CST argues that, because there is no violation of federal law, the ICFA
claim must also fail. See Lanier v. Associates Fin. Inc., 499 N.E.2d 440,
447 (Ill. 1986) (holding that compliance with TILA is a defense to
liability under ICFA). However, CST's reliance on Lanier is misplaced.
Lanier involved the question of whether ICFA imposed higher disclosure
requirements than TILA. The Illinois Supreme Court in Lanier held only
that, where TILA was implicated and the defendant was in compliance,
Illinois law does not impose greater disclosure requirements than those
mandated by federal law. Naeem, 118 F. Supp.2d at 893. The Lanier court
did not hold, as CST seems to contend, that merely because a party does
not violate a federal law, it does not violate ICFA.
Section 2 of ICFA prohibits the use of unfair or deceptive practices by
the use of misrepresentation, fraud or the concealment of a material fact
with the intent that others rely on the deception. 815 ILCS 505/2.
Despite the specificity requirement of pleading fraud, we have a notice
pleading system, where a "suit should not be dismissed so long as it is
possible to hypothesize facts, consistent with the complaint, that would
make out a claim for relief." Petri v. Gatlin, 997 F. Supp. 956 (N.D.
Ill. 1997) (Grady, J.) (internal quotation marks omitted). Here, Jenkins
alleges that CST deliberately and dishonestly charged her for a service
that it did not provide. If CST deliberately charged Jenkins for a
service it had "no intent to provide or knew was unnecessary," this could
constitute a violation of ICFA. Christakos v. Intercounty Title Co., 196
F.R.D. 496, 504 (N.D. Ill. 2000) (Bucklo, J.) (ruling in a third-party
fee splitting case where RESPA was also violated). Intent is a question
of fact not appropriate in a motion to dismiss. Id. Therefore, Jenkins
has alleged a violation of ICFA sufficient to withstand a motion to
B. Money Had and Received
CST claims that Jenkins fails to state a claim for money had and
received because she did not allege the necessary element of compulsion
that the cause of action requires. See Buitta v. First Mortgage Corp.,
578 N.E.2d 116, 118 (Ill.App. Ct. 1st Dist. 1991) (holding that
compulsion is necessary to state a claim of money wrongfully had and
received in Illinois); see also Union Pac. R.R. Co. v. Village of S.
Barrington, 958 F. Supp. 1285, 1298 (N.D. ill 1997) (Gettleman, J.)
(adopting and citing Buitta). Jenkins responds by citing another Illinois
appellate court case that holds that Buitta and South Barrington are
incorrect. Kaiser v. Fleming, 735 N.E.2d 144, 147-48 (Ill.App. Ct.2d
Dist. 2000). The Kaiser court concluded that Buitta incorrectly relied on
Peterson v. O'Neil, 255 Ill. App. 400 (1st Dist. 1930), for the
compulsion requirement because Peterson held only that "compulsion is one
way of establishing the cause of action. Nothing in Peterson supports the
defendant's assertion that one must allege compulsion." Kaiser, 735
N.E.2d at 148 (emphasis in original). Similarly, Kaiser states that South
Barrington is incorrect because it relies on Buitta for the same
proposition. Id. Kaiser states that a cause of action for money had and
received is properly maintained where a "defendant has received money
which in equity and good conscience belongs to the plaintiff." Id.
(internal quotation marks omitted).
Where I exercise supplemental jurisdiction over state law claims, I
must apply state law to substantive issues. Timmerman v. Modern Indus.,
Inc., 960 F.2d 692, 696 (7th Cir. 1992). I must determine the content of
state law as the Illinois Supreme Court would interpret it. Allstate
Ins. Co. v. Menards, Inc., 285 F.3d 630, 636 (7th Cir. 2002) (citing Erie
R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). Without clear guidance
from the Illinois Supreme Court, I must use my best judgment to make this
determination, and I may consider the decisions of lower Illinois Courts
and courts of other jurisdictions. Stephan v. Rocky Mountain Chocolate
Factory, Inc., 129 F.3d 414, 417 (7th Cir. 1997). I am not bound by the
decision of any particular Illinois appellate court; I determine the
content of state law at the "state, not the local, level." Allstate Ins.
Co., 285 F.3d at 636.
Another Illinois court has held that compulsion is not required to
maintain a cause of action as long as the plaintiff alleges fraud or
deceit. See Union Nat'l Bank of Chicago v. Goetz, 35 Ill. App. 396, 402
(1st Dist. 1889) ("[M]oney obtained by fraud or under a fraudulent
contract, may be recovered at law, in an action for money had and
received."). More recently, the high courts of other states have
recognized a cause of action for money had and received based on fraud or
deceit. Parsa v. New York, 474 N.E.2d 235, 237 (N.Y. 1984) (noting that a
cause of action for money had and received is available where one obtains
money from another through deceit); cf. Richland County v. North Dakota,
180 N.W.2d 649, 655 (N.D. 1970) (noting that although fraud would suffice
to maintain a cause of action for money had and received, the action
could still be maintained without fraud).
The reasoning of Kaiser is also consistent with the fraud exception to
the voluntary payment doctrine. Illinois law recognizes the "voluntary
payment doctrine," which "in its general formulation, holds that a person
who voluntarily pays another with full knowledge of the facts will not be
entitled to restitution." Randazzo v. Harris Bank Palatine, 262 F.3d 663,
667 (7th Cir. 2001). However, "Illinois recognizes the traditional
defenses to the voluntary payment doctrine — fraud and mistake of
fact — defenses designed to identify instances in which the
countervailing policies of traditional restitutionary principles should
prevail." Id. at 668. The fraud exception to the voluntary payment
doctrine reinforces Kaiser's interpretation of Peterson. Peterson holds
that payments "made under duress  may be recovered back from the party
receiving it, and it makes no difference that the payment was made with
full knowledge." Peterson, 255 Ill. App. at 402. For this proposition,
Peterson relies on cases holding that, if money is considered voluntarily
paid, the payment cannot be recovered. See, e.g., Illinois Glass Co. v.
Chicago Tel. Co., 85 N.E. 200, 201 (Ill. 1908); County of LaSalle v.
Simmons, 10 Ill. 513, 515 (1849). The fraud exception, like the
compulsion exception in Peterson, serves "traditional restitutionary
principles" in cases where payment can no longer be considered voluntary.
I predict that the Illinois Supreme Court would follow the reasoning of
the Kaiser court and conclude that compulsion is not a necessary element
of a cause of action for money had and received.
Here, Jenkins alleges that CST has unlawfully retained overcharged fee
payments which are rightfully owed to Jenkins, and I have already found
that Jenkins properly alleged fraud against CST. I find that Jenkins has
sufficiently pleaded a claim of money had and received.
CST argues that I should not exercise supplemental jurisdiction over
the money had and received claim because the claim represents a novel
issue of Illinois law that should not be litigated as a class action
claim, but I have denied certification of a class action against CST, so
the argument is moot.
I DENY Jenkins' motion to certify a class action against CST (Counts
V, VI, and VII). I GRANT PCFS's motion to dismiss Jenkins' TILA claims
(Count I) and DENY PCFS's motion to dismiss Jenkins' ICFA and RESPA
claims (Counts III and IX). I DENY CST's motion to dismiss Jenkins' ICFA
claims against it (Count V), I DENY CST's motion to dismiss the money had
and received claim (Count VI), but GRANT CST's motion to dismiss the
RESPA claim against it (Count VII).