Skibbe et al v. U.S. Bank Trust, N.A., As Trustee for LSF9 Master Participation Trust et al
1:16-cv-00192
N.D. Ill.Feb 15, 2018Background
- Dwayne and Deborah Skibbe refinanced in 2004 and later defaulted; multiple foreclosure suits followed (2007, 2010, 2013, 2015).
- HFC (original lender) filed Foreclosure I (2010) and voluntarily dismissed; Foreclosure II (2013) was filed by Nevel for HFC and voluntarily dismissed; loan later assigned to U.S. Bank Trust N.A.
- Nevel, on behalf of U.S. Bank, filed Foreclosure III (Jan. 2015); Illinois state courts concluded Foreclosure III was barred by Illinois’ single-refiling rule and dismissed it with prejudice.
- The Skibbes incurred approximately $18,000 defending Foreclosure III and then sued in federal court alleging FDCPA and ICFA violations against U.S. Bank and Nevel.
- On summary judgment the district court held: (1) U.S. Bank is not a ‘‘debt collector’’ under the FDCPA (Henson) and summary judgment for U.S. Bank was proper on the FDCPA count; (2) Nevel, though a debt collector, did not violate the FDCPA because filing a procedurally barred state-court foreclosure (without false factual misrepresentations) does not by itself constitute an FDCPA violation; (3) the Skibbes’ ICFA claim against U.S. Bank is barred by the litigation privilege.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. Bank is a "debt collector" under the FDCPA | Skibbes: U.S. Bank should be treated as a collector (contest assignment/ownership facts) | U.S. Bank: owns the loan as trustee; under Henson a debt purchaser/owner collecting for itself is not a "debt collector" | Court: U.S. Bank is not a debt collector under FDCPA (Henson); SJ for U.S. Bank granted |
| Whether Nevel violated the FDCPA by filing Foreclosure III that was procedurally barred | Skibbes: filing and prosecuting a foreclosure barred by Illinois single-refiling rule amounts to an FDCPA violation (misrepresentation/attempt to collect unlawfully) | Nevel: although a debt collector, filing a procedurally defective state-court suit (without false factual statements) is not an FDCPA violation | Court: SJ for Nevel granted—state procedural misstep alone is insufficient for FDCPA liability; no actionable misrepresentations shown |
| Whether U.S. Bank violated the Illinois Consumer Fraud Act (ICFA) by filing Foreclosure III | Skibbes: filing unlawful foreclosure is deceptive conduct under ICFA | U.S. Bank: litigation privilege and absence of fabricated debt or false pleadings bar the ICFA claim | Court: ICFA claim barred by litigation privilege; SJ for U.S. Bank granted |
Key Cases Cited
- Henson v. Santander, 137 S. Ct. 1718 (U.S. 2017) (a debt purchaser collecting for its own account is not a "debt collector" under FDCPA)
- Timberlake v. Illini Hosp., 676 N.E.2d 634 (Ill. 1997) (discusses Illinois single-refiling rule)
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (unsuccessful lawsuits are not per se actions that cannot legally be taken under the FDCPA)
- Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871 (7th Cir. 2015) (courts should not convert every state-court procedural error into an FDCPA claim)
- Hemmingsen v. Messerli & Kramer, P.A., 674 F.3d 814 (8th Cir. 2012) (rejecting FDCPA claims based on contested state-court filings absent clear fraudulent litigation conduct)
- Phillips v. Asset Acceptance, LLC, 736 F.3d 1076 (7th Cir. 2013) (FDCPA liability may attach where defendant attempts to collect a time-barred debt)