Tratar v. Bank of America, NA

Filing 43

MEMORANDUM Opinion and Order: For the foregoing reasons, Bank of America's motion to dismiss 26 28 , is denied in part without prejudice to the extent that the Court will not dismiss Tratar's claims at this time. Bank of America' s motion is granted in part to the extent that proceedings in this case are stayed pending resolution of the foreclosure action in state court. The parties should inform the Court when the foreclosure action is concluded and any appellate proceeding s have concluded or the time for appeal has elapsed. Additionally, Tratar filed her brief under the heading of a "motion." See 35 . To the extent that this was more than a mere administrative error, and Tratar seeks some relief beyond intending to oppose Bank of America's motion, her motion 35 is denied. Status hearing set for 3/16/2017 at 09:00 AM. Signed by the Honorable Thomas M. Durkin on 9/16/2016:Mailed notice(srn, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LAUREN J. TRATAR,
No. 15 C 5844

Plaintiff,

Judge Thomas M. Durkin

v.
BANK OF AMERICA, N.A., f/k/a BAC HOME
LOAN SERVICING, LP, f/k/a COUNTRYWIDE
HOME LOANS SERVICING, LP,
Defendant.

MEMORANDUM OPINION AND ORDER
Lauren Tratar pro se alleges that Bank of America committed fraud in
soliciting her mortgage loan and later instituting foreclosure proceedings against
her property. R. 18. Bank of America has moved to dismiss for failure to state a
claim pursuant to Federal Rule of Civil Procedure 12(b)(6), or in the alternative to
stay proceedings. R. 26; R. 28. For the following reasons, Bank of America’s motion
is granted to the extent that proceedings in this case are stayed.
Background
On September 7, 2007, Tratar mortgaged her property at 1021 Royal Saint
George Drive in Naperville, Illinois. R. 18 ¶¶ 1, 22. Bank of America filed a
foreclosure action in DuPage County on July 7, 2010. R. 18 ¶ 37. In answer to Bank
of American’s foreclosure action, Tratar alleged counterclaims for fraud and
violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, in
connection with the Tratar’s mortgage loan from Bank of America. See R. 28-1. On

April 19, 2013, the state court granted Bank of America’s motion to strike Tratar’s
affirmative defenses and to dismiss her counterclaims. See R. 28-3. The state court
twice permitted Tratar to file amended affirmative defenses and counterclaims. See
R. 28-4; R. 28-6. The state court granted Bank of America’s subsequent motions to
dismiss these affirmative defenses and counterclaims, with the final order denying
reconsideration entered on April 16, 2015. See R. 28-5; R. 28-7; R. 28-8.
Tratar then filed this action on July 1, 2015. R. 1. The original complaint was
182 pages. Id. The Court dismissed the complaint without prejudice pursuant to
Federal Rule of Civil Procedure 8. R. 16.
Tratar’s amended complaint still contains 87 pages, but it is captioned with
counts for RICO, breach of contract, and fraudulent inducement and fraudulent
concealment. R. 18 at 1. Tratar’s allegations boil down to the claim that Bank of
America intentionally “placed [her] into a high-risk loan which was designed to
default when interest rates [and] thus monthly mortgage payments rose and the
market collapsed.” R. 18 ¶ 15c (emphasis added). Tratar alleges that Bank of
America’s actions in this regard were part of a “criminal enterprise,” but her
allegations as to the existence of such an enterprise are largely incomprehensible.
For example, Tratar alleges:
[Bank of America] and its Co-Conspirators are a group of
persons associated together in fact for the purpose of
carrying out an ongoing criminal enterprise which has
been structured to operate as a unit in order to
accomplish an overarching goal and intent: to maintain
the power and control of the U.S. fiat monetary system
which [Bank of America] and its Co-Conspirators have
covertly held for decades as this system is on the precipice
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of collapse as the forgoing facts will validate. [Bank of
America] and its Co-Conspirators seek to control this
inevitable collapse and the introduction of a new fiat
monetary system which [Bank of America] and its CoConspirators are conspiring to control through the
employment of a Multi-faceted Enterprise of which this
complaint focuses upon one specific element and identifies
the Enterprise in this complaint as the Origination of
Plaintiffs mortgage loan through the attempted
Foreclosure of the subject loan. The Enterprise as defined
by the Plaintiff is an essential facet of the common plan
as it contributes to the destabilization of the public and
subsequent evisceration of the wealth and assets held by
the Middle-Class whose sheer numbers and potentially
loud and influential voices of dissent could derail the
Enterprise’s main objective whereas a disempowered
Middle-Class struggling to make ends meet is so focused
on survival it is far easier to manage.
R. 18 at 6.
Bank of America argues that Tratar’s claims should be dismissed for the
following reasons: (1) lack of standing; (2) res judicata; (3) failure to state a claim;
and (4) statute of limitations. As discussed below, the Court finds that this action
should be stayed because it will likely be barred by res judicata once the state court
foreclosure action is final. Thus, the Court does not reach Bank of America’s other
arguments.
Analysis
“In Illinois, res judicata extends to all questions actually decided in a
previous action as well as to all grounds of recovery and defenses which might have
been presented in the prior litigation.” Whitaker v. Ameritech Corp., 129 F.3d 952,
9556 (7th Cir. 1997) (citing La Salle Nat’l Bank v. Cnty. Bd. of Sch. Trustees, 337
N.E.2d 19, 22 (Ill. 1975)). Res judicata bars a subsequent action if three
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requirements are met: “(1) there was a final judgment on the merits rendered by a
court of competent jurisdiction; (2) there is an identity of cause of action; and (3)
there is an identity of parties or their privies.” Whitaker, 129 F.3d at 956 (quoting
Downing v. Chi. Transit Auth., 642 N.E.2d 456, 458 (Ill. 1994)). With respect to the
third element, the “identity of the cause of action,” Illinois employs the
“transactional” test, which provides that “separate claims will be considered the
same cause of action for purposes of res judicata if they arise from a single group of
operative facts.” Amari Co., Inc. v. Burgess, 955 F. Supp. 2d 868, 881 (N.D. Ill. 2013)
(quoting River Park, Inc. v. City of Highland Park, 703 N.E.2d 883, 893 (Ill. 1998)).
This is a broad standard: two causes of action with overlapping facts will pass the
transactional test “regardless of whether they assert different theories of relief” and
“even if there is not a substantial overlap of evidence.” River Park, 703 N.E.2d at
893. “The doctrine prohibits not only those matters which were actually litigated
and resolved in the prior suit, but also any matter which might have been raised in
that suit to defeat or sustain the claim or demand.” Kosydor v. Am. Express
Centurion Servs. Corp., 979 N.E.2d 123, 128 (Ill. App. Ct. 5th Dist. 2012) (quoting
Rein v. Noyes & Co., 665 N.E.2d 1199, 1205 (Ill. 1996) (emphasis added)).
Tratar argues that none of the three elements of res judicata are met here.
Taking the second element first, the Court finds that there is an identity of cause of
action. Tratar argues that “the RICO statutes provide an independent redress for
injuries that include using fraud to obtain money,” such that her RICO claim is not
barred by res judicata. R. 37 at 38. But whether her federal claims are

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“independent” of her state court claims is not the applicable standard. Rather, the
question is whether her state claims and federal claims “arise from a single group of
operative facts.” Tratar concedes that all her claims arise from Bank of America’s
actions with respect to her mortgage. See R. 37 at 39 (“[Bank of America] seeks
protection under Res Judicata as another ‘get out of jail free’ card to exonerate it
from the consequence of its violations of law and criminality. Had the Plaintiff not
been denied discovery in state court, the fraud would have been known thereby
warranting dismissal of [Bank of America’s] case in state court.”). In both cases,
Tratar alleges that Bank of American fraudulently induced her to agree to the
mortgage and then fraudulently pursued foreclosure. The difference between the
form of her state court claims and her federal court claims is irrelevant to res
judicata under Illinois law. Thus, the Court finds that there is an identity of
Tratar’s state court claims and federal court claims.
Nevertheless, under Illinois law, a final judgment does not exist in the state
court that permits this Court to dismiss Tratar’s federal claims at this point in time.
Bank of America cites Avery v. Auto-Pro Inc., 731 N.E.2d 319 (Ill. App. Ct. 1st Dist.
2000), in support of its argument that res judicata applies to Tratar’s dismissed
counterclaims even though Bank of America “has not yet obtained a foreclosure
judgment and order confirming sale in the [state court].” R. 28 at 9. But Avery relies
on Illinois Supreme Court Rule 273, which provides that “an involuntary dismissal
of an action, other than a dismissal for lack of jurisdiction, for improper venue, or
for failure to join an indispensable party, operates as an adjudication upon the

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merits.” This rule says nothing about counterclaims specifically, and neither does
Rein v. David A. Noyes & Co., 665 N.E.2d 1199 (Ill. 1996), which Avery also cites.
Moreover, in Illinois, even an entry of judgment at the circuit court level is
insufficient to have res judicata effect if “the potential for appellate review” has not
“been exhausted.” See Ballweg v. City of Springfield, 499 N.E.2d 1373, 1375 (Ill.
1986) (“For purposes of applying the doctrine of collateral estoppel, finality requires
that the potential for appellate review must have been exhausted.”); Rogers v.
Desiderio, 58 F.3d 299, 302 (7th Cir. 1995) (noting that Illinois courts “have
extended Ballweg from issue preclusion to claim preclusion”). For this reason,
courts in this district frequently stay federal actions where state court actions that
are already far along but have not reached final judgment and completed the
appellate process, could potentially have res judicata effect on the federal action.
See Knight v. Djk Real Estate Group, LLC, 2016 WL 427614, at *8 (N.D. Ill. Feb. 4,
2016); Thompson v. City of Chi. Bd. of Educ., 2016 WL 362375, at *3 (N.D. Ill. Jan.
29, 2016); Clark & Leland Condo., LLC v. Northside Cmty. Bank, 2016 WL 302102,
at *3 (N.D. Ill. Jan. 25, 2016). This Court will follow suit.
Conclusion
For the foregoing reasons, Bank of America’s motion to dismiss, R. 26; R. 28,
is denied in part without prejudice to the extent that the Court will not dismiss
Tratar’s claims at this time. Bank of America’s motion is granted in part to the
extent that proceedings in this case are stayed pending resolution of the foreclosure
action in state court. The parties should inform the Court when the foreclosure

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action is concluded and any appellate proceedings have concluded or the time for
appeal has elapsed.
Additionally, Tratar filed her brief under the heading of a “motion.” See R. 35.
To the extent that this was more than a mere administrative error, and Tratar
seeks some relief beyond intending to oppose Bank of America’s motion, her motion,
R. 35, is denied.
ENTERED:

______________________________
Honorable Thomas M. Durkin
United States District Judge
Dated: September 16, 2016

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