The Illinois Appellate Court will soon decide if former Madison County Circuit Judge Don Weber ignored the law or followed the law in two class action cases he dismissed.
Two of Weber's higher profile cases during his short tenure on the bench are up for appeal on June 14 in Mt. Vernon.
In the first case, Weber granted Equicredit's motion for summary judgment and dismissed a $30 courier fee class action case brought by the Lakin Law Firm.
In 2003, Gary Treadway filed the case as special administrator of his mother Juanita's estate, claiming his mother did not know the mortgage company would keep some of the $30 it charged to obtain loan documents to complete a loan transaction in 1999.
"If plaintiff were to prevail, her estate would receive something less than $30, probably somewhere in the range of $10," Weber wrote in his order. "If the court were to make the extraordinary finding that a deceased plaintiff is able to adequately represent a class of borrowers such as this, the case would generate perhaps millions of dollars in attorney's fees."
Weber also indicated that plaintiff's argument was weak.
"There is no other evidence in the record as to the state of mind of Juanita Treadway at closing," he wrote. "Plaintiff's attorneys did not ask the court for further time to develop additional facts in opposition to the motion for summary judgment but chose to rely on the record before the court."
Charles Chapman and Gerald Walters argued the motion for Treadway.
According to the complaint, the $30 charge was listed on the HUD settlement statement on line 112 and was designated as "overnight Airborne-Equicredit."
Treadway argued that his mother did not have full knowledge of the facts, specifically that she did not know Equicredit would keep some part of the $30, however at his deposition he testified that he was not at the closing, no one else assisted his mother, and he had no knowledge of the circumstances under which the loan was made.
He claimed his mother would not have agreed to the $15,000 loan had she known that Equicredit would keep some part of the $30.
Equicredit, represented by Joe Whyte of Heyl Royster, asserted the defense of "voluntary payment" claiming it provides that if a person pays a charge with full knowledge of the facts they are prohibited from paying in silence and afterward suing for an alleged wrong.
Weber also pointed out that a recent case from the Fifth District, Harris v. Chartone discussed the voluntary payment doctrine. The appellate court affirmed the dismissal of a suit based on the doctrine, ruling that plaintiff did not make any effort to discover the nature of the fees charged.
"Harris v. Chartone requires that a plaintiff make some inquiry as to the nature of the charges once those charges are made known," Weber wrote.
Weber also pointed out that the HUD settlement statement had Juanita's signature and that it is undisputed that it showed the $30 going to as "overnight Airborne-Equicredit."
"There is no evidence in the record that she did not see or read the HUD document," he wrote. "Indeed, all of the evidence points to the fact that she was aware of the $30 charge and agreed to it.
"Due to her death in 2001, it is now impossible to ask Juanita Treadway whether she would have refused the loan if she had known more conclusively that part of the $30 was going to Equicredit."
"However, if plaintiff is to maintain a cause of action he must come forward with some evidence that the payment was involuntary. This he cannot do because his only witness is deceased.
"A Latin phrase, caveat emptor, is also useful in this analysis," Weber wrote.
"Caveat emptor means literally, let the buyer beware.
"This court recognizes the difference between consumer fraud and sharp, but not lawful business practices. In our free society, a buyer has some obligation to make a reasonable investigation of charges such as these."
In the second case, Weber reluctantly dismissed a check cashing fee class action complaint against First Banks.
"It seems to be unwise policy to allow a bank to charge a fee to cash a check drawn on the bank," Weber wrote. "However unwise this policy seems, it appears to be the law."
"Although the court is of the opinion that there should be a cause of action when a bank charges a fee for cashing a check drawn on the bank, that is, apparently not the law," he wrote.
The Lakin Law Firm filed suit March 9, 2004, on behalf of Darryl Johnson of Collinsville.
Attorney Gail Renshaw complained that Johnson paid $5 each time he cashed a check drawn on First Banks, because he had no account there.
Renshaw claimed that by charging a fee the bank wrongfully dishonored the check.
For First Banks, attorney Troy Bozarth of the Hepler Broom law firm of Edwardsville moved to dismiss the complaint on May 21, 2004.
Bozarth wrote to Circuit Judge Phillip Kardis, who was assigned the case before his retirement, that Johnson lacked standing to sue because he was not a customer.
Bozarth wrote that Johnson had no claim because he paid voluntarily.
Weber ruled that the voluntary payment doctrine does not apply because the act to refuse to honor a check drawn on the bank under these circumstances is coercive.
"A reasonable consumer should be able to cash a check drawn on First Bank at First Bank without a fee," Weber wrote.
Weber said that the holder of the check is a third party beneficiary to the contract between the bank and the payor of the check.
As to whether Johnson was a "customer" Weber relied on the appellate court case Kronemeyer v. U.S. Bank, a case in which Johnson was also a named plaintiff and which the justices unanimously ruled the word "customer" has two opposite meanings in this context.
"This is not a nut easily cracked," Weber wrote.
In the other case, Kenneth Kronemeyer of New Memphis and Darryl Johnson of Collinsville, also represented by the Lakin Law Firm, sought to establish a nationwide class of individuals who paid US Bank a fee when presenting for payment a check drawn on a US Bank account
They claimed that US Bank charged $10 to cash checks drawn by the bank's depositors and payable to them. They charged consumer fraud, wrongful dishonor and unjust enrichment.
The Illinois Appellate Court reversed Madison County Circuit Court Judge Nicholas Byron's decision to deny US Bank's motion to dismiss the 2003 class action lawsuit. The July 7 decision, which effectively dissolves the case, asserted the plaintiffs "do not have standing."
Weber said the Kronemeyer case held that the payee of a check lacks standing to bring a claim for wrongful dishonor when a bank charges a fee and also points out federal regulations authorize the fee and therefore federal preemption precludes this suit based on the check cashing fee.
In the only other case Weber has had before the appellate court, he was affirmed.
Fifth District judges on March 28 backed Weber in ruling that lender RBMG cannot compel a Lakin class action client to arbitrate a $25 dispute.
Weber denied RBMG's motion to compel arbitration last May.