MOUNT VERNON – Fifth District appellate judges have affirmed two orders of 20th Circuit Associate Judge Christopher Kolker, paving the way for attorneys David Cates and John Driscoll to start class actions.
In Driscoll’s case, they found they lacked jurisdiction to review an order requiring Illinois Bell to produce information for a future suit.
In the other case, they found Kolker correctly rejected arbitration of a class action counter claim that Cates filed for defendants in a pair of credit card suits.
In the Illinois Bell case, in 2016, Driscoll alleged fraud in a petition for discovery prior to filing suit on behalf of local law firm Bosslet and O’Leary.
The suit claims the firm was victimized for having additional services for additional charges placed on its account by unauthorized persons.
It further claims that in 2015, without the firm’s knowledge or consent, Illinois Bell increased a monthly charge from $45 to $75 or more.
Driscoll wrote that Illinois Bell claimed that a person named Janice Peterson authorized the increase, and that discovery might show she was fictional.
He served 60 information requests and moved to compel responses.
At a hearing in 2016, defense counsel Steven Hughes said Illinois Bell identified Janice Peterson to plaintiffs as an employee of MMI Industries.
“This is a full onslaught of discovery as if a lawsuit had been filed,” Hughes said.
At a later hearing, Hughes called it abuse of process.
“We are willing to produce everything that we can get our hands on from this third party vendor that identifies who called Bosslet and O’Leary, what was said, what was done,” Hughes said.
“She is not an AT&T employee so we’ll give them anything that we have.”
Kolker said, “Who she works with, associates with, and oversees her, and things of that nature, could also be possible defendants.”
Hughes asked how to produce information on her manager, and Kolker said, “You can only produce what you have.”
Hughes said the plaintiffs asked for anyone who received financial gain or other benefit from the firm’s enrollment in an upgrade.
“I don’t know how we would possibly identify who within the entity of AT&T benefited financially from enrollment of this one account,” Hughes said.
Kolker said, “Do they give bonuses to AT&T employees or vendors who get people enrolled in a program? That doesn’t seem overly broad.”
Hughes said that if enrolling someone theoretically benefits the entirety of AT&T, plaintiffs essentially asked for all employees who received a paycheck.
Kolker said, “You can write ‘all employees,’ and I will tell you that’s fine with me.”
Hughes said some requests started looking for other clients as opposed to identifying a potential defendant.
Gregory Pals of Driscoll’s firm said he was unable to identify MMI Industries as a corporate entity.
“For all I know this may be smoke and mirrors, some fly by night house, somebody’s running a scam either internal to AT&T or outside of AT&T,” Pals said.
Kolker took the request under advisement. He asked about references to Illinois Bell and AT&T.
Pals said, “My understanding is that the corporate entity who is responsible for the account is Illinois Bell doing business as AT&T.”
Hughes said, “We’re to produce like the management structure of the entire AT&T corporate and all their sub entities?”
Kolker said, “I think that’s what in part you convinced me of, that it may be a separate defendant.”
Hughes said, “I didn’t convince you of anything.”
Kolker ordered him to respond to 48 requests in 30 days.
He took 12 requests under advisement.
Illinois Bell appealed, but Fifth District judges ruled on Jan. 2 of this year that they lacked jurisdiction because the order was not final.
Justice John Barberis wrote that Kolker did not grant the petition in its entirety.
“The record on appeal is devoid of any indication that the court has ruled on the matters that were taken under advisement,” Barberis wrote.
He wrote that the order did not fully adjudicate the rights of the parties.
Justices Richard Goldenhersh and Thomas Welch concurred.
The other case ruled on by the Fifth District involved a credit card action that was started in 2015, when Midland Funding filed collection suits against Theresa Raney and Shirley Darnell.
Midland Funding claimed Raney owed about $16,000, and Darnell about $6,000.
Midland Funding alleged that it purchased the accounts from Citibank in 2014.
Cates filed a counter claim for Raney and Darnell, seeking to certify them as representatives of a class of borrowers.
He alleged that Midland Funding engaged in a practice of suing to collect debts without sufficient proof that it owned the debts.
Midland Funding moved to compel arbitration, claiming plaintiffs agreed to it, and it also moved to dismiss the counter complaint, claiming plaintiffs waived a class action.
Midland Funding filed a declaration of Michael Burger, operations manager for a firm that manages the debt that Midland Funding purchases.
Plaintiffs moved to strike the declaration, arguing that Burger didn’t work for Citibank and improperly based his declaration on information and belief.
Sean Cronin of the Donovan Rose Nester firm, representing plaintiffs along with Cates, challenged Burger’s credibility at a hearing in September 2016.
“We took his deposition for hours and discovered that every single averment in his declaration except for his name and title was either untrue or he completely lacked any knowledge whatsoever regarding the averments that he put in the declaration that he signed,” Cronin said.
“He had no input in preparing that document and no one ever consulted him about what facts they should put in the affidavit that he was to sign under penalty of perjury.
“If he was here in your courtroom testifying in an evidentiary hearing, which is exactly the same as an affidavit, and he said everything he was saying was based on information and belief -”
Kolker said, “Would I strike all his testimony and tell the jury not to consider it?”
Cronin said, “I believe you would and I believe you should because testimony that is not based on personal knowledge is irrelevant and inadequate and it’s hearsay.”
Defense counsel Heather Kramer of Chicago said the words, information and belief, were used in the context of Burger’s review of documents.
“He does have personal knowledge because he is familiar with Midland’s operations,” Kramer said.
Kolker said, “Any random person off the street can review the documents and say, I reviewed the documents.”
He said he found no credibility with Burger’s statements as they applied to almost all the documents Midland Funding attached to the declaration.
“I do think they are hearsay and they’re not properly authenticated,” Kolker said.
Later he said, “It strikes me as odd that Midland files in our court system a suit against these two defendants and then, as soon as they turn around, they say oh, no, now it’s arbitration.”
Kramer said Midland Funding didn’t waive arbitration.
“Other activities don’t show waiver and here, all that Midland did is initiate the proceeding,” Kramer said.
Kolker said, “That’s a pretty big step. All they did was file a lawsuit in court.”
Chad Mooney of Cates’s firm said Midland Funding knew they had an arbitration agreement in a credit card agreement.
“They disregarded that and filed in the circuit court regardless,” Mooney said.
“There’s a reason we’re in this court right now. It’s because they chose it.”
In October 2016, Kolker issued an order denying arbitration.
“All the court has before it is a card agreement without any evidence that it applies to Darnell and Raney and the sworn statements of Darnell and Raney that they had never seen the agreement nor agreed to the terms,” Kolker wrote.
He found Midland Funding’s actions indicative of forum shopping.
“It appears Midland desired to save money and time. It short circuited the arbitration process by going directly to this court,” Kolker wrote.
He wrote that when defendants counter claimed, “Midland suddenly developed a desire to avoid the circuit court’s authority.”
He wrote that Midland Funding is plaintiff in hundreds of debt collection actions filed in the circuit.
“Midland actively seeks and uses the authority of this court for holding alleged debtors liable,” Kolker wrote.
“That also demonstrates enough for this court to find that Midland has acted inconsistently with its right to arbitrate in this matter.”
Fifth District judges affirmed him on Jan. 4.
Justice David Overstreet wrote, “Whether under federal rules or state law, there can be no forced arbitration without a valid contract to arbitrate.”
He wrote that to compel arbitration, a card issuer must allege the terms at the time of each use and allege that the terms were reasonably communicated.
He found no indication that a card agreement was mailed or communicated in any way to Darnell and Raney.
Barberis and Goldenhersh concurred.
Kolker presides over the Illinois Bell case because Driscoll moved at the outset to substitute the late circuit judge Robert LeChien.
Kolker presides over the Midland Funding case because Midland Funding moved at the outset to substitute LeChien.
Kolker is running on the Democratic ticket in the November election for the vacancy created by LeChien’s death.
He received a $1,000 campaign contribution from the Cates Mahoney firm in October.