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 2018 IL App (5th) 160479 NOTICE 

Decision filed 01/04/18. The 

text of this decision may be NO. 5-16-0479 

changed or corrected prior to 

the filing of a Peti ion for IN THE 

Rehearing or the disposition of 

the same. 

APPELLATE COURT OF ILLINOIS 

FIFTH DISTRICT 

MIDLAND FUNDING, LLC, ) Appeal from the 

) Circuit Court of 

Plaintiff and Counterdefendant-Appellant, ) St. Clair County. 

) 

v. ) No. 15-L-442 

) 

TERESA RANEY and SHIRLEY DARNELL, ) Honorable 

) Christopher T. Kolker, 

Defendants and Counterplaintiffs-Appellees. ) Judge, presiding. 

JUSTICE OVERSTREET delivered the judgment of the court, with opinion. 

Presiding Justice Barberis and Justice Goldenhersh concurred in the judgment and 

opinion. 

OPINION 

¶ 1 In this interlocutory appeal brought pursuant to Illinois Supreme Court Rule 307(a)(1) 

(eff. Feb. 26, 2010), the plaintiff-counterdefendant, Midland Funding, LLC (Midland Funding), 

appeals the circuit court’s order denying its motion to dismiss and to compel arbitration of 

counterclaims filed by the defendants-counterplaintiffs, Teresa Raney and Shirley Darnell. For 

the reasons that follow, we affirm. 

¶ 2 BACKGROUND 

¶ 3 Darnell and Raney acquired consumer credit card accounts issued by Citibank, N.A. 

(Citibank), wherein they were provided with specified lines of credit for consumer purchases in 

exchange for paying at least the minimum amounts shown on monthly billing statements. On 

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June 11, 2015, Midland Funding, as Citibank’s assignee, filed complaints against Darnell and 

Raney, seeking judgments in the sums of $5848.91, and $16,843.42, respectively, plus court 

costs, for the amounts due and owing via the Citibank lines of credit. Midland Funding alleged 

that it was the successor in interest to the Citibank accounts, that Midland Funding had 

purchased Darnell’s and Raney’s credit card account obligations from Citibank in the regular 

course of business, that Darnell and Raney had failed to make the monthly payments on said 

accounts and were in default on the accounts, and that Midland Funding was entitled to a 

judgment for the unpaid balances plus costs. Midland Funding alleged that it had purchased the 

accounts from Citibank on October 14, 2014 (Darnell), and April 23, 2014 (Raney), for good and 

valuable consideration, as evidenced by an attached bill of sale and assignment. Midland 

Funding also attached account statements showing a $5848.91 Sears MasterCard account balance 

for Darnell and a $16,843.47 Sears Premier MasterCard balance for Raney. 

¶ 4 Midland Funding attached to its complaint against Darnell the affidavit of Andrew 

Lankey. In the affidavit dated April 16, 2015, Lankey stated that he was employed as a legal 

specialist with access to pertinent account records for Midland Credit Management, Inc. (MCM), 

servicer of Darnell’s account on behalf of Midland Funding. Based upon his personal knowledge 

of the account records, Lankey stated that Midland Funding was the current owner of the 

obligation and was assigned all rights, title, and interest to Darnell’s Citibank account. Lankey 

stated that MCM’s records showed that Darnell owed a balance of $5848.91, as of April 13, 

2015. Lankey stated that Darnell opened the Citibank account on November 1, 1986, the last 

payment posted to the account on December 17, 2013, and the account was charged off on July 

29, 2014. 

2 
 

 

¶ 5 Midland Funding attached to its complaint against Raney the affidavit of Rhonda 

Schubloom. In the affidavit dated April 16, 2015, Schubloom stated that she was employed as a 

legal specialist with access to pertinent account records for MCM, servicer of Raney’s account 

on behalf of Midland Funding. Based on her personal knowledge of the account records 

maintained on Midland Funding’s behalf, Schubloom stated that Midland Funding was the 

current owner of the obligation and was assigned all rights, title, and interest to Raney’s Citibank 

account. Schobloom stated that MCM’s records showed that Raney owed a balance of 

$16,843.42 as of April 14, 2015. Schubloom stated that Raney opened the Citibank account on 

February 1, 1994, the last payment posted to the account on March 1, 2013, and the account was 

charged off on October 7, 2013. 

¶ 6 In July 2015, Raney and Darnell filed answers and affirmative defenses. They also filed 

class action counterclaims seeking to certify statewide and nationwide classes and seeking 

damages based on purported violations of the Collection Agency Act (225 ILCS 425/1 et seq. 

(West 2014)), the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 

et seq. (West 2014)), and the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq. 

(2012)). The counterclaims challenged Midland Funding’s alleged practice of suing to collect 

debt purchased from others without sufficient proof of ownership of the debt. 

¶ 7 On November 18, 2015, and December 1, 2015, Midland Funding filed motions to 

dismiss the counterclaims pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 

5/2-619 (West 2014)) and to compel arbitration. Midland Funding argued that because the 

counterclaims were within the scope of a binding card agreement that included an agreement to 

arbitrate and a class action waiver provision (the Card Agreement), the class claims were barred 

and should be dismissed. Midland Funding argued that the arbitration provision in the Card 

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Agreement was subject to the Federal Arbitration Act (9 U.S.C. § 1 et seq. (2012)) and that 

Midland Funding was entitled to elect arbitration as the forum within which to address the 

putative class claims alleged in the counterclaims. To its motions, Midland Funding attached 

account statements and a November 25, 2015, declaration of Michael Burger, senior manager of 

operations for MCM. In the declaration, Burger stated, in pertinent part: 

“1. *** I am currently employed as the Sr. Manager, Operations for [MCM]. 

MCM is the servicer and authorized agent for Midland Funding and manages the debt 

that Midland Funding purchases. 

2. In my capacity as Sr. Manager, Operations for MCM, I am responsible for, 

among other things, maintaining and overseeing ‘media’, i.e., the loan agreements, 

account purchase and transfer information, debt collection records and other account 

information pertinent to accounts and debts that MCM manages for Midland Funding. I 

make this Declaration from my own personal knowledge of the matters set forth herein, 

or on information and belief based upon my review of the business records that MCM 

maintains for Midland Funding. If called as a witness, I could and would testify 

competently to the matters set forth in this Declaration. 

* * * 

5. As part of the sale of the Citibank Account to Midland Funding, Citibank 

transferred electronic records and other records for the Account to MCM, which included 

an Excel file identifying the Account. Attached hereto as Exhibit B is an abstract of the 

true and correct data from the Excel file pertaining to the Citibank Account. Citibank also 

provided certain account statements[, attached as Exhibit C]. 

*** 

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7. As reflected in Exhibit A, Citibank assigned all interest in the Citibank Account 

to Midland Funding. Midland Funding currently owns all rights, title[,] and interest in the 

purchased account. 

8. The records produced by Citibank included the Card Agreement applicable to 

the Citibank Account. See Exhibit E. 

9. At the time MCM received the records in Exhibits A-E and maintained them on 

behalf of Midland [Funding], MCM incorporated those records into its business records 

that MCM keeps in the ordinary course of the regularly conducted business activity for 

such accounts, and it is the regular practice of MCM to make and rely upon such records, 

and MCM has routinely relied upon those records in conducting business. See Exhibits 

A-E.” 

¶ 8 Midland Funding attached the Card Agreement referenced in paragraph 8 of the 

declaration identified as Exhibit E. The language of the Card Agreement stated, “We are 

changing your card agreement and replacing it with a new one. The effective date of these 

changes is shown on your statement in the message titled ‘Important Changes to Your Account 

Terms’.” Arbitration was identified as a section change to the Card Agreement. In the arbitration 

section of the Card Agreement, it stated, in relevant part: 

“ARBITRATION 

PLEASE READ THIS PROVISION OF THE AGREEMENT CAREFULLY. IT 

PROVIDES THAT ANY DISPUTE MAY BE RESOLVED BY BINDING 

ARBITRATION. ARBITRATION REPLACES THE RIGHT TO GO TO COURT, 

INCLUDING THE RIGHT TO A JURY AND THE RIGHT TO PARTICIPATE IN A 

CLASS ACTION OR SIMILAR PROCEEDING. IN ARBITRATION, A DISPUTE IS 

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RESOLVED BY AN ARBITRATOR INSTEAD OF A JUDGE OR JURY. 

ARBITRATION PROCEDURES ARE SIMPLER AND MORE LIMITED THAN 

COURT PROCEDURES. 

Agreement to Arbitrate: Either you or we may, without the other’s consent, elect 

mandatory, binding arbitration for any claim, dispute, or controversy between you and us 

***. 

Claims Covered 

What Claims are subject to arbitration? All Claims relating to your account, a 

prior related account, or our relationship are subject to arbitration, including Claims 

regarding the application, enforceability, or interpretation of this Agreement and this 

arbitration provision. All Claims are subject to arbitration, no matter what legal theory 

they are based on or what remedy (damages, or injunctive or declaratory relief) they seek. 

This includes Claims based on contract, tort (including intentional tort), fraud, agency, 

your or our negligence, statutory or regulatory provisions, or any other sources of law; 

Claims made as counterclaims, cross-claims, third-party claims, interpleaders or 

otherwise; and Claims made independently or with other claims. A party who initiates a 

proceeding in court may elect arbitration with respect to any Claim advanced in that 

proceeding by any other party. Claims and remedies sought as part of a class action, 

private attorney general or other representative action are subject to arbitration on an 

individual (non-class, non-representative) basis, and the arbitrator may award relief only 

on an individual (non-class, non-representative) basis. 

* * * 

*** This arbitration provision is governed by the Federal Arbitration Act ***. 

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What about Claims field in Small Claims Court? Claims filed in a small claims 

court are not subject to arbitration, so long as the matter remains in such court and 

advances only an individual (non-class, non-representative) Claim. 

What about debt collections? We and anyone to whom we assign your debt will 

not initiate an arbitration proceeding to collect a debt from you unless you assert a Claim 

against us or our assignee. We and any assignee may seek arbitration on an individual 

basis of any Claim asserted by you, whether in arbitration or any proceeding, including in 

a proceeding to collect a debt. You may seek arbitration on an individual basis of any 

Claim asserted against you, including in a proceeding to collect a debt.

 * * * 

Who can be a party? Claims must be brought in the name of an individual person 

or entity and must proceed on an individual (non-class, non-representative) basis. The 

arbitrator will not award relief for or against anyone who is not a party. If you or we 

require arbitration of a Claim, neither you, we, nor any other person may pursue the 

Claim in arbitration as a class action, private attorney general action or other 

representative action, nor may such Claim be pursued on your or our behalf in any 

litigation in any court.” (Emphases in original.) 

The Card Agreement referenced variable annual percentage rates as of September 15, 2010, and 

listed a copyright date of 2010. The Card Agreement did not reference Darnell or Raney by 

name, signature, account number, address, or any other means. 

¶ 9 In response to the motion to dismiss and to compel arbitration, Raney filed a motion to 

strike Burger’s declaration, challenging the Card Agreement. Raney claimed that nothing in 

Burger’s declaration established that the Card Agreement on which Midland Funding relied for 

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its motion to dismiss was associated with Raney’s account, was ever received by Raney, or that 

Raney agreed to its terms. 

¶ 10 Prior to the filing of the motion to dismiss, the parties had not engaged in discovery. On 

March 29, 2016, the parties entered a stipulation and agreed order regarding discovery, allowing 

for the depositions of Burger and Schubloom. The agreed order provided that Midland Funding’s 

“agreement to this order or the stipulation cannot and will not be used against it for purposes of 

its Motion to Dismiss and Compel Arbitration, i.e., [to determine] that Midland Funding *** has 

waived its right to compel arbitration based on its participation in discovery.” 

¶ 11 In a discovery deposition taken on May 4, 2016, Burger testified that, as director of 

operations for MCM, he supervised the media operations team, which was responsible for 

obtaining documentation for accounts and processing that documentation and uploading it to the 

document portal. Burger identified the Card Agreement attached to his declaration as Exhibit E 

and stated that “Citibank told us that this is the card agreement associated with that account.” 

Burger acknowledged that no account number, name, or signature was included on the Card 

Agreement. 

¶ 12 When questioned about the Darnell account, Burger testified that he had no personal 

knowledge regarding whether or not the Card Agreement was applicable and did not know if 

Darnell had ever seen or received the Card Agreement. Burger testified that he did not know if or 

when the Card Agreement was ever sent to Darnell and had not seen documentation that 

indicated that the Card Agreement had been sent to Darnell. Burger testified that he was not 

aware of any evidence that the Card Agreement was ever sent to Darnell or that she saw it. 

Likewise, Burger did not testify if or when the Card Agreement was mailed or otherwise 

communicated to Raney. 

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¶ 13 On June 15, 2016, Darnell and Raney executed affidavits stating that they had “never 

seen” the Card Agreement, had never agreed to the terms of the Card Agreement, and had never 

agreed to the arbitration provision in the Card Agreement. In discovery depositions taken on 

August 12, 2016, Raney testified that she could not recall having received the Card Agreement, 

and Darnell testified that she had not seen a credit card agreement applicable to her case and did 

not know if she had ever received updated terms and conditions. On July 18, 2016, the circuit 

court entered an order consolidating the Darnell and Raney cases. 

¶ 14 On August 29, 2016, Burger executed a supplemental declaration in support of Midland 

Funding’s motion to dismiss and to compel arbitration. Attached to Burger’s supplemental 

declaration were Raney’s credit card account statements from January 2010 through October 

2013 and Darnell’s statements from December 2009 through July 2014. Although not found in 

Darnell’s account statements, a page titled “Important Changes to Your Account Terms” was 

included in Raney’s November 2010 credit card account statement, a statement which referenced 

her name, account number, and address. This statement provided that certain changes were being 

made to Raney’s account terms, which would take effect on December 7, 2010, and which would 

include an arbitration provision modification. This statement provided: “For more detailed 

information, please refer to the enclosed Notice of Change in Terms and Right to Opt Out.” The 

statement itself did not include the language of the arbitration provision, and neither the Card 

Agreement nor another document titled “Notice of Change in Terms and Right to Opt Out” was 

attached to Raney’s statement in the record. 

¶ 15 On October 14, 2016, the circuit court entered its order denying Midland Funding’s 

motion to dismiss and to compel arbitration. The circuit court found, inter alia, that Raney and 

Darnell were not subject to arbitration because there was no competent evidence that the Card 

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Agreement containing the arbitration provision applied to them. The circuit court noted that the 

Card Agreement did not include the signature of any party, did not include information that it 

related to Darnell’s or Raney’s account, and did not indicate that Darnell or Raney had received 

it or had agreed to its terms. The circuit court noted, however, that Darnell and Raney had 

executed sworn statements that they had not seen the Card Agreement nor agreed to its terms. 

The circuit court found that although Burger in his declaration had stated that the Card 

Agreement was applicable to Darnell and Raney, he testified at his deposition that he had no 

personal knowledge regarding whether or not the alleged Card Agreement was applicable. The 

circuit court further noted that Raney’s credit card statement, which provided that revised terms 

were being distributed, did not identify the Card Agreement as the revised terms so distributed. 

¶ 16 On November 14, 2016, Midland Funding filed a notice of interlocutory appeal pursuant 

to Illinois Supreme Court Rule 307(a)(1) (eff. Feb. 26, 2010). 

¶ 17 ANALYSIS 

¶ 18 “Generally, the standard of review for a decision on a motion to compel arbitration is 

whether there was a showing sufficient to sustain the circuit court’s order.” Keefe v. Allied Home 

Mortgage Corp., 393 Ill. App. 3d 226, 229 (2009). However, where the circuit court’s decision is 

based on a legal analysis, the decision to deny the motion to compel arbitration is reviewable 

de novo. Vassilkovska v. Woodfield Nissan, Inc., 358 Ill. App. 3d 20, 24 (2005). In this case, the 

circuit court did not hold an evidentiary hearing where it determined credibility issues but 

decided the issue as a matter of law. Thus, our review is de novo. See id.; see also Peach v. CIM 

Insurance Corp., 352 Ill. App. 3d 691, 694 (2004) (“review of a trial court’s construction of the 

arbitration agreement states a question of law that is subject to a de novo standard”); Travis v. 

American Manufacturers Mutual Insurance Co., 335 Ill. App. 3d 1171, 1174 (2002) (“where the 

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trial court renders its decision without an evidentiary hearing and without findings on any factual 

issues, de novo review is appropriate”). We consider anew the pleadings, declarations, 

depositions, and exhibits on file to determine whether the circuit court’s decision was correct. 

See generally Jackson v. Graham, 323 Ill. App. 3d 766, 779 (2001). 

¶ 19 “The Uniform Arbitration Act *** (710 ILCS 5/1 et seq. (West 2000)) empowers courts, 

upon application of a party showing an agreement to arbitrate, to compel or stay court action 

pending arbitration. 710 ILCS 5/2 (West 2000).” Vassilkovska, 358 Ill. App. 3d at 24-25. 

Likewise, the Federal Arbitration Act provides that a court, upon being satisfied that an issue 

involved in a proceeding is subject to arbitration pursuant to a written arbitration agreement, 

shall on application stay the trial of the action. 9 U.S.C. § 3 (2012). However, “[w]hile 

arbitration is a favored method of dispute resolution, courts have consistently cautioned that an 

agreement to submit to arbitration is a matter of contract.” United Cable Television Corp. v. 

Northwest Illinois Cable Corp., 128 Ill. 2d 301, 306 (1989). Whether under federal rules or state 

law, there can be no forced arbitration without a valid contract to arbitrate. Tortoriello v. Gerald 

Nissan of North Aurora, Inc., 379 Ill. App. 3d 214, 226 (2008); Vassilkovska, 358 Ill. App. 3d at 

25; Ervin v. Nokia, Inc., 349 Ill. App. 3d 508, 538 (2004); Aste v. Metropolitan Life Insurance 

Co., 312 Ill. App. 3d 972, 975 (2000). 

¶ 20 “An agreement to arbitrate is treated like any other contract.” Vassilkovska, 358 Ill. App. 

3d at 24. Accordingly, when deciding whether there is a valid agreement to arbitrate, courts 

apply state law principles that govern the formation of contracts. Id. at 25. “Our courts have held 

that the issuance of a credit card and cardholder agreement is a standing offer to extend credit 

that may be revoked at any time.” Portfolio Acquisitions, L.L.C. v. Feltman, 391 Ill. App. 3d 642, 

649 (2009); see also Garber v. Harris Trust & Savings Bank, 104 Ill. App. 3d 675, 679 (1982). 

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“When the cardholder makes a purchase, the bank advances funds to the merchant and this 

arrangement constitutes a loan between the bank and cardholder.” Portfolio Acquisitions, L.L.C., 

391 Ill. App. 3d at 649. “Therefore, each time the credit card is used, a separate contract is 

formed between the cardholder and bank.” Id. 

¶ 21 “The issuance of a credit card is only an offer to extend credit; acceptance of the credit 

offer occurs each time a credit purchase is made by the cardholder.” Asset Acceptance, LLC v. 

Tyler, 2012 IL App (1st) 093559, ¶ 47. “Consistent with the treatment of each credit card 

purchase as a separate offer and acceptance, modifications to credit card terms are binding 

between the parties when, after notice of the modifications, the cardholder uses his credit card.” 

Id. 

¶ 22 Accordingly “each time a credit card is used, a new contract exists between the parties 

according to the terms ‘in effect’ (i.e., having been communicated to the defendant in a 

reasonable manner) at the time of the use.” Razor Capital v. Antaal, 2012 IL App (2d) 110904, 

¶ 35; see also Garber, 104 Ill. App. 3d at 678. Those terms might include a provision regarding 

arbitration. Submission of disputes to arbitration is completely dependent on the private will of 

the parties as embodied in whatever contract they may have entered into. Asset Acceptance, LLC, 

2012 IL App (1st) 093559, ¶ 41. To compel arbitration as a term or modification of a credit card 

agreement, however, the card issuer must allege what the terms were at the time of each use, that 

those terms were communicated to the cardholder in a reasonable manner, and that the 

cardholder thereafter accepted those terms by using the card. See generally Razor Capital, 2012 

IL App (2d) 110904, ¶ 35. “[M]odified terms of an agreement, once communicated to the 

cardholder, are deemed accepted when the card is used after the modifications.” Id. ¶ 32. 

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¶ 23 In Asset Acceptance, LLC, the credit card holder contended that Asset Acceptance, as the 

credit card issuer, failed to present a prima facie case for confirmation of an arbitration award 

under section 13 of the Federal Arbitration Act (9 U.S.C. § 13 (2006)) because it failed to show 

that an arbitration agreement existed between the parties. Asset Acceptance, LLC, 2012 IL App 

(1st) 093559, ¶ 40. Asset Acceptance’s motion to dismiss the cardholder’s counterclaims 

attached two purported bank card documents, each of which contained an arbitration clause. Id. 

¶ 43. However, neither document contained the cardholder’s name or his credit card account 

number. Id. The appellate court found it problematic that the documents provided no evidence 

that they pertained to the cardholder’s account, that the cardholder had received the papers, or 

that the cardholder had agreed to the terms set forth in the papers by making a credit purchase 

after he was mailed the attached papers. Id. ¶ 48. The appellate court noted that Illinois courts 

had deemed similar documents insufficient to establish a contract. See id.; Velocity Investments, 

LLC v. Alston, 397 Ill. App. 3d 296, 299 (2010) (“Cardmember Agreement and Disclosure 

Statement” was legally insufficient to collect on a credit card debt because the document offered 

no evidence that defendant agreed to be bound by the terms or that the terms applied to this 

particular account). The appellate court determined that the documents did not support the 

conclusion that the parties had entered into a contract to arbitrate their disputes. Asset 

Acceptance, LLC, 2012 IL App (1st) 093559, ¶ 48. Thus, the appellate court concluded that 

absent such an arbitration agreement, Asset Acceptance had failed to satisfy its burden to 

establish a prima facie case to confirm the arbitration award under section 13 of the Federal 

Arbitration Act. Id. ¶¶ 57-60. 

¶ 24 In the present case, Midland Funding also did not demonstrate when or how the generic 

Card Agreement containing the arbitration provision pertained to Darnell or Raney or that it was 

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communicated to Darnell or Raney prior to subsequent credit card use. See Razor Capital, 2012 

IL App (2d) 110904, ¶ 32 (in absence of allegations or affidavits explaining when and how 

generic agreement attached to the complaint was communicated to the defendant, via mail to 

defendant’s most recent billing address or in another similar manner by which it would be 

reasonable to presume that defendant received it, and showing that the defendant used the card 

thereafter, thereby accepting the terms, the plaintiff cannot recover pursuant to those terms). As 

noted by the circuit court, the Card Agreement itself did not contain any signature, name, or 

account information and included no indication that it was mailed or in any way communicated 

to Darnell or Raney. Instead, Darnell and Raney executed sworn statements that they had never 

seen the Card Agreement nor agreed to its terms. Moreover, Burger did not attest or testify that 

the records he was allegedly responsible for maintaining and overseeing revealed that the Card 

Agreement’s arbitration provision had been communicated to Darnell or Raney prior to 

subsequent credit card use. Burger, in his declaration, stated that “[t]he records produced by 

Citibank included the Card Agreement applicable to the” accounts; however, when deposed, 

Burger testified that he had no personal knowledge regarding whether or not the Card Agreement 

was applicable, he did not know and was unaware of any document or other evidence to 

determine if the arbitration provision had been communicated to Darnell, and he did not testify 

otherwise regarding Raney. Accordingly, Midland Funding failed to show that it had 

communicated the arbitration provision to Darnell or Raney as a modification of the agreement 

or that Darnell or Raney received the arbitration provision modification before charging 

additional funds and accepting it as a modification of their agreements. See Asset Acceptance, 

LLC, 2012 IL App (1st) 093559, ¶ 48. 

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¶ 25 Raney’s November 2010 account statement referenced an enclosed “Notice of Change in 

Terms and Right to Opt Out” document that purportedly contained arbitration provision 

modifications. However, no such document was attached to Raney’s account statement in the 

record. Although the Card Agreement, which was attached to Midland Funding’s motion to 

dismiss and to compel arbitration, is also titled “Notice of Change in Terms and Right to Opt 

Out,” the circuit court correctly concluded that there was no evidence that the generic Card 

Agreement attached to the motion had been enclosed with Raney’s November 2010 account 

statement or that it was ever mailed or communicated to Darnell or Raney. 

¶ 26 Midland Funding argues that the circuit court was not permitted to determine the validity 

of the Card Agreement or the arbitration provision therein. Midland Funding cites the arbitration 

provision in the Card Agreement that provides: “All Claims *** are subject to arbitration, 

including Claims regarding the application, enforceability, or interpretation of this Agreement 

and this arbitration provision.” Midland Funding argues that the parties clearly and unmistakably 

contracted for a gateway issue, i.e., the issue of arbitrability, and therefore, the circuit court was 

bound by the agreement and should have deferred the decision of this threshold matter to an 

arbitrator. 

¶ 27 We have just held, however, that the parties did not clearly and unmistakably enter into 

an agreement regarding arbitration. Darnell and Raney challenged the arbitration clause itself 

and whether it was communicated to them as a modification of their credit card agreement. 

Having concluded that Midland Funding failed to demonstrate that Darnell or Raney was subject 

to the generic Card Agreement in the record, we decline to adopt Midland Funding’s view that 

the Card Agreement’s arbitration language controls and requires claims regarding its application 

to be subject to arbitration. In failing to demonstrate when or how the Card Agreement’s 

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arbitration provisions were communicated to Raney or Darnell, Midland Funding failed to 

demonstrate that the agreement between it and Raney and the agreement between it and Darnell 

included the arbitration provisions found in the Card Agreement. Thus, we cannot conclude that 

the agreements governing the Darnell and Raney accounts contained mandatory arbitration 

clauses requiring the enforceability of the arbitration agreements to be decided by the arbitrator. 

See In re Arbitration Between Teleserve Systems, Inc. & MCI Telecommunications Corp., 659 

N.Y.S.2d 659, 664 (App. Div. 1997) (“under either Federal or New York law, to the extent that 

petitioner challenges the arbitration clauses themselves or their inclusion in the agreements, 

those challenges are for the court to determine”); see also Donaldson, Lufkin & Jenrette Futures, 

Inc. v. Barr, 124 Ill. 2d 435, 445 (1988) (party should not be compelled to go to the expense, 

trouble, and hazard to the arbitration process when he has not agreed to do so); Bess v. DirecTV, 

Inc., 381 Ill. App. 3d 229, 237 (2008) (“independent claims specifically challenging the 

procedural unconscionability of an arbitration provision *** should be decided by the court 

rather than an arbitrator” (emphasis omitted)); Tortoriello, 379 Ill. App. 3d at 227 (issue of 

whether contract to arbitrate exists must be determined by the court, not an arbitrator). 

¶ 28 In sum, we conclude that the circuit court properly determined that Midland Funding 

failed to demonstrate that it had communicated the arbitration provision to Darnell or Raney in 

order to modify their agreements. In light of our conclusion that Midland Funding failed to show 

that Darnell or Raney agreed to the arbitration provision in the Card Agreement, we need not 

address Midland Funding’s remaining arguments on appeal. 

¶ 29 CONCLUSION 

¶ 30 For the foregoing reasons, we affirm the judgment of the circuit court of St. Clair County. 

16 
¶ 31 Affirmed. 

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______________________________________________________________________________ 

2018 IL App (5th) 160479 

NO. 5-16-0479
 

IN THE
 

APPELLATE COURT OF ILLINOIS
 

FIFTH DISTRICT
 

MIDLAND FUNDING, LLC, ) Appeal from the 

) Circuit Court of 

Plaintiff and Counterdefendant-Appellant, ) St. Clair County. 

) 

v. ) No. 15-L-442 

) 

TERESA RANEY and SHIRLEY DARNELL, ) Honorable 

) Christopher T. Kolker, 

Defendants and Counterplaintiffs-Appellees. ) Judge, presiding. 

Opinion Filed: 

_______________

January 4, 2018 

_______________________________________________________________ 

Justices: Honorable David K. Overstreet, J. 

Honorable John B. Barberis, P.J., and 

Honorable Richard P. Goldenhersh, J., 

_______________

Concur 

_______________________________________________________________ 

Attorneys Theodore W. Seitz, Dykema Gossett PLLC, Capitol View, 201 Townsend 

for Street, Suite 900, Lansing, MI 48933; Heather L. Kramer, Rosa M. 

Appellant Tumialán, Jennifer A. Warner, Dykema Gossett PLLC, 10 South Wacker 

Drive, Suite 2300, Chicago, IL 60606 

Attorneys David I. Cates, Chad M. Mooney, Cates Mahoney, LLC, 216 West Pointe 

for Drive, Suite A, Swansea, IL 62226; Brendan M. Nester, Sean K. Cronin, 

Appellees Donovan Rose Nester, P.C., 201 South Illinois Street, Belleville, IL 62220