Gonzalez v. Bank of America et al

Filing 25

Opinion and Order Signed by the Honorable Joan H. Lefkow on 1/2/2014: Defendants' motion to dismiss (dkt. #14) for lack of jurisdiction is granted as to Counts II, III, and IV. Mortgage Electronic Registration Systems, Inc.'s motion to dis miss Count I is granted with prejudice. Bank of America's motion to dismiss Count I is continued for further hearing and for ruling on January 23, 2014, at 11:00 a.m. Plaintiff must show cause in writing by January 16, 2014, as to why amendment of the complaint would not be futile so as to avoid a dismissal with prejudice. Pierce & Associates, P.C. is dismissed without prejudice because service of process was not made. Mailed notice(mad, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ARNULFO R. GONZALEZ,
Plaintiff,
v.
BANK OF AMERICA, N.A., and
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Defendants.

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No. 13 CV 3463
Judge Joan H. Lefkow

OPINION AND ORDER
Plaintiff Arnulfo R. Gonzalez filed a four-count pro se complaint against Bank of
America, N.A. (“Bank of America”) 1 and Mortgage Electronic Registration Systems, Inc.
(“MERS”) (collectively, “defendants”) 2 seeking damages arising from alleged violations of the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq. (Count I); void
assignment of mortgage in violation of the Fourteenth Amendment (Count II); lack of authority
to assign mortgage (Count III); and, against Bank of America only, violation of the Illinois
Mortgage Foreclosure Law, 735 Ill. Comp. Stat. 5/15-1101 et seq., and related state court rules
(Count IV). Defendants have moved to dismiss the complaint pursuant to Federal Rules of Civil

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The complaint lists Bank of America, not Bank of America, N.A., as a defendant; however, Bank of
America, N.A. was served and states that it is the proper defendant. The Clerk is directed to amend the
caption accordingly.

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Pierce and Associates, P.C. is also named as a defendant in Counts II and IV but it is not listed on the
caption as a defendant and has not been served. The time for service has now expired and Gonzalez has
not made a motion to extend the service period. See Fed. R. Civ. P. 4(m). Pierce and Associates, P.C. is
therefore dismissed as a defendant.

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Procedure 12(b)(1) and 12(b)(6). (Dkt. #14.) For the following reasons, the motion will be
granted. 3
BACKGROUND 4
On January 13, 2006, Gonzalez obtained a home loan from Countrywide Home Loans,
Inc. (“Countrywide”), secured by a mortgage on real estate located at 14328 Karlov Avenue,
Midlothian, Illinois (“the property”). (Def. Ex. 6.) On November 18, 2009, MERS, acting as
nominee for Countrywide, assigned the mortgage to BAC Home Loans Servicing, LP f/k/a
Countrywide Home Loans Servicing, LP (“BAC”). (Compl. Ex. A.) BAC serviced the loan and
is Bank of America’s predecessor by merger.
On November 25, 2009, BAC filed a foreclosure action in the Circuit Court of Cook
County, Chancery Division. (Def. Ex. 5.) On June 21, 2010, BAC obtained a judgment of
foreclosure and sale. (Def. Ex. 1.) On October 18, 2011, BAC obtained an order approving the
foreclosure report of sale and an order for possession of the deed. (Def. Ex. 2.) On August 17,
2012, Gonzalez filed a motion to quash service, which the Circuit Court denied on October 2,
2012. (Def. Exs. 3, 4.) Gonzalez did not appeal. (See Def. Ex. 5.) Instead, on May 9, 2013, he

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The court possesses diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because the
amount in controversy exceeds $75,000, Gonzalez is a citizen of Illinois, Bank of America is Delaware
corporation with its principal place of business in North Carolina, and MERS is a Delaware corporation
with its principal place of business in Virginia. The court also possesses federal question jurisdiction
pursuant to 28 U.S.C. § 1331 over those claims arising under federal law (Counts I and II) and
supplemental jurisdiction under 28 U.S.C. § 1367(a) over the remaining state law claims.

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The following facts are taken from the well-pleaded allegations in Gonzalez’s complaint and are
presumed true for the purpose of resolving the pending motion. See Gen. Elec. Capital Corp. v. Lease
Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). As it relates to jurisdiction, the court may
consider the competent evidence submitted by the parties and matters of public record. See Sapperstein v.
Hager, 188 F.3d 852, 855 (7th Cir. 1999) (“[W]here evidence pertinent to subject matter jurisdiction has
been submitted . . . the district court may properly look beyond the jurisdictional allegations of the
complaint . . . to determine whether in fact subject matter jurisdiction exists.”) (internal quotation marks
and citation omitted); Gen. Elec. Capital Corp., 128 F.3d at 1080 (“[A] district court [may] take judicial
notice of matters of public record[.]”).

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filed the instant complaint. Defendants now move to dismiss the complaint under Rules 12(b)(1)
and 12(b)(6), arguing that the court lacks subject matter jurisdiction under the Rooker-Feldman
doctrine and the complaint fails to state a claim upon which relief may be granted.
LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) provides that a case will be dismissed if the
court lacks the authority to hear and decide the dispute. Fed. R. Civ. P. 12(b)(1). If subject
matter jurisdiction is not evident from the face of the complaint, the court analyzes the motion to
dismiss under Rule 12(b)(1) as any other motion to dismiss. United Phosphorous, Ltd. v. Angus
Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003) (en banc) overruled on other grounds by MinnChem, Inc. v. Agrium Inc., 683 F.3d 845 (7th Cir. 2012). Where, as here, “the complaint is
formally sufficient but the contention is that there is in fact no subject matter jurisdiction, the
movant may use affidavits and other materials to support the motion.” Id. (emphasis in original);
see also Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). The court may weigh
the evidence to determine whether jurisdiction has been established. United Phosphorous, Ltd.,
322 F.3d at 946. Although pro se complaints are liberally construed, Erickson v. Pardus,
551 U.S. 89, 94, 127 S. Ct. 2197, 167 L. Ed. 2d 1081 (2007), Estelle v. Gamble, 429 U.S. 97,
106, 97 S. Ct. 285, 50 L. Ed. 2d 251 (1976), the plaintiff bears the burden of establishing the
basis for the court’s jurisdiction. United Phosphorous, Ltd., 322 F.3d at 946.
Under Rule 8(a), the complaint must provide a “short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a Rule 12(b)(6)
motion, the complaint must not only provide the defendant with fair notice of a claim’s basis but
must also establish that the requested relief is plausible on its face. Ashcroft v. Iqbal, 556 U.S.
662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009); see also Bell Atl. v. Twombly, 550 U.S.

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544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). The allegations in the complaint must be
“enough to raise a right of relief above the speculative level.” Twombly, 550 U.S. at 555. At the
same time, the plaintiff need not plead legal theories. Hatmaker v. Mem’l Med. Ctr., 619 F.3d
741, 743 (7th Cir. 2010). Rather, it is the facts that count.
ANALYSIS
Defendants first argue that the court lacks subject matter jurisdiction over Gonzalez’s
claims under the Rooker-Feldman doctrine, a doctrine derived from the United States Supreme
Court’s decisions in Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S. Ct. 149, 68 L. Ed. 2d 362
(1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S. Ct. 1303,
75 L. Ed. 2d 206 (1983). This doctrine stands for the principle that only the United States
Supreme Court has appellate jurisdiction to reverse or modify a state court judgment. Holt v.
Lake Cnty. Bd. of Comm’rs, 408 F.3d 335, 336 (7th Cir. 2005). The doctrine precludes federal
jurisdiction where “the complained of injury resulted from a state court judgment,” Sanchez v.
Onewest Bank, FSB, No. 11 CV 6820, 2013 WL 139870, at *2 (N.D. Ill. Jan. 10, 2013), and
where the federal law suit is “inextricably intertwined” with a state court decision “such that
success in the federal court would require overturning the state court decision[.]” Epps v.
Creditnet, Inc., 320 F.3d 756, 759 (7th Cir. 2003). 5 “The Rooker-Feldman doctrine asks: is the
federal plaintiff seeking to set aside a state judgment, or does he present some independent
claim, albeit one that denies a legal conclusion that a state court has reached in a case to which
he was a party? If the former, then the district court lacks jurisdiction; if the latter, then there is
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Although “‘inextricably intertwined’ is a somewhat metaphysical concept, . . . [t]he determination
hinges on whether the federal claim alleges that the injury was caused by the state court judgment, or,
alternatively, whether the federal claim alleges an independent prior injury that the state court failed to
remedy.” Taylor v. Fed. Nat’l Mortgage Ass’n, 374 F.3d 529, 533 (7th Cir. 2004). If a federal claim is
“inextricably intertwined” with a state court decision, then the plaintiff must show that he “did not have a
reasonable opportunity to raise the issue in the state court proceedings.” Id. (internal quotation marks and
citation omitted).

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jurisdiction and state law determines whether the defendant prevails under principles of
preclusion.” GASH Assocs. v. Vill. of Rosemont, Ill., 995 F.2d 726, 728 (7th Cir. 1993).
I.

The Rooker-Feldman doctrine does not deprive the court of jurisdiction over the
FDCPA claim
Count I alleges various violations of the FDCPA, which prohibits “debt collectors” from

harassing creditors or using false representations or unfair conduct to collect a debt. See 15
U.S.C. § 1692d (prohibiting harassing, oppressive, or abusive conduct); § 1692e (prohibiting
false, deceptive, or misleading representations); § 1692f (prohibiting unfair or unconscionable
debt collection practices). Gonzalez alleges that defendants violated the FDCPA by “[d]esigning
and implementing a purposeful scheme to obtain additional amounts from distressed borrowers
on the false promise and/or misleading representation that completion of trial period payments
would result in [a] permanent [loan] modification . . . when Defendants had no intention of
actually . . . honor[ing] any such final modification[.]” (Compl. Count I.)
This is not an attack on the state court judgment because damages could be awarded
under the FDCPA without disturbing the judgment of foreclosure. See Ruffino v. Bank of Am.,
N.A., No. 13 C 50124, 2013 WL 5519456, at *3 (N.D. Ill. Oct. 3, 2013) (Rooker-Feldman
doctrine does not preclude consideration of FDCPA claim); accord Hochstetler v. Fed. Home
Loan Mortgage Corp., No. 12 CV 772, 2013 WL 3756502, at *4 (N.D. Ind. July 16, 2013);
Brooks v. Flagstar Bank, FSB, No. 11-CV-67, 2011 WL 2710026, at *4 (E.D. La. July 12, 2011)
(“[W]hen the FDCPA plaintiff is not challenging the validity of the debt, but rather the collection
practices of the creditor, the FDCPA claim is independent from the state court collection action
and the federal court has subject matter jurisdiction over that FDCPA claim.”) (internal quotation
marks and citation omitted) (collecting cases); but see Byrd v. Homecomings Fin. Network,

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407 F. Supp. 2d 937, 943-44 (N.D. Ill. 2005) (Rooker-Feldman barred FDCPA and other
consumer protection claims). As such, the court has jurisdiction over the federal claim.
II.

Gonzalez fails to adequately plead a claim under the FDCPA
A review of the complaint demonstrates that it does not adhere to pleading requirements

set out in Twombly and Iqbal, even in light of the more forgiving review given a pro se pleading.
See Erickson, 551 U.S. at 94; Estelle, 429 U.S. at 106. Count I is not plausible on its face. This
count hinges on some type of loan modification program that defendants allegedly designed and
implemented as part of a scheme to obtain money from distressed borrowers. (Compl. ¶ 8A.) 6
Gonzalez alleges that defendants’ actions violated six separate provisions of the FDCPA. He
alleges no specific facts, however, supporting any alleged violation. It is unclear from the
complaint whether Gonzalez requested a loan modification or was eligible for one, whether
defendants agreed to modify his loan or approve a trial period plan, whether Gonzalez made
payments towards such a plan, and what was false, harassing, deceptive, or unfair about this
process as it specifically relates to Gonzalez. Moreover, because MERS did not service
Gonzalez’s loan, there is no apparent basis to allege that MERS violated the FDCPA. The
conclusional facts contained in the complaint fail to provide fair notice of what Gonzalez
believes defendants did wrong. Thus, unless Gonzalez can allege that Bank of America or its
predecessor BAC acted or failed to act on specific occasions in a specific manner in violation of
a specific provision of the FDCPA, Gonzalez’s federal claim must fail. At the least, any claim
against MERS is entirely implausible. 7

6

This agreement is not attached to the complaint.

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In the event Gonzalez can allege his claim with more specificity, he is reminded that an action to
enforce liability under the FDCPA must be brought within one year from the date on which the
violation(s) occurred. 15 U.S.C. 1692k(d). Because the case was filed well beyond one year from the
initiation of the foreclosure action, unless an exception to this rule applies, such as where the defendant

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III.

The Rooker-Feldman doctrine deprives this court of jurisdiction over the remaining
claims against Bank of America and MERS
Gonzalez’s remaining claims must be dismissed for lack of jurisdiction because of the

Rooker-Feldman doctrine. In the first place, Gonzalez’s allegations that the assignment of the
mortgage to Bank of America is void and that its filing the law suit was based on a fraudulent
affidavit, merely assert defenses to the foreclosure, not independent causes of action. Even if
they were independent causes of action, because the alleged injury resulted from the foreclosure
judgment, this court lacks jurisdiction to adjudicate them.
Count II alleges that, because MERS acted as Countrywide’s nominee, MERS did not
have authority to assign Gonzalez’s mortgage to BAC, violating Gonzalez’s Fourteenth
Amendment rights. 8 Gonzalez requests “a Quiet Title Judgment determining that [he is] the
owner of the property and that the Defendant has no rights, title, estate lien or interest in the
property.” (Compl. Count II.) These allegations directly challenge the state court judgment by
suggesting that the mortgage and note upon which it relied were invalid. The claim is therefore
barred by Rooker-Feldman. See Fogarty St., Ltd. v. Mortgage Elec. Registration Sys., No. 3:12CV-412 RLM, 2012 WL 5831163, at *3 (N.D. Ind. Nov. 14, 2012) (Rooker-Feldman bars claims
for fraud in the foreclosure proceedings where plaintiffs “haven’t identified any injury separate
from the foreclosure judgment . . . [and] their prayer for relief is to retain possession and regain
title to the foreclosed property”).

took active steps to prevent Gonzalez from suing in time, see Hill v. Wells Fargo Bank, N.A., __ F. Supp.
2d ___, 2013 WL 2297056, *6 (N.D. Ill. May 24, 2013), the FDCPA claim is most likely barred by the
statute of limitations.
8

In Ocwen Loan Servicing LLC v. Kroening, No. 10 C 4692, 2011 WL 5130357, at **3-4 (N.D. Ill. Oct.
28, 2011), Judge Kendall concluded that MERS had the authority to assign the mortgage at issue even
though it was acting as the lender’s nominee. The mortgage language in Kroening is identical to that
here. Compare id. at *4 with Def. Ex. 6. Thus, to the extent Gonzalez contests MERS’s assignment
authority, Kroening is instructive.

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Count III rests on facts similar to those alleged in Count II, that MERS had “no legal
authority” to assign the mortgage to BAC and that “MERS is contractually prohibited from
exercising any rights in a foreclosure case without the authorization of the lender, and . . . [t]here
is no evidence of any such authorization in the instant case.” (Compl. Count III.) As such,
Gonzalez alleges that BAC lacked standing to initiate foreclosure proceedings against him. (Id.)
Unlike Count II, which requests a quiet title determination, Count III seeks damages. The
Rooker-Feldman doctrine still applies, however. Cf. Nora v. Residential Funding Co., LLC, __
F. App’x ___, 2013 WL 6171046, at *2 (7th Cir. Nov. 26, 2013) (“[A] request for review of a
state-court foreclosure decision that includes a claim for damages based on charges of defrauding
the state court does not elude Rooker-Feldman.”). The allegations in Count III directly challenge
BAC’s standing to initiate foreclosure proceedings against Gonzalez and, as such, they are
barred under Rooker-Feldman.
The same conclusion applies to Count IV, which alleges that that Bank of America
violated the Illinois Mortgage Foreclosure Law and related state court rules by, for example,
failing to file the foreclosure complaint under oath and obtaining a fraudulent prove-up affidavit
in support its motion for summary judgment. (Compl. Count IV). Gonzalez was aware of the
facts supporting Counts II, III, and IV before the state court entered judgment, and it appears that
he had a reasonable opportunity to raise his claims in the prior proceeding. As such, the RookerFeldman doctrine deprives the court of subject matter jurisdiction over those claims asserted
against Bank of America. See, e.g., Hochstetler, 2013 WL 3756502, at *4 (holding that the
Rooker-Feldman doctrine precluded consideration of “claims attacking the validity of the
mortgage note” because they were “inextricably intertwined with the [foreclosure] claims
brought to the state court below”); accord Green v. Wells Fargo, No. 12 C 6848, 2013 WL

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1966567, at *2 (N.D. Ill. May 13, 2013) (collecting cases); Moore v. Chase Home Fin., LLC, No.
06 C 3202, 2007 WL 1119204, at *3 (N.D. Ill. Apr. 11, 2007).
Finally, although MERS was not a party to the foreclosure action (as it had no interest at
stake), to the extent it could have been liable for a faulty assignment, its liability would have
been to Bank of America, which would have been unable to foreclose because of MERS’s
wrongdoing. To the extent MERS had any potential liability to Gonzalez due to the assignment,
it would have been a necessary party which Gonzalez should have joined to the foreclosure
action. Because this law suit is “inextricably intertwined” with a state court decision “such that
success in the federal court would require overturning the state court decision, claims against
MERS are also barred.
For all of these reasons, this complaint must be dismissed.
CONCLUSION
Defendants’ motion to dismiss (dkt. #14) for lack of jurisdiction is granted as to Counts
II, III, and IV. MERS’s motion to dismiss Count I is granted with prejudice. Bank of America’s
motion to dismiss Count I is continued for further hearing and for ruling on January 23, 2014, at
11:00 a.m. Plaintiff must show cause in writing by January 16, 2014, as to why amendment of
the complaint would not be futile so as to avoid a dismissal with prejudice. Pierce & Associates,
P.C. is dismissed without prejudice because service of process was not made.
ENTER:
Date: January 2, 2014

_____________________________
U.S. District Judge Joan H. Lefkow

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