LVNV Funding, LLC v. Trice
2015 IL 116129
| Ill. | 2015Background
- Trice defaulted on a credit-card debt; Citibank assigned the account to LVNV, which sued in Illinois and obtained a default money judgment on Jan. 15, 2009.
- Trice later filed a 735 ILCS 5/2-1401 petition to vacate, alleging LVNV was an unregistered collection agency and therefore the original complaint and judgment were void.
- The Illinois Appellate Court held that a complaint filed by an unregistered collection agency is a nullity and any resulting judgment is void, so it remanded for a hearing on LVNV’s registration status.
- On remand the circuit court declared 225 ILCS 425/4.5, 14, and 14b (penalties for unlicensed debt collection) unconstitutional and ordered the judgment to stand.
- The Illinois Supreme Court granted direct review, held the judgment was not void (only voidable), vacated the circuit court’s constitutional rulings as unnecessary, rejected the appellate court’s “nullity” analysis, and remanded for confirmation of LVNV’s monetary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LVNV’s failure to register under the Collection Agency Act rendered the underlying judgment void | LVNV argued the Appellate Court erred; failure to register did not deprive the circuit court of jurisdiction and therefore the judgment is not void | Trice argued an unregistered collection agency’s complaint is a nullity and any judgment entered is void (App. Ct. position) | Judgment is not void — failure to register was error that could make a case dismissible or the judgment voidable, but did not deprive circuit court of subject-matter or personal jurisdiction |
| Whether the "inherent power" or nullity doctrine applies to civil judgments in circuit court | LVNV: post-Steinebrecher/Belleville Toyota, "inherent power" does not define jurisdiction for general-jurisdiction circuit courts | Trice/Appellate Ct: relied on Ford Motor and nullity rule to treat unlicensed filings as void ab initio | Court rejected Ford Motor’s broad use of "inherent power," reaffirmed Steinbrecher and Belleville Toyota: circuit courts have constitutional subject-matter jurisdiction; nullity/inherent-power theory inapplicable here |
| Applicability of the Collection Agency Act to debt buyers who hire attorneys | LVNV contended hiring counsel or being a passive owner of the debt meant the Act did not apply or was inapplicable to enforcement suits | State/Trice: Act’s definitions cover assignees and debt buyers; use of counsel does not shield debt buyers from regulation | Act applies to entities like LVNV; hiring an attorney does not exempt them from licensing and filing requirements |
| Need to reach constitutionality of penalty provisions (225 ILCS 425/4.5, 14, 14b) | LVNV urged constitutional challenge to criminal penalties; circuit court struck provisions as unconstitutional | Trice supported enforcement and Appellate Court’s approach making unlicensed acts void | Supreme Court found constitutional review unnecessary because the judgment is not void; vacated circuit court’s invalidation of statutes and remanded for confirmation of judgment |
Key Cases Cited
- Ford Motor Credit Co. v. Sperry, 214 Ill. 2d 371 (2005) (discussed nullity rule; Court narrows its prior language here)
- Steinbrecher v. Steinbrecher, 197 Ill. 2d 514 (2001) (circuit courts’ jurisdiction is constitutional and cannot be defeated by statutory conditions)
- Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325 (2002) (statutory prerequisites are not jurisdictional for circuit courts; protect finality of judgments)
- Downtown Disposal Services, Inc. v. City of Chicago, 2012 IL 112040 (2012) (unauthorized practice of law in filing administrative-review complaints does not render them void per se; no automatic nullity)
- Sarkissian v. Chicago Board of Education, 201 Ill. 2d 95 (2002) (void-judgment allegations excuse other 2-1401 pleading requirements)