Cook County Record

Tuesday, April 7, 2020

Court dismisses application to require arbitration with consumer in collection case

By Chandra Lye | May 30, 2017

Credit card tech

CHICAGO — A creditor's attempt to compel arbitration in a credit card collection case has been dismissed by a Chicago federal judge, after the judge agreed there were questions in whether the borrower had actually agreed to be bound to pursue her claims through arbitration.

The lawsuit was originally filed by plaintiff Jane Lillegard alleging violation of the Fair Debt Collection Practices Act by Blatt, Hasenmiller, Leibsker & Moore LLC and Unifund CCR LLC.

The complaint dates back to 2006 when Lillegard opened up a credit card with Citibank. After she was unable to pay it off, the account went into default and the debt ended up being sold to Unifund. 

“Plaintiff alleges that Unifund, along with Blatt, which Unifund retained to collect the debt, thereafter sent her correspondence for the purpose of collecting the debt and contacted her directly about the debt despite knowing she was represented by an attorney,” Judge John Z. Lee wrote.

The defendants stated that Lillegard’s claims were subject to arbitration based on an agreement with Citibank. 

Lillegard argued that the arbitration request should be rejected for two reasons. She first contended that the collection company's conduct waived its ability to seek arbitration. She also noted that Unifund could have compelled arbitration earlier, but did not. Court documents also indicate the defendants were willing to participate in a settlement conference and did not demand the issue be settled by an arbitrator. 

However, the court rejected Lillegard's reasoning on this issue.

“Defendants did not raise arbitration in their initial affirmative defenses, they produced the purported arbitration agreement in discovery and amended their affirmative defenses within the time provided by the Court to do so,” the decision said. 

Second, Lillegard questioned the existence of the arbitration agreement the defendants cited. In this respect, the court decided in her favor.

“Genuine issues remain as to the existence of the parties’ agreement to arbitrate, such that the Court cannot compel arbitration at this stage,” Judge Lee concluded. 

Thus, the court ruled not to compel arbitration as requested by the defendants and the motion was denied, though without prejudice. 

“The parties should be prepared to discuss what adjustments, if any, are needed to the current discovery schedule to accommodate whatever additional discovery is necessary in relation to the formation of the purported arbitration agreement, and Defendants’ ability to enforce it,” Judge Lee wrote.

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Organizations in this Story

CitibankU.S. District Court for the Northern District of Illinois