Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in entering judgment in favor of defendant-trucking company in class action by plaintiffs-truck drivers, alleging that defendant breached contract, which called for payment of 71% of gross revenue that defendant received from customers for use of plaintiffs' trucking equipment, where defendant failed to pay plaintiffs 71% of net revenue that defendant received for “special services” billed to its customers. Instant contract failed to contain any provision calling for payment of 71% of net revenue for anything, and “special services” was item that was expressly excluded from calculation of what was owed to plaintiffs. Ct. rejected plaintiff’s argument that instant exclusion contemplated only those special services that defendant provided to customers at cost.

Dist. Ct. did not err in dismissing for failure to state cause of action plaintiffs’ complaints alleging that defendants-debt collectors violated section 1692e(5) of FDCPA, which prohibits debt collectors from threatening to take action that they do not intend to take in course of collecting debt, where defendants filed collection lawsuits that were later voluntarily dismissed without prejudice prior to going to trial. Although plaintiffs argued that conduct of defendants indicted that they never intended to proceed to trial, and thus violated section 1692e(5), plaintiffs had failed to allege that defendants did not intend to proceed to trial at time when they filed underlying collection actions. Moreover, because mere filing of collection actions does not include implicit declaration that defendants intended to advance action all way through to trial, plaintiffs failed to show that defendants ever threatened to take collection actions to trial. Also, debt collectors are free to engage in customary cost benefit analysis when considering how far to advance litigation.

Dist. Ct. did not err in dismissing for failure to state valid cause of action instant class action lawsuit alleging that defendants violated Illinois Consumer Fraud and Deceptive Business Practices Act, when it filed more than 3,000 small claims actions against class members in Cook County to enforce personal guaranties on leases of credit-card machines. While most class members did not reside in Illinois, defendants could file said lawsuits in Cook County since leases contained forum-selection clause that required that all disputes be litigated in Cook County. Moreover, although class members argued that defendants had failed to register as debt collection agency, said Act required registration by collectors of consumer debts and not by collectors of instant commercial debts. Ct. further rejected class members’ contention that: (1) defendants’ attempt to collect $3,000 owed on each lease violated Act because credit-card processing machines were worth only $250 apiece; and (2) instant guaranties were unenforceable, where guarantor was same person as individual named in lease.

Record contained sufficient evidence to support Dist. Ct.’s judgment in favor of plaintiff in breach of contract action alleging that defendants failed to provide operational refrigeration control system (RCS) in plaintiff’s plant. Record showed that: (1) plaintiff experienced initial problems with RCS after defendants had installed system and experienced additional problems after system went through subsequent startup process that included frequent communication failures with other equipment in plaintiff’s plant; and (2) plaintiff ultimately replaced defendants’ RCS at cost of $113,500. Ct. rejected defendant’s argument that judgment against them was improper because: (1) Dist. Ct. had accepted opinion of defendants’ expert that external factors unrelated to RCS could have been cause of communication problems; and (2) RCS functioned properly for one month prior to start of communication problems.

Dist. Ct. did not err in granting plaintiff’s motion for summary judgment in action seeking to enforce personal guaranty signed by defendants-owners of corporation for $3.5 million in corporation’s debts to plaintiff. Ct. rejected defendants’ claim that language in guaranty did not cover corporation’s debts that occurred four years after execution of guaranty, where Ct. noted that instant guaranty expressly contemplated liability for future debts of unknown magnitude. Ct. also rejected defendants’ contention that instant lawsuit could not be filed in Indiana due to their lack of contacts with Indiana, since forum-selection clause in guaranty allowed for any lawsuit to enforce guaranty to be filed in Indiana. Dist. Ct. also properly dismissed defendant-corporation’s Sherman Act counterclaim where: (1) relevant limitations period is four years; (2) corporation waited seven years to file counterclaim after it had been dismissed from class action that had raised same issue as instant counterclaim; and (3) corporation could not rely on equitable tolling to render instant counterclaim timely, where it should have been aware of class action dismissal and yet took no steps to assert Sherman Act claim until filing instant counterclaim.