Gros v. Midland Credit Management

• Decision Date: 10 September 2007
• Docket Number: No. 06 C 5510.,06 C 5510.
• Citation: 525 F.Supp.2d 1019
• Parties: William GROS, Plaintiff, v. MIDLAND CREDIT MANAGEMENT and Ford Motor Credit Company, Defendants.
• Court: U.S. District Court — Northern District of Illinois

525 F.Supp.2d 1019

William GROS, Plaintiff, v. MIDLAND CREDIT MANAGEMENT and Ford Motor Credit Company, Defendants.

No. 06 C 5510.

United States District Court, N.D. Illinois, Eastern Division.

September 10, 2007.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

William George Hutul, Norman H. Lehrer, Norman H. Lehrer, P.C., Wheaton, IL, for Plaintiff.

James William McConkey, Richard Eric Gottlieb, Andrew Douglas Lemar, Renee Lynn Zipprich, Dykema Gossett PLLC, Mary K. Schulz, Schulz Law, P.C., Chicago, IL, Theodore Wilson Seitz, Dykema Gossett, PLLC, Lansing, MI, for Defendants.

MEMORANDUM OPINION AND ORDER

JAMES F. HOLDERMAN, Chief Judge.

Plaintiff William Gros ("Gros") brings this lawsuit against defendants Midland Credit Management, Inc. ("MCM") and Ford Motor Credit Company ("Ford Credit") for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/2, et seq., common law fraud, common law slander of credit, and civil conspiracy. Before the court is Ford Credit's Motion to Dismiss Counts II, III, IV and V. of Plaintiff's Amended Complaint, (Dkt. No. 40), which was later joined by MCM as it pertains to the civil conspiracy claim.

For the reasons stated below, defendants' Motion to Dismiss is granted in part and denied in part. Defendants' Motion to Dismiss Count II is denied. Defendants' Motion to Dismiss Counts III, IV and V is granted. Counts III and V are dismissed with prejudice; Count IV is dismissed without prejudice. Gros is granted leave to file a Second Amended Complaint on or before September 25, 2007, consistent with this order, for purposes of pleading his actual damages with specificity in regards to Count IV, should he choose to do so.

PRELIMINARY MATTERS

At the outset of its analysis, the court addresses Gros' untimely filing of his responsive brief. On March 13, 2007, the court set a briefing schedule on Ford Credit's motion to dismiss, according to which Gros' response was to be filed by April 17, 2007. Without explanation, notice, or seeking leave of the court for an extension, or for leave to file instanter, Gros filed his responsive brief three days late, on April 20, 2007. Because the court prefers to rule on the merits of a case, it will overlook Gros' procedural defect, finding no prejudice to the defendants at this point in the proceedings. However, Gros is hereby put on notice that any further failure to timely file pleadings, briefs or other documents in this case, or to seek leave of the court for an extension of time in which to file, may result in such documents being stricken from the record. Gros is further instructed that he must include references to specific page numbers when citing case law in future briefings before the court.

LEGAL STANDARD

Under the Federal Rules of Civil Procedure, a complaint generally need not contain more than "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). In other words, the complaint must "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, ___ U.S. ___, ___, 127 S.Ct. 1955, 1969, 167 L.Ed.2d 929 (May 21, 2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). So long as the factual allegations in the complaint "raise a right to relief above the speculative level," the complaint will withstand a 12(b)(6) challenge. Twombly, 127 S.Ct. at 1965. In conducting its analysis, the court assumes that all well-pleaded allegations in the complaint are true. Twombly, 127 S.Ct. at 1965. However, if a complaint includes facts that undermine its own allegations, a plaintiff can plead himself out of court. Kolupa v. Roselle Park Dist., 438 F.3d 713, 715 (7th Cir.2006). Any exhibits attached to a complaint are considered to be a part of the pleadings. Moranski v. Gen. Motors Corp., 433 F.3d 537, 539 (7th Cir.2005).

BACKGROUND

The court accepts as true the following facts, as alleged by Gros. On January 4, 2002, Gros entered into a "Red Carpet Lease. End Extension Agreement" ("lease agreement") with Westgate Lincoln Mercury, a car, dealership in Lombard, Illinois, and Ford Credit. The subject matter of the lease agreement was a 1999 Lincoln Town Car. When Ford Credit later refused to sell the subject car to Gros at the stated contract price, Gros filed suit against both Westgate Lincoln Mercury and Ford Credit in the Circuit Court of Cook County.¹

Gros contends that the Circuit Court of Cook County ultimately found "that Ford Motor Credit had no right to any additional funds from the plaintiff, William Gros, with respect to the Red Carpet Lease Extension Agreement or in any manner with respect to the 1999 Lincoln Town Car." (Am.Compl. ¶ 23). According to Gros, the court "ruled in favor of Gros and dismissed Ford Motor Credit's counterclaim in the suit `with prejudice' and ruled that Gros owed no money to Ford Motor Credit Company." (Am.Compl. ¶ 15). In support of this argument, Gros attaches an order from the Circuit Court stating:

IT IS ORDERED HEREBY: that Ford Motor Credit Company's motion for setoff is granted in the amount of $35,000 judgment on Count III and in the amount of $10,000 judgment on Count I against the amount of settlement already paid by the other defendant, and It So [sic] Further Ordered that Ford Motor Credit Company's counterclaim is dismissed with prejudice and without costs nunc pro tune September 20, 2005.

(Am.Compl., Ex. D). The court order is dated July 27, 2006, and is identified as case number 03 L 000520.

Gros also attaches the 24-page trial transcript of witness Laurie Rizzo ("Rizzo"), Dealer Service Supervisor for Ford Credit. (Am.Compl., Ex. C). Although Gros does not cite directly to the transcript, it appears that Rizzo was the final witness in the Circuit Court case, with both parties resting after her testimony. (See Ex. C at 40-41). At that point in the proceedings, the transcript identifies an off-the-record discussion, in which the court apparently recognized the defendant's right to voluntarily accept a dismissal with prejudice. (See Ex. C at 42). The transcript does not indicate that the defendant actually asserted this right at that time. The transcript is dated September 20, 2005, and is identified as case number 02 L 520.

Gros alleges that, despite the court's ruling in his favor, Ford Credit nevertheless falsely represented to Midland Funding, LLC (a/k/a/ MCM) that Gros owed money to Ford Credit and sold the nonexistent debt to. MCM, knowing that MCM would attempt to collect the debt from Gros. MCM has, in fact, made various attempts to collect the debt from Gros. These attempts include two letters, dated May 26, 2006 and July 21, 2006, and multiple phone calls between May 26, 2006 and July 21, 2006. (Am. Compl. ¶¶ 11-14, Ex. A & Ex. B).

Count I — Fair Debt Collection Practices Act

Count I of the Amended Complaint is brought against MCM only, setting forth alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692(e)(2). The motion before the court does not concern this count.

Count II — Illinois Consumer Fraud and Deceptive Business Practices Act

In Count II of his Amended Complaint, Gros alleges that Ford Credit and MCM violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/2 (the "Act"). Section 10a(a) of the Act creates a private cause of action for violations of the statute's provisions. 815 Ill. Comp. Stat. 505/10a(a). "To prove a private cause of action under section 10a(a) of the Act, a plaintiff must establish: (1) a deceptive act or practice by the defendant, (2) the defendant's intent that the plaintiff rely on the deception, (3) the occurrence of the deception in the course of conduct involving trade or commerce, and (4) actual damage to the plaintiff (5) proximately caused by the deception." Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill.2d 100, 296 Ill.Dec. 448, 835 N.E.2d 801, 850 (2005).

Ford Credit argues that the Act does not apply to the facts of this case, because the alleged misrepresentation necessarily took place outside of Illinois. In support of this assertion, Ford Credit attaches the affidavit of Lynne Niepage ("Niepage"), Performance and Debt Sale Manager for Ford Credit, who attests that the sale of Gros' debt was negotiated between her office in Mesa, Arizona and a representative of Encore Capital Group (parent company to MCM) in San. Diego, California. (See Dkt. No. 41, Ex. A). Ford Credit cites Avery for the proposition that the Act does not apply to fraudulent transactions which occur outside the state of Illinois. (Dkt. No. 41 at 4).

The court in Avery specifically, found that "the General Assembly intended [a] broader understanding of an in-state transaction," and held that the Act will apply whenever "the circumstances that relate to the disputed transaction occur primarily and substantially in Illinois." Avery, 296 Ill.Dec. 448, 835 N.E.2d at 853-54. Avery instructs courts to consider the totality of the circumstances in determining whether the disputed transaction occurred "primarily and substantially" in Illinois. Id. at 854. It is therefore incorrect to focus on only one aspect of the disputed transaction. Ford Credit's argument discounts the importance of such factors as Gros' residence, the location of the alleged harm, the site of Gros' dealings with Ford Credit, the Illinois court case, and the site of Gros' communications with MCM — all of which are "circumstances relating to [the] disputed transaction." Id. Furthermore, because Niepage's affidavit goes beyond the scope of Gros' Amended Complaint, the court will not consider this evidence in addressing Ford Credit's Motion to Dismiss. See Loeb Indus., Inc. v. Sumitomo Corp., 306 F.3d 469, 479 (7th Cir.2002). At this point in the proceedings, based on the...