Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in granting defendants-financial institutions’ motion for summary judgment on plaintiffs-home owners’ action under Ill. Consumer Fraud and Deceptive Business Practices Act (ICFDBPA), as well as fraudulent possession and quiet title claims arising out of defendants’ foreclosure on plaintiffs’ home after plaintiffs had ceased making payments on their mortgage. Plaintiffs failed to establish any injury on their ICFDBPA claim arising out of one defendant’s statement that it could not locate plaintiffs’ account, since such statement would, if anything, be helpful to plaintiffs in any foreclosure action. Also, plaintiffs failed to state cause of action for fraudulent possession of their home, since said claim under 735 ILCS section 15-1701(a) does not apply where, as here, defendants’ conduct occurred before initiation of foreclosure proceedings. Finally, plaintiffs lacked standing to bring instant quiet title proceeding based on alleged untimely transfer of plaintiffs’ loan documents to trust entity after trust’s closing date, since: (1) any untimely transfer would be merely voidable; and (2) plaintiffs were not included in trust’s beneficiaries, who would have standing to contest said transfer.

Dist. Ct. did not err in granting defendant-law firm’s motion for summary judgment in action alleging that defendant violated Fair Debt Collection Practices Act (FDCPA) by seeking summary judgment in state court action to collect on underlying debt after plaintiff had sought arbitration on said claim, and by asserting interest rate on debt that was lower than rate that had applied to plaintiff’s credit card. Instant credit card agreement allowed for creditor to change rate of interest, and record showed that creditor had actually lowered plaintiff’s interest rate to level asserted by defendant. As such, there was no misrepresentation on part of defendant. Moreover, defendant’s prosecution on debt in state court had no FDCPA consequence.

Record contained sufficient evidence to support Dist. Ct.’s entry of judgment in favor of defendants in bench trial on plaintiff’s breach of contract action alleging that defendant failed to pay $200,000 break-up fee called for in Letter of Intent (LOI) when negotiations between parties failed to reach deal to sell defendants’ company prior to termination date set forth in LOI. Although plaintiff argued that defendants engaged in sham negotiations and made unrealistic demands to avoid paying break-up fee, Dist. Ct. could properly find that defendants continued to engage in bona fide negotiations through LOI termination date, where defendants did not send plaintiff notice of termination of negotiations that would otherwise trigger break-up fee, and where plaintiff failed to show that defendants lacked intention to complete sale by termination date, even though plaintiff presented evidence that: (1) president of company sent angry email prior to termination date indicating desire to end negotiations; (2) defendants refused to provide full scope of due diligence documents requested by plaintiff; and (3) defendants refused to perform certain environmental studies on company property that precluded plaintiff from obtaining financing to purchase company.

Bankruptcy Ct. did not err in denying debtor’s request to discharge $260,000 in student loan debt as part of debtor’s Chapter 7 bankruptcy petition, even though debtor, who was 56 years old and unemployed, argued that repayment of said amount would constitute undue hardship. Student loans are generally not dischargeable in bankruptcy, and debtor failed to show that his current inability to pay on student loans would likely persist over significant portion of instant repayment period, where: (1) Bankruptcy Ct. noted that debtor had MBA degree, was good writer and was able to earn living; and (2) record suggested that debtor was feigning psychological problems. Ct. further found that debtor failed to establish good faith element of applicable dischargeability test, where debtor favored certain creditors over others when making prior payments on his debt.

Dist. Ct. erred in granting defendant-passive debt buyer’s motion for summary judgment in action alleging that defendant’s activities in purchasing large quantities of Illinois consumers’ defaulted debt and referring collection of said debt to its related corporate entity qualified defendant as “collection agency” under Illinois Collection Agency Act (ICAA) that in turn subjected defendant to registration requirements under ICAA. Illinois Supreme Court, in LVNV Funding, LLC v. Trice, 32 N.E. 3d 553, concluded that passive debt buyer using third-party to collect on said debt qualified as collection agency, and thus Ct. of Appeals reversed contrary holding by Dist. Ct. and remanded case for further consideration of other issues raised by defendant.

Dist. Ct. did not err in finding that Bankruptcy Ct. abused its discretion by issuing creditor contempt and damages orders arising out of creditor’s conduct in seeking from state probate court ratification of assignment to creditor of claim against debtor, under circumstances where debtor had previously filed bankruptcy petition and obtained order from Bankruptcy Ct. that enjoined creditor from collecting on any debt by operation of 11 USC section 524(a)(2) and of any bankruptcy plan of reorganization. Creditor’s motion for ratification order in probate court did not violate either statutory injunction or plan injunction issued by Bankruptcy Ct. because ratification motion did not seek to collect, recover, prosecute or satisfy any judgment against debtor. Ct. rejected debtor’s argument that creditor’s ratification motion in probate court was prohibited because it constituted indirect attempt to establish debtor’s personal liability.

Ct. of Appeals lacked jurisdiction to consider defendant’s pro se appeal of Dist. Ct.’s order granting plaintiff’s summary judgment motion seeking to foreclose on defendant’s property based upon defendant’s default on mortgage note held by plaintiff. While Dist. Ct. entered Rule 54(b) order stating that its judgment was final and appealable, instant order was not final and appealable where property was subject to future reinstatement and redemption rights that could either alter said order or render it moot. Moreover, order was not final where foreclosure proceeding was still subject to future hearing to determine propriety of judicial sale and to assess any deficiency damages. Ct. further observed that Dist. Ct.’s order: (1) was not “separate claim” for purposes of rendering it final order under Rule 54(b); (2) was not form of injunction that would make it appealable under section 1292(a)(1); and (3) was not appealable under Forgay, under circumstances where defendant would suffer irreparable harm if required to wait until order became final to file appeal. (Dissent filed.)