Schilke v. Wachovia Mortgage, FSB
2010 U.S. Dist. LEXIS 132526
N.D. Ill.2010Background
- Plaintiff Schilke, on behalf of herself and others similarly situated, sues Wachovia Mortgage and ASI over lender-placed insurance (LPI) premiums and alleged kickbacks.
- The court previously held Wachovia’s claims preempted by HOLA/OTS regulations and ASI’s claims barred by the filed rate doctrine, with ICFA injunctive relief against ASI remaining viable only if proximate causation was shown.
- Plaintiff sought to file a second amended complaint under Rule 15(a)(2) and to vacate the judgment under Rule 60(b)(6), while also moving for reconsideration under Rule 59(e).
- The proposed amendment adds breach of contract and new ICFA theories against Wachovia, arguing GLBA/McCarran-Ferguson exemptions and fiduciary duties; it also adds a new breach claim against ASI.
- The court concluded the proposed Wachovia claims would be futile due to preemption, but reinstated the ICFA injunctive relief against ASI and granted a limited opportunity to seek leave to amend within thirty days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ICFA claims against Wachovia survive preemption | Wachovia's conduct could be unfair/deceptive and not preempted. | OTS regulations preempt state ICFA claims related to lending operations. | ICFA claims against Wachovia preempted; amended ICFA theory futile. |
| Whether Wachovia breach of contract claim is preempted | Contract claim could be independent of preempted lending regulation. | Preemption covers contract claims tied to lending activities; would be futile. | Breaches of contract preempted; futile to amend. |
| Whether plaintiff’s new GLBA/McCarran-Ferguson theories save claims from preemption | GLBA/McCarran-Ferguson exemptions shield state claims. | No applicable exemption; Wachovia not an insurer; acts fall under preemption. | The theories do not save claims; preemption remains. |
| Whether the filed rate doctrine bars damages but permits injunctive relief against ASI | ASI injury claims could support damages; DOJ/DOI regulation does not bar injunctive relief. | Filed rate doctrine bars money damages; injunctive relief requires separate basis. | Damages barred; injunctive relief reinstated for ICFA claim against ASI. |
Key Cases Cited
- Ocwen, 491 F.3d 638 (7th Cir.2007) (preemption depends on whether conduct falls within lending activities)
- Cosgrove v. Bartolotta, 150 F.3d 729 (7th Cir.1998) (Rule 59(e) relief for manifest error of law)
- Paganis v. Blonstein, 3 F.3d 1067 (7th Cir.1993) (motions to amend and reconsideration discussed)
- Airborne Beepers & Video, Inc. v. AT & T Mobility LLC, 499 F.3d 663 (7th Cir.2007) (leave to amend denied on futility and prejudice grounds)
- Beraha v. Baxter Health Care Corp., 956 F.2d 1436 (7th Cir.1992) (breach of implied covenant; standard for good faith exercises of discretion)
- In re Ocwen, 491 F.3d 638 (7th Cir.2007) (Seventh Circuit discussion on preemption scope under lending regulations)