The Fifth District Appellate Court of Illinois affirmed St. Clair County Circuit Court Judge Chris Kolker's ruling in a case in which Midland Funding allegedly failed to show it offered an arbitration agreement to two individuals in regard to a credit card agreement.
The appellate court upheld Kolker's ruling that denied Midland Funding's motion to dismiss and compel arbitration of two counterclaims on Jan. 4.
According to the ruling, Teresa Raney and Shirley Darnell attained credit card accounts through Citibank, which offered them certain lines of credit for consumers with the understanding the minimum payments would be paid on their monthly billing statements.
Without warning, the ruling states Midland Funding then filed complaints against Raney and Darnell and sought a judgment against Raney for $5,848.91 and $16,843.42 from Darnell. It also sought judgment for court costs.
In the complaint, Midland Funding alleged that Darnell’s and Raney’s credit card accounts were purchased by it through Citibank and that, because the plaintiffs were in arrears on their accounts, Midland Funding “was entitled to a judgment for the unpaid balances plus costs.”
In July 2015, Darnell and Raney filed class action counterclaims seeking damages, claiming that Midland Funding violated the Collection Agency Act, the Consumer Fraud and Deceptive Business Practices Act and the Fair Debt Collection Practices Act. Their counterclaims stated that Midland Funding did not offer sufficient proof of ownership of the debt.
The court found the parties did not “clearly and unmistakably” enter into an arbitration agreement. Midland Funding had argued that the credit card agreement validity or the arbitration process was not to be determined by the circuit court.
The court found in favor Darnell and Raney and concluded that Midland Funding “failed to demonstrate that it had communicated the arbitration provision to Darnell or Raney in order to modify their agreements.”
The court determined that it was not necessary to discuss Midland Funding’s arguments on appeal.