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Charlotte Porter v. the Law Office of Charles G. Mccarthy

August 2, 2011


The opinion of the court was delivered by: John A. Gorman United States Magistrate Judge


Tuesday, 02 August, 2011 10:24:27 AM Clerk, U.S. District Court, ILCD


The parties have consented to have this case heard to judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c), and the District Judge has referred the case to me. Now before the court is the Plaintiff's motion for summary judgment (#20) and the Defendant's motion to dismiss (#24). These motions are fully briefed and I have carefully considered the evidence and arguments presented by the parties. As stated herein, the Defendant's motion is granted and the Plaintiff's motion is denied.

The parties agreed to resolve this matter by cross motions rather than by trial. As mentioned, Plaintiff has filed a motion for summary judgment, while Defendant has filed a motion to dismiss. Because Defendant's motion to dismiss relies on evidence outside of the pleadings, it is not properly a motion to dismiss under Fed.R.Civ.P. 12 but a motion for summary judgment under Fed.R.Civ.P. 56. The Court believes that the Defendant's caption on this motion was an error and that Defendant intended that the motion be brought under Rule 56. The Defendant's motion is therefore deemed to be one for summary judgment. Fed.R.Civ.P. 12(d). Because the time for discovery has passed and Defendant has submitted evidence to the Court in support of his motion, it is not necessary to provide further opportunity to conduct further discovery or to present additional information.


The following facts are taken from the parties' motions and the responses and reply thereto. In July of 2009, Charlotte Porter made a purchase from Home Decor Liquidators. She signed a retail installment contract, which stated that the contract "will be assigned" to Kahuna Payment Solutions ("Kahuna"). The contract showed that the cash price was $1054.27 less the down payment of $159.87. The balance - $894.40 - was financed with 11 monthly payments of $159.90 due to Kahuna. The truth in lending disclosure statement showed that the amount financed ($894.40) plus the finance charge ($864.50) totaled a sale price of $1918.77.

The installment contract included the following provision:

DEFAULT CHARGES: If any payment is more than 10 days late, buyer will be charged $10.00 or 5% of the payment, whichever is more. To the extent permitted by law, buyer agrees to pay reasonable attorney's fee, court costs and collection costs, after default and referral to an attorney not a salaried employee of the Seller or his assignee.

Porter allegedly did not make the first payment due to Kahuna, and in August of 2009, Kahuna assigned the debt for collection to The Law Office of Charles G. McCarthy Jr. & Associates (herein the "Law Firm").

On August 26, 2009, the Law Firm sent Porter a letter on the Law Firm's letterhead. It identified Kahuna as the creditor and showed the original amount of the debt ($1918.77), an amount for Attorney Fees ($767.51), adding those two amounts to reach a TOTAL amount being sought ($2686.28). The body of the letter read in pertinent part as follows:

This firm represents the above referenced creditor in the matter of your unpaid account. This debt is overdue and we will use all legally appropriate means for collection. If there is some dispute as to the amount of this claim, we will consider any information you wish to give us. We are also prepared to work out a reasonable payment plan ... No determination has been made at this time whether this claim will result in the filing of a lawsuit. It is our hope that this matter will be resolved without court action. If a decision to sue is made, the claim will be forwarded to an attorney in the appropriate venue.

Very truly yours, Charles G. McCarthy, Jr. & Associates."

On September 14, 2009, another letter was sent*fn1 to Plaintiff. This letter read in its entirety:

Law Offices of Charles G. McCarthy, Jr. & Associates - Attorneys at Law Licensed in Illinois and Minnesota PO Box 1045 Phone: (800) 866-6080 Bloomington, IL 61702 Fax: (309) 829-4136 Charlotte Porter 417544 [address deleted] RE: Kahuna Payment Solutions, LLC October 14, 2009 (Original Creditor) Our File Number: 417544 Amount Claimed: $2686.28

Recently you requested information to support our client's claim. Enclosed is the documentation to verify this debt.

It is our client's desire that this matter be concluded amicably, but a resolution must be forthcoming without delay to ...

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