United States District Court, N.D. Illinois, Eastern Division
July 1, 2004.
TREVOR VICKEY, Plaintiff,
ASSET ACCEPTANCE, LLC, and McMAHAN & SIGUNICK, LTD., Defendants.
The opinion of the court was delivered by: JAMES MORAN, Senior District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Trevor Vickey brought this action against defendants
Asset Acceptance, LLC and McMahan & Sigunick, Ltd. alleging
violations of the Fair Debt Collection Practices Act,
15 U.S.C. § 1692 et seq. (FDCPA), and the Illinois Consumer Fraud Act, 815
ILCS 505/2. Defendants filed separate motions for summary
judgment and plaintiff filed a motion to strike the affidavit of
Robert Deter. For the following reasons, plaintiff's motion is
denied and defendants' motions are granted.
Plaintiff obtained a Discover credit card account from
Greenwood Trust Company, a licensed bank, in early 1995. Shortly
thereafter he fell behind on his payments, causing the bank to
put the account into default and charge it off. Defendant Asset
Acceptance acquired the account and, in February 2003, began
sending letters to the plaintiff demanding payment. When
plaintiff still refused to pay the account, Asset Acceptance
enlisted the services of defendant McMahan & Sigunick, who sent a
series of letters demanding payment and threatening legal action.
Plaintiff's four-count complaint alleges that defendants, who are
not licensed by the State of Illinois, acted together in charging him
interest in excess of 5%, which is prohibited by the Illinois
Interest Act, 815 ILCS 205/1 et seq. (IIA).
Our function in ruling on a motion for summary judgment is
merely to determine if there is a genuine issue of material fact
for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986). Only if the evidence on file shows that no such issue
exists, and that the moving party is entitled to judgment as a
matter of law, will we grant the motion. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986); Bennett v. Roberts,
295 F.3d 687, 694 (7th Cir. 2002).
Plaintiff's counsel brought a suit nearly identical to this one
in Olvera v. Blitt & Gaines, 2004 WL 887372 (N.D. Ill.). In
Olvera, the court determined that the IIA did not prevent an
unlicensed entity from obtaining the rights to an account from a
licensed creditor and then charging interest in excess of the
statutory maximum. Id. at *4. The court, however, denied the
defendant's motion to dismiss, finding that the defendant had
failed to establish that the original agreement allowed for
higher interest. Id. at *5. The court subsequently issued a
minute order denying a motion for reconsideration by the
plaintiff, stating that "so long as the interest that defendant
sought to collect from plaintiff was `expressly authorized by the
agreement creating the debt,' see 15 U.S.C. § 1692f(1), then
defendant's attempt to collect that amount was not unlawful under
the FDCPA." Olvera v. Blitt & Gaines, No. 03 C 6717 (N.D. Ill.
May 18, 2004).
Plaintiff argues that Cavalry v. Olvera, 03 SC K 2373
(Circuit Court of Kane County June 17, 2004), effectively
overruled Olvera by denying a motion to dismiss claims against
an assignee under the IIA. The court in Cavalry, however,
issued only a handwritten order denying the counter-defendant's motion to dismiss without
explanation. Plaintiff attaches only the counter-claimant's brief
(again, the counter-claimant in that action was represented by
plaintiff's counsel) leaving us with no way to determine what
arguments were raised in support of that motion or what reasoning
the court used in reaching its decision.
We agree with the Olvera court's interpretation of the
relevant law. Plaintiff is asking that we find that the assignee
of a debt can be prohibited by the IIA from charging the full
interest on the debt if the assignee could not have contracted
for the same interest rate as an original creditor. Plaintiff
presents no compelling reason to disregard the general rule that
an assignee stands in the shoes of the assignor. Olvera, 2004
WL 887372 at *4, citing Wetherell v. Thirty-First Street
Building & Loan Association, 39 N.E. 143, 143 (Ill. 1894). The
IIA regulates only the origination of loans and not the
assignment of rights. Id. To hold otherwise would allow a
debtor to receive a better interest rate than was bargained for,
simply because his account was assigned to an unlicensed entity.
As long as defendants charged an interest rate that was less than
or equal to the amount originally contracted for, plaintiff's
claims must fail. Id. at *4-5. The Discover card agreement
produced by the defendants indicates that plaintiff agreed to an
interest rate of either 19.8% or the prime rate plus 8.9 points,
whichever was greater. The evidence shows that Asset Acceptance
charged plaintiff a slightly lower rate, 18%. There is no
indication that the 19.8% interest rate charged by the issuing
bank was in any way unlawful.
Plaintiff argues that the IIA applies to assignees through 815
ILCS 205/5, which provides that "No person or corporation shall
directly or indirectly accept or receive, in money, goods,
discounts or thing in action, or in any other way, any greater
sum or greater value for the loan, forbearance or discount of any
money, goods or thing in action, than is expressly authorized by this Act or other laws of this State."
Defendants, however, seek only to collect interest that plaintiff
agreed to pay the original creditor, as expressly authorized by
the IIA. Plaintiff does not allege any attempt by defendants to
charge more than he agreed to pay Greenwood Trust. In fact,
defendants offered to settle the debt at a slight discount.
In an effort to maintain his claims, plaintiff seeks to strike
the affidavit of Robert Deter, a senior manager of Discover
Financial Services. He claims that Deter is not properly
qualified to attest to the authenticity of the card member
agreement introduced by defendants. At his deposition by
plaintiff's counsel, Deter testified that he located plaintiff's
account in Discover's computer system and determined that it was
governed by "Terms Level 5." He also testified that he is
familiar with the procedures used by Discover employees in
recording what terms govern an account. He then pulled a copy of
the card member terms from Discover files and attached it to his
affidavit. While Deter does not have complete knowledge about the
document he handed over, his testimony supports defendants'
contention that the agreement governed plaintiff's account.
Moreover, plaintiff admits that he did not keep a copy of his
card member agreement, claims that he would be unable to provide
any information about its terms, and provides no reasons why we
should doubt the authenticity of the agreement submitted by the
defendants. Finally, nowhere in plaintiff's complaint or briefs
does he argue that either of the defendants actually charged an
interest rate greater than that agreed upon when he obtained the
credit card. For those reasons, plaintiff's motion to strike is
Even if we agreed with plaintiff that the IIA limits the amount
of interest that an assignee can charge, his claims would fail
because the IIA does not apply to plaintiff's debt. Section 521
of the federal Depository Institutions Deregulation and Monetary
Control Act (DIDA) explicitly creates parity between national and
state-chartered banks by preempting state interest rate law and allowing a state-chartered bank, such
as Greenwood Trust, to choose from three rate ceilings when
dealing with out-of-state customers. 12 U.S.C. § 1831d(a);
Greenwood Trust Co. v. Com. of Mass., 971 F.2d 818, 827
(1st Cir. 1992). A Delaware-based lender*fn1 may choose
to charge the highest rate allowed by Delaware law. Id.
Delaware law establishes that a credit card issuer may
essentially bargain for any agreed upon rate, and plaintiff
directs us to nothing in Delaware law that would prohibit
Greenwood Trust, or the defendants, from seeking to collect the
debt in question. See 5 Del. C. § 945.
For the foregoing reasons, plaintiff's motion to strike is
denied, and defendants' motions for summary judgment are granted.