Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in certifying nation-wide class action and Illinois sub-class in plaintiff’s action alleging that defendant breached warranties of fitness for particular purpose and merchantability, where defendant’s software that advertised fixes for common problems affecting computer speed and performance did not work as advertised. Plaintiff satisfied numerosity, typicality and commonality elements for seeking class certification under Rule 23(a), where: (1) Dist. Ct. identified common questions regarding functions that defendant's marketing materials represented that software could perform; and (2) plaintiff’s claim likely arose from same events/problems or course of conduct that others in proposed class experienced with respect to defendant's software. Moreover, plaintiff served as adequate class representative who had same interest and injury as proposed class. Also, Dist. Ct. could properly find that questions of law or fact predominated, even though questions remained for each class member as to purpose in purchasing software and amount of damages that each member incurred.

Dist. Ct. did not err in dismissing plaintiff’s action seeking enforcement of contract calling for transfer of 27 percent interest in defendant should defendant not pay $16 million to redeem notes defendant issued to plaintiff’s creditors. While Dist. Ct. erred in finding that transfer of ownership in defendant-limited liability company was not possible because defendant did not “own itself,” other language in contract included hold-harmless clause that precluded plaintiff from enforcing said notes against defendant, because whatever defendant gave to plaintiff would be returned to defendant in indemnification. Result could have been different had plaintiff paid on said notes and then been subrogated to creditors’ rights in said notes. Also, under Wisc. law, plaintiff was not entitled to enforce notes where plaintiff was not their holder and was not in possession of said notes.

In action under Fair Debt Collections Practices Act, Dist. Ct. did not err in finding that defendant (entity hired by creditor to collect credit card debt from plaintiff) had waived any motion to compel arbitration of said claim, even though said arbitration clause was contained in credit card agreement between plaintiff and creditor. Record showed that defendant did not discover existence of arbitration agreement for eight months and then waited additional five months to file motion to compel arbitration, and that defendant lacked any reasonable excuse for said delays. Moreover, defendant’s decision to litigate merits of plaintiff’s legal theory via filing motion to dismiss was inconsistent with desire to arbitrate plaintiff’s claim, especially where defendant did not file motion to compel arbitration until after motion to dismiss had been denied, and after plaintiff had obtained class action certification and parties had litigated certain discovery disputes.

Dist. Ct. erred in granting defendants’ motion for summary judgment in plaintiff-alleged debtor’s action under Fair Debt Collection Practices Act (FDCPA), where Dist. Ct. based dismissal on finding that plaintiff was not qualifying “consumer” under FDCPA. Record showed that plaintiff had previously denied that subject debt had been incurred by him, and that plaintiff had prevailed in collection case that had previously been filed in small claims court. While Dist. Ct. found that plaintiff was not qualifying consumer, since plaintiff had failed to allege that he actually owed any debt, Ct. of Appeals found that plaintiff qualified as covered consumer, since defendants had alleged that plaintiff owed said debt. Also, on remand, plaintiff will be able to amend his complaint to reflect that instant credit card debt was for personal, family or household purchases as required to satisfy definition of qualifying debt under section 1692a(5) of FDCPA.

Dist. Ct. did not err in granting defendant-supervisor’s motion to dismiss for failure to state valid claim plaintiff-subordinate’s action alleging that defendant tortiously interfered with plaintiff’s at-will employment contract with parties’ employer, which resulted in plaintiff’s termination. Plaintiff failed to allege that defendant intended to cause breach of plaintiff’s employment contract, and nothing in complaint alleged that defendant was involved in decision to terminate plaintiff or was active participant in said decision-making process. Fact that defendant had reported plaintiff’s poor job performance to management and that plaintiff’s termination followed said report was insufficient to state claim for tortious interference. Plaintiff further failed to properly plead claim for fraud under Rule 9(b), even though plaintiff claimed that defendant directed him to work on cancelled project, and that defendant had failed to tell plaintiff that management had cancelled said project. Instant complaint failed to contain sufficiently detailed theory of fraud and further failed to explain how defendant would accomplish goals of protecting his job and commercial reputation by directing plaintiff to work on cancelled project.

Dist. Ct. did not err in finding that plaintiff’s breach of contract action, that concerned plaintiff’s supply of baked goods to defendant for further sale to public, was untimely under applicable 4-year limitations period set forth in 810 ILCS 5/2-275, where instant claim accrued no later than time of final sale of baked goods in October of 2011, and where plaintiff waited until May of 2017 to file instant lawsuit. Ct. rejected plaintiff’s contention that instant contract was essentially contract for services, which had 10-year limitations period, where instant distributorship agreement was predominately for sale of goods to consumers. Dist. Ct. could also properly dismiss plaintiff’s tortious interference with contract claim arising out of plaintiff’s contention that defendant had fabricated breaches of contract and attributed them to plaintiff, where: (1) instant claim was untimely based on applicable 5-year limitations period, as claim accrued in 2011, when plaintiff knew of instance where defendant had lodged false complaint about plaintiff’s service; (2) fact that plaintiff was unaware at that time of precise wrongdoing did not entitle plaintiff to take advantage of discovery rule; and (3) under Illinois law, party to contract cannot assert tortious interference claim that concerned its own contract.