Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in affirming Bankruptcy Ct.’s disallowance of defendant-creditor’s claim in plaintiff’s Chapter 13 bankruptcy proceeding as a discovery sanction. Record showed that bank had previously obtained state-court consent judgment against plaintiff and defendant, and that defendant had paid bank to take over as judgment creditor to bring instant claim in plaintiff’s Chapter 13 proceedings. Ct. of Appeals rejected defendant’s contention that Rooker-Feldman doctrine precluded plaintiff from objecting to defendant’s claim in bankruptcy court, since state-court had never previously resolved defendant’s claim under bankruptcy law. Ct. of Appeals also rejected defendant’s claim that res judicata and collateral estoppel precluded plaintiff from objecting to defendant’s claim in bankruptcy court proceeding: (1) state-court consent judgment is not entitled to collateral estoppel effect; and (2) while state court consent judgment has preclusive effect as to issues of existence of debt and amount of debt for purposes of res judicata doctrine, instant state-court consent judgment was not final for purposes of applying res judicata doctrine.

Dist. Ct. did not err in granting defendant-bank’s motion for summary judgment in plaintiff-County’s action under Fair Housing Act (Act), alleging that defendant improperly targeted potential minority borrowers for home loans knowing that said borrowers could not repay loans, which in turn caused plaintiff to incur expenses associated with vacant properties after said loans were foreclosed, as well as lost tax income and transfer fees. Under Miami, 581 U.S. 189, Act provides relief only for injuries proximately caused by statutory violations. Moreover, plaintiff failed to allege any direct injury caused by defendant, where: (1) only borrowers incurred direct injuries from defendant’s alleged conduct in form of lost housing and money; and (2) plaintiff’s injuries were not directly related to alleged violations of Act, since plaintiff’s alleged injuries derived from injuries incurred by borrowers and other banks.

Dist. Ct. did not err in granting defendant-credit reporting agency’s motion for summary judgment with respect to portion of plaintiff-debtor’s claim under Fair Credit Reporting Act (FCRA), alleging that defendant’s credit report on plaintiff was inaccurate because it had indicated that plaintiff’s mortgage was delinquent for three months in 2017. Under terms of revised payment plan, lender indicated that plaintiff’s account would be reported as delinquent for said months, where plaintiff would be paying established, but reduced mortgage payments. Thus lender could properly report to defendant than plaintiff was delinquent during said time period. However, Dist. Ct. erred in granting defendant’s summary judgment motion in portion of FRCA claim, that alleged that defendant failed to include existence of revised payment plan in credit report, after plaintiff had brought existence of said plan to defendant’s attention, since: (1) said omission of revised repayment plan was material, and thus rendered credit report inaccurate; (2) existence of said plan was factual matter within defendant’s competency to identify and correct; and (3) plaintiff gave defendant enough information about said plan to alert defendant of its existence. Also, Dist. Ct. erred in granting defendant’s summary judgment on portion of plaintiff’s FCRA claim alleging that defendant was unreasonable in its reinvestigation of status of plaintiff’s mortgage regarding disparities that lender was telling plaintiff and defendant about status of mortgage, i.e. lender telling plaintiff that he was current under revised payment plan and telling defendant that plaintiff was delinquent on mortgage. As such, defendant had cost effective way that could have confirmed existence of revised payment plan so as to include it in credit report. Too, plaintiff had viable claim under FCRA that defendant ignored his request to add statement to credit report that reflected his understanding of repayment plan.

Dist. Ct. did not err in granting judgment on pleadings in plaintiff’s favor in action seeking declaration that contract between parties, which hired plaintiff as defendant’s exclusive agent in its shipping and logistics company, allowed plaintiff to terminate contract. Original contract had 3-year term, continuous one-year renewal option, and mutual non-renewal provision. Said contract was amended three years later to provide that agreement would renew perpetually for one-year terms, unless defendant, in its sole discretion, notified plaintiff of its intention to terminate contract with 30 days notice prior to end of annual expiration date. Amended contract, though, left intact provision in original contract that contract could be terminated under certain circumstances, where defendant had caused material breach that went uncorrected after certain period of time. Under Illinois law, as contract of indefinite duration, instant contract was terminable at will. Moreover, because contract did not clearly state that agreement can only be terminated based on occurrence of certain conditions or events, defendant did not rebut presumption that instant contract was terminable at will.