Lesniak v. Bank of America, N.A. et al

Filing 93

Enter MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 3/3/2015. Mailed notice (jdh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

Susan Lesniak

)
)
)
)
)
) Case 13 CV 4694
)
)
)
)
)
)

Plaintiff,

v.

Bank of America, N.A., et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
In this action, plaintiff asserts that “Bank of America has
systematically engaged in unfair, deceptive and illegal acts and
practices

in

mortgages”

connection

and

seeks

with

to

its

servicing

hold

it,

along

of

with

residential

various

other

financial institutions, liable for breach of contract, or, in the
alternative,

for

equitable

relief

on

the

theory

of

promissory

estoppel; common law fraudulent misrepresentation and concealment;
violation of the Illinois Consumer Fraud (“ICFA”) and Deceptive
Business Practices Act and the Real Estate Settlement Procedures
Act (“RESPA”); and “Damages Arising from Administration of Second
Mortgage

and

“Declaratory

to

Enjoin

Judgment

Foreclosure.”
for

an

Plaintiff

Accounting

and

also

seeks

Declaration

Ownership and Servicing Rights” with respect to her mortgage.

a
of

Before me are two motions to dismiss the complaint in its
entirety, one brought by defendants Bank of America, Wells Fargo,
U.S. Bank, and Mortgage Electronic Registration Systems (“MERS”),
and the other by defendants GS Mortgage Securities Corp., Goldman
Sachs Mortgage Company, and Nationstar Mortgage LLC. 1

I grant the

first of these motions for the following reasons and deny the
second as moot.
I.
Although

plaintiff’s

complaint

is

lengthy,

her

theory of defendants’ wrongdoing is straightforward.

two-pronged
The gist of

the first prong is that Bank of America failed to offer her a
permanent HAMP modification of her home loan, despite its promise
to do so upon her execution and compliance with a Trial Period
Plan (“TPP”) agreement, and despite her execution and compliance
with

several

such

agreements.

The

second

prong

asserts

that

defendants failed to respond adequately to her Qualified Written
Requests
loan.

information

about

who

owned

and

serviced

her

I summarize plaintiff’s allegations below.

In

October

defendant
naming

seeking

of

Palos

Bank

Palos

Bank

as

2005,
&

plaintiff

Trust

Lender,

borrowed

Company,
which

1

was

as

$420,000

evidenced

secured

by

by
a

a

from
Note

mortgage

References to “defendants” in this decision refer to the first
group of defendants unless otherwise noted.
2

naming defendant MERS, as nominee for the Lender, as Mortgagee. 2
Plaintiff

alleges

that

the

Note

and

Mortgage

were

transferred

multiple times thereafter, and that the loan has been serviced by
Countrywide Home Loans Servicing LP, BAC Home Loans Servicing LP,
and

Bank

of

America

N.A.,

successively,

on

behalf

of

the

instruments’ various owners.
In 2009, plaintiff began to experience financial distress,
and Bank of America informed her, in September of that year, that
it intended to accelerate her loan.

Shortly thereafter, plaintiff

began what would become a lengthy, frustrating, and ultimately
disappointing process of seeking a loan modification from Bank of
America.

Plaintiff alleges that over the next several years, Bank

of America verbally offered her several Trial Period Plan (“TPP”)
agreements, and that on “at least two occasions,” she executed a
TPP agreement.

Am. Cmplt. at ¶¶ 31, 46.

Although she does not

allege when these various offers were made, when she executed the
agreements,

or

what

their

terms

were,

she

states

that

around

January of 2010, Bank of America assured her orally that “payments
were being made pursuant to a Trial Payment Plan,” and that “she
was to make $1,977.19 trial payments after which she would receive
a 2% rate fixed for 5 years.”

Id. at ¶ 49.

2

Plaintiff began

Plaintiff’s then-partner co-borrowed the loan, but plaintiff
became the sole borrower after the two separated. Because neither
party argues that these facts are material here, for simplicity I
refer to plaintiff alone as the borrower.
3

making trial payments, but Bank of America again informed her, on
March 23, 2010, that it intended to accelerate the First Mortgage.
Plaintiff continued to make trial payments and to provide
documentation to Bank of America, but in December of 2010, Bank of
America “verbally denied [plaintiff] a modification under HAMP but
told

[plaintiff]

that

they

were

preparing

investor and management approval.”

a

modification

Am Cmplt. at ¶ 53.

for

On March

7, 2011, a Bank of America representative confirmed that plaintiff
did not qualify for a HAMP modification.

Id. at ¶ 58.

Then, in

April of 2011, plaintiff received a formal notice that her loan
modification request had been denied.

Id. at ¶ 59.

Nevertheless,

plaintiff’s file was placed in “suspense” for further review.

Id.

at ¶ 61.
After

the

denial

plaintiff

continued

continued

to

of

to

communicate

her
make
with

request
payments
Bank

of

for

a

HAMP

under
America

a

modification,
TPP,

about

and
her

she
case.

Although her file was apparently still under review, plaintiff
received another “Notice of Intent to Accelerate” on or around
August of 2011.

Shortly thereafter, two separate Bank of America

representatives told plaintiff that she had been approved for a
loan modification and would be receiving a package to effectuate
it, but she did not receive a modification at that time. Id. at
¶ 69.

Meanwhile, Bank of America continued to request additional

information

in

support

of

her
4

modification

request,

which

plaintiff provided throughout the remainder of 2011.

Her request

for modification was again denied in April of 2012 on the ground
of “excessive forebearance” (sic).

Am. Cmplt. at ¶ 74.

Still, negotiations continued.
3,

2012,

plaintiff
¶ 85.

a

Bank

that

a

of

America

trial

Finally, on or about October

representative

modification

had

been

verbally

advised

approved.

Id.

at

Plaintiff attaches to her complaint a letter from Bank of

America dated September 14, 2012, which states:
Congratulations.
We
have
determined
that
you
are
eligible for a trial modification.
Enclosed is your
Trial Period Plan.
If you successfully complete the
trial modification, your permanent modification may be
similar in terms/payments, pending final review at the
time of the permanent modification. …
After you successfully complete your Trial Period Plan
by making three trial payments, we will contact you to
discuss the terms of your permanent modification….

Am. Cmplt. Exh. D at 1 (DN 17-5).
2012

TPP”)

provides

that

The enclosed TPP (the “October

plaintiff

must

make

monthly

trial

payments of $2,105.08 within thirty days of October 1, November 1,
and December 1 of 2012.

It then states,

You will receive a permanent modification of your
account if you have a) paid each of the monthly trial
period payments (the “Trial Payments”) on time, and b)
signed and returned the final Modification Agreement,
which will be sent once you have completed your Trial
Payments.
Id.

The remainder of the TPP sets forth additional terms and

conditions, including that the terms of the final modification

5

agreement
Period.

would

be

determined

at

the

conclusion

the

Trial

The TPP also advised that plaintiff’s credit score may be

affected by accepting a TPP or final modification.
In

of

a

final

section

captioned

“Loan

Id. at 3.

Modification

Agreement

Frequently Asked Questions,” the TPP states:
There are several different ways we may modify the terms
of your loan to reach an affordable payment.
The
specific terms of your modification will be set forth in
your modification agreement, but the modifications to
your existing loan may include one or more of the
following:
o Your loan may be brought current by capitalizing past
due amounts.
This means we may add past due interest,
servicing expenses paid to third parties if taxes and
insurance have been paid but will not be collected
through escrow account and to the extent permitted and
taxes and insurance which may have been paid on your
behalf to your principal. Any unpaid late fees arising
from your most recent delinquency will be waived at the
time of modification.
o Your loan payments may be recalculated over a longer
period even though the maturity date of your loan will
not change. This will help lower your monthly payments,
however, it will result in your loan having a lump sum
payment (known as a balloon payment) which will continue
to accrue interest until you pay off the modified loan
(unless you choose to pay that amount sooner).
o You may be offered an interest rate that is equal to or
lower than your current interest rate.
If your new
modified interest rate is below market rate, it may
increase annually until it reaches the market rate on
the day your modification becomes effective….
Your permanent modification agreement may not contain
all of these terms, or may contain different terms. The
key terms of your permanent modification agreement will
be designed to provide you with affordable monthly
mortgage payments.

6

Id.
Plaintiff

complied

with

her

obligations

under

the

October

2012 TPP, and on January 30, 2013, Bank of America presented her
with a loan modification whose terms included: a New Principal
Balance of $514,841.58, of which $100,000 would be deferred and
become payable at the loan’s maturity date, which was unchanged;
extended amortization of the principal amount over 480 months,
resulting

in

a

“balloon

payment”

of

$343,764.88,

also

due

at

maturity; and a downward modification of the applicable interest
rate to 2% for the first 60 months, 3% for the next 12 months, and
3.5% for the remaining 200 months of the loan.
Exh. E.

See Am. Cmplt.,

Plaintiff alleges that the proposed modification was “not

in compliance with the terms of the modification agreement that
had been promised to her.”

Am. Cmplt. at ¶ 95.

Plaintiff also challenges the proposed modification on the
basis that “there is no evidence that Bank of America continues to
be the ‘lender’ or has any right to modify the payment terms of
the Loan.”

Id.

In this connection, plaintiff alleges that she

made Qualified Written Requests (“QWRs”) to defendants Wells Fargo
Bank, U.S. Bank, and Bank of America, “among others.” Id. at ¶ 24.
Plaintiff asserts that she sent QWRs on July 27, 2011 and August
16, 2011, to Bank of America, and on June 1, 2012, to Wells Fargo.
Id. at ¶ 164.

Bank of America did not acknowledge receipt of her

QWRs within five days as required by 12 U.S.C. ' 2605(e)(1)(A), and

7

its

responses

to

her

August

16,

2011

were

“incomplete

and

contradictory.”
II.
A motion to dismiss tests the sufficiency of a complaint, not
its merits.
Cir.

Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th

1990).

While

Rule

8

does

not

require

detailed

factual

allegations, a plaintiff must provide defendants with fair notice
of

the

factual

basis

for

information

her
to

claims,

and

she

render

her

claim

opposed to merely speculative.

must

include

legally

sufficient

plausible,

as

Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Fraud claims, which are governed by Rule 9(b), require additional
specificity, which means plaintiffs must plead the “who, what,
when, where and how: the first paragraph of any newspaper story.”
DiLeo v. Ernst & Young, 901 F.2d 624, 726 (7th Cir. 1990).
Because parties are bound by their pleadings, a plaintiff can
“plead himself out of court by alleging facts which show that he
has no claim.”

Soo Line R. Co. v. St. Louis Southwestern Ry. Co.,

125

483

F.3d

481,

(7th

Cir.

1997).

While

all

well-pleaded

allegations are generally presumed true, “to the extent that the
terms of an attached contract conflict with the allegations of the
complaint, the contract controls.”
Inc., 398 F.3d 930 (7th Cir. 2005).

8

Centers v. Centennial Mortg.,

A. Breach of contract and promissory estoppel
Defendants

argue

that

plaintiff’s

contractual

and

quasi-

contractual claims must be denied for the simple reason that, as
plaintiff’s allegations and exhibits make plain, Bank of America
fully

performed

offering

her

its

the

contractual

January

2013,

and

equitable

non-HAMP

obligations

loan

by

modification.

Defendants emphasize that nothing in either the October 2012 TPP,
or any other agreement plaintiff claims to have had with Bank of
America, promised her a HAMP modification. 3

I agree.

Plaintiff’s assertion that Bank of America promised her a
HAMP modification cannot be reconciled with her allegations that
Bank of America denied her request for a HAMP modification in
December

of

modification

2010,
was

stating

being

that

prepared

3

“for

a

(presumably
investor

and

non-HAMP)
management

While plaintiff states that she executed “at least two” TPP
agreements, her breach of contract claim specifically identifies
the October 2012 TPP as the relevant agreement. See Am. Cmplt.,
Exh. D at ¶¶ 117, 122. While her alternative, promissory estoppel
count
refers
to
TPP
“Agreements”
(plural),
then
refers,
confusingly, to “the TPP Agreement at Exhibit A” (confusing
because the complaint contains no “Exhibit A” but rather Exhibits
A-1 and A-2, neither of which is a TPP), other paragraphs in that
count suggest that it, too, is premised on the promises contained
in the October 2012 TPP.
See, e.g., id. at ¶ 140 (identifying
“verbiage” in the TPP as a basis for her reasonable reliance).
Even assuming, however, that one or more of the TPP agreements she
claims Bank of America “offered verbally” were the basis for these
claims, the complaint says so little about them (such as when—even
roughly—the agreements were formed or what their basic terms
were), that it does not plausibly suggest an entitlement to
relief. See Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir.
2008).
9

approval,” then reiterated, in March of 2011, that she was not
eligible

for

a

HAMP

modification.

Am.

Cmplt.

at

¶ 53,

58.

Plaintiff’s claim is likewise at odds with the October 2012 TPP
itself, which made no mention of HAMP and underscored that the
terms

of

plaintiff’s

permanent

modification

would

determined until the completion of the Trial Period.

not

be

Neither the

oral representations plaintiff attributes to Bank of America, nor
the statements it made in the October 2012 TPP, can reasonably be
construed as a promise (conditioned on plaintiff’s compliance with
certain terms) to offer plaintiff a permanent HAMP modification.
Moreover, the October 2012 TPP explicitly advised plaintiff
that

a

permanent

modification

would

be

designed

to

achieve

“affordable monthly mortgage payments,” and that it could include
deferred “balloon payments,” capitalization of past due amounts,
and

lower

these

interest

rates,

representations,

among

the

other

permanent

terms.

Consistent

modification

with

plaintiff

received in January of 2013 contained all three of these elements
and proposed monthly payments similar to her trial payments.
Plaintiff’s

response

to

defendants’

motion

ignores

the

language of the October 2012 TPP and instead refers to a decision
in the HAMP multi-district litigation currently pending in the
District

of

Massachusetts,

to

which

plaintiff

is

not

a

party.

Plaintiff reproduces several of the court’s observations in that
case,

including

that

many

Americans
10

have

felt

“vast

frustration…over

the

mismanagement

of

the

HAMP

modification

process,” and that the plaintiffs there had “plausibly alleged
that

Bank

of

America

utterly

failed

to

administer

modifications in a timely or efficient way.”

its

HAMP

Case No. 1:10–md–

02193–RWZ (D. Mass.) (DN 272 at 31), Pl.’s Opp., Exh. A.
Unlike

plaintiff,

however,

the

borrowers

in

the

MDL

case

received TPPs expressly promising HAMP modifications at the end of
a successful trial period.

See Sykes v. Bank of America Corp.,

2014 WL 4681608 (E.D. Mich. Sept. 19, 2014) (noting that TPPs in
the MDL were titled “Home Affordable Modification Trial Period
Plan” and promised “a Home Affordable Modification Agreement” upon
its successful completion).

Indeed, the MDL concerns only TPPs

issued under HAMP Supplemental Directive 09-01. See Pl.’s Opp.,
Exh. A at 31.

Plaintiff does not allege that the October 2012

TPP, or any other TPP she was offered, was issued pursuant to that
Supplemental Directive or any other HAMP-related authority. 4
Finally,
eligible

for

plaintiff’s
a

HAMP

insistence

modification

does

that
not

she

was,

support

in

her

fact,
claims.

Because HAMP provides no private right of action, see Wigod v.
Wells Fargo Bank, N.A., 673 F.3d 547, 559 n. 4 (7th Cir. 2012),
Bank

of

America’s

alleged

failure

4

to

evaluate

her

application

Also inapposite is plaintiff’s argument that Bank of America “did
not deny, in writing, eligibility for a HAMP modification by the
Modification Effective Date.” Pl.’s Opp. at 2-3.
Neither these
allegations, nor indeed the term “Modification Effective Date,”
appears anywhere in plaintiff’s complaint.
11

consistently with HAMP Guidelines is actionable only to the extent
that Bank of America’s conduct violates some other principle of
law or equity.

See Wigod, 673 F.3d at 585-86 (reversing dismissal

of claims alleging noncompliance with HAMP that are “actionable
under the laws of [Illinois]”).
the

conduct

plaintiff

alleges

For the reasons explained above,
as

the

basis

for

her

contract and promissory estoppel claims did neither.

breach

of

See id. at

560 (breach of contract claim requires breach) All-Tech Telecom,
Inc. v. Amway Corp., 174 F.3d 862, 868 (7th Cir. 1999) (promissory
estoppel claim requires “clear and definite” promise).
B. Fraudulent misrepresentation/concealment; violation of ICFA
Defendants

argue

that

plaintiff’s

fraud

claims

fail

for

multiple reasons, including substantially the same one as doomed
her

contract

claims:

just

as

Bank

of

America

did

not

promise

anything it failed to deliver, it did not make any statements that
turned out to be untrue.

I address the primary reason these

claims fail below.
Fraudulent representation requires: 1) a false statement of
material fact; 2) known or believed to be false by the party
making it; 3) intent to induce the other party to act; 4) action
by the other party in reliance on the statement’s truth; and 5)
damage resulting from that reliance.
Plaintiff

alleges

that

Bank

Wigod, 673 F.3d at 569.
of

America

“intentionally

misrepresented to her that if she complied with the TPP, she would
12

get a Modification Agreement which would modify her loan documents
and waive all past late charges,” and that this statement was
false because she did not receive such a modification.
at

¶¶ 144,

permanent

153.

But

plaintiff

modification,

and

did

receive

plaintiff

has

an

not

Am. Cmplt.

offer

pointed

for
to

a

any

representation, in the October 2012 TPP or elsewhere, that “all
past

late

charges”

would

modification of her loan.

be

waived

incident

to

a

permanent

Indeed, the October 2012 TPP contained

explicit representations about how late fees would be handled upon
permanent modification (“[a]ny unpaid late fees arising from your
most

recent

delinquency

will

be

waived

at

the

time

of

modification”), which plaintiff does not claim to be inconsistent
with the January 2013 permanent modification.
reasons,

she

has

not

plausibly

For at least these
alleged

fraudulent

misrepresentation. 5
Plaintiff’s statutory fraud claim fares no better.
requires

her

to

unfair practice.

establish,

among

other

things,

a

The ICFA

deceptive

or

Plaintiff does not adequately plead deception

5

Plaintiff’s fraudulent concealment claim does not require
independent discussion because it is not materially distinct from
her fraudulent misrepresentation claim.
The only fact plaintiff
claims Bank of America failed to disclose was its intent not to
offer or properly consider her for a HAMP modification.
See Am.
Cmplt. at ¶¶ 150-51. But Bank of America did not conceal any such
intent. To the contrary, it expressly rejected her request for a
HAMP modification, and plaintiff does not raise a plausible claim
that it intentionally evaluated her application improperly, much
less that it concealed an intent to do so.
13

for reasons previously explained.

And while the ICFA contemplates

claims

distinct

based

“deception,”

on
in

“unfairness”
this

case

the

as

two

are

from

those

coextensive.

based

on

Plaintiff

recites the terms “unfair” throughout her complaint, but the only
substantive allegations that support this characterization simply
refer back to Bank of America’s putative misrepresentations and
deception.
C. RESPA
Defendants assert that plaintiff’s RESPA claim fails as a
matter of law because: 1) plaintiff does not allege actual damages
resulting from defendant’s failure to identify creditors, and 2)
plaintiff’s allegations are insufficient to state that her alleged
requests
under

for

information

RESPA.

Plaintiff

arguments.

constituted
does

not

Qualified

respond

to

Written
either

Requests
of

these

While I am not persuaded plaintiff’s RESPA claim is

formally defective under Rule 8 for failing to allege the kinds of
details

defendants

fault

her

for

omitting,

I

agree

that

her

allegations are substantively deficient because they do not state
actual damages resulting from defendants’ non-compliance with of
RESPA.
Failure to plead actual damages is fatal to a RESPA claim.
Konieczka v. Wachovia Mortg. Corp., No. 11 C 71, 2012 WL 1049910
at *4 (N.D. Ill. Mar. 28, 2012) (Kendall, J.).
v.

GMAC

Mortg.

Corp.,

629

F.3d
14

676,

693-94

See also Catalan
(7th

Cir.

2011).

Plaintiff claims that Bank of America and Wells Fargo violated
RESPA by failing to respond timely to her QWRs, and by providing
incomplete or contradictory information about who ultimately holds
the interest in her loan.
either

of

these

alleged

pecuniary damages to her.

She does not claim, however, that
violations

resulted

in

any

actual,

She does not allege, for example, that

her mortgage payments were not received by the appropriate entity
at

any

point

throughout

the

loan’s

alleged

transfers,

such

as

might have caused her to incur late fees, penalties, or interest.
Cf. Konieczka,

2012

resulting

Bank’s

from

WL

1049910
failure

at
to

*2

(overpayment

correct

documents could amount to actual damages).
that

her

failure

to

obtain

a

HAMP

PIN

of

number

interest
on

loan

Nor does she allege

modification

from

Bank

of

America, or the damages that resulted therefrom, were related in
any way to her inability to ascertain the identity of the Note
holder or “investor.”

For these reasons, her RESPA claim must be

dismissed.
D. Declaratory judgment, accounting and injunctive claims (Counts
I, VII, and VIII)
Three

claims

remain

for

disposition.

Although

they

are

analytically distinct, each warrants dismissal on the basis that
plaintiff fails to respond to the arguments defendants raise. See
Kirksey v. R.J. Reynolds Tobacco Co., 168 F.3d 1039, 1043 (7th
Cir. 1999) (“by failing to respond responsively to the motion to
15

dismiss…[plaintiff] forfeited her right to continue litigating her
claim.”)
III.
For
Because

the
this

foregoing
order

reasons,

disposes

of

defendants’

motion

plaintiff’s

is

complaint

granted.
in

its

entirety, I need not reach the issues raised by other defendants’
motion and therefore deny it as moot.

ENTER ORDER:

_____________________________
Elaine E. Bucklo
United States District Judge

Dated: March 3, 2015

16