IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

DWAYNE S. ARMBRISTER, LAWRENCE

GUARNIERI, DARON WILLIFORD, and

RANDOLPH PETRON, individually and on

behalf of the classes described

below

Plaintiffs,

v.

PUSHPIN HOLDINGS, LLC,

Defendant.

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MEMORANDUM OPINION AND ORDER

This putative class-action complaint accuses Pushpin

Holdings, LCC (“Pushpin”) of unlawful lending practices,

including filing suits on time-barred debts, threatening to

report old debts to credit bureaus, and failure to honor the

arbitration clauses in its contracts. Pushpin brings the instant

motion to dismiss pursuant to Rules 12(b) and 9(b) of the Federal

Rules of Civil Procedure. In the alternative, Pushpin asks for

an order compelling Plaintiff Dwayne S. Armbrister (“Armbrister”)

to arbitrate his dispute with Pushpin and dismissing or staying

this lawsuit as to Armbrister’s claims pending arbitration. For

the reasons stated, Armbrister’s claims in Count I and Count II

are stayed pending arbitration, and the remainder of Count II is

dismissed, with leave to replead within 30 days of the date of

this Order.
I.

In ruling on this motion to dismiss, I will accept the facts

in the Second Amended Complaint (“SAC”) as true. Pushpin is a

limited liability company organized under Delaware law. 

Plaintiffs allege that Pushpin’s principal business is filing

suit, or threatening to file suit, on time-barred debts that it

purchased for as little as a penny on the dollar. The named

Plaintiffs, Armbrister, Lawrence Guarnieri (“Guarnieri”), Daron

Williford (“Williford”), and Randolph Petren (“Petren”) are

businessmen who leased equipment from a unit of CIT Financial

(“CIT”), in Chicago. 

A. Facts Relating to Armbrister

Armbrister operated a company called Ace Security Laminates,

LLC, in North Carolina. On or about Sept. 6, 2002, he leased two

credit card processing machines from CIT, and personally

guaranteed the lease. Armbrister’s business failed, and the last

payment made on the lease was in early 2003. Armbrister returned

the equipment at that time, and heard nothing further about the

lease until May 2011. 

On May 16, 2011, Armbrister received a delinquency letter

from Alethea Wiggins, an account manager in the Legal Collections

Department at Pushpin. Wiggins wrote that “[d]ue to your

continued delinquency and failure to pay the outstanding balance

listed above, your account has been referred to my department to

2
initiate a civil action against you as allowed under your

personal guaranty in your lease agreement.” (emphasis in

original) (Dkt. No. 54, App. A to SAC). Wiggins added: “Please

be advised that your delinquency has been reported to the credit

bureaus as a chargeoff or collection account and will be

reflected on your credit report.” (emphasis in original) (Id.)

In November 2011, Armbrister received a letter from

Pushpin’s attorney demanding payment of $7,628.22 as well as a

draft verified complaint for breach of a personal guaranty. 

(Dkt. No. 54, App. B to SAC). The draft complaint was to be

filed in the Circuit Court of Cook County, but Pushpin has not

filed it. The guaranty signed by Armbrister, but not those of

the other named plaintiffs, contains an arbitration provision. 

It provides, “Any claim or controversy, including any contract or

tort claim between or among us, you or any Guarantor related to

this Lease, shall be determined by binding arbitration in

accordance with Title 9 of the U.S. Code and the Commercial

Arbitration Rules of the American Arbitration Association.” 

(Dkt. No. 54, App. B.)

B. Facts Relating to Plaintiff Guarnieri

In 2001, Guarnieri opened a restaurant in Rancho Cucamonga,

Calif. In February 2001, he leased equipment from CIT and

personally guaranteed the lease. According to Pushpin, the

restaurant defaulted on the lease on Nov. 5, 2001. Guarnieri

3
filed for personal bankruptcy in the summer of 2001, and believes

that the liability was discharged at that time.

In October 2011, Guarnieri received a form demand letter and

a draft form complaint similar to the one Pushpin sent to

Armbrister. In those documents, Pushpin sought $11,963.04 and

threatened to file suit in the Circuit Court of Cook County.

(Dkt. No. 54-1, App. D to SAC.) Pushpin filed a verified

complaint for breach of a personal guaranty on Nov. 2, 2011. 

(Dkt. No. 54-1, App. E to SAC.) No action has been taken in the

state court case.

C. Facts Relating to Plaintiff Williford

Williford operated a car wash in Anderson, South Carolina as

a sole proprietorship. In January 2001, he leased equipment from

CIT and personally signed the lease. According to Pushpin, the

car wash defaulted on the lease on Dec. 18, 2001. Williford

heard nothing further about the lease until mid-2011. On

information and belief, at that time he received a delinquency

letter similar to the one mailed to Armbrister. Also on

information and belief, Plaintiffs allege that Williford received

a demand letter and a draft complaint similar to the one

described above. On Nov. 30, 2011, Pushpin filed suit against

Williford in Cook County Circuit Court. (Dkt. No. 54-1, App. F

to SAC). Nothing has happened in the state court case.

D. Facts Relating to Plaintiff Petren

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Petren operated a business in Florida, and on Feb. 12, 2001,

he leased a credit card processing machine from CIT. His

business failed in 2001 or 2002, and according to Pushpin, the

business defaulted on the lease on Dec. 21, 2001. Petren heard

nothing further about the lease until the fall of 2011. At that

time, on information and belief, he received a delinquency letter

similar to the one received by Armbrister. On Nov. 30, 2011,

Pushpin filed suit against Petren in the Circuit Court of Cook

County. (Dkt. No 54-1, App. G to SAC.) Nothing has happened in

the state case.

E. General Allegations

Plaintiffs allege that the delinquency letter amounted to a

wrongful threat of credit reporting by Pushpin because under the

Fair Credit Reporting Act (“FCRA”) a delinquent debt that is more

than 7 years and 180 days old cannot appear on a person’s credit

report. 15 U.S.C. § 1681c(a)(4). The reporting period with

respect to Plaintiffs’ debts had expired at the time Pushpin sent

the delinquency letter, and Pushpin knew or should have known

this.

Plaintiffs additionally allege that the applicable statute

of limitations for the collection of a debt based on the breach

of the guarantees is 810 ILCS 5/2A-506, which provides, in

relevant part, “[a]n action for default under a lease contract,

including breach of warranty or indemnity, must be commenced

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within 4 years after the cause of action accrued.” All the debts

at issue here were barred by the statute of limitations prior to

Pushpin’s having filed suit, Plaintiffs contend.

Plaintiffs further contend that Pushpin regularly files suit

in Cook County Circuit Court in regard to similar leases against

small business owners who live in various locations throughout

the United States. The amount demanded typically does not exceed

$10,000, and in many cases is far less than that. Plaintiffs

attached to their complaint a list of more than 300 Cook County

filings by Pushpin, beginning in August 2011. On information and

belief, Plaintiffs allege that most of the debts involved CIT

leases similar to the ones signed by Plaintiffs and of a similar

age.

Plaintiffs contend the lawsuits were wrongfully filed

because the representations relating to credit reporting are

false, the claims are time-barred, and many of the CIT leases,

like Armbrister’s, provide for mandatory arbitration before the

American Arbitration Association (“AAA”). 

Plaintiffs contend that Pushpin files suits in Cook County,

rather than arbitrating the claims as required, in order to

obtain fraudulent default judgments. A lawsuit filed in the

Municipal Department of the Cook County Circuit Court will result

in a default judgment unless the defendant appears either

personally or by an attorney. An AAA arbitration, by contrast,

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allows for resolution by telephone or through written

submissions. Because many of the Plaintiffs live in other

states, it is not economically feasible for them to come to Cook

County to defend these suits. By filing or threatening to file

these lawsuits that they know Plaintiffs cannot afford to defend, 

Pushpin sought to prevent debtors from asserting valid defenses,

and to obtain default judgments, Plaintiffs allege.

Plaintiffs seek recovery on behalf of three classes. Class

A consists of all persons sued or threatened with suit in

Illinois by Pushpin on a lease containing an arbitration clause. 

Armbrister is the class representative. Class B consists of all

people sued or threatened with suit in Illinois by Pushpin on a

lease where the date of default or last payment occurred more

than four years ago. All plaintiffs are class representatives. 

Class C consists of all people who were sent a delinquency letter

by Pushpin that referred to credit reporting with respect to a

defaulted lease where the default occurred more than 7 years and

180 days prior to the suit or threat. All plaintiffs are class

representatives.

Count I, brought on behalf of Class A, seeks an order

compelling Pushpin to arbitrate the claims against lessees or

guarantors pursuant to the Federal Arbitration Act (“FAA”), 9

U.S.C. § 1, et seq. It seeks: (1) an injunction requiring

Pushpin to file individual arbitrations before the AAA, (2) an

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order requiring Pushpin to vacate any judgments it has obtained

against class members;1

 and (3) the return of any funds obtained

pursuant to those judgments. 

Count II, brought on behalf of all three classes, alleges

that Pushpin violated the Illinois Consumer Fraud and Deceptive

Business Practices Act (“ICFA”) when it threatened to file, or

did file suits: (1) when it was required to arbitrate; (2) on

debts that were time-barred; (3) in an effort to take advantage

fo the fact that a personal appearance is required in Cook County

but not under the AAA rules; and (4) when the amount claimed made

a personal appearance in Chicago economically impracticable. 

Plaintiffs similarly allege that falsely representing that timebarred debts could appear on credit reports amounted to a

deceptive practice under the ICFA. Plaintiffs seek: (1) an

injunction restraining Pushpin from filing or threatening to file

suit on leases containing arbitration clauses; (2) an injunction

restraining Pushpin from filing or threatening to file suit on

leases where the alleged default occurred more than four years

ago; (3) an injunction restraining Pushpin from reporting or

threatening to report debts to credit bureaus that are more than

1 Pushpin seeks to dismiss Count I in part on the basis

that vacating state court judgments would violate the RookerFeldman doctrine. See Van Harken v. City of Chicago, 103 F.3d

1346, 1349 (7th Cir. 1997). In their response, however,

Plaintiffs indicate that Pushpin has not yet obtained any

judgments. As such, and given the disposition of Count I, I need

not address this issue at this time.

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7 years and 180 days old; (4) disgorgement of all sums obtained

by Pushpin using the tactics described in the complaint; (5) an

order requiring Pushpin to vacate any judgments it obtained

against class members; (6) punitive damages; and (7) attorney’s

fees and costs.

II.

To survive a Rule 12(b)(6) motion to dismiss, a complaint

must contain sufficient facts, accepted as true, “to state a

claim for relief that is plausible on its face.” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007)). Although a complaint's

factual allegations need not be detailed, they must provide more

than “labels, conclusions, or formulaic recitations of the

elements of a cause of action, and allege enough to raise a right

to relief above the speculative level.” Ruiz v. Kinsella, 770 F.

Supp. 2d 936, 941–42 (N.D. Ill. 2011) (citing Twombly, 550 U.S.

at 555). In ruling on such a motion, the question is whether the

facts, accepted as true, “present a story that holds together.” 

Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). 

III.

A. Count I

As noted above, in Count I, brought on behalf of Class A,

Armbrister seeks to compel Pushpin to file individual

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arbitrations under the FAA. Section 4 of the FAA provides, in

relevant part: 

A party aggrieved by the alleged failure, neglect, or

refusal of another to arbitrate under a written agreement

for arbitration may petition any United States district

court which, save for such agreement, would have

jurisdiction under Title 28, in a civil action or in

admiralty of the subject matter of a suit arising out of

the controversy between the parties, for an order

directing that such arbitration proceed in the manner

provided for in such agreement. 

9 U.S.C § 4. Pushpin argues that this lawsuit is the first

demand for arbitration by Armbrister, and that Armbrister’s

allegations that Pushpin threatened to sue him and served him

with a draft complaint are insufficient as a matter of law to

constitute a rejection of arbitration.

Under the FAA, arbitration may be compelled if three

elements are shown: a written agreement to arbitrate, a dispute

within the scope of the arbitration agreement, and a refusal to

arbitrate. Zurich American Ins. Co. v. Watts Industries, Inc.,

417 F.3d 682, 687 (7th Cir. 2005). Only the third element is at

issue here. 

Relying primarily on cases from the Second and Third

circuits, Pushpin argues that a refusal to arbitrate can be

established only if the non-moving party files a lawsuit or is

ordered to arbitrate a dispute and fails to do so. See, e.g.,

LAIF X SPRL v. Axtel, S.A. de C.V., 390 F.3d 194, 198 (2d Cir.

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2004) (“A party has refused to arbitrate if it “commences

litigation or is ordered to arbitrate th[e] dispute [by the

relevant arbitral authority] and fails to do so.”); PaineWebber

Inc. v. Faragalli, 61 F.3d 1063, 1066 (3d Cir. 1995) (holding

that an action to compel arbitration accrues “only when the

respondent unequivocally refuses to arbitrate, either by failing

to comply with an arbitration demand or by otherwise

unambiguously manifesting an intention not to arbitrate the

subject matter of the dispute.”).

In Paine Webber, the Third Circuit held that sending the

opposing party a draft complaint that had not been filed in court

did not constitute an “unequivocal” refusal to arbitrate because

it did not rule out a willingness to arbitrate. Id. Other

courts, however, have disagreed with the Paine Webber court’s

holding that a refusal to arbitrate must be “unequivocal.” See,

e.g., Beauperthuy v. 24 Hour Fitness USA, Inc., No. 6-715 SC, 

2011 WL 6014438, at *2 n.4 (N.D. Cal. Dec 2, 2011).2 The

parties have not presented, nor have I found, any Seventh Circuit

2

 In Beauperthuy, the issue was whether a refusal to

arbitrate in that district, coupled with an expressed willingness

to submit to arbitration elsewhere, amounted to a refusal to

arbitrate. 2011 WL 6014438, at *2. The court held that it did,

finding that to hold otherwise would render the arbitration

agreement meaningless by the parties’ inability to agree on a

satisfactory location. Id. at *4.

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cases interpreting the meaning of a party’s “failure, neglect or

refusal to arbitrate” under Section 4 of the FAA.

In arguing that it has not refused to arbitrate Armbrister’s

claim, Pushpin points to settlement communications between the

parties. Its counsel, Scott Silberfein, has submitted a

declaration in support of the motion to dismiss stating that

after Plaintiffs brought suit, he spoke on several occasions with

Plaintiffs’ counsel to request that Armbrister arbitrate his

dispute pursuant to the binding arbitration clause in his

guaranty. (Dkt. No. 51.) Pushpin has never resisted arbitration

with Armbrister or filed any action against him, according to

Silberfein. 

Plaintiffs contend that it is inappropriate for Pushpin to

use settlement communications to show that it has not refused to

arbitrate. They also contend that Pushpin has in fact brought

suit against people with arbitration clauses, attaching to their 

response a suit brought against Floyd Beard for breach of a

guaranty containing an arbitration agreement. (Dkt. No. 56, Ex.

4.) 

First, I may consider the settlement negotiations in

determining whether Pushpin has refused to arbitrate. See Zurich

Am. Ins. Co., 417 F.3d at 689–90.3

 Additionally, Plaintiffs’

3

 Although Pushpin’s motion to dismiss is styled as a Rule

12(b)(6) motion, as to Armbrister’s claims, it is more accurately

12
argument that Pushpin has sued others with arbitration clauses is

not well-taken because even though the complaint contains class

allegations, no class has been certified, and Beard is not a

named Plaintiff. Thus, I must determine whether Armbrister’s

allegations are sufficient to show a refusal to arbitrate by

Pushpin. See Morlan v. Universal Guar. Life Ins. Co., 298 F.3d

609, 616 (7th Cir. 2002) (“[U]ntil [class] certification [is

granted] there is no class action but merely the prospect of one;

the only action is the suit by the named plaintiff[ ].”).

Plaintiffs contend that “nothing says that a party who sues

100 persons with identical arbitration clauses must be the

subject of 100 separate proceedings to compel arbitration rather

than just one.” Pls.’ Resp., 11. Plaintiffs provide no support

for this proposition, but even if it is correct, it does not

relieve Armbrister of his responsibility to show that Pushpin has

failed to arbitrate the dispute in order to seek relief from this

court.

viewed as a request to stay the litigation and compel

arbitration. See Seremak v. American Exp., Inc., No. 10 C 3463, 

2011 WL 3359915, at *3 (N.D. Ill. Aug. 3, 2011) (internal

citations omitted). The authority to stay litigation derives not

from the Federal Rules of Civil Procedure, but from Section 3 of

the FAA, 9 U.S.C. § 3. Id. Additionally, in ruling on such a

motion, I may consider matters outside of the pleadings. See

Falbe v. Dell, Inc., No. 04 C 1425, 2004 WL 1588243, at *1 n. 1

(N.D.Ill. July 14, 2004) (internal citations omitted).

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Armbrister has not shown that Pushpin failed to arbitrate

this dispute. He has not filed an arbitration proceeding in

which Pusphin has refused to participate, nor has Pushpin brought

suit against him. I agree with those courts that have held that

in the absence of such a step, Armbrister has not shown that he

was aggrieved by the failure, neglect, or refusal of Pushpin to

arbitrate, so he has not shown an entitlement to relief under § 4

of the FAA. The Paine Webber court noted that the requirement of

showing a refusal to arbitrate is “little discussed,” but

important. 61 F.3d at 1067. “[U]nless and until an adverse

party has refused to arbitrate a dispute putatively governed by a

contractual arbitration clause, no breach of contract has

occurred, no dispute over whether to arbitrate has arisen, and no

harm has befallen the petitioner-hence, the petitioner cannot

claim to be ‘aggrieved’ under the FAA.” Id.; see also Moses H.

Cone Memorial Hospital, 460 U.S. 1, 21 (1983) (“[a]n

indispensable element of Mercury's cause of action under § 4 for

an arbitration order is the Hospital's refusal to arbitrate”).

While others in the proposed class may have been aggrieved

by Armbrister’s refusal to arbitrate their claims, only

Armbrister’s claim is before me. Armbrister, in fact, filed the

present action, so in effect it was he who has refused to

arbitrate his claims against Pushpin. Plaintiffs do not address

that portion of Pushpin’s motion seeking to compel Armbrister to

14
arbitrate his claims against Pushpin, and such an action appears

appropriate in light of the broad scope of the arbitration

provision in his contract with CIT. As such, I grant Pushpin’s

motion to stay Armbrister’s claims pending arbitration.

B. Count II 

While Armbrister is the only class representative for Count

I, all Plaintiffs are class representatives for Count II, which

alleges violations of the ICFA and is brought on behalf of all

classes. Pushpin contends that Plaintiffs fail to allege any

cognizable claim under the ICFA.

The ICFA provides a remedy for “unfair methods of

competition and unfair or deceptive acts or practices” in

specified commercial transactions.” Greenberger v. GEICO Gen.

Ins. Co., 631 F.3d 392, 399 (7th Cir. 2011) (quoting 815 ILCS

505/2). To state a claim under the ICFA, Plaintiffs must allege

five elements: (1) a deceptive act or unfair practice occurred,

(2) the defendant intended for plaintiff to rely on the

deception, (3) the deception occurred in the course of conduct

involving trade or commerce, (4) the plaintiff sustained actual

damages, and (5) such damages were proximately caused by the

defendant's deception. Hardaway v. CIT Group/Consumer Fin. Inc.,

836 F. Supp. 2d 677, 685 (N.D.Ill. 2011) (citing Dubey v. Public

Storage, Inc., 918 N.E.2d 265, 277 (Ill. App. Ct. 2009)). 

Complaints alleging deceptive practices in violation of the ICFA

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must be plead with sufficient particularity under Fed. R. Civ. P.

9(b), while those alleging unfair practices need only meet the

notice pleading standards of Fed. R. Civ. P. 8(a). Windy City

Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Srvs., Inc.,

536 F.3d 663, 670 (7th Cir. 2008).

Plaintiffs allege both unfair and deceptive practices. 

First, they allege that Pushpin violated the ICFA when it

threatened to file or filed suits when Pushpin was required to

arbitrate the disputes. Of the named plaintiffs, only

Armbrister’s guaranty contained an arbitration provision. Since

I have stayed the claims as to Armbrister pending arbitration and

no other named plaintiffs were injured as a result of this

practice, it cannot be the basis of an ICFA claim. However,

Plaintiffs also allege that Pushpin filed suit on time-barred

debts and that it falsely represented that debts older than seven

and a half years old would appear on credit report when FCRA bars

this.

As to the first allegation, the parties disagree over the

applicable statute of limitations for Pushpin’s claim. 

Plaintiffs argue that the appropriate statute of limitations is

810 ILCS 5/2A-506, which provides, in relevant part:

An action for default under a lease contract, including

breach of warranty or indemnity, must be commenced within

4 years after the cause of action accrued. By the

original lease contract the parties may reduce the period

16
of limitation to not less than one year.

810 ILCS 5/2A-506 (1). This-four year statute of limitations,

Plaintiffs allege, ran long before Pushpin filed or threatened to

file suit against them. Plaintiffs contend that as this is the

only Illinois statute of limitations that specifically governs

leases of personal property, it controls. Hernon v. E.W.

Corrigan Const. Co., 595 N.E.2d 561, 563 (Ill. 1992) (internal

citations omitted).

Pushpin contends that their efforts to collect on the

guarantees were timely because they fell within the 10-year

statute of limitations set out in 735 ILCS 5/13-206. That

statute provides, in relevant part:

Except as provided in Section 2-725 of the “Uniform

Commercial Code” . . . actions on bonds, promissory

notes, bills of exchange, written leases, written

contracts, or other evidences of indebtedness in writing

and actions brought under the Illinois Wage Payment and

Collection Act shall be commenced within 10 years next

after the cause of action accrued; but if any payment or

new promise to pay has been made, in writing, on any

bond, note, bill, lease, contract, or other written

evidence of indebtedness, within or after the period of

10 years, then an action may be commenced thereon at any

time within 10 years after the time of such payment or

promise to pay. 

735 ILCS 5/13-206. 

It is well-established that a guaranty is an independent

obligation separate from the underlying contract. Colonial Am.

Nat’l Bank v. Kosnoski, 617 F.2d 1025, 1030–31 (4th Cir. 1980).

“Guarantees invol[ve] duties and impos[e] responsibilities very

17
different from those created by the original contract to which it

is collateral. The fact that both contracts are written on the

same paper or instrument does not affect their separate nature.” 

Id. Plaintiffs have not presented any cases where the statute of

limitations for leases under 810 ILCS 5/2A-506 has been applied

to a breach of a guaranty related to a lease, and I have not

found any. 

However, in similar circumstances, courts within this

district have found that written guarantees are subject to the

10-year statute of limitations in 735 ILCS 5/13-206 despite the

fact that the statute of limitations on the underlying debt has

run. For example, in Cessna Fin. Corp. v. Brown, No. 88 C 3369,

1995 WL 462190, at *1 (N.D. Ill. Aug. 3, 1995) the parties

disputed whether Illinois’ four-year statute of limitations for a

breach of a contract for the sale of goods applied to an alleged

breach of guaranty, or whether or the ten-year statute of

limitations for breach of a written contract applied. The court

found that the latter statute of limitations applied because the

plaintiff was not suing on the contract for the sale of goods,

but rather on the guaranty. Id. at *1–*2 (citing Chrysler Corp.

v. Gallagher, No. 85 C 5930, 1987 WL 6310 (N.D. Ill. Jan. 30,

1987)). 

Plaintiffs rely in part on Fallimento C.Op.M.A. v. Fischer

Crane Co., 995 F.2d 789, 792 (7th Cir. 1993), in which the

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Seventh Circuit held that a note executed in connection with the

sale of goods was governed by the four-year statute of

limitations for breach of contract for the sale of goods. The

Seventh Circuit noted that “[t]he obligation to pay is a

fundamental part of the contract for sale. It is not, as

plaintiff suggests, separate and distinct from the transfer of

the physical possession of the [goods].” Id. (citing Citizen’s

Nat’l Bank v. Farmer, 395 N.E.2d 1121 (Ill. App. Ct. 1979)). By

contrast, a guaranty is an independent obligation, separate and

distinct from the transfer of goods. Colonial Am. Nat’l Bank, 617

F.2d at 1030–31. As such, I find that the ten-year statute of

limitations in 735 ILCS 5/13-206 should apply to guarantees for

equipment leases.4

This assumes, of course, that the transactions entered into

with Plaintiffs are actually guarantees. Plaintiffs, in their

response, contend that some of the guarantees were illusory

because CIT’s salespeople had the owner of the business sign both

as lessee using the either the individual’s name or the name of a 

4

 I note that § 2A-506 applies to “actions for default

under a lease contract,” and a lease contract is defined by

Illinois law as the total legal obligation that results from the

lease agreement as affected by this Article and any other

applicable rules of law.” 810 ILCS 5/2A-103(1). “Lease

agreement,” in turn, is defined as “the bargain, with respect to

the lease, of the lessor and the lessee.” 810 ILCS 5/2A-103(k). 

The statutory language makes no reference to the breach of a

guaranty being included in the four-year statute of limitations.

19
partnership or proprietorship, and then had the same person sign

as guarantor. In Williford’s case, for example, Williford signed

the lease both as lessee and guarantor. (Dkt No. 54-1, App. E to

SAC.) An individual operating a sole proprietorship is

personally liable for its debts. GMAC, LLC v. Hillquist, 652 F.

Supp. 2d 908, 919 (N.D. Ill. 2009) (citing Packard Bell Elec.

Corp. v. Ets–Hokin, 509 F.2d 634, 637 (7th Cir. 1975)). If he

guarantees the debt of the sole proprietorship, he is

guaranteeing debts for which is already liable and the guaranty

is meaningless. Id. Although the ten-year statute of

limitations in 735 ILCS 5/13-206 would apply to true guarantees,

it is possible that Williford’s only obligation was as lessee, in

which the four-year statute of limitations applies. If Pushpin

misrepresented to Plaintiffs that their debts were not timebarred, when they in fact were, this could amount to a deceptive

practice under the ICFA. See Taylor v. Unifund Corp., No. 98 C

6921, 1999 WL 33545372, at *2 (N.D. Ill. May 3, 1999).

However, while their allegations of deceptive practices are

sufficiently plead in regard to Pushpin’s conduct, Plaintiffs

have not alleged actual damages, which is a required element of

an ICFA claim. They concede that Pushpin has not obtained

judgments against the Plaintiffs, and it is not clear whether

Plaintiffs have filed an appearance or incurred any expenses in

defending these suits. In their response, Plaintiffs contend

20
that nothing has happened in regard to these state court suits,

and the papers they attached to their response showed that, at

least as of the time of filing their response, Plaintiffs had not

been served with the state court complaints. (See Dkt. No. 56-

1.) While “time and money” spent defending debt collection

lawsuits can be an actual injury under ICFA, see Grant-Hall v.

Cavalry Portfolio Srvs., LLC, --- F. Supp. 2d ---, 2012 WL

619651, at *10 (N.D. Ill. Feb. 24, 2012), it is not clear that

either was incurred here. 

Additionally, Plaintiffs allege that Pushpin filed timebarred suits in an effort to extort payments from them, but it is

not clear whether any of the Plaintiffs have paid these debts. 

Without specific allegations of actual damages, the filing or

threat to file time-barred suits cannot be the basis of a private

cause of action under the ICFA. See Worix v. MedAssets, Inc.,

No. 11 C 8088, 2012 WL 787210, at *7–*8 (N.D. Ill. March 8,

2012). This is true even where Plaintiffs seek injunctive

relief. See Schilke v. Wachovia Mortg., 820 F. Supp. 2d 825, 838

n.5 (N.D. Ill. 2011) (collecting cases). 

Plaintiffs also allege an ICFA violation on the basis of

their allegation that Pushpin wrongfully threatened to report to

credit reporting agencies debts that were more than 7 years and

180 days old, and as such not reportable under the FCRA. I note

that Plaintiffs’ pleading in this regard is confusing. 

21
Plaintiffs cite the FCRA in their complaint, and in their

response note that threats to report debts that are older than

seven and a half years old have been held to be deceptive and

unfair in violation of the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. §§ 1692e, f. See Gonzalez v. Arrow Fin.

Srvs., 660 F.3d 1055 (9th Cir. 2011). Although Plaintiffs have

not brought a claim under the FDCPA,5 they contend in their

response that this presents an analogous situation. Pushpin

devotes much of its briefing to arguing that it cannot be liable

under either the FCRA or the FDCPA, but Plaintiffs have not

brought a claim under those acts. Similarly, Plaintiffs, in

their response, devote much of their argument to contending that

similar practices have been found deceptive under the FDCPA,

without addressing the elements of an ICFA claim. They contend,

“A fortiori, an express statement that a debt that can no longer

appear on most credit reports ‘will be reflected on your credit

report’ is unfair, deceptive, and actionable.” Pls.’ Resp., 10

(emphasis in original). This may be true, but again, Plaintiffs

fail to allege actual damages, a required element of a claim

under ICFA, so Count II must be dismissed. Because it may be

5 The FDCPA applies only to consumer debt, not the business

debts incurred in this case. See 15 § U.S.C. § 1692e. 

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possible for Plaintiffs to allege actual damages in connection

with their ICFA claim, they are given 30 days from the date of

this Order to replead Count II.

IV.

For the reasons stated herein, Count I, and Plaintiff

Armbrister’s claims in regard to Count II, are stayed pending

arbitration. The remainder of Count II is dismissed without

prejudice to Plaintiffs’ repleading this count within 30 days of

the date of this Order. Plaintiffs’ motion to file a surresponse

(Dkt. No. 58) is granted, and I have considered that response in

reaching this ruling. Finally, Plaintiffs’ motion for class

certification (Dkt. 22) is denied with leave to reinstate upon

the filing of an amended complaint.

 ENTER ORDER:

 ____________________________

 Elaine E. Bucklo

 United States District Judge

Dated: September 17, 2012

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