, LLC
(“GMAC”). MERS assigned the mortgage to GMAC after Plaintiffs defaulted in September
2010, and GMAC commenced a foreclosure action against Plaintiffs in February 2011 in the
Circuit Court of Cook County, Illinois. Plaintiffs then filed this suit, alleging among other things
that GMAC and MERS “filed an illegal lien in the way of an ‘Assignment of Mortgage’ against
Plaintiffs[’] property” and made false representations as to their identity. Doc. 1 at ¶¶ 139, 152.
The complaint seeks damages for Defendants’ alleged violations of the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., and the common law of fraud.
Defendants have moved to dismiss. Their motions are granted, and the complaint is dismissed
without prejudice to allow Plaintiffs a second and final opportunity to plead viable claims.
-1-

Defendants GMAC and MERS argue that this court lacks jurisdiction under the AntiInjunction Act, which states: “A court of the United States may not grant an injunction to stay
proceedings in a State court except as expressly authorized by Act of Congress, or where
necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” 22 U.S.C. § 2283.
The argument is meritless. The Anti-Injunction Act is not a jurisdictional statute; it simply
provides that courts may not provide a certain form of relief regarding pending state
proceedings. See Jones v. Brennan, 465 F.3d 304, 305-06 (7th Cir. 2006). In any event, the Act
does not apply to damages actions. See 22 U.S.C. § 2283 (“[a] court of the United States may
not grant an injunction to stay proceedings in a State court”) (emphasis added); Pelfresne v. Vill.
of Williams Bay, 917 F.2d 1017, 1023 (7th Cir. 1990). Plaintiffs seek damages, Doc. 1-1 at 29,
so the Anti-Injunction Act does not bar this suit.
Defendants also argue that Plaintiffs’ claims fail as a matter of law, warranting dismissal
under Federal Rule of Civil Procedure 12(b)(6). They contend, among other things, that: (1) it
was not fraudulent for Standard to assign Plaintiffs’ mortgage and promissory note to another
entity, Doc. 29 at 9; (2) there is no conspiracy to commit fraud because there is no fraud and no
agreement among Defendants, id. at 10; (3) the RICO conspiracy claim fails because Plaintiffs
“do not state how GMAC, MERS, or anyone else was involved in any agreement to participate
in the affairs of any enterprise committing the acts,” and also because “the filing and prosecuting
of a complaint does not constitute mail or wire fraud, nor a predicate act under RICO,” Doc. 31
at 7-8; (5) the § 1962(c) claim fails because “the mere use of MERS in mortgage transactions …
is neither unlawful nor improper,” id. at 9-10; (6) the § 1962(d) claim fails because a § 1962(c)
fails, ibid.; and (7) the state law fraud and conspiracy claims fail because the complaint does not

-2-

allege that Defendants made any specific misrepresentations or that Plaintiffs relied on any such
misrepresentations.
Plaintiffs filed a response to the motions to dismiss, but the response does not actually
provide a substantive response to Defendants’ arguments for dismissal. Doc. 34. If a court is
given plausible reasons for granting a motion to dismiss, the court will “not … do the plaintiff’s
research and try to discover whether there might be something to say against the defendants’
reasoning.” Kirksey v. R.J. Reynolds Tobacco Co., 168 F.3d 1039, 1041 (7th Cir. 1999); see also
Stransky v. Cummins Engine Co., 51 F.3d 1329, 1335 (7th Cir. 1995) (“The federal courts will
not invent legal arguments for litigants.”). A plaintiff's failure to substantively respond to a
motion to dismiss therefore provides sufficient grounds for granting the motion. See Alioto v.
Town of Lisbon, 651 F.3d 715, 719 (7th Cir. 2011) (“As to the defendants’ motion to dismiss the
complaint, Alioto waived his right to contest the dismissal by failing to oppose the motions.”);
Lekas v. Briley, 405 F.3d 602, 614 (7th Cir. 2005) (“[w]hile Lekas alleged in his complaint that
his segregation was in retaliation for his filing of grievances, he did not present legal arguments
or cite relevant authority to substantiate that claim in responding to defendants’ motion to
dismiss”); Kirksey, 168 F.3d at 1041 (“In effect the plaintiff was defaulted for refusing to
respond to the motion to dismiss. And rightly so.”).
Defendants provide several plausible grounds for dismissal. For example, a lender’s use
of MERS does not by itself constitute fraud. See Cervantes v. Countywide Home Loans, Inc.,
656 F.3d 1034, 1042-43 (9th Cir. 2011). Moreover, the complaint is full of conclusory
allegations regarding conspiracy that do not specify the particular actions taken by the particular
defendants. Doc. 1 at ¶¶ 73, 103, 200. The complaint also does not identify the particular
fraudulent misrepresentation that Defendants allegedly made. See Greenberger v. GEICO Gen.
-3-

Ins. Co., 631 F.3d 392, 401 (7th Cir. 2011). And filing and prosecuting a complaint is not
considered mail or wire fraud or a predicate act under RICO. See United States v. Pendergraft,
297 F.3d 1198, 1208 (11th Cir. 2002); Harris Custom Builders, Inc. v. Hoffmeyer, 1994 WL
329962, at *4 (N.D. Ill. July 7, 1994).
Defendants’ motions to dismiss accordingly are granted. Because the court cannot
foreclose the possibility that Plaintiffs could state valid claims against some of all of the
defendants, the dismissal is without prejudice. Plaintiffs have until June 1, 2012, to file an
amended complaint. If an amended complaint is not filed, the case will be dismissed with
prejudice. If an amended complaint is filed, Defendants shall answer or otherwise plead within
twenty-one days of its filing.

May 11, 2012
United States District Judge

-4-