Order Form (01/2005)

United States District Court, Northern District of Illinois

Name of Assigned Judge

or Magistrate Judge

Ronald A. Guzman Sitting Judge if Other

than Assigned Judge

CASE NUMBER 12 C 1968 DATE 11/19/2012

CASE

TITLE

Gary Horwitz vs. Wells Fargo, et al.

DOCKET ENTRY TEXT

For the reasons set forth in this order, the Court grants in part Wells Fargo’s motion to dismiss the amended

complaint [46] and dismisses without prejudice the Sherman Act and slander of title claims (Counts IV and VI). 

In all other respects, the motion is denied. Plaintiff has fourteen days from the date of this order to amend Counts

IV and VI. If he fails to do so, the Court will dismiss those counts with prejudice. 

O[ For further details see text below.] Docketing to mail notices.

STATEMENT

Facts

On August 16, 2005, plaintiff obtained a home loan from and executed a promissory note and mortgage

in favor of The Home Loan Center (“HLC”). (Am. Compl. ¶¶ 13-14; see id., Ex. A, Note & Ex. B, Mortgage.)

 On October 1, 2005, HLC assigned its interest in the note and mortgage to Freddie Mac and its right to

service the note and mortgage to Wells Fargo (“Wells”). (Id. ¶ 15; see id., Ex. C, Notice of Assignment, Sale

or Transfer of Servicing Rights.) 

On October 14, 2005, Freddie Mac securitized the note and transferred it to a mortgage-backed securitized

trust, which designated Wells as the note and mortgage servicer. (Id. ¶¶ 16-17.) On April 1, 2007, the trust, and

Wells’ associated servicing rights, terminated. (Id. ¶ 19.) 

On April 9, 2007, Wells created a document that purported to assign HLC’s interest in plaintiff’s note

and mortgage to Wells. (Id. ¶¶ 19-20; see id., Ex. F, Assignment of Mortgage.) The assignment is executed by

HLC’s “Attorney in Fact,” Michael Snively, Wells’ Vice President of Loan Documentation. (Id., Ex. F,

Assignment of Mortgage.) Subsequently, Wells recorded the false assignment with the Cook County Recorder

of Deeds, and since then, has held itself out to plaintiff as the owner and servicer of his note and mortgage. (Id.

¶¶ 21-22.) 

On January 3, 2012, Wells filed suit in state court to foreclose the mortgage and attached a copy of

plaintiff’s note to HLC falsely endorsed to Wells by HLC’s “Attorney-in-Fact,” Wells’ Vice President Lynnette

Hanson. (Id. ¶ 23; see id., Ex. H, Compl., Wells Fargo Bank N.A. v. Gary Horwitz, No. 12 CH 69 (Cir. Ct. Cook

Cnty.), Ex. B, Note.)

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STATEMENT

Plaintiff alleges that Wells’ conduct violates the Fair Debt Collection Practices Act (“FDCPA”), the

Sherman Act and the Illinois Uniform Deceptive Trade Practices Act (“Deceptive Trade Practices Act”) and

asserts claims against it to quiet title, for slander of title and unjust enrichment. 

Discussion

On a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded factual allegations of the

complaint, drawing all reasonable inferences in plaintiff’s favor. Hecker v. Deere & Co., 556 F.3d 575, 580 (7th

Cir. 2009). “[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual

allegations” but must contain “enough facts to state a claim for relief that is plausible on its face.” Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007).

Wells argues that all of plaintiff’s claims should be dismissed because they are based on his conclusory

assertion that the documents evidencing Wells’ interest in his note and mortgage are fraudulent. At this stage

of the litigation, however, plausibility, not proof, is required. See id. Plaintiff’s detailed allegations easily vault

this low hurdle. (See Am. Compl. ¶¶ 1-46.) 

Alternatively, Wells argues that the FDCPA claim should be dismissed because the exhibits to the

amended complaint establish that Wells is not a “debt collector” governed by the statute, and the claim is barred

in whole or part by the statute of limitations. See 15 U.S.C. §§ 1692a(6), 1692(e) (barring a “debt collector,”

defined as a person in the debt collection business or who collects a debt owed to another that it obtained before

the debt was in default, from using false or deceptive representations to collect a debt). But plaintiff expressly

alleges that HLC did not assign its interest in the note and mortgage to Wells and that Wells’ servicing rights

ended in April 2007. (See Am. Comp. ¶¶ 15-24.) These allegations, if true, could support an FDCPA claim. 

See 15 U.S.C. § 1692e(2) (stating that “[t]he false representation of . . . the character, amount, or legal status of

any debt” violates the FDCPA). Moreover, untimeliness is an affirmative defense that Wells has the burden of

proving. See Fed. R. Civ. P. 8(c). Thus, unless the amended complaint “alleges facts that create an ironclad

defense,” which it does not, the asserted untimeliness of the FDCPA claim is not a basis for dismissing it. See

Foss v. Bear, Stearns & Co., Inc., 394 F.3d 540, 542 (7th Cir. 2005).

Wells also contends that plaintiff’s quiet title claim is defeated by his admission that his mortgage is in

foreclosure. “An action to quiet title in property is an equitable proceeding wherein a party seeks to settle a

dispute over ownership of property or to remove a cloud upon his title to the property.” Lakeview Trust & Sav.

Bank v. Estrada, 480 N.E.2d 1312, 1327 (Ill. App. Ct. 1985). To prevail on such a claim, plaintiff need not

establish that he has perfect title, but must show that “his title is superior to that of defendant[].” Dudley v.

Neteler, 924 N.E.2d 1023, 1026 (Ill. App. Ct. 2009) (quotation omitted). Plaintiff alleges that he holds title to

the mortgaged property (Am. Compl. ¶ 8), and under Illinois law he retains that title until a court enters a

judgment of foreclosure, confirms a sale of the property and issues a deed to the purchaser. See 735 Ill. Comp.

Stat. 5/15-1509. Thus, plaintiff’s admission that foreclosure proceedings are pending does not preclude him from

asserting a quiet title claim. See Diaz v. Home Federal Sav. & Loan Ass’n of Elgin, 786 N.E.2d 1033, 1039 (Ill.

App. Ct. 2002) (stating that a quiet title action is barred “only [if plaintiff ] can show no title whatsoever in the

property at issue”). 

Wells also argues that plaintiff’s unjust enrichment and Deceptive Trade Practices claims are infirm

because he cannot allege that Wells’ conduct has already harmed him or is likely to do so in the future. See 815

Ill. Comp. Stat. 510/3 (vesting “[a] person likely to be damaged by [another’s] deceptive trade practice” with a

cause of action for injunctive relief); HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 545 N.E.2d 672,

679 (Ill. 1989) (“To state a cause of action based on a theory of unjust enrichment, a plaintiff must allege that

the defendant has unjustly retained a benefit to the plaintiff’s detriment, and that defendant’s retention of the

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STATEMENT

benefit violates the fundamental principles of justice, equity, and good conscience.”). Given plaintiff’s

allegations that Wells collected mortgage payments to which it is not entitled and is pursuing baseless foreclosure

proceedings, the Court rejects this argument. 

The Court agrees, however, that the slander of title claim is flawed because plaintiff has not specifically

alleged special damages. Ringier Am., Inc. v. Enviro-Technics, Ltd., 673 N.E.2d 444, 446 (Ill. App. Ct. 1996)

(“To make out a cause of action in slander of title . . . , a plaintiff must allege a false and malicious publication,

oral or written, of words which disparage its title to property resulting in special damages.” ) (quotation omitted);

see Fed. R. Civ. P. 9(g) (“If an item of special damage is claimed, it must be specifically stated.”). Plaintiff’s

allegations that Wells’ actions have “decreased the value of [his] home” and “increased the cost of everything

he has purchased with credit,” (Am. Compl. ¶ 71), do not satisfy Rule 9(g). See Brown & Williamson Tobacco

Corp. v. Jacobson, 713 F.2d 262, 270 (7th Cir. 1983) (plaintiff’s assertions that “the natural tendency” of

defamatory statements was to decrease plaintiff’s sales, injure its goodwill and destroy the value of its advertising

were not specific allegations of special injury required by Rule 9(g)).

Plaintiff’s Sherman Act claim, which he pleads as an alternative to his other claims, is also infirm. To

state a viable claim, plaintiff must allege that there is a contract, combination, or conspiracy, it unreasonably

restrains trade in a relevant market and there is an accompanying injury. Agnew v. Nat’l Collegiate Athletic

Ass’n, 683 F.3d 328, 335 (7th Cir. 2012). Plaintiff alleges that: (1) Wells and HLC had an agreement “to

produce and record false documents” and “prosecute false foreclosures”; (2) the agreement “prevent[ed]

mortgagors from refinancing” by “concealing from [them] . . .the identity of their mortgagees,” and froze

“legitimate banks” out of the mortgage business; and (3) the agreement has resulted in a general decrease in home

values “throughout the country,” including that of plaintiff’s home. (Am. Compl. ¶¶ 81-87.) He does not,

however, allege facts that suggest: (1) HLC and Wells agreed to falsely assign and foreclose on any mortgage

other than his own; (2) Wells is so powerful in the nationwide mortgage market – the only market to which

plaintiff even refers – that any such agreement would unreasonably restrain trade; or (3) the general decrease in

U.S. home values is attributable to any such agreement. Absent such allegations, plaintiff has not stated a viable

Sherman Act claim. See Twombly, 550 U.S. 544, 554-61 (2007); Agnew, 683 F.3d at 335-38.

Conclusion

For the reasons stated above, the Court grants in part Wells Fargo’s motion to dismiss the amended

complaint [46] and dismisses without prejudice the Sherman Act and slander of title claims (Counts IV and VI). 

 The motion is otherwise denied. Plaintiff has fourteen days from the date of this order to amend the Sherman

Act and slander of title claims in accordance with this order. If he fails to do so, the Court will dismiss those

counts with prejudice. 

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