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

Filing 87

MEMORANDUM Opinion and Order Signed by the Honorable Harry D. Leinenweber on 6/9/2017:Mailed notice(wp, )

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
For the reasons stated herein, the Court grants Dwayne and
Deborah

Skibbe’s

Motion

to

Dismiss

U.S.

Bank

Trust’s

Counterclaims [ECF No. 50].
I.
The

events

in

this

BACKGROUND

lawsuit

are

largely

undisputed.

In

2004, Dwayne and Deborah Skibbe (collectively, the “Skibbes”)
obtained a mortgage from Household Finance Corporation.

The

mortgage was secured by the Skibbes’ residence.

In April 2010,

the

have

Skibbes

another
Finance,

stopped

payment
through

paying

since.
its

their

In
agent

mortgage

December
Ira

T.

of

and

that

Nevel

year,

not

made

Household

(“Nevel”),

a

co-

Defendant in this case, filed a foreclosure action again the
Skibbes in Kane County.

In this first of three foreclosure

lawsuits, Household Finance alleged that the Skibbes defaulted
in April 2010 and owed Household Finance some $259,657.30.
In 2011, the Skibbes filed for Chapter 13 bankruptcy.

As

part of the bankruptcy, they submitted a statement of intention
in which they declared that they would surrender the subject
property in satisfaction of the outstanding debt.

Even though

such a statement would not alleviate the need for the creditor
to

foreclose

on

the

property,

see,

Vlasic

v.

Equifax

Credit

Info. Servs., No. 03 C 4044, 2004 U.S. Dist. LEXIS 8361, at *6
(N.D. Ill. May 10, 2004) (“Defendants correctly point out that
Vlasic’s intention to surrender the property did not transfer
title in the property.”); ECF No. 72 (U.S. Bank Trust’s Reply
Br.) at 14 (agreeing that “legal transfer of title requires a
judicial foreclosure”), Household Finance, for whatever reason,
voluntarily

dismissed

its

foreclosure

lawsuit

against

the

Skibbes about a year later.
The mortgagee then evidently had a change of heart, as it
filed

another

foreclosure

lawsuit

in

June

of

2013.

This

complaint alleged a default date of August 10, 2010, with an
unpaid balance of roughly $1,000 less than what was alleged in
the

first

lawsuit,

or

$258,542.72.

Despite

this

later-pled

default date, the record shows that the Skibbes had not made a
payment since April 2010.

See, ECF No. 46 (Countercl.) at 19
- 2 -

¶ 7; ECF No. 72, Ex. B, at 10:7-12:18; United States Bank Tr.,
N.A. v. Skibbe, 2016 IL App (2d) 151143-U, ¶¶ 8-9.
In October 2013, the Skibbes converted their Chapter 13
bankruptcy to Chapter 7.

The effect of this conversion on the

present matter is unclear.

The parties, however, do not dispute

that the Skibbes did not amend their statement of intention to
surrender

the

subject

Chapter 7 bankruptcy.

property

at

any

point

during

their

Sometime after the conversion, Household

Finance voluntarily dismissed its second foreclosure complaint.
In

January

discharge.

2014,

the

Skibbes

received

their

bankruptcy

The case closed some two months later, seemingly

without any objections from Household Finance despite the fact
that the Skibbes did not surrender the property and Household
Finance

had

not

successfully

foreclosed

on

it.

Indeed,

the

Skibbes never gave up possession of their house, and later that
same year, Household Finance transferred their mortgage loan to
U.S. Bank Trust.

U.S. Bank Trust then took the action that led

to the Skibbes bringing this lawsuit:

it had Nevel file a third

foreclosure action against the couple.
U.S. Bank Trust’s lawsuit fared worse than the first two
foreclosure actions.

The state circuit court dismissed the suit

with prejudice for violating Illinois’s no-second-refiling rule.
This rule came about as a result of the Illinois Supreme Court
- 3 -

interpreting 735 ILCS 5/13-217 as allowing a case to be refiled
just once.

See, Timberlake v. Illini Hosp., 175 Ill.2d 159,

162-63 (1997) (“[735 ILCS 5/13-217] was not intended to permit
multiple

refilings

of

the

same

action.

This

court

has

interpreted section 13-217 as permitting only one refiling even
in a case where the applicable statute of limitations has not
yet expired.”).

In reaching its decision to dismiss the case,

the circuit court deemed the 2010 action to be the originally
filed action, the 2013 action to be the first refiling, and the
2015 action to be the second – and thus barred – refiling.
court

further

denied

U.S.

Bank’s

motion

for

The

reconsideration,

giving no weight to the argument that the Skibbes were unfairly
getting a “free house” as a result of the court turning away the
foreclosure

suit.

See,

ECF

No.

72,

Ex.

B

(Ruling

on

Mot.

Reconsider), at 13:18-14:21.
The

Illinois

appellate

court

affirmed

Skibbe, 2016 IL App (2d) 151143-U, ¶ 11.
ILCS

5/13-217

action

as

“applies

well

as

to

all

all

claims

claims

that

the

dismissal.

It explained that 735

raised
grew

in
out

transaction involved in the original action.”

the
of

original
the

same

Id. ¶ 6.

The

court rejected the argument that the 2015 foreclosure action was
not a second refiling of the original 2010 action because the
2015

action,

like

the

2013

complaint
- 4 -

but

unlike

the

2010

complaint, alleged a default date of August 2010 and not April
2010.

As

the

appellate

court

stated,

“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.”
Having won, the Skibbes went on the offensive.

Id. ¶ 8.
They filed

this federal lawsuit alleging that U.S. Bank Trust and Nevel
violated the Fair Debt Collection Practices Act (“FDCPA”) and
the Illinois Consumer Fraud and Deceptive Business Practices Act
(“ICFA”) in instituting the third foreclosure action.
Trust

hit

back

with

four

counterclaims,

including

U.S. Bank
promissory

estoppel, set-off, constructive trust, and equitable lien.

The

nub of the counterclaims is that the Skibbes should be compelled
to pay the Bank, in one way or another, for their “free house.”
U.S. Bank Trust proposed as remedies an award of damages, a
surrender

of

the

property,

an

imposition

of

a

constructive

trust, or a creation of an equitable lien.
The

Dismiss

the

Counterclaims on both Rule 12(b)(1) and 12(b)(6) grounds.

For

the

Skibbes

reasons

now

discussed

appropriate

because

reach

Skibbes’

the

of

bring

this

below,
res

Rule

Motion

the

Court

judicata.
12(b)(6)

It

finds

therefore

arguments

adequacy of U.S. Bank Trust’s pleadings.
- 5 -

to

dismissal
does

regarding

not
the

II.
Although
Trust’s

the

Court

counterclaims

ANALYSIS

ultimately

are

barred

concludes

by

res

that

judicata,

addresses its jurisdiction to decide the issue.
v.

Citizens

for

a

Better

Env’t,

523

U.S.

83,

U.S.

Bank

it

first

See, Steel Co.
94-95

(1998)

(“Without jurisdiction the court cannot proceed at all in any
cause.”) (internal quotation marks omitted).
A.

Jurisdiction

The Skibbes contest jurisdiction on two grounds:

the lack

of supplemental jurisdiction under 28 U.S.C. § 1367 to reach
U.S. Bank Trust’s counterclaims and Rooker-Feldman.

The Court

takes each argument in turn below.
1.

Supplemental Jurisdiction

U.S. Bank Trust concedes that all its counterclaims are
predicated on state law.

As such, the claims may be heard in a

federal forum only if they are “so related” to the Skibbes’
federal FDCPA claim so as to “form part of the same case or
controversy.”

See, 28 U.S.C. § 1367(a) (“[T]he district courts

shall have supplemental jurisdiction over all other claims that
are so related to claims in the action within such original
jurisdiction that they form part of the same case or controversy
under Article III of the United States Constitution.”).

This

requirement is satisfied so long as there is a “loose factual
- 6 -

connection” between the FDCPA claim and the counterclaims.

See,

Channell v. Citicorp Nat’l Servs., 89 F.3d 379, 385 (7th Cir.
1996)

(stating

that

Ҥ 1367

has

extended

the

scope

of

supplemental jurisdiction . . . to the limits of Article III –
which means that a loose factual connection between the claims
can

be

enough”)

(internal

quotation

and

alteration

marks

omitted).
U.S. Bank Trust contends that its counterclaims meet this
standard as “they are inextricably intertwined with the Skibbes’
claim.”
that

the

complaint

ECF No. 72 at 2.
claims
rests

are
on

In particular, U.S. Bank Trust argues

intertwined

the

contention

because
that

the
the

Skibbes’
2015

FDCPA

foreclosure

lawsuit was filed when “foreclosure could not legally occur,”
while U.S. Bank Trust’s counterclaims are bottomed on the fact
that “U.S. Bank Trust absolutely had a right to foreclose.”

ECF

No. 1 (Compl.), ¶ 27; ECF No. 72 at 3.
The Court agrees that there is a “loose factual connection”
between

the

counterclaims.

Skibbes’

Complaint

and

U.S.

Bank

Trust’s

In essence, the Skibbes are suing because U.S.

Bank Trust unfairly attempted to collect the mortgage loan debt,
and

U.S.

Bank

Trust

is

collect that same debt.

counter-suing

to

attempt

(again)

to

The secured mortgage debt is thus the

- 7 -

linchpin

tying

together

the

Skibbes’

and

U.S.

Bank

Trust’s

claims.
The

Skibbes

nonetheless

protest

that

supplemental

jurisdiction does not exist because their consumer action does
not arise from the mortgage loan.

That is, they say that they

are able to sue U.S. Bank Trust for unfairly trying to collect
on

the

loan

regardless

of

whether

the

loan

actually

exists.

That this may be true does not change the fact that to state
their claims, both the Skibbes and U.S. Bank Trust need to plead
the

details

of

the

underlying

the

subject

property, the bankruptcy, and the foreclosure actions.

Indeed,

both parties pleaded those facts.

mortgage

loan,

The Court is thus persuaded

that there exists “a common nucleus of operative facts” between
the

claims

and

counterclaims

supplemental jurisdiction.
495

(7th

Cir.

2008)

(“A

that

permits

the

exercise

of

Houskins v. Sheahan, 549 F.3d 480,
district

court

has

supplemental

jurisdiction over the state claims . . . pursuant to § 1367(a)
so long as they derive from a common nucleus of operative fact
with the original federal claims.”) (internal quotation marks
omitted).
Furthermore, the Seventh Circuit seems to have rejected the
argument that the Skibbes here bring.

In Channell, the Seventh

Circuit dealt with a case where a class of plaintiffs sued the
- 8 -

defendant Citicorp for not properly disclosing in their lease
agreement the method for calculating an early termination fee.
See, Channell, 89 F.3d at 380-81.

Citicorp counterclaimed when

it discovered that it had charged the plaintiffs less than what
the

method

leases

allowed

early.

Citicorp’s

Id.

for
at

when

acts

creating

claims

against

while

the

the

Citicorp

claims

Seventh

falls

Id. at 385-86.

“[t]he

plaintiffs

The

384.

“counterclaim

§ 1367(a).”

the

within

their

Circuit

found

outer

boundary

the

that
of

This is despite the fact that

[parties’]

stem

against

terminated

from

the

claims

the

class

termination of the lease.” Id. at 385.

differ”

signing
stem

as

“the

of

the

lease,

from

the

early

Here, the Skibbes say

that the act giving rise to their FDCPA claim is the collection
of the debt.

In contrast, the act creating U.S. Bank Trust’s

right to collect is the signing of the mortgage instrument.

But

Channell teaches that this is not dispositive.
What are dispositive are the shared facts or “constants”
across the claims.
was

proper

because

The Channell court found that jurisdiction
the

plaintiffs’

claim

counterclaim had as “constants” the following:
the

lease,

the

clause

[in

the

lease

and

Citicorp’s

“the parties,

governing

the

early

termination charge], and the terminations.” Id. at 385-86.
this

case,

the

parties,

the

mortgage

- 9 -

instruments,

and

In
the

nonpayment

likewise

counterclaims.
counterclaims

are

As
fall

“constants”

in

Channell

within

the

across

then,

the

U.S.

boundary

of

claims

Bank

the

and

Trust’s

jurisdiction

granted to the Court by 28 U.S.C. § 1367(a).
Besides Channel, the parties seem to agree that Mufwene and
Crawford

are

the

current Motion.
addressed

most

relevant

authorities

for

deciding

The relevance of the two cases is clear.

supplemental

jurisdiction

claim was a FDCPA claim.

issues

when

the

the
Both

federal

Although the parties cited Mufwene and

Crawford as cases standing in contradiction to each other, the
courts

in

both

of

those

cases

supplemental jurisdiction.

actually

found

that

they

had

See, In Mufwene v. Am. Credit Exch.,

No. 10 C 2591, 2010 U.S. Dist. LEXIS 117026, at *3-6 (N.D. Ill.
Nov. 3, 2010) (“Here, the court finds that American Credit’s
breach

of

Mufwene’s

contract
FDCPA

supplemental

counterclaim

claim

to

is

jurisdiction

support
under

sufficiently
this

§

court’s

1367(a).”);

related

to

exercise

of

Crawford

v.

Equifax Payment Servs., No. 97 C 4240, 1998 U.S. Dist. LEXIS
15719,

at

*11-18

(N.D.

Ill.

Sep.

30,

1998)

(“Applying

the

liberal interpretation of § 1367(a) recognized in Channell, we
agree

with

the

Magistrate

Judge

that

we

may

exercise

supplemental jurisdiction here.”).

It is true that the Crawford

court

exercise

ultimately

declined

to
- 10 -

its

supplemental

jurisdiction.
*18-20.

See, Crawford, 1998 U.S. Dist. LEXIS 15719 at

However,

this

was

done

as

a

matter

of

discretion

permitted the court under 28 U.S.C. § 1367(c), and not because
the court lacked the authority to hear the case under 28 U.S.C.
§ 1367(a).
Like the courts in Channell, Mufwene, and Crawford then,
the Court believes its jurisdiction reaches U.S. Bank Trust’s
counterclaims.

As such, the Court may hear the claims unless

another jurisdictional bar stands in its way.

Whether Rooker-

Feldman may be such a bar is an issue to which the Court turns
next.
2.

Rooker-Feldman

“Because the Rooker-Feldman doctrine is jurisdictional in
nature, its applicability ends the litigation in federal court
and the court has no authority to address affirmative defenses,
including res judicata.”

Ctrs., Inc. v. Town of Brookfield, 148

F.3d 699, 703 (7th Cir. 1998).

Thus, before the Court may go

any further and reach res judicata grounds, it considers whether
Rooker-Feldman applies in this case.
Rooker-Feldman refers to the principle that a lower federal
court may not review a state court’s judgment.
Fid.

Tr.

Co.,

263

U.S.

413,

415-16

(1923)

See, Rooker v.
(“Under

the

legislation of Congress, no court of the United States other
- 11 -

than

this

[Supreme]

Court

could

entertain

a

proceeding

to

reverse or modify the judgment [of the state court].”); D.C.
Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983) (“[L]ower
federal courts possess no power whatever to sit in direct review
of state court decisions.”) (internal quotation marks omitted).
As

the

Seventh

applicability

of

Circuit
the

has

explained,

Rooker-Feldman

“to

doctrine,

determine
the

the

fundamental

and appropriate question to ask is whether the injury alleged by
the federal plaintiff resulted from the state court judgment
itself.”
Only

if

Garry v. Geils, 82 F.3d 1362, 1365 (7th Cir. 1996).
the

alleged

injury

resulted

from

the

state

court

judgment, or is inextricably intertwined with it, does RookerFeldman find a foothold. Id.

If instead the party “maintains an

injury apart from the loss in state court,” then Rooker-Feldman
does not apply, but – as is important for our purpose later –
res judicata may. Id.
In this case, U.S. Bank Trust’s injury is separate from the
state court’s judgment dismissing its foreclosure case.

The

injury stems from the Skibbes’ failure to repay the Bank for its
loan

–

either

by

making

their

mortgage

payment

surrendering the property securing the mortgage.

or

by

Thus, U.S.

Bank Trust arrived at the circuit court already injured; the
court

may

have

failed

to

remedy
- 12 -

the

Bank’s

injury

but

its

judgment was not the cause of the harm itself. In other words,
U.S. Bank Trust “suffer[ed] an injury out of court and then
fail[ed]

to

get

relief

from

state

court.”

Rosemont, 995 F.2d 726, 729 (7th Cir. 1993).
Rooker-Feldman finds no applicability.

GASH

Assocs.

v.

In such a case,

See, id.; Garry, 82 F.3d

at 1365-66.
B.
While

the

Skibbes

Res Judicata

have

not

found

purchase

with

their

jurisdictional arguments, they are on firmer footing in arguing
that res judicata bars U.S. Bank Trust’s counterclaims.

“In

general, the doctrine of claim preclusion or res judicata bars a
party from asserting a claim that has already been resolved in
another lawsuit between the same parties or those in privity
with

them,

and

the

doctrine

reaches

both

claims

that

were

actually asserted in an earlier lawsuit and those that could
have been asserted but were not.”

Russian Media Grp., LLC v.

Cable Am., Inc., 598 F.3d 302, 310 (7th Cir. 2010).

Here, U.S.

Bank Trust sued the Skibbes in state court, lost, and is now
suing the couple again in federal court.

The question then is

whether the prior action precludes the Bank from doing so.
To answer this question, the Court consults Illinois law
since an Illinois court decided the prior lawsuit.

See, Arlin-

Golf, LLC v. Vill. of Arlington Heights, 631 F.3d 818, 821 (7th
- 13 -

Cir. 2011) (“To determine whether res judicata applies, we apply
the

preclusion

judgment.”).

law

of

Illinois,

the

state

that

rendered

the

In Illinois, “[f]or the doctrine of res judicata

to apply, the following three requirements must be satisfied:
(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

privies.”

(3)

there

is

an

identity

of

parties

or

their

Nowak v. St. Rita High Sch., 197 Ill.2d 381, 390

(2001).
U.S. Bank Trust does not dispute that there was a final
judgment in the foreclosure case and that the same parties are
involved in both actions.

This leaves only the issue of whether

there is an identity of cause of action between the state court
foreclosure

claim

and

the

current

counterclaims.

Illinois

applies the transactional test to decide such questions. Under
this test, “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,

regardless

different theories of relief.”

on

the

facts

whether

they

assert

River Park v. City of Highland

Park, 184 Ill.2d 290, 311 (1998).
focuses

of

underlying

The test is “pragmatic” as it
the

different

claims

while

disregarding “the number of substantive theories, the variant
forms of relief flowing from those theories, and the variations
- 14 -

in evidence needed to support the theories.”

Garcia v. Vill. of

Mt. Prospect, 360 F.3d 630, 637 (7th Cir. 2004); accord, River
Park, 184 Ill.2d at 309.
U.S.

Bank

precluded

since

lawsuits.
actions

Trust
it

makes

According

alleged

argues

the

to

that

its

different
U.S.

Skibbes

are

not

the

two

allegations

in

Trust,

Bank

failed

counterclaims

“foreclosure

to

make

its

monthly

mortgage

payments since April 2010 under the Mortgage and Note,” whereas
the current lawsuit “allege[d] the Skibbes failed to surrender
the property as required by their Bankruptcy Discharge.”
No. 72 at 8-9.

ECF

U.S. Bank Trust thus seems to draw a line

between the bankruptcy surrender and the foreclosure, treating
the two as belonging to different groups of operative facts.
The Court finds that demarcation untenable.

Whatever is

the legal labels and sought-for forms of relief, the factual
predicates underlying the surrender and the foreclosure are the
same.

In

pursuing

the

surrender

Trust seeks the same object:
money equivalent.

and

foreclosure,

U.S. Bank Trust’s right to insist on that
the mortgage debt.

debt was created by a single extension of credit:
loan.

Bank

the Skibbes’ residence or its

relief stems from the same obligation:

mortgage

U.S.

The

nonpayment

of

the

debt

gives

The

the 2004
U.S.

Bank

Trust, as successor in interest to the lender, the right it
- 15 -

seeks to vindicate – that to seize the property securing the
mortgage.

See, Perry v. Globe Auto Recycling, Inc., 227 F.3d

950, 953 (7th Cir. 2000) (“[T]he assignee stands in the shoes of
the assignor and assumes the same rights, title and interest
possessed by the assignor.”) (internal quotation marks omitted).
It is because of this common “group of operating facts” that
U.S. Bank Trust attached to its counterclaims the same written
instruments

–

the

mortgage

contract,

security

agreement,

and

assignment of interest from Household Finance to U.S. Bank Trust
– that it attached to the 2015 foreclosure action.

Compare, ECF

No. 45, Ex. A, B, & C with U.S. Bank Trust v. Skibbe, No. 15 CH
22, Complaint to Foreclose Mortgage, Ex. A, B, & D (Jan. 8,
2015).
The bankruptcy is relevant insofar as it discharged the
Skibbes from personal liability on the debt.

See, 11 U.S.C.

§ 524(a); Johnson v. Home State Bank, 501 U.S. 78, 82-83 (1991).
The

proceeding

obligation.

did

not

otherwise

transmogrify

the

underlying

The right to seize the property to satisfy the debt

predates the Skibbes’ bankruptcy, and it survives it.
U.S.C.

§ 522(c)(2);

Johnson,

501

U.S.

at

82-83

See, 11

(“[T]he

Code

provides that a creditor’s right to foreclose on the mortgage
survives

or

Skibbes

owed

passes
to

through

U.S.

Bank

the

bankruptcy.”).

Trust,
- 16 -

they

owed

Whatever
because

of

the
the

original mortgage loan, secured by the same property before and
after bankruptcy.

In sum, there is one unpaid debt, stemming

from one loan, secured by one collateral – ergo, one group of
operative facts.
The arguments that U.S. Bank Trust makes elsewhere in its
brief further persuade the Court that the Bank’s counterclaims
arise from the same factual predicates as the foreclosure.

For

one, the Bank repeatedly presses for the Court to adopt the
Eleventh
(11th

Circuit’s

Cir.

2016).

holding
The

from

court

In

re

there

Failla,

held

838

that

F.3d

a

debtor

1170
who

chooses to surrender a property in bankruptcy “must drop his
opposition to the creditor’s subsequent foreclosure action.” Id.
at

1178.

The

holding

from

In

re

Failla

is

not

uniformly

followed, and the Seventh Circuit has not opined on the matter.
See, e.g., In re Elkouby, 561 B.R. 551, 557 (Bankr. S.D. Fla.
2016)

(“[I]t

is

apodictic

that

a

lienholder

cannot,

in

any

court, assert that a debtor’s indicated intent to surrender real
property in a chapter 7 case has any consequence with respect to
the lienholder post-bankruptcy, including precluding that debtor
from

defending

an

action

by

a

lienholder

to

foreclose

its

security interest in real property.”); In re Ryan, 560 B.R. 339,
348-50 (Bankr. D. Haw. 2016) (similarly declining to follow In
re Failla); ECF No. 72 at 8 (acknowledging that there is a “lack
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of contrary 7th Circuit authority”).

Nonetheless, U.S. Bank

Trust devotes significant space to the case.
The

importance

foreclosure
[their]

efforts

opposition

of
is
to

In

re

Failla

obvious.
the

If

to
the

creditor’s

U.S.

Bank

Skibbes

subsequent

Trust’s

“must

drop

foreclosure

action,” then they should not fight any foreclosure action that
the Bank brings, regardless of whether that action complies with
the one-refiling rule.

But U.S. Bank Trust is urging the case

on this Court in defending its counterclaims.

This makes its

assertion that the claims are unrelated to the foreclosure less
than convincing.
For

another,

U.S.

Bank

Trust

appears

to

advance

incredibly narrow view of the scope of res judicata.
asserts

that,

while

it

has

not

“filed

counterclaim,” it may do so in this case.
This

is

because

despite

what

the

a

an

The Bank

foreclosure

ECF No. 72, at 5 n.5.

Illinois

courts

said

in

dismissing its 2015 foreclosure action, “each missed payment on
an obligation payable in installments is a separate cause of
action.” Id.

As such, the only action barred is that alleging

an April 2010 default date. See, id.

Any other cause of action,

U.S. Bank Trust may viably advance, either as a counterclaim in
this federal lawsuit or as a foreclosure action in the state
court. See, id.
- 18 -

The Court cannot agree.

As a preliminary matter, it notes

that if U.S. Bank Trust is correct, then the Bank has avenues
for relief in the state court.

According to U.S. Bank Trust’s

reading of the law, all the Bank has to do to keep the Skibbes
from getting a “free house” is institute another foreclosure
action.

The

denial

of

a

federal

forum

is

thus

neither

a

windfall to the Skibbes nor inequitable to the Bank.
More to the point, U.S. Bank Trust’s narrow conception of
res judicata cannot be correct.
Bank

Trust’s

claims

would

Under that conception, U.S.

never

be

barred

by

any

prior

adjudication as long as the Bank can vary its complaints everso-slightly by changing a default date.
reality

has

changed

at

all

–

whether

Regardless of whether
the

Skibbes

have

made

another payment, received another loan, or otherwise modified
their obligation to the Bank – U.S. Bank Trust would be in total
control as to how often they can go after the same couple, for
the same loan, seeking the same collateral.
But

Illinois

has

adopted

a

judicata to avoid such maneuvers.

“pragmatic”

approach

to

res

If the facts are the same,

then U.S. Bank cannot get a do-over simply by hiring better
lawyers to draft better complaints (or more lawyers to draft yet
more complaints).

See, People ex rel. Burris v. Progressive

Land Developers, Inc., 151 Ill.2d 285, 294 (1992) (“The doctrine
- 19 -

[of res judicata] extends not only to what actually was decided
in the original action but also to matters which could have been
decided in that suit.”).
Ultimately, there is unresolvable tension between U.S. Bank
Trust’s argument for supplemental jurisdiction and its argument
to avoid res judicata.
Trust

asserts

that

In fighting for jurisdiction, U.S. Bank

its

counterclaims

and

the

Skibbes’

FDCPA

claim are “inextricably intertwined” because both had to do with
the Bank’s right to foreclose.

In trying to shrug off res

judicata, U.S. Bank Trust attempts an about-face and says that
its counterclaims have nothing to do with the foreclosure but
everything to do with the bankruptcy surrender.

Given such a

fine needle to thread, it should come as no surprise that the
Bank is not entirely successful.

The Court has jurisdiction

over the case, but it exercises that jurisdiction to find that
U.S. Bank Trust’s counterclaims are precluded.
III.
For

the

reasons

stated

CONCLUSION
herein,

the

Skibbes’

Motion

Dismiss [ECF No. 50] is granted.
IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated: 6/9/2017
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to