Drobny v. JP Morgan Chase Bank, NA

• Decision Date: 08 March 2013
• Docket Number: Case No. 12–CV–5392.
• Parties: Anita DROBNY and Sheldon Drobny, Plaintiffs, v. JP MORGAN CHASE BANK, NA, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

929 F.Supp.2d 839

Anita DROBNY and Sheldon Drobny, Plaintiffs,

v.JP MORGAN CHASE BANK, NA, et al., Defendants.

Case No. 12–CV–5392.

United States District Court,

N.D. Illinois,

Eastern Division.

March 8, 2013.

Anita Drobny, Highland Park, IL, pro se.

Sheldon Drobny, Highland Park, IL, pro se.

Glenn E. Heilizer, Law Offices of Glenn E. Heilizer, David M. Schultz, Peter E. Pederson, Jr., Hinshaw & Culbertson, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

Plaintiffs Anita and Sheldon Drobny filed a pro se complaint arising out of two lawsuits that JP Morgan Chase Bank, NA (“Chase”) filed in Lake County, Illinois, to foreclose the mortgage on their home. Plaintiffs contend that Chase's two foreclosure lawsuits were improperly filed because Chase failed to obtain a mortgage assignment from Washington Mutual Bank and because the note indorsement is “forged.” Plaintiffs further complain that Chase failed to offer Ms. Drobny a mortgage loan modification after she applied several times and accuse Chase and its chief executive officer of “treating the [Washington Mutual Bank] mortgages different[ly] than those that originated from [Chase],” in order to avoid “the cost of servicing those loans and making modifications.” Plaintiffs have named the following defendants: Chase, the alleged assignee of their mortgage, and Jamie Dimon, the CEO of Chase (collectively referred to as the “Chase Defendants”); Codilis & Associates, PC, the law firm that represented Chase in the foreclosure actions, and Ernest Codilis, the managing director of Codilis & Associates, PC (collectively referred to as the “Codilis Defendants”); the Federal Deposit Insurance Corporation (“FDIC”), which shuttered WaMu and transferred its loans to Chase; and Robert Schoppe, the FDIC receiver who executed an affidavit attesting to WaMu's assignment of the mortgages to Chase. Plaintiffs assert federal claims under Sections 1962(a)-(c) of RICO as well as pendent state law claims of fraud, consumer fraud, and intentional infliction of emotional distress.

This matter is before the Court on two motions to dismiss filed by the Codilis Defendants [18] and the Chase Defendants [21]. Defendants seek dismissal of all claims brought against them. For the following reasons, the Court grants the motions [18 and 21] and dismisses Plaintiffs' complaint. At this time, the dismissal is without prejudice and subject to the further explanation set forth on pages 19 and 20 below.

I. Factual Background¹

On September 25, 2008, following Washington Mutual Bank's failure, JPMorgan Chase Bank (“Chase”) acquired Washington Mutual Bank's “banking assets” from FDIC. (Cplt. ¶¶ 1–3.) According to the complaint, litigation between Washington Mutual Bank's “parent company” and Chase concerning the transaction continues. ( Id. ¶¶ 4–9.) The FDIC's inspector general, the FBI, and others are “reportedly probing the sale” and other “bailouts” as well. ( Id. ¶ 6.) Following the acquisition, in order for Chase to file foreclosure lawsuits more quickly and save costs, the FDIC and Chase failed to “properly transfer” the Washington Mutual Bank mortgages, and Chase further “chose to deny many reasonable modifications.” (Cplt. ¶¶ 10, 11, 37.) Consequently, certain undescribed foreclosure lawsuits—not involving Plaintiffs—were filed “without the required legal documentation or submitted with improperly forged assignments,” which “resulted in homeowners unjustly losing their homes” and has “cost * * * the U.S. economy * * * trillions of dollars * * *.” (Cplt. ¶¶ 12, 13.)

Plaintiffs are a married couple with more than eighty years' accounting experience between them. (Cplt. ¶¶ 22, 23, 44.) They further are “experts in the field of mortgage modifications.” ( Id.) Plaintiff Anita Drobny obtained a $680,000 mortgage loan originated by Washington Mutual Bank in 2007. (Cplt. ¶ 24.) In May 2009, due to adverse financial circumstances, Ms. Drobny requested to modify her mortgage loan from a fifteen-year amortization period to a thirty-year period, which meant that her monthly payment would be reduced and the term of her loan would be extended from 15 to 30 years. (Cplt. ¶¶ 25, 26.) Ms. Drobny completed a loan modification application, but Chase advised that it was not received, so she submitted another application in October 2009. ( Id. ¶¶ 27, 28.) Chase advised that application also was not received, at which point Ms. Drobny wrote a complaint letter to her congresswoman. ( Id. ¶¶ 29, 30.)

Ms. Drobny submitted a new application to Chase on December 21, 2009. (Cplt. ¶ 31.) Although a Chase representative alleged assured Ms. Drobny that the loan would be modified, Chase instead filed a foreclosure lawsuit against Ms. Drobny in May 2010. ( Id. ¶¶ 30–33.)

Ms. Drobny's letter to her congresswoman, attached to Plaintiffs' complaint, contradicts Ms. Drobny's assertions that Chase failed to respond to her loan modification applications, then later promised to modify her loan. (Cplt. Exh. C.) According to the letter, which is dated December 2, 2009, Chase did inform her that her loan modification request was denied. ( Id. Exh. C at 2, 3.) Among other things, Chase advised that Ms. Drobny's income was “insufficient for the loan.” ( Id. at 3, 4.) Although Ms. Drobny alleges that Chase later promised to modify her loan, she says she supplied “the same supporting documents that had previously been sent,” i.e., the materials that Chase reviewed when it denied her application a few weeks earlier for insufficient income. (Cplt. ¶ 31; Exh. C at 2, 3.)

The first foreclosure complaint was signed by a Codilis lawyer and named both Anita and her husband Sheldon. ( Id. ¶ 33; Id. Exh. E at 2.) According to the complaint, the May 2010 foreclosure complaint was “false” due to Chase's failure to receive and record an assignment of mortgage and because the indorsement was forged. (Cplt. ¶ 36.) As to Ms. Drobny's mortgage, the instrument did not attach any assignment from Washington Mutual Bank to Chase, nor was any assignment recorded in Lake County, Illinois. (Cplt. ¶ 33.) As to Ms. Drobny's note, although the note does bear an indorsement in blank, the indorsement is “false” and is a “robo signed forger[y],” to aid in a “criminal enterprise.” (Cplt. ¶ 33.) Someone either used a “signature stamp” or “photo shopped” the signature on the indorsement, without the signer's authority. ( Id. ¶ 37.) Plaintiffs base their allegations regarding the indorsement on an unattributed “determin[ation]” that “[t]he signature stamp for the blank endorsement by Cynthia A. Riley has been reported as the one most commonly used by the people that forged that endorsement.” ( Id. ¶¶ 33, 36.) Eventually these “legal deficiencies” let to a “voluntary dismissal of the complaint” without prejudice ( Id. ¶ 42.)

The Codilis Defendants allegedly falsely stated at ¶ 3(N) of the foreclosure complaint that Chase had the capacity to foreclose as mortgagee, but Chase was not actually WaMu's assignee because it had not received or a recorded an assignment of the mortgage. According to the complaint, the Codilis Defendants knew or should have known that Riley's blank endorsement was a forgery because only the FDIC could make a blank endorsement. The Codilis Defendants knew that Chase “never intended to get assignments and make recordings for several million mortgages that were owned and serviced” by WaMu. (Doc. # 1 ¶¶ 37–38). Chase and “their attorneys”—the complaint does not specify whether attorneys other than the Codilis Defendants were involved—improperly foreclosed upon thousands of mortgages. Chase and its attorneys effectuated the improper foreclosures by using telecommunications and the U.S. Mail to have “complaints and briefs sent to the many defendants.”

Following the voluntary dismissal of the May 2010 foreclosure, Ms. Drobny again attempted to have Chase modify the mortgage with the assistance of two agencies. (Cplt. ¶ 43.) However, Chase “failed to approve or disapprove” the application. ( Id. ¶ 44.) Based on the foregoing, Plaintiffs believe that Chase is “treating the [Washington Mutual Bank] mortgages different[ly] than those that originated from [Chase],” in order to avoid “the cost of servicing those loans and making modifications.” ( Id. ¶ 45.)

In March 2012, Chase filed a second foreclosure lawsuit against the Drobnys, also signed by the Codilis Defendants. (Cplt. ¶ 46; Id. Exh. G.) The complaint attached an affidavit prepared by Robert C. Schoppe of the FDIC, attesting that the FDIC sold the WaMu mortgages to Chase. ( Id. ¶ 46; Exh. F.) According to Plaintiffs' complaint in this lawsuit, the affidavit “has no force of law in Illinois or any other state” and was “intended to prove that the mortgage was legally owned by [Chase] despite the forged endorsement and lack of assignment.” ( Id. ¶¶ 46, 47.) By signing the affidavit, Schoppe facilitated Chase's “criminal enterprise”; by using the affidavit, Chase meant to deceive “the courts and the thousands of foreclosures [sic] they were planning to pursue.” ( Id.)

Plaintiffs contend that Chase's foreclosure actions destroyed their credit and caused damages exceeding $10,000,000. In Count I (“RICO Section 1962(a)”), Plaintiffs contend that all Defendants “conducted and participated in the conduct of their affairs through a pattern of racketeering activity,” all related by purpose, victims and participants, in violation of §§ 1962(a) and 1962(c) of RICO. (Cplt. ¶¶ 48, 51, 52.) Plaintiffs continue that “these illegal acts were accomplished by use of the United States Mail and through telecommunications,” and that Chase is a “continuing enterprise” which is “separate and distinct from the pattern of racketeering activity * * *.” ( Id. ¶¶ 40, 49.) The allegedly illegal acts occurred over a period of years through Chase's “mortgage acquisition of [Washington Mutual Bank] from the FDIC,” as “facilitated by use of the United States mails and wires...