Certifying a class action often complicates a simple matter, but Madison County Associate Judge Clarence Harrison certified one to simplify a complex matter.
He ruled in April that Cassandra Williams, former owner of a home in Granite City, could represent a national class suing mortgage company ABN AMRO.
Williams, a client of Stephen Tillery, claims the company charged excessive penalties on partial payments.
Harrison found he should focus on whether a five percent penalty applied to the full amount of the monthly note or only the unpaid portion.
If he decides ABN AMRO overcharged Williams, debates will follow over who belongs to the class, whether Williams can adequately represent the class, and who she can sue.
ABN AMRO ceased to exist in 2007, when it merged into Citi Mortgage.
Tillery has proposed to substitute Citi Mortgage as defendant, and he argued in March that Bank of America was the true party in interest.
So far, Harrison has retained ABN AMRO as defendant.
Williams sued ABN AMRO in 2005. In 2008, Tillery moved to certify a class action.
ABN AMRO removed the case to federal court, arguing Tillery changed his claims so much that he created a new action for purposes of the Class Action Fairness Act.
U.S. District Judge Michael Reagan remanded the case to Madison County, finding he lacked jurisdiction because no one had certified it as a class action.
He found "good reason to believe that certification is required prior to removal when a motion to certify identifies a class in such a way that its certification may leave defendant liable for conduct not specifically addressed by the complaint."
Back in Madison County, Tillery filed a new motion for certification.
At a hearing on April 28, Harrison said, "I'm not overly impressed at how factually intensive this case is."
"Most of what you folks seem to be suggesting across the board is an argument as to how numbers are properly mathematically calculated," Harrison said.
Tillery offered an example of a borrower with a $500 monthly note who sends in $400.
"Our position is that the late charge must be calculated as five percent of one hundred dollars, that portion of the full monthly payment that is overdue," he said.
Harrison said, "Five dollars versus 25 dollars."
Tillery said, "They say they didn't start doing this until 1999."
He said ABN AMRO argued it would have to review documents manually.
"It doesn't matter that it takes work to do it," he said.
Harrison said as he understood it, the request is for more than $20 back.
Tillery associate Michael Klenov said, "No, it is a refund of all inflated charges."
Klenov branded as a red herring a suggestion that ABN AMRO would have to depose individuals to ascertain their understanding of the late charge.
"These differences that ABN raises are merely hypothetical and have no effect on the claim that plaintiff is trying to certify," Klenov said.
For ABN AMRO, Sarah Wolff of Chicago said there are different notes with different
"You have to find out which note each of the class members signed," Wolff said.
She said the number of loans in question exceeded a million.
Harrison said, "Aren't you really saying that it's tedious rather than it's difficult? It doesn't take a Nobel prize winning rocket scientist to figure this out.
"I don't get to rewrite the note. I get to interpret the note."
Wolff said, "Their definition of payment is a transfer of any amount of money.
"The definition of a payment is payment of the principal and interest due for the month."
Harrison said, "I'm getting to the point of dealing with something that is either uniformly right or uniformly wrong.
"Regardless of the merits of your argument, isn't it the same argument with regard to all the members of the class?"
Wolff said yes.
Harrison said, "It's appropriate that I deal with these issues on a uniform basis with regard to all the members of the class, not whether I grant any relief or not today."
Wolff's associate, David Smith of Chicago, said there was no contractual relationship between Williams and ABN AMRO.
He said that two weeks after she filed the suit, she paid off the loan without protest.
"That to me is a different factual circumstance than the person who did or did
not get these series of letters," Smith said.
He said laws of states vary on unjust enrichment and fraud.
"Our argument is, until you make a monthly payment, the entire amount is still
outstanding," Smith said.
Harrison said, "The only debate here is, is there any difference in what the penalty is
between whether I pay one dollar or whether I pay 499 dollars."
Smith asked if he considered a dollar a timely payment of principal and interest.
Harrison said no and added, "It is considered a default. It constitutes grounds to foreclose.
"Everybody in the class certification that plaintiff proposes is in violation of their
Wolff said Williams made voluntary payment.
Harrison said, "To me, the voluntary payment doctrine in a consumer account situation
isn't very attractive."
"If I buy something and it costs five dollars, and I give the cashier a twenty and they give me five in change and I walk off, you are suggesting that's voluntary payment.
"I'm suggesting it is not. I'm suggesting that it's not a voluntary payment.
"It's an involuntary overcharging."
Klenov said, "If a note doesn't have the specific language, it's not part of our class. Our class is defined by borrowers who paid the full late charge."
Harrison said legal issues predominated, not factual issues.
He said ABN AMRO raised a voluntary payment defense against all claims, including that
He said that doesn't mean she prevails.
"First, the plaintiff would have to succeed on the court's ruling as to the
definition of overdue payment," Harrison said.
He granted class certification.