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Treadway v. Nations Credit Financial Services Corp.

July 17, 2008

GARY TREADWAY, SPECIAL REPRESENTATIVE OF THE ESTATE OF JUANITA TREADWAY, DECEASED, INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
NATIONS CREDIT FINANCIAL SERVICES CORPORATION, D/B/A EQUICREDIT, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Madison County. No. 05-L-27. Honorable Lola P. Maddox, Judge, presiding.

The opinion of the court was delivered by: Justice Spomer

NOTICE Decision filed 07/17/2008. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.

Opinion Filed: November 26, 2007

Petition for Rehearing Granted: January 7, 2008 (November 26, 2007, opinion vacated)

Opinion on Rehearing Filed: July 17, 2008

Justices: Honorable Stephen L. Spomer, J. & Honorable James K. Donovan, J., concurs.

Honorable Melissa A. Chapman, J., dissents

The plaintiff, Gary Treadway, the special representative of the estate of Juanita Treadway, deceased, individually and on behalf of others similarly situated, appeals the order of the circuit court of Madison County that dismissed his class action complaint against the defendant, Nations Credit Financial Services Corp., doing business as EquiCredit (EquiCredit). The plaintiff raises the following issues on appeal: (1) whether the circuit court erred in dismissing Gary Treadway's complaint on the basis that it is preempted by sections 85 and 86 of the National Bank Act (12 U.S.C. §§85, 86 (2000)) and (2) whether Gary Treadway's complaint is barred by the doctrine of res judicata.

On November 26, 2007, we issued an opinion in this case in which we found that the circuit court erred in dismissing Gary Treadway's claims on the basis of federal preemption. We also found that Mr. Treadway's complaint was not barred by the doctrine of res judicata because EquiCredit had acquiesced in the splitting of his causes of action. Accordingly, we reversed the order of the circuit court that dismissed this action, and we remanded for further proceedings not inconsistent with our opinion. On December 14, 2007, EquiCredit filed a petition for a rehearing and an application for a certificate of importance pursuant to Illinois Supreme Court Rule 316 (Official Reports Advance Sheet No. 26 (December 20, 2006), R. 316, eff. December 6, 2006). On January 7, 2008, we granted EquiCredit's petition for a rehearing and denied its application for a certificate of importance. In its reply brief on rehearing, EquiCredit requests that we reconsider its application for a certificate of importance. Upon rehearing, and for the reasons set forth below, we affirm the order of the circuit court that dismissed this action because we find that Gary Treadway's complaint is barred by the doctrine of res judicata. We again deny EquiCredit's application for a certificate of importance.

FACTS

The facts necessary for our disposition of this appeal are as follows. In September 1999, Juanita Treadway (Mrs. Treadway) obtained a $15,000 loan from EquiCredit secured by a first mortgage on her home. Mrs. Treadway passed away in November 2001. On October 22, 2003, Mrs. Treadway's son, Gary Treadway, filed a class action complaint in the circuit court of Madison County against EquiCredit, which he amended on April 30, 2004 (the 2003 action). Although the 2003 action is not the subject of this appeal, it is a part of the record on appeal and we discuss it here because it is relevant to our res judicata analysis.

The complaint in the 2003 action alleged that as a part of the closing costs for the 1999 loan to Mrs. Treadway, EquiCredit deducted $30 from the loan amount for what was described on the closing statement as "Overnights Airborne-Equi[C]redit." According to the 2003 complaint, Airborne Express charged less than $30 to deliver the closing documents to the title company and EquiCredit secretly kept the remainder of the $30 fee for itself. The 2003 complaint, as amended, contained two alternative counts for unjust enrichment.

While the 2003 action was pending, Gary Treadway filed the instant class action complaint in the circuit court of Madison County against EquiCredit on January 10, 2005 (the instant action). The complaint in the instant action alleged that as a part of the same 1999 loan transaction, EquiCredit charged Mrs. Treadway a $150 "loan discount fee." According to the complaint in the instant action, EquiCredit did not reduce Mrs. Treadway's interest rate in exchange for her payment of the loan discount fee but, instead, kept the fee as profit for itself. Count I of the complaint alleged a cause of action for a breach of contract. Count II alleged a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2004)) on the basis that the actions forming the basis of the breach-of-contract claim amounted to a deceptive practice. Count III alleged an alternative claim for unjust enrichment.

On February 24, 2005, the discovery deposition of Gary Treadway was taken on behalf of EquiCredit in the 2003 action. Gary Treadway testified that he did not accompany Mrs. Treadway to the closing on the 1999 loan and did not speak to Mrs. Treadway about the transaction until after the closing, when Mrs. Treadway told him she had taken out the loan. Gary Treadway does not know how Mrs. Treadway came to do business with EquiCredit, and neither he nor his siblings know any of the details of the transaction other than what is stated on the paperwork. Mrs. Treadway never told him she thought she had been overcharged on the transaction. Mrs. Treadway tended to her own affairs until her death. Gary Treadway knew nothing about any "questionable" fees until he was solicited by an attorney who was reviewing the paperwork associated with the transaction.

On February 25, 2005, EquiCredit filed a notice that it had removed the instant action to the United States District Court for the Southern District of Illinois. While the instant action was pending in the federal court, EquiCredit filed an answer and affirmative defenses to Gary Treadway's complaint. EquiCredit raised the voluntary-payment doctrine as its sixth affirmative defense. EquiCredit's eighth affirmative defense stated that in the event the case was remanded to state court, Gary Treadway's claims would be barred by section 2-619(a)(3) of the Code of Civil Procedure (the Code) (735 ILCS 5/2-619(a)(3) (West 2004)) because there was another action pending between the same parties for the same cause. On June 8, 2005, the United States District Court for the Southern District of Illinois entered an order remanding the case to the circuit court of Madison County. Once the instant action was remanded, Gary Treadway filed a reply to EquiCredit's affirmative defenses in the circuit court of ...


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