                        NONPRECEDENTIAL DISPOSITION
                To be cited only in accordance with Fed. R. App. P. 32.1



                United States Court of Appeals
                                 For the Seventh Circuit
                                 Chicago, Illinois 60604

                               Submitted February 3, 2016*
                                Decided February 3, 2016

                                          Before

                          DANIEL A. MANION, Circuit Judge

                          ILANA DIAMOND ROVNER, Circuit Judge

                           DAVID F. HAMILTON, Circuit Judge

No. 15-2126

TIMOTHY C. PLATT and                             Appeal from the United States District
SONIA E. PLATT,                                  Court for the Southern District of Indiana,
     Plaintiffs-Appellants,                      Indianapolis Division.

       v.                                        No. 1:14-CV-02088-JMS-TAB

CITIMORTGAGE, INC.,                              Jane E. Magnus-Stinson,
     Defendant-Appellee.                         Judge.

                                        ORDER

       Timothy and Sonia Platt appeal the dismissal of their lawsuit against
CitiMortgage, which held and serviced their home mortgage. Their complaint asserts
several claims, but the district court concluded that all of those claims are precluded by a
judgment in favor of CitiMortgage in its foreclosure suit in Indiana state court. We agree
and affirm the judgment.



       *After examining the briefs and record, we have concluded that oral argument is
unnecessary. Thus the appeal is submitted on the briefs and record. See FED. R. APP. P.
34(a)(2)(C).
No. 15-2126                                                                            Page 2

        When CitiMortgage filed its state-court foreclosure complaint against the Platts in
2010, they counterclaimed that CitiMortgage had engaged in a scheme to defraud the
federal government by exploiting the Federal Housing Administration’s insurance of
home mortgages. The Platts also counterclaimed that the company had “published
libelous statements” that injured their financial reputation. After an unsuccessful
attempt to remove the foreclosure case to federal court, the Platts filed this action in the
district court, again alleging fraud involving FHA insurance and libel against them. The
Platts also alleged that CitiMortgage had failed to offer them opportunities to participate
in FHA programs that might have helped them avoid foreclosure. A month later, the
state court granted summary judgment to CitiMortgage, finding that there was no
genuine issue of material fact on its foreclosure claim or the Platts’ counterclaims.
CitiMortgage then moved the district court to dismiss this lawsuit with prejudice,
arguing that the Platts’ federal claims are identical to their now-adjudicated state
counterclaims and thus precluded. The district court agreed, reasoning that the
requirements of claim preclusion under Indiana law are all present: There was a
judgment rendered on the merits by a court of competent jurisdiction, the previous suit
was between the same parties, and the Platt’s claims in federal court all had been
brought as counterclaims in the earlier action and concerned the same transaction.
See Jarrard v. CDI Telecomms., Inc., 408 F.3d 905, 916 (7th Cir. 2005) (summarizing Indiana
law). The Platts appeal.

       As a preliminary matter, CitiMortgage contends that the Platts waived any
challenge to the district court’s judgment by failing to respond to its motion to dismiss.
Although a party may waive an argument “by not responding to alleged deficiencies in
a motion to dismiss,” Alioto v. Town of Lisbon, 651 F.3d 715, 721 (7th Cir. 2011), “the
waiver rule does not prevent a party from attacking on appeal the legal theory upon
which the district court based its decision,” Sidney Hillman Health Ctr. of Rochester v.
Abbott Labs., Inc., 782 F.3d 922, 927 (7th Cir. 2015) (quoting Hedge v. Cnty. of Tippecanoe,
890 F.2d 4, 8 (7th Cir. 1989)). Here, the Platts may dispute the district court’s conclusion
that each of their claims is precluded. Nevertheless, although the Platts restate each of
those three claims in their brief, they do not challenge the district court’s adverse
decision except as to one: that CitiMortgage failed to offer them opportunities to
participate in federal programs designed to avert foreclosure. The Platts thus have
waived any attempt to salvage the other two claims. See Silk v. Bd. of Trs., 795 F.3d 698,
709 (7th Cir. 2015).

        We review de novo the district court’s decision to dismiss the Platts’ complaint,
see Arlin-Golf, LLC v. Village of Arlington Heights, 631 F.3d 818, 821 (7th Cir. 2011), and we
No. 15-2126                                                                           Page 3

apply the claim preclusion principles of Indiana, where the prior adjudication occurred,
see Chicago Title Land Trust Co. v. Potash Corp. of Sask. Sales Ltd., 664 F.3d 1075, 1079
(7th Cir. 2011). Claim preclusion requires: “(1) a judgment rendered by a court of
competent jurisdiction, (2) on the merits, (3) in a suit between the same parties, where
(4) the matter now at issue was, or could have been, decided.” Wabash Valley Power Ass’n,
Inc. v. Rural Electrification Admin., 903 F.2d 445, 455–56 (7th Cir. 1990). When two parallel
cases are pending at the same time, the first final judgment will raise the issue of
preclusion in the other case. See Jones v. Am. Family Mut. Ins. Co., 489 N.E.2d 160, 164
(Ind. Ct. App. 1986); England v. Dana Corp., 259 N.E.2d 433, 435 (Ind. App. 1970). Under
Indiana law, the foreclosure judgment is an immediately appealable final judgment,
see Bahar v. Tadros, 123 N.E.2d 189, 189–90 (Ind. 1954), and its finality for purposes of
claim preclusion is not undermined by the Platts’ still-pending appeal in that case,
see Starzenski v. City of Elkhart, 87 F.3d 872, 878 (7th Cir. 1996).

        The Platts argue that the state court did not decide their claim about
CitiMortgage’s supposed failure to offer opportunities to participate in federal
foreclosure-avoidance programs and that they could not have brought this claim in state
court because it concerns federal regulations. CitiMortgage insists that the Platts did
raise this as a counterclaim in state court because of an allegation in their
counter-complaint that the company’s “libel” prevented them from “being able to
refinance their home” through the provisions of the 2009 “federal economic stimulus
act.” In context, however, this statement does not appear to present an independent
claim but, rather, identifies harm that the Platts attributed to CitiMortgage’s alleged false
reporting of their mortgage payments.

       Regardless, it does not matter if the Platts explicitly included a counterclaim
about CitiMortgage’s alleged failure to offer measures to avoid foreclosure. In Indiana, a
loan servicer’s noncompliance with the FHA regulations can be raised as an affirmative
defense to foreclosure. See Lacy-McKinney v. Taylor, Bean & Whitaker Mortg. Corp.,
937 N.E.2d 853, 864 (Ind. Ct. App. 2010). And withholding a claim to litigate later, or
claim-splitting, is prohibited: “[M]ultiple legal theories supporting relief on account of
one transaction must be litigated at one go.” Quimby v. Becovic Mgmt. Grp., Inc.,
946 N.E.2d 30, 34 n.4 (Ind. Ct. App. 2011) (quoting Wabash Valley Power Ass’n, Inc.,
903 F.2d at 455). The Platts’ claim here is related to the same transaction—CitiMortgage’s
servicing of their mortgage—as the foreclosure suit and their other counterclaims, which
addressed CitiMortgage’s reporting of their payments and its fraud related to FHA
insurance. The Platts could have brought their claim at that time, and, therefore, the
No. 15-2126                                                                      Page 4

third requirement for claim preclusion is satisfied. Because the other requirements are
present as well, the claim is precluded, and the district court’s judgment is AFFIRMED.
