David v. Bayview Loan Servicing, LLC
Filing
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MEMORANDUM OPINION AND ORDER Signed by the Honorable Robert M. Dow, Jr. on 3/3/2017. Mailed notice(cdh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
GEORGE DAVID,
Plaintiff,
v.
BAYVIEW LOAN SERVICING, LLC,
Defendant.
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Case No. 15-cv-9274
Judge Robert M. Dow, Jr.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant’s motion [25] to dismiss Plaintiff’s Second
Amended Complaint [24] for lack of jurisdiction and for failure to state a claim. For the reasons
stated below, Defendant’s motion [25] is granted. Plaintiff’s Second Amended Complaint fails
to establish that the Court has jurisdiction over this suit. Plaintiff shall be given until April 7,
2017 to file a Third Amended Complaint. To survive dismissal, the Third Amended Complaint
must either: 1) allege a viable federal claim under the Real Estate Settlement Procedures Act
(“RESPA”), which would give the Court federal question jurisdiction over Plaintiff’s lawsuit and
allow the Court to exercise supplemental jurisdiction over Plaintiff’s claim under the Illinois
Consumer Fraud Act (“ICFA”); or 2) demonstrate that the amount in controversy in this suit is at
least $75,000 and that there is complete diversity among the parties. Defendant shall have until
March 24, 2017 to file a statement with the Court identifying all the citizenship information
necessary to determine whether complete diversity exists, as explained below.
I.
Background1
In his Second Amended Complaint, Plaintiff alleges that Defendant violated the Fifth
Amendment to the United States Constitution and the ICFA by depriving him of his home
without due process. Plaintiff alleges that he is a citizen of Illinois, that Defendant is “a
company incorporated in the state of Delaware,” [24] at 1, that the amount in controversy
exceeds $75,000, and therefore that the Court has diversity jurisdiction over his claims.
In 1987, Plaintiff’s family purchased a four-unit apartment building located at 6522 N.
Richmond Street in Chicago (the “Property”). Plaintiff lives (or lived) in the Property with his
elderly mother, his brothers, their spouses, and their thirteen minor children. There was a
mortgage on the Property, held by lender Taylor Bean & Whitaker.
In May 2007, following months of illness, Plaintiff was admitted to the hospital and
underwent multiple surgeries on his brain and back. Due to his illness, Plaintiff lost his family
business and defaulted on his mortgage.
Plaintiff sought to modify the mortgage through the federal Home Affordable
Modification Program (“HAMP”). In March 2009, Plaintiff filed an application for modification
with Taylor Bean & Whitaker. The application contained an “actual budget” and an “affordable
proposed budget.” [24] at 5. In 2010, Taylor Bean & Whitaker went out of business and
Defendant took over the mortgage. Plaintiff submitted two applications for modification to
Defendant in 2010 and 2011 but did not receive any response from Defendant.
On October 12, 2012, the Cook County Circuit Court entered a judgment of foreclosure
against Plaintiff and ordered the Property sold.
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For purposes of Defendant’s motion to dismiss, the Court assumes as true all well-plead allegations set
forth in Plaintiff’s Second Amended Complaint. See Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939,
946 (7th Cir. 2013).
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On November 8, 2012, Plaintiff filed another HAMP application for modification with
Defendant. This application showed a total household income of $6382.00 and was supported by
pay stubs, tax returns, and government issued benefits letters. Plaintiff alleges that throughout
this process, he “was told by [Defendant’s] representatives not to worry, ‘[Defendant] has an inhouse program that qualifies homeowners based on their income.’” [24] at 6. Plaintiff “relied on
[this] information” and “spent a large sum of his family’s savings remodeling portion[s] of the
property.” Id.
On September 20, 2013, Plaintiff received a letter from Defendant informing him that he
did not qualify for a loan modification because his “$2488.18 household income is outside the
range of required income.” Id. Plaintiff complained to the Illinois and Florida Attorneys
General. On October 17, 2013, Defendant requested that Plaintiff fill out a new application with
supporting documents. Defendant insisted that the application must be completed by the next
day. This deadline was impossible for Plaintiff to meet because the application involved several
families. Id. at 6-7. Plaintiff submitted a new HAMP application and supporting documents to
Defendant on October, 2013, showing a verified monthly income of $6766.00. Id.
On October 25, 2013, Plaintiff filed an emergency motion in the Cook County Circuit
Court seeking to stay the sale of the Property. Defendant voluntarily stopped the sale. The judge
did not, as Plaintiff had expected, question Defendant about why it had rejected Plaintiff’s
HAMP applications. Id. at 7.
On January 17, 2014, Plaintiff received an email from an employee of Defendant, Andre
South, asking to verify his mother’s address. South wrote to Plaintiff: “George the file looks
good. We can get your income cleared if we resolve this one missing document[.]” [24] at 7.
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Plaintiff obtained a state identification card for his mother and verified her address with
Defendant. Id. at 7-8.
On February 7, 2014, Plaintiff received a letter from Defendant denying his HAMP
application on the basis that his total gross income, which Defendant verified as $2,497.90, was
not high enough to make Plaintiff eligible for HAMP. Id. at 8. On February 10, 2016, the Cook
County Circuit Court approved the sale of the Property and the Property was sold. See [24] at 8.
Plaintiff is pursuing an appeal of the order approving sale in the Illinois Appellate Court. See id.;
see also [25-1]. On April 19, 2016, Plaintiff and his family were evicted from the Property. [24]
at 8.
Plaintiff filed the instant lawsuit against Defendant on October 20, 2015. Plaintiff’s
original Complaint asserted claims for violations of 42 U.S.C. §§ 1983, 1985, and 1986.
Defendant moved to dismiss the Complaint. See [12]. While the motion to dismiss was
pending, Plaintiff filed an Amended Complaint [20]. On April 29, 2016, the Court dismissed
Plaintiff’s Complaint for lack of subject matter jurisdiction and struck Plaintiff’s First Amended
Complaint. See [23]. On May 31, 2016, Plaintiff filed a Second Amended Complaint, [24],
which Defendant now moves to dismiss.
II.
Legal Standard
Defendant seeks dismissal of Plaintiff’s Second Amended Complaint under Federal Rules
of Civil Procedure 12(b)(1) and 12(b)(6). “For purposes of a motion to dismiss under either Rule
12(b)(1) or Rule 12(b)(6), the court accepts all well-pleaded factual allegations as true and
construes all reasonable inferences in the plaintiff’s favor.” Mutter v. Madigan, 17 F. Supp. 3d
752, 756 (N.D. Ill. 2014). A Rule 12(b)(1) motion challenges federal subject matter jurisdiction.
In ruling on the motion, the district court may look beyond the jurisdictional allegations alleged
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in the complaint and take into consideration whatever evidence has been submitted on the issue
to determine if subject matter jurisdiction exists. County of Cook v. HSBC N. Am. Holdings Inc.,
136 F. Supp. 3d 952, 958 (N.D. Ill. 2015). The burden of proof is on the party asserting that
jurisdiction exists. Id.
A Rule 12(b)(6) motion challenges the legal sufficiency of the complaint. To survive a
motion to dismiss under Rule 12(b)(6), a plaintiff’s complaint must allege facts which, when
taken as true, “‘plausibly suggest that the plaintiff has a right to relief, raising that possibility
above a speculative level.’” Cochran v. Illinois State Toll Highway Auth., 828 F.3d 597, 599
(7th Cir. 2016) (quoting EEOC v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir.
2007)). The Court reads the Second Amended Complaint and assesses its plausibility as a
whole. See Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011).
III.
Analysis
Upon reviewing Plaintiff’s Second Amended Complaint, the parties’ briefs, and its prior
order in this suit, see [23], [24], [25], [28] and [29], the Court concludes that Defendant’s motion
to dismiss must be granted because Plaintiff fails to establish that the Court has jurisdiction over
the lawsuit. As the Court explained in its April 29, 2016 order, see [23] at 6-17, Plaintiff has the
burden to establish that the Court has either federal question jurisdiction or diversity jurisdiction
over his lawsuit.
Plaintiff’s Second Amended Complaint fails to overcome the pleading
deficiencies that the Court identified in its earlier order.
As to federal question jurisdiction, Plaintiff once again has not alleged a viable federal
claim. Plaintiff asserts that Defendant violated his rights under the Fifth Amendment to the
United States Constitution. However, private actors like Defendant do not have a constitutional
obligation to provide due process. That is because the purpose of the due process clause is “to
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protect the people from the State, not to ensure that the State protect[s] them from each other.”
DeShaney v. Winnebago Cty. Dep’t of Soc. Servs., 489 U.S. 189, 196 (1989); see also Jackson v.
Indian Prairie Sch. Dist. 204, 653 F.3d 647, 654 (7th Cir. 2011) (“The Due Process Clause of the
Fourteenth Amendment generally does not impose upon the state a duty to protect individuals
from harm by private actors.” (internal citation and quotation marks omitted)).
Plaintiff argues in his response to Defendant’s motion to dismiss that he should be
allowed to amend his complaint again to add a claim for violation of RESPA. While the Court
will allow Plaintiff to do so, this does not save Plaintiff’s Second Amended Complaint from
dismissal for want of federal question jurisdiction.
Turning to diversity jurisdiction, Plaintiff’s Second Amended Complaint does not remedy
the pleading deficiencies that the Court outlined in its last opinion. See [23] at 8-10. As the
Court explained, it has “diversity” jurisdiction over all civil actions in which two requirements
are met: First, there must be “complete diversity between all named plaintiffs and all named
defendants”—meaning that no named plaintiff is from the same state as any named defendant—
“and no defendant [may be] a citizen of the forum State.” Lincoln Prop. Co. v. Roche, 546 U.S.
81, 84 (2005); see also 28 U.S.C. § 1332(a). Second, the matter in controversy must “exceed[]
the sum or value of $75,000, exclusive of interest and costs.” Id.
In his Second Amended Complaint, Plaintiff asserts generally that his ICFA claim is
worth well in excess of $75,000, for the “time, suffering, penalty and the loss of Plaintiff’s
[Property] of 28 years.” [24] at 2. However, Plaintiff still does not specify the type or amount of
relief that he is seeking in this lawsuit. The Court must have this information to evaluate
whether Plaintiff’s claim is worth at least $75,000. Specifically, if he prevails in this lawsuit,
does Plaintiff want the Court to award him 1) monetary damages; 2) punitive damages; 3)
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injunctive relief; 4) attorneys’ fees; or 5) anything else? To the extent that Plaintiff alleges that
he has suffered monetary damages, he should at least estimate the dollar amount in which he was
damaged and explain how Defendant’s alleged actions caused these damages. For example, how
much money did Plaintiff spend fixing the Property, in reliance on Defendant’s representations
that it was considering his application for a HAMP modification?
Plaintiff’s Second Amended Complaint also fails to establish that there is complete
diversity of citizenship between the parties. Defendant is an LLC. As the Court explained in its
prior decision, “[f]or diversity jurisdiction purposes, the citizenship of an LLC is the citizenship
of each of its members.” Thomas v. Guardsmark, LLC, 487 F.3d 531, 534 (7th Cir. 2007).
Therefore, in order to establish that the Court has diversity jurisdiction, a plaintiff is required to
“identify the citizenship of each of [the LLC’s] members as of the date the complaint * * * was
filed, and, if those members have members, the citizenship of those members as well.” Id. See
also DC Liquidators, LLC v. Warehouse Equip. Specialists, LLC, 66 F. Supp. 3d 1138, 1139
(N.D. Ill. 2014) (“the citizenship of an LLC is that of each of its members, and this must be
traced all the way through any corporate, LLC, or other entity members”).
The Second
Amended Complaint alleges that Defendant is incorporated in Delaware, but does not identify
the citizenship of Defendant’s members.
The Court recognizes that it may be difficult for Plaintiff, who is acting pro se, to identify
Defendant’s members and their citizenship. Therefore the Court orders Defendant to submit a
statement identifying the citizenship of each of the members of its LLC.
If Defendant’s
members are themselves LLCs, then Defendant must identify the citizenship of those member
LLCs, as well.
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Plaintiff will be allowed to file a Third Amended Complaint if he is able to do so
consistent with this opinion. If Plaintiff’s Third Amended Complaint establishes that Court has
jurisdiction, then the Court will issue another order addressing Defendant’s arguments
concerning: 1) the applicability of the Colorado River abstention doctrine, and, if necessary, 2)
the sufficiency of Plaintiff’s ICFA claim.
The Court’s preliminary assessment of these
arguments is that Colorado River abstention likely is appropriate because Plaintiff has raised in
the state appellate court the same ICFA violation that he alleges here. See generally Deb v.
SIRVA, Inc., 832 F.3d 800, 814 (7th Cir. 2016) (explaining that the Colorado River abstention
doctrine “allows courts to conserve judicial resources by abstaining from accepting jurisdiction
when there is a parallel proceeding elsewhere”). But the Court need not issue a definitive ruling
on Colorado River at least until Plaintiff’s operative complaint properly alleges a claim over
which the Court has jurisdiction.
IV.
Conclusion
For the foregoing reasons, the Court grants Defendant’s motion to dismiss Plaintiff’s
Second Amended Complaint. Plaintiff shall have until April 7, 2017 to file a Third Amended
Complaint if he can do so consistent with this opinion. To survive dismissal, the Third Amended
Complaint must either: 1) allege a viable claim under the Real Estate Settlement Procedures Act
(“RESPA”), which would give the Court federal question jurisdiction over Plaintiff’s lawsuit and
allow the Court to exercise supplemental jurisdiction over Plaintiff’s claim under the Illinois
Consumer Fraud Act (“ICFA”); or 2) demonstrate that the amount in controversy in Plaintiff’s
ICFA claim is at least $75,000 and that there is complete diversity among the parties. Defendant
shall have until March 24, 2017 to file a statement with the Court identifying all the citizenship
information necessary to determine whether complete diversity exists.
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Dated: March 3, 2017
_________________________________
Robert M. Dow, Jr.
United States District Judge
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