Cook v. H.S.B.C. Bank USA. N.A

District Court, N.D. Illinois·Decided March 19, 2018·No. 1:17-cv-00059·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION RUFUS COOK, ) ) Plaintiff, ) ) v. ) No. 17-CV-00059 ) H.S.B.C. BANK USA, N.A., as trustee Judge John J. Tharp, Jr. ) for the Registered holders of ) Renaissance Equity Loan Asset— ) Backed Certificates, series 2007-3, ) RANDALL S. MILLER & ) ASSOCIATES, LLC, POTESTIVO ) ASSOCIATES, P.C., KIMBERLY J. ) GOODELL, and GREENBERG ) TRAURIG, LLP ) ) Defendants. MEMORANDUM OPINION AND ORDER After protracted state court litigation in which HSBC Bank attempted (and is still attempting, by all accounts) to foreclose on his property, Rufus Cook filed suit against HSBC, its attorneys, and the state court judge. Cook alleges that throughout the course of the foreclosure proceeding the defendants violated his rights under the Illinois and federal constitutions, the Illinois Consumer Fraud Act, and the Fair Debt Collection Practices Act. This Court previously dismissed Cook’s claims against the state court judge. The remaining defendants now move to dismiss. I. BACKGROUND1 On June 23, 2007, Rufus Cook entered into a mortgage agreement and promissory note (“the note”) with Delta Funding Corporation for a property located at 951 East Hyde Park 1 As this is a motion to dismiss, the Court accepts all well-pleaded facts as true and construes all inferences in favor of the plaintiff. Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632, 634 (7th Cir. 2012). Boulevard in Chicago (“the property”). Compl. Ex. 4, ECF No. 1. Shortly thereafter, on August 1, 2007, Delta entered into a pooling and servicing agreement with, among others, Renaissance Mortgage Acceptance Corp., as depositor, and HSBC Bank USA, NA, as trustee. As part of the agreement, Cook’s loan was pooled with other loans and assigned to HSBC as trustee for the new noteholders. Compl. ¶ 2, Ex. 1. In November 2011, HSBC filed a foreclosure action against

Cook in the Circuit Court of Cook County, Illinois, alleging that Cook defaulted on the note. Compl. Ex. 4. HSBC attached the note to the complaint, but the note did not contain an endorsement indicating that it had been transferred from Delta to HSBC. Id. Nonetheless, the complaint listed HSBC as the current mortgagee and owner of the indebtedness. Id. HSBC unsuccessfully attempted to serve the foreclosure complaint on Cook at the property, although the loan’s servicer (not HSBC) for years had communicated with Cook via mail sent to his office, rather than to the property. Compl. ¶ 13. HSBC, represented by Randall S. Miller and Associates, convinced the judge presiding over the foreclosure action to permit service by publication, submitting an affidavit indicating that Cook was outside the state or in

hiding. Id. HSBC subsequently obtained a default judgment against Cook permitting sale of the property. Id. Cook, however, learned of the impending sale and successfully moved to vacate the default judgment. Id. HSBC proceeded to properly serve Cook at his office. Id. ¶ 14. Cook filed a motion to dismiss the foreclosure action on May 2, 2014, asserting that HSBC lacked standing to foreclose on the property because the note did not contain an endorsement. Compl. Ex. 6. Cook did not notice the motion for presentment. HSBC did nothing until September 2015, when, now represented by Kimberly J. Goodell of Potestivo Associates, PC, it filed a second motion for default judgment. Compl. Ex. 10. The motion argued that Cook failed to respond to the complaint, and that his motion to dismiss was neither noticed for presentment nor timely. Id. Instead of attempting to serve the motion for default judgment on Cook at his office, which was Cook’s address of record in the case, HSBC sent notice of the motion to an address unknown to Cook. Compl. ¶ 16. Without notice to Cook, the second motion for default judgment was granted in November 2015, and a sale was scheduled for February 4, 2016. Id. ¶ 22. In January 2016, Cook learned of the impending sale from a stranger, and he

successfully moved to vacate the second default judgment. Id. ¶ 28. In April 2016, Cook filed an amended motion to dismiss and noticed it for presentment, again asserting that HSBC lacked standing to foreclose on the property. Id. ¶ 29. On the day the motion was to be presented, the judge announced that she had already denied the motion with prejudice, on the ground that the absence of standing must be asserted as an affirmative defense rather than in a motion to dismiss. Id. ¶ 30. The court granted Cook leave to file a response to the complaint and any affirmative defenses. Compl. Ex. 13. Cook availed himself of that opportunity, but also filed a counterclaim against HSBC, Goodell, Randall S. Miller, and the Miller and Potestivo law firms alleging a conspiracy to defraud and violation of Cook’s

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Cook v. H.S.B.C. Bank USA. N.A, (N.D. Ill. 2018).

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