Grant-Hall v. Cavalry Portfolio Services, LLC
856 F. Supp. 2d 929
N.D. Ill.2012Background
- Calvary Portfolio Services filed debt collection actions in Illinois without proper §8b documentation; law firms Kelly, Adler, and Shindler represented Calvary in those actions.
- Plaintiffs-grant-Hall, Asiama, Gray, and Perry allege Calvary’s filings violated ICAA §8b, ICFA, and FDCPA; they sue Calvary and the law firms.
- State court complaints attached some documents (Affidavits of Claim, Bills of Sale, and Assignments) but not the referenced Purchase Agreements, Sale File, Schedule I, or Servicing/Management Agreement.
- Bills of Sale and Assignments refer to broader transaction documents; those documents were not attached to the complaints, and §8b requires more specific assignment documentation.
- Plaintiffs’ amended complaint asserts the state actions were improper under §8b, seeks relief under ICAA, ICFA, and FDCPA, and Calvary removed to federal court; the court denied motions to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have standing to challenge §8b assignments. | Plaintiffs have concrete injury (time/money) from defending suits; standing to challenge assignments too. | Standing lacking because state actions were dismissed, so injury is not redressable. | Plaintiffs have standing. |
| Whether §8b documentation requirement is satisfied by attached/referenced documents. | Bills of Sale/Assignments alone do not specify consideration or identified accounts; referenced documents could satisfy §8b, but not attached. | Calvary had the necessary documentation prior to filing actions; documentation was not attached to complaint itself. | Not resolved on 12(b)(6); §8b plausibly requires more than what attached documents show. |
| Private right of action under ICAA §9 for §8b violations. | §9 incorporates §8b and creates private remedies for filing suits without proper documentation. | Illinois appellate law on private §8b action is unclear; no explicit private right. | Plaintiffs plausibly have a private right of action under §9. |
| Whether the ICFA claims against Calvary and Law Firms survive, including vicarious liability. | Agency principles allow liability for attorney/agent misconduct; Calvary may be an active/direct participant. | ICFA liability limited for attorneys; derivative liability theories limit claims against Law Firms. | ICFA claims survive; Calvary may be liable for active/direct participation; Law Firms not immune at pleading stage. |
| FDCPA claims against Calvary and Law Firms survive. | FDCPA §1692e/14 prohibits deceptive filings; defective filings misrepresent legal status. | Law Firms may be insulated from ICAA but FDCPA applies to attorneys; claims against firms survive. | FDCPA claims survive against Calvary and the Law Firms at pleadings stage. |
Key Cases Cited
- Aldens, Inc. v. LaFollette, 552 F.2d 745 (7th Cir. 1977) (upheld state regulation affecting consumer credit under Pike balancing)
- Alliant Energy Corp. v. Bie, 330 F.3d 904 (7th Cir. 2003) (dormant Commerce Clause analysis with two-tier approach)
- Gearing v. Check Brokerage Corp., 233 F.3d 469 (7th Cir. 2000) (FDCPA false implication when asserting rights not held)
- Jackson v. S. Holland Dodge, Inc., 197 Ill.2d 39 (Ill. 2001) (ICFA liability for active/direct participation; agency principles apply)
- Zekman v. Direct American Marketers, Inc., 231 Ill.2d 359 (Ill. 1998) (ICFA liability for direct and active fraud; limits on derivative liability)
- Horwitz v. Holabird & Root, 816 N.E.2d 272 (Ill. 2004) (limits on employer liability for attorney misconduct; agency principles)
- Heintz v. Jenkins, 514 U.S. 291 (S. Ct. 1995) (FDCPA applies to attorneys who regularly engage in debt collection)