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represented by a single law firm, and Fairbanks is likewise represented by the same law firm in
all of the cases.

Local Rule 40.4(a) states that two or more civil cases may be related if they involve the
same property, the same issues of fact or law, arise from the same transaction or occurrence, or,
in the case of class action suits, involve the same classes. N.D. Ill. LR 40.4(a)(1)-(4).
EquiCredit and Fairbanks do not argue that the cases are not related within the meaning of Rule
40.4(a), and even if they had done so, the Court would find that the criteria of Rule 40.4(a)(2)
have been met, as the cases involve the same issues of law. There is no question that each of
these cases will involve the issue of the legality, under TILA and ICFA, of EquiCredit’s alleged
practice of requiring borrowers to sign non-rescission “confirmations.” The Rule does not
require complete identity of issues in order for cases to be considered related.

EquiCredit and Fairbanks’ challenge to defendants’ motion turns on the application of
Local Rule 40.4(b), which provides the criteria for determining whether assignment of related
cases to the judge with the lowest-numbered case is appropriate. Under Rule 40.4(b),
reassignment may be ordered if four criteria are met as to all of the cases in question: they are
pending in this Court; the handling of all the cases by the same judge is likely to result in a
substantial saving of judicial time and effort; the earliest case has not progressed to far that
designating later cases as related would likely delay substantially the proceedings in the earliest
case; and the cases are susceptible of disposition in a single proceeding. N.D. Ill. LR 40.4(b)(1)-
(4). There is no question that the first and third of these criteria are met here; all of the cases are
pending in this Court, and Fairbanks Capital Corp. v. Jenkins, the first of the cases to be filed,

has not progressed all that far: the Court has ruled on a motion to dismiss the counterclaim, and


wg

foreclosure is the alleged TILA violation). Moreover, as defendants argue, the evidence
regarding the manner in which each of the borrowers allegedly was required to sign the non-
rescission confirmation is likely to be admissible in the other cases pursuant to Federal Rule of
Evidence 404(b) to show modus operandi and/or the absence of mistake or accident.
Conclusion

For the reasons stated above, the Court finds that Case Nos. 02 C 5023, 02 C 6059, and
02 C 7262 are related to the present case within the meaning of Local Rule 40.4(a) and that
reassignment of those cases to this Court’s docket is appropriate under Local Rule 40.4(b) and
therefore grants defendants’ motion and second motion to designate those cases as related to this
one [docket items 22-1, 25-1]. The appropriate request will be submitted to the Executive
Committee. This case (as well as the others, assuming they are reassigned by then) is set for a

status hearing on December 19, 2002 at 9:30 a.m.

‘WA WU,

MATTHEW F. KENNEL!
United States District Judge
Date: November 25, 2002

‘(...continued)
The presence of the HOEPA claim thus does not suggest that the cases are not susceptible of
being determined in a single proceeding.



loans made by EquiCredit and assigned to Fairbanks. The defendants are Nationscredit d/b/a
EquiCredit Corp. of Illinois, EquiCredit Corp. of Missouri; EquiCredit Corp. of America; and
Fairbanks. The plaintiffs’ complaint asserts claims under TILA and the Illinois Consumer Fraud
Act arising from EquiCredit’s alleged practice of requiring borrowers to sign confirmation forms
effectively giving up their right to rescind.

Brown v. Nationscredit Financial Services Corp., Case No. 02 C 5023, pending before
Judge William Hibbler, is a putative class action brought by a single plaintiff against
Nationscredit d/b/a EquiCredit Corp. of Illinois; EquiCredit Corp. of America; and Fairbanks.
The plaintiff, a homeowner who obtained a mortgage loan from EquiCredit (and assigned to
Fairbanks) in order to finance improvements to his home, alleges TILA and ICFA violations
based on the practice of requiring borrowers to “confirm” their non-rescission at the time of the
transaction. He also alleges that the loan was subject to the Home Ownership and Equity
Protection Act, which he says EquiCredit violated by failing to make certain HOEPA-required
disclosures.

Finally, Brown v. Nationscredit Financial Services Corp., Case No. 02 C 6059, pending
before Judge Charles Norgle, is brought on behalf of two plaintiffs against Nationscredit d/b/a
EquiCredit Corp. of Illinois; EquiCredit Corp. of America; and Fairbanks. The plaintiffs, who
obtained a mortgage loan from EquiCredit which was assigned to Fairbanks, alleges violations of
TILA and ICFA arising from the previously-mentioned practice of requiring borrowers to
“confirm” non-rescission at the time of the transaction.

The plaintiffs in all of the cases that are subject to this motion are represented by the same

law firm. As best we can tell, all of the Nationscredit / EquiCredit entities in all of the cases are



discovery has just gotten started.

The Court likewise believes that significant judicial efficiency will result from having one
judge handle all four of the cases. None of the cases can be disposed of without determining the
legality of EquiCredit’s alleged practice regarding non-rescission “confirmation” at the time of
the loan, as well as the consequences of that practice vis-a-vis Fairbanks as assignee.
Reassignment of all of the cases to this Court’s calendar will permit these issues to be briefed
and determined once, rather than four separate times, which will result in a substantial saving of
judicial time and effort — not to mention a substantial saving of the parties’ and their counsels’
time and effort. The overall administration of justice will likewise be enhanced by having a
single judge determine this issue in all four of the cases. Indeed, the Court of Appeals for the
Seventh Circuit recently criticized the judges of this Court for permitting numerous lawsuits
involving TILA and ICFA-related challenges to the practices of “payday loan” companies to
proceed along different tracks before different judges, resulting in numerous and disparate
decisions, as well as multiple appeals. Smith v. Check-N-Go of Illinois, Inc., 200 F.3d 511, 513
n.* (7th Cir. 1999). The criticism was not entirely justified, as none of the parties in any of those
cases had sought reassignment under Local Rule 40.4 or on any other basis. But the same, of
course, cannot be said here.

Finally, all of the cases are reasonably subject to disposition in a single proceeding.
EquiCredit and Fairbanks argue strenuously that the fact that the case already pending on this
Court’s docket is, unlike the other cases, a mortgage foreclosure case, requires denial of
defendants’ motion for reassignment. They contend that a mortgagee is “the master of his

complaint” and is entitled to proceed with the foreclosure without the annoyance of extraneous


Minpte Order Form (0697)

United States District Court, Northern District of Illinois

Name of Assigned Jud Sitting Judge if Oth
vor Magistrate Judge Matthew F. Kennelly than Astigued Judge
CASE NUMBER 02 C 3930 DATE 11/25/2002
CASE Fairbanks Capital vs. Jenkins
TITLE
[ln the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: ‘of the motion being presented,]
DOCKET ENTRY:
(1) o Filed motion of [ use listing in “Motion” box above.]
(2) oO Brief in support of motion due
Q) o Answer brief to motion due . Reply to answer brief due :
(4) im Ruling/Hearing on set for at
(5) a Status hearing[held/continued to] [set for/re-set for] on set for at
(6) QO Pretrial conference[held/continued to] [set for/re-set for] on set for at :
(7) Oo Trial{set for/re-set for] on at
(8) im [Bench/Jury tria!] [Hearing] held/continued to at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) Local Rule 41.1 CIFRCP41(a)\(1) Cl FRCP4i(a)(2).
ao [Other docket entry] For the reasons set forth on the attached order, the Court finds that Case nos.
02C5023, 02C6059 and 02C7262 are related to the present case within the meaning of Local Rule 40.4(a)
and that reassignment of those cases to this Court’s docket is appropriate under Local Rule 40.4(b) and
therefore grants defendants’ motion and second motion to designate those cases as related to this one (22-
1, 25-1). The appropriate request will be submitted to the Executive Committee. This case (as well as
the others, assuming they are reassigned by then) is set for a status hearing on 12/19/02 at 9:30 a.m.
a1) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required,

Notices anailed by judge's staff.

Notified counsel by telephone.

Y | Docketing to mail notices
Mail AO 450 form.

44N09 Lotsia-siq

Copy to judge/magistrate judge. wu379
a
on cout 60:01KY 2-23020
initials r i
OT Gaera tt dice

Document
Number”



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matters. But even though Fairbanks is entitled to prosecute its foreclosure claim against the
Jenkins defendants, that claim cannot be determined without addressing the TILA issue raised as
part of defendants’ affirmative defense of rescission. Thus the Court will be required to consider
that issue in Fairbanks v. Jenkins whether or not the other cases are reassigned to this Court.
Determination of that same issue in four cases simultaneously is not likely to prolong the time
needed to consider it; the same lawyers appear in all the cases, which can and will be briefed
jointly on the common issues. The HOEPA issue raised in one of the Brown cases likely can be
determined at the same time and thus likewise does not undercut the Court’s ability to resolve all
of the cases simultaneously.

Fairbanks and Nationscredit also argue that Illinois’ mortgage foreclosure laws preclude
the assertion of a class action as part of a counterclaim by the mortgagor/defendant. But that is
not a necessary result of reassignment; the Jenkins defendants have not asserted a class claim,
and reassignment of cases as related does not inexorably lead to their consolidation for all
purposes. And although Rule 40.4(b) requires a showing that the cases to be reassigned be
susceptible of determination in a single proceeding with the earlier case already pending on the
judge’s docket, it does not require proof that the cases can or should be consolidated. Rather, the
Rule requires only a finding that the cases are “susceptible” (that is, capable) of determination in
a single proceeding. The Court finds that this is so. Determination of the common TILA / ICFA
issues raised in all four cases, whatever the outcome, will be outcome-determinative of McWethy

and both Brown cases! as well as in Fairbanks v. Jenkins (in which the primary defense to

1 One of the Brown cases also involves a HOEPA claim, but this involves the same
evidence as the TILA claim, and it likely can and will be determined together with that claim.
(continued...)



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

FAIRBANKS CAPITAL CORP.,

Plaintiff, D 0 c K ETED

Case No. 02 C 3930 DEC 03 2002

vs.

JOHNNY JENKINS and ANNIE J.
WESSON-JENKINS,

Defendants.

JOHNNY JENKINS and ANNIE J.
WESSON-JENKINS,

Counterclaimants,

vs.

FAIRBANKS CAPITAL CORP. and
NATIONSCREDIT FINANCIAL
SERVICES CORP., d/b/a EQUICREDIT
CORPORATION OF ILLINOIS,

ew eee eee

Counterdefendants.

MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:

Fairbanks Capital Corp., the assignee of a mortgage of real estate given to secure payment
of a promissory note, sued the mortgagors, Johnny Jenkins and Annie Wesson-Jenkins, seeking
to foreclose on the mortgage. The case was filed in this Court based on diversity of citizenship.
In their answer, the defendants asserted as an affirmative defense that they were entitled under

the Truth in Lending Act to rescind the transaction and were exercising that right. They also

Jo


counterclaimed against Fairbanks and Nationscredit Financial Services Corp. (which does
business as EquiCredit Corp. of Illinois), the original mortgagee, for damages under the TILA.
The Court previously denied Fairbanks’ motion to strike the affirmative defense and dismiss the
counterclaim. Fairbanks Capital Corp. v. Jenkins, __F. Supp. 2d __, 2002 WL 31260011
(N.D. Ill. Oct. 9, 2002).

The defendants have now moved this Court pursuant to Northern District of Illinois Local
Rule 40.4(c) to find that three later-filed cases pending before other judges of the Court are
related to this one and for that reason to request reassignment of those cases to this Court’s
docket. Fairbanks and EquiCredit have objected to the motion. For the reasons stated below, the
Court grants defendants’ motion.

The defendants’ TILA claim involves EquiCredit’s alleged violation of TILA provisions
requiring that they be given notice of their right to rescind the transaction within three business
days. See 15 U.S.C. §1635; 12 C.F.R. §226.23. Defendants contend that a document they were
asked to sign at closing purportedly “confirming” that they were not rescinding was invalid
because it improperly negated their right to rescind. This TILA violation, defendants contend,
had the effect of giving them an extended three-year period in which to rescind, see 15 U.S.C.
§1635(f); 12 C.F.R. §226.23(a), which they contend can be asserted against an assignee like
Fairbanks. See 15 U.S.C. §1641(c). As noted earlier, they seek rescission of the transaction as
well as damages and attomey’s fees.

McWethy v. Nationscredit Financial Services Corp., Case No. 02 C 7262, pending before
Judge Robert Gettleman, is a putative class action brought on behalf of eight named plaintiffs

(two individual mortgagors and three groups of dual mortgagors) who are parties to mortgage