IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

MARION J. TUCKER and 

STEPHANIE TUCKER,

Plaintiffs,

v.

CHARLES SCHWAB BANK, f/k/a 

Charles Schwab Bank, N.A., and 

MORGAN STANLEY CAPITAL I, 

INC., f/k/a Morgan Stanley Dean Witter 

Corporation,

Defendants.

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No. 12-CV-3399

Judge John J. Tharp, Jr.

MEMORANDUM OPINION AND ORDER

The plaintiffs, Marion and Stephanie Tucker, allege that Defendants Morgan Stanley 

Capital I, Inc. (“Morgan Stanley”) and Charles Schwab Bank (“Charles Schwab”) violated the 

Illinois Consumer Fraud and Deceptive Business Practices Act (the “ICFA”) and the Illinois 

Uniform Deceptive Trade Practices Act (the “IDPA”) and committed fraud, attempted 

conversion, and unjust enrichment. The Tuckers also allege that Morgan Stanley (but not Charles 

Schwab) violated the Fair Debt Collection Practices Act (the “FDCPA”) and the Illinois 

Collection Agency Act (the “ICAA”). Both defendants move to dismiss all of the plaintiffs’ 

claims pursuant to Rule 12(b)(6). For the reasons stated below, the Court grants the defendants’ 

motions to dismiss without prejudice.
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I. Background1

On February 9, 2005, the Tuckers signed a mortgage note and mortgage in favor of 

Morgan Stanley. Cmplt. ¶ 13. The mortgage conveyed a security interest in the Tuckers’

property located in Olympia Fields, Illinois (the “property”) to Morgan Stanley. Id. ¶¶ 1, 14. On 

March 1, 2005, Morgan Stanley transferred ownership in the mortgage note and mortgage to a 

mortgage-backed-securities trust (the “Trust”), which listed Morgan Stanley as the servicer. Id. ¶

15. After filing certain forms with the SEC, the complaint alleges that the Trust filed a 

“Certification and Notice of Termination,” and the Trust was no longer registered. Id. ¶ 16. The 

Tuckers further allege, without providing any detail, that the Trust itself terminated and was 

dissolved on May 26, 2006, when its final form 10-K was filed with the SEC. Id. ¶¶ 16-17. 

According to the Tuckers, upon termination of the Trust, the Trust’s certificate holders received 

the Trust’s assets and became the holders of the note and mortgage.2 Id. ¶ 19. 

After the Trust allegedly dissolved, Morgan Stanley Home Loans (an entity that the 

Tuckers implicitly admit is distinct from Morgan Stanley) began communicating with the 

plaintiffs about the mortgage. Id. ¶¶ 20-21; Resp. Br. (Dkt. 37) at ¶ 13. The first communication 

consisted of a letter dated January 4, 2011 from Morgan Stanley Home Loans to the Tuckers

confirming a payment the Tuckers had made in December 2010. Cmplt. ¶ 20, Ex. H. On May 16, 

2011, Morgan Stanley Home Loans induced the Tuckers to enter into a formal mortgage 

1 The Court accepts the Tuckers’ well-pleaded factual allegations as true and construes all 

reasonable inferences in their favor. Gessert v. United States, 703 F.3d 1028, 1033 (7th Cir. 

2013).

2 Defendant Charles Schwab disputes that ownership of the mortgage note and mortgage 

transferred to the Trust and claims that it owns both. See Charles Schwab MTD (Dkt. 19) at 7-

11; Charles Schwab Reply Br. (Dkt. 39) at Ex. 1. But because the plaintiffs sufficiently alleged 

that the mortgage note and mortgage were transferred to the Trust, the Court accepts this as true 

for the purpose of the motion to dismiss.
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repayment plan. Id. ¶ 21, Ex. I. Later, on January 30, 2012, Defendant Charles Schwab filed a 

complaint against the Tuckers to foreclose on the mortgage. Id. ¶ 22, Ex. J.

II. Analysis

A. The Tuckers Fail to Adequately Plead Termination of the Trust.

The Tuckers’ claims against both Morgan Stanley and Schwab are predicated on their 

allegation that the Trust terminated and was dissolved while it held the mortgage and note to the 

Tuckers’ property. Morgan Stanley notes that the Tuckers’ allegations on this point are “vague 

and confusing,” and the Court agrees. As the only factual basis for alleging that the Trust 

terminated while it was the holder of the mortgage and note, the Tuckers attach a document that 

they call the Trust’s “Certification and Notice of Termination,” but which in reality is a notice of 

termination of the Trust’s registration with the SEC. Although “vague and confusing,” the 

complaint appears to claim that de-registration terminated the trust itself. See, e.g., Cmplt. (Dkt. 

1) ¶¶ 16-17 (mischaracterizing the trust’s “Certification and Notice of Termination of 

Registration” as merely “Notice of Termination,” and implying that the trust was terminated in 

conjunction with the filing of its final 10-K Annual Report).

To the extent that the Tuckers’ claims depend on the thesis that the Trust’s deregistration 

with the SEC terminated the trust itself, they are frivolous. Whether a mortgage-backed security 

trust is registered with the SEC has nothing at all to do with its legal existence, and de-registering 

the Trust does not terminate the Trust’s existence. See, e.g., 15 U.S.C. § 78l(g)(4); 17 C.F.R. § 

240.12g-4. Although at this stage the Court must take the Tuckers’ factual allegations as true and 

draw all reasonable inferences in their favor, see Gessert, 703 F.3d at 1033, the Court need not 

accept specious claims uncritically. To the extent that the Tuckers allege that the Trust was 

dissolved due to its deregistration with the SEC, that allegation is simply an erroneous legal 

conclusion to which no deference is owed. And if the plaintiffs did not intend to allege that 
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deregistration terminated the trust, and that the Trust was dissolved by some other act, they have 

provided no facts whatsoever that would (if true) establish, or even plausibly suggest, that the 

Trust was actually dissolved. Either way, at present the Tuckers’ allegations regarding the 

termination of the Trust are insufficient to “state a claim to relief that is plausible on its face,” 

and they do not “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555, 570 (2007).

Because the Tuckers have failed to allege sufficient facts to plausibly show that the Trust 

was dissolved, and all of their claims turn on that claim, their complaint will be dismissed in its 

entirety without prejudice. The Tuckers have leave to file an amended complaint, if they are able 

to do so consistent with the requirements of Fed. R. Civ. P. 11, within 30 days. Though the 

Tuckers’ entire complaint is being dismissed without prejudice, the Court will nonetheless 

review the Tuckers’ claims against the Morgan Stanley and Charles Schwab to determine 

whether there are other independent grounds for dismissal.

B. The Tuckers Fail to State Any Claims Against Morgan Stanley.

Even if the Tuckers had alleged the facts necessary to show that the Trust was dissolved

in 2006, they would still fail to state any valid claim against Morgan Stanley. The Tuckers argue 

that Morgan Stanley violated federal and state law3 by: (1) sending the plaintiffs a confirmation 

letter regarding their payment on a loan, and (2) entering into a formal repayment plan with the 

3 Morgan Stanley argues that if the Court dismisses the Tuckers’ federal FDCPA claim, it should 

decline to exercise supplemental jurisdiction over the Tuckers’ state law claims. Morgan Stanley 

MTD (Dkt. 17) at 3, 4, 8. But the Tuckers properly invoked the Court’s diversity of citizenship 

jurisdiction. Cmplt. ¶¶ 2, 5, 9, 11. Because Morgan Stanley does not challenge the Court’s 

diversity jurisdiction, its argument that the Court “should decline to exercise supplemental 

jurisdiction” is misplaced. 
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plaintiffs for their mortgage. Id. ¶¶ 20-21, Ex. H-I.4 These two facts underlie all of the plaintiffs’ 

claims against Morgan Stanley.5

Though the Tuckers’ complaint alleges that Morgan Stanley sent the confirmation letter 

and entered into the formal repayment plan, the exhibits attached to the complaint do not 

mention the Morgan Stanley entity that the Tuckers sued, but rather only Morgan Stanley Home 

Loans. “It is a well-settled rule that when a written instrument contradicts allegations in the 

complaint to which it is attached, the exhibit trumps the allegations.” N. Ind. Gun & Outdoor 

Shows, Inc. v. City of South Bend, 163 F.3d 449, 454 (7th Cir. 1998). Because the Tuckers’ 

exhibit refutes their factual allegations, they have not alleged facts sufficient to state their claims 

against the Morgan Stanley entity that they named as a defendant. See id. at 455.

After Morgan Stanley’s motion pointed out that their exhibits involved Morgan Stanley 

Home Loans rather than the defendant, Morgan Stanley Capital I, Inc., the Tuckers contended for 

the first time that “[o]n information and belief, Morgan Stanley Capital and Morgan Stanley 

Home Loans were working together to collect the debt.” Resp. Br. (Dkt. 37) at ¶ 13. Even if the 

Court ignores the Tuckers’ improper attempt to amend their complaint in a response brief, see 

Agnew v. Nat’l Collegiate Athletic Ass’n, 683 F.3d 328, 348 (7th Cir. 2012) (briefs in opposition 

to a motion to dismiss may not amend the complaint), they still fail to provide any factual basis 

4 Exhibits attached to a complaint become a part of it for all purposes, and the Court can consider 

the exhibit in its decision without converting the motion to dismiss into a motion for summary 

judgment. See Tierney v. Vahle, 304 F.3d 734, 738 (7th Cir. 2002); Fed. R. Civ. P. 10(c).

5 The plaintiffs argue that Morgan Stanley violated the FDCPA and ICAA by making false 

representations in connection with the collection of a debt, evidenced by both the letter and 

repayment plan. Cmplt. ¶¶ 25-43, 74-93. Furthermore, the plaintiffs’ quiet title claim depends on 

the letter and repayment plan to show that Morgan Stanley asserted legal title to the mortgage 

note and mortgage. Id. ¶¶ 44-53. And the plaintiffs argue that Morgan Stanley committed fraud, 

attempted conversion, and unjust enrichment by collecting (and soliciting to collect) funds from 

the Tuckers through the confirmation letter and repayment plan. Id. ¶¶ 54-64. Finally, plaintiffs 

argue that Morgan Stanley violated the ICFA and the IDPA by holding itself out as the servicer 

of the mortgage in these communications. Id. ¶¶ 65-73.
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for their conclusory allegation that Morgan Stanley was in any way involved in the events 

alleged.; Hickey v. O’Bannon, 287 F.3d 656, 658 (7th Cir. 2002) (the Court is “not obliged to 

accept as true legal conclusions or unsupported conclusions of fact”). In fact, the Tuckers’ 

complaint never mentions Morgan Stanley Home Loans at all. The Tuckers appear to have sued 

the wrong Morgan Stanley entity, which provides the Court with an independent basis to dismiss 

the Tuckers’ claims against Morgan Stanley without prejudice.

C. The Fraud, Attempted Conversion, and Unjust Enrichment Claims Against 

Charles Schwab Fail on Their Own Merits, But the Tuckers’ Other Claims 

Would Survive if They Properly Alleged that the Trust Was Dissolved.

Several of the plaintiffs’ claims against Charles Schwab would be dismissed even if the 

plaintiffs had adequately pleaded that the trust terminated in 2006, so the Court addresses the 

arguments regarding those claims as well.

1. Quiet Title

The plaintiffs argue that Charles Schwab has no legal interest in the mortgage, and that its 

state court complaint to foreclose constitutes a cloud on the title to the property. Charles Schwab 

claims that the Tuckers effectively seek to “have this Court declare the mortgage unenforceable 

and the note unsecured under the guise that the Plaintiffs are unsure of whom to pay.” Charles 

Schwab MTD (Dkt. 19) at 8. That is wrong. The Tuckers “do not contest that the holder of [the 

mortgage] is entitled to enforce it;” they allege only that Charles Schwab is not the holder of the 

note. Resp. Br. (Dkt. 36) ¶ 10. Under Illinois law, to prevail on a quiet title action “it is not 

required that a perfect title be established.” Dudley v. Neteler, 392 Ill. App. 3d 140, 143, 924 

N.E.2d 1023, 1026 (Ill. App. Ct. 2009). Rather, the Tuckers “must establish title superior to that 

of defendants.” Id. In their complaint, the Tuckers request a declaration stating only that Charles 

Schwab has no interest in their property or any mortgage on it. Cmplt. (Dkt. 1) at 15-16. 
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Therefore, to succeed on their quiet title claim they need only show that Charles Schwab is not 

entitled to enforce the mortgage, not that the mortgage is wholly unenforceable.

Charles Schwab next argues that it is the holder of the mortgage note and it cites to the

complaint it filed in state court as evidence of that fact. See Charles Schwab MTD (Dkt. 19). at

7-8. But the state court complaint attaches only copies of the mortgage note and mortgage 

without providing any proof of assignment to Charles Schwab. See Cmplt. Ex. J. Charles Schwab 

presented a purported proof of assignment for the first time as an attachment to its reply brief.

See Charles Schwab Reply Br. (Dkt. 39) at Ex. 1. 

On a Rule 12(b)(6) motion to dismiss, the Court may consider “the complaint itself, 

documents attached to the complaint, documents that are critical to the complaint and referred to 

in it, and information that is subject to proper judicial notice.” Geinosky v. City of Chicago, 675 

F.3d 743, 745 n.1 (7th Cir. 2012). Here, the Tuckers did not attach any proof of assignment to

their complaint, nor did they refer to the proof of assignment in the complaint. In fact, the 

plaintiffs expressly deny the existence of any assignment. Cmplt. ¶¶ 22-23.

The Court declines to take judicial notice of the assignment because it is subject to 

reasonable dispute. See Fed. R. Evid. 201(b) (“The court may judicially notice a fact that is not 

subject to reasonable dispute because it: (1) is generally known within the trial court’s territorial 

jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot 

reasonably be questioned.”). Charles Schwab admits in its reply brief that it did not record the 

assignment until July 26, 2012, after the complaint and motions to dismiss were filed. Charles 

Schwab Reply Br. (Dkt. 39) at 2. As the plaintiffs deny that any assignment took place, there are 

questions of fact regarding the validity of the assignment that necessitate further discovery and 

prevent judicial notice. Therefore, the Court cannot consider the mortgage assignment that 
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Charles Schwab attached to its reply brief. Taking the facts alleged in the complaint as true, then, 

if the Tuckers had adequately alleged that the Trust dissolved while it owned their mortgage and 

note, they would have adequately pleaded a quiet title claim against Charles Schwab.

2. Fraud, Attempted Conversion, and Unjust Enrichment6

In Count III of their complaint, the Tuckers allege fraud, attempted conversion, and 

unjust enrichment claims against Charles Schwab. The Tuckers argue that Charles Schwab 

committed fraud by recording a lis pendens and filing a complaint to foreclose on the property 

without an interest in the mortgage note or mortgage. The elements of common law fraud are: 

(1) a statement by defendant; (2) of a material nature as opposed to 

opinion; (3) that was untrue; (4) that was known or believed by the 

speaker to be untrue or made in culpable ignorance of its truth or 

falsity; (5) that was relied on by the plaintiff to his detriment; (6) 

made for the purpose of inducing reliance; and (7) such reliance 

led to the plaintiff’s injury.

Chow v. Aegis Mortg. Corp., 185 F. Supp. 2d 914, 917 (N.D. Ill. 2002) (quoting Duran v. Leslie 

Oldsmobile, Inc., 229 Ill. App. 3d 1032, 1039, 594 N.E.2d 1355, 1360 (Ill. App. Ct. 1992))

(internal quotation marks omitted). Rule 9(b) requires a party to “state with particularity the 

circumstances constituting fraud.” Fed. R. Civ. P. 9(b). 

The Tuckers fail to allege particular facts required to meet each element of common law 

fraud. Assuming that Charles Schwab’s lis pendens and complaint to foreclose on the property 

constitute untrue statements of a material nature, the Tuckers still fail to allege that they relied on 

6 Charles Schwab argues that the Tuckers only assert a quiet title action, i.e. Count II, against 

them. Charles Schwab Reply Br. (Dkt. 39) at 1. Indeed, the Tuckers stated in their response brief 

that they “have stated no other claims against Defendant Charles Schwab.” Resp. Br. (Dkt. 36) at 

¶ 15. But the complaint contains specific factual assertions against Charles Schwab in Counts III 

and IV. Cmplt. ¶¶ 55, 57, 62, 66-67, 71, 73. Viewing the complaint in the light most favorable to 

the Tuckers, the Court finds that it does attempt to set forth claims against Charles Schwab in 

Counts III and IV, and therefore it will consider Charles Schwab’s arguments for dismissing 

those claims.
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those statements, or that they were injured by their reliance. Because the Tuckers fail to allege 

particular facts establishing the required elements of fraud, their fraud claim fails.

Charles Schwab also correctly argues that it cannot be liable for conversion by seeking to 

foreclose on real property. Under Illinois law, an action for conversion only lies for personal 

property—not real property. See Sandy Creek Condo. Ass’n v. Stolt & Egner, Inc., 267 Ill. App. 

3d 291, 295, 642 N.E.2d 171, 175 (Ill. App. Ct. 1994); In re Thebus, 108 Ill. 2d 255, 260, 483 

N.E.2d 1258, 1260 (1985). Because the Tuckers claim that Charles Schwab is attempting to take 

their real property, Charles Schwab cannot be liable for conversion.7

Finally, the Tuckers have also failed to plead a plausible claim of unjust enrichment 

against Charles Schwab because they do not allege any facts showing that Charles Schwab was

unjustly enriched to the impoverishment of the Tuckers. See Cmplt. ¶¶ 54-64; Sherman v. Ryan,

392 Ill. App. 3d 712, 734, 911 N.E.2d 378, 399 (Ill App. Ct. 2009) (The elements of unjust 

enrichment are: “(1) an enrichment, (2) an impoverishment; (3) a relation between the 

enrichment and impoverishment, (4) the absence of justification and (5) the absence of a remedy 

provided by law.”). Therefore, because the plaintiffs have not pleaded sufficient facts to support 

claims for fraud, conversion or unjust enrichment, Count III would be dismissed even if the 

Tuckers had adequately pleaded that the Trust was dissolved.

3. ICFA and IDPA

The Tuckers allege in Count IV of their complaint that Charles Schwab has violated the 

ICFA and the IDPA by recording a lis pendens and filing a complaint to foreclose on the 

property. To state a claim under the ICFA,

7 Additionally, the plaintiffs actually pleaded “attempted conversion” rather than actual 

conversion, and the Seventh Circuit has rejected similar claims. See United States v. Stefonek,

179 F.3d 1030, 1036 (7th Cir. 1999) (“There are no ‘attempted torts.’”).
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a plaintiff must allege: (1) an unfair or deceptive act or practice by 

the defendant; (2) the defendant’s intent that the plaintiff rely on 

the deception; (3) that the deception occurred in the course of 

conduct involving trade or commerce; (4) actual damage to the 

plaintiff; and (5) that such damages were proximately caused by 

the defendant’s deception.

Thrasher-Lyon v. Ill. Farmers Ins. Co., 861 F. Supp. 2d 898, 908-09 (N.D. Ill. 2012). Because 

the ICFA asserts fraud, it requires plaintiffs to plead with particularity. Freedom Mortg. Corp. v. 

Burnham Mortg., Inc., 720 F. Supp. 2d 978, 1004 (N.D. Ill. 2010). The Tuckers allege that 

Charles Schwab has attempted to take their property by recording a lis pendens and moving to 

foreclose on the false pretext that it has rights under the note or mortgage. Cmplt. ¶¶ 66, 71. The 

Court cannot presently credit Charles Schwab’s argument that it is the true holder of the note and 

mortgage, and must accept the Tuckers’ allegations. Read broadly, the Tuckers’ allegations 

would be sufficient to meet the necessary ICFA elements.

To state a claim under the IDPA, the plaintiff must allege facts showing that the 

defendant “engaged in a deceptive trade practice” such as “[passing] off goods or services as 

those of another” or conduct that “similarly creates a likelihood of confusion or 

misunderstanding.”8 815 ILCS 510/2(a)(1), (12). The Tuckers’ IDPA allegations hinge on 

whether any valid assignment of the mortgage to Charles Schwab occurred. As explained above, 

the Court may not consider the assignment of the mortgage that Charles Schwab attached to its

reply brief, nor its argument that the Tuckers defaulted on their mortgage. Rather, it must accept

the plaintiffs’ allegation that no assignment took place. Therefore, had the Tuckers adequately 

8 Charles Schwab correctly notes that the IDPA does not allow for the recovery of damages 

without a separate common law or statutory violation. See Vincent v. Alden-Park Strathmoor, 

Inc., 399 Ill. App. 3d 1102, 1110-11, 928 N.E.2d 115, 122-23 (Ill. App. Ct. 2010); Glazewski v. 

Coronet Ins. Co., 108 Ill. 2d 243, 252-53, 483 N.E.2d 1263, 1267 (1985). But because the 

Tuckers also seek injunctive relief, and because they do claim other common law and statutory 

violations, the IDPA claim need not be dismissed on that basis.
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alleged the dissolution of the Trust, they would also have adequately alleged a violation of the 

IDPA.

***

For the reasons set forth above, the Court grants the defendants motions to dismiss the 

complaint without prejudice.

Entered: March 29, 2013

John J. Tharp, Jr.

United States District Judge