US Bank Nat. Ass'n v. Clark
| Decision Date | 31 March 2004 |
| Citation | 807 N.E.2d 1109,283 Ill.Dec. 268,348 Ill. App.3d 856 |
| Parties | U.S. BANK NATIONAL ASSOCIATION, Plaintiff-Appellee, v. Michael CLARK and Betty Clark, Defendants-Appellants. Eastern Savings Bank, FSB, Plaintiff-Appellee, v. Iris Peters, Defendant-Appellant. Equicredit Corporation of America, Plaintiff-Appellee, v. Goldie Johnson, Defendant-Appellant. Aames Funding Corporation, d/b/a Aames Home Loan, Plaintiff-Appellee, v. John D. Paluch, Defendant-Appellant. Bank One, N.A., as Trustee, Plaintiff-Appellee, v. Columbus Campbell, Village of Robbins, and Unknown Owners, Defendants and Third Party Plaintiffs-Appellants. Banker's Trust Company, Plaintiff-Appellee, v. Eloise King, R.V. King, Mercury Finance Company of Illinois, Jim McCrory, as Trustee or successor Trustee, Fidelity Financial Services, Inc., Eloise King, Heir, Wanda Gosa, Heir, Felicia King, Heir, Sabrina King, a/k/a Surbrina King, Heir, Unknown Heirs and Legatees of Eloise King, if any, Unknown Tenants, Unknown Owners and Non-Record Claimants, Defendants-Appellants. Bank of New York, as Trustee of Amresco Residential Securities Corporation Mortgage Loan Trust 1997-3 Under the Polling & Servicing Agreement Dated as of September 1, 1997, Plaintiff-Appellee, v. Linda Heath, Defendant and Counterplaintiff-Appellant, (Bank of New York as Trustee of Amresco Residential Securities Corporation Mortgage Loan Trust 1997-3 Under the Polling & Servicing Agreement Dated as of September 1, 1997, Counterdefendant-Appellee). Bankers Trust Company, as Trustee of Amresco Residential Securities Corporation Mortgage Loan Trust 1996-5 Under the Pooling & Servicing Agreement Dated as of December 1, 1996, Plaintiff-Appellee, v. Frances N. Coleman, a/k/a Frances N. Dixon, the City of Chicago, Unknown Owners and Non-Record Claimants, Defendants and Counterplaintiffs-Appellants (Bankers Trust Company, as Trustee of Amresco Residential Securities Corporation Mortgage Loan Trust 1996-5 Under the Pooling & Servicing Agreement Dated as of December 1, 1996, Counterdefendant-Appellee). IMC Mortgage Company, Plaintiff-Appellee, v. Pamela Cushman, Non-Record Claimants, Unknown Tenants and Unknown Owners, Defendants and Counterplaintiffs-Appellants (IMC Mortgage Company, Counterdefendant-Appellee). |
| Court | United States Appellate Court of Illinois |
Meites, Mulder, Burger & Mollica, Chicago (Thomas R. Meites and Jamie S. Franklin, of counsel); Chicago Lawyers' Committee for Civil Rights Under Law (Sharon K. Legenza, of counsel); Legal Assistance Foundation of Metropolitan Chicago (Aneel L. Chablani, of counsel); Leadership Council for Metropolitan Open Communities, Chicago (Stephen Stern, of counsel); and National Center on Poverty Law, Chicago (John Bouman and Dory Rand, of counsel), for Appellants Michael and Betty Clark, et al.
Lisa Madigan, Attorney General and Gary S. Feinerman, Solicitor General (Mary E. Welsh, Assistant Attorney General, of counsel), for Appellant State of Illinois.
Law Office of Nina E. Vinik, Evanston (Nina E. Vinik, of counsel), for Appellants Amici Curiae, Woodstock Institute National Training and Information Center, Neighborhood Housing Services of Chicago, South Austin Coalition Community Council and South Suburban Housing Center.
Chapman and Cutler, Chicago (Dianne E. Rist, Robert J. Lepri and Joseph P. Lombardo, of counsel); Noonan & Lieberman, Chicago (James V. Noonan and Mitchell A. Lieberman, of counsel); Williams, Montgomery & John, Ltd., Chicago (Alyssa M. Campbell and Hall Adams III, of counsel); Arnstein & Lehr, Chicago (Samuel H. Levine and Christopher S. Naveja, of counsel); Winston & Strawn, Chicago (Steven F. Molo, Joseph A. Spiegler, Lester G. Bovia, Jr., and Amy L. Flaherty, of counsel); Varga, Berger, Ledsky, Hayes & Casey, Chicago (Craig A. Varga, of counsel); and Pierce & Associates, P.C., Chicago (Jill Rein, of counsel), for Appellees Bankers Trust, the Bank of New York and IMC Mortgage Company.
Burke, Warren, Mackay & Serritella, P.C., Chicago (Jeffrey D. Warren and Kimberly A. Smith, of counsel), for Appellees Amici Curiae, Illinois Mortgage Bankers Association and Illinois Association of Mortgage Brokers.,
American Financial Services Association, Washington, D.C. (Robert E. McKew, General Counsel, of counsel), for Appellees Amici Curiae, American Financial Services Association.
In these nine consolidated cases, defendants appeal from orders of the circuit court of Cook County dismissing their counterclaims and affirmative defenses in foreclosure actions brought by the plaintiff creditors. The defendants alleged that the creditors violated the Illinois Interest Act by imposing fees in excess of 3% on loans with an interest rate in excess of 8%. 815 ILCS 205/4.1a(f) (West 2000). The creditors filed motions to dismiss pursuant to sections 2-615 and 2-519 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-615, 2-619 (West 2000). On May 16, 2001, the trial court issued a memorandum opinion holding that the defendants' counterclaims and affirmative defenses under the Interest Act were preempted by the federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and, in certain cases, the federal Alternative Mortgage Transaction Parity Act of 1982 (Parity Act). 12 U.S.C. § 1735 et seq. (2000); 12 U.S.C. § 3801 et seq. (2000). Three defendants also seek to appeal an February 2, 2001, order denying their motions to file class countercomplaints alleging violations of the Interest Act and various other consumer protection statutes.
Initially, this court addresses the standards of review. The debtors appeal dismissals entered pursuant to sections 2-615 and 2-619 of the Code. A section 2-615 motion admits all well-pleaded facts and attacks the legal sufficiency of the complaint; a section 2-619 motion admits the legal sufficiency of the complaint, but raises defects, defenses or other affirmative matter that defeat the action. Joseph v. Chicago Transit Authority, 306 Ill. App.3d 927, 930, 240 Ill.Dec. 46, 715 N.E.2d 733, 736 (1999). The preemption of Illinois law by a federal statute is generally considered "affirmative matter" properly raised under section 2-619, not section 2-615. Illinois Graphics Co. v. Nickum, 159 Ill.2d 469, 487, 203 Ill.Dec. 463, 639 N.E.2d 1282, 1290-91 (1994). However, as the trial court noted in its opinion, where the affirmative matter is apparent on the face of the pleading, a motion to dismiss may fall within an area of confluence between section 2-615 and section 2-619(a)(9). Nickum, 159 Ill.2d at 486, 203 Ill.Dec. 463, 639 N.E.2d at 1290. Accordingly, this court will not penalize those creditors that filed motions pursuant to section 2-615. Dismissals under either section are reviewed de novo. R-Five, Inc. v. Shadeco, Inc., 305 Ill.App.3d 635, 639, 238 Ill.Dec. 809, 712 N.E.2d 913, 915 (1999).
The supremacy clause of the United States Constitution states that "the Laws of the United States * * * shall be the supreme Law of the Land; * * * any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const., art. VI, cl. 2. Congress' purpose "`is the ultimate touchstone' of pre-emption analysis." Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407, 422 (1992), quoting Malone v. White Motor Corp., 435 U.S. 497, 504, 98 S.Ct. 1185, 1190, 55 L.Ed.2d 443, 450 (1978). "Congress' intent to preempt State law may be manifested by express provision, by implication, or by a conflict between federal and state law."' Busch v. Graphic Color Corp., 169 Ill.2d 325, 335, 214 Ill.Dec. 831, 662 N.E.2d 397 (1996), quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co., 514 U.S. 645, 654, 115 S.Ct. 1671, 1676, 131 L.Ed.2d 695, 704 (1995). The creditors argue that the homeowners' counterclaims and affirmative defenses under the Interest Act were preempted by the DIDMCA and the Alternative Mortgage Transaction Parity Act of 1982 (Parity Act). This court will address each statute in turn.
First, we address whether section 4.1a of the Interest Act is preempted by section 501 of the DIDMCA. Section 4.1a of the Interest Act provides in part as follows:
Section 501(a) of the DIDMCA provides in relevant part as follows:
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U.S. Bank Nat. Ass'n v. Clark
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