Sembach v. Lakeview Loan Servicing, LLC

CourtDistrict Court, N.D. Illinois
DecidedAugust 20, 2021
Docket1:20-cv-00752
StatusUnknown

This text of Sembach v. Lakeview Loan Servicing, LLC (Sembach v. Lakeview Loan Servicing, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sembach v. Lakeview Loan Servicing, LLC, (N.D. Ill. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

CYNTHIA SEMBACH, ) ) Plaintiff, ) ) No. 20-cv-00752 v. ) ) Judge Andrea R. Wood LAKEVIEW LOAN SERVICING, LLC, ) et al., ) ) Defendants. )

MEMORANDUM OPINION AND ORDER

After Plaintiff Cynthia Sembach lost her job in August 2016, she defaulted on the loan she had taken out to purchase her Matteson, Illinois home (the “Property”) the previous year. Sembach eventually obtained a new job but it required her to move to Indiana. Sembach claims that she nonetheless regularly visited the Property to ensure it remained in good condition while she attempted to pay off the loan through a short sale. Sembach alleges that during one of her visits, she saw that someone had entered the Property without authorization and made several alterations. In addition, some of the personal property that Sembach kept at the Property was missing. As a result of the alleged unauthorized entry, Sembach has brought the present action asserting seven state-law claims against Defendants Lakeview Loan Servicing, LLC (“Lakeview”), M&T Bank, and Safeguard Properties Management, LLC (“Safeguard”). Lakeview and M&T Bank have jointly moved to dismiss Sembach’s amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 37.) In addition to adopting Lakeview and M&T Bank’s arguments for dismissal, Safeguard has also separately filed a Rule 12(b)(6) motion to dismiss. (Dkt. No. 46.) For the reasons that follow, Defendants’ motions to dismiss are granted in part and denied in part. BACKGROUND

For the purposes of the motions to dismiss, the Court accepts all well-pleaded facts in the amended complaint as true and views those facts in the light most favorable to Sembach as the non-moving party. Killingsworth v. HSBC Bank Nev., N.A., 507 F.3d 614, 618 (7th Cir. 2007). Accordingly, the following facts are taken from Sembach’s amended complaint. In October 2015, Sembach executed a mortgage and promissory note securing a loan for the purchase of the Property. (Am. Compl. ¶¶ 16–18, Dkt. No. 31.) When Sembach lost her job in August 2016, she contacted the mortgage servicer to request retention and non-retention alternatives to foreclosure. (Id. ¶¶ 19–21.) The servicer informed Sembach that she was not eligible for retention programs but agreed to evaluate her for a short sale, a non-retention foreclosure alternative. (Id. ¶ 22.) Shortly thereafter, the servicer deemed Sembach’s loan in default and began collection activity. (Id. ¶ 23.) Sembach obtained a new job that required her to move to Fort Wayne, Indiana, in February 2017. (Id. ¶ 25.) Despite moving out of the Property, she kept it furnished and left a

significant amount of her personal property there. (Id. ¶¶ 26, 43.) Moreover, Sembach made weekly visits back to the Property to keep it in good condition and ensure its habitability and marketability. (Id. ¶¶ 27–28.) During that time, Sembach and her mortgage servicer continued to discuss the possibility of a short sale as a way of satisfying the loan underlying the Property. (Id. ¶¶ 29–30.) On May 18, 2017, Sembach received a $130,000 short sale offer from a third party. (Id. ¶ 31.) Upon receiving the offer, Sembach submitted a complete “Short Sale Package” to her servicer, which included all information and documents necessary to consummate the short sale. (Id. ¶¶ 32–33.) By June 2, 2017, Defendant Lakeview had acquired the loan on the Property and delegated servicing duties to Defendant M&T Bank. (Id. ¶¶ 24, 34.) M&T Bank received Sembach’s “Short Sale Package” and, on July 7, 2017, informed her that she was approved for a pre-foreclosure sale program. (Id. ¶ 37.) In the approval letter, M&T Bank stated that, “if the property is vacant or becomes vacant during marketing, you must inform your lender immediately and ensure that the

property is protected from freeze damage by ‘winterizing’ plumbing pipes.” (Id. ¶ 38.) Throughout July and August, Sembach continued working with M&T Bank on completing the short sale process and was in frequent contact with the servicer. (Id. ¶¶ 39, 41–43.) In early August 2017, M&T Bank, on behalf of Lakeview, issued a work order to Defendant Safeguard to perform certain property preservation services at the Property. (Id. ¶ 40.) Thus, when Sembach made one of her weekly visits to the Property on August 25, 2017, she discovered that the Property was unlocked and her realtor’s lockbox was missing. (Id. ¶¶ 45–46.) Upon further investigation, Sembach discovered that the Property had been winterized, its locks had been changed, its windows were open, and the air conditioning had been turned down to 50

degrees. (Id. ¶¶ 46–47.) In addition, she observed that her curtains had been removed, her appliances had been disconnected, and that food and some of the personal property she kept at the Property were missing or damaged. (Id. ¶¶ 47–48, 73.) When Sembach contacted M&T Bank to inform it of what she had discovered during her visit, M&T Bank told her that it had determined that the Property was “abandoned,” thereby allowing M&T Bank to exercise its right to possession of the Property. (Id. ¶¶ 49–50.) M&T Bank ignored Sembach’s complaints about her missing personal property and made no offer to compensate her for the losses. (Id. ¶ 51.) Ultimately, M&T Bank refused to approve Sembach’s proposed short sale, claiming that the Property “needed repairs” without providing more specifics. (Id. ¶¶ 54–57.) Despite Sembach’s continued attempts to obtain approval of the short sale, Lakeview initiated foreclosure proceedings on the Property on March 9, 2018. (Id. ¶¶ 58–60.) According to Sembach, Defendants’ conduct caused her stress, anxiety, mental anguish, and loss of valuable and sentimental personal property. (Id. ¶ 71.) DISCUSSION

To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This pleading standard does not necessarily require a complaint to contain detailed factual allegations. Twombly, 550 U.S. at 555. Rather, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678). Sembach’s seven-count amended complaint asserts claims for breach of contract (Count

I), intentional infliction of emotional distress (“IIED”) (Count II), intrusion upon seclusion (Count III), trespass to real property (Count IV), violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 ILCS 505/2 (Count V), conversion (Count VI), and negligence (Count VII). Together, Defendants’ motions seek the dismissal of all claims. In her response to the motions to dismiss, Sembach concedes that her breach of contract claim (Count I) is barred by the doctrine of res judicata and withdraws it. That claim is therefore dismissed with prejudice. The Court addresses each of the remaining claims in turn. I. IIED Sembach asserts her IIED claim in Count II against only Safeguard.

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Sembach v. Lakeview Loan Servicing, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sembach-v-lakeview-loan-servicing-llc-ilnd-2021.