Blankenship v. Pushpin Holdings, LLC
| Decision Date | 06 October 2015 |
| Docket Number | No. 14 C 6636,14 C 6636 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | RONALD W. BLANKENSHIP, and GARY BRASSFIELD, on behalf of themselves and all others similarly situated, Plaintiffs, v. PUSHPIN HOLDINGS, LLC, LEASE FINANCE GROUP LLC, and JAY COHEN, Defendants. |
AMY J. ST. EVE, District Court Judge:
Before the Court is Defendants Pushpin Holdings, LLC's ("Pushpin's"), Lease Finance Group LLC's ("Lease Finance's"), and Jay Cohen's ("Cohen's") (collectively, "Defendants'") Motion to Dismiss Plaintiffs' First Amended Class Action Complaint or in the Alternative, to Strike Scandalous and Class Allegations Therefrom. (R.53.)
On July 28, 2014, Plaintiffs Ronald W. Blankenship ("Blankenship") and Gary Brassfield ("Brassfield"), filed this action, individually and on behalf of a putative class of similarly situated plaintiffs, in the Circuit Court of Cook County, Illinois, against Defendants. (See R.1, Notice of Removal, ¶ 1.) Plaintiffs allege that Defendants filed suits against them and obtained ex parte judgments—against Blankenship for $2,497.65 plus costs and against Brassfield for $2,753.00 plus costs. (R.45, Am. Compl., ¶¶ 3, 32, 41.) According to the Cook County Small Claims Court complaint, Pushpin originally acquired the claims against Plaintiffs based on "acommercial equipment finance lease agreement and accompanying Personal Guaranty Agreement" between Plaintiff Blankenship and Pushpin and between Plaintiff Brassfield and Lease Finance Group. (R.45-4, at 12, Pushpin Holdings LLC v. Blankenship, Case No 13-M1-155481, Circuit Court of Cook County, Illinois, Verified Complt., ¶ 4, attached as Ex. 4 to Am. Compl; R.45-5, at 4, Lease Finance Grp. v. Brassfield, Case No. 13-M1-152732, Circuit Court of Cook County, Illinois, Verified Complt., ¶ 5, attached as Ex. 5 to Am. Compl.) Defendants removed the case pursuant to 28 U.S.C. §§ 1446 and 1453, premising federal jurisdiction on the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). Plaintiffs have since filed their First Amended Class Action Complaint ("Amended Complaint") alleging a claim for violation of the Illinois Consumer Fraud and Deceptive Practice Act ("ICFA"), 815 ILCS 505/1 et seq. (R.45, ¶¶ 58-66 (Count I)) and a breach of contract claim (id., ¶¶ 67-68 (Count II)). Defendants' motion seeks dismissal of both counts. For the reasons set forth below, the Court grants in part and denies in part Defendants' motion.
Viewing the allegations in the light most favorable to Plaintiffs, Plaintiffs allege the following:
I. The Parties
Plaintiff Blankenship operates a shoe repair business doing business as "Grand Shoe Repair" in Bessemer, Alabama. (See R.45, ¶ 9.) Plaintiff Brassfield operates an oil lube shop in Greenwood, Arkansas. (See id., ¶ 10.) Defendant Pushpin is a limited liability company with three (3) members—themselves limited liability companies with individuals as sole members. (See R.1, ¶¶ 4-7; R.45, ¶ 11; R.54, Baranello Decl., ¶ 3; R.54-2, Ex. B., at 2 ().) Defendant Lease Finance Group is alimited liability company with a single listed member—Defendant Cohen.1 (R.45, ¶ 13; see also R.54, Baranello Decl., ¶ 2; R.54-2, at 3 ().) Defendant Cohen is a citizen of New York who, according to Plaintiffs, owns and operates numerous shell entities that sell equipment leases, buy debts, and collect debts acquired through purchase of leases. (R.1, ¶ 9; R.45, ¶ 14.) Defendant Cohen's alleged shell entities include Defendants Pushpin and Lease Finance. (R.45, ¶ 14.) Plaintiffs further allege that Defendant Cohen is also the managing member of and controls the operations for GCN Holdings, LLC—a corporation that acquires debts and subsequently assigns them to Defendant Pushpin. (Id., ¶ 15.) As "President" of Pushpin and managing member of GCN Holdings, LLC, Defendant Cohen is on both sides of the alleged assignment. (Id.) Plaintiffs allege that Defendant Cohen controls each of Defendants Pushpin and Lease Finance, as well as GCN Holdings, LLC and assigns and transfers claims by and between them "as he sees fit." (Id.)
II. Plaintiff Blankenship - Lease Agreement & Assignment
Blankenship is a 71-year old sole proprietor operating a shoe repair store in Bessemer, Alabama under the name "Grand Shoe Repair." (R.45, ¶ 17.) Blankenship has been in the shoe repair business for 45 years. (Id., ¶ 18.) In 2002—when Blankenship's shoe repair store was located at 102 W. 3rd Street in Sheffield, Alabama—a representative of Retriever Payment Systems marketed a credit card swiping machine to Blankenship's assistant and then left a machine at the store a few days later. (Id., ¶ 19.) Blankenship was not present at his store on the day Retriever Payment Systems marketed the machine to his assistant. (Id.) Blankenship'smachine never worked properly—credit cards did not swipe correctly and it may not have processed some transactions. (Id., ¶ 27.) In addition, the lessor did not directly deposit payments from credit card customers into Blankenship's bank account within 48 hours. (Id., ¶¶ 29, 30.) Blankenship's numerous calls complaining that the machine did not work were never addressed and the machine was never fixed. (Id.) Although the machine did not work properly, a monthly base payment of $39.95 was deducted from Blankenship's bank account for a period of months. (Id., ¶ 28.) After seven or eight months, he turned in the machine. (Id. ¶ 27.) Lease Finance took a deduction of $500 out of his bank account after Blankenship turned in the machine. (Id., ¶ 31.)
A Non-Cancellable Lease, dated November 25, 2002, bears a signature for "Ronald Blankenship" as Lessee and "Lease Finance Group, a Division of CIT Financial USA, Inc." as Lessor. (R.45, ¶ 20; id., ¶ 32 ().) Blankenship alleges his signature on the Blankenship Lease is forged. (R.45, ¶¶ 20-24.) The Blankenship Lease lists "Retriever Payment Systems" as the "Rep Code" and indicates the equipment as a "Hypercom", Model/License Agreement "T7P". (R.45-4, at 8; R.45, ¶ 24.) The schedule of payments is listed as $39.95 per month for a term of 48 months, and there is a provision authorizing automatic withdrawal of payments from an account at Compass Bank. (R.45-4, at 8.) The Blankenship Lease contains various provisions, including a Personal Guaranty "[t]o induce Lessor to enter into this Lease" which also bears a signature for "Ronald Blankenship" as Guarantor and states that "the undersigned unconditionally guarantees to Lessor the prompt payment when due of all of Lessee's obligations to Lessor under [] Lease ..." (Id.) Relevant to the dispute here, the Blankenship Lease also has a "Choice of Law; Arbitration" provision which states:
CHOICE OF LAW; ARBITRATION: Any claim or controversy, including any contract or tort claim, between or among us, you or any Guarantor related to this Lease, shall be determined by binding arbitration in accordance with Title 9 of the U.S. Code and the Commercial Arbitration rules of the American Arbitration Association.
Defendant Pushpin filed a claim against Plaintiff Blankenship in Cook County Small Claims Court on October 8, 2013 and obtained an ex parte judgment for $2,497.65 plus costs on January 6, 2014. (R.45, ¶ 32; R.45-4, at 2; id., at 4-12, Pushpin Holdings LLC v. Blankenship, Case No 13-M1-155481, Circuit Court of Cook County, Illinois, Verified Complt., ¶ 4.) Along with the Blankenship Lease, Defendant Pushpin attached two additional agreements to its complaint in the Small Claims Court related to assignment. First, Pushpin attached an "Instrument of Assignment", dated November 30, 2005, that lists CIT Financial USA, Inc., a Delaware Corporation as "Seller" and GCN Holding LLC, a Delaware limited liability company as "Buyer" and indicates "Seller does hereby sell, assign, transfer, convey and deliver unto Buyer, its successors and assigns each and all of the US Purchased Assets (as such term is defined in the Agreement) ...". (R.45-4, at 12 ("Instrument of Assignment").) The Instrument of Assignment does not contain an explicit reference to the Blankenship Lease. (Id.) Second, Pushpin attached an "Assignment and Assumption Agreement", dated March 1, 2010, that lists GCN HOLDING LLC, a Delaware limited liability company, and GCN HOLDING (CANADA) ULC, a Canadian unlimited liability company" as "Seller" and "PUSHPIN HOLDINGS LLC, a Delaware limited liability company" as "Buyer" and indicates "Seller ... does hereby transfer and assign to Buyer, its successors and assignees, all of the Receivables as of the Closing Date". (R.45-4, at 10-11 ("Assignment and Assumption Agreement").) Defendant Cohen, as President of Pushpin Holdings, LLC, signed the Assignment and Assumption Agreement. (Id.) TheAssignment and Assumption Agreement does not contain an explicit reference to the Blankenship Lease. (Id.)
III. Plaintiff Brassfield - Lease Agreement & Bill of Sale
Plaintiff Brassfield operates an auto lube shop in Arkansas. (R.45, ¶¶ 1, 35.) Brassfield also received a credit card swiping machine from Lease Finance that broke down and after unsuccessful efforts to have Lease Finance fix the machine, he tendered the machine to Lease Finance—which never came to retrieve it. (Id., ¶¶ 35, 38, 39.)2 Lease Finance took payments for the defective machine from Brassfield's bank account. (Id., ¶ 44.)
A Non-Cancellable Lease, dated March 15, 2010, bears a purported signature for "Gary Brassfield" as Lessee and "RPSI, Inc. d/b/a Retriever Payment Systems" as Lessor. (R.45-5, Non-Cancellable Lease, attached to the Am. Compl. as Ex. 5, at 8 ("Brassfield Lease")).) Like Blankenship, Brassfield alleges that his signature on the Brassfield Lease is forged. (R.45, ¶¶ 36, 41.)...
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