Chicago Business Litigation Lawyer Blog

In a case based on the federal Truth in Lending Act (TILA) and Illinois Consumer Fraud and Deceptive Business Practices Act, the Seventh Circuit has ruled that a victim of a bait-and-switch scheme for title insurance may sue his lender. Doss v. Clearwater Title Co., No. 07-2400 (7th Cir. Dec. 24, 2008). Charles Doss refinanced his mortgage in 2004, using a company called The Loan Arranger that did indeed arrange a loan for Doss with Franklin Financial Company. Franklin asked Doss to get title insurance, which he did through Clearwater Title Company.

Clearwater turned out to be an unlicensed company with a secret affiliation with The Loan Arranger. Doss was told via closing documents that the title insurance cost was $500, but was actually charged $1,470. In late 2006, Doss sued all three companies plus JP Morgan Chase, which held his mortgage, and Saxon Mortgage Services, Inc., which serviced it. However, Chase and Saxon had filed for foreclosure against Doss earlier in that year, and in response to the lawsuit, filed papers claiming that Doss had no claim because he had already sold his home. Doss replied that their quitclaim deed was a forgery and that indeed, he had filed documents showing he was still the owner. The trial court sided with Chase and Saxon and dismissed the homeowner's claims.

Doss appealed; while the appeal was pending, an Illinois trial court found that the property had not changed hands. The Seventh Circuit first examined the claim by Chase and Saxon that the trial court had no jurisdiction under the TILA because Doss had sold the property. That was irrelevant, the court said, because the question was whether Doss had actually sold the property. On the dismissal itself, the Seventh found that the trial court should have treated the sale allegations by Chase and Saxon as a motion for summary judgment, which would have given Doss a chance to present and support his own assertions. This would have led the trial court to conclude that there was indeed a genuine issue of material fact in the case and continued the litigation, the opinion said.

Thus, both the TILA claim and the state claims that were dismissed alongside should be reinstated, the appeals court concluded. The court reversed and remanded the decision. Along the way, it noted that defendant Franklin was in a state of ambiguity. Clearwater and The Loan Arranger had settled with Doss, but the court had entered default judgment against Franklin. Franklin moved to set it aside, but that motion was mooted when the trial court dismissed the case. The appeals court, expressing no opinion on the motion's merits, pointed out that the default judgment was still in place.

Violations of the Truth in Lending Act are a type of billing fraud -- one that may go unnoticed because of the complexity of loan documents. Federal TILA claims are on the rise, due in part to the financial crisis in the mortgage industry. Consumer protection law firm DiTommaso-Lubin represents consumers who have been harmed by violations of the TILA or other types of billing fraud, including unauthorized charges on bills from hotels, health clubs and more. Based in Oak Brook, Illinois and Chicago, our Oak Brook and Chicago civil litigation lawyers represent clients from all over the Chicago area including Naperville, Aurora, Highland Park, Northbrook, Wilmette, Wheaton, Joliet and Waukegan and throughout Illinois and nationally. To speak with us about a possible violation of your own rights as a consumer, you can contact us through our Web site for a free consultation.

The Federal Reserve Board has prepared an excellent summary of consumer rights available under the Fair Debt Collection Practices Act ("FDCPA") in an online handbook on the FDCPA. You can view the handbook by clicking here.

Our consumer rights private law firm handles individual and class action unfair debt collection and other consumer fraud cases that government agencies and public interest law firms such as the FTC may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. DiTommaso-Lubin is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers' rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

Our Naperville, Aurora, Waukegan, Joliet, Elgin, Highland Park, Northbrook, Wilmette, Wheaton, Oak Brook, and Chicago consumer civil litigation lawyers provide assistance in fair debt collection, consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Chicago area consumer protection lawyers who can assist in lemon law, unfair debt collection, junk fax, prerecorded telephone solicitations, and other consumer, consumer fraud or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.

A legal malpractice plaintiff who is also the executor of an estate may issue new creditor notices to avoid having his case dismissed, the First District Court of Appeal decided March 31. In Jaason v. Sullivan, No. 1-08-1254 (Ill. 1st Dist. March 31, 2009), the executor, Erik Jaason, filed a Chicago legal malpractice lawsuit against Barbara J. Sullivan and B.J. Sullivan & Associates for alleged mistakes in a will Sullivan prepared for Alexander Koepp.

In his complaint, Jaason alleges that Koepp instructed Sullivan to prepare a will giving Jaason the right to purchase Koepp’s home for $150,000, at Jaason’s discretion. However, Koepp’s home was already held in joint tenancy with his wife, Karsti Koepp. Thus, upon Alexander Koepp’s death in November of 2006, the property was outside the purview of the will and passed to Karsti Koepp under the joint tenancy, leaving Jaason with no option to purchase it. He sued Sullivan in December of 2007 for legal malpractice, alleging that her failure to recognize and take action on the joint tenancy fell outside the applicable standard of care.

In response, Sullivan filed a motion to dismiss the suit as time-barred. The Illinois Code of Civil Procedure requires that, in cases where probate has been opened, plaintiffs must file their claims for legal malpractice within the time given for claims against the estate or the time given for contesting the validity of a will -- whichever is greater. The six-month window for contesting the will had clearly elapsed in the 13 months since Koepp’s death. To make a claim against an estate, creditors in Illinois have three months from the date they receive a notice of the death in the mail, or six months from the date of publication of the death as a legal notice, whichever is later.

As the independent executor of Koepp’s will, Jaason had already published notice of the death giving a deadline of December 1, 2007 -- just before the legal malpractice lawsuit was filed. On February 7, 2008, the same day of Sullivan’s motion to dismiss, he placed new creditor notices giving a deadline of May 9, 2008. Jaason argued that these new notices made his legal malpractice lawsuit timely. Sullivan argued that the Probate Act does not allow different deadlines for different creditors, requiring one notice and one deadline for all potential creditors. Thus, she argued, the court must dismiss Jaason’s claim as untimely.

The First District disagreed. Construing the plain language of the Probate Act, it found that the “whichever is later” provision clearly allows different deadlines for different creditors. Because the most recent notice to creditors went out in February of 2008, two months after the legal malpractice suit was commenced, the court found that Jaason’s claim was timely. It added that it is not unaware of the self-interest involved in Jaason’s actions, as both the personal representative of Koepp’s estate and the plaintiff in this claim. However, the judges wrote, there is no evidence to show that the notices were fraudulent. Thus, the dismissal of Jaason’s suit was reversed and remanded to trial court.

The Illinois, Wheaton, Waukegan, Wilmette and Chicago civil litigation lawyers and probate and business trial attorneys at DiTommaso-Lubin handle malpractice claims and contested probate estate lawsuits. Based in Oakbrook Terrace, near Oak Brook, Wheaton, and Chicago, DiTommaso-Lubin represents clients in state and federal courts throughout Illinois and the Midwest. Our Illinois legal malpractice attorneys represent clients aggressively in malpractice claims and fee disputes, working hard to ensure that justice is served. If you are involved in a legal malpractice lawsuit and you’re looking for experienced representation, DiTommaso-Lubin can help. To learn more at a free consultation, please contact us online or call 1-877-990-4990 today.

In a Fair Debt Collection Practices Act class action, the Seventh U.S. Circuit Court of Appeals has ruled that a bill collector’s failure to correctly break down a bill into principal and interest does not violate that Act. Wahl v. Midland Credit Management, No. 08-1517 (7th Cir. Feb. 23, 2009) was a class action lawsuit alleging that debt collectors violate the FDCPA when they send out bills that state the correct total amount but break down the charges incorrectly.

Plaintiff Barbara Wahl had just $66.98 on a credit card when she sustained a stroke and racked up much larger medical bills during a time when she couldn’t work. The credit card went unpaid and eventually, the balance was $1,149.09, mostly in interest and late fees. Midland purchased the debt in January of 2005 and started sending demand letters to Wahl. The letter at issue arrived April 15, 2005, listing both the “current balance” and “amount due” at $1,160.57. On the back side, it listed the “principal” as $1,149.09 and the “accrued interest” as $11.48. This was followed by a similar letter listing a higher interest. The letters construed the “principal” as the total value of the debt Midland had bought, including interest accrued with the original creditor.

Wahl filed a proposed class-action lawsuit in federal court for the Northern District of Illinois. One of her two claims was that Midland had violated the FDCPA by incorrectly stating that the principal on her account was $1,149.09 rather than breaking down the original principal, the original interest and the new interest. Debt collectors are not required by law to break down charges, it said -- but when they do, the law requires that the breakdown not contain false or misleading information. On cross-motions for summary judgment, the trial court ruled in favor of Midland. Wahl appealed.

On appeal, the Seventh Circuit agreed. Wahl relied on language from the FDCPA prohibiting “[t]he false representation of... the character, amount, or legal status of any debt,” they said, and argued that this meant she need only show that the breakdown of charges was outright false. The court disagreed, saying it has consistently tested for violations of the act on whether the disputed action would mislead an unsophisticated consumer. If it would not, the court said, it cannot find a violation. Furthermore, the judges argued, Wahl’s argument that the statement was outright false is not correct because Midland’s breakdown of charges was perfectly correct in Midland’s eyes -- it had paid for $1,149.09 in debt and the interest it added was its own interest, not the original creditor’s.

The Seventh Circuit also said Wahl could not overcome the precedent it set in Barnes v. Advanced Call Center Technologies, LLC, 493 F.3d 838 (7th Cir. 2007). In that case, the court rejected an argument that a bill collector had violated the FDCPA by failing to state the total balance due, listing only the amount in collections. There, the court ruled that the correct amount of debt to list was the amount that the debt collector was seeking -- not that amount plus the amount owned by the original creditor. In both cases, the original creditor is irrelevant to the transaction at hand. “Wahl’s argument rests on empty semantics and conflicts with Barnes,” the Seventh wrote, and thus the summary judgment order was upheld.

DiTommaso-Lubin has an active practice in Fair Debt Collection Practices Act litigation, specializing in protecting consumers from illegal, misleading and harassing behavior by debt collectors. Our debt collection abuse lawyers are based in Chicago and Oak Brook, Illinois, but we help clients throughout the United States, in both individual lawsuits and class actions. If you’re being harassed by bill collectors or they are using fraud and deception to charge fees you don't owe, you don’t have to put up with it. For a free, confidential consultation, please contact us online or call us toll-free at 1-877-990-4990.