failure to state a claim “unless it appears beyond a doubt that the plaintiff can prove no
set of facts in support ofhis claim which would entitle him to relief.” Conley v. Gibson,

355 US. 41, 45-46 (1957); see also Hartford Fire Ins. Co. v. California, 509 U.S. 764
(1993); Sherwin Manor Nursing Ctr., Inc. v. McAuliffe, 37 F.3d 1216, 1219 (7th Cir.

1994). Nonetheless, in order to withstand a motion to dismiss, a complaint must allege

facts sufficiently setting forth the essential elements of the cause of action. Lucien v.

Preiner, 967 F.2d 1166, 1168 (7th Cir. 1992).

In reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, the
court is limited to the allegations contained in the pleadings themselves. Documents
incorporated by reference into the pleadings and documents attached to the pleadings
as exhibits are considered part of the pleadings for all purposes. Fed.R. Civ.P. 10(c).
In addition, “documents that a defendant attaches to a motion to dismiss are considered
a part of the pleadings if they are referred to in the plaintiff's complaint and are central

to her claim.” Venture Assoc. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th

Cir. 1993). Finally, the standard of review for a motion for judgment on the pleadings
under Fed.R. Civ.Pro 12(c) is the same as for a motion to dismiss under Rule 12(b). Zic
v. Italian Gov’t Travel Office, 130 F. Supp.2d 991 (N.D. Ill. 2001). With these

principles in mind, the court turns to the instant motions.

DISCUSSION

The primary basis for each of the Defendants’ motions is that Thomas’s RESPA
and TILA claims are barred by the statute of limitations. Both RESPA and TILA each

-4-


Having dismissed Counts I, IL, III, IV, V, and VII, the court turns to the viability
of Counts V and VII. Only Ocwen has moved for the dismissal of these counts.
Thomas brings Count V under § 2607 of RESPA. She alleges that Ocwen imposed
improper fees on a payoff statement when Thomas attempted to refinance her loan with
AMA. Ocwen argues, and the court agrees, that § 2607 of RESPA only applies to fee-
splitting and referrals for settlement services and does not apply to charges incurred
after closing and unrelated to settlement services. See ¢.g., Bloom v. Martin, 77 F.3d
318 (9th Cir. 1996). Ocwen further argues, and the court also agrees, that the alleged
fees on the payoff statement are unrelated to settlement services. Thomas has failed to
present any argument to the contrary in her response brief. Therefore, because Count
V is based on fees unrelated to settlement services, the court finds that it fails to state
and claim under § 2607 of RESPA and must be dismissed.

Finally, Count VII alleges a violation of the FDCPA. Count VII is problematic
because it does not sufficiently notify Defendants or the court against which Defendant
it is being brought. Although Count VII is titled “Ocwen Refused to Cease
Communication with Plaintiff,’ the factual allegations are directed toward
“Defendants” generally. In her response, Thomas makes clear that this claim is brought
only against Litton. Accordingly, the court finds that this claim is brought only against
Litton and dismisses it insofar as it may have been interpreted to apply to Ocwen or any

of the other Defendants.


whether Thomas’s allegations justify the application of an exception to the statute of
limitations. The court notes that the burden of demonstrating that the applicable statute
of limitations be tolled falls on Thomas. See e.g., Kerby v. Mortgage Funding Corp.,
992 F. Supp. 787, 798 (D. Md. 1998); Diehl v. ACRI Co., 910 F. Supp. 439, 444 (C.D.
Ill. 1995).

The court begins by noting that where, as here, the expiration of the statute of
limitations is clear from the face of the complaint, the plaintiff must plead in the
complaint any exceptions to the application of the statute of limitations upon which the

plaintiff relied in bringing her case. See Theriot, III v. Captain James Sprinkle, Inc.,

No. 93-3709, 1994 WL 287392 (7th Cir. June 28, 1994) (quoting Kincheloe v. Farmer,
214 £.2d 604, 605 (7th Cir. 1954)); Anderson, 2001 U.S. Dist LEXIS 11412, at *14;

Pedraza vy. United Guaranty Corp., 114 F. Supp.2d 1347, 1356 (S.D. Ga. 2000);
Training Inst., Inc. v. City of Chicago, 937 F. Supp. 743, 751 (N.D. Ill. 1996). It is not

clear from Thomas’s opposition papers whether she is attempting to invoke the
exception of equitable tolling or the exception of fraudulent concealment. In the end,
however, this is of little import because Thomas’s allegations fail to provide a factual
basis for either doctrine.

Fraudulent concealment “denotes efforts by the defendant — above and beyond
the wrongdoing upon which the plaintiffs claim is founded — to prevent the plaintiff

from suing in time.” Cada v. Baxter Healthcare Corp., 920 F.2d 446, 452 (7th Cir.

1990); see Evans, 39 F. Supp.2d at 1184 (explaining that fraudulent concealment

-6-


have a one year statute of limitations period. 12 U.S.C. § 2614; 15 U.S.C. § 1640(e).
Defendants assert that all of the conduct complained about in Counts I, I, III, IV, VI,
and VIII occurred in May 2000 or earlier. Notably, the closing of Thomas’s loan, the
day upon which claims under RESPA and disclosure claims under TILA typically

accrue, see e.g., Anderson v. New Dimension Fin. Serv., L.P., No. 00 C 3725, 2001

US. Dist. LEXIS 11412, *13 (N.D. Ill. Aug. 6, 2001); Evans v. Rudy-Luther Toyota.

Inc., 39 F. Supp.2d 1177, 1181 (D. Minn. 1999), is October 23, 1998.' This action was
filed more than one year later on June 7, 2001. Accordingly, Defendants ask that the
court dismiss Thomas’s claims.

Thomas does not dispute that she filed her complaint outside the one year statute
of limitations period. Instead, she argues that both RESPA and TILA are subject to
equitable tolling. The court agrees that RESPA and TILA are subject to equitable

tolling. See Lawyers Title Ins. Corp. v. Dearborn Title Corp., 118 F.3d 1157 (7th Cir.
1997); Evans, 39 F, Supp.2d at 1177; Ramadan v. The Chase Manhattan Corp., 156

F.3d 499 (3rd Cir. 1998); Ellis v. Gen’] Motors Acceptance Corp., 160 F.3d 703 (11th
Cir. 1998). But the conclusion that equitable tolling may apply to Thomas’s claims

does not mean that the doctrine in fact does apply. The court now turns to the issue of

' Thomas’s complaint presents two dates for the closing of her loan. Her complaint
alleges that her loan closed on November 8, 1998 but the HUD-1 Settlement Statement
attached to her complaint is dated October 23, 1998. Although the date on the HUD-1
Settlement Statement controls, Banco Del Estado v. Navistar Int’] Transp. Corp., 942 F.
Supp. 1176, 1179 (N.D. Il. 1996), this discrepancy is ultimately of no consequence because
both dates are outside of the one-year period before Thomas filed her complaint.

-5-


more importantly, was signed by Thomas. By signing the HUD-1 Settlement Statement,
Thomas certified that she had “carefully reviewed” its contents and had received a copy
of the statement. Similarly, although Thomas claims she never received or read a Truth
in Lending Statement pertaining to her loan, Defendant Meritage has attached a copy
of a Truth in Lending Statement dated August 5, 1998, which Thomas has signed. See
Venture Assoc. Corp., 987 F.2d at 431 (court can consider documents defendants
attaches to motion to dismiss if central to plaintiffs claim); Menominee Indian Tribe
yv. Thompson, 161 F.3d 449, 456 (7th Cir. 1998),

Thomas’s complaint is devoid of any allegation that she took efforts to inquire
about these charges either at the time she signed both the HUD-1 Settlement Statement
and Truth in Lending Statement or afterwards. If she signed the documents without
reading them, she cannot argue that she acted diligently. Additionally, if she read the
documents and asked no questions about the fees currently at issue either at the time of
reading it or sometime thereafter she cannot contend that she acted in a diligent manner.

See Johnson, U.S. Dist. LEXIS 21384, at *4-5; Diehl, 910 F. Supp. at 443-45; Training

Inst., 937 F. Supp. at 751. Therefore, the court finds that Thomas’s complaint does not
provide a factual basis for the application of equitable tolling or fraudulent concealment.
Accordingly, the court dismisses Counts I, Il, II, IV, V, and VIII because Thomas has
failed to allege any facts upon which she can show she is entitled to an exception to the

applicable statute of limitations.


Mintite Order Form (06/97)

-
United States District Court, Northern District of Hlinois
Name of Assigned Judge Sitting Judge if Other
or Magistrate Judge Charles P. Kocoras than Assigned Judge
CASE NUMBER 01 C 4249 DATE 1/23/2002
CASE Thomas vs. Ocwan Federal Bank et al
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented,
DOCKET ENTRY:
q) Qo Filed motion of [ use listing in “Motion” box above.]
(2) oO Brief in support of motion due
(3) Qo Answer brief to motion due. . Reply to answer brief due
(4) oO Ruling/Hearing on set for at
(5) o Status hearing[held/continued to] [set for/re-set for] on set for at
(6) QO Pretrial conference[held/continued to] [set for/re-set for] on set for at :
(@) im} Trial[set for/re-set for] on at
(8) o [Bench/Jury trial] [Hearing] held/continued to at
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
OFRCP4(m) O General Rule21 [FRCP41(a)(1) O FRCP41(a)(2).
ao) ff {Other docket entry) Ruling held. ENTER MEMORANDUM OPINION: Defendant Ocwan
Federal Bank’s motion (Doc 18-1 & 18-2) to dismiss, or in the alternative, motion to stay, is granted.
Defendant Marquette National Bank’s motion (Doc 15-1) motion for judgment on the pleadings is
granted. Defendant Meritage Mortgage Corp.’s motion (Doc 24-1) to dismiss is granted. Thomas’
complaint is dismissed against defendants Ocwen, Marquette and Meritage. Litton’s motion for judgment
on the pleadings is granted as to Count IV. Answer to the remainder of defendant Litton’s motion for
judgment on the pleadings is due February 6, 2002. Reply due February 13, 2002. Ruling set for March
; ayn 6, 2003. 4
(il) (For further detail see order attached to the original minute order.]
Y | Nonotices required, advised in open court. ‘Dor
No notices required, umber of notices
Notices mailed by judge’s staff, JAN 25 2002
Notified counsel by telephone. dathdocketed
Docketing to mail notices. j ))
Mail AO 450 form. WAAAY, o)
Copy tojudge/magistra Je judge.
Q courtroom date mailed notice
SCT deputy’s
initials
ate/time received in
central Clerk’s Office reiting deputy initiate



CONCLUSION
For the foregoing reasons, Thomas’s complaint is dismissed as against

Ocwen, Marquette, and Meritage.

Charles P. Kocoras
United States District Judge

JAN 28 2002
Dated:

-10-


exception only applies to toll TILA statute of limitations when there is fraudulent

conduct by the defendant beyond the nondisclosure itself). Additionally, the heightened

pleading requirements of Fed.R. Civ. Pro 9(b) apply. Evans, 39 F. Supp. 2d at 1185 n.
5; Pedraza, 114 F. Supp.2d at 1356. Thomas has not alleged in her First Amended
Complaint that any of the Defendants engaged in fraudulent conduct beyond the alleged
violations themselves. She alleges no affirmative misrepresentations by the Defendants
that prevented her from filing her suit in a timely manner. Therefore, Thomas’s
allegations do not support the application of fraudulent concealment to toll the statute

of limitations. See Cada, 920 F.2d at 452; Evans, 39 F. Supp.2d at 1184-85; Pedraza,

114 F. Supp.2d at 1357-58; See Johnson v. Resource Bancshares Mortgage Grp., No.
97-2378, 2000 U.S. Dist. LEXIS 21384, at *4-5 (D. Minn. May 5, 2000).

Nor do her allegations support application of the doctrine of equitable tolling. To
avoid the application of a statute of limitations through equitable tolling, a plaintiff
“need show [] that he could not by the exercise of reasonable diligence have discovered
essential information bearing on his claim.” Cada, 920 F.2d at 452. Thomas has not
alleged any facts indicating that she exercised diligence to discover the allegedly
wrongful nature of the fees and charges she now challenges.

Indeed, the HUD-1 Settlement Statement, which Thomas has attached to her
complaint, belies Thomas’s allegations that she was unaware of the yield spread
premium and that the Defendants’ concealed its existence from her. The HUD-1

Settlement Statement identifies the charges about which Thomas now complains and,

-7-


prepayment penalties. Additionally, Thomas alleges that Ocwen wrongfully charged her
for forced-placed insurance.

Thomas filed an original Complaint consisting of sixteen counts against
Defendants Ocwen, Marquette, Meritage, and Litton on June 7, 2001. Thomas
subsequently filed a First Amended Complaint consisting of eight counts against the
same four Defendants on July 20, 2001. Counts I, II, III, IV, V, and VI are brought
under RESPA and based on the allegations described above. Count VII alleges a
violation of the Fair Debt Collection Practices Act, 15, U.S.C. §§ 1692 et seg
(“FDCPA”) and Count VIII alleges a violation of the Truth in Lending Act, 15 U.S.C.
§ 1639 (“TILA”). Ocwen, Meritage, and Marquette (collectively “the Defendants”)
now move to dismiss the Counts against them. Although Defendants have filed
separate motions, the court considers their motions together because they present, in
large part, the same legal argument.

LEGAL STANDARD

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the

sufficiency of the complaint, not to decide the merits of the case. Triad Assoc., Inc. v.
Chicago Housing Auth., 892 F.2d 583, 586 (7th Cir. 1989). In ruling on a motion to
dismiss, the court must first construe the complaint’s allegations in the lightmost
favorable to the plaintiff and all well-pleaded facts and allegations in the plaintiff's

complaint must be taken as true. Bontkowski v. First Nat’] Bank of Cicero, 998 F.2d

459, 461 (7th Cir. 1993). The allegations of a complaint should not be dismissed for

-3-


Evergreen Bank ceased operations, Thomas subsequently refinanced this loan with
Marquette. Acting as mortgage broker, Marquette arranged for and transferred the
mortgage loan to Ocwen in 1998. Ocwen ultimately assigned, sold or transferred the
servicing of Thomas’s loan to Defendant Litton Loan Servicing on November 1, 2000.

The HUD-1 Settlement Statement, signed by Thomas and dated October 23,
1998, lists the charges for the settlement services Thomas incurred in connection with
the closing of her loan. According to Thomas, she did not receive any compensable
good, service or facility for the charge labeled “yield spread premium,” and, therefore,
that charge is duplicative in violation of section 8 of Real Estate Settlement Procedures
Act 12 U.S.C. 2607 (“RESPA”). As such, Thomas alleges that the yield spread
premium constitutes an illegal kickback or referral fee. She further alleges that none
of the Defendants, either before or during the closing of her loan, informed her of the
nature of the yield spread premium payment or the effect it would have on her interest
rate.

In addition to alleging that the charges she incurred during the closing ofher loan
violated RESPA, Thomas alleges that certain other fees Defendants charged her after
the closing of her loan violate RESPA. Among these are attorney fees related to
foreclosure proceedings that Ocwen charged her for in both October 1999 and March
2001, even though she was not in foreclosure at those times. Thomas further alleges
that, when she attempted to refinance her loan with AMA Financial Mortgage

Corporation (“AMA”), Ocwen sent AMA a payoff statement which contained inflated

-2-


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ALICE L. THOMAS,
Plaintiff,

01 C 4249

vs.

LOAN SERVICING, MARQUETTE
NATIONAL BANK, and MERITAGE
MORTGAGE CORPORATION,

DAL Be

JAN 25 2002

)

)

)

)

OCWEN FEDERAL BANK FSB, LITTON )
)

)

)

)

Defendants. )

MEMORANDUM OPINION

The following matter is before the court on Defendant Ocwen Federal Bank
FSB’s (“Ocwen”) motion to dismiss or, in the alternative, motion to stay, Defendant
Marquette National Bank (“Marquette’s”) motion for judgment on the pleadings, and
Defendant Meritage Mortgage Corporation’s (“Meritage”) motion to dismiss. For the
following reasons, the Defendants’ motions are granted. _

BACKGROUND

The following facts are taken from Plaintiff Alice Thomas’s (“Thomas”)
complaint, and the court is obligated to accept them as true. Thomas, along with Isiah
Thomas, purchased a single-family home in Chicago in 1968 and paid off the mortgage
on that home in 1978. In 1994, Thomas borrowed approximately $69,000 against that

home from Evergreen Bank for home repairs and to pay off consolidated bills. Because

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