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Lvnv Funding, LLC v. Matthew Trice

March 16, 2011

LVNV FUNDING, LLC,
PLAINTIFF-APPELLEE,
v.
MATTHEW TRICE,
DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. 08 M1 107717 Honorable Martin Moltz, Judge Presiding.

The opinion of the court was delivered by: Justice Neville

JUSTICE NEVILLE delivered the opinion of the court, with judgment.

Presiding Justice Quinn and Justice Murphy concurred in the opinion and judgment.

OPINION

When an unregistered collection agency obtains a judgment against a debtor, does the lack of a license make the judgment void, or merely voidable? The trial court here said it made the judgment merely voidable, so that the debtor's failure to raise the issue before entry of the final judgment left him with no recourse. We disagree. We find that our legislature's criminalization of an unregistered collection agency's collection of a debt establishes an intent to void any judgment entered in favor of an unregistered collection agency. Accordingly, we reverse and remand.

BACKGROUND

Matthew Trice used his Citibank credit card to pay for some plumbing. He did not pay Citibank the full amount the plumber charged. Citibank sold its interest in the credit card account to a collection agency named LVNV Funding, LLC. In January 2008, LVNV sued Trice to recover the balance due on the account. On January 15, 2009, after a trial at which Trice represented himself, the trial court entered a judgment in favor of LVNV for $3,303.90.

Trice hired counsel and, on March 3, 2009, Trice's counsel filed a motion to vacate the judgment pursuant to section 2-1401 of the Code of Civil Procedure. 735 ILCS 5/2-1401 (West 2008). In the motion, Trice alleged that LVNV had not registered with the state as a collection agency before it filed the suit against him. According to Trice, LVNV obtained a license to act as a collection agency on August 28, 2008, some months after LVNV filed the lawsuit against Trice, but some months before the court entered a judgment in favor of LVNV. Trice did not include any allegations concerning how he discovered that LVNV had not registered, and he included no other allegations related to his diligence. He sought only a finding that LVNV's failure to register rendered void the judgment entered against him on January 15, 2009.

LVNV invoked section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2008)) as grounds for its motion to dismiss Trice's motion to vacate the judgment. LVNV argued that the trial court had jurisdiction over the parties and the subject matter, so the judgment was not void.

The trial court denied Trice's motion to vacate the judgment without hearing evidence because Trice should have notified the court before trial that LVNV had not registered as a collection agency. Trice now appeals.

ANALYSIS

Our supreme court clarified the law pertaining to section 2-1401 motions in People v. Vincent, 226 Ill. 2d 1 (2007). The party seeking relief from a judgment must plead and prove (1) that he had "a defense or claim that would have precluded entry of the judgment in the original action" and (2) that he acted with "diligence in both discovering the defense or claim and presenting the petition." Vincent, 226 Ill. 2d at 7-8. The party opposing the section 2-1401 petition may move to dismiss it as insufficient at law, or the party may dispute the factual assertions of the petition. Vincent, 226 Ill. 2d at 8-9. Where the parties dispute a material issue of fact, the trial court should hold an evidentiary hearing before ruling on the petition. Vincent, 226 Ill. 2d at 9. "[W]hen a court enters either a judgment on the pleadings or a dismissal in a section 2-1401 proceeding, that order will be reviewed, on appeal, de novo." Vincent, 226 Ill. 2d at 18.

Here, LVNV moved to dismiss the section 2-1401 motion as legally insufficient. See 735 ILCS 5/2-615 (West 2008); Oliveira v. Amoco Oil Co., 201 Ill. 2d 134, 147 (2002). For purposes of our review of the judgment, we must accept as true all well-pleaded facts in Trice's motion to vacate the judgment. Oliveira, 201 Ill. 2d at 147. We will affirm the dismissal "only where no set of facts can be proved under pleadings which set forth a cause of action entitling the plaintiff to relief." Bank of Northern Illinois v. Nugent, 223 Ill. App. ...


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