Tripicchio et al v. Seterus, Inc. et al
MEMORANDUM Opinion and Order Signed by the Honorable Sharon Johnson Coleman on 12/20/2016:Mailed notice(rth, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
THOMAS A. TRIPICCHIO and
DENISE R. TRIPICCHIO,
SETERUS, INC., a Delaware
CODILIS AND ASSOCIATES, P.C.,
an Illinois corporation,
Case No. 16-cv-4967
Judge Sharon Johnson Coleman
MEMORANDUM OPINION AND ORDER
The plaintiffs, Thomas A. Tripicchio and Denise R. Tripicchio, brought this action against
defendants Seterus, Inc. (“Seterus”) and Codilis and Associations, P.C. (“Codilis”). The Tripicchios
allege that Seterus breached its contract with the Tripicchios, violated 12 C.F.R §1024.41(g), and
violated the Illinois Fraud Act and that Codilis violated the Fair Debt Collection Practices Act.
Seterus and Codilis both move to dismiss the claims against them for failure to state a claim on
which relief can be granted. For the reasons set forth herein, both Seterus’ motion to dismiss 
and Codilis’ motion to dismiss  are granted.
The following facts are taken from the complaint and its attachments and are accepted as
true for the purpose of the present motion. The Tripicchios owned a home in Lake Zurich, Illinois,
which secured a mortgage held by Bank of America. In 2014, Bank of America initiated foreclosure
proceedings against the Tripicchios and a judgment of foreclosure was entered. On December 1,
2015, Seterus took over the servicing of the Tripicchios’ loan.
The Tripicchios submitted a complete loss mitigation application to Seterus. Seterus
subsequently approved the Tripicchios to enter a trial period plan (“TPP”). Under the TPP, the
Tripicchios were to make three monthly payments of a modified amount, after which they would
receive a permanent loan modification. The TPP also provided that Seterus would not proceed with
the foreclosure sale as long as the Tripicchios were in compliance with the terms of the TPP. In
order to accept the trial offer, the TPP required that the Tripicchios:
[S]end [Seterus] the first ‘trial period payment,' by the Due
Date . . . To qualify for a permanent modification, you must make the
remainder of the trial period payments on time and as indicated and
maintain eligibility. Payment amounts shown do not include your
PMI [private mortgage insurance] premium of $145.98, which you
must pay in addition to each trial payment.
(Dkt. 1-1). The TPP provided that the Tripicchios were required to make monthly payments of
$3,237.96 on February 1, 2016, March 1, 2016, and April 1, 2016.
The evidence attached to the complaint shows that the Tripicchios made three payments of
$3,237.96. The first payment was signed on February 23, 2016 and received on February 26, 2016.
The second payment was received on March 30, 2016. The third payment was signed on April 27,
2016, and received on April 28, 2016. Seterus accepted all three of these payments.
On April 25, 2016, Codilis filed a Notice of Sherriff’s Sale of Real Estate in the state court
foreclosure case. Codilis filed this notice at Seterus’ direction, although Bank of America remained
the nominal plaintiff in the state court action. The Tripicchios subsequently filed this action against
Seterus and Codilis.
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the complaint, not the merits of the allegations. The allegations must describe the
claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon
which it rests and must contain sufficient factual material to raise a plausible right to relief. Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 569 n.14, 127 S.Ct. 1955, 1973, 167 L.Ed.2d 929 (2007).
Although Rule 8 does not require a plaintiff to plead particularized facts, the complaint must allege
factual allegations that raise a right to relief above the speculative level.” Arnett v. Webster, 658 F.3d.
742, 751-52 (7th Cir. 2011). In other words, Rule 8 “does not require ‘detailed factual allegations,'
but it demands more than an unadorned, the-defendant-lawfully-harmed-me-accusation.” Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), see also Fed. R. Civ. P. 8(a).
When ruling on a motion to dismiss, the court must accept all well-pleaded factual allegations in the
complaint as true and draw all reasonable inferences in the plaintiff’s favor. Park v. Ind. Univ. Sch. Of
Dentistry, 692 F.3d 828, 830 (7th Cir. 2012).
Breach of Contract
In order to state a claim for breach of contract under Illinois law, the Tripicchios must
allege: “(1) the existence of a valid and enforceable contract; (2) substantial performance by the
plaintiff; (3) breach of contract by the defendant; and (4) resultant injury to the plaintiff.” Avila v.
CitiMortgage, Inc., 801 F.3d 777, 786 (7th Cir. 2015).
Here, the parties agree that the TPP was a valid and enforceable contract. Seterus, however,
contends that the Tripicchios’ complaint does not allege substantial performance because the
evidence attached to the complaint shows that the Tripicchios did not make their monthly payments
on time and failed to make their PMI payments.
The TPP expressly stated that “[i]n addition to the Trial Period Plan payments, you must pay
your regularly scheduled PMI payment of $145.98 to remain contractually current with the
conditions of your mortgage loan.” (Dkt.1-1) (emphasis removed). The TPP later reiterated that
“Payment amounts shown do not include your PMI [private mortgage insurance] premium of
$145.98, which you must pay in addition to each trial payment.” (Dkt. 1-1). Although the
Tripicchios attached proof of their monthly TPP payments to their complaint, they did not
specifically allege or provide any proof that they made their monthly PMI payments. Seterus
therefore contends that the Tripicchios breached the TPP by failing to make their PMI payments.
The Tripicchios complaint, however, alleges that they “performed all obligations of the New TPP.”
Because at this stage in the proceedings this Court is required to credit this allegation absent
allegations or evidence to the contrary, this Court must assume that the Tripicchios made the
required PMI payments.
Seterus also contends that the Tripicchios breached the TPP by failing to make timely
payments. The TPP states:
To accept this trial offer, send us the first “trial period payment,” by
the Due Date, as shown in the following table. To qualify for a
permanent modification, you must make the remainder of the trial
period payments on time and as indicated and maintain eligibility.
(Dkt. 1-1). According to the TPP, the Tripicchios’ three TPP payments were due on February 1,
2016, March 1, 2016, and April 1, 2016. A separate portion of the TPP, however, provided that
“[e]ach trial payment must be received by us in the month in which it is due, or you will no longer be
eligible for a loan modification, and your loan will not be modified.” (Dkt. 1-1). The Tripicchios
therefore contend that their payments, which Seterus allegedly received on February 27, 2016, March
31, 2016, and April 29, 2016, were all timely under the TPP.
The TPP, as this Court reads it, contains two sets of deadlines. The first provides when
payments must be paid (“on time and as indicated”) in order to maintain eligibility for a loan
modification. The second set of deadlines provides that a loan payment more than a month overdue
automatically destroys eligibility for a loan modification. Presumably, if a payment is paid after the
due date but less than a month late, it falls to the servicer’s discretion whether or not to treat it as a
violation of the trial period plan. Although the Tripicchios read these provisions as conflicting, this
Court does not. But even if these provisions are ambiguous, one deadline in the TPP is not. The
TPP expressly states that the first trial period plan payment must be sent by the due date of
2/1/2016. The evidence that the Tripicchios attached to their complaint clearly establishes that this
was not the case. Accordingly, the Tripicchios did not substantially perform under the contract.
The Tripicchios also allege that Seterus breached the covenant of good faith and fair dealing
by accepting the Tripicchios’ payments while proceeding with the foreclosure sale. Under Illinois
law, every contract has an implied covenant of good faith and fair dealing, which is taken into
consideration when interpreting ambiguous contractual language or evaluating discretionary conduct
pursuant to a contract. Resolution Trust Corp. v. Holtzman, 618 N.E.2d 418, 424, 248 Ill.App.3d 105
(1993). But the Tripicchios’ response to Seterus’ motion does not address the covenant of good
faith and fair dealing or offer any argument supporting its application here. Accordingly, that
contention is waived. Jones v. Connors, No. 11 C 8276, 2012 WL 4361500, at *7 (N.D. Ill. Sept. 20,
2012) (Castillo, J.) (“A party's failure to respond to arguments the opposing party makes in a motion
to dismiss operates as a waiver or forfeiture of the claim and an abandonment of any argument
against dismissing the claim.”).
12 C.F.R. § 1024.41(g)
Count II of the Tripicchios’ complaint alleges that Seterus violated 12 C.F.R. § 1024.41(g) by
moving for a foreclosure sale despite the fact that the Tripicchios were performing under the TPP.
12 C.F.R.§ 1024.41(g) provides:
Prohibition on foreclosure sale. If a borrower submits a complete
loss mitigation application after a servicer has made the first notice or
filing required by applicable law for any judicial or non-juridical
foreclosure process but more than 37 days before a foreclosure sale, a
servicer shall not move for a foreclosure judgment or order of sale,
or conduct a foreclosure sale, unless:
1) The servicer has sent the borrower a notice pursuant to paragraph
(c)(1)(ii) of this section that the borrower is not eligible for any loss
mitigation option and the appeal process in paragraph (h) of this
section is not applicable, the borrower has not requested an appeal
within the applicable time period for requesting an appeal, or the
borrower's appeal has been denied;
2) The borrower rejects all loss mitigation options offered by the
3) The borrower fails to perform under an agreement on a loss
As an initial matter, this Court notes that the Tripicchios have failed to establish how issuing
a notice of sale constitutes either “mov[ing] for a foreclosure judgment” or “conduct[ing] a
foreclosure sale” as those terms are used within the regulation. The CFPB’s official interpretation of
the regulation allows a servicer to proceed with an already-pending foreclosure process so long as
the steps taken, including issuing required publications, do not result in the issuance of a foreclosure
judgment or the conduct of a foreclosure sale. Mortgage Servicing Rules Under the Real Estate
Settlement Procedures Act (Regulation X), 78 Fed. Reg. 10696-01, at 10897–98 (Feb. 14, 2013). The
Tripicchios offer no authority to support their assertion that the notice of sale was all that was
needed to bring about a foreclosure sale.
Moreover, as previously discussed, the evidence attached to the complaint shows that the
Tripicchios failed to perform under the TPP. Thus, Seterus was not prohibited from proceeding
with the foreclosure sale in light of section 1024.41(g)(3).
Illinois Consumer Fraud Act
Count IV of the Tripicchios’ complaint alleges that Seterus violated the Illinois Consumer
Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., (“ICFA”) by proceeding with
foreclosure proceedings after approving the Tripicchios for a trial payment plan and accepting their
payments under the plan. To state a claim under ICFA, a plaintiff must allege 1) a deceptive or
unfair act or practice by the defendant; 2) the defendant’s intent that the plaintiff rely on the
deceptive or unfair practice; 3) that the unfair or deceptive practice occurred during a course of
conduct involving trade or commerce; 4) actual damage to the plaintiff; and 5) that the damage was
proximately caused by the deception. David v. Bayview Loan Servicing, LLC, No. 15-cv-9274, 2016
U.S. Dist. LEXIS 57100, at *16 (N.D. Ill. Apr. 29, 2016). (Dow.J.); Martis v. Pekin Mem’l Hosp. Inc.,
917 N.E.2d 598, 603, 395 Ill.App.3d 943 (2009)); White v. DaimlerChrysler Corp., 856 N.E.2d 542, 546,
368 Ill.App.3d 278 (2006). In order to determine whether a defendant’s conduct is unfair under
ICFA, courts consider whether the conduct violates public policy, is so oppressive that the
consumer has little choice but to submit, or causes consumers substantial injury. Siegel v. Shell Oil
Co., 612 F.3d 932, 935 (7th Cir. 2010) (citing Robinson v. Toyota Motor Credit Corp., 775 N.E.2d 951,
961, 201 Ill.2d 403 (2002)). All three criteria do not need to be satisfied to support a finding of
unfairness; “[a] practice may be unfair because of the degree to which it meets one of the criteria or
because to a lesser extent it meets all three.” Robinson, 775 N.E.2d at 961.
The Tripicchios allege solely that Seterus used fraud, deception, or misrepresentation in its
attempt to “wrongfully breach the New TPP”. It is well established, however, that “[a] breach of
contractual promise, without more, is not actionable under the Consumer Fraud Act.” Avery v. State
Farm. Mut. Auto. Ins. Co., 835 N.E.2d 801, 844, 216 Ill.2d 100 (2005); see also Zankle v. Queen Anne
Landscaping, 724 N.E.2d 988, 993, 311 IllApp.3d 308 (2000) (“We believe that a ‘deceptive act or
practice’ involves more than the mere fact that a defendant promised something and then failed to
do it. That type of ‘misrepresentation’ occurs every time a defendant breaches a contract.”). The
Tripicchios have accordingly failed to state a claim under ICFA. 1
1 This Court additionally notes that the Tripicchios’ allegations that they suffered emotional distress are incapable of
giving rise to injuries actionable under ICFA. Morris v. Harvey Cycle & Camper, Inc., 911 N.E.2d 1049, 1053, 392
Ill.App.3d 399 (2009) (recognizing that actual damages must be alleged in the form of specific economic injuries and that
emotional damages therefore do not suffice). The Tripicchios have, however, adequately alleged the existence of actual
The Tripicchios also allege that Codilis violated sections 1692d, 1692e, and 1692f of the Fair
Debt Collection Practices Act (“FDCPA”), which protects against abusive, deceptive, and unfair
debt collection practices by debt collectors. 15 U.S.C. §1692 et seq. This Court addresses each
section in turn.
Section 1692d provides that “[a] debt collector may not engage in any conduct the natural
consequence of which is to harass, oppress, or abuse any person in connection with the collection of
a debt.” 15 U.S.C. § 1692d. Examples of such conduct include “[t]he use or threat of use of
violence or other criminal means to harm the physical person, reputation, or property of any
person,” “[t]he use of obscene or profane language or language the natural consequence of which is
to abuse the hearer or reader,” “[t]he publication of a list of consumers who allegedly refuse to pay
debts,” or “[c]ausing a telephone to ring or engaging any person in telephone conversation
repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.”
The Tripicchios allege that Codilis violated this section by employing unfair and
unconscionable means to collect the subject debt. Although the Tripicchios do not identify what
means Codilis used, this Court must assume that they reference the filing of the Notice of Sale. It is
well established, however, that taking legal action to recover a debt does not, in and of itself,
constitute harassment or deception. Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 330 (6th Cir.
2006) (recognizing that the tactics forbidden by section 1692d are “not comparable to the single
filing of a debt-collection lawsuit). Legal actions violate section 1692d only when they are frivolous,
based on blatant lies, or misrepresent a key fact. Eichman v. Mann Bracken, LLC, 689 F. Supp. 2d
1094, 1100–01 (W.D. Wis. 2010). Although the Tripicchios challenge the propriety of sending the
harm because legal fees incurred in defending a separate proceeding can constitute actual damages under ICFA. See
Armbrister v. Pushpin Holdings, LLC, 896 F.Supp.2d 746, 756 (2012).
Notice of Sale, they do not contend that the Notice of Sale was based on blatant lies or that it was
frivolous. Accordingly, the Tripicchios have failed to state a claim for violation of section 1692d.
Section 1692e provides that “[a] debt collector may not use any false, deceptive, or
misleading representations in connection with the collection of any debt.” 15 U.S.C. §1692e. The
statute provides examples of such conduct, such as “[t]he false representation of the character,
amount, or legal status of any debt,” “[t]he threat to take any action that cannot legally be taken or
that is not intended to be taken,” or “[t]he use of any false representation or deceptive means to
collect or attempt to collect any debt or to obtain information concerning a consumer.” Id. The
Tripicchios allege that Codilis violated this section by filing the Notice of Sale while they were
enrolled in the TPP and while foreclosure was thus prohibited by section 1024.41(g). As this Court
previously decided, however, the Tripicchios’ allegations and the evidence attached to the complaint
establish that the Tripicchios did not substantially comply with their obligations under the TPP.
Accordingly, the Tripicchios’ allegations do not establish that Codilis falsely represented the status of
their debt or threatened to take unavailable legal actions.
Section 1692f provides that “a debt collector may not use unfair or unconscionable means to
collect or attempt to collect any debt.” 15 U.S.C. §1692f. Examples of such conduct include
communicating with a consumer regarding a debt by post card, taking nonjudicial action to effect
dispossession, depositing a postdated check prior to the date on the check, or collecting
unauthorized fees. The Tripicchios allege that Codilis violated this section by using unconscionable
means to collect a debt by sending the Notice of Sale. As previously noted, however, the allegations
and evidence attached to the complaint do not support the assertion that Codilis acted wrongfully
when it sent notice of sale. Moreover, the Tripicchios’ section 1692f claim is premised on the same
factual allegations as their section 1692e claim, and therefore fails to state an independent basis on
which relief may be granted. See Heffron v. Green Tree Servicing, LLC, No. X, 2016 WL 47915, at *5
(N.D. Ill. Jan. 5, 2016) (recognizing that a section 1692f violation cannot be premised on an alleged
section 1692e violation). Accordingly, the Tripicchios have failed to state a claim for violations of
15 U.S.C. §1692
For the reasons stated herein, Seterus’ motion to dismiss  and Codilis’ motion to dismiss
 are granted and this case is dismissed with prejudice.
IT IS SO ORDERED.
Date: December 20, 2016
SHARON JOHNSON COLEMAN
United States District Court Judge
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