Whitmer v. CitiMortgage Inc.

Filing 95

ORDER/WRITTEN Opinion signed by the Honorable Philip G. Reinhard on 5/20/2015: For the reasons stated below, defendant's motion 88 to dismiss Counts V, VI, and VII of plaintiff's complaint is denied. The parties are urged to contact Magistrate Judge Johnston to make another attempt to settle this case. (See attached Statement-Opinion) Mailed notice (ngm, )

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
WESTERN DIVISION
Michelle Whitmer,
Plaintiff,
vs.
CitiMortgage Inc.,
Defendant.

)
)
)
)
)
)
)
)
)

Case No. 12 C 50115

Judge Philip G. Reinhard

ORDER
For the reasons stated below, defendant’s motion [88] to dismiss Counts V, VI, and VII
of plaintiff’s complaint is denied. The parties are urged to contact Magistrate Judge Johnston to
make another attempt to settle this case.
STATEMENT - OPINION
Plaintiff, Michelle Whitmer, filed a first amended complaint ("FAC”) in this matter
asserting new claims against defendant, CitiMortgage, Inc. Count I and Count II of the FAC
were contained in plaintiff’s original complaint in this matter and survived defendant’s motion to
dismiss.1 The FAC adds new counts for negligent loan servicing (Count V), common law fraud
(Count VI) and again, seeking punitive damages (Count VII). Subject matter jurisdiction is
proper under 28 U.S. C. § 1332(a) as set forth in the court’s prior order [32]. Defendant moves
[88] to dismiss the claims in Counts V and VI and the request for punitive damages in Count VII
for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6).
Defendant argues plaintiff’s negligent servicing claim must be dismissed because
defendant had no general tort duty under Illinois law to service plaintiff’s loan in a non-negligent
manner. Relying on Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 568 (7th Cir. 2012),
defendant contends there is no general duty of care between a lender and a borrower and in the
absence of a fiduciary relationship, a lender cannot be liable to a borrower for the breach of an
“extra-contractual duty”. However, Wigod was addressing the economic loss doctrine, a
doctrine of Illinois law that bars recovery in tort for purely economic losses arising out of failure
to perform a contractual obligation. Id. at 567. In Wigod, there were no allegations of personal
1

Counts III and IV of the original complaint were dismissed [32]. Count V of the
original complaint was also dismissed because it was simply a request for punitive damages
under the claims in Counts III and IV.
1

injury or non-economic loss. Allegations of emotional and physical distress have been found
sufficient to survive a motion to dismiss based on the economic loss doctrine. Haymer v.
Countrywide Bank, FSB, No. 10 C 5910, 2011 WL 2790172, *6 (N.D. Ill. July 15, 2011)
(Kocoras, J.) It has been suggested that allegations of embarrassment, humiliation, emotional
and mental pain and anguish also would be sufficient to survive an economic loss doctrine based
motion to dismiss. Geimer v. Bank of America, N.A., 784 F. Supp. 2d 926, 934, n. 2 (N.D. Ill.
2011) (Pallmeyer, J.) “While the determination of a duty is a question of law for the court to
decide, such a determination is more properly made after discovery has been completed and all
the facts have been presented via a motion for summary judgment.” Haymer, 2011 WL 2790172
at *6. (internal quotation marks and citation omitted.)
Plaintiff alleges defendant’s actions caused her to suffer from depression, anxiety, stress,
shame, humiliation, anxiety and sleeplessness. In light of all of the allegations in the FAC, and
particularly the allegations of non-economic losses, the court will not conclude based on the
pleadings that plaintiff has failed to state a claim in Count V of the FAC. The determination of
the existence of a duty is better left to a later stage of this action.
Defendant also moves to dismiss the common law fraud claim set forth in Count VI of the
complaint. The elements of common law fraud in Illinois are: “(1) a false statement of material
fact; (2) by one who knows or believes it to be false; (3) made with intent to induce action by
another in reliance on the statement; (4) action by the other in reliance on the truthfulness of the
statement; and (5) injury to the other resulting from that reliance.” JPMorgan Chase Bank, N.A.
v. East-West Logistics, L.L.C. , 9 N.E.3d 104, 120 (Ill. App. 2014). Federal pleading is not fact
pleading. Plaintiff need only provide “a short plain statement of the claim showing that the
pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), and, since fraud is pled, state with
particularity the circumstances constituting the fraud, Fed. R. Civ. P. 9(b), which “ordinarily
requires describing the ‘who, what, when, where and how’ of the fraud.” AnchorBank, FSB v.
Hofer, 649 F.3d 610, 615 (7th Cir. 2011). Intent and knowledge may be alleged generally. Fed. R.
Civ. P. 9(b).
Plaintiff has met this pleading standard. The complaint adequately sets out the numerous
alleged false statements by defendant’s representatives, plaintiff’s reliance on those statements
and her resultant injuries. Intent and knowledge are alleged generally, which is all that is
required. While the complaint may not allege knowledge and intent as to each specific alleged
false statement by each employee of defendant, nothing will be served by the court requiring
plaintiff to re-plead in order to make such a general allegation of knowledge and intent for each
employee’s statement. This is not summary judgment. Plaintiff’s allegations are sufficient to
survive the motion to dismiss.
Defendant seeks dismissal of plaintiff’s Count VII request for punitive damages.
Defendant is correct that punitive damages are a remedy not a cause of action under Illinois law,
Vincent v. Alden-Park Strathmoor, Inc., 948 N.E.2d 610, 615 (Ill. 2011), but there is no point in
striking the request and requiring plaintiff to re-plead to correct this non-substantive error.
2

Defendant’s substantive argument is that plaintiff has not pled sufficient facts to show she is
entitled to punitive damages but no heightened pleading standard applies to punitive damages.
See Fed. R. Civ. P. 8 & 9; Northwest Pipe Co. V. Travelers Indem. Co., No. C-02-04189JF, 2003
WL 24027882, * 2 (N.D. Cal. Feb. 12, 2003). Defendant is making summary judgment
arguments on a motion to dismiss.
For the foregoing reasons, defendant’s motion [88] to dismiss Counts V, VI, and VII of
plaintiff’s complaint is denied. Defendant’s arguments are better suited to a motion for summary
judgment. The court notes that surviving a motion to dismiss is a long way from winning the
case. The parties are urged to contact Magistrate Judge Johnston to make another attempt to
settle this case.
Date: 5/20/2015

ENTER:

United States District Court Judge

Electronic Notices. (LC)
Copy to Magistrate Judge Johnston

3