Kadiyala v. Servicing (Feb. 6, 2026)

Case details
Full caption
Ravi Kadiyala v. Shellpoint Mortgage Servicing et al.
Country
United States
Jurisdiction
Federal
Decided
Feb. 6, 2026
Disposition
Motion Granted
Majority
Sunil R. Harjani (J.) (unanimous Court)
RAVI KADIYALA, Plaintiff, v. SHELLPOINT MORTGAGE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 323295Only the Westlaw citation is currently available.United States District Court, N.D. Illinois, Eastern Division,EASTERN DIVISION.RAVI KADIYALA, Plaintiff,v.SHELLPOINT MORTGAGE SERVICING,DIRECTOR’S MORTGAGE GROUP,and POPULAR BANK, Defendants.Case No. 25 cv 9363|Filed: 02/06/2026Editor's Note: This decision contains discussion of citationreferences that are incorrect or do not actually exist. Theseinvalid citations appeared in the original court opinion andhave been preserved as written since they are part of theofficial record. Any links to these invalid citations have beenremoved.MEMORANDUM OPINION AND ORDERSunil R. Harjani United States District Judge*1 Ravi Kadiyala seeks to unencumber the title to hishome by suing Defendants Shellpoint Mortgage Servicing,Director's Financial Group, and Popular Bank to void theirclaims to a mortgage and promissory note, cancel a homeequity line of credit, and quiet title. Defendant Shellpoint,with the consent of Popular Bank, removed this case tofederal court. Plaintiff seeks to remand this case back tostate court, or in the alternative, asks this Court to abstainfrom exercising jurisdiction because of ongoing state courtforeclosure actions. [13]. Shellpoint argues that the Courtshould retain jurisdiction and dismiss Plaintiff's claims underFederal Rule of Civil Procedure 12(b)(6). For the reasonsstated below, Plaintiff's motion to remand [13] is denied, andShellpoint's motion to dismiss [9] is granted.BackgroundPro se Plaintiff Ravi Kadiyala owns and resides at 2000Mustang Drive, Naperville, IL 60565 (Mustang Property).[1-1] 2. This property is subject to a mortgage and aHome Equity Line of Credit (HELOC) currently owned byDefendants Shellpoint and Popular Bank, respectively. Id. ¶¶2–7. The details of these instruments are not relevant to theissues before the Court beyond a few allegations about theirorigination.On October 25, 2013, Plaintiff executed a promissory noteand mortgage in favor of Defendant Director's FinancialGroup (DFG). Id. ¶¶ 5, 10. Plaintiff alleges that in October2013, DFG was: (1) “Not registered to conduct business inIllinois with the Illinois Secretary of State;” (2) “not licensedto issue/lend mortgages under the Residential MortgageLicense Act of 1987 (205 ILCS 635); and” (3) “notlicensed to originate mortgage loans under the ResidentialMortgage License Act of 1987 (205 ILCS 645).” Id. 6.This mortgage was later assigned to Defendant ShellpointMortgage Servicing (Shellpoint), which currently servicesand owns the mortgage. Id. ¶¶ 3, 4. The second instrument isa HELOC held by Defendant Popular Bank. Id. 7.Plaintiff brought this action in the Circuit Court of DuPageCounty on June 17, 2025. [1-1]. On August 7, 2025,Shellpoint, with the written consent of Popular Bank,removed this case to federal court. [1]; [1-3]. In the removalnotice, Shellpoint claimed that the removal was timelyunder 28 U.S.C. § 1446(b) and that venue is proper in thisDistrict under 28 U.S.C. § 1441(a). [1] ¶¶ 4, 5. Shellpointfurther asserted that this Court has subject matter jurisdictionpursuant to 28 U.S.C. § 1332 because Plaintiff is a citizenof Illinois, Shellpoint is a citizen of Delaware and NewYork, Popular Bank is a citizen of New York, and DFGis a defunct entity with a last-known principal place ofbusiness in California. Id. ¶¶ 8–11. According to Shellpoint,the amount in controversy for diversity jurisdiction is metas Plaintiff seeks an order discharging a mortgage for$380,000, and quieting title to real estate estimated to beworth approximately $853,200. Id. 12.Legal StandardPlaintiff moves to remand this case back to DuPage CountyCourt under Section 1447(c), which provides, in relevant part,a “motion to remand the case on the basis of any defect otherthan lack of subject matter jurisdiction must be made within30 days after the filing of the notice of removal under section1446(a).” 28 U.S.C. § 1447(c). The failure to timely bringthe motion to remand results in a waiver of any such defects.
RAVI KADIYALA, Plaintiff, v. SHELLPOINT MORTGAGE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2Pettitt v. Boeing Co., 606 F.3d 340, 343 (7th Cir. 2010). “Theparty seeking removal has the burden of establishing federaljurisdiction, and federal courts should interpret the removalstatute narrowly, resolving any doubt in favor of the plaintiff'schoice of forum in state court.” Schur v. L.A. Weight LossCenters, Inc., 577 F.3d 752, 758 (7th Cir. 2009).*2 Shellpoint moves to dismiss this case under Rule12(b)(6). “A motion under Rule 12(b)(6) tests whether thecomplaint states a claim on which relief may be granted.”Richards v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012).Under Rule 8(a)(2), a complaint must include only “a shortand plain statement of the claim showing that the pleader isentitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a Rule12(b)(6) motion, “a complaint must contain sufficient factualmatter, accepted as true, to ‘state a claim to relief that isplausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570(2007)). This pleading standard does not necessarily requirea complaint to contain detailed factual allegations. Twombly,550 U.S. at 555. Rather, “[a] claim has facial plausibilitywhen the plaintiff pleads factual content that allows the courtto draw the reasonable inference that the defendant is liablefor the misconduct alleged.” Adams v. City of Indianapolis,742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S.at 678). The allegations “must be enough to raise a rightto relief above the speculative level.” Twombly, 550 U.S. at555. When deciding a motion to dismiss under Rule 12(b)(6), the court accepts as true all factual allegations in thecomplaint and draws all inferences in favor of the plaintiff.Heredia v. Capital Management Services, L.P., 942 F.3d 811,814 (7th Cir. 2019). However, a complaint must consist ofmore than “threadbare recitals of the elements of a cause ofaction, supported by mere conclusory statements[.]” Iqbal,556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).DiscussionPlaintiff brings four claims against Defendants: Count I -Declaratory Judgment (Void Mortgage and Note – Lack ofLicensure by DFG), Count II - Quiet Title, Count III -Cancellation of Instruments, and Count IV - Lack of Standingto Enforce Mortgage. [1-1]. Plaintiff has moved to remand.Shellpoint has moved to dismiss Counts I, II, and IV forfailing to state a claim under Rule 12(b)(6).1I. Motion to RemandA defendant has the right to remove an action brought instate court to federal court when the federal court has originalsubject matter jurisdiction. 28 U.S.C. § 1441(a). Federaldiversity jurisdiction exists when the action involves citizensof different states, and the amount in controversy exceeds$75,000.00 per plaintiff, exclusive of interest and costs. 28U.S.C. § 1332(a). In the removal petition, Shellpoint asserts,and Plaintiff does not contest, that diversity jurisdictionexists. Instead, Plaintiff filed a motion to remand. [13]. But,although titled as a motion to remand, Plaintiff's openingbrief exclusively argues that this Court should abstain fromdeciding this case because of parallel state court cases. Later,Plaintiff argues for the first time in his reply brief that theremoval was procedurally deficient because there was not“continuing unanimity among defendants until” the removalissue was resolved. [17] at 3–4.Plaintiff waived this argument twice over. First, Plaintiffwaived the argument by not bringing it in his initial brief.White v. United States, 8 F.4th 547, 552 (7th Cir. 2021)(“Arguments raised for the first time in [a] reply brief arewaived because they leave no chance to respond.”). Theargument is also waived because by the time Plaintiff raisedit, the 30-day window for raising procedural defects expired.“Once a defendant has filed a notice of removal in the federaldistrict court, a plaintiff objecting to removal ‘on the basisof any defect in removal procedure’ may, within 30 days,file a motion asking the district court to remand the case tostate court.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 69 (1996)(quoting § 1447(c)). Even if this argument could have beenraised as a defect to removal, by raising it outside of the30-day window, Plaintiff waived the argument. See Doe v.GTE Corp., 347 F.3d 655, 657 (7th Cir. 2003) (“This defectin the removal process could have justified a remand, butbecause 30 days passed without protest—and the problemdoes not imperil subject-matter jurisdiction—the case is infederal court to stay.”); Pettitt v. Boeing Co., 606 F.3d 340,343 (7th Cir. 2010) (procedural “defects are waived if a partydoes not bring a timely motion to remand the case to statecourt.”). Therefore, Plaintiff's argument about the proceduraldefect is waived.*3 However, even if the Court liberally construed Plaintiff'spro se opening brief, his continuing unanimity argument doesnot withstand scrutiny.2 For removal in a multi-defendantcase, all served defendants must jointly consent in writingwithin the 30-day time limit. Roe v. O'Donohue, 38 F.3d 298,301 (7th Cir. 1994), overruled in part on other grounds byMurphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S.
RAVI KADIYALA, Plaintiff, v. SHELLPOINT MORTGAGE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3344 (1999). Here, Shellpoint filed Popular Bank's writtenconsent with its notice of removal, which is sufficient underthe statute.3 [1-3]. Thus, Plaintiff's motion for remand isdenied.II. AbstentionNext, in the motion to remand, Plaintiff argues that this Courtshould abstain from deciding this case under the ColoradoRiver doctrine. Abstention is appropriate under ColoradoRiver “when a concurrent state court case is underway, butonly under exceptional circumstances and if it would promote‘wise judicial administration.’ ” Freed v. J.P. Morgan ChaseBank, N.A., 756 F.3d 1013, 1018 (7th Cir. 2014) (quotingColorado River Water Conservation Dist. v. United States,424 U.S. 800, 817–18 (1976)). The Supreme Court hascautioned courts that in addressing abstention, “the task ofthe district court ‘is not to find some substantial reason forthe exercise of federal jurisdiction’ but instead ‘to ascertainwhether there exist exceptional circumstances, the clearest ofjustifications, to justify the surrender of that jurisdiction.’ ”Huon v. Johnson & Bell, Ltd., 657 F.3d 641, 646 (7th Cir.2011) (quoting Moses H. Cone Mem. Hosp. v. Mercury Const.Corp., 460 U.S. 1, 25–26 (1993) (cleaned up)). This requirescourts first to consider whether the state and federal litigationare parallel. Freed, 756 F.3d at 1018. “If the actions are notparallel, the Colorado River doctrine does not apply, and thecourt need not address the second part of the analysis.” Id. Ifthe cases are parallel, then the Court must determine “whether‘exceptional circumstances’ justify abstention.” Adkins v.VIM Recycling, Inc., 644 F.3d 483, 498 (7th Cir. 2011).A. Parallel Cases“To determine whether a stay is appropriate, a district courtmust first evaluate whether the federal and state cases areparallel.” Huon, 657 F.3d at 646. “In other words, the courtmust ascertain whether ‘substantially the same parties arecontemporaneously litigating substantially the same issuesin another forum.’ ” Id. (quoting Clark v. Lacy, 376 F.3d682, 686 (7th Cir. 2004). “[F]or Colorado River purposes ...[p]recisely formal symmetry” between the state and federalsuits is “unnecessary” to find parallelism. Adkins, 644 F.3d at498–99. The critical question is whether there is a “substantiallikelihood that the state litigation will dispose of all claimspresented in the federal case.” Id. at 499 (quoting Clark, 376F.3d at 686). If the proceedings are not parallel, then theColorado River doctrine does not apply, and a stay is notproper. AAR Int'l, 250 F.3d at 518. If there is any doubt thatcases are parallel, a district court should not abstain. Id. at 520.*4 Plaintiff initially argued that two Illinois foreclosureactions were parallel to this litigation, one brought byPopular Bank and one involving Shellpoint. The case Plaintiffprimarily relied on to support his argument was PopularBank's foreclosure action against Plaintiff and his wife fortheir Mustang Property (Popular Foreclosure Action)—thesame property at issue in this litigation. However, this actionwas voluntarily dismissed in November 2025. [25]. Thesecond state court action is Shellpoint's foreclosure actionagainst the Kadiyalas on a property located at 50 EastBellevue Place #1704, Chicago, Cook County, Illinois (CookCounty Case No. 2024CH08963) (Bellevue ForeclosureAction). However, that foreclosure involves a differentproperty, located in a different county, from the MustangProperty at issue here. In the Bellevue Foreclosure Action, theKadiyalas filed a counterclaim seeking to link the Bellevueand Mustang transactions because both “transactions wereoriginated by the unlicensed DFG entity, were no-cash-outrefinance transactions, and were closed within weeks of eachother in October 2013. They were also closed by the sameclosing/title agent and notary.” [13] at 9. Plaintiff's originalargument focused on why the Popular Foreclosure Action andBellevue Foreclosure Action should be joined in state courtwith this case, because all three actions “arise from the same2013 DFG refinance pipeline involving forged applications,unlicensed origination, and invalid assignments.” [17] at7. However, with the dismissal of the Popular ForeclosureAction, the only remaining state court action is the BellevueForeclosure Action.The Bellevue Foreclosure Action is not parallel to thislitigation as it involves a different property, located in adifferent county, and a different loan. While Plaintiff arguesthat the cases involve the same lender/servicer and thesame DFG-originated loan portfolio, the relevant question iswhether there is a substantial likelihood that the outcome ofthe Bellevue Foreclosure Action will dispose of the claimspresented here. The answer is clearly no, as the propertiesinvolved are different. Whether or not Shellpoint forecloseson the Kadiyalas’ property in Cook County will not resolvewhether Plaintiff can obtain a declaratory judgment and quiettitle to his property in DuPage County. Thus, relying on thelack of parallel cases alone, the Court should not abstainfrom this case and need not consider whether an exceptionalcircumstance exists.
RAVI KADIYALA, Plaintiff, v. SHELLPOINT MORTGAGE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.4B. Colorado River FactorsEven if the cases were parallel, the ten Colorado River factorsalso weigh against abstention. When the state and federal suitsare parallel, the Court may stay the exercise of its jurisdictionunder “exceptional circumstances.” Moses H. Cone Mem'lHosp. v. Mercury Const. Corp., 460 U.S. 1, 25–26 (1983).As such, “a federal court's ability to abstain from exercisingfederal jurisdiction ‘is the exception, not the rule[.]’ ” Adkins,644 F.3d at 496 (quoting Ankenbrandt v. Richards, 504 U.S.689, 705). “These factors are not meant to be a ‘mechanicalchecklist,’ but require careful balancing by the federal districtcourt.” Id. at 501. “ ‘The weight to be given to any onefactor may vary greatly from case to case, depending on theparticular setting of the case,’ but in any case, the evaluationmust be made ‘with the balance heavily weighted in favor ofthe exercise of jurisdiction.’ ” Id. (quoting Moses, 460 U.S.at 16). The factors are:(1) whether the state has assumedjurisdiction over property; (2) theinconvenience of the federal forum;(3) the desirability of avoidingpiecemeal litigation; (4) the order inwhich jurisdiction was obtained by theconcurrent forums; (5) the source ofgoverning law, state or federal; (6)the adequacy of state-court action toprotect the federal plaintiff's rights;(7) the relative progress of state andfederal proceedings; (8) the presenceor absence of concurrent jurisdiction;(9) the availability of removal; and(10) the vexatious or contrived natureof the federal claim.Huon, 657 F.3d at 647–48 (quoting Adkins, 644 F.3d at 500–01).Considering these factors overall, they weigh againstabstention. The Bellevue Foreclosure Action involves anunrelated property and a different loan instrument than thoseat issue in this case. No state court has assumed jurisdictionover the property or the claims related to the MustangProperty at issue here, nor is there a concern about piecemeallitigation, as the properties are unrelated. There is also noinconvenience to either party to litigate this matter in a federalforum. While some of the broad factors favor abstention,such as the claims being based on Illinois law, this Courtroutinely handles Illinois state law claims. After consideringthe factors, plus the presumption against abstention, the Courtfinds they weigh in favor of exercising jurisdiction.C. Quackenbush*5 Lastly, Plaintiff argues that because he is seeking a quiettitle, which is an equitable remedy, the Court may remandor dismiss the action under Quackenbush v. Allstate Ins. Co.,517 U.S. 706, 716–31 (1996). [13] at 7. Defendant arguesthat although Quackenbush allows for courts to remand anaction seeking equitable relief, it does not mandate theirremand, and that Plaintiff still needed to meet the ColoradoRiver abstention requirements. [16] at 2–3. Plaintiff does notrespond to this argument in his reply brief.As an initial point, Plaintiff waived the argument by notresponding to Shellpoint's arguments. See Webb v. Frawley,906 F.3d 569, 581 (7th Cir. 2018) (“Webb has waived anycounterarguments he may have had by not responding toFrawley's argument on this topic in his reply brief.”); Inre GT Automation Grp., Inc., 828 F.3d 602, 605 (7th Cir.2016) (“An argument not responded to is ordinarily deemedwaived.”). Further, even in Plaintiff's opening brief, it isunclear what his argument is for how Quackenbush applies,which is another basis for waiver. Gross v. Town of Cicero,Ill., 619 F.3d 697, 704 (7th Cir. 2010) (“[I]t is not thiscourt's responsibility to research and construct the parties’arguments, and conclusory analysis will be construed aswaiver.”); Lewis v. Mills, 677 F.3d 324, 332 (7th Cir. 2012)(“Unsupported and underdeveloped arguments are waived.”)(cleaned up). Moreover, Quackenbush does not provide anindependent path for dismissal or remand; it merely allows forfederal courts to dismiss or remand a case based on abstentionprinciples where equitable relief is sought. Quackenbush, 517U.S. at 721. But Plaintiff has not established that abstentionis appropriate here, so Quackenbush does not provide a basisto remand.III. Motion to DismissTurning to Defendant Shellpoint's motion to dismiss forfailure to state a claim, Shellpoint seeks to dismiss CountI (Declaratory Judgment (Void Mortgage and Note)), CountII (Quiet Title), and Count IV (Lack of Standing to Enforce
RAVI KADIYALA, Plaintiff, v. SHELLPOINT MORTGAGE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.5Mortgage). As to Count I, Shellpoint contends that the Illinoislegislature amended the Residential Mortgage License Actto prohibit this claim that a mortgage is void because ofimproper licensing. Shellpoint asserts that Count II fails tostate a claim because it has a valid mortgage, so Plaintiffcannot obtain a quiet title. Lastly, on Count IV, Shellpointargues that the lack of standing to enforce a mortgage is anaffirmative defense, which cannot be raised by a plaintiff asan independent claim.A. Count I: Declaratory Judgment(Void Mortgage and Note)In Count I, Plaintiff alleges that all mortgage lenders arerequired “to be licensed to originate and lend residentialmortgage loans in Illinois” under the Residential MortgageLicense Act of 1987 (205 ILCS 635/1-3(a)) (RMLA). [1-1] 17. According to Plaintiff, DFG was not licensed or registeredat the time of origination and lending, so the promissory noteand mortgage are void and unenforceable. Id. ¶¶ 18, 19.Defendant argues that in July 2015, the Illinois legislatureamended RMLA to abrogate the line of Illinois cases that heldthat a mortgage made by an entity that lacks authorizationunder the RMLA was void as against public policy. [10] at3. The Illinois legislature amended RMLA in 2015 to state:“A mortgage loan brokered, funded, originated, serviced, orpurchased by a party who is not licensed under this Sectionshall not be held to be invalid solely on the basis of a violationunder this Section.” 205 ILCS 635/1–3(e). “The legislativeintent of the plain language of this amendment seems to beto abrogate [an Illinois state appellate court's] holding thata mortgage made by an unlicensed lender is void as againstpublic policy.” Nationstar Mortg. LLC v. Missirlian, 2017 ILApp (1st) 152730, 15. “The amendment explicitly statesthat it is intended to clarify, not change, existing law, andis consistent with the License Act's preexisting provisions,which do not provide for any private remedies for violationsof its licensing requirements, such as a private right of actionor the right of a mortgagor to avoid a mortgage obtained byan unlicensed lender.” Id. 15. “Thus, as the amendmentmakes clear, there is not (and has never been) a right to void amortgage that violates the Licensing Act.” Wells Fargo Bank,N.A. v. Maka, 2017 IL App (1st) 153010, 20. Thus, asamended, RMLA does not allow for a mortgage loan to beinvalidated solely based on an RMLA licensing violation. Id.*6 Plaintiff does not dispute that this is the governinglaw. Instead, Plaintiff attempts to allege a whole new setof facts as the basis for his requested declaratory judgmentin his response brief. [30] at 4–7. But a plaintiff cannotamend his complaint in a response brief. See Agnew v. Nat'lCollegiate Athletic Ass'n, 683 F.3d 328, 348 (7th Cir. 2012)(“[I]t is a basic principle that the complaint may not beamended by the briefs in opposition to a motion to dismiss[.]”)(quoting Thomason v. Nachtrieb, 888 F.2d 1202, 1205 (7thCir. 1989)). While a plaintiff may elaborate on the claimsraised in the complaint, “those materials or elaborations” mustbe “consistent with the pleadings.” Heng v. Heavner, Beyers& Mihlar, LLC, 849 F.3d 348, 354 (7th Cir. 2017) (quotingGeinosky v. City of Chi., 675 F.3d 743, 745 n.1 (7th Cir.2012)).As alleged, the only basis on which Plaintiff claims themortgage is void is because “DFG was not licensed orregistered at the time of origination and lending, rendering thepromissory note and mortgage void and unenforceable as amatter of law and public policy.” [1-1] 18. But under RMLA,a mortgage cannot be deemed void because it was originatedby a party that lacked proper licensing. 205 ILCS 635/1–3(e). Therefore, Plaintiff failed to state a claim in Count I,and it is dismissed. To the extent Plaintiff seeks to makeadditional allegations about the assignments, they must be inan amended complaint.B. Count II: Quiet TitleNext, in Count II, Plaintiff seeks an order to obtain quiettitle on the Mustang Property “and remove all clouds basedon the void promissory note, mortgage, and HELOC.” [1-1] 24. Plaintiff alleges that “Defendants assert claims orencumbrances on the title to the property that are withouta lawful basis.” Id. 23. Shellpoint argues that since themortgage is valid, it cannot constitute a cloud on the title,so Count II must be dismissed. [10] at 4. Plaintiff respondsthat his quiet title count should survive because he allegedthat the assignments are “plausibly void ab initio because theyare disconnected from the 2013 note sale/servicing transferand were executed years later by or through entities withoutauthority (including DFG's lack of corporate capacity).” [30]at 9–10.However, as with Count I, Plaintiff does not make thoseallegations in his Complaint and instead raises them forthe first time in his response brief to the motion to
RAVI KADIYALA, Plaintiff, v. SHELLPOINT MORTGAGE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.6dismiss. Plaintiff cannot use his response brief to amendhis complaint to add new theories and expanded allegations.Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v.Walgreen Co., 631 F.3d 436, 448 (7th Cir. 2011) (“Theeffort founders, however, because of the axiomatic rule that aplaintiff may not amend his complaint in his response brief.”).Therefore, the motion to dismiss Count II is granted.C. Count IV: Lack of Standing to Enforce MortgageLastly, in Count IV, Plaintiff alleges that “Shellpoint has notproduced evidence of a complete chain of assignments, proofof consideration, endorsement, or allonge of the original wet-ink promissory note.” [1-1] 29. Thus, “[n]either of theDefendants has standing to enforce the promissory note ormortgage under Illinois law.” Id. 30. Shellpoint argues thatunder Illinois law, a lack of standing to enforce a mortgageis an affirmative defense that must be pled and proven by thedefendant, and not an independent cause of action. [10] at4. And that even if Plaintiff could raise this claim, he lacksstanding to challenge those transfers as he was not a party tothem. Id.*7 Plaintiff responds that he is challenging the recordedinstruments as void for lack of authority. He claims he isseeking equitable relief and not enforcing a contract. [30]at 10. Further, Plaintiff asks the Court for leave to amendhis complaint so this count can be “restyled or folded intoCount I/II” or for this count to be construed as a declaratoryjudgment. [30] at 11. In its reply brief, Shellpoint arguesthat Plaintiff cannot affirmatively raise this as a claim in thisaction, as it is an affirmative defense to a foreclosure action,and that Plaintiff is improperly seeking an advisory opinion.[34] at 6.Under Illinois law, in a foreclosure action, after “a plaintiffhas filed a complaint, a defendant may raise the plaintiff's lackof standing as an affirmative defense.” Rosestone Invs., LLCv. Garner, 2013 IL App (1st) 123422, 24; see also DeutscheBank Nat. Tr. Co. v. Iordanov, 2016 IL App (1st) 152656, 34. This is not what occurred here. Instead, Plaintiff attemptsto affirmatively bring an independent claim that Shellpointlacks standing to enforce the mortgage. Plaintiff proffered noargument or legal precedent that allows for this defense to beraised as an independent claim, and this Court found none.As such, Count IV is dismissed for failure to state a claim onwhich relief can be granted.ConclusionFor the reasons stated above, Plaintiff's motion to remand [13]is denied, and Defendant's motion to dismiss [9] is granted.Plaintiff may refile an amended complaint if he can curethe deficiencies and such an amendment is consistent withhis obligations under Federal Rule of Civil Procedure 11.Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago &Nw. Indiana, 786 F.3d 510, 519–20 (7th Cir. 2015) (“Unless itis certain from the face of the complaint that any amendmentwould be futile or otherwise unwarranted, the district courtshould grant leave to amend after granting a motion todismiss.”). If Plaintiff does not file an amended complaintby February 27, 2026, then the dismissal will automaticallyconvert to a dismissal with prejudice.SO ORDERED.All CitationsSlip Copy, 2026 WL 323295Footnotes1Popular Bank did not join Shellpoint's motion or bring its own motion. As Count III is only against PopularBank and was not discussed in the motion to dismiss, the Court does not address it here.2The case plaintiff cites to support this proposition—Chicago Title & Land Tr. Co. v. JS II, LLC, No. 11-cv-50249, 2012 WL 2343416 (N.D. Ill. June 20, 2012)—does not exist. It's quite clear from the format ofthe motion that Plaintiff is using an AI tool. Plaintiff should proceed with caution in any future filings as alllitigants, whether represented by counsel or not, “must read their filings and take reasonable care to avoid
RAVI KADIYALA, Plaintiff, v. SHELLPOINT MORTGAGE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.7misrepresentations, factual and legal.” Jones v. Kankakee Cnty. Sheriff's Dep't, ___ F.4th ___, 2026 WL157661, at *3 (7th Cir. Jan. 21, 2026); Fed. R. Civ. P. 11(b)(2), (3). A failure to do so may result in Rule11 sanctions.3The parties do not dispute that DFG's consent was not required as it was not served in the state court case.[1] 15; [13] at 2; 28 U.S.C. § 1446(b)(2).End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
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