Russo v. Bank Of America Corp.
1:14-cv-00382
N.D. Ill.Aug 1, 2014Background
- Russo obtained a 2006 Illinois mortgage from Bank of America, N.A. (BoA).
- In Aug. 2012, Russo was invited to participate in a Trial Period Plan (TPP) aiming for a permanent loan modification.
- To qualify, Russo had to make three on-time, reduced payments Oct–Dec 2012 and meet eligibility requirements for modification.
- Russo allegedly completed the TPP and later received a permanent modification.
- Russo contends BoA breached the TPP and the modification by failing to report TPP and post‑modification payments to credit bureaus, causing credit damage and financial harms.
- BoA moved to dismiss Russo’s breach-of-contract claim under Rule 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the TPP letter is a valid contract despite Statute of Frauds. | Russo maintains the executed TPP formed a contract. | BoA contends the unsigned letter falls within the Statute of Frauds. | TPP sufficiently pleaded; not foreclosed by Statute of Frauds. |
| Whether the FAQ can be considered part of the TPP contract. | FAQ may supplement the TPP terms. | FAQ cannot be part of the contract. | FAQ may be considered as extrinsic evidence; ambiguity persists. |
| Whether BoA owed a duty to report TPP payments to credit bureaus. | FAQ created a duty to report; reporting harmed Russo. | FCRA/CDIA do not independently obligate reporting; ambiguity governs. | Ambiguity regarding reporting duties; not resolved at motion to dismiss. |
| Whether Russo suffered cognizable damages from BoA’s alleged failure to report. | Damages include lower credit score and lost credit opportunities. | Argues damages not cognizable under Illinois breach of contract. | Plaintiff plausibly alleged damages; not dismissed on this basis. |
| Whether the loan modification claim survives independently of the TPP claim. | Modification terms breached by BoA. | Modification agreement distinct; post‑TPP period dismissed. | Breach claim as to the loan modification is dismissed. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard requires plausibility not mere possibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard to show plausible entitlement to relief)
- Weiler v. Household Fin. Corp., 101 F.3d 519 (7th Cir. 1996) (12(b)(6) tests; merits not reached on motion to dismiss)
- Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939 (7th Cir. 2013) (notice pleading and plausibility standard in contract cases)