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Dearion v. Financial Management Systems, Inc.

United States District Court, N.D. Illinois, Eastern Division

July 1, 2015

AISHA DEARION, individually and on behalf of herself and all others similarly situated, Plaintiff,


ROBERT W. GETTLEMAN, District Judge.

Plaintiff Aisha Dearion, on behalf of herself and all others similarly situated, has brought a putative class action complaint against defendant Financial Management Systems, Inc., alleging a violation of the writing and notice requirements of the Electronic Funds Transfer Act ("EFTA"). 15 U.S.C. § 1693e(a) (1978). Defendant answered and raised a number of affirmative defenses, including that plaintiff had already settled and released her claims. Defendant has now moved to enforce the settlement agreement allegedly reached with plaintiff prior to the filing of the lawsuit. For the reasons discussed below, the court grants the motion to enforce the settlement agreement.


According to the complaint, defendant is a corporation that engages in debt collection. In October 2014, defendant contacted plaintiff over the telephone to collect or recover payment for an allegedly defaulted student loan obligation. In that telephone conversation, plaintiff provided defendant with her personal banking information to allow defendant to begin automatic deductions from her account. Plaintiff filed the instant action alleging that defendant violated the EFTA, after defendant began electronically debiting plaintiff's personal bank account in the amount of five dollars each month for five months without written authorization, and without providing to plaintiff a copy of any document that plaintiff signed authorizing the funds transfer.

Prior to filing the complaint, however, on November 18, 2014, plaintiff, through her then lawyer, Derek DePetrillo of the Consumer Rights Law Firm, sent a pre-litigation demand letter to defendant asserting violations of the Fair Debt Collections Practices Act ("FDCPA") and the Telephone Consumer Protection Act ("TCPA") based upon phone calls made to plaintiff and the deductions from her account. The letter included a section titled "Possible Additional Liability" that stated:

Please be aware that in addition to your clear liability under both the FDCPA and the TCPA, my office is currently exploring your potential liability under other laws and statutes but not limited to the Fair Credit Reporting Act, 15 U.S.C. § 1681.

The demand letter also contained a section titled "Settlement Option, " in which the plaintiff's attorney stated, "my client has authorized me to settle this matter with your company."

On January 15, 2015, DePetrillo reached out by e-mail to defendant's lawyer, Samuel Ford, with whom DePetrillo was familiar, having settled numerous cases with him on behalf of defendant and other debt collectors, requesting status of the demand. The following day, Ford responded by e-mail stating, "I'm not sure there is liability here because I don't see calls to plaintiff's mother at the number alleged and I don't see where plaintiff asked FMS to stop calling her POE. Nonetheless, what is your demand for this matter?"[2] On the same day, plaintiff replied with a demand amount. On January 19, 2015, Ford replied, "Although FMS Investment Corp. denies any liability on this one, it is willing to offer settlement of [omitted] for a full release and confidentiality, in order to avoid paying defense costs." (Emphasis added.) On January 20, 2015, DePetrillo sent Ford yet another e-mail: "I have authority to resolve this matter at [omitted]. If that is acceptable than [sic] please send along a release."

Ford responded that same day stating, "I'm getting a lot of pushback on this one and I had to fight to get above the [omitted] mark but I can do [omitted] to wrap this one up. Please confirm that this is acceptable and I will draft a release." Two days later, on January 22, 2015, DePetrillo accepted the counteroffer by replying, "We can agree to the [omitted], can you turn around a release in 24 hours?" Ford replied, "That shouldn't be a problem. The client needs to see it first but we are flipping it to him now and it should be a quick turn around."

On January 29, 2015, DePetrillo asked Ford to send the release. Ford sent it the same day, acknowledging that he was sorry for the delay. One month later, on February 26, 2015, DePetrillo sent Ford an e-mail requesting that the following language be added to the release to exclude the violations of the EFTA alleged the instant action filed that same day by a different law firm:

However, such released claims do not and will not include the claims asserted by Plaintiff in the matter of Aisha Dearion v. Financial Management Systems, Inc. filed on February 26, 2015 in the United States District Court for the Northern District of Illinois... pertaining to Plaintiff's or the putative class' claims asserted therein, specifically, claims asserted under the Electronic Funds Transfers Act, 15 U.S.C. 1693, et seq.

After not hearing from defense counsel, DePetrillo inquired as to the status of the addition to the release. On March 6, 2015, Ford rejected the proposed amendment to the release:

We will stick to what we agreed to - a full and complete release. That is clear from the negotiations in the email chain below, wherein we countered your initial demand with an offer of [omitted] for a full release and confidentiality. The final monetary figure was hammered out from there. You made no mention of limiting the release or doing anything different then [sic] we have done in probably 100 settlement releases previously. On behalf of and with authority from your client, she accepted [omitted] for a full release through and including January 29, 2915. We fully ...

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