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January 14, 1997

JULIUS V. MOORE, JR., Plaintiff,

The opinion of the court was delivered by: GETTLEMAN

 Plaintiff Julius V. Moore, Jr. brings this six count amended putative class action complaint against defendants, Fidelity Financial Services, Inc. ("Fidelity"), its corporate parent, Fidelity Acceptance Corporation ("FAC"), and certain of their officers and directors, alleging that all were involved in devising and implementing a scheme for imposing and collecting illegal charges from consumers. Counts I through III are brought Pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) ("RICO"), against FAC, and the officers and directors, respectively. Count IV is a Truth-In-Lending Act ("TILA"), 15 U.S.C. § 1640, claim against Fidelity. Count V is a breach of contract claim against Fidelity, and Count VI is a claim against Fidelity and FAC under the Illinois Consumer Fraud Act, 815 ILCS 505/2. Defendants have moved to dismiss the RICO counts, I through III, and FAC has moved to dismiss Count VI for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons set forth below, defendants' motions are granted.


 In May 1992 plaintiff purchased a Nissan automobile from Mid City Nissan. He financed that purchase through defendant Fidelity. Plaintiff obtained a loan in the amount of $ 9,769.83 with an annual percentage interest rate of 23.43%. The loan was secured by the automobile. The loan agreement and TILA statement were prepared on standard pre-printed forms. The loan agreement required plaintiff to insure the automobile against loss from fire, theft, and casualty. Specifically, the agreement provided:

"I will keep the security insured against loss by fire, theft and collision in case of motor vehicles, and against loss by fire for other security. If I do not I am in default or at your option, you may advance the premium on required or authorized insurance, the advance will become a part of the Note, and it will be secured by this Security Agreement, and will bear interest at the Agreed Rate of Charge provided for in the Note."

 Plaintiff failed to purchase insurance, and on November 15, 1993, defendant Fidelity purchased insurance on the automobile (a practice denominated by plaintiff as "force placed insurance"). As a result, Fidelity added $ 1,090.00 to plaintiff's loan balance as premium for the policy, and charged the increased premium at the same 23.43% interest rate. Fidelity did not send plaintiff a new credit disclosure statement, but did send a copy of the insurance policy purchased. Plaintiff alleges that the insurance that defendant regularly purchases in such cases, including the insurance purchased in this case, includes coverage not required under the agreement, and cost Fidelity less than the amount charged to consumers due to kickbacks from the insurance company.

 Plaintiff failed to make the required payments. In January 1994, Fidelity told plaintiff that if he paid $ 430.00 toward the premium, the balance of the premium would be added to the end of his contract. Plaintiff paid the $ 430.00, but alleges that defendant demanded further payment prior to the end of the contract, which he then refused to pay. Fidelity repossessed the automobile on April 13, 1994, and sent plaintiff a repossession notice the following day.


 A motion to dismiss for failure to state a claim should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). When deciding a motion to dismiss, the court shall accept as true all of plaintiff's well pleaded factual allegations and otherwise liberally construe the complaint. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1979). In addition, the court must give the plaintiff the benefit of every reasonable inference that may be drawn from the facts. Powe v. City of Chicago, 664 F.2d 639, 642 (7th Cir. 1981).


 The defendants have moved to dismiss Counts I through III, the RICO counts, which allege violations of 18 U.S.C. § 1962(c):

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities which affect, interstate commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs to a pattern of racketeering activity or collection of unlawful debt.

 To state a claim under section 1962(c), a RICO plaintiff must show the "(1) conduct, (2) of an enterprise, (3) through a pattern, (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 87 L. Ed. 2d 346, 105 S. Ct. 3275 (1985).

 Defendants attack plaintiff's RICO claims on the second element, asserting that plaintiff has presented insufficient allegations of an enterprise through which the alleged racketeering activity took place. As discussed below, defendants are correct. The court's review of the complaint reveals, however, ...

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