FDCPA

Re: 12(b)(6) (cf. defendants’ motions)

Mistretta v. Babb, (N.D.Ill. 2003) No. 03 C 00808

United States District Court, N_D. Illinois, Eastern Division. April 3, 2003

Because Plaintiff's complaint alleged that Defendants' dunning letter was
confusing, her complaint is legally sufficient and thus survives a motion to
dismiss under Rule 12(b)(6).

The Seventh Circuit has held that a FOCPA complaint states a legal claim, and
therefore survives a motion to dismiss under Rule 12(b)(6), simply by alleging
that a dunning letter is confusing. Marshall-Mosby v. Corporate Receivables, Inc.,
205 F.3d 323, 326 (7th Cir. 2000); see also Walker v. Nat'l Recovery, Inc., 200
F.3d 500 (7th Cir. 1999); Johnson v. Revenue Mgmt. Corp., 169 F.3d 1057, 1059
(7th Cir. 1999) (stating a contention that a debt-collection notice is confusing is a
recognized legal claim; no more is needed to survive a motion under Rule

12(b)(6)).

FDCPA Re: General intent (cf. entire proceedings)

“The FDCPA, codified at 15 U.S.C. § 1692, prohibits, among other things, the use
of false or misleading representations by debt collectors. 15 U.S.C. § 1692(e). Its
“purpose ... is to eliminate abusive debt collection practices..." 15 USC § 1692(e).
The legislative history suggests a broad definition of such practices and wide
discretion in the courts to proscribe them: "this bill prohibits in general terms any
harassing, unfair, or deceptive collection practices, [enabling] the courts, where
appropriate, to proscribe other improper conduct which is not specifically
addressed ... the committee views this legislation as primarily self-enforcing;
consumers who have been subjected to collection abuses will be enforcing
compliance." Senate Report No. 95-382, 1977 U.S.Code. Cong. and Adm.News.
Pg. 1695, 1698, 1699. See also: 15 U.S.C. § 1692 Congressional Findings and

Declaration of Purpose)." Travieso, et al. v. Gutman, Mintz, Baker &
Sonnenfeldt, P.C., et al., E.D. N.Y., (1995) (emphasis added).

“Unlike most private tort litigants, [a plaintiff that brings an FDCPA action] seeks
to vindicate important ***** rights that cannot be valued solely in monetary
terms”, City of Riverside v. Rivera, 106 8. Ct. 2686 (1986), and congress has
determined that the public as a whole has an interest in the vindication of the
statutory rights. Id. Tolentino v. Friedman, 46 F.3d 645 (7th Cir 1995).

FDCPA Re: injunctions (cf. May 8, 2003 Order)
Piper v. Portnoff Law Assocs., 262 F. Supp. 2d 520 (E.D. Pa., 2003).


everywhere, for the purpose of conducting almost every kind of legitimate
business. If such a body transcend its powers it commits a wrong against the
state, and ordinarily it is for the state, only, to call it to account for such
violation." *431

Mazer Co., Inc. v. Blauer-Goldstone Co., 259 Ill. App. 305 (1930):

The law is well settled that it is an ultra vires act for a corporation to issue
accommodation paper, and no recovery can be had by the plaintiff unless the
plaintiff is a holder in due course and there is a consideration moving from the
plaintiff, and without notice that the note reduced to judgment is accommodation
paper. Section 52 of the Negotiable Instruments Act, Cahill's St. ch. 98, { 72,
defines "holder in due course" as one who has taken the instrument before
maturity and upon the condition, among others, Page 310 that he took it in good
faith and for value, and with no notice of any infirmity in the instrument or
defect in the title of the person negotiating it.

McCormick vs. Market National Bank, 165 U.S. 538:
“A contract made by a corporation beyond the scope of its corporate powers is
unlawful and void."

Atkinson v. Englewood State Bank, 141 Colo 436:
The extension of credit is not the giving of value. See: UCC 3-303:0

Bankers Trust vs. Nagler 229, NYS 2nd 142:
“A bank is not the holder in due course upon merely crediting the depositors
account.”

Farmers & Miners Bank vs. Bluefield National Bank, 11 F2d 83, 271 US 669:

“A national bank has no power to lend its credit.”

St. Louis Savings Bank vs. Parmalee, 95 U. S. 557:
“Banking Associations from the very nature of their business are prohibited
from lending credit.”

Norton Grocery vs. Peoples National Bank, 144 S.E. 501, 151 Va. 1920:
“National Banks may lend their money but not their credit.”

First National Bank of Tallapoosa vs. Monroe, 135 Ga 614, 69 SE 1123, 32
LRA:“A bank can lend its money but not its credit.”

First Intermediate Credit Bank vs. Herisson, 33 F 2nd 841:
“Tt is not within the statutory powers for a national bank, even though solvent, to
lend its credit.

First National Bank of Amarillo vs. Slaton Independent School District, Tex Civ
App 1933, 58 SW 2d 870):
“Banking corporations cannot lend credit.”



relief, including the discharging of a lien filed at a time when the creditor is
prohibited by the FDCPA from taking further collection efforts. Where a "legal
right has been infringed, a remedy will be given," is how Pomeroy expressed the
equitable.maxim more commonly phrased “equity will not suffer a wrong without
a remedy.” 2 Pomeroy, Equity Jurisprudence (1941) § 423. In the absence of
legislative prohibition, the power of a court of equity to remedy a wrong exists. It
then becomes the province of the court to determine whether, under the particular
circumstances of the case, the remedy should be provided. Other than the absence
of a provision in the FDCPA which would expressly support such a conclusion --
which only creates a vacuum, not a prohibition — the court can fathom no reason
why it may not, in good conscience and in the discretionary exercise of its
equitable powers, remedy the actions taken by the Association in breach of 15
U.S.C. § 1692g(b) by ordering a discharge of the lien.” (emphasis added)

DISCOVERY / SUMMARY JUDGMENT
Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292 2" Cir., (2003).

““Fed. R. Civ. P. 56(f) provides, as interpreted by court opinions, that when a
party facing an adversary’s motion for sumimary judgment reasonably advises the
court that it needs discovery to be able to present facts needed to defend the
motion, the court should defer decision of the motion until the party has had the
opportunity to take discovery and rebut the motion.” Commercial Cleaning
Servs., L.L.C. v. Colin Serv, Sys., Inc., 271 F.3d 374, 386 (2d Cir. 2001).
Accordingly, we have held that summary judgment should only be granted if
“after discovery, the nonmoving party has failed to make a sufficient showing on
an essential element of [its] case with respect to which [it] has the burden of
proof.” Hellstrom v, United States Dep’t of Veterans Affairs, 201 F.3d 94, 97 (2d
Cir, 2000) (internal quotation marks omitted) (alterations in original). “Only in
the rarest of cases may summary judgment be granted against a plaintiff who has
not been afforded the opportunity to conduct discovery.” Id.” Miller.

ESTOPPEL

Baldwin v. Wolff, 294 Ill. App. 3d 373, 378 (1998).

Under the doctrine of equitable estoppel, an individual may be precluded by his
conduct from asserting a right he may otherwise have where his statements or
conduct induces another to do something that he would otherwise not have done
but for the individual's statements or conduct.

ILLINOIS FRAUD AND DECEPTIVE PRACTICES ACT

Bradley v. Fairbanks Capital Corporation, (N.D.IIl. 2003):

Plaintiffs allege that "Roeser & Vucha had no information that supported the
filing of the [2002] complaint and had no basis for alleging the default claimed or
that Fairbanks had complied with the note and mortgage, as is required in any
action seeking to enforce a contract."



OVERVIEW: A federal district court enjoined a state court an action foreclosing
by sheriff's sale a lien for a past due water bill against a homeowner's residence,
where the homeowner was being charged excessive attorney's fees, in aid of its
jurisdiction

Following a hearing held on May 14, 2003, this court granted plaintiff's motion
for a preliminary injunction and enjoined the defendants from taking any action to
facilitate the sheriff's sale of Bridget Piper's home.

[a] debt collector's decision to proceed in rem rather than in personam is
insignificant when determining whether the underlying obligation falls within the
FDCPA's statutory definition. If a debt collector were able to avoid liability under
the FDCPA simply by choosing to proceed in rem rather than in personam, it
would undermine the purpose of the FOCPA

West v. Costen, 558 F. Supp. 564 (W.D. Vir 1983):

1. The FDCPA
[I]n 1977 Congress enacted the FDCPA in response to national concern over “the
use of abusive, deceptive and unfair debt collection practices by many debt
collectors.” 15 U.S.C. § 1692(a). The purpose of the FDCPA is "to protect
consumers from a host of unfair, harassing, and deceptive debt collection
practices without imposing unnecessary restrictions on ethical debt collectors."
S.Rep. No. 382, 95th Cong., Ist Sess. 1-2,reprinted in 1977 U.S. Code Cong. &
Ad. News 1695, 1696.

The FDCPA sets forth a nonexclusive list of unlawful debt collection practices.
Although it does provide for public enforcement by the Federal Trade
Commission (FTC), see15 U.S.C. § 16921, it is “primarily self-enforcing," S.Rep.
No. 382, supra at 5, 1977 U.S. Code Cong. & Ad. News at 1699, through private
causes of action.

Plaintiffs then moved for class certification and for a preliminary injunction
prohibiting the defendants from using certain collection practices. After an
evidentiary hearing, supplemented by affidavits, the court on January 17, 1980,
entered an order finding for purposes of injunctive relief only a continuing pattern
of practices prohibited by the FDCPA, certifying a class for purposes of
injunctive relief only, and enjoining the defendants from violating various
provisions of the Act.” (emphasis added)

Loigman_v. Kings Landing Condominium Association, Inc.; 324 N.J. Super.
97,734 A.2d 367( N.J. Super 1999):

“Interestingly, the FDCPA expressly creates only a cause of action for monetary
relief, and is silent with regard to a court's ability to provide equitable relief as
sought here. The FDCPA does not, however, prohibit the granting of equitable


10.

to him for value." The Supreme court of Illinois holds that mere possession by
such a holder "is not alone evidence of title, either legal or equitable, in the
possessor" and "the burden [of proof] is on the possessor to prove his equitable
title by showing a delivery to him with the intent to pass title." Elvin v.
Wuchetich, 326 Ill. 285, 157 N.E. 243, 245; Collins v. Ogden, 323 Ill. 594, 154
NE. 701; Brannan's Negotiable Instruments Law, 6th Ed., p. 519.

Ainsworth Corp. v. Cenco, Inc., 107 Ill. App. 3d 435, 439, 437 N.E.2d 817 (1982)
“fraud in the inducement vitiates all contracts"):

*it is black letter law that the misrepresentations *** vitiate any obligation that

party has under the contract."

Eisenberg v. Goldstein, 29 Ill. 2d 617, 622, 195 N.E.2d 184 (1963):
If a defrauded party does not "disaffirm or abandon the transaction with all
reasonable diligence" and "conducts himself *** as though [the contract were]

still subsisting and binding," he waives his right to rescind and must continue to
perform his obligations under the contract.

NONERIVOLOUS: VALIDITY OF TRANSACTION ARGUMENT
American Express Co. vs. Citizens State Bank, 194 N.W. 427, 181 Wis. 172:
“Neither, as to include in its powers not incidental to them, is it a part of a bank's
business to lend its credit. If a bank could lend its credit as well as its money, it
might, if it received compensation and was not careful to put its name only to
solid paper, make a great deal more than any lawful interest on its money would
amount to. If not careful, the power would be the mother of panics . . . Indeed,
lending credit is the exact opposite of lending money, which is the real business
of banking, for while the latter creates a liability in favor of the bank, the former
gives rise to a liability of the bank to another.” 1 Morse, Banks and Banking (5th
Ed.) § 65; Magee, Banks and Banking (3 Ed.), § 248; 1 Michie, Banks and
Banking, § 99.

Mr. Justice Marshall said:

“The doctrine of ultra vires is a most powerful weapon to keep private
corporations within their legitimate spheres and to punish them for violations of
their corporate charters, and it probably is not invoked too often; but to place that
power in the hands of a corporation itself, or a private individual, to be used by it
or him as a means of obtaining or retaining something of value which belongs to
another, would turn an instrument intended to effect justice between the state and
corporations into one of fraud as between. the latter and innocent parties. Such is
the modern doctrine, evolved and settled in the progress of events, reaching from
the time when private corporations were few and the doctrine of ultra vires
invoked quite as freely as to them as to public corporations, to a time when
substantially all restrictions to the formation of such private bodies were
removed, and they were authorized and commenced to exist, great and small,



UNITED STATES DISTRICT COURT 2
FOR THE NORTHERN DISTRICT OF ILLINOIS oR
EASTERN DIVISION ae &

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x01

CATUARA,
Plaintiff,
Case No. 03 CV 563

Judge Gottschall
HEAVNER HANDEGAN et al.,

DOCKETED

OCT 16 2003

Defendants,

wee SS Se SS Se SS Sw

NOTICE OF FILING

To: Daniel F. Konicek Edward S. Weil
Jeffrey T. Mitchell Partick T. Stanton
KONICEK & DILLION, P.C Arika J. Osacky
21. W. State Street Schwartz, Cooper, Greenberger,
Geneva, Illinois 60134 & Krauss Chartered
(630) 262-9655 180 N. LaSalle St., Suite 2700
(630) 262-9659 (Fax) Chicago, Illinois 60601
(312) 782-8416 (Fax)

I>
PLEASE TAKE NOTICE that on October, 2003, Chad F. Catuara’s
Mandatory Judicial Notice No. 2 was filed with the Clerk of the United States District
Court for Northern District of Illinois Eastern Division, a copy her attached,

fp
By:
Chad F. Catuara


Howard & Foster Co. vs. Citizens National Bank of Union,

133 SC 202, 130 SE_758):

“A national bank, under federal law being limited in its powers and capacity,
cannot lend its credit.”

Gardilner Trust vs. Augusta Trust, 134 Me 191:
“Nowhere is the express authority granted to the corporation to lend its credit.

Raine v. State. 226 S.W. 189, 143 Tenn. 168:
Legal tender notes are not good as lawful money of the U.S.

Commercial Nat. Bank v. Pirie, 82 Fed. 779, 27 C.C.A.:

It cannot for the accommodation of another indorse his note or guarantee the
performance of obligations in which it has no interest. Such an act is an adventure
beyond the confines of its charter, and, when its true character is known, no rights
grow out of it, though it has taken on in part the garb of a lawful transaction. *646

VERIFICATION

Under penalties as provided by law of the United States the undersigned certifies and
declares that the statements set forth in this instrument are true and correct except as to
matters therein stated to be on information and belief and as to such matters the
undersigned certifies as aforesaid that he verily believes the same to be true.

wy Deb (Ot.

October 14, 2003

Chad F. Catuara

14540 S. Lavergne Ave.
Midlothian, Illinois 60445
(708) 597-1873


‘Notwithstanding Fairbanks' arguments to the contrary, in People ex. rel. Daley v.
Datacom Systems Corp., 146 Ill.2d 1, 585 N.E.2d 51 (1991), the Illinois Supreme
Court concluded that "debt collection practices are embraced by the [Illinois
Consumer Fraud Act]." Id. at 31.

Given the Datacom decision, the court further concludes that debt collection
practices are a consumer activity that involves trade or commerce. See Perperas
at *3 (Perperas v. United Recovery Systems, Inc., (N.D.Ill. 1997). Lending
activities are covered by the Illinois Consumer Fraud Act, as well. See, e.g., April
vy. Union Mortgage Company, 709 F. Supp. 809 (N.D.Ill. 1989) (borrowers stated
claim under Illinois Consumer Fraud Act by alleging that lender's failure to
include in finance charge that portion of amount retained as "prepaid finance
charge" constituted unfair and deceptive practice). The fact that there was not a
consumer transaction between plaintiffs and defendant Fairbanks[fn5] does not
alter the court's conclusion.

Last, defendant's argument that plaintiffs have not met the heightened
pleading standards required under the Illinois Consumer Fraud Act is not
persuasive. Plaintiffs identify a specific complaint filed by defendants
that they allege was baseless, and provide extensive background facts to
illuminate that allegation. Thus, the court concludes that defendant
Fairbanks has ample notice of plaintiffs’ claims against it.

ILLINOIS INSTRUMENTS & RELATED MATTERS

Moore v. Lewis 366 N.E.2d 594 Ill App. 1977:

Mortgage, which in Illinois is only regarded as mere incident to debt, is not
assignable at law; it is debt which is assigned, and transfer of debt carries with it
mortgage security.

Locks v. North Towne Nat. Bank of Rockford 451 N.E.2d 19 Ill. App. 2
Dist.,1983:

Proof of possession is essential for standing to enforce payment on an instrument
S.HLA. ch. 26, ff 1-201(20), 3-301.

A plaintiff's legal interest to sue upon an instrument must be shown as of the
commencement of the suit. (Kroer v. Smith (1943), 318 Il App. 489, 48 N.E.2d
743; Investment Service Co. v. Martin Bros. Container and Timber Products
Corp. (1970), 255 Or. 192, 465 P.2d 868.)

Qulvey v. Converse, 326 Ill. 226, 157 N.E. 245, 247:

The Illinois cases hold that in an action by one other than the payee the complaint
must allege an assignment or indorsement of the note or "some other fact to show
plaintiff's ownership.”

Brannan on Negotiable Instruments Law, 6th Ed., p. 520, says a plaintiff in
possession, but not payee, indorsee or bearer, to bring himself within the
description of transferee under section 49 "must show that a holder transferred it



UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF ILLINOIS 2 3
EASTERN DIVISION _ fal o
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CATUARA, ) en ae
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Plaintiff, ) o
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v. : ) Case No. 03 CV 563
)
)
) Judge Gottschall
HEAVNER HANDEGAN et al., ) a
) DoeKErEn
Defendants, ) oer . ss
Gh ds 2002

MANDATORY JUDICIAL NOTICE No. 2
NOW COMES, Plaintiff Chad F. Catuara giving all parties and the Court
Mandatory Judicial Notice of on point relevant Controlling Precedents, pursuant Federal
Rules of Evidence 201(d). In support of this notice, Plaintiff cites the following:

1. PLEADINGS RULE 9b)

We acknowledge that Rule 9(b) does not require plaintiffs to plead facts to which
they lack access prior to discovery. Katz, 36 F.3d at 676. Thus Katz did not have
to plead specific facts about exactly what contradictory information Household
possessed when it made favorable earnings forecasts in September 1991, if that
information was not available to him without discovery. (cf. to Defendants
WaMu’s March 20, 2003, Motion to Dismiss p. 13 and Defendants Heavner
Handegan’s Motion to Dismiss p. 9.)

2. TIME TO FILE REMOVALS
Undoubtedly, when the case, as stated in the plaintiff's declaration, is a removable
one, the defendant should file his petition for removal at or before the time when
he is required by the law or practice of the State to make any defence whatever in
its courts. Edrington v. Jefferson, 111 U.S. 770; Baltimore & Ohio Railroad v.
Burns, 124 U.S. 165; Kansas City & c. Railroad v. Daughtry, 138 U.S. 298;

Martin v. Baltimore & Ohio Railroad, 151 U.S. 673, 686, 687. (cf. May 8, 2003,
Order p.3 fin.3)

sy


* Service mailing list:

Daniel F. Konicek

Jeffrey T. Mitchell
KONICEK & DILLION, P.C
21. W. State Street

Geneva, Illinois 60134

(630) 262-9655

(630) 262-9659 (Fax)

Edward S. Weil

Partick T. Stanton

Arika J. Osacky

Schwartz, Cooper, Greenberger,
& Krauss Chartered

180 N. LaSalle St., Suite 2700
Chicago, Illinois 60601

(312) 782-8416 (Fax)



UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
)
CATUARA, )
)
Plaintiff, )
)
v. ) Case No. 03 CV 563
)
)
) Judge Gottschall
HEAVNER HANDEGAN et al., )
)
Defendants. )
CERTIFICATE OF SERVICE
To: Daniel F. Konicek Edward S. Weil
Jeffrey T. Mitchell Partick T. Stanton
KONICEK & DILLION, P.C Arika J. Osacky
21. W. State Street Schwartz, Cooper, Greenberger,
Geneva, Illinois 60134 & Krauss Chartered
(630) 262-9655 180 N. LaSalle St., Suite 2700
(630) 262-9659 (Fax) Chicago, Illinois 60601

(312) 782-8416 (Fax)

I hereby certify delivery of a copy of Chad F. Catuara’s Mandatory Judicial
Notice No. 2 to the person(s), as listed above, on theg}- fh day of October, 2003, by
prepaid U.S. certified mail # 7002 3150 0003 5247/6715(K&D P.C.) and

# 7002 3150 0003 5247 6722. [sth
B Lad cl de
y: Awd | ee

(Schwartz Chtd.)
Chad F. Catuara