Safeguard Properties says the lawsuit wrongly attempts to challenge the company's businesses practices with no factual or legal basis for doing so. Image: Fotolia

Safeguard Properties filed a motion Tuesday morning to dismiss a lawsuit filed by Illinois Attorney General Lisa Madigan that claims the field service company disposed occupants from their homes illegally.

Madigan’s lawsuit, which was filed in Cook County Circuit Court on Sept. 10, says that Safeguard Properties allegedly locked homeowners out of their housing units even though they weren’t supposed to, removed personal property from homes, and shut off all utilities despite clear evidence that homes were legally occupied. All of these actions violate the Illinois Consumer Fraud Act.

But the Valley View, Ohio-based property preservation firm said in its dismissal motion that the AG’s allegations facts are wrong because they don’t comply with federal and local laws.

“Every day, consistent with obligations imposed both by federal guidelines and state and local laws, Safeguard vendors inspect properties delinquent on their mortgages and secure those found vacant or abandoned, thereby addressing the epidemic of blight, depressed home values, and criminal activity caused by abandoned homes from the foreclosure crisis that began in 2008 and continues to this day,” the field service company said.

“In focusing on just four allegedly erroneous vacancy determinations by Safeguard vendors over the past five and a half years—when the company currently performs approximately 90,000 property inspections and 7,000 preservations every month in Illinois alone—the lawsuit wrongly attempts to challenge Safeguard’s businesses practices with no factual or legal basis for doing so,” the company continued.

Madigan claims Safeguard violated the “deceptive conduct” rule under the ICFA, as well as the statute’s prohibition against “unfair business practices.”

To prove the “deceptive conduct” assertion, a plaintiff must show the following evidence: a deceptive practice by the defendant, intent for the targets of the deceptive conduct to rely upon this deception, and that the deception occurred in the course of trade or commerce. Also, a plaintiff alleging “unfair conduct” must show that the defendant intended consumers to rely on defendant’s supposedly unfair practices.

The state contends that Safeguard deceived mortgagors by placing a sticker on the door of properties found to be vacant. But Safeguard says the sticker attached on the property basically informs the reader of the vacancy determination to contact the field service company if the home is actually occupied.

Here is what the informational posting said: “IMPORTANT! We found this property to be vacant/abandoned. This information will be reported to the mortgage holder. The mortgage holder has the right and duty to protect this property. The property will be rekeyed and/or winterized within 3 days. If this property is NOT VACANT, please contact Safeguard Properties at 877-340-8482."

A federal court less than four months ago rejected the precise ICFA deceptive conduct theory (Hill v. Wells Fargo Bank) that Madigan asserted against Safeguard Properties. The court held that the notice could not support an ICFA claim because the final sentence of the posting makes clear that…the owner can stop the field service company from securing the property by calling and informing it that that property is not vacant.

“The same result should follow here: Safeguard’s posting provides the same notice that a vacancy determination was made and of a plan to rekey or winterize the property, and requests a telephone call to correct the determination if that determination was wrong,” the dismissal motion says.

“Safeguard never solicited consumers nor induced their reliance. Thus, the complaint does not allege any facts showing that Safeguard intended mortgagors to rely on Safeguard’s vacancy determinations,” the company added. “Here the state does not allege sufficient facts to state a claim under either theory. Nor does the state plead sufficient facts to justify the extraordinary injunctive relief it seeks—an injunction barring Safeguard from performing any work in Illinois.”

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