Suttle v. Calk

• Decision Date: 07 March 2022
• Docket Number: 19 C 4541
• Parties: STEPHANIE SUTTLE, Plaintiff, v. STEPHEN CALK and THE FEDERAL SAVINGS BANK, Defendants.
• Court: U.S. District Court — Northern District of Illinois

STEPHANIE SUTTLE, Plaintiff, v. STEPHEN CALK and THE FEDERAL SAVINGS BANK, Defendants.

No. 19 C 4541

United States District Court, N.D. Illinois, Eastern Division

March 7, 2022

OPINION AND ORDER

Joan H. Lefkow U.S. District Judge

In 2019, Stephanie Suttle filed this action against defendants The Federal Savings Bank (FSB) and former FSB executive Stephen Calk for claims under the Truth in Lending Act (TILA), 15 U.S.C. § 1601, the Illinois Consumer Fraud Act (ICFA), 815 Ill. Comp. Stat. 505/1, common law fraud, and promissory estoppel. (Dkts. 1, 17.) FSB counterclaimed for amounts Suttle allegedly owes under a loan agreement. (Dkt 37.) Defendants have moved for summary judgment on all of Suttle's claims and FSB's counterclaim. (Dkt. 104.) Suttle has cross-moved for summary judgment on her TILA claims alone. (Dkt. 109.) For the following reasons Suttle's motion for summary judgment is granted defendants' motion for summary judgment is granted as to Suttle's common law fraud and promissory estoppel claims and defendants' motion is denied as to Suttle's TILA and ICFA claims and FSB's counterclaim.

BACKGROUND

I. Objections to Local Rule 56.1 Statements of Undisputed Material Facts

As an initial matter, the parties' objections to each other's Local Rule 56.1 submissions and related exhibits require resolution before turning to the undisputed facts.

A. Defendants' objections to Suttle's expert report and Suttle's affidavit

Defendants object to the admissibility of two evidentiary exhibits. First, they object to the admissibility of an expert report submitted in support of Suttle's Local Rule 56.1 statement of undisputed facts on the basis that it improperly offers legal conclusions. (Dkt. 117.) Experts may not answer a legal question central to the case's resolution. See Good Shepherd Manor Found., Inc. v. City of Momence, 323 F.3 556, 564 (7th Cir. 2003). Among other opinions about the mortgage industry, Suttle's expert opines on whether her loan is exempt from TILA requirements. (Dkt. 110-5 at 15-19.) This is precisely the legal question that determines the outcome of her TILA claims. Therefore, the legal conclusions offered in the report are stricken and will not be considered.

Second, defendants object to the following statements in Suttle's affidavit submitted in support of her response to defendant's motion for summary judgment on the ground that they are “conclusory statements” rather than “statements of specific facts” and are therefore inadmissible. (Dkt. 126 at 6.)

6. [M]ost of my funds were held in my retirement accounts.

23. After our bitter divorce, I struggled with my personal and financial affairs.

24. My ex-husband also improperly claimed both of my children as dependents on his tax returns.

25. I was overwhelmed and struggling with my divorce. 36. [Calk] promised me a mortgage[.]

42. Steve . . . made me feel like I was being ungrateful or insulting[.]

63. [I]t was too late for me to do anything else.

64. After I received the loan documents from FSB, Steve pressured me to sign them. 66. [Calk] was already acting upset and antagonized.

70. I had no choice but to continue trying to work with Steve [Calk.]

(Dkt. 126 at 6 (citing dkt. 118-1) (cleaned up).) Of these, only Paragraph 36 is material to the disposition of the motions before the court. As such, the challenged paragraphs are considered only to the extent that they would be admissible at trial, i.e., relevant and supported by proper foundation. See Davis v. City of Chi., 841 F.2d 186, 189 (7th Cir. 1988) (citing Fed.R.Evid. 602).

B. Suttle's objections to defendants' statement of additional material facts

Suttle objects to the statements made in paragraphs 1 and 2 of defendants' Local Rule 56.1(b)(3) statement of additional material facts. Paragraph 1 provides: “The primary purpose of the loan at issue in this case was to finance the plaintiff's acquisition of her ex-husband's interest in their former marital home.” (Dkt. 124, ¶ 1.) Paragraph 2, in relevant part, states: “The Federal Savings Bank wired $398, 776.34 . . . to be used for the purchase of the plaintiff's ex-husband's interest in their former marital home . . . . Of that amount, approximately $330, 000 was used to acquire the ex-husband's interest in the home[.]” (Id. ¶ 2.)

Although not stated as such, Suttle's objections to these statements-specifically the words “acquisition, ” “purchase, ” and “acquire”-appear to be related to defendants' argument that the loan at issue was for an “acquisition” of Suttle's home and thus qualified under the residential mortgage exemption to TILA's disclosure and rescission requirements. (Dkt. 115 at 3.) Whether Suttle's loan is exempt under TILA is a legal question, and defendants' characterization of the loan as an “acquisition” is a legal argument, not a statement “grounded in specific facts.” See Bordelon v. Board of Educ., 811 F.3d 984, 989 (7th Cir. 2016). Therefore, these assertions are construed only as factual statements regarding Suttle's procurement of the loan and FSB's transfer of funds to Suttle's divorce trustee. Any legal conclusions in Paragraphs 1 and 2 are disregarded.

II. Undisputed Facts Regarding Suttle's Loan

The following facts are undisputed. In 2016, Suttle sought to resolve lingering issues from her 2013 divorce. (Dkt. 119, ¶¶ 2-3.) Relevant to this case, Suttle wanted to purchase her ex-husband's interest in their marital home and to do so needed to provide by October 28, 2016 the requisite funds to a trustee overseeing the divorce proceeding. (Id. ¶ 4.) Suttle started the process of obtaining a loan with NFM Lending (id. ¶ 5) but ultimately decided to obtain a loan from FSB (dkt. 117, ¶¶ 7-9). Suttle was aware of FSB because of her connection to Calk, an executive at FSB, whom she had known since the 1980s. (Dkt. 119, ¶ 10.) In August 2016, while still working with NFM Lending, Suttle discussed with Calk her financial situation and desire for a loan. (Id. ¶¶ 10-11.)

On or around October 21, 2016, Suttle opened an account at FSB and on Calk's instruction began transferring funds to it. (Id. ¶ 21.) Suttle ultimately transferred $417, 000 to FSB. (The parties dispute whether Suttle knew that these funds were to serve as collateral for a loan and that she would not be able to access them. (Id.; dkt. 118 at 3; dkt. 126, ¶ 4.)) On October 28, 2016, at approximately 11:45 AM (Eastern Time), FSB wired $398, 276.34 from Suttle's account to the trustee. (Dkt. 126, ¶ 6.) Suttle received the Loan Note and Loan Agreement documents several hours after FSB transferred the funds to the trustee. (Dkt. 119, ¶ 36.) Suttle and Calk then exchanged the following text messages:

Suttle: Got the docs. I am reading them. Is someone available to discuss with me what I'm signing? How long do you expect this to be in place[?] And subsequently replaced by the refinance mortgage loan?

Calk: The term is one year. Assuming you pay your taxes, square away your credit and get me your income info on your divorce etc[.] we can get you qualified and refi ASAP.

Suttle: Do I have . . . access to the balance of the $417K? I'll start getting info to you or whomever is handling my loan[] now. What do you need? Who do I send it to? Do you have 2 minutes to answer questions? How much fees are eating into the $417k? Fees [p]aid up front or prorated for term of loan?

Calk: Yes. Calling now.

(Dkt. 119, ¶ 34; dkt. 119-5 at 21 (cleaned up).)

Suttle and Calk spoke on the phone after this exchange, but the contents of that conversation remain in dispute. (Dkt. 119, ¶ 35.) Suttle signed and sent the documents to the FSB loan officer later that evening. (Id. ¶ 36.) FSB did not provide Suttle with disclosure forms that are required for most loans under TILA, including notice of the option to rescind the loan. (Dkt. 117, ¶ 9.) Suttle ultimately received a one-year bridge loan at an adjustable interest rate, ranging from 7.25% to 12.25%, which was secured by the $417, 000 that she deposited at FSB as well as a mortgage that FSB took on her home. (Dkt. 119, ¶ 1; dkt. 126, ¶ 13.)

In the months that followed, Suttle, Calk, and FSB had various discussions about refinancing the bridge loan and procuring a traditional mortgage loan. (Id. ¶¶ 41-43; dkt. 126, ¶¶ 21-25.) To obtain a traditional mortgage loan, FSB required that Suttle provide copies of her filed taxes from 2012 to 2015, which she did not do. (Dkt. 119, ¶¶ 6, 21.)^[1] In February 2017, Calk informed Suttle by email that her refinancing application was being denied. (Id. ¶ 45.) Communications dropped off, and Suttle never refinanced the bridge loan or obtained a traditional mortgage loan. (Id. ¶ 38.) On July 5, 2018, Suttle sent FSB a letter giving notice that she was rescinding the loan. (Dkt. 124, ¶ 2.) FSB did not respond. (Dkt. 126, ¶ 25.) Suttle then brought this action against Calk and FSB. (Dkt. 17.)

LEGAL STANDARD

Summary judgment is appropriate where there is no genuine dispute of material fact, entitling the movant to judgment as a matter of law. Fed.R.Civ.P. 56(a). A genuine dispute of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant has the burden of showing that there is no genuine, material factual dispute. See Celotex Corp. v Catrett, 477 U.S. 317, 323 (1986). If the movant carries its burden, the non-movant must then show a genuine dispute of fact supported by “proper documentary evidence.” Weaver v. Champion Petfoods USA Inc., 3 F.4th 927, 934 (7th Cir. 2021). Still, the court views all facts in the light most favorable to the non-moving party and draws all reasonable inferences in its favor. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S....