Byron denies defense reconsideration: Says Avery doesn't apply

Attorneys for Accredited Home Lenders thought the Illinois Supreme Court's Aug. 18 decision in Avery vs. State Farm might stop a class action suit against their client, but Madison County Circuit Judge Nicholas Byron disagreed.

At a Dec. 14 hearing, Byron denied Accredited's motion to reconsider an earlier order certifying Paul and LaDonna Wratchford as representatives of a class of plaintiffs.

Defense attorney Bruce Allensworth had based his motion for reconsideration on the Avery decision, which wiped out a Williamson County class action verdict.

Byron said at the hearing that Avery would affect some class actions but not all.

According to a transcript of the hearing, Byron and plaintiff attorney Gary Peel started the hearing without Allensworth or his associate, Kevin Babb.

Byron and Peel had begun discussing facts of the case before Allensworth and Babb entered the courtroom.

The Record reported on its website and in print that Allensworth and Babb arrived late. Allensworth read the report and asked for a correction.

Allensworth said he and Babb appeared before the scheduled start of the hearing.

The hearing was set for 10:30 a.m. The transcript does not indicate when it started.

The transcript:

Byron: Court is open for business. Proceed.

Peel, of the Lakin Law Firm in Wood River, said, "The plaintiff is ready to proceed. I know the other side lawyers are here. They've been down at the other end of the hall for an hour."

Byron: Do I have a copy, judge's copy?

Peel: I'm not sure.

He gave a number to bailiff Fred Perry.

Byron: See if I've got something on my desk. Who's on the other side here?

Peel: Kevin Babb and Bruce Allensworth.

Babb practices at Unsell, Schattnik, Babb and Juen. Allensworth practices at Kirkpatrick & Lockhart.

Byron: What's the case?

Peel: It's a courier fee.

A door opened and defense counsel entered.

Peel: Good morning.

Byron told Allensworth to proceed. Allensworth said the motion focused on issues the Avery case raised.

Byron: I understand. Show me the similarities in this application.

Allensworth: What Avery makes clear is that we can't certify a class where the definition of the class itself has the effect of precluding – really precluding either party, but in this case the defendant – of the right to present valid defenses on its behalf.

Byron: It goes without saying I have some class actions where I think Avery is going to affect them directly. But just because you dub it a class action you can't impose Avery on it and say, ipso facto, it goes.

Allensworth: We have defined a class that presumes that any money paid to defendant for these courier fees or other fees was represented or intended to be limited strictly to services provided by third parties and that the defendant had a practice of marking up those third party fees.

Byron said to Peel: Your assertion is, it's across the board?

Peel: All third party fees are marked up.

Allensworth: There is no way of telling whether that happened uniformly or not without looking at the specifics of the transaction.

Byron: Don't you think it's incumbent upon the plaintiff to prove the uniformity?

Allensworth said Avery dealt with that. Byron asked where. Allensworth said the Court took its reasoning from a Texas Supreme Court decision, Southwest Refinery vs. Bernal.

Byron: The defendant has a right to do two things. It has a right to offer evidence that is contrary to what the plaintiff proposes to prove, and it has the right to offer independent evidence in defense of – in support of its defenses.

Are you saying that you would be precluded from any defense on the questions involved here? I don't think that's the case.

Allensworth: The fee is a flat rate fee. It has never been represented as a third party fee.

Byron: They have to get past that assertion, if your position is correct, to even make a submissible case.

Allensworth said that was not what the Supreme Court said. Under Avery, he said, a case against State Farm would have required an examination of hundreds of thousands of transactions to see what representations were made.

Allensworth: Was there actual deception? And two, was there actual loss?

He said plaintiffs asserted uniformly false statements that uniformly resulted in loss.

Allensworth: There is no way of proving that on a uniform basis. I can show that there is no misrepresentation. Services were provided. The fee was reasonable.

The Avery question

He said Justice Freeman's concurrence in Avery raised a question whether Illinois has any interest in entertaining claims of non- Illinois residents against a non-Illinois defendant for acts that did not occur in Illinois.

Byron said he agreed on that point.

Byron: I am going to hold the plaintiff responsible to establish that. So you got a point here.

However, when you discuss Illinois interest in protecting the rights of other people, I don't know where you're coming from on that.

These are courts. You know, you go into court. And the question is, you have venue? You have forum? You have a right to be there?

I can see the rationale of Avery. You know, I'm not going to oppose it. Well, I can't oppose it. I didn't mean to use that term. But I'm not going to argue with that at all.

I don't mind telling you that when they came in for a nationwide consumer fraud, I said no way. Illinois. And I was right. I've been saying that before Avery.

Allensworth: You were right.

Byron: But there are certain issues that I think contractually, they are so simplistic. Or unjust enrichment – that may well apply to the entire United States.

The fee charged that is claimed to be unreasonable and unjust is a 25 dollar fee, right?

The unreasonable fee: $20.90

Peel: Twenty dollars and 90 cents.

Byron: Across the board, without any basis for that charge except just to tack on the fee for services that weren't rendered? I don't see the applicability of Avery.

This is the kind of class action you want. You mean to tell me you're going to file a separate action against – I mean, you're going to expect every individual to file a claim for 20 dollars and 90 cents?

That will never happen, and that defeats the nature of class actions. If that is the case and class actions are abrogated, then I want either the Legislature or the Supreme Court to say, no more class actions. And then I'll go along with that.

Allensworth told Byron he raised a valid point.

Allensworth: Your consideration applies but Avery says it doesn't matter.

Byron: I've got cases with other insurance companies involving Avery, and boy, if they come within the purview of Avery – boom! Out they go. I'm going to follow the law, period. But I don't see Avery there.

Byron asked Peel for his argument. Peel said Allensworth argued that they provided service and there was no damage.

Byron: That goes to the merits but address it anyway.

Peel: Accredited is not a courier. They are a lender in the real estate residential business, but they are not a courier.

The HUD-1 form says the courier fee was 20 dollars and 90 cents. So they have either misrepresented that they are a courier, because Accredited's name is mentioned after that, or they are representing that they have already paid 20 dollars and 90 cents to some courier.

He said Accredited put the charge on line 812, for courier fees. He said they should have put it on line 801, as a handling charge, or on a separate blank space.

Peel said the case was not like Avery because the fee was described in a uniform manner on a uniform document.

Peel: The deception is the same across the board. Every single class member is affected in the same fashion.

He said Accredited moved to appeal four questions to the appellate court.

Peel said all the questions "contain the same implanted erroneous information." He said they were "embedded with falsehoods or presumptions that don't exist."

Byron asked Allensworth for rebuttal.

Allensworth: I do react to the notion and allegations of the falsehoods.

Byron: I don't appreciate, and Mr. Peel, there are other ways of stating that.

Allensworth: What counsel is asking you to do as a conclusive matter on the merits is assume that we provided no courier services when we know from testimony on the record -

Byron: Let me interrupt you. I make no assumptions. That's a defense. You prove that, you get a directed verdict.

Allensworth thanked him and said, "He is asking you to assume that there is a markup in each case. There is no basis on which you can assume that."

Byron: Again, I point to you - He has to prove that.

Allensworth: In each case, in each case.

Byron: No, no, no, no, no. In those cases that each member of the class that constitutes the class that I have certified.

Allensworth: "That is what Avery says you can't do.

Byron: No, no, no. Avery didn't say that.

Byron denied the motion for reconsideration and the motion for leave to appeal.