Portfolio Acquisitions, L.L.C. v. Feltman, 1-07-3004.
| Decision Date | 20 May 2009 |
| Docket Number | No. 1-07-3004.,1-07-3004. |
| Citation | 391 Ill. App. 3d 642,909 N.E.2d 876 |
| Parties | PORTFOLIO ACQUISITIONS, L.L.C., Plaintiff-Appellant, v. Randy FELTMAN, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
Deborah Zuckerman, Julie Nepveu, Michael Schuster, ARP Foundation, Washington, DC, for Amicus Curiae, AARP.
Michelle A. Weinberg, Legal Assistance Foundation of Metropolitan Chicago, Chicago, IL, for Amicus Curiae, Legal Asst Fnd of Metropolitan Chicago.
Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Edelman, Combs, Latturner & Goodwin, LLC, Chicago, IL, for Amicus Curiae, Natl. Assn of Consumer.
This case is before this court on plaintiff's appeal of the trial court's order granting defendant's motion to dismiss plaintiff's second amended complaint with prejudice pursuant to section 2-619(a)(5) of the Code of Civil Procedure. 735 ILCS 5/2-619(a)(5) (West 2006). On June 28, 2005, plaintiff filed its initial complaint against defendant to collect on an alleged defaulted credit card debt. Following the trial court's dismissal, with leave to amend, of plaintiff's complaint and first amended complaint, plaintiff filed its second amended complaint on March 9, 2007. The trial court agreed with defendant that plaintiff had failed to plead a viable breach of contract case based on a written contract and that it also failed to file its complaint within the five-year statute of limitations for accounts stated. 735 ILCS 5/13-205 (West 2006). Accordingly, the trial court granted defendant's motion to dismiss the second amended complaint under section 2-619(a)(5).
On appeal, plaintiff argues that the trial court improperly based its order on the finding that the 5-year and not the 10-year statute of limitations applied to its cause of action. See 735 ILCS 5/13-205, 13-206 (West 2006). Plaintiff asserts that it is well entrenched in Illinois law that the statute of limitations for an action on a credit card debt is 10 years. Plaintiff argues that the documents it presented at trial were sufficient to be considered evidence of a written contract or other evidence of indebtedness in writing. Plaintiff also argues that this court may follow the composite document theory to prove the existence of a written agreement. For the following reasons, we affirm the findings of the trial court.
Plaintiff, Portfolio Acquisitions, LLC, is a debt buyer and collector. As a matter of background, the debt collection business has grown to the point of $110 billion of bad debt purchases in 2007. Often, these debts have been transferred between several creditors and eventually written-off to be sold for pennies on the dollar to debt collection agencies. In Illinois, millions of these bad debts have been purchased by these debt collection agencies. Amici for defendant estimate that roughly more than half of the 158,152 debt collection lawsuits filed in Cook County in 2007 were filed on behalf of debt collection agencies, primarily for credit card debts. Because these debts often are transferred multiple times, amici for defendant express their concern that, despite the use of computers and sophisticated software, the odds drastically increase that documents will be lost and errors will result. They assert that this concern is compounded by the sheer volume of cases, which precludes careful examination for inconsistencies and inadequate documentation.
In the matter at hand, on or about June 18, 1994, defendant allegedly applied for a Master Card credit card account with Prudential Bank. GE Select originally serviced the account until it was transferred to Direct Merchants Credit Card Bank (Direct Merchants) in September 1999. On or about March 30, 2005, the account was assigned from Direct Merchants to Metris Companies, Inc., which assigned it to OSI Portfolio Services, Inc., which finally assigned the account to plaintiff. Plaintiff then placed the account with the law offices of Blatt, Hasenmiller, Leibsker and Moore, LLC, for the purpose of collecting the debt allegedly defaulted on in 1999.
On June 28, 2005, plaintiff filed its complaint against defendant alleging that defendant had opened a charge account with GE Capital Consumer Card Company, agreeing to make payments as required by the charge agreement for any purchases made. Plaintiff asserted that, as assignee of the account, defendant was in default of the balance of $6,324.96 on the account. Defendant filed a combined motion to dismiss the complaint under section 2-619.1 of the Code of Civil Procedure. 735 ILCS 5/2-619.1 (West 2006).
Defendant attached an affidavit to her motion testifying that she first learned of this account via a telephone call in 2005 and disputed the charges. Defendant claimed that she never received written notification of the debt or opportunity to dispute the debt. Defendant argued that the complaint be dismissed pursuant to section 2-615 for plaintiff's failure to attach a copy of the written instrument to the complaint and under section 2-619(a)(9) for plaintiff's alleged failure to comply with section 1692g(a) of the Fair Debt Collection Practices Act (15 U.S.C. § 1692g(a) (2006)). The trial court denied the motion as to section 2-619, but granted it pursuant to section 2-615, with leave to amend, for plaintiff's failure to attach a copy of the written instrument.
Plaintiff filed an amended complaint on July 25, 2006, based on an account stated theory. The trial court again granted defendant's motion to dismiss, finding that the account stated claim was barred by the five-year statute of limitations. Plaintiff filed its second amended complaint on March 9, 2007. Plaintiff did not identify a specific cause of action, but pled that defendant applied for a credit card, agreed to pay for amounts charged, but failed to make required payments. Plaintiff alleged that this resulted in a debt including late payments and interest, of $6,324.96 on the account. Plaintiff attached a copy of a signed application dated July 14, 1994, to Prudential Bank for the Master Card account as well as copies of cardholder agreements from Direct Merchants dated August 1998 and April 1999. In addition, plaintiff attached account statements issued from GE Select and Direct Merchants dated between July 24, 1999, and April 26, 2000, that indicated the last payment or charge date on the account was November 26, 1999.
Defendant again filed a motion to dismiss pursuant to section 2-619(a)(5) of the Illinois Code of Civil Procedure. 735 ILCS 5/2-619(a)(5) (West 2006). Defendant argued that the documents plaintiff attached to the second amended complaint did not constitute a written contract or other evidence of indebtedness in writing. Therefore, defendant concluded that the complaint was barred by the five-year statute of limitations because the last activity on the account occurred over five years from the date the lawsuit was filed, June 28, 2005.
The trial court found that plaintiff had failed to show the existence of a written contract and granted the motion to dismiss. In denying plaintiff's motion to reconsider, the trial court concluded:
Section 2-619 of the Code of Civil Procedure allows a party to move for summary disposition of issues of law or easily proved issues of fact. Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill.2d 112, 116-117, 189 Ill.Dec. 31, 619 N.E.2d 732 (1993). Such a motion admits the legal sufficiency of the complaint but raises defects, defenses or other affirmative matter appearing on the face of the complaint which defeat the plaintiff's claim. Joseph v. Chicago Transit Authority, 306 Ill.App.3d 927, 930, 240 Ill.Dec. 46, 715 N.E.2d 733 (1999). This court, under a de novo standard of review, must determine whether a material issue of fact should have precluded dismissal or, absent a question of fact, whether the dismissal was proper as a matter of law. Kedzie & 103rd Currency Exchange, Inc., 156 Ill.2d at 116-117, 189 Ill.Dec. 31, 619 N.E.2d 732. This court may uphold a trial court's decision on any basis appearing in the record. Arangold Corp. v. Zehnder, 187 Ill.2d 341, 359-60, 240 Ill.Dec. 710, 718 N.E.2d 191 (1999).
For purposes of this appeal, there is no dispute that the use of a credit card constitutes a contractual obligation or that the contract alleged by plaintiff exists. The resolution of this case hinges on the determination of whether the alleged contract is oral and the 5-year limitation period of section 13-205 applies or if it is a written contract and the 10-year limitation period of section 13-206 applies. Section 13-205 provides, in pertinent part:
"[A]ctions on unwritten contracts, expressed or implied, or on awards of arbitration, or to recover damages for an injury done to property, real or personal, or to recover the possession of personal property or damages for the detention or conversion...
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