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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

KENNETH KAROL and JANE KAROL, 

Plaintiffs, 

v.

OLD SECOND NATIONAL BANK, 

 Defendant. 

 

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20 C 4344

Charles P. Kocoras, United States District Judge:

MEMORANDUM OPINION

Before the Court is Defendant Old Second National Bank’s (“Old Second”) 

motion to stay the above-captioned matter pending the resolution of a related appeal 

before the Illinois Appellate Court’s First District. For the following reasons, the Court

grants Old Second’s motion.

BACKGROUND 

This federal action arises from the foreclosure of Plaintiffs’ Kenneth Karol and 

Jane Karol (collectively, “Karols”) home by the Cook County Circuit Court on July 26, 

2018. (Cook County Case No. 16-CH-7557). In that state foreclosure action, the 

Illinois trial court granted summary judgment for Old Second, issued a judgment of 

foreclosure, and allowed a judicial sale of the subject property. After the Illinois trial 

court entered judgment for Old Second and denied Karols’ post-trial motions, Karols 

appealed to the Illinois Appellate Court’s First District on October 10, 2019. (First 

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District Appellate Case No. 0119-2091). That appeal argues that Illinois Hardest Hit 

program funds cured the Karols’ default in loan payments that resulted in the 

foreclosure. The appeal also concerns, among other relevant things, the legal force of 

three key documents, including a 2010 Mortgage Note, a 2014 Terms Modification 

Agreement, and a 2017 Terms Modification Agreement. As of August 31, 2020, the 

Illinois appeal is fully briefed and remains pending. 

Karols’ federal complaint filed on July 28, 2020—almost four years after the 

state foreclosure action was initiated—alleges misconduct with respect to the 2017 

Terms Modification Agreement, which the Karols’ allege modified their obligations 

under the 2010 Mortgage Note. Specifically, Karols allege that Old Second’s conduct

with respect to the 2017 Terms Modification Agreement (1) violated the Real Estate 

Settlement Procedures Act (“RESPA”) (Count 1); (2) violated the Illinois Consumer 

Fraud and Deceptive Business Practices Act (“ICFA”) (Count 2); and (3) breached the 

2017 Terms Modification Agreement (Count 3). In the instant motion, Old Second

argues that these claims are parallel and that a judicial stay is warranted under both 

Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) and 

this Court’s inherent authority to stay proceedings.

LEGAL STANDARD

The Colorado River doctrine provides that “a federal court may stay or dismiss 

a suit in federal court when a concurrent state case is underway, but only under 

exceptional circumstances and only if it would promote wise judicial administration.” 

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Freed v. J.P. Morgan Chase Bank, N.A., 756 F.3d 1013, 1018 (7th Cir. 2014) (cleaned 

up).1 The Supreme Court has “cautioned that abstention is appropriate only in 

exceptional circumstances and has also emphasized that federal courts have a virtually 

unflagging obligation to exercise the jurisdiction given them.” AXA Corp. Sols. v. 

Underwriters Reinsurance Corp., 347 F.3d 272, 278 (7th Cir. 2003) (cleaned up). The 

Court’s task “in cases such as this is not to find some substantial reason for the exercise 

of federal jurisdiction; rather, the task is to ascertain whether there exist exceptional 

circumstances, the clearest of justifications, that can suffice under Colorado River to 

justify the surrender of that jurisdiction.” Moses H. Cone Mem'l Hosp. v. Mercury 

Constr. Corp., 460 U.S. 1, 25–26 (1983) (cleaned up). At the same time, “[u]nder 

established abstention doctrines, however, a federal court may, and often must, decline 

to exercise its jurisdiction where doing so would intrude upon the independence of the 

state courts and their ability to resolve the cases before them.” SKS & Assocs., Inc. v. 

Dart, 619 F.3d 674, 677 (7th Cir. 2010). 

The Court’s analysis under Colorado River has two steps. The Court first asks

“whether the state and federal court actions are parallel.” Freed, 756 F.3d at 1018. “If 

the actions are not parallel, the Colorado River doctrine does not apply and the court 

need not address the second part of the analysis.” Id. If the proceedings are parallel, the 

Court must then weigh ten non-exclusive factors that include (1) whether the state has 

1 The Court uses the parenthetical “cleaned up” to enhance the readability of this opinion. See Jack 

Metzler, Cleaning Up Quotations, 18 J. App. Prac. & Process 143 (2017). 

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assumed jurisdiction over property; (2) the inconvenience of the federal forum; (3) the 

desirability of avoiding piecemeal litigation; (4) the order in which jurisdiction was 

obtained by the concurrent forums; (5) the source of governing law, state or federal; (6) 

the adequacy of state-court action to protect the federal plaintiff's rights; (7) the relative 

progress of state and federal proceedings; (8) the presence or absence of concurrent 

jurisdiction; (9) the availability of removal; and (10) the vexatious or contrived nature 

of the federal claim. Tyrer v. City of S. Beloit, Ill., 456 F.3d 744, 754 (7th Cir. 2006).

“No one factor is necessarily determinative; a carefully considered judgment taking into 

account both the obligation to exercise jurisdiction and the combination of factors 

counselling against that exercise is required.” Colorado River, 424 U.S. at 818–19. 

DISCUSSION

1. The State and Federal Actions Are Parallel 

“Two suits are parallel for Colorado River purposes when substantially the same 

parties are contemporaneously litigating substantially the same issues. Precisely formal 

symmetry is unnecessary. A court should examine whether the suits involve the same 

parties, arise out of the same facts and raise similar factual and legal issues. In essence, 

the question is whether there is a substantial likelihood that the state litigation will 

dispose of all claims presented in the federal case. Any doubt regarding the parallel 

nature of the [state] suit should be resolved in favor of exercising jurisdiction.” Adkins 

v. VIM Recycling, Inc., 644 F.3d 483, 498–99 (7th Cir. 2011) (cleaned up).

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Applying these principles, the Court concludes that the state and federal actions 

are parallel because there is a “substantial likelihood” that the Illinois appeal will 

resolve Karols’ claims. See Adkins, 644 F.3d at 499. The parties to the state foreclosure 

action and this action—Kenneth Karol, Jane Karol, and Old Second National Bank—

are identical. Furthermore, the state foreclosure action and this action involve 

extremely closely related legal and factual issues, which include the following. 1. Did 

Old Second breach a valid contract? 2. Did Old Second properly apply payments to the 

Karols’ loan? 3. Did Old Second have a right to foreclose on the property? 3. Were 

Old Second’s actions related to the loan and the Karols’ payments in compliance with

both the original mortgage contract and the subsequent Change in Terms Agreements 

executed in 2014 and 2017. 4. Did Old Second waive any default by signing the 2017 

Change in Terms Agreement? 5. Did the 2017 Change in Terms Agreement constitute 

a new note? 6. Are the Karols correct that the earlier notes were superseded by and 

merged into the 2017 Change in Terms Agreement?

These essential factual and legal questions are likely to be conclusively resolved 

by the state appeal, which warrants the Court’s temporary abstention to best streamline 

the federal proceedings and facilitate their prompt resolution. Indeed, the Illinois 

court’s decision could be “res judicata in this action.” Canna v. Canna, 2020 WL 

6203334, at *5 (N.D. Ill. 2020) (collecting cases discussing Colorado River abstention 

and res judicata). While the Court is mindful of the differences between res judicata

and Colorado River abstention, the Court still observes that but for the pendency of 

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Karols’ appeal, Old Second would likely have the ability to file a motion to dismiss on 

res judicata grounds, which could meaningfully simplify, and may even fully resolve, 

this litigation. Even were the Karols’ right that some of the claims ripened only after 

the state foreclosure judgment, “the success of all of Plaintiff's claims [still] turn on the 

same underlying issue[s]” Willson v. Bank of Am., N.A., 2016 WL 8943333, at *3 (S.D. 

Fla. 2016), aff'd, 684 F. App'x 897 (11th Cir. 2017). Additionally, even if some

discovery into Old Second’s state of mind is necessary, that does “not necessarily 

preclude a finding that the two suits are parallel.” Placek v. U.S. Bank, Nat'l Ass'n, 2018 

WL 1397428, at *4 (N.D. Ill. 2018).

The Karols are correct that there are some differences in the state and federal 

proceedings, but that does not defeat the Court’s conclusion that the claims are parallel. 

This is because “[p]recisely formal symmetry is unnecessary” to establish parallelism. 

Adkins, 644 F.3d at 499; Clark v. Lacy, 376 F.3d 682, 686 (7th Cir. 2004) (“suits need 

not be identical to be parallel”). Indeed, “the mere presence of additional parties or 

issues in one of the cases will not necessarily preclude a finding that they are parallel.” 

AAR Int'l, Inc. v. Nimelias Enterprises S.A., 250 F.3d 510, 518 (7th Cir. 2001). Rather, 

cases are parallel if “substantially the same parties are contemporaneously litigating 

substantially the same issues in another forum or if the cases involve the same parties, 

arise out of the same facts and raise similar factual and legal issues,” Tyrer, 456 F.3d at

752. Put concisely: the governing test is not whether the issues are completely the same; 

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rather, it is whether the issues are substantially the same. See Restoration Servs., LLC 

v. R&R Boardwalk, LLC, 2017 WL 5478304, at *4 (N.D. Ill. 2017). 

The issues here are substantially the same because there is a substantial 

likelihood that the state foreclosure appeal will dispose of all claims presented in 

Karols’ complaint, which is the critical question in analyzing parallelism. See Huon v. 

Johnson & Bell, Ltd., 657 F.3d 641, 646 (7th Cir. 2011). For example, if the Illinois 

Appellate Court concludes that the 2017 Terms Modification Agreement was not an 

independent, non-integrated contract, then Karols’ federal claims may be resolved. 

While it is conceivable that the state appeal may not resolve every aspect of Karols’ 

claims it will still affirmatively answer the core legal and factual questions “by 

examining largely the same evidence” at issue in this case. Id. at 647. Specifically, in 

this case and in the pending appeal, the contract at issue in the two suits are identical

and both actions involve the same property, the same mortgage, the same note, the same 

Change in Terms Agreements, and the same relevant payments.

Any difference between the cases also do not cast doubt on whether the state 

appeal will be an “adequate vehicle for the complete and prompt resolution of the issues 

between the parties.” Moses, 460 U.S. at 28. This is because the federal RESPA claim 

is largely derivative of the underlying state claims concerning what force, if any, the 

2017 Modification of Terms Agreement has. Moreover, the mere presence of a federal 

cause of action itself is not dispositive because the parallel nature of actions cannot “be 

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dispelled by repackaging the same issue under different causes of action.” Clark, 376 

F.3d at 686–87.

For these reasons, the state appeal and the instant case are parallel because they 

involve the same parties, an identical set of facts, and present substantially similar legal 

issues. See Freed, 756 F.3d at 1020 (“The factual allegations and legal analyses in the 

cases largely overlap, and the issues will be resolved largely by referencing the same 

facts and evidence. Therefore, the issues in the two cases, while not identical, are 

substantially the same.”). 

2. The Colorado River Factors Favor Abstention

Having concluded that the proceedings are parallel, the Court will address each 

of the ten factors in turn. See Freed, 756 F.3d at 1022 (district courts must “carefully 

address[] each of the ten factors and provide sufficient explanation for its findings”). 

The first factor—whether Illinois has assumed jurisdiction over the property—

favors abstention. Because Old Second initiated a foreclosure action in Illinois state 

court, the Illinois courts—including the Illinois Appellate Court—have assumed

jurisdiction over the subject property. See Beal Bank USA v. Swift, 2017 WL 372325, 

at *4 (N.D. Ill. 2017).

The second factor—whether the federal forum is inconvenient—is neutral 

because both cases are pending in Chicago courts. See Freed v. Friedman, 215 F. Supp. 

3d 642, 655 (N.D. Ill. 2016) (“Because the federal and state suits are pending in courts 

located in Chicago, the federal forum is not inconvenient, and the second factor weighs 

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against abstention.”); Knight v. DJK Real Estate Grp., LLC, 2016 WL 427614, at *6 

(N.D. Ill. 2016) (similar). 

The third factor—the desire to avoid piecemeal litigation—strongly favors 

abstention. Because the foreclosure appeal is substantially likely to dispose of a 

majority of the factual and legal issues presented in this case, abstaining would prevent 

the parties from having to contemporaneously litigate substantially similar issues in 

state and federal court. Specifically, if the Illinois Appellate Court were to rule 

favorably for Old Second, then Karols’ federal case might be wholly or substantially 

dismissed on res judicata grounds. “The Seventh Circuit has made clear that this sort 

of redundancy counsels in favor of a stay.” See Cramblett v. Midwest Sperm Bank, LLC, 

230 F. Supp. 3d 865, 871 (N.D. Ill. 2017) (cleaned up). A stay would also save 

resources and is therefore in line with Colorado River’s intent. The Court observes that 

if “both state and federal proceedings were allowed to proceed, inconsistent rulings 

could jeopardize the appearance and actuality of justice.” Interstate Material Corp. v. 

City of Chicago, 847 F.2d 1285, 1290 (7th Cir. 1988). Such potentially inconsistent 

factual rulings would run afoul of Colorado River and are another reason strongly 

favoring abstention.

The fourth factor—the order in which jurisdiction was obtained—heavily favors 

abstention. The Seventh Circuit has held that differences in filing times as short as 

between five and seventh months favor abstention. See, e.g., Interstate Material Corp., 

847 F.2d at 1290 (seventh months); Lumen Const., Inc. v. Brant Const. Co., 780 F.2d 

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691, 697 (7th Cir. 1985) (five months). Here, jurisdiction was obtained in the state 

court on June 3, 2016—well before Karols’ July 28, 2020 federal complaint. This 

nearly four-year period surpasses seven months and therefore favors abstention. 

Additionally, this delay itself undercuts Karols’ reliance on Clinton v. Jones, 520 U.S. 

681 (1997) because Karols did not pursue their federal claims with all due dispatch. In 

any event, Clinton is easily distinguishable as being about the Executive Office of the 

President—not state court foreclosure judgments. 

The fifth factor—the source of governing law—favors abstention. Counts 2 and 

3 involve state law claims that involve factual issues relating to the 2017 Modification 

of Terms Agreement. Accordingly, these state law claims are best resolved—at least

at this stage—by state courts. Freed, 756 F.3d at 1022 (“[A] state court’s expertise in 

applying its own law favors a Colorado River stay.”). Karols raise a valid argument 

that Count 1—the RESPA claim—is a creature of federal, not state, law, but that claim 

is still substantially “derivative” of the factual and legal issues at play in the Illinois 

appellate action. See Brodsky v. Blake, 2018 WL 1138539, at *10 (N.D. Ill. 2018) 

(collecting cases where federal claims are derivative of state law claims). This factor 

therefore favors abstention. 

The sixth factor—the adequacy of state proceedings to vindicate a plaintiff’s 

rights—is neutral. Because two of the Karols’ claims arise under state law and because 

RESPA grants concurrent jurisdiction to the state court, the state courts can 

satisfactorily protect Karols’ rights. See Willson, 2016 WL 8943333, at *3 (“RESPA 

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provides for concurrent jurisdiction, which indicates a policy in favor of abstention.”). 

Significantly, the Court is also staying, not dismissing, this case which gives the Karols’ 

the opportunity to “revive” the “federal litigation depending on the outcome in state 

court.” Freed, 756 F.3d at 1023. Any delay is also likely to be very short as the Karols’

appeal is currently fully briefed and pending before the First District as of August 31, 

2020. 

The seventh factor—the relative progress of state and federal proceedings—

strongly favors abstention. In this litigation, as in Colorado River, there have been no 

proceedings prior to the filing of this motion. By contrast, the state trial court has 

already issued a foreclosure judgment and the case is currently pending on appeal in the 

Illinois Appellate Court. “[T]his factor weighs in favor of abstention—and heavily so, 

given that the state proceeding is already on appeal.” Cramblett v. Midwest Sperm Bank, 

LLC, 230 F. Supp. 3d 865, 873 (N.D. Ill. 2017); see also Bozek v. Bank of Am., N.A., 

2016 WL 6395509, at *4 (N.D. Ill. 2016) (ordering a Colorado River stay where a 

“judgment of foreclosure has been entered”). 

The eighth factor—the presence or absence of concurrent jurisdiction—also 

favors abstention. Karols’ claims are fundamentally “matters[s] of Illinois mortgageforeclosure law.” Schuller v. Am.'s Wholesale Lender, 2015 WL 5316413, at *5 (N.D. 

Ill. 2015). Accordingly, the Court has no reason to doubt the adequacy of the state-court 

appeal for the Karols’ especially because RESPA grants concurrent jurisdiction in state 

and federal courts. 

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The ninth factor—the availability of removal—is neutral and therefore disfavors 

abstention. The availability of removal has been different at different points in this 

litigation, but the simple fact now is that this case is on appeal and no longer removable.

Taken together with the other factors, any prejudice to the Karols’ is outweighed by the 

legal and factual clarity likely to be provided by the Illinois appellate decision—

especially because a decision is potentially imminent as the state appeal has been fully 

briefed for almost two months.

The tenth and final factor—the vexatious or contrived nature of the plaintiff’s 

federal claims—also favor abstention. “As other courts have recognized, one need not 

comment adversely on a federal plaintiff’s motives to conclude that, because his federal 

court claims closely track his state-court pleadings, the federal suit is vexatious and 

contrived within the meaning of Colorado River.” Brodsky, 2018 WL 1138539, at *13

(cleaned up).

“As explained above, several of these factors—namely, the desirability of 

avoiding piecemeal litigation, the order in which the concurrent forums obtained 

jurisdiction, and the relative progress of the state and federal proceedings—weigh 

particularly heavily in favor of a stay, as they especially indicate that abstention would 

promote wise, efficient judicial administration.” Cramblett, 230 F. Supp. 3d at 874. 

Abstention is therefore warranted and is in line with how other courts in this district 

have handled similar cases. See, e.g., Loughran v. Wells Fargo Bank, N.A., 2019 WL 

6349890 (N.D. Ill. 2019); Kane v. Bank of Am., Nat'l Ass'n, 2017 WL 2243055 (N.D. 

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Ill. 2017); Kinzy v. Howard & Howard, PLLC, 2017 WL 168480 (N.D. Ill. 2017); 

Delaney v. Specialized Loan Servicing, LLC, 2015 WL 7776902 (N.D. Ill. 2015) 

(collecting cases); Nieves v. Bank of Am., N.A., 2015 WL 753977, at *7 (N.D. Ill. 2015); 

Schuller, 2015 WL 5316413.

3. The Court Also Exercises Its Inherent Authority To Issue A Stay 

“[T]he power to stay proceedings is incidental to the power inherent in every 

court to control the disposition of the causes on its docket[.]” Landis v. N. Am. Co., 299 

U.S. 248, 254 (1936). Thus, “[a]part from abstention, the Court enjoys the inherent 

power to stay proceedings before it, to control the disposition of the causes on its docket 

with economy of time and effort for itself, for counsel, and for litigants.” Calleros v. 

FSI Int'l, Inc., 892 F. Supp. 2d 1163, 1171 n.8 (D. Minn. 2012) (cleaned up); e.g., 

Rhodes v. Indep. Blue Cross, 2012 WL 447544, at *3 (E.D. Pa. 2012) (exercising 

court’s inherent authority notwithstanding Colorado River); Melo v. Gardere Wynne 

Sewell, 2005 WL 991600, at *3 n.3 (N.D. Tex. 2005) (similar and noting the 

permissibility of relying on inherent authority “even when other standards for 

abstention are not strictly met”). 

Applying these principles, even if Colorado River abstention were not warranted, 

this Court would still exercise its inherent authority to issue a stay pending the 

forthcoming resolution of the state appeal. This approach is a “measured one” and it 

“protects the substantial rights of the parties while permitting the district court to 

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manage its time effectively.” Ingersoll Mill. Mach. Co. v. Granger, 833 F.2d 680, 686 

(7th Cir. 1987). 

Accordingly, Old Second’s motion is granted. 

CONCLUSION

For the foregoing reasons, Old Second’s motion is granted because Colorado 

River abstention is warranted. Even if Colorado River were not satisfied, the Court 

would nevertheless stay this action under its inherent authority pending resolution of 

the related state appeal. Once the Illinois Appellate Court resolves the appeal, either 

party may move this Court to lift the stay. The parties are also ordered to file a joint 

status report with this Court within seven days of the Illinois Appellate Court’s final 

disposition of the case. It is so ordered. 

Dated: 10/29/2020

___________________________

Charles P. Kocoras 

United States District Judge

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