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Midland Funding LLC v. Hilliker

Court of Appeals of Illinois, Fifth District

December 16, 2016

MIDLAND FUNDING LLC, Plaintiff and Counterdefendant-Appellant,
MELISSA HILLIKER, Defendant and Counterplaintiff-Appellee.

          Rehearing denied January 10, 2017

         Appeal from the Circuit Court of St. Clair County, No. 15-L-200; the Hon. Christopher T. Kolker, Judge, presiding.

         Judgment Affirmed; cause remanded.

          Heather L. Kramer and Jennifer A. Warner, of Dykema Gossett PLLC, of Chicago, and Theodore W. Seitz, of Dykema Gossett PLLC, Appeal of Lansing, Michigan, for appellant.

          James R. Williams and Ashley P. Cook, of Williams, Caponi & Associates, P.C., of Belleville, for appellee.

          JUSTICE CATES delivered the judgment of the court, with opinion. Presiding Justice Schwarm [*] and Justice Goldenhersh concurred in the judgment and opinion.



         ¶ 1 Plaintiff-counterdefendant, Midland Funding LLC, appeals the circuit court's order denying its motion to compel arbitration of a counterclaim filed by defendant-counterplaintiff, Melissa Hilliker. For reasons that follow, we affirm.

         ¶ 2 BACKGROUND

         ¶ 3 Defendant-counterplaintiff, Melissa Hilliker, obtained a credit card from Chase Bank USA, N.A. (Chase Bank) in April 2001. Hilliker was provided with a specified line of credit for consumer purchases, wherein she agreed to make at least the minimum payment shown on her monthly billing statement.

         ¶ 4 On September 9, 2013, plaintiff-counterdefendant, Midland Funding LLC (Midland), a company in the business of purchasing outstanding consumer debt, filed a complaint against Hilliker in the circuit court of St. Clair County. Midland alleged that it was the successor in interest to Hilliker's Chase Bank account; that Midland had purchased Hilliker's credit card account from Chase Bank in the regular course of business in good faith and for value; that there was an unpaid balance of $8, 809.38 due on Hilliker's account; that because Hilliker had failed to make the monthly payments due on the account, Hilliker was in default on the account; and that Midland was entitled to a judgment for the unpaid balance, plus costs.

         ¶ 5 In support of its complaint, Midland attached the "Affidavit of Kory Holst In Support Of Judgment." In the affidavit, Holst stated that he was a "Legal Specialist, " who had access to "pertinent account records for Midland Credit Management, Inc. ('MCM'), " the entity servicing this account on behalf of Midland. Holst further stated that he was making the statements contained in his affidavit based upon personal knowledge. Holst averred he had reviewed MCM's account records; that he was familiar with, and trained in, the methods by which MCM created and maintained its records; and that MCM's records were kept in the ordinary course of its business. Based on his personal knowledge of the MCM account records, Holst asserted that Midland was the "current owner of, and/or successor to, the obligation sued upon, and was assigned all the rights, title, and interest" in Hilliker's credit card account with Chase Bank. Holst stated that MCM's records showed that Hilliker opened her account with Chase Bank on April 23, 2001; that her last payment was posted on January 13, 2009; that the account was charged off on August 31, 2009; and that Hilliker owed $8809.38 as of July 15, 2013. Midland did not provide any records documenting the sale of Hilliker's debt, or the terms of the assignment of that debt, in support of the Holst affidavit or the complaint. Contrary to section 2-606, Midland did not provide a copy of any written instrument upon which they based their claim for the debt, nor did they attach an affidavit indicating that the written instrument evidencing the debt was not accessible. 735 ILCS 5/2-606 (West 2012).

         ¶ 6 Midland's complaint was automatically assigned to the St. Clair County circuit court's arbitration docket because the amount in controversy was between $5000 and $50, 000, exclusive of costs and interest. 20th Judicial Cir. Ct. Mandatory Arb. Rs. (eff. Aug. 2, 2004) (Civil Actions Subject to Mandatory Arbitration, describing St. Clair County provisions pursuant to Ill. S.Ct. R. 86 (eff. Jan. 1, 1994)). This arbitration docket is a nonbinding, court-annexed arbitration docket and is a part of the Illinois judicial system. See generally Ill. S.Ct. Rs. 86 to 95 (rules regarding arbitration). Thus, the provisions of the Illinois Code of Civil Procedure and the rules of the Illinois Supreme Court are applicable to the arbitration proceedings, except where specific arbitration rules otherwise provide. See Ill. S.Ct. R. 86.

         ¶ 7 On October 14, 2013, Hilliker filed an answer to Midland's complaint, denying the main allegations, including the allegation that Midland was the successor in interest to the Hilliker account. Hilliker also filed a counterclaim. Therein, she alleged that Midland's complaint violated the Illinois Collection Agency Act (Collection Agency Act) (225 ILCS 425/1 et seq. (West 2012)), because Midland failed to attach the proper documents, including the assignment documents, to its complaint. She also alleged that in violating provisions of the Collection Agency Act, Midland also violated the Illinois Consumer Fraud and Deceptive ...

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