Thomas v. Urban Partnership Bank et al

Filing 43

MEMORANDUM Opinion and Order Written by the Honorable Gary Feinerman on 4/26/2013.Mailed notice.(jlj)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BARBARA THOMAS,
Plaintiff,
vs.
URBAN PARTNERSHIP BANK, RESIDENTIAL
CREDIT SOLUTIONS, INC., and SHOREBANK,
Defendants.

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12 C 6257
Judge Feinerman

MEMORANDUM OPINION AND ORDER
Barbara Thomas brought this suit against Urban Partnership Bank, Residential Credit
Solutions, Inc. (“RCS”), and ShoreBank. Her central allegation is that Urban has sought to
collect payments from her on her mortgage loan even though it does not own the loan. The
amended complaint asserts numerous claims, organized into the following six counts: (1)
violation of the federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.;
(2) quiet title under Illinois law; (3) fraud, conversion, and unjust enrichment under Illinois law;
(4) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815
ILCS 505/1 et seq., and the Illinois Uniform Deceptive Trade Practices Act (“UDTPA”), 815
ILCS 510/1 et seq.; (5) violation of the Illinois Collection Agency Act (“ICAA”), 225 ILCS
425/1 et seq.; and (6) violation the Sherman Antitrust Act, 15 U.S.C. § 1 et seq. Doc. 33. Urban
has moved to dismiss the amended complaint in its entirety under Federal Rule of Civil
Procedure 12(b)(6). Doc. 35. The motion is granted in part and denied in part.
Background
In considering the motion to dismiss, the court assumes the truth of the amended
complaint’s factual allegations, though not its legal conclusions. See Munson v. Gaetz, 673 F.3d

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630, 632 (7th Cir. 2012). The court also must consider “documents attached to the complaint,
documents that are critical to the complaint and referred to in it, and information that is subject to
proper judicial notice,” along with additional facts set forth in Thomas’s brief opposing
dismissal, so long as those facts “are consistent with the pleadings.” Geinosky v. City of
Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). The following facts are set forth as favorably to
Thomas as permitted by the complaint and the other materials that must be considered on a Rule
12(b)(6) motion. See Gomez v. Randle, 680 F.3d 859, 864 (7th Cir. 2012).
Some basic facts about the mortgage industry put this case in context. Persons who own
real property can take out mortgage loans from banks and other lending institutions; the loan is
secured by the mortgaged property, meaning that if the borrower fails to repay the loan as
required by the loan agreement, the lender can foreclose on the property in satisfaction of the
loan. The task of collecting payments on the loan as they become due, applying the payments to
the loan principal and interest, and otherwise dealing with the borrower is called “servicing” the
loan. The owner of the loan—meaning the entity that is entitled to receive the loan payments,
whether the lender or some other entity to which the lender has sold the loan—may but need not
service the loan, for there is an industry of third-party firms that service loans. Banks often sell
the loans they originate to other institutions; one such institution is the Federal National
Mortgage Association, commonly known as Fannie Mae. Fannie Mae was created by the federal
government to buy loans from banks as a way of providing banks with fast access to capital and
thereby encouraging them to make more loans. Fannie Mae does not service the loans it owns,
but rather contracts with third parties to perform that task on its behalf.
Thomas owns and possesses the property that is the subject of this suit. Doc. 33 at ¶¶ 6,
10. Urban and ShoreBank are banks. Id. at ¶¶ 7, 9. RCS is a corporation that services

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mortgages for non-party Fannie Mae. Id. at ¶¶ 1, 8. In 2006, Thomas signed a promissory note
and a mortgage agreement to mortgage her property to ShoreBank in exchange for a mortgage
loan. Id. at ¶¶ 1, 11-12; Doc. 33-2 (the note); Doc. 33-3 (the mortgage).
ShoreBank serviced the loan itself for the first several years; in July 2010, RCS sent a
letter to Thomas notifying her that RCS would now be servicing the loan. Doc. 33 at ¶¶ 1, 14;
Doc. 33-4 (the letter). RCS serviced Thomas’s loan from July 2010 through August 2011. Doc.
33 at ¶ 14. Although the letter does not say on whose behalf RCS was servicing Thomas’s loan,
Thomas alleges Fannie Mae had purchased the loan from ShoreBank and that RCS was servicing
the loan on Fannie Mae’s behalf. Ibid. Thomas asserts that when a new servicer begins to
service a mortgage, “this event means that the underlying mortgage probably has been sold at the
same time; otherwise there is no reason to switch servicers.” Ibid. Also, as of July 2010, there
was a commitment in force between Fannie Mae and ShoreBank under which Fannie Mae would
buy loans held by ShoreBank that were modified under the Making Home Affordable
Modification Program (“HAMP”). Id. at ¶¶ 1, 13; Doc. 34-2 (the commitment). In April 2010,
Thomas applied for received a HAMP modification of her mortgage. Doc. 33 at ¶¶ 1, 13; Doc.
34-3 (Thomas’s HAMP application). For these reasons, Thomas alleges “upon information and
belief” that Fannie Mae owns the promissory note and the mortgage. Doc. 33 at ¶ 1.
In August 2010, ShoreBank went into receivership, with the FDIC acting as receiver. Id.
at ¶¶ 1, 15. That same month, the FDIC and Urban entered into a Purchase and Assumption
Agreement (“Agreement”) pursuant to which Urban purchased assets held by ShoreBank. Ibid.;
Doc. 33-5 (the Agreement). Central to this litigation, and disputed by the parties, is the question
whether Thomas’s mortgage loan was among the assets Urban purchased from ShoreBank;
Thomas says no, while Urban says yes. Doc. 33 at ¶ 1. Thomas believes that her loan had

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already been transferred to nonparty Fannie Mae in or before July 2010, prior to the date of the
Agreement, in which case the loan could not have been among the assets transferred by the
Agreement from ShoreBank to Urban. Ibid.
Thomas also believes that even if ShoreBank continued to own her loan as of the date of
the Agreement, the Agreement did not transfer the loan to Urban. In debating this point, the
parties focus on two sections of the Agreement. The first, § 3.1, provides:
3.1 Assets Purchased by Assuming Institution. With the exception of
certain assets expressly excluded in Sections 3.5 and 3.6, the Assuming
Institution hereby purchases from the Receiver, and the Receiver hereby sells,
assigns, transfers, conveys, and delivers to the Assuming Institution, all right,
title, and interest of the Receiver in and to all of the assets (real, personal and
mixed, wherever located and however acquired) including all subsidiaries,
joint ventures, partnerships, and any and all other business combinations or
arrangements, whether active, inactive, dissolved or terminated, of the Failed
Bank whether or not reflected on the books of the Failed Bank as of Bank
Closing. Assets are purchased hereunder by the Assuming Institution subject
to all liabilities for indebtedness, collateralized by Liens affecting such Assets
to the extent provided in Section 2.1 Notwithstanding Section 4.8, the
Assuming Institution specifically purchases all mortgage servicing rights and
obligations of the Failed Bank.
Doc. 33-5 at 17. The “Failed Bank” is ShoreBank, the “Assuming Institution” is Urban, and the
“Receiver” is the FDIC, acting as receiver of ShoreBank. Id. at 6. The second section is § 3.3,
which states:
3.3 Manner of Conveyance; Limited Warranty; Nonrecourse; Etc. The
conveyance of all assets, including real and personal property interests,
purchased by the assuming institution under this agreement shall be made, as
necessary, by receiver’s deed or receiver’s bill of sale, “as is”, “where is”,
without recourse and, except as otherwise specifically provided in this
agreement, without any warranties whatsoever with respect to such assets,
express or implied, with respect to title, enforceability, collectibility [sic],
documentation or freedom from liens or encumbrances (in whole or in part),
or any other matters.
Doc. 33-5 at 18 (emphasis added). In the Agreement, § 3.3 printed in boldface and mostly
capital letters, which implies a particular emphasis. Pointing to the language italicized by the

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court, Thomas alleges that no receiver’s deed or receiver’s bill of sale was made conveying the
promissory note and mortgage from the FDIC to Urban. Doc. 33 at ¶ 17. Urban has not sought
to dispute this assertion by submitting any such deed or bill of sale.
In September 2011, Urban began holding itself out as servicer of the loan and began
sending mortgage bills to Thomas. Id. at ¶ 18; Doc. 33-6 (letter from Urban to Thomas stating:
“[E]ffective 9/1/2011, we are providing loan servicing on your account. … Effective 9/1/2011,
your previous loan servicer, Residential Credit Solutions, will no longer accept payments for
your loan. Beginning 9/1/2011, please make your payments to Urban Partnership Bank at the
address provided below.”). Thomas paid several of these bills. Doc. 33 at ¶ 18. But at some
point, Thomas stopped paying. Thomas alleges that Urban has damaged her credit and that she
received a letter from Urban’s law firm in November 2012 stating that the mortgage is now in
default and that Urban intends to foreclose on Thomas’s property. Doc. 33 at ¶¶ 1, 19; Doc. 34-4
(letter from Urban’s law firm to Thomas).
Discussion
Believing that Thomas must establish that Urban does not own her mortgage loan in
order to succeed on any of her claims, Urban first argues that the materials that the court can
consider on a Rule 12(b)(6) motion establish that Urban is indeed the loan’s owner. Doc. 36 at
3-6. In the alternative, assuming that Urban’s ownership of Thomas’s loan cannot be established
on the pleadings, Urban advances grounds for dismissing each of Thomas’s claims. Id. at 6-15.
I.

Whether The Pleadings Establish That Urban Owns Thomas’s Mortgage
Thomas advances two arguments for the proposition that Urban does not own her

mortgage. First, she argues that ShoreBank had already transferred the mortgage to Fannie Mae
before ShoreBank transferred its remaining assets to Urban pursuant to the Agreement. Doc. 33

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at ¶ 16 (“The [Agreement] does not convey any mortgage loans from FDIC to [Urban]. It does
not state that Urban Partnership purchased all mortgage loans owned by ShoreBank. This is no
accident; the parties to the [Agreement] understood that many mortgage loans originated by
ShoreBank could not be conveyed by the [Agreement], because ShoreBank had already
securitized and sold off those loans to other entities.”). Second, Thomas argues that even if
ShoreBank still held her mortgage when its assets were transferred to Urban pursuant to the
Agreement, the Agreement did not transfer all of ShoreBank’s assets and in particular did not
transfer her mortgage. The court is satisfied that the amended complaint sufficiently alleges that
ShoreBank had transferred the mortgage to Fannie Mae prior to ShoreBank’s failure and that
Urban therefore could not have received the mortgage under the Agreement. It is therefore
unnecessary to consider Thomas’s second argument.
Thomas alleges that RCS began servicing her loan effective August 1, 2010, several
weeks before ShoreBank’s remaining assets were transferred to Urban under the Agreement, and
that RCS is Fannie Mae’s approved servicer. Thomas further alleges that she received a HAMP
modification in April 2010, and that there was at the relevant time a contract between ShoreBank
and Fannie Mae providing that Fannie Mae would buy loans held by ShoreBank that received
HAMP modifications. Doc. 33 at ¶¶ 1, 13-14, 16. Thomas infers from these alleged facts that
ShoreBank had in fact sold the loan to Fannie Mae before ShoreBank’s assets were transferred to
Urban pursuant to the Agreement. Although Thomas does not provide any document directly
supporting that inference, her allegations are sufficient for purposes of a motion to dismiss. One
can reasonably infer from the alleged facts that ShoreBank had sold her loan to Fannie Mae and
that this is why RCS began servicing the loan. That is not a necessary inference from her
allegations, but it is a reasonable one, and the court must make all reasonable inferences in the

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nonmovant’s favor in considering a Rule 12(b)(6) motion. See Citadel Group Ltd. v.
Washington Regional Med. Ctr., 692 F.3d 580, 591 (7th Cir. 2012) (“We construe the amended
complaint in the light most favorable to Citadel, accept Citadel’s well-pleaded facts as true, and
draw all reasonable inferences in Citadel’s favor.”).
Urban submits that Thomas’s belief that ShoreBank sold the loan to Fannie Mae is
“speculative.” Doc. 36 at 5. That characterization ignores the specific factual allegations noted
above, which make it reasonable to infer that Fannie Mae purchased the loan. Urban also points
out that Thomas “does not allege that she has been contacted by Fannie Mae (or anyone else) for
payment or in any way related to the servicing of her Loan. Of course, she cannot allege that she
has ever made a payment to Fannie Mae either.” Id. at 5 n.1. But where, as here, a complaint’s
allegations are sufficient to establish a fact for Rule 12(b)(6) purposes, the plaintiff’s failure to
include other allegations that might have established that fact more firmly does not warrant
dismissal. A requirement that a complaint include every factual allegation that might support the
plaintiff’s claims would effectively nullify Rule 8(a)(2)’s requirement of only “a short and plain
statement of the claim showing that the pleader is entitled to relief.” See Mehta v. Beaconridge
Improvement Ass’n, 432 F. App’x 614, 616 (7th Cir. 2011) (“To cross the [Rule 8(a)(2)]
threshold, a plaintiff must provide enough details about the subject matter of the case to present a
story that holds together.”).
Next, Urban argues that “the letter upon which [Thomas] relies in assuming that the Loan
was transferred to Fannie Mae expressly states that ShoreBank merely transferred the servicing
of the Loan to RCS and that ShoreBank’s rights under the Loan’s documents are not otherwise
affected.” Doc. 36 at 5. Were the second part of this sentence true, then Thomas might have
pleaded herself out of court by attaching to the complaint a document that refuted her assertion

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that ShoreBank sold the loan to Fannie Mae. See Thompson v. Ill. Dep’t of Prof’l Regulation,
300 F.3d 750, 754 (7th Cir. 2002) (“when a written instrument contradicts allegations in a
complaint to which it is attached, the exhibit trumps the allegations”) (internal quotation marks
omitted); In re Wade, 969 F.2d 241, 249 (7th Cir. 1992) (“A plaintiff may plead himself out of
court by attaching documents to the complaint that indicate that he or she is not entitled to
judgment.”). But Urban is wrong to maintain that the letter “expressly states … that
ShoreBank’s rights under the Loan’s documents are not otherwise affected.” What the letter
says is that “[t]he assignment, sale or transfer of the servicing of your mortgage loan does not
affect any term or condition of the mortgage instruments, other than terms directly related to the
servicing of your loan.” Doc. 33-4 at 2. That the substitution of one servicer for another does
not alter the rights and obligations created by the loan agreement is an unremarkable proposition;
it hardly implies that the loan itself has not been transferred—after all, if Fannie Mae had
purchased the loan, it would have assumed ShoreBank’s rights and obligations—and the quoted
material says nothing about “ShoreBank’s rights under the Loan’s documents.” Urban also is
wrong to maintain that the letter “expressly states that ShoreBank merely transferred the
servicing of the Loan to RCS.” The letter says that RCS had taken over servicing the loan from
ShoreBank, but there is no “merely”; the letter does not say or imply that ShoreBank had not
transferred ownership of the loan as well.
Finally, Urban asserts that “[h]ad she investigated her claim prior to filing, [Thomas]
would know that RCS served as ShoreBank’s servicer. Indeed, had she read [RCS’s letter to
Thomas] in its entirety, she would have known that fact.” Doc. 40 at 3. Urban does not point to
any particular sentence or paragraph of RCS’s letter to Thomas (Doc. 33-4), and the court does
not perceive any indication in that letter that RCS had been retained by ShoreBank to service the

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loan. The letter simply does not say on whose behalf—ShoreBank’s, Fannie Mae’s, RCS’s, or
anyone else’s—RCS was undertaking that task. And Urban fails to point to any allegation of
Thomas’s or to any other passage in the documents attached to her complaint that supports the
proposition that RCS was acting as ShoreBank’s servicer.
Thus, for purposes of Rule 12(b)(6), the court will proceed on the premise that Fannie
Mae bought the loan from ShoreBank and that Fannie Mae, not Urban, has been the owner of the
loan since July or August 2010. If this premise is not factually accurate, then Urban should have
little difficulty demonstrating that fact on summary judgment or at trial.
II.

Alternative Grounds for Dismissal
Urban advances alternative grounds for dismissing each of Thomas’s claims, which are

addressed in turn.
A.

Count I: FDCPA

As relevant here, the FDCPA provides:
§ 1692e. False or misleading representations
A debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt.
Without limiting the general application of the foregoing, the following
conduct is a violation of this section:
…
(2) The false representation of—
(A) the character, amount, or legal status of any debt; …
(4) The representation or implication that nonpayment of any debt will result
in the … seizure, garnishment, attachment, or sale of any property … unless
such action is lawful …
(5) The threat to take any action that cannot legally be taken …
(8) Communicating or threatening to communicate to any person credit
information which is known or which should be known to be false …
(10) The use of any false representation or deceptive means to collect or
attempt to collect any debt …

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§ 1692f. Unfair practices
A debt collector may not use unfair or unconscionable means to collect or
attempt to collect any debt. Without limiting the general application of the
foregoing, the following conduct is a violation of this section:
(1) The collection of any amount (including any interest, fee, charge, or
expense incidental to the principal obligation) unless such amount is expressly
authorized by the agreement creating the debt or permitted by law.
15 U.S.C. §§ 1692e, 1692f. The FDCPA defines “debt collector” to mean “any person who uses
any instrumentality of interstate commerce or the mails in any business the principal purpose of
which is the collection of any debts, or who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another,” and further provides that
“[t]he term does not include (A) any officer or employee of a creditor while, in the name of the
creditor, collecting debts for such creditor.” 15 U.S.C. § 1692a(6).
Thomas asserts that Urban is a “debt collector” and violated the above-quoted FDCPA
provisions by making false representations in connection with its attempt to collect her mortgage
loan debt. Urban is a “debt collector,” Thomas says, because it has used the mails to attempt to
collect a debt “owed or due another.” This argument rests on the premise that Urban does not
own the loan, and since the court accepts that premise for Rule 12(b)(6) purposes, it also accepts
that Urban is a debt collector under the FDCPA. Urban disputes this, and while the facts may
prove it right, Urban cannot obtain dismissal under the standards that govern resolution of a Rule
12(b)(6) motion.
Urban also argues that Thomas “ignores the paradox in her pleading that requires its
dismissal. … Plaintiff claims that the [Agreement] transferred the servicing rights to
ShoreBank’s Loans to [Urban]. Therefore, according to Plaintiff’s allegations and interpretation
of the [Agreement], [Urban] had the right to service the Loan and send the notices that Plaintiff
alleges violated the Collection Acts. Simply, Plaintiff cannot maintain that [Urban] only

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acquired the servicing rights while simultaneously alleging that [Urban] violated the Collection
Acts by servicing and collecting on the Loan.” Doc. 40 at 6-7; see also Doc. 36 at 7 (same).
There is no paradox here. Thomas has not alleged that Urban rightfully held even the right to
service her loan. Urban’s brief cites ¶ 16 of the amended complaint for the proposition that
Thomas “claims that only the mortgage servicing rights to her Loan were transferred.” Doc. 36
at 3. But ¶ 16 alleges: “The [Agreement] does not convey any mortgage loans from FDIC to
[Urban]. It does not state that [Urban] purchased all mortgage loans owned by ShoreBank. This
is no accident; the parties to the [Agreement] understood that many mortgage loans originated by
ShoreBank could not be conveyed by the [Agreement], because ShoreBank had already
securitized and sold off those loans to other entities.” Doc. 33 at ¶ 16 (citing Doc. 33-5 (the
Agreement)). Nothing in ¶ 16 implies even obliquely that the Agreement had transferred
servicing rights to Urban. True, § 3.1 of the Agreement provides that “the Assuming Institution
[Urban] specifically purchases all mortgage servicing rights and obligations of the Failed Bank
[ShoreBank].” Doc. 33-5 at 17. But ShoreBank had transferred the loan to Fannie Mae (or so
the court assumes at this juncture) and the servicing rights to RCS several weeks before it
entered into the Agreement, Doc. 33-4, and it therefore no longer had them to sell to Urban at the
time of the Agreement. So this argument is rejected, and because Urban makes no other
arguments for dismissal of the FDCPA claim, the court denies its motion to dismiss Count I.
B.

Count II: Quiet Title

In her quiet title claim, Thomas alleges that all three Defendants—ShoreBank, Urban,
and RCS—“are competing claimants to an interest in [her property] adverse to that of [Thomas]”
and that those competing claims “constitute clouds on title.” Doc. 33 at ¶ 38. “[A] suit to quiet
title is functionally a form of declaratory judgment action.” Samuel C. Johnson 1988 Trust v.

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Bayfield Cnty., 649 F.3d 799, 801 (7th Cir. 2011). Thomas seeks a declaration that Urban, RCS,
and ShoreBank have no right to seek to collect mortgage payments from her, and says that such a
declaration would remove the cloud on her title that they have created by purporting to have such
a right. Doc. 33 at ¶¶ 40-41, 45, 46(a). Her aim, it seems, is to have the court determine who
owns the mortgage loan. Id. at ¶ 46 (“All mortgagors have a duty to make payments to the
correct mortgagee. Only with a declaratory judgment can Plaintiff know to which party to make
their mortgage payments.”).
An Illinois Supreme Court decision quoted by Urban explains that “to constitute a cloud
there must be a semblance of title which is, in fact, unfounded and which casts a doubt upon the
validity of the record title.” Hill v. 1550 Hinman Ave. Bldg. Corp., 6 N.E.2d 128, 134 (Ill. 1936).
Does Urban’s claim that it owns the loan and the servicing rights to the loan amount to a “cloud”
on Thomas’s title to her property? Urban says no: “[Thomas] has not alleged that [Urban] has
done anything but assert a right in an existing mortgage, nor can she. Asserting a right to a
mortgage placed on the Property in 2007 (more than three years before [Urban] even existed) is
not placing a cloud on title. The Mortgage exists, regardless of who holds it and [Urban’s] claim
to the Property is based solely on that Mortgage. Plaintiff cannot be heard to complain that the
Mortgage she admits to signing is now a cloud on title caused by [Urban].” Doc. 36 at 8. Urban
is right that Thomas does not contend that she does not owe anyone money under the loan; she
simply argues that she does not owe Urban anything and seeks a declaration to that effect. Doc.
39 at 15. The key question, then, is whether a dispute over who owns a mortgage that
concededly exists can amount to a cloud on title.
Urban thinks not, but it does not cite any authority to support its view, aside from the
above-quoted sentence from Hill. Doc. 36 at 7-36; Doc. 40 at 7-8. Is Urban’s claim that it owns

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the mortgage a “semblance of title” within the meaning of Hill? Urban does not explain why it is
not, and so it has forfeited the argument, at least for Rule 12(b)(6) purposes. See Judge v. Quinn,
612 F.3d 537, 557 (7th Cir. 2010) (“perfunctory and undeveloped arguments, and arguments that
are unsupported by pertinent authority, are waived”) (internal quotation marks omitted). At any
rate, as stated above, an action to quiet title is a sort of declaratory judgment action, and what
Thomas requests is, in substance, a declaration as to whether or not Urban (or ShoreBank or
RCS) currently holds any rights related to the mortgage. Thomas is entitled to request a
declaratory judgment to that effect—and any ruling on her FDCPA claim would be likely to
entail a determination of Urban’s rights anyhow—so not much turns on whether the label “quiet
title” is properly applied to her request. The motion to dismiss Count II is denied.
C.

Count III: Fraud, Unjust Enrichment, and Conversion

Thomas alleges that Urban defrauded her by causing her to make mortgage payments to it
when it lacked any legal right to collect those payments; that it was unjustly enriched by those
payments; and that Urban is engaging in conversion by foreclosing on her real property and
thereby diminishing its value to Thomas. Doc. 33 at ¶¶ 47-64. Although Thomas pleads them in
a single count, these three legal theories are distinct and will be addressed separately.
“In order to state a cause of action for common law fraud [under Illinois law], a
complaint must allege (1) a false statement of material fact, (2) knowledge or belief of the falsity
by the party making it, (3) intention to induce the other party to act, (4) action by the other party
in reliance on the truth of the statements, and (5) damage to the other party resulting from such
reliance.” People ex rel. Hartigan v. E & E Hauling, Inc., 607 N.E.2d 165, 174 (Ill. 1992)
(internal quotation marks omitted); see also Athey Prods. Corp. v. Harris Bank Roselle, 89 F.3d
430, 434 (7th Cir. 1996) (“Under Illinois law … the elements of common law fraud are: (1) a

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false statement of material fact; (2) by one who knows or believes it to be false; (3) made with
the intent to induce action by another in reliance on the statement; (4) action by the other in
reliance on the truthfulness of the statement; and (5) injury to the other resulting from that
reliance.”). Moreover, a plaintiff alleging fraud in federal court must plead it with the
particularity required by Rule 9(b), which provides that “[i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting fraud or mistake. Malice, intent,
knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P.
9(b). “The circumstances of fraud or mistake include the identity of the person who made the
misrepresentation, the time, place and content of the misrepresentation, and the method by which
the misrepresentation was communicated to the plaintiff.” Windy City Metal Fabricators &
Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663, 668 (7th Cir. 2008) (internal quotation
marks omitted); see also Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen
Co., 631 F.3d 436, 441-42 (7th Cir. 2011).
Thomas has failed to satisfy these requirements. With respect to the allegedly false
statements made by Urban, she alleges:
51. The evidence shows that the Ms. Thomas’s Note and Mortgage were
sold before ShoreBank collapsed. Specifically, Co-Defendant, [RCS], began
holding itself out as the servicer of the Plaintiff’s loans, at least twenty-five
days before [Urban] claims it purchased the Note and Mortgage.
52. Furthermore, a contract existed between Fannie Mae and ShoreBank to
buy ShoreBank’s loans that were to be modified under the Home Affordable
Modification Program (HAMP). Ms. Thomas’s loan would have fallen in this
category as she applied for, and received, a modification of her Mortgage
under this program.
53. Despite this, Defendant [Urban], knowing that ShoreBank had been in
financial trouble, began representing to the Ms. Thomas that it was the true
holder of her Note and Mortgage, without verifying whether ShoreBank still
owned the Note and Mortgage, without proper transfer under the Uniform

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Commercial Code and without the receiver’s deed or bill of sale as required
under paragraph 3.3 of the [Agreement].
54. By making these representations, it is plausible that Defendant Urban
Partnership acted without regard to the truth of who owned the Plaintiff’s
Note and Mortgage and wished the Plaintiff, Ms. Thomas, to act by
submitting mortgage payments to them, which she did.
Doc. 33 at ¶¶ 51-54. It is not “plausible,” based on Thomas’s factual allegations, that Urban
“acted without regard to the truth of who owned [Thomas’s] Note and Mortgage.” At best,
Thomas’s factual allegations establish that ShoreBank transferred the mortgage loan to Fannie
Mae rather than to Urban and that Urban, which had acquired numerous assets of the failed
ShoreBank pursuant to the Agreement, was unaware of this and failed to find out, and instead
believed that it had become owner of the mortgage and acted on that belief by seeking payments
from Thomas. Acting “without regard to the truth” is not fraud, which instead requires
“knowledge or belief of the falsity [of the allegedly fraudulent statement] by the party making
it.” Hartigan, 607 N.E.2d at 174. In other words, “[a] claim for fraud … requires a showing
that, at the time the allegedly fraudulent statement was made, it was an intentional
misrepresentation.” Ass’n Benefit Servs., Inc. v. Caremark RX, Inc., 493 F.3d 841, 853 (7th Cir.
2007) (emphasis removed). Thomas has not alleged that Urban knew that its claims to rights
under her loan were false at the time it made them, and nor is that a reasonable inference from
the facts that she has alleged. Therefore, Thomas’s fraud claim must be dismissed, though the
dismissal is without prejudice and Thomas will be given a chance to replead. See Fed. R. Civ. P.
15(a) (“The court should freely give leave [to amend] when justice so requires.”); Bogie v.
Rosenberg, 705 F.3d 603, 608 (7th Cir. 2013) (“When a complaint fails to state a claim for relief,
the plaintiff should ordinarily be given an opportunity, at least upon request, to amend the
complaint to correct the problem if possible.”); Bausch v. Stryker Corp., 630 F.3d 546, 562 (7th

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Cir. 2010) (“As a general matter, Rule 15 ordinarily requires that leave to amend be granted at
least once when there is a potentially curable problem with the complaint or other pleading.”).
“In Illinois, to state a cause of action based on a theory of unjust enrichment, a plaintiff
must allege that the defendant has unjustly retained a benefit to the plaintiff’s detriment, and that
defendant’s retention of the benefit violates the fundamental principles of justice, equity, and
good conscience.” Cleary v. Philip Morris Inc., 656 F.3d 511, 516 (7th Cir. 2011) (brackets and
internal quotation marks omitted). Thomas claims that Urban was unjustly enriched when she
made loan payments that Urban was not entitled to receive because it has no rights under the
loan. Doc. 33 at ¶¶ 57-61. Urban’s argument for dismissal of this claim is very brief: “Plaintiff
does not allege that any other servicer has made a competing claim to the mortgage payments.
Further, she does not allege how she is entitled to the return of the funds. Plaintiff’s allegations
are simply too vague and conclusory to state a claim.” Doc. 36 at 11.
This argument has not merit. Thomas clearly alleges that she owes someone money
under the mortgage loan and that that someone is not Urban, and so it is irrelevant that no one
else is currently making claims to her mortgage payments. If Thomas is correct that she owes
money to someone other than Urban, then by paying Urban she has lost money without reducing
the debt she owes to the loan’s true owner. See Bank of Naperville v. Catalano, 408 N.E.2d 441,
444 (Ill. App. 1980) (“As a general rule, where money is paid under a mistake of fact, and
payment would not have been made had the facts been known to the payor, such money may be
recovered. The fact that the person to whom the money was paid under a mistake of fact was not
guilty of deceit or unfairness, and acted in good faith, does not prevent recovery of the sum paid,
nor does the negligence of the payor preclude recovery.”); Restatement (Third) of Restitution
and Unjust Enrichment § 6 (2011) (“Payment of Money Not Due. Payment by mistake gives the

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payor a claim in restitution against the recipient to the extent payment was not due.”); id. at
comment c (“Mistake as to liability. A payor’s mistake as to liability may well be a mistake
about the identity of the creditor. In such a case, the payor believes that an obligation runs to the
payee when in fact the obligation is to someone else.”); id. at Illustration 5 (“Tenant, believing
that rent is payable to A, pays rent to A. In fact, Tenant owes rent, not to A, but to B. Tenant
has a claim in restitution against A.”). That amounts to the enrichment of Urban to Thomas’s
detriment, since Thomas has lost and Urban has gained money for nothing. And it is not clear
what Urban means when it says that Thomas “does not allege how she is entitled to return of the
funds.” If, as Thomas adequately alleges, Urban had no right under the mortgage loan to the
payments it received and Thomas made the payments on the mistaken premise that Urban was
the loan’s owner, then “fundamental principles of justice, equity, and good conscience” require
that Urban disgorge the payments; at any rate, Urban does not suggest that they do not.
“To prove conversion, a plaintiff must establish that (1) he has a right to the property; (2)
he has an absolute and unconditional right to the immediate possession of the property; (3) he
made a demand for possession; and (4) the defendant wrongfully and without authorization
assumed control, dominion, or ownership over the property.” Loman v. Freeman, 890 N.E.2d
446, 461 (Ill. 2008); see also Van Diest Supply Co. v. Shelby Cnty. State Bank, 425 F.3d 437, 439
(7th Cir. 2005) (“In order to recover for conversion in Illinois, a plaintiff must show: (1) a right
to the property; (2) an absolute and unconditional right to the immediate possession of the
property; (3) a demand for possession; and (4) that the defendant wrongfully and without
authorization assumed control, dominion, or ownership over the property.”). Thomas alleges
that the “property” at issue is the real property subject to the mortgage loan and that Urban is
converting it by wrongfully foreclosing on it. Doc. 33 at ¶ 63. Urban counters that a claim for

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conversion pertains only to personal property, not to real property. See In re Thebus, 483 N.E.2d
1258, 1260-61 (Ill. 1985); Restatement (Second) of Torts § 222A (“Conversion is an intentional
exercise of dominion or control over a chattel which so seriously interferes with the right of
another to control it that the actor may justly be required to pay the other the full value of the
chattel.”) (emphasis added).
In her brief opposing dismissal, Thomas argues only that “what the Defendant fails to
acknowledge is that the conversion in this situation is not necessarily one involving funds, but
rather personal and real property.” Doc. 39 at 18. The reference to “personal” property is
wholly conclusory; neither the amended complaint nor Thomas’s brief refer to any personal
property that Urban has taken from her. Because the law does not permit Thomas to state a
“conversion” when only real property is at issue, her conversion claim must be dismissed. As
with the fraud claim, the dismissal is without prejudice to repleading.
As to Count III, then, the fraud and conversion claims are dismissed without prejudice
while the unjust enrichment claim survives.
D.

Count IV: UDTPA and ICFA

Thomas alleges that Urban violated the UDTPA and the ICFA by holding itself out as the
holder of her mortgage loan, by demanding payments under the loan, and by threatening to
foreclose on her property. The UDTPA sets forth a list of “deceptive trade practices” and states
that “[a] person likely to be damaged by a deceptive trade practice of another may be granted
injunctive relief upon terms that the court considers reasonable.” 815 ILCS 510/2, 3. Urban
does not argue that Thomas has failed to adequately allege that it engaged in one or more of the
practices listed in the UDTPA. Rather, Urban contends that Thomas has asked for a form of
relief—damages—that the UDTPA does not permit. This argument rests on a badly mistaken

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premise, for Count IV clearly requests injunctive relief and does not mention damages. Doc. 33
at ¶ 74 & pp. 24-25 (requesting relief for the UDTPA claim).
Urban next argues: “Plaintiff has failed to adequately allege an IUDTPA injury. The act
limits plaintiffs to those ‘likely to be damaged by a deceptive trade practice of another…’ See
815 ILCS 510/3. Plaintiff has not alleged that she is a borrower or a prospective borrower who
may do business with a lender and be damaged by the purported deceptive trade practices of the
defendants concerning her loan. Nor does she allege any future harm resulting from the
allegedly deceptive trade practices. Absent such allegations, plaintiffs’ claim must be
dismissed.” Doc. 36 at 12; see also Doc. 40 at 8-9. Urban does not explain the basis for its
belief that Thomas must “allege[] that she is a borrower or a prospective borrower who may do
business with a lender and be damaged by the purported deceptive trade practices of the
defendants concerning her loan.” Certainly that requirement does not follow directly from the
UDTPA’s being limited to plaintiffs “likely to be damaged by a deceptive trade practice of
another”—there are many other ways to be damaged by a deceptive trade practice—and Urban
does not point to any authority that does erect such a requirement. And Urban is wrong to say
that Thomas does not “allege any future harm resulting from the allegedly deceptive trade
practices.” In fact, the amended complaint alleges that “the Defendant’s threat of foreclosure
creates a future harm to the Plaintiff, which is the exact sort of future harm by persons ‘damaged
by a deceptive trade practice of another’ that the Illinois Legislature sought to prevent by passing
the IUDTPA,” and that “[n]ot only does the Plaintiff risk losing her home [to a foreclosure by
Urban], but she also risks having to pay the same claim twice to the true mortgagee.” Doc. 33 at
¶¶ 67, 74. Nothing in Urban’s threadbare argument shows that this insufficiently alleges a
potential future harm that could justify injunctive relief.

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The ICFA provides in relevant part:
§ 2. Unfair methods of competition and unfair or deceptive acts or practices,
including but not limited to the use or employment of any deception, fraud,
false pretense, false promise, misrepresentation or the concealment,
suppression or omission of any material fact, with intent that others rely upon
the concealment, suppression or omission of such material fact, or the use or
employment of any practice described in Section 2 of the [UDTPA] in the
conduct of any trade or commerce are hereby declared unlawful ….
815 ILCS 505/2. The ICFA prohibits “[u]nfair methods of competition and unfair or deceptive
acts or practices,” ibid. (emphasis added), which means that a plaintiff can state a good claim by
sufficiently alleging that the defendant engaged in trade practices that were either unfair or
deceptive. See Siegel v. Shell Oil Co., 612 F.3d 932, 935 (7th Cir. 2010) (“A plaintiff is entitled
to recovery under ICFA when there is unfair or deceptive conduct. A plaintiff may allege that
conduct is unfair under ICFA without alleging that the conduct is deceptive.”) (citation omitted).
Pappas v. Pella Corp., 844 N.E.2d 995, 1002-03 (Ill. App. 2006) (“the statute is in the
disjunctive … [r]ecovery may be had for unfair as well as deceptive conduct”) (internal
quotation marks omitted).
A private plaintiff seeking to state an ICFA deceptive trade practices claim must allege:
“(1) a deceptive act or practice by the defendant, (2) the defendant’s intent that the plaintiff rely
on the deception, (3) the occurrence of the deception in the course of conduct involving trade or
commerce, and (4) actual damage to the plaintiff (5) proximately caused by that deception.”
Oliveira v. Amoco Oil Co., 776 N.E.2d 151, 160 (Ill. 2002). When a plaintiff instead alleges
unfairness, the court must consider three factors: “(1) whether the practice offends public policy;
(2) whether it is immoral, unethical, oppressive, or unscrupulous; [and] (3) whether it causes
substantial injury to consumers.” Id. at 1002. Thomas claims that Urban’s actions were both
unfair and deceptive. Doc. 39 at 21 (“It is the position of Mrs. Thomas that the Defendant has

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acted fraudulently, and that alternatively, its actions are immoral, offend public policy and harm
consumers.”).
After briefly setting out the elements of an ICFA claim, Urban contends only that
“Plaintiff’s conclusory statements that [Urban] ‘willfully’ acted in ‘violation’ of the ICFA are
plainly insufficient to state an ICFA claim. Plaintiff does not plead the required elements, nor
does she offer any well-pled facts sufficient to support her conclusory statements demanding
recovery under the ICFA. Count IV should be dismissed as a matter of law.” Doc. 36 at 13
(citations omitted). In its reply brief, Urban adds only that Thomas “also pleads mere
conclusions insufficient to withstand a motion to dismiss. Plaintiff’s bold assertions in her
Response that she has pled claims do not remedy the actual defects in her pleading. She has
alleged nothing but conclusory statements without any facts to support them. The claims must
be dismissed.” Doc. 40 at 8-9. Urban’s argument that the ICFA claim is fatally conclusory is
itself fatally conclusory, untethered to the particulars of either the ICFA or this litigation. Urban
makes no attempt to apply its boilerplate to the particular allegations in the amended complaint.
Urban does not explain why each of Thomas’s allegations is conclusory, which elements it
thinks she fails to plead and why, or why it believes the facts she alleges are not well-pled.
In fact, although Count IV contains several conclusory assertions, it also includes the
following factual allegations of wrongdoing by Urban: “Urban Partnership has passed off its
services as those of the servicer and/or mortgagee of the Note and the Mortgage”; “Urban
Partnership holds itself out to Ms. Thomas as the servicer and/or the mortgagee when it is not”;
“Urban Partnership is not the mortgagee … [, it] is not authorized by the mortgagee to collect
payments under the Note and the Mortgage … [, and it] cannot release the Mortgage if Ms.
Thomas were to make all payments under the Note to Urban Partnership”; and “Urban

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Partnership Bank holds itself out, falsely, as the servicer and/or mortgagee, without admitting or
disclosing the identity of the true mortgagee of the Subject Property.” Doc. 33 at ¶¶ 69-72.
Urban makes no effort to explain why these allegations do not suffice to state an ICFA claim,
and has therefore forfeited the argument for purposes of its Rule 12(b)(6) motion. See Judge,
612 F.3d at 557 (“perfunctory and undeveloped arguments, and arguments that are unsupported
by pertinent authority, are waived”) (internal quotation marks omitted). The motion to dismiss is
denied as to Count IV.
E.

Count V: ICAA

Thomas’s ICAA allegations closely track her FDCPA allegations in Count I, and Urban
treats them together in urging dismissal. Doc. 36 at 6-7 (“[t]he ICAA mirrors the FDCPA”);
Doc. 40 at 6-7. Because the court has rejected Urban’s arguments for dismissing the FDCPA
claim, and because Urban does not make any further arguments that are specific to the ICAA
claim, Urban’s motion to dismiss Count V is denied.
F.

Count VI: Sherman Antitrust Act

Count VI alleges that Urban and RCS violated § 1 of the Sherman Antitrust Act, which
provides:
§ 1. Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise, or conspiracy,
in restraint of trade or commerce among the several States, or with foreign
nations, is declared to be illegal. …
15 U.S.C. § 1. Thomas brings this claim under § 4(a) of the Clayton Act, 15 U.S.C. § 15(a),
which creates a private right of action for “any person who shall be injured in his business or
property by reason of anything forbidden in the antitrust laws.” Thomas alleges that “[t]here is
an unreasonable combination or conspiracy in restraint of trade or commerce, by and between
Defendants [Urban] and [RCS], to send false bills and to collect on these false bills by

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threatening wrongful foreclosure” against Thomas and other mortgagors like her. Doc. 33 at
¶ 96. She further alleges that “[s]aid predatory scheme reduced competition in the relevant
markets and is a per se violation of the Sherman Antitrust Act” and that “[s]aid anti-competitive,
predatory scheme has had a substantial impact on the cost of mortgages in the relevant market by
harming borrowers’ credit ratings, by causing them to be discharged from their employment, by
causing them to incur costs and attorneys’ fees, by intentionally inflicting severe emotional harm
upon them, and by causing them to send their mortgage payments to the wrong party each month
after August, 2012.” Id. at ¶¶ 98, 107.
A plaintiff asserting an antitrust claim must allege that she has suffered an “antitrust
injury,” meaning that “her claimed injuries are of the type the antitrust laws were intended to
prevent and reflect the anticompetitive effect of either the violation or of anticompetitive acts
made possible by the violation.” Kochert v. Greater Lafayette Health Servs., Inc., 463 F.3d 710,
716 (7th Cir. 2006) (internal quotation marks omitted). Thomas does not defend her view that a
conspiracy to commit fraud among two participants in a market is a “conspiracy in restraint of
trade” within the meaning of the Sherman Act, or that increased loan prices that result from a
borrower’s lower credit rating that result in turn from such fraud constitute “antitrust injury.”
Indeed, her brief opposing dismissal makes no argument in defense of Count VI whatsoever,
even though Urban argued for dismissal of that claim. Doc. 36 at 13-15. By failing to defend it,
Thomas has forfeited her antitrust claim. See Alioto v. Town of Lisbon, 651 F.3d 715, 721 (7th
Cir. 2011) (noting that forfeiture occurs “where a litigant effectively abandons the litigation by
not responding to alleged deficiencies in a motion to dismiss”); Bonte v. U.S. Bank, N.A., 624
F.3d 461, 466 (7th Cir. 2010) (“Failure to respond to an argument—as the [plaintiffs] have done
here—results in waiver.”); Cincinnati Ins. Co. v. E. Atl. Ins. Co., 260 F.3d 742, 747 (7th Cir.

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2011) (a party’s failure to oppose an argument permits an inference of acquiescence, and
“acquiescence operates as a waiver”); Fiala v. Wasco Sanitary Dist., 2012 WL 917851, at *8
(N.D. Ill. Mar. 16, 2012) (“Any argument that this injury provides a basis for RICO standing has
been forfeited because Plaintiffs’ briefs do not press this point in opposing dismissal; in fact, the
briefs do not mention this point at all.”). Claims that a plaintiff fails to defend in opposing a
Rule 12(b)(6) motion are deemed abandoned and thus are dismissed with prejudice. See Baker v.
Chisom, 501 F.3d 920, 926 (8th Cir. 2007); Simkus v. United Air Lines, Inc., 2012 WL 3133603,
at *6 (N.D. Ill. July 31, 2012).
Conclusion
For the foregoing reasons, Thomas’s fraud and conversion claims are dismissed without
prejudice, and her Sherman Act claim is dismissed with prejudice. If Thomas wishes to replead
the fraud and conversion claims, she must do so by May 17, 2013. Thomas’s FDCPA, quiet title,
unjust enrichment, UDTPA, ICFA, and ICAA claims may proceed.

April 26, 2013
United States District Judge

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