Appellate court says Lakin plaintiff can't sue twice over same deal

Steve Korris Jul. 24, 2008, 3:27am

MOUNT VERNON – One plaintiff can't sue twice over one transaction, Fifth District appellate judges ruled July 17.

Justices Stephen Spomer and William Donovan dismissed a class action lawsuit the Lakin Law Firm filed in Madison County against lender EquiCredit in 2005, declaring it equal to one the Lakins filed in 2003.

Summary judgment in the first suit closed the second, Spomer and Donovan agreed.

"Both actions assert that EquiCredit improperly charged fees in connection with that loan transaction," Spomer wrote.

"The fees challenged in each action appeared on the same settlement statement, and both fees were paid by one deduction from the loan proceeds," he wrote.

Spomer and Donovan reversed themselves, having ruled last year that Lakin client Gary Treadway could pursue a class action.

Justice Melissa Chapman held to the position Spomer and Donovan abandoned, arguing in dissent that EquiCredit acquiesced in the splitting of the suits.

The Lakin law firm sued EquiCredit for Treadway in 2003 on behalf of his mother, Juanita Treadway, who had died in 2001.

Treadway alleged that when his mother borrowed $15,000, EquiCredit inflated an Airborne Express shipping fee to $30 and kept the excess.

At a deposition he said his mother never told him she thought she was overcharged.

"Mrs. Treadway tended to her own affairs until her death," Spomer wrote.

"Gary Treadway knew nothing about any 'questionable' fees until he was solicited by an attorney who was reviewing the paperwork associated with the transaction," he wrote.

In 2005 Treadway sued again, alleging EquiCredit charged a discount fee of $150 but kept it instead of passing it along to trim the interest rate.

EquiCredit removed the second suit to U.S. district court in East St. Louis and filed an answer asserting voluntary payment as a defense.

EquiCredit also argued that if the suit returned to Madison County, law would bar the claim because the first suit involved the same parties and the same cause.

The suit did bounce back to Madison County, where EquiCredit withdrew its answer and replaced it with a motion to dismiss.

EquiCredit argued that the National Bank Act preempted Treadway's claims.

In the first suit, EquiCredit moved for summary judgment under the voluntary payment doctrine which was granted it in June 2006.

In the second suit, Circuit Judge Lola Maddox adopted EquiCredit's preemption argument and granted the motion to dismiss in July 2006.

Treadway appealed both decisions to the Fifth District, but he voluntarily withdrew his appeal of the first suit in December 2006.

In his appeal of the second suit he argued that Maddox committed an error when she held that the National Bank Act preempted the claim.

In response EquiCredit argued that the second suit ended when the first one did.

EquiCredit relied on the doctrine of "res judicata," which in
Latin means a matter already adjudicated.

Last November, Spomer, Donovan and Chapman decided that Maddox made a mistake and "res judicata" didn't apply because EquiCredit acquiesced in the splitting of cases.

EquiCredit petitioned for rehearing and the Fifth District granted it.

Spomer and Donovan didn't change their minds about preemption, but they changed their minds on "res judicata."

In Illinois, they wrote, claims arising from the same transaction are considered part of the same cause of action even if there is not a substantial overlap of evidence.

EquiCredit's decision to withdraw the defense of another claim pending and move to dismiss on other grounds did not amount to acquiescence, they wrote.

Chapman argued in dissent that EquiCredit acquiesced in the splitting of suits and waived "res judicata" by failing to raise it as a defense in circuit court.

Chicago attorney Lawrence Benjamin and Edwardsville attorneys Robert Shultz and Joseph Whyte represented EquiCredit.

Brad Lakin led the team representing Treadway, along with Gerald Walters and Gail Renshaw of the Lakin firm.

Timothy Campbell of Godfrey, Charles Chapman of Wood River, and Chicago attorneys Paul Weiss, Philip Bock and Robert Hatch also represented Treadway.

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