In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16‐3544
DERICK L. BERRY,
Plaintiff‐Appellant,
v.
WELLS FARGO BANK, N.A. & HSBC BANK USA, N.A., as Trus‐
tee for NOMURA PMSR NHELI Asset Backed Certificate
Series 2006‐AF1,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 15 C 5269 — Virginia M. Kendall, Judge.
____________________
ARGUED JULY 6, 2017 — DECIDED AUGUST 1, 2017
____________________
Before POSNER, KANNE, and SYKES, Circuit Judges.
POSNER, Circuit Judge. In 2006 the plaintiff, Derick Berry,
had taken out a 30‐year, fixed‐rate mortgage of approximate‐
ly $270,000 to pay for improvements to his Chicago home.
He denies having missed any payments on the mortgage,
2 No. 16‐3544
but nevertheless the mortgage was foreclosed later that year.
He fought the foreclosure. The following year HSBC, as trus‐
tee of the mortgagee, took over the foreclosure suit against
Berry. Years of protracted litigation in the Illinois state court
system ensued, with Berry arguing that HSBC did not have
the right to foreclose on his home, that he didn’t know how
much he owed and to whom, and that he should have re‐
ceived a loan modification. He contested a judicial sale of his
home in 2010 that the Illinois court later set aside as prema‐
ture. And he contended that HSBC had discriminated
against him because of his race (Berry is African‐American),
thereby violating the Fair Housing Act, 42 U.S.C. §§ 3601
et seq.
The final judicial sale of the mortgaged property took
place in 2015, and while he argued that the defendants had
violated Illinois’s notice requirements for judicial sales, the
state court disagreed. Shortly before the sale, Berry had filed
the present, federal suit against both HSBC and Wells Fargo,
his mortgage servicer (a company to which some borrowers
pay their mortgage loan payments and which performs oth‐
er services in connection with mortgages and mortgage‐
backed securities), accusing them of charging improper fees,
misstating the amount he owed, and discriminating against
him because of his race. He alleges that he had had difficulty
obtaining information from them about what he owed and
to whom, that they had not granted him a loan modification
despite promising to do so, that his home had been sold
prematurely in 2010, and that they had hounded him for
payments that he says he did not owe.
His original federal complaint had made claims under
the Fair Housing Act, the Equal Credit Opportunity Act, 15
No. 16‐3544 3
U.S.C. §§ 1691 et seq., and the Truth in Lending Act, 15 U.S.C.
§ 1639, as well as a number of state statutory and common
law claims including breach of contract, negligence, and
consumer fraud, the basis of federal jurisdiction over those
claims being the supplemental jurisdiction of the federal
courts. The district court dismissed the federal claims as un‐
timely and declined to exercise supplemental jurisdiction
over the state law claims, but allowed Berry to file an
amended complaint that realleged many of the same facts
but also invoked the court’s diversity jurisdiction and modi‐
fied several of his state law claims. By the time Berry had
amended his federal complaint, however, the state court had
confirmed the sale of the home. The court having rendered a
final judgment, the defendants moved to dismiss Berry’s
amended federal complaint on several grounds, including
claim preclusion. The district judge obliged, ruling that the
amended complaint raised “the same claims he presented to
challenge the foreclosure in state court: his defaulted mort‐
gage, subsequent attempts to obtain a modification, alleged
failures in communication with Wells Fargo during those
attempts, and disputes regarding payments and fees related
to the mortgage and his subsequent default.” Berry had even
argued in state court, in an unsuccessful attempt to convince
that court to defer to the pending federal litigation, that his
federal lawsuit concerned the same “events and actions” as
the state one. Because judgment had been entered in state
court and the parties were the same or, in the case of Wells
Fargo, in privity with a party (HSBC), claim preclusion ap‐
plied; that is, the federal court would not reconsider claims
of Berry’s that the state court had rejected.
The district court allowed Berry to amend his complaint
one last time. The amended complaint alleged most of the
4 No. 16‐3544
same facts as his earlier complaints, but added a charge that
security officers at the public‐housing complex to which he’d
moved after the loss of his home had searched his apartment
unlawfully, though he did not name them as defendants. He
added a state law claim for infliction of emotional distress
but abandoned many of his other state law claims and his
Equal Credit Opportunity Act claim, and having previously
withdrawn his Truth in Lending Act claim his Fair Housing
Act claim was his only remaining federal claim. The district
court concluded that Berry’s latest complaint “rehashe[d] the
same arguments and facts that he already presented to the
state court and this Court previously,” and any new allega‐
tions still arose out of the “same set of operative facts” that
the court already had reviewed. The district court concluded
that Berry’s claims were all claim‐precluded, thus requiring
dismissal—this time with prejudice—of his suit.
Berry argues that the district court erred by dismissing
his suit on the basis of preclusion. Typically a defendant
must specify claim preclusion as an affirmative defense in
his answer, to be able to avail himself of it, then file a Rule
12(c) motion for judgment on the pleadings. But Berry’s
state‐court filings gave the district court everything it need‐
ed in order to be able to rule on the defense, Walczak v. Chi‐
cago Board of Education, 739 F.3d 1013, 1016 n. 2 (7th Cir.
2014), and Berry presents no evidence that the district court
neglected to consider regarding preclusion. See United States
v. Rogers Cartage Co., 794 F.3d 854, 861 (7th Cir. 2015).
Under Illinois law, claim preclusion bars a second lawsuit
when (1) the first suit resulted in a final judgment on the
merits rendered by a court of competent jurisdiction; (2) the
two suits present the same causes of action; and (3) they
No. 16‐3544 5
have the same parties or privies. The first and third elements
are met. An order approving a foreclosure sale is a final
judgment under Illinois law. See EMC Mortgage Corp. v.
Kemp, 982 N.E.2d 152, 154 (Ill. 2012). HSBC, one of the two
defendants here, was the plaintiff in the foreclosure suit.
Wells Fargo was not a plaintiff in that suit, but its interests as
the mortgage servicer are no different from those of HSBC,
the legal representative of the mortgagee. “Typically, a mort‐
gage servicer acts as the agent of the mortgagee to effect col‐
lection of payments on the mortgage loan. Thus, it will be a
rare case in which those two parties are not perfectly identi‐
cal with respect to successive suits arising out of a single
mortgage transaction.” R.G. Financial Corp. v. Vergara‐Nuñez,
446 F.3d 178, 187 (1st Cir. 2006). Berry gives no reason for be‐
lieving this case atypical, so we conclude that there was priv‐
ity between the two companies. See Cooney v. Rossiter, 986
N.E.2d 618, 625 (Ill. 2012).
The second element (the two suits present the same caus‐
es of action) has also been satisfied; “separate claims are con‐
sidered the same cause of action for claim‐preclusion pur‐
poses if they arise from a single group of operative facts, re‐
gardless of whether they assert different theories of relief.”
Walczak v. Chicago Board of Education, supra, 739 F.3d at 1016–
17. This includes both “claims actually litigated” and “those
that could have been litigated.” Dookeran v. County of Cook,
Ill., 719 F.3d 570, 576 (7th Cir. 2013).
Berry argues that he had no chance to present in state
court the matters advanced in his federal lawsuit. But he did
present them in state court. His federal complaint and his
state‐court filings describe the same “group of operative
facts,” see Rose v. Board of Election Comm’rs for the City of Chi‐
6 No. 16‐3544
cago, 815 F.3d 372, 375 (7th Cir. 2016). He also argues that the
state court wrongly rejected his motion for leave to file an
affirmative defense under the Fair Housing Act without a
detailed written explanation. But if he was dissatisfied with
the state court’s decision or justifications, his remedy was to
appeal, not to start over with a new suit. In any event he
can’t avoid his previous concession that the two lawsuits de‐
scribe the same “events and actions.” See Parungao v. Com‐
munity Health Systems, 858 F.3d 452, 458–59 (7th Cir. 2017).
Berry argues that claim preclusion should not apply be‐
cause litigating his federal claims would not automatically
nullify the foreclosure sale. See Ross Advertising, Inc.
v. Heartland Bank & Trust Co., 969 N.E.2d 966, 975 (Ill. App.
2012). But it would, because the federal claims are designed
to change the outcome of the state court proceeding.
Berry alleges one set of facts in his second amended
complaint that he did not allege in the state court: the search
of his public‐housing unit. But these allegations describe
conduct by third parties unconnected to Wells Fargo or
HSBC, and Berry doesn’t argue that either defendant was
responsible for those parties’ actions. Thus although these
specific allegations may form the basis for a claim that
would not be precluded by the foreclosure judgment, they
fail to state a claim against either named defendant.
AFFIRMED.