Hanlon v. CitiMortgage, Inc. et al
Filing
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ORDER GRANTING CT LIEN SOLUTIONS' MOTION TO DISMISS, signed by the Honorable Matthew F. Kennelly on 8/14/2017: For the reasons stated in the accompanying order, the Court grants CT Lien's motion to dismiss and dismisses Hanlon's claim s against CT Lien (Counts 1 and 3) for failure to state a claim. Unless Hanlon files, by no later than 9/5/2017, an amended complaint that states at least one viable federal claim against CT Lien, the Court will enter judgment against him. The case is set for a status hearing on 9/7/2017 at 9:30 a.m. The status hearing set for 8/15/2017 is vacated. (mk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOHN HANLON,
Plaintiff,
vs.
CITIMORTGAGE INC., CITIBANK,
INC., and CT LIEN SOLUTIONS,
Defendant.
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Case No. 17 C 1161
ORDER GRANTING CT LIEN SOLUTIONS' MOTION TO DISMISS
John Hanlon sued CitiMortgage Inc., Citibank, N.A., and CT Lien Solutions. He
has since voluntarily dismissed CitiMortgage and Citibank, leaving only CT Lien, which
has filed a motion to dismiss. The Court needs to discuss the allegations against all of
the originally-named defendants in order to describe how Hanlon claims CT Lien fits in.
Hanlon owns a home in a Chicago suburb. In 2007, he obtained a mortgage
loan from CitiMortgage, secured by the home. In February 2011, the loan was
"purportedly assigned" from Mortgage Electronic Registration Systems as nominee for
CitiMortgage to CitiMortgage itself. Compl. ¶ 33. This apparently was a preclude to
CitMortgage's filing of a mortgage foreclosure suit against Hanlon in March 2011. Id. ¶
34.
Hanlon alleges that before filing the foreclosure suit, CitiMortgage did not make a
reasonable effort to contact him or review his loan for loss mitigation as required by
federal law and a consent judgment in another lawsuit. Id. ¶ 35. He also alleges that
from October 2012 to December 2014, CitiMortgage billed him for unreasonable and
unnecessary "inspection fees." Id. ¶ 36. He also alleges that on December 9, 2016, an
individual named Laura Jones, who Hanlon says is an employee of CitiMortgage,
"prepared a document purported to be an assignment purportedly granting, selling,
assigned [sic], transferred [sic] and transferring Hanlon's loan" to US Bank as trustee for
a pool of loans. Id. ¶ 37. Hanlon alleges that the same day, "CT Lien Solutions had the
document recorded with the Cook County Recorder's Office . . . ." Id. ¶ 38. The
assignment, Hanlon alleges, "was false and deceptive because for a loan to be properly
assigned to US Bank, it must go from CitiMortgage, to the Depositor of the Trust, and
then to US Bank." Id. ¶ 39. The assignment, he alleges "is missing the endorsement to
the Depositor of the Trust." Id. ¶ 40. The complaint contains no allegations regarding
how, if at all, this assignment fits in with the foreclosure case or whether it led to any
further collection activity.
Hanlon filed a five-count complaint. In Count 1, he alleges that CitiMortgage and
CT Lien violated the Fair Debt Collection Practices Act (FDCPA). In Count 2, he alleges
that CitiMortgage and Citibank violated the Racketeer Influenced and Corrupt
Organizations Act. In Count 3, he alleges that CitiMortgage and CT Lien violated the
Illinois Consumer Fraud Act (ICFA) based on deceptive conduct. In Count 4, he alleges
that CitiMortgage violated the Illinois Collection Agency Act. And in Count 5, he alleges
that CitiMortgage violated the ICFA based on unfair conduct.
All three defendants filed motion to dismiss. Hanlon voluntarily dismissed his
claims against CitiMortgage and Citibank, leaving only CT Lien. In considering CT
Lien's motion to dismiss, the Court takes Hanlon's factual allegations as true and draws
reasonable inferences in his favor.
Hanlon has failed to state a claim against CT Lien under the FDCPA. That
statute requires the plaintiff to show that the defendant was a debt collector, see Nwoke
v. Countrywide Home Loans, Inc., 251 F. App'x 363, 364-65 (7th Cir. 2007); 15 U.S.C. §
1692a(6), and that it committed some form of prohibited conduct in the course of
collecting a debt. Hanlon alleges neither of these elements with regard to CT Lien (as
distinguished from CitiMortgage). He does not allege that CT Lien is in the business of
collecting debts or that it had any involvement in collecting his debt. Rather, all he
alleges that CT Lien did was record a lien. This is insufficient to state a claim,
particularly because the complaint does not connect the recording of the lien—let alone
CT Lien itself—to any collection activity.
Hanlon has also failed to state a claim against CT Lien under the ICFA. There
are two types of ICFA claims, those based on deceptive conduct and those based on
unfair conduct. See 815 ILCS 505/2; Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d
403, 416-17, 775 N.E.2d 951, 960 (2002); Bywater v. Wells Fargo Bank, No. 13 C 4415,
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2014 WL 1256103, at *2 (N.D. Ill. Mar. 24, 2014) (Kennelly, J.). Hanlon specifically
identifies his ICFA claim against CT Lien, Count 3, as a claim based on deceptive
conduct. This means that Count 3 must meet the heightened pleading standards of
Federal Rule of Civil Procedure 9(b), which requires a plaintiff to plead with particularity
"the circumstances constituting fraud . . . ." Fed. R. Civ. P. 9(b). But Hanlon does not
allege CT Lien's involvement in the preparation of the allegedly false assignment; he
attributes that only to CitiMortgage. All he alleges that CT Lien did was record the
assignment. The complaint includes no allegations describing how or why CT Lien's
recording of a document that it did not prepare constitutes deceptive conduct under the
ICFA. The Court also notes that Hanlon does not allege, as required for a ICFA claim
based on deception, that CT Lien intended him to rely on the allegedly deceptive
assignment, or that he was damaged by it. See Cozzi Iron and Metal, Inc. v. U.S. Ofc.
Equip., Inc., 250 F.3d 570, 576 (7th Cir. 2001) (listing elements of ICFA claim based on
deceptive conduct).
For these reasons, the Court grants CT Lien's motion to dismiss and dismisses
Hanlon's claims against CT Lien (Counts 1 and 3) for failure to state a claim. Unless
Hanlon files, by no later than 9/5/2017, an amended complaint that states at least one
viable federal claim against CT Lien, the Court will enter judgment against him. The
case is set for a status hearing on 9/7/2017 at 9:30 a.m. The status hearing set for
8/15/2017 is vacated.
Date: 8/14/2017
________________________________
MATTHEW F. KENNELLY
United States District Judge
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