Hunte v. Safeguard Properties Management, LLC
1:16-cv-11198
| N.D. Ill. | Jun 6, 2017Background
- Hunte owned a mortgaged single-family property and defaulted on the loan held by JPMorgan Chase.
- Hunte sought a short sale and authorized Chase to communicate with his attorneys; Chase approved pre-foreclosure communications.
- Chase sent notices indicating the property was vacant and might be secured; Hunte and his attorney informed Chase the property was not abandoned.
- Safeguard representatives later changed locks, winterized plumbing, and removed Hunte’s personal belongings to dumpsters while Hunte was away.
- Hunte sued Safeguard and Chase asserting an FDCPA claim against Safeguard and related state-law claims; both defendants moved to dismiss under Rule 12(b)(6).
- The court dismissed the FDCPA claim for failure to plead that Safeguard was a “debt collector,” and declined supplemental jurisdiction over the state claims, dismissing them without prejudice and granting leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Safeguard is a “debt collector” under the FDCPA | Safeguard’s principal purpose is enforcement of security interests, making it a debt collector under §1692a(6) | Safeguard’s principal purpose is property preservation/management, not enforcement of security interests | Complaint fails to allege Safeguard’s principal purpose is enforcement; FDCPA claim dismissed |
| Whether allegation that Safeguard “regularly collects” debts suffices | Complaint alleges Safeguard regularly collects/attempts to collect defaulted debts (Paragraph 6) | Defendants dispute characterization; court notes defendants’ argument focused on principal-purpose issue | Plaintiff forfeited reliance on Paragraph 6 in opposition; court does not treat that argument as pressed |
| Whether inconsistent allegations can be read as alternative pleadings under Rule 8(d)(2) | Plaintiff suggests alternative facts (principal purpose enforcement vs. preservation) | Defendants assert complaint shows only preservation as principal purpose | Court finds no Rule 8(d)(2) compliant alternative pleading; rejects inconsistent allegations |
| Whether to retain supplemental jurisdiction over state-law claims after dismissing federal claim | N/A (plaintiff seeks to proceed on state claims) | N/A | Court declines to exercise supplemental jurisdiction under 28 U.S.C. §1367(c)(3); state claims dismissed without prejudice and plaintiff given leave to amend |
Key Cases Cited
- Ruth v. Triumph P’ships, 577 F.3d 790 (7th Cir.) (FDCPA governs only "debt collectors")
- Nadalin v. Automobile Recovery Bureau, Inc., 169 F.3d 1084 (7th Cir.) (interpretation of §1692f(6) regarding enforcement of security interests)
- Rumsfeld v. Padilla, 542 U.S. 426 (U.S.) (use of the definite article 'the' may particularize statutory language)
- Rockridge Trust v. Wells Fargo, N.A., 985 F. Supp. 2d 1110 (N.D. Cal.) (distinguishing ‘‘one of the principal businesses’’ from ‘‘the principal purpose’’ in FDCPA context)
- Williams v. Rodriguez, 509 F.3d 392 (7th Cir.) (general rule to relinquish supplemental jurisdiction when federal claims are dismissed)
- Dietchweiler by Dietchweiler v. Lucas, 827 F.3d 622 (7th Cir.) (presumption to relinquish jurisdiction over state claims when federal claims dismissed)
- Firestone Financial Corp. v. Meyer, 796 F.3d 822 (7th Cir.) (issue forfeiture when not raised in response to motion to dismiss)