Johnson v. Household Finance Corp., 78-1040.

Decision Date21 July 1978
Docket NumberNo. 78-1040.,78-1040.
Citation453 F. Supp. 1327
PartiesJerry R. JOHNSON and Judith J. Johnson, Plaintiffs, v. HOUSEHOLD FINANCE CORPORATION, Defendant.
CourtU.S. District Court — Southern District of Illinois

DeWayne Morrison, Galesburg, Ill., for plaintiffs.

Harry C. Bulkeley, Galesburg, Ill., for defendant.

DECISION AND ORDER

ROBERT D. MORGAN, Chief Judge.

The initial issue which the court must face in this action under TILA, 15 U.S.C. § 1601 et seq., is the question whether a suit for violation of the Act survives the death of a deceased plaintiff.

The complaint alleges that plaintiffs borrowed money from defendant on March 16, 1977, and on November 10, 1977, and that the disclosures made to plaintiffs in each loan context violated TILA. The complaint was filed on March 10, 1978 by Jerry R. Johnson and Judith J. Johnson as co-plaintiffs. Judith Johnson died within several days after the complaint was filed.

Defendant filed a motion to dismiss the complaint as to the latter plaintiff because of her death. Counsel for plaintiff responded to that motion by a motion by the administrator of Judith's estate for substitution as a party plaintiff.1

After reviewing pertinent authorities, the motion to dismiss the complaint as to Judith J. Johnson must be allowed.

The threshold question must be a determination as to the applicable law governing the issue, i. e., whether federal or state.

Plaintiff relies upon the statement in Murphy v. Household Finance Corp., 560 F.2d 206, 208 (6th Cir. 1977), that the question of survivability of a TILA action is a matter of federal law. However, the more persuasive authorities hold that the question of survivability must be determined by the application of state law. Brazier v. Cherry, 293 F.2d 401 (5th Cir. 1961), cert. denied, 368 U.S. 921, 82 S.Ct. 243, 7 L.Ed.2d 136; Dear v. Rathje, 391 F.Supp. 1, 7 (N.D. Ill.1975);2 Holmes v. Silver Cross Hospital of Joliet, Illinois, 340 F.Supp. 125, 128-129 (N.D.Ill.1972); Davis v. Johnson, 138 F.Supp. 572 (N.D.Ill.1955). In Holmes, the court said that, absent any specific congressional enactment on the subject, "state law in relation to survival of actions must be ascertained and adopted as the law governing the issue of survival of" an action under the federal Civil Rights Act.3 340 F.Supp. at 129. In Dear, supra, the court, applying Illinois law, held that a purely personal cause of action did not survive the death of a party.4

The Illinois survival statute provides:

"In addition to the actions which survive by the common law, the following also survive: actions of replevin, actions to recover damages for an injury to the person (except slander and libel), actions to recover damages for an injury to real or personal property or for the detention or conversion of personal property, actions against officers for misfeasance, malfeasance, or nonfeasance of themselves or their deputies, actions for fraud or deceit, and actions provided in Section 14 of Article VI of `An Act relating to alcoholic liquors.'" Ill.Rev.Stat.1977, ch. 110½ § 27-6.

Defendant principally relies upon Creighton v. County of Pope, 386 Ill. 468, 54 N.E.2d 543 (1944), to support its position that the cause of action does not survive the death of Judith. Creighton was a suit by an administrator to recover statutory benefits which allegedly had accrued to the decedent prior to his death. In holding that the cause of action did not survive, the court said that a cause of action created by statute does not survive unless survival of the action is mandated by the same statute or another statute of the state. Ibid. at 476, 54 N.E. 543. Creighton was recently cited and followed in Shapiro v. Chernoff, 3 Ill.App.3d 396, 279 N.E.2d 454, 457 (1st Dist. 1972).5

Plaintiffs place principal reliance upon McDaniel v. Bullard, 34 Ill.2d 487, 216 N.E.2d 140 (1966), as overruling, by implication, the Creighton principle that a cause of action created wholly by statute does not survive. They misconstrue McDaniel. In that suit under the wrongful death act, a suit was filed on behalf of the sole beneficiary of the decedent for injury to her means of support. About nine and one-half months after the fatal incident, the sole beneficiary died from causes unrelated to the fatal injury. The trial court then dismissed her pending complaint. In reversing that dismissal and remanding the cause, the court criticized its prior decision in Wilcox v. Bierd, post, n. 6. The court's decision rested upon its definition of "personal property" as that term was employed in the then Illinois survival statute. Ill.Rev.Stat. 1963, ch. 3, § 339.6 The court held that the claim under the Wrongful Death Act created an accrued property right in the sole beneficiary during her lifetime, and that that accrued right did not abate as the result of her untimely death. The court also recognized that it was dealing with a statutory right which was "strictly compensatory." 216 N.E.2d at 143. The Creighton decision was not mentioned by the court.

Later opinions by the Illinois courts are found in Jones v. Siesennop, 55 Ill.App.3d 1037, 13 Ill.Dec. 800, 803, 371 N.E.2d 892, 895 (1st Dist. 1977), which held that a professional negligence suit against an attorney, which had the effect of jeopardizing the title to real estate, did survive the death of the plaintiff, and Hogan v. Braudon, 40 Ill.App.3d 352, 352 N.E.2d 303, 304 (2d Dist. 1976), which held that a suit to foreclose special assessment liens against real estate did survive the death of the original plaintiff in the cause of action.

It appears that McDaniel and subsequent cases do ameliorate the Illinois rule of survivability to the extent that a court must determine whether there was, prior to death, an injury to some compensatory property right of the deceased party, which, if unredressed, would have the effect of decreasing the value of his estate. None of these decisions can be construed as derogating from the Creighton principle that a wholly personal, statutory right does not survive.

The critical issue thus becomes the question whether abatement of this suit would fail to recognize an accrued compensatory property right of Judith Johnson at the time of her death. The answer must be no.

In the context of this issue, it seems necessary to precisely define and categorize the TILA claim. Although this court is not concerned with the issue in Murphy, supra, and Porter v. Household Finance Corp., 385 F.Supp. 336 (S.D.Ohio 1974), upon which Murphy substantially relied, we yet must be concerned with the reasoning of those cases which equated the issue therein faced with the question whether a TILA claim does survive the death of a party.7 One must question the reasoning which led each of those courts to a determination that a TILA claim would survive the death of the potential claimant.

Murphy, in particular, and Porter, to a lesser degree, placed great emphasis upon Huntington v. Attrill, 146 U.S. 657, 666-667, 13 S.Ct. 224, 36 L.Ed. 1123 (1892), which equated the concepts of the words "penal" and "penalty" with the common law concept that those terms were limited to forfeitures, either corporal or monetary, to the state for offenses committed against the state as such. This court would not take the position of ignoring, criticizing, or evading Huntington, but we cannot ignore reality. When the court spoke in the nineteenth century, the social legislation, which was enacted as an aftermath of the Civil War, were words in a book which were to be largely ignored and forgotten by litigants, attorneys, and courts until the same were unearthed many decades later. Query, and only the Supreme Court can ultimately answer the question — can Huntington have any significance after more than eight decades, which were tempered by four major wars, and the technology and public consensus generated by those wars, and other factors? We think not. The Huntington concept requires one to retrogress to an era in which a stark distinction between civil and criminal law existed both in government and in popular thinking, unaffected by the mass of twentieth century regulatory legislation which has blurred that clear distinction.

Both Murphy and Porter sought to find an analogy between the treble damage provisions of the Sherman Act, the patent laws, and the Securities Exchange Commission Act and TILA.8 In this court's view, that analogy is misplaced. Each of those statutes creates a civil cause of action which is grounded upon the proof of monetary damage. For example, the treble damages provision of the Sherman Act is meaningless to the litigant who proves that his actual damages, occasioned by a Sherman Act violation, were zero. This plaintiff asserts the same analogy, but in the court's view the analogy will not wash.

It appears to this court that its appraisal of Huntington is fortified by the one TILA decision of the Supreme Court. Mourning v. Family Publications Service, Inc., 411 U.S. 356, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973). Reference here is to the language of the court that Congress placed the principal enforcement burden upon the consuming public by enacting a provision for a civil penalty. 411 U.S. at 376, 93 S.Ct. 1652. Murphy quotes, in part, the applicable language, but emphasizes the statement that the civil penalty "is modest" and that the Act should not be so narrowly construed as a criminal statute must be construed. In our view, Murphy failed to consider the issue with which the Court was concerned in Mourning. Review was upon a challenge to the constitutionality of the Act and of Regulation Z, which was alleged to constitute an unconstitutional usurpation of Congressional power by the Federal Reserve Board.9 Mourning must be construed as holding that TILA does involve a civil penalty.

The conclusion that the Act is penal, in the true sense of that word, is compelled by the language of the statute itself. Congress elected the device of private litigation as...

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6 cases
  • Ppg Industries v. Jmb/Houston Centers
    • United States
    • Texas Supreme Court
    • 9 Julio 2004
    ...53, 385 F.Supp. 336, 342 (1974); Murphy v. Household Fin. Corp., 560 F.2d 206, 211 (6th Cir. 1977); but see Johnson v. Household Fin. Corp., 453 F.Supp. 1327, 1331 (S.D.Ill.1978) (holding that because "actual damages are not a necessary allegation" of a complaint under the Truth-in-Lending ......
  • Wood, Matter of, 79-1504
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 22 Agosto 1980
    ...here convinces us otherwise. The plaintiff's attack on Murphy and Porter is founded in large measure on Johnson v. Household Finance Corp., 453 F.Supp. 1327 (N.D.Ill.1978). The district court there questioned the vitality of Huntington, the efficacy of analogizing TILA civil liability to an......
  • US v. $47,409.00 IN US CURRENCY
    • United States
    • U.S. District Court — Northern District of Ohio
    • 15 Enero 1993
    ...to forfeitures, either corporeal or monetary, to the state for offenses committed against the state as such." Johnson v. Household Finance Corp., 453 F.Supp. 1327 (1978). Simply put, the court believes civil forfeitures which are part of a criminal statute such as these are, constitute pena......
  • Stafford v. Purofied Down Products Corp., 88 C 10205.
    • United States
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    • 2 Septiembre 1992
    ...for its survival is made by some other statute. Larson v. Wind, 542 F.Supp. 25, 26 n. 1 (N.D.Ill.1982); Johnson v. Household Finance Corp., 453 F.Supp. 1327, 1329-1330 (S.D.Ill.1978). Applying that principle, Johnson determined that a statutory action under the Truth In Lending Act ("TILA")......
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