Lewis v. Loandepot.com, LLC
1:20-cv-07820
N.D. Ill.Oct 29, 2021Background
- In spring 2020 Samuel Lewis, struggling to pay his mortgage, spoke by phone with his servicer loanDepot about CARES Act forbearance and alleges a loanDepot representative told him forbearance "would not have any effect" on his credit.
- Lewis requested and received written confirmation of forbearance on April 5, 2020; that letter, however, stated loanDepot was "uncertain as to the impact" of forbearance on his credit score.
- In June 2020 Lewis discovered his loan balance had increased by unpaid interest rolled into principal and his credit score fell; he alleges this prevented refinancing.
- Lewis filed CFPB complaints, exhausted that avenue, then sued loanDepot in a putative class action asserting FDCPA, FCRA, and Illinois Consumer Fraud Act (ICFA) claims; he sought CAFA jurisdiction.
- loanDepot moved to dismiss under Rule 12(b)(6); Lewis did not oppose the FDCPA and FCRA claims in response, and the court deemed those claims abandoned.
- The court denied dismissal of the ICFA claim (fraud/deceptive practice) but dismissed the federal claims; key issues were FCRA preemption, Rule 9(b) pleading particularity, and whether Lewis plausibly was deceived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lewis's state-law ICFA claim is preempted by the FCRA | Lewis: claim is based on loanDepot's oral misrepresentation to him, not on furnishing information to credit bureaus, so not preempted | loanDepot: ICFA claim concerns responsibilities of furnishers to CRAs and therefore is preempted by 15 U.S.C. § 1681t(b)(1)(F) | Not preempted — Court: claims that concern misconduct distinct from furnisher duties are not swept up by §1681t(b)(1)(F) (Galper framework) |
| Whether fraud/deception allegations meet Rule 9(b) particularity | Lewis: pleads when (narrow window), how (phone), and content; defendant can access records—details limited by information asymmetry | loanDepot: complaint lacks speaker identity, precise date/time, and is contradicted by the April 5 letter | Sufficient — Court: particulars suffice to give notice; 9(b) does not require proof at pleading; information asymmetry considered |
| Whether ICFA deception element and proximate causation are plausibly alleged | Lewis: relied on the oral assurance and suffered concrete harm (failed refinance) when balance/reporting changed | loanDepot: April 5 letter corrected the record; plaintiff "knew the truth," so could not have been deceived; plus implausible motive to induce nonpayment | Sufficient at pleading stage — Court: whether plaintiff actually knew the truth is a factual dispute inappropriate to resolve on a motion to dismiss |
| Effect of plaintiff abandoning federal claims | Lewis: focused briefing on ICFA; did not press FDCPA/FCRA claims | loanDepot: moved to dismiss all claims | Court: FDCPA and FCRA claims deemed abandoned and dismissed; ICFA claim survives |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for complaints)
- Galper v. JP Morgan Chase Bank, N.A., 802 F.3d 437 (2d Cir. 2015) (FCRA preemption limited to claims concerning furnishers' responsibilities)
- Pirelli Armstrong Tire Corp. Retiree Med. Ben. Trust v. Walgreen Co., 631 F.3d 436 (7th Cir. 2011) (Rule 9(b) particularity explained)
- Swanson v. Citibank, N.A., 614 F.3d 400 (7th Cir. 2010) (pleading must present a story that holds together; assessment of plausibility)
- Richards v. Mitcheff, 696 F.3d 635 (7th Cir. 2012) (Rule 12(b)(6) testing complaint sufficiency)
- Avery v. State Farm Mut. Auto. Ins. Co., 835 N.E.2d 801 (Ill. 2005) (elements of private ICFA claim)