Skibbe et al v. U.S. Bank Trust, N.A., As Trustee for LSF9 Master Participation Trust et al

Filing 184

MEMORANDUM Opinion and Order signed by the Honorable Harry D. Leinenweber on 2/15/2018. Mailed notice (jh, )

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

DWAYNE SKIBBE and DEBORAH
SKIBBE,
Plaintiffs,
Case No. 16 C 192
v.
Judge Harry D. Leinenweber
U.S. BANK TRUST, N.A.,
As Trustee for LSF9 MASTER
PARTICIPATION TRUST; and
LAW OFFICES OF IRA T. NEVEL,
Defendants.

MEMORANDUM OPINION AND ORDER
This
Illinois

case
state

involves
court

and

an

improperly-filed

the

homeowners’

foreclosure
claim

that

in
this

improper foreclosure constitutes a violation of the Fair Debt
Collection Practice Act, see, 15 U.S.C. § 1692 et seq. (the
“FDCPA”), and the Illinois Consumer Fraud and Deceptive Business
Practices Act, 810 ILCS 505/1 et seq. (the “ICPA”).

Before the

Court are Cross-Motions for Summary Judgment [ECF Nos. 126, 131,
142].

For the reasons stated herein, the Court grants U.S. Bank

and Nevel’s Motions for Summary Judgment [ECF Nos. 126, 131] and
denies the Skibbes’ Motion for Partial Summary Judgment [ECF
No. 142].

I.

FACTUAL BACKGROUND

Most of the facts are undisputed between the parties.

The

parties before the Court are the foreclosed-upon homeowners (the
“Skibbes”), the bank (“U.S. Bank”), and the bank’s law firm that
filed the foreclosure actions (“Nevel”).
foreclosures

in

this

case.

Each

There have been four

will

be

described

here,

although only the latter three are relevant.
A.

The Mortgage Loan

In October 2004, Dwayne and Deborah Skibbe (the “Skibbes”)
refinanced

their

home

mortgage

loan

with

Household

Finance

Corporation (“HFC”) in the amount of $271,132.11 and secured the
loan with their home. (U.S. Bank and Nevel’s Resps. to Skibbes’
Facts ¶ 18 (U.S. Bank and Nevel filed separate responses to the
Skibbes’

Statement

of

Facts,

but

where

no

difference

apparent, the responses will be cited together).)

is

Eventually,

the Skibbes stopped making regular payments on their mortgage.
(Skibbes’ Resp. to U.S. Bank ¶ 9.)

A foreclosure action was

filed in 2007 and later voluntarily dismissed.

(Id. ¶ 10; HFC

v. Deborah Skibbe et al., No. 07 CH 1562 (Ill. Cir. Ct.).)

This

initial foreclosure is not relevant to the issues here.
B.

Foreclosure I

The Skibbes defaulted on their monthly mortgage payments
again in 2010.

(U.S. Bank and Nevel’s Resps. to Skibbes’ Facts
- 2 -

¶ 20.)

In December 2010, HFC filed a foreclosure suit against

the Skibbes in Kane County seeking a judgment of foreclosure and
sale of the Skibbes’ home (“Foreclosure I”).
Skibbe, 10 CH 5758 (Ill. Cir. Ct.)).
bankruptcy on December 23, 2011.
¶ 19.)

(Id. ¶ 21; HFC v.

The Skibbes filed for

(Skibbes’ Resp. to U.S. Bank

During the bankruptcy proceedings, the Skibbes filed a

statement of intention to surrender the property. (Id. ¶ 20.)
Plaintiffs’ Chapter 13 Plan was confirmed on May 21, 2012, and
HFC afterwards voluntarily dismissed Foreclosure I. (Id. ¶¶ 2122.)
C.

Foreclosure II

A little over a year later, in June 2013, Nevel, on behalf
of HFC, filed a second foreclosure against the Skibbes in Kane
County

seeking

(“Foreclosure

foreclosure

II”).

(See,

and
U.S.

sale
Bank

of

and

Skibbes’

Nevel’s

home

Resps.

to

Skibbes’ Facts ¶ 23; HFC v. Skibbe, 13 CH 1418 (Ill. Cir. Ct.)).
Unfortunately

for

the

Defendants,

Foreclosure II five months later.

HFC

voluntarily

(Id. ¶ 24.)

dismissed

It seems a

mystery even to the parties why Foreclosure II was voluntarily
dismissed. (Skibbes’ Resp. to U.S. Bank ¶ 26.)

The Skibbes

converted

subsequently

their

bankruptcy

to

Chapter

7

and

received a bankruptcy discharge on January 6, 2014.
28.)

(Id. ¶¶ 27-

The mortgage loan was later assigned from HFC to U.S. Bank
- 3 -

Trust N.A. (“U.S. Bank”) after having already been in default.
(Skibbes’ Resp. to U.S. Bank’s Add’l Facts ¶ 2; U.S. Bank’s
Resp. to Skibbes’ Facts ¶ 25.)

U.S. Bank retained Defendant Law

Offices of Ira T. Nevel (“Nevel”) to collect the debt through
foreclosure on the property.

(Nevel’s Resp. to Skibbes’ Facts

¶¶ 14-15.)
D.

Foreclosure III

In its ill-fated third attempt, Nevel, on behalf of U.S.
Bank,

filed

a

third

foreclosure

against

the

Skibbes

in

Kane

County on January 8, 2015, seeking foreclosure and sale of the
Skibbes’ home to satisfy their mortgage obligation (“Foreclosure
III”).
¶ 30;

(See, U.S. Bank and Nevel’s Resps. to Skibbes’ Facts
U.S.

Bank

v.

Skibbe,

15

CH

22

(Ill.

Cir.

Ct.)).

Foreclosure III is at the heart of the Skibbes’ FDCPA claim.
The propriety of Foreclosure III was (and still is) heavily
disputed

between

the

parties.

The

crux

of

the

dispute

was

whether Foreclosure III was procedurally barred under Illinois
law.
barred

The Skibbes argued (successfully) that Foreclosure III was
by

Illinois’

single

refiling

rule,

which

allows

a

litigant to dismiss voluntarily a lawsuit and then refile that
same lawsuit only once.

The Skibbes argue that Foreclosure III

was a second refiling and thus barred by the Illinois Code of
Civil Procedure.

See, 735 ILCS 5/13-217; Timberlake v. Illini
- 4 -

Hosp., 676 N.E.2d 634, 635 (Ill. 1997).

The Defendants argued

that Foreclosure I and Foreclosures II and III were different
cases because Foreclosure I was based on an April 2010 default
date

whereas

Foreclosures

August 2010 default date.
22.)

II

and

III

were

based

on

an

(Skibbes’ Resp. to Nevel ¶¶ 8, 16,

Thus, according to the Defendants, Foreclosure III was

proper under the single refiling rule because it was just the
first refiling of Foreclosure II, not the second refiling of
Foreclosure I.
their

position

Now in federal court, the Defendants buttress
by

pointing

to

the

fact

that

the

foreclosure

complaints allege different default dates because the Skibbes
made additional payments in 2011, after Foreclosure I was filed.
(U.S. Bank’s Facts ¶ 16; Nevel’s Facts ¶ 11.)

The Defendants

rely on the Skibbes’ bank statements to support its assertion.
Id.

The Skibbes do not dispute that these payments were made to

HFC from their bank account, but they dispute characterizing
them as mortgage payments, notably without any indication about
what else those payments could possibly be.

(Skibbes’ Resp. to

U.S. Bank’s Facts ¶ 16.)
The

parties

continued

to

argue

about

whether

Foreclosure III was proper, both in letter correspondence prior
to Foreclosure III’s filing and then throughout the state court

- 5 -

litigation, including on appeal.

(Skibbes’ Resp. to U.S. Bank

¶¶ 29-32.)
E.

Prior State Court Litigation

The Skibbes won that argument in state court.
2015,

the

circuit

court

dismissed

Foreclosure

On June 24,
III

with

prejudice, holding it was barred by the single-refiling rule.
(U.S. Bank and Nevel’s Resps. to Skibbes’ Facts ¶ 34.)
moved to reconsider.

Nevel

The court denied the motion, at least

partially based on the court’s understanding that no payments
had been made after April 2010.
U.S. Bank ¶¶ 42-43.)

(Id. ¶ 38; Skibbes’ Resp. to

The court found that “both sides agreed

and reaffirmed this morning that no payments were made after
April 2010” and denied reconsideration, stating in its ruling
that “[b]ased on the representations that were made on the date
of our first hearing and today that no additional payments were
made . . . what’s been presented is that nothing has changed in
terms of the payments since [Foreclosure I]” and “[t]he fact of
the matter is . . . the Plaintiff alleged the same breach in
[Foreclosure

I],

[Foreclosure

II],

and

[Foreclosure

III].”

(Transcript of Mot. to Recon. Hearing 8:4-6, 17:17-19:14, Ex. F
to U.S. Bank ¶ 45; Skibbes’ Resp. to U.S. Bank ¶ 45.)

The

Defendants now state that additional payments were, in fact,
made by the Skibbes in 2011, and that counsel for both parties
- 6 -

incorrectly stated otherwise at the hearing.
U.S. Bank ¶ 46.)

(Skibbes’ Resp. to

Neither party disputes that the state court

denied the motion to reconsider, but the parties do dispute why.
The

Skibbes

maintain

that

the

court

denied

reconsideration

because U.S. Bank through Nevel alleged the same breach in all
three foreclosures and thus violated the single refiling rule;
whereas

the

Defendants

maintain

that

the

state

court

denied

reconsideration on the incorrect factual basis that all three
foreclosures

were

based

on

the

same

additional payments had been made.

default

date

because

no

(Id. ¶ 45.)

The Defendants appealed, but they fared no better.
Bank and Nevel’s Resps. to Skibbes’ Facts ¶ 39.)

(U.S.

On appeal, the

appellate court denied Nevel’s motion to supplement the record
with proof of the additional payments, the court finding “that a
reviewing court cannot review the contents of a record that were
not a part of the trial court record and reviewed first by that
court.”

U.S. Bank Tr., N.A. v. Skibbe, 2016 IL App (2d) 151143-

U, ¶ 5 (Ill. App. Ct. Aug. 31, 2016).

The appellate court

continued:
Turning to what transpired here, HFC filed a complaint
to foreclose defendants’ mortgage on December 23,
2010. In this complaint, HFC alleged that no payments
were made on defendants’ mortgage since April 2010.
HFC subsequently voluntarily dismissed that complaint
without prejudice on September 17, 2012.
Thereafter,
on June 5, 2013, which was well within one year after
the initial complaint was voluntarily dismissed, HFC
- 7 -

filed a second complaint to foreclose defendants’
mortgage.
In this complaint, HFC alleged that no
payments were made since August 2010. This second
complaint was voluntarily dismissed without prejudice
on November 27, 2013.
On January 8, 2015, plaintiff
filed yet another complaint to foreclose defendants’
mortgage.
In this complaint, like the June 5, 2013,
complaint, plaintiff alleged that no payments were
made since August 2010.
Pursuant to section 13–217,
this third action to foreclose defendants’ mortgage is
barred even though it was filed within the applicable
10–year statute of limitations (see 735 ILCS 5/13–206
(West 2014)). Timberlake, 175 Ill.2d at 163.
In reaching this conclusion, we find irrelevant the
fact that the 2010 complaint alleged that the default
date was in April 2010 and the 2013 and 2015
complaints alleged that the default date was in August
2010.
At the hearing on plaintiff’s motion to
reconsider, the court, with the parties’ consent, made
clear that no payments were made since April 2010.
Accordingly, in contrast to what plaintiff alleges on
appeal, the 2010, 2013, and 2015 complaints all
involve
the
same
transaction,
i.e.,
defendants’
failure to make any payments on their mortgage since
April 2010.
Id. at ¶¶ 7-8.

The Skibbes incurred approximately $18,000 in

legal

costs

fees

and

to

defend

Foreclosure

III,

appellate court ruled improper in the above opinion.
and Nevel’s Resps. to Skibbes’ Facts ¶ 44.)

which

the

(U.S. Bank

The fallout is that

U.S. Bank is unable to foreclose on the property even though the
Skibbes agreed to surrender the property during bankruptcy and
are no longer making mortgage payments.
Bank ¶ 20.)

(Skibbes’ Resp. to U.S.

Due to the Defendants’ procedural blunder, the

Skibbes received a windfall; essentially, the Skibbes get to

- 8 -

keep their home despite not paying back the majority of their
mortgage loan.
F.
On

January

7,

Federal Court Litigation
2016,

the

Skibbes

filed

this

lawsuit

in

federal court alleging that the Defendants’ improper filing of
Foreclosure III violated the Fair Debt Collection Practice Act,
see,

15

U.S.C.

§

1692

et

seq.

(“FDCPA”),

and

the

Illinois

Consumer Fraud and Deceptive Business Practices Act, 810 ILCS
505/1 et seq. (the “ICPA”).

A brief procedural history:

Bank’s Motion to Dismiss was denied.
No. 21 (May 11, 2016).)

U.S.

(See, Oral Ruling, ECF

Both Defendants answered the Complaint

and asserted affirmative defenses; the Court struck Nevel’s four
affirmative defenses, but U.S. Bank’s thirteen remain.
Oral

Ruling,

ECF

No.

125

(Sept.

26,

2017).)

U.S.

(See,
Bank’s

counterclaims were dismissed primarily based on res judicata.
(See, Memorandum Opinion and Order, ECF No. 87 (June 9, 2017).)
The Court denied the Skibbes’ Motion to Amend their Complaint
after the Supreme Court’s ruling in Henson v. Santander, 137
S.Ct. 1718, 1721 (2017).

(Order, ECF No. 99 (June 27, 2017).)

The Court now has before it cross-motions for summary judgment
and rules as follows.

- 9 -

II.
A.
Summary

STANDARD OF REVIEW

Legal Standard for Summary Judgment

judgment

is

appropriate

when

the

admissible
FED. R.

evidence reveals no genuine issue of any material fact.
CIV. P. 56(c).

A fact is “material” if it is one identified by

the law as affecting the outcome of the case.

Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

An issue of

material

such

fact

is

“genuine”

if

“the

evidence

is

that

a

reasonable jury could return a verdict for the nonmoving party.”
The Court construes all facts and reasonable inferences in the
light

most

favorable

to

the

non-moving

party.

Bentrud

v.

Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871, 874 (7th
Cir. 2015) (citing Apex Digital, Inc. v. Sears, Roebuck, & Co.,
735

F.3d

962,

965

(7th

Cir.

summary

judgment,

we

against

whom

motion

the

draw

2013)).

inferences
under

On
“in

cross-motions

favor

consideration

of

was

the

for

party

made.”

Id.

(citing McKinney v. Cadleway Props., Inc., 548 F.3d 496, 500
(7th Cir. 2008)).
III.

ANALYSIS

A. Violation of the Fair Debt
Collections Practices Act (“FDCPA”)
1.

FDCPA Claim Against U.S. Bank (Count I)

U.S. Bank argues that it is not a “debt collector” under
the

FDCPA,

pointing

to

the

Supreme
- 10 -

Court’s

recently

decided

Henson

v.

Santander,

137

S.Ct.

1718,

1721

(2017).

Henson

resolved a Circuit split as to whether an entity that purchases
a debt from another and then seeks to collect payment for itself
is

a

“debt

collector”

under

the

FDCPA.

Id.

Answering

the

question in the negative, Henson held that “a debt purchaser
. . . may

indeed

collect

debts

for

its

own

account

without

triggering the statutory definition [of ‘debt collector’].” Id.
at 1721-22.
The Skibbes make no legal argument against the import of
Henson.

Rather, they attempt to backpedal the facts alleged in

this case, arguing that U.S. Bank is not the owner of the loan.
Yet the Skibbes alleged to the contrary in their Complaint–and
they cannot alter their earlier contention.

See, Compl. ¶ 13;

U.S. Bank Trust Ans. ¶ 13; Help At Home Inc. v. Med. Capital,
L.L.C., 260 F.3d 748, 753 (7th Cir. 2001) (“It is a ‘wellsettled rule that a party is bound by what it states in its
pleadings.’” (quoting Soo Line R.R. Co. v. St. Louis SW. Ry.
Co., 125 F.3d 481, 483 (7th Cir. 1997))).
Furthermore, even if the Skibbes could work around their
own pleadings, the record supports U.S. Bank’s ownership, in
other words, no reasonable jury could find that U.S. Bank does
not own the loan at issue.

The prior owner, HFC, assigned the

loan and loan documents to “U.S. Bank Trust N.A., as Trustee for
- 11 -

LSF9 Master Participation Trust,” the entity that is a party to
this case, as reflected in the loan assignment documentation.
(See, Assignment of Mortgage/Deed of Trust, Ex. D to Foreclosure
Compl., Case No. 15 CH 22, filed Oct. 2, 2017; U.S. Bank Add’l
Facts ¶ 1; U.S. Bank’s Resp. to Skibbes’ Facts ¶ 25; Skibbes’
Resp. to U.S. Bank’s Add’l Facts ¶ 2.)
the

notice

of

transfer

letter

The Skibbes argue that

states

that

LSF9

Master

Participation Trust–not U.S. Bank–owns the loan, which, though
true, does not matter.

(See, Notice of Sale of Ownership of

Mortgage Loan, Ex. 32; U.S. Bank Add’l Facts ¶ 1.)

It is clear

from the Loan Assignment that U.S. Bank owns the loan as trustee
and that these documents are, therefore, consistent.
One outstanding issue remains.

There are two prongs to the

definition of debt collector under the FDCPA.

An entity is a

debt collector if (1) the “principal purpose” of its business is
the “collection of any debts,” or (2) its business “regularly
collects or attempts to collect, directly or indirectly, debts
owed or due or asserted to be owed or due another.”
§ 1692a.

15 U.S.C.A.

Henson addressed the second prong, and, as discussed,

removed U.S. Bank from the definition of “debt collector” under
that

prong.

See,

Henson,

137

S.Ct.

at

1721.

The

Skibbes

contend that U.S. Bank is still a “debt collector” under the
primary-purpose prong, which was unaffected by Henson.
- 12 -

However,

the

Skibbes

never

alleged

that

the

primary

purpose

of

U.S.

Bank’s business was debt collection (the first prong) and their
Motion

to

Amend

the

Complaint

for

that

purpose

was

denied.

Therefore, the Skibbes cannot move forward under the primarypurpose definition.

Accordingly, U.S. Bank’s Motion for Summary

Judgment on the FDCPA claim is granted.
2.

FDCPA Claim Against Nevel (Count II)

The only FDCPA claim remaining is against Nevel.

Nevel

admits that it is a debt collector under the FDCPA.

However,

Nevel

is

argues

that

summary

judgment

in

its

favor

also

appropriate because a violation of the Illinois Rules of Civil
Procedure does not, on its own, give rise to a violation of the
FDCPA and that is all the Skibbes have been able to prove here.
On this point, the Court agrees.
The

Fair

Debt

Collection

Practices

Act

(“FDCPA”)

“designed to deter wayward collection practices.”
S.Ct. at 1720.

was

Henson, 137

It is not a mechanism to remedy violations of

state pleading requirements.

St. John v. CACH, No. 14 C 0733,

2014 WL 3377354, at *3 (N.D. Ill. July 8, 2014); see also,
Pantoja v. Portfolio Recovery Assoc., No 13 C 7654, 2015 WL
1396609, at *3-4 (N.D. Ill. Mar. 24, 2015).

Nor is it an avenue

to recover for violations of state laws.

See, Washington v.

North Star Capital Acquisition, No. 08 C 2823, 2008 WL 4280139,
- 13 -

at *2 (N.D. Ill. Sept. 15, 2008).

In the same vein, the FDCPA

is not “a vehicle to litigate claims arising under the Illinois
rules

of

civil

procedure”

evidentiary missteps.”

or

“state-court

procedural

and

Id.; Lena v. Cach, LLC, No. 14 C 01805,

2015 WL 4692443, at *2 (N.D. Ill. Aug. 6, 2015).
In

Lena

v.

Cach,

the

district

court

dismissed

an

FDCPA

claim based on plaintiff’s allegation that defendant brought a
debt

collection

action

when

it

knew

it

did

not

documentation necessary to prove its case at trial.
WL 4692443, at *2.

have

the

Lena, 2015

The court found that merely launching an

unsuccessful state court suit was insufficient to establish a
violation of the FDCPA.

Similarly, in Washington v. North Star

Capital Acquisition, LLC, the district court dismissed an FDCPA
claim premised on a violation of an Illinois law that required
certain

documentation

reasoning

that

violation

of

violation.”

the
a

when

FDCPA

state

filing
was

debt

a

“not

debt
meant

collection

collection
to

law

suit,

convert

into

a

every
federal

Washington, 2008 WL 4280139, at *2.

This is not to say that certain conduct in state court
litigation cannot lead to a violation of FDCPA.
WL 4692443, at *5.
under

the

FDCPA

See, Lena, 2015

However, cases that result in liability
based

on

state

court

distinguishable from the case before us.
- 14 -

litigation

are

In those cases, the

state

court

filings

misrepresentations.

contained

false

statements

or

See, Rosales v. Weltman, Weinberg & Reis

Co., No. 15 CV 06943, 2017 WL 1436957, at *3 (N.D. Ill. Apr. 24,
2017)

(denying

motion

to

dismiss

FDCPA

claim

based

on

misrepresentations in a state court complaint); Butler v. J.R.SI,

Inc.,

Apr. 4,

No.
2016)

15

C

6059,

(same);

2016

WL

Matmanivong

1298780,
v.

at

Unifund

*8
CCR

(N.D.

Ill.

Partners,

No. 08 CV 6415, 2009 WL 1181529, at *3 (N.D. Ill. Apr. 28, 2009)
(same).

Here,

accurate

the

statements.

state
There

court
is

no

filings
factual

contain

factually

misrepresentation

outside of the alleged misrepresentation of filing and pursuing
litigation barred by the Illinois single-refiling rule.

The

parties heavily dispute the factual basis of the state court
rulings, but that need not be decided here.

What is true for

the purposes of this motion based on the state court rulings is
this:

Foreclosure III was barred by Illinois’ single-filing

rule.

However, “the fact that a lawsuit turns out ultimately to

be

unsuccessful”

is

not

itself

sufficient

“action that cannot legally be taken.”

to

constitute

an

Heintz v. Jenkins, 514

U.S. 291, 295-96 (1995) (quoting 15 U.S.C. § 1692e(5)).

When

the facts based on violating Illinois’ single-refiling rule (and
the litigation that followed) are removed from the case, the
Skibbes are left with no other evidence of an FDCPA violation.
- 15 -

Thus, the Court grants summary judgment to Nevel on the basis
that a violation of the Illinois procedural rules is not the
same as a violation of the FDCPA.
The Skibbes claim that the filing of Foreclosure III was
more than a procedural misstep.

They claim that by filing suit,

Nevel essentially misrepresented that it could properly bring
the

foreclosure

when

it

could

not,

citing

Kabir

v.

Freedman

Anselmo Lindberg LLC, No. 14 C 1131, 2015 WL 4730053, at *5
(N.D. Ill. Aug. 10, 2015).
Skibbes
There,

because
the

Court

the

court

denied

However, Kabir does not save the
came

to

defendant’s

the

opposite

motion

to

conclusion.

dismiss

after

finding the plaintiff’s complaint did not merely complain “about
whether [the defendant] followed Illinois procedural rules or
violated the Illinois Mortgage Foreclosure Law . . .” Id.

Here,

however, the Court finds that the crux of the undisputed facts
shows that the Skibbes’ claimed violation is just that.
Past Kabir, the Skibbes rely on the general rule that a
defendant violates the FDCPA by attempting to collect a debt
that is barred by the statute of limitations.

See, Parkis v.

Arrow Fin. Servs., No. 07 C 410, 2008 WL 94798, at *7 (N.D. Ill.
Jan. 8, 2008) (claim for filing state court complaint attempting
to collect time-barred debt is viable under FDCPA).
the

Court

does

not

find

Parkis
- 16 -

as

analogous

as

However,
the

cases

previously discussed above.

A statute of limitations bar has

significant public policy underpinnings, the protection of which
fall

within

the

type

of

unfair

practices

the

FDCPA

forbids.

See, Phillips v. Asset Acceptance, LLC, 736 F.3d 1076, 1079 (7th
Cir. 2013) (citing Kimber v. Federal Financial Corp., 668 F.
Supp. 1480, 1487 (M.D. Ala. 1987)) (discussing the public policy
behind “outlawing stale suits to collect consumer debts”).

This

public policy is not at play where state court procedural rules
are involved, as here.

The state court is well able to enforce

its procedural rules and does not need the assistance of the
federal courts.
Taking

a

different

Court’s

earlier

ruling

already

decided

these

tact,
denying

issues.

the

Skibbes

Defendants’
However,

argue
Motion

the

that

this

to

Dismiss

Court’s

earlier

ruling found only that the pleadings were sufficient, not that
the Skibbes would prevail.

At the motion-to-dismiss stage, the

Court assessed the adequacy of the pleadings taking all factual
inferences in the Skibbes’ favor.
(May

11,

2016).)

This

ruling

did

(See, Oral Ruling, 5:11-14
not

evaluate

the

alleged

misrepresentations in the state court proceeding, nor whether
the filing and subsequent prosecution of Foreclosure III was, in
fact, false, deceptive, or misleading. Id.
that

the

Skibbes

stated

a

claim
- 17 -

that

It merely determined
may

have

established

liability under the FDCPA.
at *3.

See, e.g., Rosales, 2017 WL 1436957,

Now with the benefit of a full record, it is apparent

that the state court proceedings here did not contain factual
misrepresentations
established

like

that

in

Rosales;

Foreclosure

III

rather,

was

barred

the
by

evidence
a

state

procedural rule — the Skibbes maintain this is enough.
The

Court

disagrees.

Disputes

over

the

application

of

state procedural rules should be resolved in its proper forum—
the state court.

This Circuit has made clear that it will not

“transform the FDCPA into an enforcement mechanism for matters
governed by state law.”

Bentrud v. Bowman, Heintz, Boscia &

Vician, P.C., 794 F.3d 871, 876 (7th Cir. 2015) (rejecting claim
that filing a summary judgment motion containing inaccuracies in
state

court

violated

the

FDCPA).

Yet,

the

Skibbes

entire

argument is that the Defendants’ loss in state court constitutes
an FDCPA violation.

The entire point of the Seventh Circuit’s

admonition is to prevent every state court debt collection or
foreclosure loss from becoming a federal claim.

See, id.

Furthermore, a litigant should not fear bringing contested
issues before a tribunal because a loss in state court will
create a claim under the FDCPA.

This would be a different case

if, after Foreclosure III’s final judgment, the Defendants filed
Foreclosure IV.

In that case, the Defendants may very well have
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violated the FDCPA if they brazenly ignored a final judgment
from the state court.
Court.

Yet those are not the facts before the

Rather, the Skibbes would have this Court find an FDCPA

violation merely for bringing a foreclosure suit that was later
ruled

to

be

improper

Procedure.

based

on

the

Illinois

Rules

of

Civil

The Court questions the wisdom of attaching FDCPA

liability to defendants who bring an unsuccessful suit, finding
the

Eighth

Circuit’s

Kramer,

P.A.

rejected

an

reasoning

persuasive.
FDCPA

claim

In
based

in

Hemmingsen

Hemmingsen,
on

alleged

the

v.

Messerli

Eighth

Circuit

misrepresentations

within a summary judgment motion in state court.

In dismissing

the FDCPA claim, the Court reasoned:
The rule [plaintiff] urges – that a debt collector’s
fact allegations are false and misleading for purposes
of § 1692e when . . . not adequately supported in the
collection suit – would be contrary to the FDCPA’s
“apparent objective of preserving creditors’ judicial
remedies,” Heintz, 514 U.S. at 296, an objective
consistent with the principle “that the right of
access to the courts is an aspect of the First
Amendment right to petition the Government for redress
of grievances.”
Bill Johnson’s Restaurants, Inc. v.
NLRB,
461
U.S.
731,
741
(1983).
If
judicial
proceedings
are
to
accurately
resolve
factual
disputes, a lawyer “must be permitted to call
witnesses without fear of being sued if the witness is
disbelieved and it is alleged that the lawyer knew or
should have known that the witness’ testimony was
false.” Imbler v. Pachtman, 424 U.S. 409, 439 (1976)
(White, J., concurring).
Judges have ample power to
award attorney’s fees to a party injured by a lawyer’s
fraudulent or vexatious litigation tactics.
See,
e.g., Chambers v. NASCO, Inc., 501 U.S. 32, 45-46, 111
S. Ct. 2123, 115 L. Ed. 2d 27 (1991); 28 USC. § 1927.
- 19 -

&

There is no need for follow-on § 1692e litigation that
increases the cost of resolving bona fide debtorcreditor disputes.
Hemmingson, 674 F.3d 814, 819-20 (8th Cir. 2012). Certainly an
FDCPA claim could arise from state court litigation, but merely
violating a procedural rule (as here) is insufficient.
Based
summary

on

all

judgment,

the

undisputed

the

Court

facts

finds

before
that

this

the

Court

filing

on
and

prosecuting of the procedurally-barred Foreclosure III does not
give

rise

to

an

FDCPA

violation.

“Because

state-court

procedural and evidentiary missteps are not ‘false, deceptive,
or misleading representations or means that are actionable under
[15 U.S.C.] § 1692e [of] [sic] the FDCPA,” this Court grants
summary judgment to Nevel.

Lena, 2015 WL 4692443, at *2.

B. Violation of Illinois Consumer Fraud and Deceptive
Business Practices Act Against U.S. Bank (Count III)
The Skibbes also argue that U.S. Bank violated the ICFA by
filing

Foreclosure

III

when

it

was

unlawful.

U.S.

Bank

vehemently argues that merely losing a foreclosure action does
not constitute a violation of ICFA.

As stated above, the Court

takes as true the fact that Foreclosure III was procedurally
barred.

However, the question for this Court’s consideration is

not whether the filing was procedurally proper, but whether the
litigation privilege applies.

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“The
Illinois]

majority

approach

in

has

to

ICFA

been

view

[the

Northern

claims

as

District

barred

by

of
the

litigation privilege when a debt collector files a lawsuit.”
Rosales v. Weltman, Weinberg & Reis Co., No. 15 CV 06943, 2017
WL 1436957, at *5 (N.D. Ill. Apr. 24, 2017) (collecting cases).
In Rosales, the plaintiff was sued in state court for defaulting
on a personal loan. Id. at *1.

The state court complaint named

the wrong bank as the creditor. Id.

The plaintiff then filed a

claim in federal court against the defendant for violating the
ICFA, claiming that the defendant had falsely represented that
it could sue the plaintiff when it legally could not. Id.

The

Court dismissed the ICFA claim, following the majority rule.
Similarly,

in

Rehman

v.

Pierce

&

Assocs.,

P.C.,

the

Court

dismissed an ICFA claim based on the litigation privilege where
the

defendant

imposed

by

failed

state

law

to

allow

before

plaintiffs

filing

for

the

grace

foreclosure.

period
Rehman,

No. 16 C 5178, 2017 WL 131560, at *3 (N.D. Ill. Jan. 13, 2017);
see also, Whittler v. Midland Funding, LLC, No. 14 C 9423, 2015
WL 3407324, at *3 (N.D. Ill. May 27, 2015) (finding no unfair or
deceptive practice in violation of ICFA, but noting that the
litigation privilege would bar an ICFA claim regardless).

Both

cases illustrate a mistake in state court litigation at least as
egregious as the one before this Court.
- 21 -

Rosales involved a

factual misrepresentation in the pleadings and Rehman involved a
violation of Illinois law. See, id.

Yet, in both cases, the

litigation

Court

majority

privilege
approach

applied.

and

finds

This
that

the

applies to bar the Skibbes’ ICFA claim.

thus

follows

litigation

the

privilege

See, Rosales, 2017 WL

1436957 at *5; Rehman, 2017 WL 131560, at *3; Whittler, 2015 WL
3407324 at *3.
Although the Skibbes attempt to distinguish the cases cited
by U.S. Bank, they do not point to any case law with analogous
facts that support a claim under the ICFA.

Certainly, “debt

collectors may violate the ICFA if they fabricate the debt or
lie about their right to collect on a debt.”

Maldanado v.

Freedman Anselmo Lindberg, LLC, No. 14 C 10176, 2015 WL 2330213,
at *4 (N.D. Ill. May 14, 2015).

Here, there is no dispute that

the mortgage was valid and owed by the Skibbes and that the
factual statements in the pleadings were accurate.
cite

Maldonado,

but

Maldonado

held

that

The Skibbes

bringing

a

debt

collection action in a more distant venue, although improper,
was

“not

the

contemplates.”

kind

of

deceptive

conduct

that

Maldanado, 2015 WL 2330213 at *4.

the

ICFA

Here, the

state court found Foreclosure III was improper, but that alone
is insufficient to avoid the litigation privilege.

- 22 -

The Skibbes also cite to Grant-Hall v. Cavalry Portfolio
Servs., LLC, 856 F. Supp.2d 929, 942 (N.D. Ill. 2012), which
held that the plaintiff stated a claim under ICFA when defendant
filed

a

state

action

in

violation

certain documentation of assignment.

of

a

state

law

requiring

The complaint alleged that

the defendant “misrepresented to consumers and courts that it
had the right to file suit,” which was sufficient to plead under
the ICFA. Id. at 942 (alteration marks omitted).
summary judgment, the inquiry is different.

First, at

And second, Grant-

Hall involved a debt collection action where the creditor never
had

the

legal

documentation

necessary

to

bring

the

to

Phillips

suit,

a

scenario not present here.
The

Skibbes

analogize

this

case

v.

Asset

Acceptance, LLC, 736 F.3d 1076, 1079 (7th Cir. 2013), where the
Seventh Circuit upheld a class action asserting violations of
the

FDCPA

based

on

litigation

limitations had passed.

filed

after

the

statute

of

In comparing the facts of Phillips to

Rosales and Rehman, this Court finds Rosales and Rehman more
analogous.

As discussed above, the public policy considerations

underpinning a statute of limitations bar are not present where
a state procedural rule is at issue.

This would be a different

case if the statute of limitations had run.

- 23 -

Finally, the Skibbes rely on their earlier victory where
this

Court

denied

U.S.

Bank’s

motion

to

dismiss.

However,

denial of a motion to dismiss does not ensure victory at summary
judgment.

U.S. Bank did not raise the litigation privilege in

its motion to dismiss.

Now that it is before the Court, this

Court finds that the litigation privilege applies as a matter of
law and bars the Skibbes’ claim under the ICFA.
IV.
For

the

reasons

CONCLUSION

stated

herein,

U.S.

Bank

and

Nevel’s

Motions for Summary Judgment [ECF Nos. 126, 131] are granted.
The Skibbes’ Motion for Partial Summary Judgment [ECF No. 142]
is denied.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated:

2/15/18

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