October 27, 2016
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 15 C 08454 -
Charles R. Norgle, Judge. No. 15 C 11618 - Robert W.
Gettleman, fudge. No. 16 C 01897 - Milton I. Shadur, fudge.
WOOD, Chief Judge, and BAUER and MANION, Circuit Judges.
these three separate cases consolidated on appeal, appellants
challenge the dismissal of their claims brought under the
Fair Debt Collection Practices Act, 15 U.S.C. § 1692,
et. seq. Appellants in Heng, et al., v. Heavner,
et al., separately challenge the district court's
order striking an exhibit, and also challenge the district
court's denial of their request for leave to amend. We
not discuss the specifics for each individual case because
the underlying facts are consistent (the exception to this is
the procedural history in Heng). Appellants obtained
a Federal Housing Administration-insured residential mortgage
loan and subsequently defaulted due to financial
hardship.Appellees are law firms that represent the
loan servicing agents; they filed foreclosure complaints in
Illinois state court against appellants. These complaints
generally followed the statutory complaint template set forth
in Section 15-1504(a) of the Illinois' Mortgage
Foreclosure Law. See 735 Ill.Comp.Stat.
5/15-1504(a). The template includes the following language:
"Names of defendants claimed to be personally liable for
deficiency, if any[, ]" and, "[a] personal judgment
for a deficiency, if sought." Id. at
5/15-1504(a)(3)(M), (3)(iii). Appellees included both
allegations in their foreclosure complaints, and identified
appellants to be personally liable for any deficiency.
filed suit against appellees, alleging violations of the
FDCPA. According to the complaints, the FHA does not
authorize deficiency judgments where, as here, appellants
suffered a financial hardship. Attached as an exhibit to
their complaints, appellants included a letter from the FHA
responding to a Freedom of Information Act request. In part,
the FHA's response provided:
There have been zero foreclosed FHA loans in Illinois in
which the pursuit of a deficiency judgment was authorized.
FHA is not currently pursuing deficiency judgments[T]he
Department has determined it is not [in] the best interests
of FHA to routinely seek deficiency judgments in connection
with [claims without conveyance of title or
"CWCOT"] claims. Therefore, FHA is not requesting
that the mortgagees pursue any deficiency judgments in
connection with CWCOT claims, unless FHA makes a special
request pursuant to 24 C.F.R. [§] 203.369. ... Since FHA
is not currently pursuing deficiency judgments, we do not
maintain any reports tracking deficiency judgments.
filed a motion to dismiss, which the district court granted
under Federal Rule of Civil Procedure 12(b)(6). Appellants
filed timely notices of appeal. This consolidated appeal
to certain facts pertaining only to the Heng case.
As stated above, appellants filed a complaint and appellee
filed a motion to dismiss. Shortly thereafter, appellants
filed a first amended complaint on December 12, 2015. On
December 23, 2015, appellee filed a motion to dismiss the
amended complaint. Appellants received a letter dated
December 23, 2015, from appellants' loan servicing agent
who was represented by appellee. This letter provided an
explanation about deficiency judgments and an offer to waive
a deficiency judgment.
February 5, 2016, appellants filed a response to the second
motion to dismiss, which included the letter as an exhibit
and allegations concerning it. Appellee filed both a reply
and a motion to strike on February 19, 2016. Appellants were
not given an opportunity to oppose the motion to strike,
which the district court granted without comment.
February 25, 2016, appellants filed a motion to reconsider
the district court's order granting appellee's motion
to strike and, alternatively, requested leave to amend the
first amended complaint to include the exhibit. On March 23,
2016, the district court denied appellants' motion to
reconsider and the alternative request for leave to amend,
and granted appellee's motion to dismiss.