Case 1:09-cv-06746 Document 102 Filed 06/14/10 Page 1 of 15

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

DREW W. PETERSON, )
)
Plaintiff, ) Case No. 1:09-cv-0674
)
v. ) Hon. Ronald A. Guzman
) U.S. District Judge
JPMORGAN CHASE BANK, NA, )
d/b/a CHASE, ) Hon. Nan R. Nolan
) U.S. Magistrate Judge
Defendant. )
PLAINTIFFS MEMORANDA OF LAW IN OPPOSITION
TO DEFENDANTS MOTION TO DISMISS AMENDED COMPLAINT
NOW COMES the DREW W. PETERSON, Plaintiff, by his attorney, WALTER MAKSYM, and
submits the following argument and authorities in opposition to Defendant CHASES Motion to Dismiss his
Amended Complaint and Memoranda in Support (CHASEs Motion [Doc. 89]):
BACKGROUND
PETERSONs Amended Complaint (Doc. 85) arises and seeks enforcement of his HELCO and
actual and statutory damages under the Truth-in-Lending Act (TILA), 15 U.S.C. 1601, et seq., Home
Ownership and Equity Protection Act of 1994 (HOEPA), 15 U.S.C. 1639, and Regulation Z of the
Federal Reserve Board (Regulation Z), 12 C.F.R. 226.1 et. seq., and state law, per the TILA savings
clause, 15 U.S.C.S. 1601 et. seq., 15 U.S.C.S. 1610(d).
CHASE again fails to mention that, as alleged, that it refused to consider any information offered or
provide any factual basis for its summary suspension his home equity line of credit (HELOC). CHASE not
only failed to conduct any investigation to develop any factual basis prior to its action, but would not
consider anything PETERSONs counsel attempted to submit to it in a futile effort to show it that there was
no imprisonment, his financial circumstances had not materially changed since was approved, and its
belief was unreasonable. (Am. Compl. Doc. 85) Therefore, he submits that CHASE should be estopped to
say anything its lawyers could find out through discovery that might have made any difference with respect to
its ostrich-like decision to suspend his HELCO back in May of 2009. The unanswered Amended Complaint
must be taken as true, including its exhibits, and must serve as the context for resolution of CHASEs
Motion. If CHASE did not have, consider and would not consider any financial information when it was
offered it, anything it might now wish to now assert or has obtained through discovery should not be used to
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now justify1 a bad decision that could not have been base upon it, especially, given its blanket refusal to
consider anything relating to PETERSONs finances.
PETERSONs Amended Complaint should not be dismissed with prejudice because his allegations
set for plausible claims and do not confirm, as CHASE asserts, but has not established, that the criminal
charges (as opposed to any non-existent imprisonment) not only had no material effect on his income but
also left his assets and expenses are similarly unaffected. Further, HELCO loan that has had all times a zero
balance, since being suspended by it on March 15, 2009. PETERSONS claims therefore have facial
plausibility because he pleads factual content beyond the speculative level that would allow this Court to
draw the reasonable inference that the CHASE is liable for the misconduct alleged.
As this Court has noted, the key facts are relatively uncomplicated, well known to the parties, and
relate to a suspension that occurred and was complete in May of 2009. Indeed, since virtually all of the
documents pled as exhibits A, C, D, E, F and G to the Amended Complaint, were either
authored by CHASE or are public documents (Doc. 85, Ex. B) of which this Court can take judicial
notice, few, if any, facts are in dispute in this case. CHASE is fully aware of and familiar with the facts and
circumstances leading to the filing of this cause by Plaintiff concerning its suspension of his HELCO. (Am.
Compl. 10-20, Exhs. A, B C and the Affidavits of Lechnowsky, Griego, Dunn, McLendon [the
CHASES Officers, Attorneys and Employees Affidavits - Exhibit D, E, F & G attached to the
Amended Complaint. (Doc. 85) CHASES said Officers, Attorney and Employees filed said Affidavits in the
Circuit Court of the Will County Illinois Court on or about September 29, 2009 in the pending and
undetermined matter of People v. Peterson, Case No. 09 CF 1048 (the Criminal Case). Said affidavits
filed by CHASES said Officers and Attorneys in the state criminal case unequivocally acknowledge,
establish, and admit that it suspended PETERSONs HELOC only because he was the subject to pre-trial

1
Transcript of proceedings Hon. Ronald A. Guzman, pp. 15-16, 12/16/09, Doc. 57)
***
THE COURT: By the way, your motion to dismiss addresses the issue of whether theres a change in
circumstance here. Its not quite the issue before us. The issue before us is what was the basis for closing out the loan.
If the basis for closing out the loan was different from what you're asserting is a good basis now, that may not be a
defense.
MS. COLLADO: Our motion tries to attack, your Honor, the sufficiency of the complaint and the allegations
where hes saying we havent --
THE COURT: As I understand the complaint, the complaint goes to why your clients did what they did at
the time they did it, not whether looking back on it now they had good reason for doing it, which were not the reasons
they exercised. Those are two slightly separate issues. (Emphasis supplied)
***

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detention that it wrongfully characterized as imprisonment, and that his actual financial circumstances
were not considered. (See Am. Compl. 11 and Exhs. C, D, E, F and G thereto. [Doc. 85])
There is also no dispute that PETERSON is currently being held and awaiting trial in a Will County Sheriffs
Adult Detention Facility in Joliet on and unable to make a high bail and is currently awaiting trial under an
indictment for the murder of his late wife, he has pled not guilty, has not been found guilty, has not been
sentenced or imprisoned, and must, therefore, be presumed innocent until and unless convicted upon a
verdict rendered by a jury and exhausts of any and all appeal and remedies relating thereto. (Am. Compl.
11, Exhibit B [Doc. 85])
PRTERSONs W-2 and federal income tax returns for 2005, 2006, 2007 and 2008 and his 2009
1099-R (re: pension retirement payments), disclosed during discovery to CHASE, show that since it
approved him for said HELOC in May of 2005, at all times relevant, he had sufficient financial condition
and monthly earning capacity to pay and service any and all sums that did, might or could come due under
his HELCO. (See Doc. 85 - Group Exhibit No. 1) They show that that following his retirement from the
Bolingbrook Police Department in 2007 PETERSON was entitled to and has since collected pension
benefits in the amount of $6,067.71 per month (the Pension). Because those benefits are vested, he has
received and will be entitled to receive said pension payments, with increases, until his death. In addition his
vested pension benefits, PETERSON has received and continues to receive additional monthly Social
Security benefits of approximate $2,758.00 per month that can be used for the housing the support of his
and his late wifes children. No unfavorable material change in his financial condition ever occurred. So,
in May of 2009, when CHASES suspended PETERSONs HELOC, his income was not materially changed
from his 2005 gross income of approximately $73,840.00. Likewise, this Court can consider and take
judicial notice of the previously disclosed Board of Trustees of the Bolingbrook Police Pension Fund
Decision and Order and Certificate of Payment attached to PETERSONs Memo in Opposition to CHASEs
prior Motion to Dismiss as Exhibits A and B (Doc. 37). Accordingly, the only material change in his
financial condition, if any, that occurred since his application for and CHASES issuance of his HELOC
in 2005 was a favorable one, because his gross income had actually become more stable because it was
vested due to his retirement.
CHASE has previously conceded, as PETERSON pleads in his Amended Complaint, that in May
2005, he and his wife obtained and were approved by it for and had a $220,000.00 HELOC secured by a
mortgage on their Bolingbrook. Because his Amended Complaint is predicated on undenied and undisputed

3
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facts, i.e., his clearly stated assets, income and expenses, CHASE and its Officers and Agents documents,
Affidavits, whereby it has essentially admitted or conceded its violation of, and liability and relief issues,
especially those arising under the TILA, there would be no good reason that they could be denied or
contradicted in good-faith and CHASEs suspension was made without any factual basis despite it claims it
reasonably believed that PETERSON would be unable to fulfill his payment obligations. Likewise, there is
no dispute that, as CHASE also states, that upon learning of his indictment and incarceration, it suspended
further withdrawals on HELOC and that he sued challenging the suspension, including, inter alia, claims for
violations the Truth in Lending Act (TILA). (Doc. 37) It is further undisputed that, as CHASE has stated,
and PETERSON has plead, that on May 8, 2009, a CHASE investigative specialist saw television news
coverage about his arrest and incarceration, and then on the next business day, a CHASE assistant general
counsel learned of his arrest and incarceration from that investigative specialist, who in turn conferred
with another CHASE assistant general counsel and that, without more, on this and this alone, and without
any further investigation or inquiry, they summarily determined that there had been a material change in
[his] financial condition. It sent the Petersons a letter dated May 15, 2009 informing them that it had
suspended further advances from [the] line, effective immediately, because of a material change in your
financial condition as noted below. (Doc. 37) CHASE has since argued without any factual support, that,
[d]ue to the circumstances of his incarceration, [it] believed that [Plaintiff] would be unable to pay his
account if [CHASE] allowed it to be substantially drawn down. (Doc. 37)
PETERSON submits CHASES unreasonable suspension of his HELOC violated TILA or the
HELOC agreement and that there was no material change in his financial circumstances other than a
significant improvement, the factual support for this conclusion is his allegation that his pension payments
remained stable despite his indictment and arrest, and pre-trial detention. In particular, PETERSON
submits that his still undenied allegations regarding his vested2 pension payments establish that there was no
material change in his financial circumstances prior to or at the time of the suspension, nor does CHASE
establish that it did not believe that his indictment or distension, or even a possible future imprisonment,
would affect his ability to repay any further HELOC extensions and refused to provide him, despite his
requests, with any factual support for belief that would render it reasonable under the circumstances or
a reinstatement as required under TILA and Regulation Z. PETERSONs income at the time of the
suspension was the basis of his financial circumstances. CHASE has not yet plead or denied any specific

2
Because his police retirement pension is vested, he will receive it whether he is acquitted and set free, or is
convicted and languishes for life in prison.

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facts that would establish that his indictment or pre-trial detention materially (since there was no
imprisonment) impacted his assets or liabilities in any way when its decision was made or that he would be
in fact unable to pay all payments that might come due on his HELCO were he to draw it down it partially or
in full.
MOTION TO DISMISS STANDARD
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true,
to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) A
complaint is sufficient if it includes enough factual content to state a claim to relief that is plausible on its
face. Iqbal, at 1949 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (the factual
allegations in the complaint must be sufficient to raise the possibility of relief above the speculative level).
This standard is met when the factual content allows a court to draw the reasonable inference that the
defendant is liable for the misconduct alleged, Id., and a claim has facial plausibility when the plaintiff
pleads factual content allowing the court to draw the reasonable inference that the defendant may be liable,
though legal conclusions and naked assertions are not entitled to the assumption of truth and must be
disregarded. Iqbal, 129 S. Ct. at 1950; Twombly, 550 U.S. at 555, 557; Rodriguez v. Plymouth
Ambulance Serv., 577 F.3d 816, 821 (7th Cir. 2009). Rather, the Court must assess the well-plead,
nonconclusory factual allegations. Iqbal, 129 S. Ct. at 1950; Twombly, 550 U.S. at 565; Christensen v.
County of Boone, 483 F.3d 454, 457 (7th Cir. 2007).
Shortly after Twombly, the Supreme Court held in Erickson v. Pardus, 551 U.S. 89, 93 (2007) held
that Twombly should not be interpreted to require fact pleading. Erickson at 93 (Specific facts are not
necessary; the statement need only give the defendant fair notice of what the ... claim is and the grounds
upon which it rests.) Twombly interpreted Rule 8(a)(2) as requiring complaints to contain sufficient
factual allegations to permit a district court to find that the claim is facially plausible. See 550 U.S. at 556.
After Twombly the Seventh Circuit adopted a limited plausibility standard concluding that Twombly only
requires a plausibility standard in certain kinds of cases, in, for example, onerous discovery intensive
litigation. See Limestone Development Corp. v. Village of Lemont, 520 F.3d 797, 802-803 (7th Cir.
2008) where Judge Posner wrote that Twombly teaches a defendant should not be forced to undergo costly
discovery unless the complaint contains enough detail, factual or argumentative, to indicate that the plaintiff
has a substantial case. See also U.S. ex rel. Lusby v. Rolls-Royce Corp., 570 F. 3d 849 (7th Cir. 2009)
(dismissal reversed because inference plausible) In the matter at bar, the concerns presented in Twombly

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and Smith v. Duffey, 576 F.3d 336, 33940 (7th Cir. 2009), is not present since discovery is closed and
complete. In Smith, in Judge Posner suggested that Twombly and Iqbal may be limited to complex antitrust
actions and such as antitrust and immunity cases that, unlike the instant case, involve extensive discovery:
In our initial thinking about the case, however, we were reluctant to endorse the district
courts citation of the Supreme Courts decision in [Twombly] fast becoming the citation du
jour in Rule 12(b)(6) cases, as authority for the dismissal of this suit. The Court held that in
complex litigation (the case was an antitrust suit) the defendant is not to be put to the cost
of pretrial discovery - a cost that in complex litigation can be so steep as to coerce a
settlement on terms favorable to the plaintiff even when his claim is very weak - unless the
complaint says enough about the case to permit an inference that it may well have real merit.
The present case, however, is not complex. Were this suit to survive dismissal and proceed
to the summary judgment stage, it would be unlikely to place on the defendants a heavy
burden of compliance with demands for pretrial discovery

A 12(b)(6) motion tests the sufficiency of the complaint, not the merits of the case. Gibson v. City of
Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A dismissal will be affirmed only if it appears beyond
doubt that the plaintiff can prove no set of facts which would entitle the plaintiff to relief. Goren v. New
Vision International, 156 F.3d721 (7th Cir. 1998). See also Brooks v. Ross, 578 F.3d 574, 581 (7th Cir.
2009) (We understand the Court in Iqbal to be admonishing those plaintiffs who merely parrot the
statutory language of the claims that they are pleading ... rather than providing some specific facts to ground
those legal claims, that they must do more.); Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir.
2008) (application of Twombly requires a case-by-case determination: In each context, we must determine
what allegations are necessary to show that recovery is plausible.). In the Northern District has summed
up the new standard in two steps: first, the complaint must describe the claim in sufficient detail to give the
defendant fair notice of what the claim is and the grounds upon which it rests; and second, its allegations
must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level.
Echo, Inc. v. Timberland Machs. & Irrigation, Inc., 2009 WL 2746725, at *1 (N.D. Ill. Aug. 26, 2009)
When analyzing a motion to dismiss, the factual universe generally is defined by and restricted to the
Plaintiffs complaint not to the unpled factual assertion of the Defendant: the Court accepts as true all of
the well-pleaded facts alleged by the Plaintiff and all reasonable inferences that can be drawn from those
facts. See Barnes v. Briley, 420 F.3d 673, 677 (7th Cir. 2005); United Phosphorus, Ltd. v. Angus Chem.
Co., 322 F.3d 942, 946 (7th Cir. 2003) (On a Rule 12(b)(6) motion the court ordinarily cannot consider
matters outside of the pleadings). To survive a Rule 12(b)(6) motion to dismiss, a complaint needs to
provide a short and plain statement of the claim showing that the pleader is entitled to relief (Fed. R. Civ.

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P. 8(a)(2)), such that the defendant is given fair notice of what the * * * claim is and the grounds upon
which it rests. Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Second,
the factual allegations in the complaint must be sufficient to raise the possibility of relief above the
speculative level, assuming that all of the allegations in the complaint are true. E.E.O.C. v. Concentra
Health Svcs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555 [[O]nce a
claim has been stated adequately, it may be supported by showing any set of facts consistent with the
allegations in the complaint. Id at 563]
In interpreting Twombly and Iqbal, the Seventh Circuit has emphasized the admonition that
plausible claims are not the stuff of probabilistic reasoning: a well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts is improbable *** [And the plausibility requirement]
simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence supporting
the plaintiffs allegations. Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009) (quotation marks omitted)
(quoting Twombly, 550 U.S. at 556). So, a plaintiff need not allege specific facts unless the factual detail is
so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is
entitled under Rule 8. Brooks, 578 F.3d at 581 (discussing the Seventh Circuits interpretation of
Twombly, Iqbal, and Erickson). Recently, Judge Virginia Kendall in applying Iqbal noted that the level of
facts required varies with the type of claims asserted. Mounts v. United States Parcel Service of America,
2009 WL 2778004 (N.D. Ill. Aug. 31, 2009) To avoid dismissal, the allegations must plausibly suggest
that the defendant has a right to relief, raising that possibility above a speculative level. E.E.O.C. v.
Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007) (citing Twombly, 127 S. Ct. at
1965). Waters Edge Living, LLC v. Rsui Indem. Co., 2009 WL 4366031 (11th Cir. Dec. 3, 2009) (per
curiam) a complaint will be upheld where its factual content allows a reasonable fact-finder to draw the
inference. Id. at *4 and a complaint need not contain detailed factual allegations. Id. at *3. As was noted
in McDorman v. Smith, 437 F.Supp.2d 768, 779-80 (N.D. Ill. 2006) (Plaintiff[s] Complaint is sufficient
to put Defendants on notice of Plaintiff[s] claims and the grounds upon which they are based. Greater
factual detail will have to be developed through the discovery process)
The issue on a Rule 12(b)(6) motion is not whether the claimant will ultimately prevail, i.e., the
merits of the case, but whether the claimant is entitled to offer evidence in support of his, her, or its claims.
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128
F.3d 1074, 1080 (7th Cir. 1997); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990)

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Importantly, a court does not weigh evidence in a motion to dismiss. Recently, in Aguila Records, Inc. v.
Federico, Case No. 07 C 3993, Slip Op. (N.D. Ill. Oct. 10, 2007) Judge Der-Yeghiayan denied
defendants 12(b)(6) motion to dismiss a complaint holding that it was not the appropriate vehicle for
evaluating the strength of the evidence. A court does not weigh evidence in a motion to dismiss - the issue is
not whether the claimant will ultimately prevail but whether the claimant is entitled to offer evidence to
support the claims asserted. Gilligan v. Jamco Development Corp., 108 F.3d 246, 249 (9th Cir. 1997).
The notice pleading standard set forth in Rule 8 establishes a powerful presumption against rejecting
pleadings for failure to state a claim. Gilligan at 249 (citations omitted). See also Desantis v. Roz-Ber, Inc.,
51 F. Supp. 2d 244 (E.D.N.Y. 1999) (To the extent that evidence may help in making the legal
determination, a case is better resolved in a summary judgment motion than a motion to dismiss.)3
ARGUMENT
PLAINTIFF STATES CLAIMS UPON WHICH RELIEF CAN BE GRANTED - HIS ALLEGATIONS DO
NOT CONFIRM THAT THERE WAS A MATERIAL CHANGE IN HIS FINANCIAL CIRCUMSTANCES
The TILA is strictly a liability statute liberally construed in favor of consumers. TILA Section 102 et
seq., 15 U.S.C.A. Section 1601 et seq. Brophy v. Chase Manhattan Morgt Co, 947 F.Supp. 879 (E.D. Pa.
1996), Quino v. A-I Credjl Com., 635 F.Supp. 151. CHASEs compliance with the TILA, as is the case
with all lenders, is required. Even a minor TILA violation cannot be ignored, TILA, 102 et seq. as
amended, 15 U.SC.A. 1601 et. seq.; TILA Regulations, Regulation Z Section 226.1 et. seq., 15 U.S.C.A.
foil. 1700. Griggs v. Firpyideot Consumer Discount Co., 503 F.Supp. 246, appeal dismissed 672 F.2d
903, appeal after remand 680 F.2d 927, certiorari granted, vacated, 459 U.S. 56, on remand 699 F.2d
642. Moreover, the TILA must be strictly construed and liability imposed for any violation, no matter how
technical. TILA 102 et. seq., as amended, 15 U.S.C.A. Section 1601 et. seq., Abele v. Mid-Penn
Consumer Discount, 77 B.R. 460, affirmed 545 F.2d 1009 (5th Cir. 1977). Lenders, like CHASE, are
allowed to freeze or reduce a HELOC account only in certain well-defined limited situations under

3 If
a Rule 12(b)(6) is granted [a] district court should grant leave to amend even if no request to amend the pleading
was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts. Lopez v.
Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc). When a plaintiffs complaint is dismissed for failure to state a
claim, the plaintiff should be given at least one chance to amend the complaint under Fed. R. Civ. Proc. 15(a) before
dismissing the action with prejudice. Bank v. Pitt, 928 F.2d 1108, 1112 (11th Cir. 1991) A plaintiff should only be
denied leave to amend a complaint if the court determines that allegations of other facts consistent with the
challenged pleading could not possibly cure the deficiency. Schreiber Distrib. Co, v. Serv-Well Furniture Co. Inc.,
806 F.2d 1393, 140 (9th Cir. 1986) (The question of whether plaintiff is entitled to a particular remedy requires the
development of a factual record and is not appropriately resolved pursuant to a Rule 12(b)(6) motion.)

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Regulation Z4, that implements TILA and lists three, and only three, primary bases for doing so: (1) if the
value of the collateral declines significantly below the appraised value (not an issue here); (2) if the creditor
reasonably believes that the consumer will be unable to make payments as agreed because of a material
change in the consumer's financial circumstances (the issue in this case); or (3) if the consumer is in default
on a material term of the HELOC agreement (also not an issue here). 12 C.F.R.
226.5(b)(f)(3)(vi). Whether CHASE sufficiently met standard (2) is the focus of this lawsuit.
Once a lender, such as CHASE, violates the TILA, no matter how technical violation appears, unless
one of statutory defenses applies (none are applicable here), the Court has no discretion in imposing liability
under 102-186 as amended, 15 U.SC.A. 1601-1667e. Solis v. Fidelity Consumer Discount Co. 58
B.R. 983 (E.D. Pa. 1986). As the court stated in Aquino v. Public Fin. Consumer Discount Co., 606 F.
Supp. 504 (E.D. Pa. 1985), courts in their effort to insure a just result should not forget that the TILA was
passed primarily to aid the unsophisticated consumer and that it was intended to balance scales thought
to be weighted in favor of lenders and ... to be liberally construed in favor of borrowers. Id. at 509, citing
Thomka v. A.Z. Chevrolet, Inc., 619 F.2d 246, 248 (3d Cir. 1980), and Bizier v. Globe Financial Services,
Inc., 654 F.2d 1, 3 (1st Cir. 1981). The scheme of [TILA] is to create a system of private attorneys
general to aid its enforcement, and its language should be construed liberally in light of its remedial
purpose of protecting consumer McGowan v. King, Inc., 569 F.2d 845, 848 (5th Cir. 1978); TILA 102
et. seq., as amended, 15 U.S.C.A. 1601 et. seq. Lifschitz v. American Exp. Co., 560 F.Supp. 458 (E.D.
Pa. 1983). Where, as here, a lender uses flimsy pretexts to renege on a loan, because a Plaintiffs damages
may be indefinite, may order specific performance, i.e., the district court performance by require it to
perform its obligations under the loan agreement. See, e.g., Eakin v. Continental Illinois National Bank and
Trust Company Chicago, 875 F.2d 114 (7th Cir. 1989), Bighorn Capital, Inc. v. Moody Group
International, Ltd., Slip. Opin. Case 1:05-cv-05364 Doc. 45 (March 30, 2006, Kendall, Judge) (order
refusing to dismiss multi-count complaint stemming from the breach of a loan commitment agreement.)
Relevant here, the TILA and Regulation Z permit a creditor to suspend a HELOC only during any period

4 Regulation
Z, which implements TILA, sets forth the circumstances under which a HELOC 4 can be terminated,
suspended, or reduced. Lenders are responsible under Regulation Z for timely reinstatement of lines of credit which
cease to meet the criteria for suspension or reduction. With limited exceptions, Regulation Z prohibits creditors from
terminating a HELOC before the scheduled expiration of its term. For more information about HELOCs, see The
Federal Reserve Board, What You Should Know About Home Equity Lines of Credit, June 12, 2007, available at
http://www.federalreserve.gov/pubs/equity/equity_english.htm

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in which the creditor has reason to believe that the consumer will be unable to comply with the repayment
requirements of the account due to a material change in the consumers financial circumstances. See 15
U.S.C. 1647(c)(2)(C); 12 C.F.R. 226.5b(f)(3)(vi)(B). Thus, there are two conditions for this provision
to apply: (1) a material change in financial circumstances; and (2) as a result of this change, CHASES
reasonable belief that he would be unable to fulfill his repayment obligations. PETERSONs TILA claims do
not fail because he pleads plausible factual content that would allow this Court to draw the reasonable
inference that CHASE is liable for the misconduct alleged and because he alleges facts that a fact-finder
could conclude that there was no material change in his financial circumstances such that could not pay back
amount he now desperately needs which is a sum far below the amount CHASE authorized. Though he was
arrested for murder and paid but now owes no some defense costs, but would simply like to uses his HELCO
to draw down approximately 20% of his approve line of credit to retain experts for his upcoming July trial.
This Court has held that under TILA, financial circumstances does not refer solely to income, but
also includes expenses. Peterson v. JPMorgan Chase Bank, NA., No. 09 C 6746, 2010 WL 1741590, at
*2 (N.D. Ill. April 29, 2010). However, as plead in PETERSONs Amended Complaint and undenied by
CHASE, he has virtually the same assets and expenses and income he had when CHASE approved his
HELCO in 2005. Further, given CHASEs authorized limit on his HELCO it was foreseeable that he had its
imprimatur to increase his debt and or expenses by $220,000, though he has not done so. The fact that he
seeks through this suit to recover for a wrongful suspension and refusal to reinstate his HELCO because he
wishes to use approximately 20% of what CHASE approved $220,000 in order to retain needed experts he
cannot otherwise afford or had the resources to obtain, does not defeat his claim, i.e., merely wanting to
draw down an amount far less than what CHASE previously preapproved and preauthorized expenditure of
its funds. Indeed, CHASE totally ignores that he now affirmatively alleges not only are his current assets
substantially the same as those owned when his HELCO, and he has pled and disclosed though discovery,
facts that satisfy this Courts instruction that he set for his expenses, which he has, in detail, to wit:
PETERSON has no outstanding debt since April of 2009, other than reoccurring modest
living expenses for himself and his minor children for whom he is responsible, that have
been disclosed to CHASE and are, approximately, personal, household expenses and
monthly utilities, to wit: municipal water: $81.95, Comcast Cable $115.09; Sprint
telephone: $210.19; Nicor Gas $140.42; ComEd electric: $145.84; housing: no
mortgage (other than the CHASE zero balance HELCO), Will County real estate taxes for
2009: $6,132.32; medical care covered by pension retirement benefits, home and auto
insurance, his childrens food provided by relatives or paid in substantially from his income
or in part from social security benefits for his and his late wifes two sons; childcare: none.

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On information and belief, from April 2009 to the present, litigation costs and fees,
including, without limitation, if any expert fees, cost and expenses, i.e., attorneys fees and
other legal services, other legal services (e.g., paralegals, support staff, etc.), fees and/or costs
for investigators; fees and/or costs for witnesses; fees and/or costs for court reporters; clerk
filing fees; service costs (e.g., costs for service of subpoenas); fees and/or costs for copy
services; travel expenses, hotel accommodations, food expenses for attorneys and staff, and
other costs, if any, have been confidentially disclosed to CHASE pursuant to protective
order, have been paid and no other attorneys fees, costs or expenses are due and owing
through the conclusion of the upcoming trial [of the] criminal case. His checking, savings, or
investment accounts from March 2009 to the present have been with CHASE from
March 2009 to the present. [I]t is currently estimated that approximately $45,000.00
will be needed to retain and pay all necessary expert witnesses for said trial, a sum well
within the limits of his HELOC that he will clearly be able to repay in connection with the
terms thereof. (Am. Compl. 20) (Emphasis supplied)

CHASES NOTICE AND BASIS FOR SUSPENSION OF THE HELOC UNREASONABLE BECAUSE
THERE WAS NO IMPRISONMENT OR A MATERIAL CHANGE IN HIS FINANCIAL CIRCUMSTANCES

PETERSON is not and has never been in prison but is currently awaiting trial in the Will County
Detention Facility. (Am. Compl. 11; id., Ex. B, p. 3.) Since day one CHASE has repeatedly and
deliberately mischaracterized Petersons pretrial detainment as imprisonment, no doubt in order to
stigmatize him, though he has never been convicted or ever imprisoned for anything. Just a few months ago,
the U.S. Supreme Court reaffirmed the long established distinction between mere pre-trial detention and
imprisonment. Jail is a local governments detention center where persons awaiting trial ... are
confined. Blacks Law Dictionary 910 (9th ed. 2009). Prison, by contrast, is a state or federal facility of
confinement for convicted criminals, esp. felons. Id., at 1314. Maryland v. Shatzer, 559 U. S. __ (Slip
Opinion p. 7 fn. 2, Feb. 24, 2010) So, it is key, that CHASE admits that the one and only reason given for it
action was imprisonment, and has not denied that he was never imprisoned.
When CHASEs assistant general counsel learned of PETERSONs arrest and incarceration (Am.
Compl. 12; id., Ex. G, 1-2) he conferred with another of its assistant general counsel, and they
determined that there had been a material change in [his] financial condition based only on a false
assumption of his imprisonment. (Am. Compl. 12; id., Ex. G, 3; id., Ex. D, 1-3) PETERSON
pleads facts that plausibly show that the notice was false and that the reason given for suspension was not
reasonable. It plausible that CHASEs decision was not reasonable, i.e., rational or logical, but
unreasonable, i.e. irrational and illogical, because there was simply no imprisonment, or material change
in financial circumstances, since it chose not investigate and refused to consider the facts to the contrary.

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It is undenied that in 2005, the year the Petersons entered into the HELOC, PETERSON had an
income of $74,210. (Am. Compl. 19), and in 2009, the year CHASE suspended the HELOC,
PETERSON had $72,643.59 in vested retirement income. (Id.) PETERSONs allegations regarding his
bank accounts, i.e., [h]is checking, savings, or investment accounts from March 2009 to the present have
been he [held] with CHASE from March 2009 to the present. (Id., 20) Since PETERSONs May 2009
arrest, all incurred costs and expenses in connection with the defense of the criminal charge have been paid
and none are or will be owed. (Am. Compl. 20) PETERSON needs multiple experts to defend against the
murder charge. (Id., 40(a)-(c), (e).) He alleges, It is currently estimated that approximately $45,000 will
be needed to retain and pay all necessary expert witnesses for his murder trial. (Id., 20.) He also needs to
retain other professionals (e.g., investigators and document organization specialists) and but has not
incurred other costs (e.g., mock trials, exhibits and models) in connection with the murder charge. (Id.,
40(d), (g)-(1)) The fact is PETERSONs fast approaching murder trial is now ordered to commence on July
14, 2010. Thus, he does not estimate how much it will cost to retain the other professionals or to pay these
other expenses because his need for investigators, document organization specialists mock trials, exhibits
and models is now effectively moot, thanks to CHASEs successful dilatory strategy and his inability to
obtain them without access to his HELCO. Contrary to CHASEs assertion, PETERSON need not allege
that the social security benefit for his children are his income or that he could use them to pay litigation
expenses or to repay any amount he might borrow from his HELOC. This is also not inconsistent with
filings in the state criminal case, in which he stated that his police pension is his only source of income.
Further, that he owns his home free and clear but has no substantial savings or investment accounts only
emphasizes his need to use his HELCO it does not show an inability to pay back what would be
approximately 20% of its CHASE-authorized limit he can pay down given his stable, now vested, income.
Thus, contrary to CHASEs assertion, the additional allegations contained in the Amended
Complaint confirm the criminal case has not and will not materially changed PETERSONs finances. Indeed,
he alleges they have not. (Am. Comply. 20) CHASE conveniently misconstrues his need to have it
unfreeze and fund his HELCO so that as an actual expense, not so. His need for its funding of his HELCO to
pay for needed and desired expert witnesses expenses, that prompted the necessity of ligation due to its
knee-jerk freeze does not constitute an actual expense or debt. Moreover, the $45,000 that PETERSON
needs for experts cannot be spent unless his HELCO is reinstated. The fact that he has incurred and paid

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some costs and expenses5 defending the criminal case has not, as shown, materially changed his finances.
(Id. 20.) Though he does not allege the amount of those costs they have been paid at a time when the
HELCO balance was zero. Further, just because he may have seen such expenses as potential[ly]
enormous. because of what was thought might be a need for other experts, no longer needed, he did not say
what actually were or might be. In any event, due to good fortune, his criminal defense is being handled pro
bono by a team of top defense attorneys however, due to the bad fortune, of CHASE having reneged on and
denying him access to his HELCO he could not retain needed experts.
Moreover, what might be appeared potentially enormous to a retired police sergeant, a man of
modest means, does not mean that even if they surfaced, which they did not to the extent feared, they would
actually have been incurred and exceeded $220,000, thereby materially changing his financial
circumstances. In any event, what he needs but has not expended is the approximately $45,000 he needs to
has a proper defense, an amount that luckily turned out much less than originally expected. He does not
concede the expenses he has already incurred are just the beginning because he cannot incur another
$45,000 in expenses to retain and pay all necessary expert witnesses for his trial without access to his
HELCO. (Am. Compl. 20.) CHASE distorts his need to fund expert and other expenses and want this
Court to jump to the conclusion that he has or will incur such expenses when the point of this suit is that he
has not and cannot pay for or incur such expenses because CHASE refused to permit him any access to his
HELCO in order to do so. Essentially, because trial is looming, the non-expert services will not be able to
utilized in time. So, thanks to CHASEs factually baseless, knee-jerk decision to suspend his HELOC,
PETERSON has not, cannot, and will not now incur expenses totaling more than 60% of his yearly
income in the next few weeks. (CHASE Memo p. 2) Even if he were able to do so, had CHASE freed up his
HELCO to permit an expenditure of $45,000, such sum would be only approximately a relatively modest
20% of the $220,000 HELCO it had admittedly authorized and acknowledged he had the ability to pay
down. Though PETERSON needs to retain and pay for other costs for his upcoming trial but, again, he
cannot use HELCO to utilize less than one-fifth of his CHASE admittedly approved. His allegations do not
show a material change in his financial circumstances resulting of his arrest and incarceration. In fact his

5
A lender has no authority to micromanage or disapprove the use of an authorized line of credit for one or another
particular or needed purpose, so long as they are, as here, lawful. In its discovery CHASE was really concerned with
the expenses he might incur through the conclusion of trial - not was he had spent and did not owe. Not detaining
previsiouly paid miscellaneous expenses is not fatal. As Magistrate Judge Nolan observed and commented, she, like
PETERSON, banks at CASE and it does not and should not concern itself with previously paid expenditures not
drawn from the HELCO, only current assets, liabilities and expenses.

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income, asset and financial circumstances have stayed quite stable. The fact he may have paid some defense
costs does not impact on his current expenses so as to place him beyond the limits of his CHASE admittedly
approved for his HELCO nor did it harm his ability to pay it down. (Am. Compl. 20) That he needs
multiple experts to defend against the criminal charge at an estimated cost of $45,000. (Id., 20, 40(a)-
(c), (e)) does not prove he has or will incur such an expense. He simply must do without because of
CHASEs imprudent and unreasonable suspension of his HELCO. He needs to retain other professionals
and pay other costs in connection with the criminal case, but he does not allege how much those costs are or
will be because the trial is a few weeks away and cannot be incurred, again because CHASE has frozen his
HELCO. (Id., 40(d), (g)-(1)) Further, the amount of his bail is irrelevant to his finances since it is neither
an expense or debt and he still gets his vested pension payments like clock-work for the rest of his life
though detained or if he were to be convicted and imprisoned Likewise, that he has no substantial savings or
investment accounts is irrelevant since his main asset is his paid-off home that secures his HELCO. Further,
that he desperately needs the access to his HELOC to obtain money to properly defend himself in order to
hopefully retain needed experts prior to trial does not impact either his expenses, assets or debt because
CHASE continues to deny him use of HELCO, then attempts to gain advantage from deprivation. Put into
perspective, the only actual numbers regarding his expenses that PETERSON alleges reveal he needs, NOT
will incur, in just a few weeks, expenses totaling more than 60% of his 2009 income of $72,643.59. The
$45,000 he needs is not an anticipated or expected expert fees for the upcoming trial, but an amount
he believe he has the right to access for that purpose. CHASE misses the point: he cannot afford to incur it
and must therefore forego them having been deprive the use of his HELCO. (See Am. Compl. 19, 20)
PETERSON does not admit[] he has already incurred other defense costs (id., 19) and that he
expects to incur yet more (id., 40(d), (g)-(1)), and has not kept the amount of these other costs hidden
from the Court. He has pled and disclosed though discovery that he will owe nothing when his trial
concludes. In sum, his allegations do not show his indictment and incarceration caused a material change on
his financial circumstances - the liability side of his ledger has not skyrocketed because CHASE has
prevented him from accessing his HELOC. CHASE has failed to so much as infer, let alone alleged or
proven, nowhere near his approved HELCO limit of $220,000 as a result of his arrest and incarceration.
PETERSON plausibly alleges CHASE lacked a reasonable belief that he would be unable to repay money he
needed to draw from his HELOC. See 15 U.S.C. 1647(c)(2)(C). Further, as shown above, he alleges facts
that support his allegation that CHASE knowingly failed to have reasonably [sic] belief for the suspension.

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Even given the facts he does allege regarding his lack of defense expenses, he plausibly alleges that CHASE
did not reasonably believe that he would be unable to pay his account if [CHASE] allowed it to be
substantially drawn down. When it made that decision on May 15, 2009 (Am. Compl., Ex. D, 3.) The
facts alleged support and infer that CHASEs belief was not only unreasonable, but baseless. The Lipton
case relied on by CHASE concerned civil litigation, specific facts and involved a state, not a Federal TILA
claim involving expenses less than approved HELCO amount. That PETERSON nay have also been arrested
on felony weapons charge is a red herring and does not mean that he would lose his pension if convicted.
Finally, the weapons charge was for an alleged violation that did not arise out of or in connection with his or
her service as a police officer. Therefore, 40 ILCS 5/3-147 has absolutely no applicability or relation to
his previously vested pension since CHASE has never maintained it made its decision based on the weapons
charge, as to which he is likewise pled not guilty and not been convicted.
VOLUNTARILY DISMISSED COUNTS
(III, IV, V, VI, VII, VIII, IX, X, XI AND XII)
In lieu of responding to Chases Motion to Dismiss Counts Nos. IV, V, VI, VII, VIII, IX, X, XI and
XII PETERSON elects to voluntarily dismiss them without prejudice pursuant to Fed. R. Civ. P. 41(a)(1)(A)
pursuant to notice of voluntarily dismissal that is being appropriately filed without order of court because
none of the defendants to this action have served an answer or a motion for summary judgment. Fed. R. Civ.
P. 41(a)(l)(A)(i). PETERSON will file a dismissal notice said Counts and will promptly seek leave to file a
Second Amended Complaint to reflect same, correct scriveners errors and cure the deficiency CHASE
claims by attaching the HELOC Agreement (Exhibit 1 to CHASEs Motion) he inadvertently misidentified
as the mortgage executed in connection with the HELCO. (Am. Compl. 10; id., Ex. A.)
CONCLUSION
Because sufficient facts are pled that establish plausible claims, CHASEs Motion should be denied.
Respectfully submitted,
DREW W. PETERSON, Plaintiff

By_/s/ Walter Maksym_________

Walter Maksym
Walter Maksym
Attorney for Plaintiff
2056 N. Lincoln Avenue
Chicago, IL 60614-4525
Telephone: (312) 218-4475
e-mail: wmaksym@gmail.com

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