Hawthorne v. Silverleaf Funding, LLC et al
MEMORANDUM Opinion and Order Signed by the Honorable John J. Tharp, Jr on 6/14/2017: For the reasons set forth in the Memorandum Opinion, the defendants' motion to dismiss 33 is granted. Should the plaintiff wish to amend his complaint in accordance with this Opinion, he must do so by July 12, 2017. In the event an amended complaint is not timely filed, the case will be terminated. Mailed notice(air, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
derrick family: hawthorne; a true man of God
AND THE PEOPLE OF THE STATE OF
ILLINOIS EX REL DARREY HAWTHORNE,
SILVERLEAF FUNDING, LLC, AS
ASSIGNEE OF WOODBRIDGE MORTGAGE
FUND 1, LLC, TAFT STETTINIUS &
HOLLISTER ATTY. FOR SILVERLEAF
FUNDING, BRIANNA SONSONE,
INDIVIDUALLY, INVERSE ASSET FUND,
ROBERT WOODS, INDIVIDUALLY, NEW
PLAN INC., JOSEPH DEBELLA, JR.
No. 16 CV 02934
Judge John J. Tharp, Jr.
MEMORANDUM OPINION AND ORDER
Plaintiff Derrick Hawthorne filed this suit pro se in March 2016, the third in a series of
suits he has attempted to litigate in this Court arising from a state court mortgage foreclosure
action that resulted in entry of judgment against Hawthorne’s now-dissolved company and an
order confirming the sale of the property in January 2015.1 His prior efforts having failed,
Hawthorne now accuses the defendants of violating the federal Fair Debt Collection Practices
Act (“FDCPA”), the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”),
and the Illinois Collection Agency Act (“ICAA”). Hawthorne’s complaint also asserts state tort
claims for intentional infliction of emotional distress and intrusion upon seclusion. The
See Hawthorne v. Inverse Asset Fund, LLC, No. 16 C 07440, Remand Order, ECF No. 6
(N.D. Ill. July 26, 2016); Silverleaf Funding, LLC v. Home Electronic Solutions, Inc. et. al, No.
15 C 04443, Remand Order, ECF No. 5 (N.D. Ill. June 10, 2015).
defendants, all entities and individuals which have been involved to varying degrees in
underlying state court litigation, have moved to dismiss the complaint for lack of subject-matter
jurisdiction, failure to state a claim, and insufficient service. That motion to dismiss is granted
for the reasons set forth below.
The defendants lodged their joint motion to dismiss pursuant to Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6), and further argue that the case should be dismissed for
insufficient service under Rule 12(b)(5). This Court takes as true all well-pleaded facts alleged in
the complaint and draws all reasonable inferences in favor of Hawthorne, the non-moving party.
See Lee v. City of Chi., 330 F.3d 456, 468 (7th Cir. 2003) (Rule 12(b)(1); Mann v. Vogel, 707
F.3d 872, 877 (7th Cir. 2012) (Rule 12(b)(6)). Still, the facts as alleged in the complaint are
difficult to parse.
The confusion starts with the plaintiff’s identity. Under a section labeled “The Parties,”
the complaint states that plaintiff Derrick Hawthorne is a “Citizen/National,” and states that
“Plaintiffs the People of the State of Illinois ex rel derrick family:hawthorne are at all times
relevant to this action Illinoisans.” Compl. ¶ 2. The caption of the complaint, as reflected above,
lists “derrick family: hawthorne; a true man of God AND THE PEOPLE OF THE STATE OF
ILLINOIS EX REL DARREY HAWTHORNE” as the “Plaintiff(s).” Id. at 1. The complaint is
signed by “derrick Hawthorne,” but verified by “derrick family: hawthorne.” Id. at 14.2 This, of
course, is part of the unfortunately familiar gibberish of the “sovereign citizen” movement,
whose theories have repeatedly been rejected as frivolous, bizarre, and nonsensical. Although
This page of the complaint is actually numbered “16,” but follows the first 13 pages of
the complaint, which are numbered in that order. As the final sentence that appears on page 13
cuts off, it is possible that the complaint was filed with two pages—numbered 14 and 15—
adorned with these trappings of the sovereign dogma, for the most part (exceptions noted below)
the plaintiff’s claims do not appear to invoke “sovereign” theories. Nor does it appear that the
plaintiff in this case could be anyone other than an individual named Derrick Hawthorne.
Accordingly, the Court proceeds from that premise.
Hawthorne asserts generally that the defendants have attempted to collect an alleged debt
from him, but states that he is “without knowledge” of that debt. Id. ¶ 10. His complaint states
that on April 15, 2014, he received a verified complaint by mail in state court case number 14
CH 03063. Id. ¶ 11. That state court complaint, which the defendants attach to their motion to
dismiss,3 was for a foreclosure action brought by current defendant Silverleaf Funding LLC, as
assignee of Woodbridge Mortgage Investment Fund 1, LLC, against Hawthorne, Home
Electronic Solutions, Inc.—which appears to be a now-dissolved corporation of which
Hawthorne was the president, see Corporation File Detail Report, “Home Electronic Solutions,
Hawthorne attached just the first page of the 2014 state court complaint to his federal
court complaint in this case, while the defendants attached what appears to be a complete copy,
minus any exhibits. This Court may consider that document without converting the motion to
dismiss into a motion for summary judgment. See Brownmark Films, LLC v. Comedy Partners,
682 F.3d 687, 690 (7th Cir. 2012) (“In effect, the incorporation-by-reference doctrine provides
that if a plaintiff mentions a document in his complaint, the defendant may then submit the
document to the court without converting defendant’s 12(b)(6) motion to a motion for summary
judgment. The doctrine prevents a plaintiff from ‘evad[ing] dismissal under Rule 12(b)(6) simply
by failing to attach to his complaint a document that prove[s] his claim has no merit.’” (quoting
Tierney v. Vahle, 304 F.3d 734, 738 (7th Cir. 2002)). This Court may also take judicial notice of
other public filings from that 2014 state court case as well as the 2016 forcible eviction action
described, infra, at 4. “Taking judicial notice of matters of public record need not convert a
motion to dismiss into a motion for summary judgment.” Ennenga v. Starns, 677 F.3d 766, 773
(7th Cir. 2012). This Court “may take judicial notice of facts that are (1) not subject to
reasonable dispute and (2) either generally known within the territorial jurisdiction or capable of
accurate and ready determination through sources whose accuracy cannot be questioned.” Id. at
773-74. The Seventh Circuit has also specifically found that a district court may take judicial
notice of public court documents. See Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir.
claimants, and occupants. See 2014 Compl., ECF No. 33-1. The 2014 complaint specifically
involved a property at 4136 West Jackson Boulevard, in Chicago. Id. The state court judge later
dismissed Hawthorne from the case, see State Order of 8/29/14, ECF No. 33-1, and entered
judgment against Home Electronic Solutions, see State Order of 9/19/14, ECF No. 33-1. On
January 9, 2015, the state court judge entered an order approving the report of the property’s sale
and distribution, confirming the sale, and issuing an order for possession. See State Order of
1/9/15, ECF No. 33-1. Hawthorne then lodged a motion on January 20, 2015, seeking to vacate
those judgments and orders, which the state court judge denied on May 1, 2015. See Pet. to
Vacate, ECF No. 33-1; State Order of 5/1/15, ECF No. 33-1.
Despite the foreclosure and sale of the property, Hawthorne refused to vacate the
premises, prompting additional litigation in 2016. The property at 4136 West Jackson had been
conveyed to Inverse Asset Fund LLC, a defendant in this federal court case;4 in June 2016,
Inverse Asset Fund—through its attorneys Taft Stettinius & Hollister and Brianna Sansone
(misspelled “Sonsone” in Hawthorne’s complaint), also defendants to the current action—lodged
forcible eviction proceedings against Hawthorne in three separate state court cases numbered 16M1-710912, 16-M1-710913, and 16-M1-710914. See Eviction Compls., ECF No. 33-1. The state
court judge eventually entered final orders of possession against Hawthorne as to the subject
property in all three proceedings on September 8, 2016. See State Orders of 9/8/16, ECF No.
Hawthorne, meanwhile, had filed the current federal court complaint on March 8, 2016.
In it, he alleges that on March 2, 2014, before he actually received a copy of the 2014 state court
A sale deed was publicly recorded on October 29, 2016 to reflect that transfer. See
Deed, ECF No. 331-1.
complaint, a process server acting on behalf of defendant Silverleaf Funding, LLC, falsified
documents which stated that the process server had served the complaint by leaving it with a
family member or co-resident. Compl. ¶ 13. The person who supposedly received service was
not a resident of Illinois, and was actually at her place of employment on the morning the process
server claimed to have completed service, Hawthorne asserts. Id. In making these allegations,
Hawthorne invokes his constitutional rights to due process and to equal protection. Id. The
complaint also asserts that the defendants “failed to inform Plaintiff of his validation rights” and
seems to allege that they did not provide him sufficient notice of their attempt, as debt collectors,
to collect a debt from him. Id. ¶ 14. Hawthorne says that he served the defendants with a notice
that he was disputing the debt in accordance with the FDCPA, 15 U.S.C. § 1692g, and he
attached a series of notarized documents referring to that notice—which seem to allege that the
notice was served in February 2015, though it is difficult to make out on the scanned copies
provided—to his complaint in this case. See id. ¶ 14; Compl. Ex. 3. On August 2, 2015,
defendant Robert Woods came to Hawthorne’s residence and left a note—the substance of which
is unclear—with a family member who was visiting. See Compl. ¶ 17. Hawthorne stressed to
Woods that “no liability between plaintiff(s) and these alleged new owners existed,” but Woods
continued to try to communicate with Hawthorne without his consent. Id. The subject of Woods’
continued contacts with Hawthorne is, again, not alleged.
Hawthorne asserts that on September 24, 2015, he “issued a rescission notice of the
consumer transaction,” and that on January 12, 2016, he filed a “Notice of Judgment and Final
Order Pursuant Rescission” in the Illinois state court. Compl. ¶¶ 15-16.5 Based on the documents
Hawthorne does not explain the purported significance of these documents, but it
appears that he is invoking common and ineffective sovereign citizen claims that contracts can
be nullified on election. See, e.g., El v. AmeriCredit Fin. Servs., Inc., 710 F.3d 748, 750 (7th Cir.
Hawthorne attached to his complaint, it appears that he filed a letter dated September 24, 2015—
which states that he was rescinding “the entire consumer credit transaction” related to the
property at 4136 West Jackson Boulevard—with the Cook County Recorder of Deeds. See
Compl. Ex. 4. It is not clear to this Court what Hawthorne refers to as his January 12, 2016
filing; the copy of the September 2015 letter he attached does appear, however, to have been
notarized on that January date. See Compl. Exs. 4-5.
Hawthorne alleges that on March 3, 2016, defendants Joseph DeBella, Jr. and New Plan,
Inc. threatened Hawthorne and his family with forcible removal from their home. Compl. ¶ 18.
Hawthorne alleges that they did so “without first bringing such action before the judicial district;
validating or obtaining verification; providing accurate accounting or chain of title; and, without
providing an authentic agreement signed by Plaintiff or consent to communicate about any
alleged debt.” Id. DeBella “verbally terrorized” Hawthorne, and provided him with a business
card, a copy of a judicial sale deed, and a letter on letterhead associated with defendant Taft
Stettinius & Hollister LLP stating that DeBella was from New Plan and was “authorized to act
on Inverse Asset Fund, LLC’s behalf concerning the properties owned by Inverse Asset Fund,
LLC.” Compl. Ex. 6. DeBella also allegedly said that Hawthorne owed some $7,500 in back
rent. Compl. ¶ 18.
2013). Hawthorne’s unilateral “rescission” of any debts he has incurred is, of course, legally
ineffective and will not be discussed further. See Bey v. State of Indiana, 847 F.3d 559, 561 (7th
Cir. 2017) (in affirming dismissal of sovereign citizen claims, describing the sovereign citizen
movement but clarifying that district court judges need not “delve into the history of every
particular organization involved in every case before them”); see also United States v. Benabe,
654 F.3d 753, 767 (7th Cir. 2011) (“Regardless of an individual’s claimed status of descent, be it
as a ‘sovereign citizen,’ a ‘secured-party creditor,’ or a ‘flesh-and-blood human being,’ that
person is not beyond the jurisdiction of the courts. These theories should be rejected summarily,
however they are presented.”).
The defendants filed their joint motion to dismiss the case in October 2016, arguing that
Hawthorne’s claims are barred by the Rooker-Feldman doctrine and by the doctrine of res
judicata. Mot. to Dismiss at 4. They further argue that Hawthorne’s complaint should be
dismissed for failure to state a claim and for insufficient service. Id. Hawthorne did not respond
to the arguments in the motion, instead filing two letters he apparently sent to defense counsel in
this case after the motion to dismiss in which Hawthorne referred to himself as a “Consumer
Enforcement Director” and directed the recipients to stop contacting him about any alleged
debts. See Notice of Filing, ECF No. 36. Hawthorne also submitted copies of the appearances
that defense counsel submitted in this case with the word “RESCINDED” written across them in
red ink. Id.
This Court now turns to the defendants’ motion to dismiss.
The defendants’ first argument is that Hawthorne’s current claims are barred by the
Rooker-Feldman doctrine and that this Court therefore lacks subject-matter jurisdiction to hear
the case. See Mot. to Dismiss at 4-6. The Rooker-Feldman doctrine provides “that the Supreme
Court of the United States is the sole federal tribunal authorized to review the judgments of state
courts in civil litigation.” Iqbal v. Patel, 780 F.3d 728, 729 (7th Cir. 2015) (citing Rooker v. Fid.
Tr. Co., 263 U.S. 413, 415–16 (1923); D.C. Cir. v. Feldman, 460 U.S. 462, 486 (1983)). The
Seventh Circuit has explained:
Lower federal courts are not vested with appellate authority over
state courts. The Rooker-Feldman doctrine prevents lower federal
courts from exercising jurisdiction over cases brought by state
court losers challenging state court judgments rendered before the
district court proceedings commenced. The rationale for the
doctrine is that no matter how wrong a state court judgment may
be under federal law, only the Supreme Court of the United States
has jurisdiction to review it.
Sykes v. Cook Cty. Cir. Ct. Prob. Div., 837 F.3d 736, 741–42 (7th Cir. 2016) (citations omitted);
see also Jakupovic v. Curran, 850 F.3d 898, 902 (7th Cir. 2017) (quoting same); Kelley v. Med-1
Sols., LLC, 548 F.3d 600, 603 (7th Cir. 2008) (“A state litigant seeking review of a state court
judgment must follow the appellate process through the state court system and then directly to
the United States Supreme Court.”) (citation omitted). Claims “that directly seek to set aside a
state-court judgment are de facto appeals that trigger the doctrine,” and even federal claims “that
were not raised in state court, or that do not on their face require review of a state court's
decision, may be subject to Rooker-Feldman if those claims are closely enough related to a statecourt judgment.” Mains v. Citibank, N.A., 852 F.3d 669, 675 (7th Cir. 2017).
The defendants argue that Rooker-Feldman applies because Hawthorne has challenged
the adequacy of service in the underlying state court litigation—including by alleging that a
process server falsified documents—and that this Court cannot rule on such an allegation
because doing so would be a collateral attack on the state court’s judgment. Mot. to Dismiss at 5.
In the “petition to vacate” Hawthorne filed in the 2014 state court case on January 20, 2015, he
did assert simply “1. Not properly served, 2. Fraud in factum,” without additional argument. See
Pet. to Vacate. The state court denied that motion on May 1, 2015. The state court therefore
rejected Hawthorne’s arguments of insufficient service in the 2014 case when deciding not to
vacate its January 9, 2015 order confirming the judicial sale in that case. Under Illinois law, the
state court’s January 9, 2105 ruling was a final judgment on the merits. See EMC Mortg. Corp. v.
Kemp, 982 N.E.2d 152, 154 (Ill. 2012) (“[I]t is the order confirming the sale, rather than the
judgment of foreclosure, that operates as the final and appealable order in a foreclosure case.”).
There is also no indication that any state court appeal of that ruling was pending at the time
Hawthorne filed this current suit. See Parker v. Lyons, 757 F.3d 701, 705-06 (7th Cir. 2014)
(agreeing with other federal circuit courts that have concluded, after the Supreme Court’s
decision in Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005), that “Rooker–
Feldman does not bar the claims of federal-court plaintiffs who . . . file a federal suit when a
state-court appeal is pending”). To the extent that Hawthorne seeks to challenge the sufficiency
of service in the 2014 state court case, therefore, that challenge is an attack on a final state court
judgment and so is barred by the Rooker-Feldman doctrine. See Riddle v. Deutsche Bank Nat’l
Trust Co., 599 Fed. App’x 598, 600 (7th Cir. 2015) (finding Rooker-Feldman barred plaintiff’s
claim that he was injured when the defendants foreclosed on his house despite knowing that their
service of process was defective, saying that because the state court judgment had authorized the
foreclosure and sale of his house, his federal claim was “an attack on that judgment”) (citing
Exxon Mobil, 544 U.S. at 284; Crawford v. Countrywide Home Loans, Inc., 647 F.3d 642, 646–
47 (7th Cir. 2011); Taylor v. Fed. Nat’l Mortg. Ass’n, 374 F.3d 529, 532–33 (7th Cir. 2004)).
To the extent the complaint alleges that the defendants failed to properly communicate
with him or otherwise act appropriately in connection with their attempts to collect a debt,
however, that purported claim is not “closely enough related” to any state court judgment to
trigger Rooker-Feldman. That doctrine is a narrow one, and only bars a federal claim where there
is “no way for the injury complained of by [the] plaintiff to be separated from [the] state court
judgment.” Jakupovic, 850 F.3d at 902-03 (quoting Sykes, 837 F.3d. at 742) (internal quotation
marks omitted). The state court judgments in the foreclosure and forcible eviction litigation did
not turn on any alleged debt collection tactics, and any injuries Hawthorne alleges that he
suffered from such communications by the defendants can be separated from the state court
rulings. The FDCPA does govern how debt collectors are to communicate with debtors, but the
issues of whether that federal statute applied in circumstances here—and, if so, whether the
defendants violated it—had no bearing on the state court judgments. As to Hawthorne’s
remaining claims, then, this is not a case where “there is no conceivable way to redress the
[alleged] wrong without overturning the order of a state court.” Sykes, 837 F.3d at 743.
This Court also rejects the defendants’ argument that res judicata applies to bar the
remainder of Hawthorne’s claims. It is true that “[e]ven if Rooker-Feldman does not bar a claim,
when there is a prior state-court judgment that appears to cover the same transaction or the same
issues as the later federal case, the possibility exists that res judicata may apply.” Mains, 852
F.3d at 675. In circumstances involving a prior state court judgment, “the Full Faith and Credit
Statute, 28 U.S.C. § 1738, requires [federal] courts to give a state court judgment the same
preclusive effect it would have in state court.” Id. (quoting Long v. Shorebank Dev. Corp., 182
F.3d 548, 560 (7th Cir. 1999). “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 Group, LLC v. Cable Am., Inc., 598 F.3d 302, 310 (7th Cir. 2010). For res judicata to
apply in Illinois, “there must be (1) a final judgment on the merits rendered by a court of
competent jurisdiction, (2) the same cause of action, and (3) the same parties or their privies.”
Bonnstetter v. City of Chicago, 811 F.3d 969, 975 (7th Cir. 2016) (quoting Chi. Title Land Trust
Co. v. Potash Corp. of Saskatchewan Sales, 664 F.3d 1075, 1079 (7th Cir. 2011)) (internal
quotation marks omitted).
This Court will not dismiss Hawthorne’s FDCPA allegations on the basis of res judicata.
The defendants argue that Hawthorne’s claims in the current suit arise from the same core of
operative facts as the state court litigation, and assert that Hawthorne already raised “a lengthy
FDCPA-based argument in his state court filings.” Mot. to Dismiss at 7-8. But while the
defendants point to the notices of removal that Hawthorne filed in the underlying eviction
actions, see Removal Notices, ECF No. 33-1, in which Hawthorne does accuse them of violating
the FDCPA, there is no indication that his FDCPA claim was ever litigated to a final judgment
on the merits.6 Notably, this Court remanded the two actions that Hawthorne sought to remove,
noting in one that even if an FDCPA violation could provide a defense to the claims against him,
a federal law defense does not provide a basis for federal jurisdiction. See Hawthorne v. Inverse
Asset Fund, LLC, No. 16 C 07440, Remand Order, ECF No. 6 (N.D. Ill. July 26, 2016);
Silverleaf Funding, LLC v. Home Electronic Solutions, Inc. et. al, No. 15 C 04443, Remand
Order, ECF No. 5 (N.D. Ill. June 10, 2015). The underlying state court judgments make no
reference to the FDCPA.
The defendants correctly argue that Illinois law provides that “[s]eparate claims will be
considered the same cause of action for purposes of res judicata if they arise from a single group
of operative facts” or the “same transaction.” Arlin-Golf, LLC v. Vill. of Arlington Heights, 631
F.3d 818, 821 (7th Cir. 2011) (quoting River Park, Inc. v. City of Highland Park, 703 N.E.2d
883, 893 (Ill. 1998)). But the fact remains that an eviction action is an effort to obtain lawful
possession of a property, not to collect a debt. See Eviction, BLACK’S LAW DICTIONARY (10th ed.
2014) (“The act or process of legally dispossessing a person of land or rental property.”). To the
best this Court can decipher Hawthorne’s allegations, they seem to be based at least partly on a
As noted, the January 2015 state court order does qualify as a final judgment under
Illinois law. The state court’s September 8, 2016 orders of possession in the eviction proceeding
also qualify as final judgments. See In re DiGregorio, 458 B.R. 436, 442 (N.D. Ill. Bankr. 2011)
(“Illinois courts treat eviction orders under the [Illinois Condominium Property Act] as final
judgments subject to appeal.”) (citing Knolls Condo. Ass’n v. Harms, 781 N.E.2d 261, 263-64
transaction—an alleged debt collection, asserted mainly in connection with DeBella’s March
2016 communications with Hawthorne— that is separate from the 2016 eviction case.
Turning to the merits, however, Hawthorne has failed to state a claim for violation of the
FDCPA. To defeat a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon
which relief can be granted, a complaint must “contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Fed. R. Civ. P.
12(b)(6). A claim is facially plausible “‘when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’”
Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at
678). Rule 8(a)(2) requires just “a short and plain statement of the claim showing that the pleader
is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A plaintiff need not bring “detailed factual
allegations” to satisfy this standard, but the Supreme Court has specified that Rule 8(a) requires
more than “labels and conclusions,” and that “a formulaic recitation of the elements of a cause of
action will not do.” Twombly, 550 U.S. at 555.
The FDCPA is geared toward addressing the use of “abusive, deceptive, and unfair debt
collection practices.” 15 U.S.C. § 1692(a). In his complaint, Hawthorne includes a laundry list of
FDCPA provisions that he alleges the defendants violated. In particular, he states that the
defendants violated § 1692d, which bars debt collectors from engaging “in any conduct the
natural consequence of which is to harass, oppress, or abuse any person in connection with the
collection of a debt.” See 15 U.S.C. § 1692d. Examples of such conduct include causing “a
telephone to ring or engaging any person in telephone conversation repeatedly or continuously
with intent to annoy, abuse, or harass,” using “obscene or profane language,” and using or
threatening to use “violence or other criminal means to harm the physical person, reputation, or
property of any person.” Id. Hawthorne also asserts that the defendants violated § 1692j, which
makes it unlawful to “design, compile and furnish any form knowing that such form would be
used to create a false belief in a consumer that a person other than the creditor of such consumer
is participating in the collection of or in an attempt to collect a debt such consumer allegedly
owes such creditor, when in fact such person is not so participating.” Id. at § 1692j. Other
allegedly violated provisions include § 1692f, which prohibits the use of “unfair or
unconscionable means to collect or attempt to collect any debt;” § 1692e, which prohibits the use
of “any false, deceptive, or misleading representation or means in connection with the collection
of any debt;” and § 1692i, which requires that debt collectors who sue on a debt against a
consumer in order to enforce an interest in real property must do so “only in a judicial district or
similar legal entity in which such real property is located.” See id. at §§ 1692f, 1692e, 1692i.
Claims under that statute are subject to a one-year statute of limitations; as Hawthorne
filed this suit on March 8, 2016, any basis for his claim must have occurred after March 8, 2015,
at the very latest. See 15 U.S.C. § 1692k. The only allegation that falls within the permissible
timeframe is that concerning DeBella’s March 2016 communication.7 In his complaint,
Hawthorne alleges that at that time, New Plan and DeBella threatened to forcibly remove him
and his family from their home without taking certain steps—such as “providing accurate
accounting or chain of title” or “providing an authentic agreement signed by plaintiff”—
beforehand. Compl. ¶ 18. Hawthorne alleges that DeBella “verbally terrorized” him, and that
Hawthorne also alleges that on August 2, 2015, Woods came to Hawthorne’s residence
and “left a note with a visiting family member,” but the complaint makes no allegation as to what
this note even said, let alone that Woods was attempting to collect a debt. See Compl. ¶ 17. This
portion of Hawthorne’s complaint cites only to Exhibit 6, which is the previously described letter
explaining that DeBella of New Plan was authorized to act on behalf of Inverse Asset Fund. See
Compl. Ex. 6.
DeBella said, “We can do this the hard way, or you can work with me and not get the Cook
County Sheriffs to come sit you out.” Id. But those allegations relate to the alleged efforts to
evict Hawthorne, which were the subject of the 2016 eviction proceeding. As this Court has
previously noted, supra, at 11, an effort to evict seeks to obtain possession of property; it has
nothing to do with an effort to collect a debt. That was a matter for the foreclosure suit filed in
2014, but that judgment was entered more than a year before Hawthorne filed this suit.
The only allegation concerning conduct within the FDCPA’s limitations period that
arguably relates to collecting a debt is Hawthorne’s assertion that “DeBella also alleged that
somehow plaintiff(s) owed an alleged $7500 in back rents.” See id. This falls well short of
plausibly stating an FDCPA violation. To begin, Hawthorne has failed to even adequately allege
that DeBella was attempting to collect a debt;8 Hawthorne merely asserts that DeBella informed
him that he owed back rent, but makes no allegation that DeBella asked for repayment. Cf.
McCready v. Jacobsen, No. 06-2443, 2007 WL 1224616, at *1 (7th Cir. Apr. 25, 2007) (“We
previously have concluded that a letter informing plaintiffs of the current status of their account
and demanding no payment was not a communication ‘in connection with the collection of any
debt’ under the FDCPA.”) (citing Bailey v. Sec. Nat’l Servicing Corp., 154 F.3d 384, 388-89 (7th
Cir. 1998)). The complaint also fails to adequately allege a violation of any of the statutory
provisions Hawthorne enumerates. Hawthorne does not allege that any further communication or
This failure also dooms any claim Hawthorne may be attempting to bring that the
defendants violated 15 U.S.C. § 1692g by not properly responding to the “Notice of Dispute of
Debt” that Hawthorne alleges he served on them at some unspecified date. See Compl. ¶ 14. That
statutory provision sets out what information a debt collector must provide a consumer within
five days of initially communicating with him or her regarding the debt collection, and also sets
forth how a debt collector must respond to a consumer who provides timely notification that the
sought-after debt is disputed. See 15 U.S.C. § 1692g. Because Hawthorne has failed to
adequately allege that the defendants attempted to collect a debt from him in the first place,
however, he has also failed to allege that the defendants violated this statutory provision.
attempt to collect a debt occurred after this single mention of back rents, and does not allege that
any defendants threatened him by use of criminal means or otherwise exhibited conduct related
to debt collection that rose to the level of harassment or abuse under the statute. And the
complaint does not sufficiently allege any instance within the statutory period that the defendants
made any deceptive or misleading representations regarding the collection of any debt. The only
potential “form” to which Hawthorne points is the law firm letterhead on which the letter
explaining DeBella’s authorization appeared, and that letter makes no mention of any debt or
debt collection effort.
Hawthorne has therefore failed to state a claim for violation of the FDCPA.9 As that
theory provided the sole asserted basis for federal jurisdiction in this case, this Court declines to
address Hawthorne’s state court claims. To the extent that Hawthorne’s FDCPA claim is
premised on violations of state procedural rules in the foreclosure action, the Court lacks
jurisdiction to review the claim and it is dismissed without prejudice to refiling in state court.10
The dismissal of the FDCPA claim is with prejudice to the extent the complaint is premised on
conduct occurring before March 8, 2015; otherwise, it is without prejudice and with leave to
The defendants also argue that Hawthorne failed to state an FDCPA claim because (1)
he does not adequately allege that they were debt collectors, and (2) because the statute does not
apply to commercial debts, and the state court found this was a commercial property. Mot. to
Dismiss at 10-11. These arguments are, however, quite abbreviated. Should the defendants wish
to raise these arguments in a future motion to dismiss, they would do well to develop them
Where claims are jurisdictionally barred under Rooker-Feldman, dismissal without
prejudice is appropriate. See Jakupovic, 850 F.3d at 904 (citing Frederiksen v. City of Lockport,
384 F.3d 437, 438–39 (7th Cir. 2004) (“When the Rooker-Feldman doctrine applies, there is only
one proper disposition: dismissal for lack of federal jurisdiction. A jurisdictional disposition is
conclusive on the jurisdictional question: the plaintiff cannot re-file in federal court. But it is
without prejudice on the merits, which are open to review in state court to the extent the state’s
law of preclusion permits.”)).
amend within 28 days of the entry of this Order. In the event an amended complaint is not timely
filed, the case will be terminated.
John J. Tharp, Jr.
United States District Judge
Date: June 14, 2017
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