MIDLAND FUNDING, LLC, Plaintiff and Counterdefendant-Appellant,
TERESA RANEY and SHIRLEY DARNELL, Defendants and Counterplaintiffs-Appellees.
from the Circuit Court of St. Clair County. No. 15-L-442
Honorable Christopher T. Kolker, Judge, presiding.
Attorneys for Appellant Theodore W. Seitz, Dykema Gossett
PLLC, Heather L. Kramer, Rosa M. Tumialán, Jennifer A.
Warner, Dykema Gossett PLLC.
Attorneys for Appellees David I. Cates, Chad M. Mooney, Cates
Mahoney, LLC Brendan M. Nester, Sean K. Cronin.
JUSTICE OVERSTREET delivered the judgment of the court, with
opinion. Presiding Justice Barberis and Justice Goldenhersh
concurred in the judgment and opinion.
1 In this interlocutory appeal brought pursuant to Illinois
Supreme Court Rule 307(a)(1) (eff. Feb. 26, 2010), the
plaintiff-counterdefendant, Midland Funding, LLC (Midland
Funding), appeals the circuit court's order denying its
motion to dismiss and to compel arbitration of counterclaims
filed by the defendants-counterplaintiffs, Teresa Raney and
Shirley Darnell. For the reasons that follow, we affirm.
3 Darnell and Raney acquired consumer credit card accounts
issued by Citibank, N.A. (Citibank), wherein they were
provided with specified lines of credit for consumer
purchases in exchange for paying at least the minimum amounts
shown on monthly billing statements. On June 11, 2015,
Midland Funding, as Citibank's assignee, filed complaints
against Darnell and Raney, seeking judgments in the sums of
$5848.91, and $16, 843.42, respectively, plus court costs,
for the amounts due and owing via the Citibank lines of
credit. Midland Funding alleged that it was the successor in
interest to the Citibank accounts, that Midland Funding had
purchased Darnell's and Raney's credit card account
obligations from Citibank in the regular course of business,
that Darnell and Raney had failed to make the monthly
payments on said accounts and were in default on the
accounts, and that Midland Funding was entitled to a judgment
for the unpaid balances plus costs. Midland Funding alleged
that it had purchased the accounts from Citibank on October
14, 2014 (Darnell), and April 23, 2014 (Raney), for good and
valuable consideration, as evidenced by an attached bill of
sale and assignment. Midland Funding also attached account
statements showing a $5848.91 Sears MasterCard account
balance for Darnell and a $16, 843.47 Sears Premier
MasterCard balance for Raney.
4 Midland Funding attached to its complaint against Darnell
the affidavit of Andrew Lankey. In the affidavit dated April
16, 2015, Lankey stated that he was employed as a legal
specialist with access to pertinent account records for
Midland Credit Management, Inc. (MCM), servicer of
Darnell's account on behalf of Midland Funding. Based
upon his personal knowledge of the account records, Lankey
stated that Midland Funding was the current owner of the
obligation and was assigned all rights, title, and interest
to Darnell's Citibank account. Lankey stated that
MCM's records showed that Darnell owed a balance of
$5848.91, as of April 13, 2015. Lankey stated that Darnell
opened the Citibank account on November 1, 1986, the last
payment posted to the account on December 17, 2013, and the
account was charged off on July 29, 2014.
5 Midland Funding attached to its complaint against Raney the
affidavit of Rhonda Schubloom. In the affidavit dated April
16, 2015, Schubloom stated that she was employed as a legal
specialist with access to pertinent account records for MCM,
servicer of Raney's account on behalf of Midland Funding.
Based on her personal knowledge of the account records
maintained on Midland Funding's behalf, Schubloom stated
that Midland Funding was the current owner of the obligation
and was assigned all rights, title, and interest to
Raney's Citibank account. Schobloom stated that MCM's
records showed that Raney owed a balance of $16, 843.42 as of
April 14, 2015. Schubloom stated that Raney opened the
Citibank account on February 1, 1994, the last payment posted
to the account on March 1, 2013, and the account was charged
off on October 7, 2013.
6 In July 2015, Raney and Darnell filed answers and
affirmative defenses. They also filed class action
counterclaims seeking to certify statewide and nationwide
classes and seeking damages based on purported violations of
the Collection Agency Act (225 ILCS 425/1 et seq.
(West 2014)), the Consumer Fraud and Deceptive Business
Practices Act (815 ILCS 505/1 et seq. (West 2014)),
and the Fair Debt Collection Practices Act (15 U.S.C. §
1692 et seq. (2012)). The counterclaims challenged
Midland Funding's alleged practice of suing to collect
debt purchased from others without sufficient proof of
ownership of the debt.
7 On November 18, 2015, and December 1, 2015, Midland Funding
filed motions to dismiss the counterclaims pursuant to
section 2-619 of the Code of Civil Procedure (735 ILCS
5/2-619 (West 2014)) and to compel arbitration. Midland
Funding argued that because the counterclaims were within the
scope of a binding card agreement that included an agreement
to arbitrate and a class action waiver provision (the Card
Agreement), the class claims were barred and should be
dismissed. Midland Funding argued that the arbitration
provision in the Card Agreement was subject to the Federal
Arbitration Act (9 U.S.C. § 1 et seq. (2012))
and that Midland Funding was entitled to elect arbitration as
the forum within which to address the putative class claims
alleged in the counterclaims. To its motions, Midland Funding
attached account statements and a November 25, 2015,
declaration of Michael Burger, senior manager of operations
for MCM. In the declaration, Burger stated, in pertinent
"1. *** I am currently employed as the Sr. Manager,
Operations for [MCM]. MCM is the servicer and authorized
agent for Midland Funding and manages the debt that Midland
2. In my capacity as Sr. Manager, Operations for MCM, I am
responsible for, among other things, maintaining and
overseeing 'media', i.e., the loan agreements,
account purchase and transfer information, debt collection
records and other account information pertinent to accounts
and debts that MCM manages for Midland Funding. I make this
Declaration from my own personal knowledge of the matters set
forth herein, or on information and belief based upon my
review of the business records that MCM maintains for Midland
Funding. If called as a witness, I could and would testify
competently to the matters set forth in this Declaration.
* * *
5. As part of the sale of the Citibank Account to Midland
Funding, Citibank transferred electronic records and other
records for the Account to MCM, which included an Excel file
identifying the Account. Attached hereto as Exhibit B is an
abstract of the true and correct data from the Excel file
pertaining to the Citibank ...