Maloney et al v. Potestivo & Associates PC et al
MEMORANDUM OPINION Signed by the Honorable Samuel Der-Yeghiayan on 8/17/2017: Granting Defendants' motions to dismiss. Mailed notice (mw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EILEEN MALONEY, et al.,
POTESTIVO & ASSOCIATES PC, et al., )
No. 17 C 1355
SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Defendant Potestivo & Associates, PC’s
(Potestivo) motion to dismiss and on Defendant RBS Citizen Bank NA, successor to
Charter One Bank, F.S.B.’s (RBS) motion to dismiss. For the reasons stated below,
the motions to dismiss are granted.
Plaintiff Eileen and Lawrence T. Maloney allegedly owed a home in Park
Ridge, Illinois. In 2001, Plaintiffs allegedly defaulted on their Home Equity Line of
Credit (HELOC), which was issued by Charter One Bank, F.S.B. (Charter). In 2012,
RBS, a successor to Charter, allegedly filed a mortgage foreclosure action (RBS
Foreclosure Action) against Plaintiffs in state court, and in 2013, state court entered a
judgment of foreclosure against Plaintiffs. In July 2014, RBS allegedly sent
Plaintiffs a solicitation letter outlining a proposed loan modification (Proposal Form).
On the Proposal Form, Plaintiffs were instructed to sign and return the Proposal
Form and then an Acceptance of the Proposed Modification Form (Modification
Agreement) would be mailed to them. The Proposal Form also allegedly informed
Plaintiffs that the HELOC would only be modified when RBS received the executed
Modification Agreement. On August 25, 2014, after receiving the signed Proposal
Form, RBS allegedly sent Plaintiffs a Modification Form, informing Plaintiffs that
they needed to return a signed Modification form within 14 days. Plaintiffs allegedly
failed to return the form and on November 6, 2014, RBS allegedly again sent a
Modification Form to Plaintiffs again informing them that they needed to return a
signed Modification form within 14 days. Plaintiffs allegedly never returned a
signed Modification Form to RBS.
On March 20, 2015, Federal National Mortgage Association filed a separate
foreclosure action (FM Foreclosure Action) against Plaintiffs in state court. In May
2015, in the RBS Foreclosure Action, RBS allegedly conducted a foreclosure sale,
and the sale was confirmed and an order of possession for RBS was entered in
November 2015. In December 2015, the parties agreed to vacate the foreclosure sale
and RBS agreed to dismiss the RBS Foreclosure Action due to the FM Foreclosure
Plaintiffs filed an action in state court and Defendants removed the instant
action to federal court. Plaintiffs include in their complaint claims alleging
violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et
seq. brought against Potestivo (Counts I and III), and claims alleging violations of
the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605 et seq.
brought against RBS (Counts II and IV). The court notes that although Plaintiffs
have designated certain claims as “class claims,” this court has not certified a class in
this action and there is no plaintiff class in this case. Defendants now move to
dismiss all claims. The court also notes that although Plaintiffs reference their last
name as “Mahoney” throughout their filings, the correct spelling of their last name is
In ruling on a motion to dismiss brought pursuant Federal Rule of Civil
Procedure 12(b)(6) (Rule 12(b)(6)), the court must draw all reasonable inferences
that favor the plaintiff, construe the allegations of the complaint in the light most
favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in
the complaint. Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 622 (7th
Cir. 2012); Thompson v. Ill. Dep’t of Prof’l Regulation, 300 F.3d 750, 753 (7th Cir.
2002). A plaintiff is required to include allegations in the complaint that “plausibly
suggest that the plaintiff has a right to relief, raising that possibility above a
‘speculative level’” and “if they do not, the plaintiff pleads itself out of court.”
E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir.
2007)(quoting in part Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007));
see also Morgan Stanley Dean Witter, Inc., 673 F.3d at 622 (stating that “[t]o survive
a motion to dismiss, the complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face,” and that “[a] claim has
facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct
alleged”)(quoting Ashcroft v. Iqbal, 556 U.S. 662 (2009))(internal quotations
I. Evidence Outside of Complaint
RBS argues that the court can consider evidence outside of the complaint for
the purposes of adjudicating the instant motion. Although a court when ruling on a
Rule 12(b)(6) motion is limited to a consideration of the pleadings, “documents
attached to a motion to dismiss are considered part of the pleadings if they are
referred to in the plaintiff’s complaint and are central to his claim.” Yassan v. J.P.
Morgan Chase & Co., 708 F.3d 963, 975 (7th Cir. 2013)(internal quotations
omitted)(quoting 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002)).
A court may also take judicial notice of public records when ruling on a Rule
12(b)(6) motion. Parungao v. Cmty. Health Sys., Inc., 858 F.3d 452, 457 (7th Cir.
2017)(stating that “[c]ourts may take judicial notice of court filings and other matters
of public record when the accuracy of those documents reasonably cannot be
questioned”). RBS has shown that the court in ruling on the instant motion may
consider documents such as the Proposal Form, the Modification Agreement and
various court filings and orders.
II. FDCPA Claims (Counts I and II)
Potestivo moves to dismiss the FDCPA claims. Plaintiffs’ allegations as to
how Potestivo allegedly violated the FDCPA are extremely vague and fail to provide
Potestivo with sufficient notice of the FDCPA claims. Plaintiffs appear to indicate
that Potestivo violated the FDCPA by pursuing the RBS Foreclosure Action after
Plaintiffs claim to have modified the HELOC. (Compl. Par. 29). However, there are
no allegations that Plaintiffs ever returned a signed Modification Form that would
have modified the HELOC. In addition, the latest alleged wrongful conduct by
Potestivo was in May 2015, and thus the filing of the complaint in October 2016 was
untimely. See Jackson v. Blitt & Gaines, P.C., 833 F.3d 860, 865 (7th Cir.
2016)(indicating that there is a one-year statute of limitations for FDCPA claims);
(Compl. Par. 16). Plaintiffs argue in response to the instant motion that there was
improper conduct by Potestivo in November 2015, when Potestivo sought an order of
possession and eviction. However, the public record reflects that Potestivo’s
affirmative action of filing the Motion for Order Approving Report of Sale and
Distribution and Possession occurred in August 2015. (DE 22-1). The mere fact that
the court in the RBS Foreclosure Action may have granted the motion later did not
restart the limitations period. Thus, the FDCPA claims are also untimely.
Plaintiffs now claim that Potestivo’s pursuit of an order of possession and
eviction after the dismissal of the action violated the FDCPA, but that is different
than what is alleged in the complaint. In the complaint, Plaintiffs allege that
Potestivo violated the FDCPA by taking actions “despite having obtained a signed
Modification.” (Compl. Par. 29). Plaintiffs cannot amend their complaint in their
response to the instant motions. Thus, the FDCPA claims are untimely. Nor have
Plaintiffs shown that any equitable tolling doctrines would be applicable in the
instant action. Therefore, the motion to dismiss the FDCPA claims is granted.
III. RESPA Claims (Counts II and IV)
RBS moves to dismiss the RESPA claims. Plaintiffs allege in the complaint
that RBS violated the “‘loss mitigation procedures’ as described in 12 CFR
1024.41.” (Compl. Par. 12). RBS is correct that Plaintiffs have failed to specify
what provision of 12 C.F.R. § 1024.41 (Section 1024.41) was violated. Nor did
Plaintiffs provide clarification on that point in their response to the instant motion.
Plaintiffs have thus failed to provide RBS with sufficient notice of the RESPA claim
brought against them. In addition, the record reflects that the judgment of
foreclosure was entered in the RBS Foreclosure Action in February 2013, before
Section 1024.41 became effective on January 10, 2014. Nor are there any allegations
that Plaintiffs returned the signed Modification Form, which would have modified
the HELOC. Nor have Plaintiffs alleged facts that would suggest they suffered
actual damages or that there was a pattern or practice of non-compliance with
RESPA that could support a RESPA claim. Therefore, RBS’s motion to dismiss the
RESPA claims is granted.
The court notes that Plaintiffs fail in their response to the instant motion to
respond to the majority of RBS’s arguments, and instead in their response request 60
days to conduct discovery or allow them to dismiss RBS with leave to reinstate RBS.
Plaintiffs have not explained why they could not have presented sufficient facts to
meet the minimal federal pleading standard, and discovery is not necessary in order
to present proper allegations in a complaint. Nor have Plaintiffs filed a proper formal
motion for leave to file an amended complaint or attached a proposed amended
complaint to any of their filings. Plaintiffs chose to bring the instant action and
having failed to plead a proper claim against RBS are not entitled to engage in a
fishing expedition in discovery. Plaintiffs also chose to oppose the instant motion,
instead of seeking a voluntary dismissal in this case.
Based on the foregoing analysis, Defendants’ motions to dismiss are granted.
United States District Court Judge
Dated: August 17, 2017
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