LVNV Funding, LLC v. Davis

• Decision Date: 23 December 2020
• Docket Number: 5-19-0380
• Citation: 450 Ill.Dec. 544,2020 IL App (5th) 190380,181 N.E.3d 896
• Parties: LVNV FUNDING, LLC, Plaintiff and Counterdefendant-Appellant, v. Casey DAVIS, as Independent Administrator of the Estate of Guillermo Macia, Individually and on Behalf of Class Defined Herein, Defendant and Counterplaintiff-Appellee (Alegis Group, LLC; Resurgent Capital Services LP; and Sherman Financial Group, LLC, Third-Party Defendants-Appellants).
• Court: United States Appellate Court of Illinois

2020 IL App (5th) 190380
181 N.E.3d 896
450 Ill.Dec. 544

LVNV FUNDING, LLC, Plaintiff and Counterdefendant-Appellant,
v.
Casey DAVIS, as Independent Administrator of the Estate of Guillermo Macia, Individually and on Behalf of Class Defined Herein, Defendant and Counterplaintiff-Appellee

(Alegis Group, LLC; Resurgent Capital Services LP; and Sherman Financial Group, LLC, Third-Party Defendants-Appellants).

NO. 5-19-0380

Appellate Court of Illinois, Fifth District.

December 23, 2020

Nabil G. Foster, of Barron & Newburger, P.C., of Evanston, and Louis J. Manetti Jr., of Hinshaw & Culbertson LLP, of Chicago, for appellants.

David Cates, of Cates Mahoney, LLC, of Swansea, and Sean K. Cronin, of Donovan Rose Nester, P.C., of Belleville, for appellee.

OPINION

JUSTICE MOORE delivered the judgment of the court, with opinion.

450 Ill.Dec. 545

¶ 1 The plaintiff/counterdefendant, LVNV Funding, LLC (LVNV), along with the third-party defendants, Alegis Group, LLC, Resurgent Capital Services LP, and Sherman Financial Group, LLC, appeal, pursuant to Illinois Supreme Court Rule 306(a)(8) (eff. Oct. 1, 2019), the August 5, 2019, order of the circuit court of St. Clair County that granted the motion of the defendant and counterplaintiff, Casey Davis, as independent administrator of the estate of Guillermo Macia, deceased, to certify a class as to count I of Davis's counterclaim, which alleges a violation of section 8b of the Collection Agency Act (Act) ( 225 ILCS 425/8b (West 2012) ). For the following reasons, we reverse and remand for further proceedings.

¶ 2 I. BACKGROUND

¶ 3 On December 26, 2012, LVNV filed a complaint against Guillermo Macia in the circuit court of St. Clair County. The complaint requested payment for a debt Macia owed to Chase Bank USA for use of a credit card. According to the complaint, Chase Bank USA assigned, "for value," its rights under the credit card agreement to LVNV "per Exhibit B." Thereafter, Macia filed a class action counterclaim against

181 N.E.3d 898

450 Ill.Dec. 546

LVNV, as well as third-party claims against Alegis Group, LLC, Resurgent Capital Services LP, and Sherman Financial Group, LLC (collectively, the defendants).¹

¶ 4 Macia's counterclaim alleges that LVNV is a licensed debt collection agency that is "in the business of purchasing or acquiring defaulted debts, including debts originally owed to others and incurred for personal, family, or household purposes." Count I of the counterclaim requests money damages as a result of the defendants' alleged violation of section 8b of the Act. Id. In particular, count I alleges that the defendants violated section 8b of the Act in the following ways: (1) filing suit without having an assignment in the form specified by section 8b and (2) filing suit without attaching an assignment in the form specified by section 8b.

¶ 5 On January 21, 2014, the circuit court was informed that Macia had died, and Davis was substituted as the representative for his estate. On April 30, 2018, Davis filed an amended motion for partial class certification, requesting class certification for count I of the class action counterclaim only. On August 14, 2018, after full briefing by the parties, the circuit court held a hearing on the amended motion for partial class certification and took the matter under advisement. On August 5, 2019, the circuit court entered an order certifying the following class:

"THE ILLINOIS CLASS : All individuals who have been named as a defendant in a collection lawsuit filed in an Illinois court, since January 1, 2008, to this date, where any of the ‘debt collectors’ was a named plaintiff, and the lawsuit, on the date it was filed, did not comply with the provisions of the Illinois Collection Agency Act, 225 ILCS 425/1 et seq. , in that the debt collector was not in possession of a valid assignment of the purported debt and/or failed to attach same to the Complaint.

Further, the Court HEREBY FINDS that the term ‘debt collector,’ as defined by the Illinois Class, means:

‘DEBT COLLECTORS’ : Counter-Defendant and Third Party Defendants and any other entities or individuals associated in fact with the above or which are owned, wholly or in part, managed, agents, employed by, or otherwise controlled by the above." (Emphases in original.)

¶ 6 On September 4, 2019, the defendants filed a petition for leave to appeal from the circuit court's order certifying the class. On October 2, 2019, this court entered an order allowing the appeal.

¶ 7 II. ANALYSIS

¶ 8 This court has explained the standards we are to employ when reviewing an order granting class certification as follows:

" ‘The decision regarding class certification is within the discretion of the trial court and will not be disturbed on appeal unless the trial court abused its discretion or applied impermissible legal criteria.’ Cruz v. Unilock Chicago, Inc. , 383 Ill. App. 3d 752, 761 [322 Ill.Dec. 831, 892 N.E.2d 78] (2008) (citing

181 N.E.3d 899

450 Ill.Dec. 547

Smith v. Illinois Central R.R. Co. , 223 Ill. 2d 441, 447 [307 Ill.Dec. 678, 860 N.E.2d 332] (2006) ). ‘The proponent of the class action bears the burden to establish all four of the prerequisites set forth in section 2-801 [of the Code of Civil Procedure ( 735 ILCS 5/2-801 (West 2002) )].’ Cruz , 383 Ill. App. 3d at 761 [322 Ill.Dec. 831, 892 N.E.2d 78] (citing Avery v. State Farm Mutual Automobile Insurance Co. , 216 Ill. 2d 100, 125 [296 Ill.Dec. 448, 835 N.E.2d 801] (2005) ). However, as indicated by the Illinois Supreme Court in Barbara's Sales, Inc. [v. Intel Corp. , 227 Ill. 2d 45, 72, 316 Ill.Dec. 522, 879 N.E.2d 910 (2007) ], there is no need to determine whether the prerequisites of the class action are satisfied if, as a threshold matter, the record establishes that the plaintiffs have not stated an actionable claim." Coy Chiropractic Health Center, Inc. v. Travelers Casualty & Surety Co. , 409 Ill. App. 3d 1114, 1118 [354 Ill.Dec. 381, 957 N.E.2d 1174] (2011).

¶ 9 The defendants ask this court to consider whether there is a private right of action under the Act and to reverse the class certification on the basis that no such private right of action exists. We decline to do so because, as an initial matter, we find that count I fails to state an actionable claim against the defendants. Count I of the class action counterclaim, upon which the class was certified in this case, is predicated on LVNV's alleged violation of section 8b of the Act. 225 ILCS 425/8b (West 2012). Specifically, count I is based upon LVNV's filing of a collection lawsuit against Macia in December 2012 without possessing an assignment that complies with section 8b and/or without attaching that assignment to the complaint. Section 8b of the Act provides, in relevant part, as follows:

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