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Razor Capital v. Paviterjit Antaal

July 11, 2012


Appeal from the Circuit Court of Du Page County. No. 10-AR-2408 Honorable Bruce R. Kelsey, Judge, Presiding.

The opinion of the court was delivered by: Presiding Justice Jorgensen

PRESIDING JUSTICE JORGENSEN delivered the judgment of the court, with opinion. Justices Hutchinson and Burke concurred in the judgment and opinion.


¶ 1 Plaintiff, Razor Capital, final transferee of a credit card issuer, sued defendant, Paviterjit Antaal, to collect on an alleged credit card debt. On August 10, 2011, the trial court granted with prejudice defendant's motion to dismiss plaintiff's second amended complaint. 735 ILCS 5/2-615 (West 2010). Plaintiff appeals. For the following reasons, we conclude that the complaint was properly dismissed but, nevertheless, we reverse and remand so that plaintiff may replead.


¶ 3 A. Unwritten Contract

¶ 4 As plaintiff's complaints and the proceedings below focused on the decision in Garber v. Harris Trust & Savings Bank, 104 Ill. App. 3d 675, 684 (1982), we briefly summarize the holding therein. In Garber, the plaintiffs, credit card holders, brought suit against the defendants, credit card issuers, for breach of contract. Specifically, the plaintiffs argued that the defendants had breached the provisions of their cardholder agreements by modifying the terms of the agreements without consideration. In essence, the plaintiffs alleged that the cardholder agreements were binding contracts between the credit card issuers and the holders to extend credit on specific terms and that, without additional consideration, the agreements could not be modified. The appellate court rejected the plaintiffs' argument, stating, "we conclude that a contract was not formed at the time of the issuance of the credit card; that a separate contract is created each time the card is used according to the terms of the cardholder agreement at the time of such use; that the cardholder agreements were subject to modification at will." (Emphasis added.) Id. at 678. Thus, the plaintiffs were bound by the modifications to the cardholder agreements where they used the credit cards after the effective date of the modifications. Id. at 685.

¶ 5 B. Complaint and Motion to Dismiss

¶ 6 On July 20, 2010, plaintiff filed a verified complaint alleging that defendant had opened a Wells Fargo credit card account (the complaint specified the account number) and made charges on the account without making the monthly payments called for "under the Agreement." Plaintiff alleged that defendant had refused to pay the balance due upon demand; specifically, the complaint alleged that defendant was in default on the account in the amount of $12,783.12, plus $3,458.37 in interest, and that the amounts alleged were due to plaintiff under either a breach-of-contract or an unjust-enrichment theory. Plaintiff further alleged that it was the final transferee of the account and, "per [the] attached cardmember agreement," was thereby entitled to the outstanding principal and interest, plus court costs and reasonable attorney fees.

¶ 7 Plaintiff attached to the complaint an affidavit from one of its agents, wherein the agent attested that: (1) he received information from the transferor of the debt and thereby had knowledge of the facts forming the basis of the complaint; (2) defendant had applied for the credit card account either online or via telephone; (3) Wells Fargo made an offer of credit to defendant in the form of a credit card with terms and conditions governing use of the card; (4) defendant accepted the credit offer by using the credit card to make purchases; (5) plaintiff purchased and is now the owner of the account and, therefore, is the party to whom defendant is liable; (6) written demand was made upon defendant; and (7) defendant owes plaintiff "the sum of $12,783.12 plus interest as of May 10, 2010 of $3,465.47 at 19.99% per annum, totaling $16,248.59."

¶ 8 Also attached to the complaint were two pages of an undated "Wells Fargo Visa or Mastercard Customer Agreement and Disclosure Statement." The section entitled "promise to pay" provides that the account holder promises to pay the total amount of purchases or cash advances, as well as any finance charges and other fees and charges due under the agreement, and that, further, to the extent permitted by law, the account holder promises to pay all costs and expenses, including reasonable attorney fees, that the lender incurs in enforcing the agreement.

¶ 9 Pursuant to section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2010)), defendant filed a combined motion to dismiss the complaint, based on standing and plaintiff's failure to attach to the complaint a written agreement as required by section 2-606 of the Code (735 ILCS 5/2-606 (West 2010)).*fn1 At a March 8, 2011, hearing on defendant's motion, plaintiff represented first that, in response to defendant's challenge to plaintiff's standing, it had provided defense counsel with assignment documents reflecting a chain of title for defendant's account. Next, regarding defendant's argument that the complaint failed because there was no written agreement attached pursuant to section 2-606, plaintiff argued, "it's a credit card. Credit cards are not written contracts. It's a non-written contract. Garber v. Harris Trust has clarified that point of law. *** The actual contract is each time the card is swept ***."

¶ 10 The court acknowledged the merit of plaintiff's argument, noting for defendant that, because plaintiff was pursuing an unwritten-contract theory as described in Garber, "the attached agreement is not necessary from my perspective in my courtroom. It's very simple. It's a question of fact and a question of proof. [Plaintiff] may have a difficult time, but that's [its] choice." The court stated that it was denying defendant's motion to dismiss because plaintiff was following Garber.

ΒΆ 11 Thereafter, however, the court noted for plaintiff that, to succeed, it would need to establish each time defendant had used the card, stating, "I don't know how you're going to do it, but you have a right to do so." In response to those comments, plaintiff requested leave to amend the complaint to "make sure that it's stated as clearly as possible with every cause of action as possible." The court granted plaintiff leave to file an amended complaint. Defendant asked, "so is my motion granted?" The court responded, ...

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