Bianca Lace Merritt-Wilson v. New American Funding LLC - IFP Denied Federal Foreclosure Claims Dismissed

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April 9, 2026 Get Citation Alerts Download PDF Add Note

Bianca Lace Merritt-Wilson v. New American Funding, LLC, et al.

District Court, S.D. Illinois

• Citations: None known
• Docket Number: 3:26-cv-00393

• Precedential Status: Unknown Status

• Opinion

• Authorities (20)

• Cited By (0)

• Summaries (0)

• Similar Cases (21.7K)

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Trial Court Document

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS

BIANCA LACE MERRITT-WILSON,

Plaintiff,

v. Case No. 26-CV-00393-SPM

NEW AMERICAN FUNDING, LLC,
et al.,

Defendants.

MEMORANDUM AND ORDER

McGLYNN, District Judge:
This matter comes before the Court on a Motion for Leave to Proceed in forma
pauperis (“IFP”) filed by pro se Plaintiff Bianca Lace Merritt-Wilson. (Doc. 3). Because
the Court concludes that it lacks subject matter jurisdiction over this action,
Plaintiff’s Motion is DENIED and this case is DISMISSED without prejudice.
RELEVANT FACUTAL AND PROCEDURAL BACKGROUND
This action arises from a state-court foreclosure concerning Plaintiff’s
residential property located at 1321 Lebanon Avenue in Belleville, Illinois. (Doc. 2,
pp. 1–2). Plaintiff’s Complaint spans nearly thirty pages and describes a lengthy and
contentious history between Plaintiff and the various Defendants involved in the
origination, servicing, and foreclosure of her mortgage loan. (Doc. 2). For purposes of
this Section 1915(e)(2) review, the Court takes “all well-pleaded allegations of the
complaint as true and viewing them in the light most favorable to the plaintiff.”
Luevano v. Wal–Mart Stores, Inc., 722 F.3d 1014, 1027 (7th Cir. 2013)
According to the Complaint, beginning in or about March 2024, Plaintiff
encountered substantial difficulties obtaining accurate information from her loan
service provider, New American Funding, LLC. (“NAF”) (Doc. 2, pp. 7–10). She sent
multiple Qualified Written Requests, Requests for Information, Notices of Error, and

related correspondence to NAF and other Defendants seeking information about the
identity of the creditor, the chain of title, the loan balance, escrow accounting, and
the application of payments. (Id., pp. 8–10). Plaintiff alleges that Defendants failed
to provide complete or consistent responses and that this prevented her from
understanding the true status of her loan. (Id., pp. 8–12).
In August 2024, Plaintiff made a substantial payment of approximately

$4,300.00, which she believed was sufficient to bring the principal and interest
current. (Id., p. 14). She also instructed Defendants to apply available escrow surplus
toward any remaining arrears. (Id., pp. 14–15). Instead, Defendants applied the
payment as periodic installments, continued to treat the loan as delinquent, and
refused to apply escrow surplus funds that she requested be used to cure the default.
(Id., p. 15). Subsequently, a state-court foreclosure action was filed and proceeded to
judgment. Plaintiff acknowledges that the state court entered an Order of Foreclosure

and later an Order Confirming Sale and Order for Possession. (Doc. 4, p. 2). She also
acknowledges that she has appealed the foreclosure judgment in state court and that
the appeal remains pending. (Doc. 2, p. 3).
In this federal action, Plaintiff asserts claims under the Real Estate Settlement
Procedures Act, 12 U.S.C. §§ 2601–2617 (“RESPA”), the Fair Debt Collection
Practices Act, 15 U.S.C. §§ 1692–1692p (“FDCPA”), the Truth in Lending Act, 15
U.S.C. §§ 1601–1667f (“TILA”), the Illinois Consumer Fraud and Deceptive Business
Practices Act, 815 ILCS 505/1 et seq (“ICFA”), and common law negligence alleging
that Defendants’ servicing conduct, notice practices, and handling of escrow and
payments were unlawful and directly interfered with her ability to cure the loan.

(Doc. 2). In her Emergency Motion for Temporary Restraining Order, she asks this
Court to prevent eviction, prevent transfer of the property, and preserve her
possession of the home while this case is litigated. (Doc. 4, pp. 1–2). Although Plaintiff
repeatedly asserts that she is not seeking review of the foreclosure judgment, the
factual allegations and requested relief demonstrate that the injuries she identifies
flow directly from that judgment.

LEGAL STANDARD
A federal court may permit an indigent party to proceed without pre-payment
of fees. 28 U.S.C. § 1915 (a)(1). Nevertheless, a court can deny a qualified plaintiff
leave to file IFP or can dismiss a case if the action is frivolous, malicious, or fails to
state a claim. 28 U.S.C. § 1915 (e)(2)(B). When assessing a motion to proceed IFP, a
district court should inquire into the merits of the plaintiff’s claims, and if the court
finds that the complaint fails to state a claim, it should deny leave to proceed IFP.

Ciarpaglini v. Saini, 352 F.3d 328, 331 (7th Cir. 2003). The analysis of a complaint
pursuant to Section 1915(e)(2)(B)(ii) is governed by the same standard applicable to
motions to dismiss under Federal Rule of Civil Procedure 12(b)(6), Coleman v. Lab.
& Indus. Rev. Comm’n of Wisconsin, 860 F.3d 461, 468 (7th Cir. 2017), which requires
the Court to determine whether the complaint contains “sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
Additionally, this Court has an independent duty to ensure that it has subject
matter jurisdiction to hear cases brought before it. Hammes v. AAMCO

Transmissions, Inc., 33 F.3d 774, 778 (7th Cir. 1994). The Supreme Court has long
instructed that “federal courts, as courts of limited jurisdiction, must make their own
inquiry to ensure that all statutory requirements are met before exercising
jurisdiction.” Page v. Democratic Nat’l Comm., 2 F.4th 630, 634 (7th Cir. 2021).
Subject matter jurisdiction cannot be waived and may be “raised sua sponte by the
court at any point in the proceedings.” Hawxhurst v. Pettibone Corp., 40 F.3d 175, 179 (7th Cir. 1994). In other words, this Court cannot hear this action if it lacks subject
matter jurisdiction, established through diversity citizenship of the parties under 28
U.S.C. § 1332 or pursuant to a federal question under 28 U.S.C. § 1331. Plaintiff has
the burden to prove that subject matter jurisdiction exists. Lee v. City of Chicago, 330
F.3d 456, 468 (7th Cir. 2003) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)).
DISCUSSION

In her Complaint, Plaintiff seeks damages related to purported violations of
RESPA, FDCPA, TILA, ICFA, and common law negligence principles. (Doc. 2).
Critically, all the alleged violations arise from Plaintiff’s dealings with various
Defendants during the months preceding the foreclosure of Plaintiff’s home in
Belleville, Illinois.
The Rooker-Feldman doctrine prohibits parties from challenging state court
decisions in federal district or circuit courts. See Rooker v. Fidelity Trust Co., 263 U.S.
413 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983); Durgins v. City of
East St. Louis, 272 F.3d 837, 843 (7th Cir. 2001). Instead, parties must seek relief via

the cognizant state appellate court infrastructure and may only seek a writ of
certiorari from the Supreme Court once a final determination has been made by the
state’s court of last resort. See Durgins, 272 F.3d 837, 841. The doctrine applies when
the plaintiff’s alleged injury arises from the state court’s judgment itself and applies
not only to the claims raised in state court but also to any claims inextricably
intertwined with those claims. See Manley v. City of Chicago, 236 F.3d 392, 396 (7th

Cir. 2001). Most importantly, parties cannot side-step application of the doctrine by
using a federal civil rights claim to challenge the decision of a state court. See id. at
397–98. When the Rooker-Feldman doctrine applies, dismissing the suit for lack of
subject-matter jurisdiction is required. Frederiksen v. City of Lockport, 384 F.3d 437,
439 (7th Cir. 2004)
Plaintiff’s claims fall squarely within the scope of the Rooker-Feldman doctrine
as applied by the Seventh Circuit in foreclosure-related cases. In GASH Associates v.

Village of Rosemont, the Seventh Circuit held that a plaintiff who lost property in a
foreclosure sale could not pursue a federal claim alleging that the foreclosure was
improper because the injury flowed directly from the state-court judgment. 995 F.2d
726 (7th Cir. 1993). The court explained that the plaintiff “did not suffer an injury
out of court and then fail to get relief from state court; its injury came from the
judgment confirming the sale.” Id. at 729. Because the alleged harm was the
foreclosure itself, any federal claim seeking to undo or compensate for that harm was,
in substance, an impermissible appeal of the state-court judgment. Id. District courts in this Circuit have applied the same reasoning in the mortgage
context. In Byrd v. Homecomings Financial Network, the U.S. District Court for the

Northern District of Illinois considered a borrower’s attempt to challenge a
state-court foreclosure judgment by alleging federal statutory violations and seeking
to prevent the loss of her home. 407 F. Supp. 2d 937 (N.D. Ill. 2005). Although the
plaintiff framed her claims as seeking damages under RESPA, FDCPA, and TILA,
the court observed that the only injury she identified was the foreclosure itself—not
any independent harm caused by the alleged statutory violations. Id. at 943. The

court concluded that the plaintiff’s injury “came from the judgment confirming the
sale” and that her federal claims were either direct attacks on, or inextricably
intertwined with, the state-court foreclosure judgment. Id. Because granting relief
would require the federal court to effectively review and overturn the state-court
judgment, the court held that Rooker-Feldman barred jurisdiction. Id. at 944.
The same logic applies here. Plaintiff alleges that Defendants mishandled
servicing, failed to provide accurate information, misapplied payments, refused to

apply escrow surplus, and pursued foreclosure despite unresolved disputes and
pending loss-mitigation efforts. (Doc. 2, pp. 8–9). She contends that these actions
prevented her from curing the loan and led to the foreclosure of her home. (Id., p. 9).
She further asks this Court to prevent eviction, preserve her possession, and
effectively halt the consequences of the state-court foreclosure and confirmation of
sale. (Doc. 4, pp. 1–2). As in GASH and Byrd, the only injury Plaintiff identifies is the
loss of her property through foreclosure and the resulting threat of eviction. This
injury flows directly from the state-court judgment confirming the foreclosure sale
and issuing an order of possession.
Although Plaintiff frames her claims under RESPA, FDCPA, TILA, ICFA, and

common law negligence, the relief she seeks would require this Court to declare that
the foreclosure was improper or that the state-court judgment should not be given
effect. Under Seventh Circuit precedent, a plaintiff cannot avoid Rooker-Feldman by
repackaging a challenge to a state-court judgment as a federal statutory claim. See
Taylor v. Fed. Nat’l Mortg. Ass’n, 374 F.3d 529, 534 (7th Cir. 2004); Holt v. Lake
County Bd. of Comm’rs, 408 F.3d 335, 336–37 (7th Cir. 2005); Ritter v. Ross, [992 F.2d

750](https://www.courtlistener.com/opinion/606040/ritter-v-ross/), 754–55 (7th Cir. 1993). Here, as in those cases, Plaintiff’s alleged injuries and
requested remedies are “inextricably intertwined” with the state-court foreclosure
judgment. Manley, 236 F.3d at 396.
Plaintiff emphasizes that she has a pending appeal in state court and that she
does not ask this Court to “review, reverse, or modify” the foreclosure judgment. (Doc.
2, p. 3; Doc. 4, p. 1). But the Court must look to the substance of the claims and the
relief sought, not the labels Plaintiff attaches to them. See GASH, 995 F.2d at 728–

1. Substantively, Plaintiff asks this Court to prevent eviction, preserve her possession, and grant relief that would undermine or nullify the effect of the state-court foreclosure and confirmation of sale. (Doc. 4, pp. 1–2). That is precisely what Rooker-Feldman forbids. While Plaintiff also seeks statutory and actual damages, the facts underlying those damages claims are the same facts she raised— or could have raised—in the state foreclosure proceedings. See Taylor, 374 F.3d at 533 (“if the plaintiff could have raised the issue in state court proceedings, the claim is barred under the Rooker-Feldman doctrine.”). Since the alleged injuries stem entirely from the foreclosure judgment and its consequences, the damages theories function as a collateral attack on that judgment and are therefore barred by Rooker-

Feldman.
Because Plaintiff’s claims are precluded by Rooker-Feldman, the Court lacks
subject matter jurisdiction. Frederiksen, 384 F.3d at 439. Accordingly, it cannot reach
the merits of Plaintiff’s claims, her request for emergency injunctive relief, or the
sufficiency of her allegations under Section 1915(e)(2). The only appropriate course is
dismissal for want of jurisdiction, which must be without prejudice. Kowalski v.

Boliker, 893 F.3d 987, 994–95 (7th Cir. 2018) (“a dismissal for want of subject-matter
jurisdiction is necessarily without prejudice because it does not preclude pursuit of
the action in a different forum.”). The Court need not provide Plaintiff Merritt-Wilson
with leave to amend her pleadings in accordance with Federal Rule of Civil Procedure
15(a)(2) because the defect here is jurisdictional, not a matter of pleading, and no
amendment could cure the deficiencies identified in this Order. See Villa v. City of
Chicago, 924 F.2d 629, 632 (7th Cir. 1991) (explaining that although amendment is

discretionary, it should be denied when it would be futile).
CONCLUSION
Therefore, Plaintiff Bianca Lace Merritt-Wilson’s Motion for Leave to Proceed
in forma pauperis is DENIED and this case is DISMISSED without prejudice. All
other pending matters are hereby DENIED as moot. The Clerk of Court is
DIRECTED to close this case on the Court’s docket.
IT IS SO ORDERED.
DATED: April 9, 2026

s/ Stephen P. McGlynn
STEPHEN P. McGLYNN
U.S. District Judge