Maag calls litigation funding firm 'immoral, unethical' in new class action

Kelly Holleran Jun. 22, 2009, 1:46am

A Madison County woman has filed a class action lawsuit against a company who she says illegally loaned money to people and expected them to repay it with money they won in injury claims.

Sheila Kelly says she entered into a purported contract with Whitehaven Settlement Funding in 2008 for a loan of $25,000.

Kelly was required to pay the $25,000 back out of the proceeds she received in a personal injury lawsuit, according to the complaint filed June 12 in Madison County Circuit Court.

"It is a violation of the public policy and law of Illinois to allow assignment of causes of action resulting from personal injury claims, such as Kelly's case," the complaint says.

Thomas G. Maag and Peter J. Maag of Wendler Law in Edwardsville will be representing Kelly and the putative class.

According to the complaint, Whitehaven tried to circumvent the law by inserting a choice of law provision into its contract, purporting to require the imposition of New York law over a contract entered into in Illinois, the suit states.

"To further the wrongful scheme, Defendant inserted a provision into the contract, which is and was a contract of adhesion, which purported to require arbitration, in New York, before a New York attorney, knowing that Plaintiff, and members of the Plaintiff class, are uniformly impoverished, desperate, badly injured and unable to travel substantial distances, and unable to afford the costs and expenses of arbitration in New York, such that Plaintiff, and the members of the Plaintiff class in Illinois would be economically and physically prohibited from ever vindicating their rights," the suit states.

In addition, Whitehaven attempts to scare people who enter into contracts with it from ever vindicating their rights by requiring an obligation to pay enormous costs and expenses if an arbitrator rules against them, Kelly claims.

In addition to the $25,000, Kelly says Whitehaven is asking her for 60 percent simple interest, plus additional sums of money.

Kelly contends she should not have to pay the money because the contract is void.

"Defendant Whitehaven's actions are immoral, unethical, oppressive and/or unscrupulous, as it purports to provide for the assignment and transfer of some or all of a personal injury action, and Defendant Whitehaven's actions have caused substantial injury to consumers, including Plaintiff thereby," the suit states.

The lawsuit is divided into two classes.

The first class is composed of Illinois residents who suffered an injury and have a pending case of which money won from that case would go toward Whitehaven, who says the resident owes them for a past loan.

The second class consists of Illinois residents who suffered an injury and who have recovered money from a claim. Whitehaven says it is now due money from the claim after loans it gave to the second class.

In the two-count suit, Kelly is asking the court to certify the class. She is also asking the court to declare that class members do not owe Whitehaven any money; to disgorge any amounts actually paid by class members; to declare the contract void and to prohibit Whitehaven from enforcing, collecting or attempting to collect any money on the basis of the contract.

In addition, Kelly is seeking actual and treble damages of more than $50,000 and an award of all damages as allowed by law in excess of $50,000, plus attorney's fees, costs and other relief the court deems appropriate.

Thomas G. Maag and Peter J. Maag of Wendler Law in Edwardsville will be representing Kelly and the putative class.

Madison County Circuit Court case number: 09-L-628.

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