Galvan et al v. Bank of American, N.A.
Filing
26
MEMORANDUM Opinion and Order. For the reasons stated herein, Plaintiffs' Motion to Strike is denied. Defendant's Motion to Dismiss is granted. Status hearing set for 1/30/19 at 9:00 AM. Signed by the Honorable Harry D. Leinenweber on 12/19/2018:Mailed notice(maf)
Case: 1:18-cv-00200 Document #: 26 Filed: 12/19/18 Page 1 of 7 PageID #:184
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOSEFA and DOMINGO GALVAN,
Individually and on Behalf
of a Class of Persons
Similarly Situated,
Plaintiffs,
Case No. 18 C 200
Judge Harry D. Leinenweber
v.
BANK OF AMERICA, N.A.,
Defendant.
MEMORANDUM OPINION AND ORDER
I.
BACKGROUND
The Plaintiffs bring this putative class action against Bank
of America (“BOA”) seeking damages as a result of BOA’s alleged
violation of the Illinois Consumer Fraud and Deceptive Practices
Act (“ICFA”), 815 ILCS § 505/1 et seq.
Enrichment.
They also claim Unjust
The gravamen of Plaintiffs’ claim is that BOA charged
them a “Legal Order Fee” for responding to a garnishment proceeding
filed in the Circuit Court of Cook County seeking to garnish
Plaintiffs’ BOA savings account and that it did not refund the fee
after the Circuit Court reversed the garnishment and ordered the
fee returned.
The Circuit Court reversed the garnishment because
the Plaintiffs claimed a so-called “wild card” exemption to the
garnishment authorized by Illinois law.
735 ILCS 5/12-1001(b).
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BOA has moved to dismiss the Complaint alleging that it, as
a national banking institution, has a right to charge such a legal
order fee when responding to a garnishment.
In support, BOA
attached to its Motion the opinion of the Office of the Comptroller
of the Currency (“OCC”) and its savings account agreement with
plaintiffs which authorizes the charging of such a fee.
In
response, Plaintiffs move to strike these exhibits as documents
not referenced in the Complaint and thus outside the four corners
of the Complaint, citing Levenstein v. Salafsky, 164 F.3d 345, 347
(7th Cir. 1998).
Plaintiffs also contend in their response brief
that the garnishment froze their checking account where their
Social Security payments were deposited rather than their savings
account in violation of Illinois law.
II.
THE ILLINOIS GARNISHMENT LAW
Under the Illinois garnishment statute, a judgment creditor
may bring a garnishment action in state court seeking to recover
assets held by some entity that is alleged to be holding assets of
the judgment debtor.
The judgment creditor initiates the process
by filing a summons to a garnishee alleged to be holding assets of
the judgment debtor.
The summons discloses the name and address
of the judgment debtor, the amount of the judgment, and the name
of the garnishee.
The statute requires that the notice disclose
a list of a judgment debtor’s rights, including a list of the types
of property exempt from garnishment, the procedure for obtaining
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an exemption, and the procedures for contesting the validity of
the judgment debt.
The garnishee then freezes the asset awaiting
order of the court. In this case the Plaintiffs, judgment debtors,
appeared in court in response to the summons and claimed a wild
card exemption.
The Circuit Court declared the funds sought by
judgment debtor exempt, ordered the freeze lifted, and the fees
returned.
III.
DISCUSSION
In their response brief, the Plaintiffs for the first time
appear to charge BOA with improperly freezing their BOA checking
account, which contained direct deposits of their Social Security
payments.
However, the court order attached to their Complaint
shows that the account sought to be garnished was their savings
account and they claimed a wild card exemption, not a Social
Security exemption.
In any event, the statute does not require
the garnishee to decide whether the property is exempt.
The wild
card exemption is for $4,000.00 of the judgment debtor’s assets.
A garnishee could not in advance know what assets the judgment
debtor wishes to protect until he makes the request.
This is one
of the reasons the statute provides a hearing for an exemption
claim and at which the judgment creditor may object.
Until an
exemption is allowed by the court, the garnishee must maintain the
asset for the benefit of the parties, subject to order of the
court.
735 ILCS5/12-707(a).
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A.
Plaintiffs’ Motion to Strike
The Plaintiffs’ contend that the fee agreement is outside the
four corners of the Complaint.
However, a savings account is
obviously a “contract” between an account holder and a bank.
The
former deposits money with the bank and the bank agrees to pay
interest on the deposit.
The Complaint alleges the existence of
a “savings account” with BOA owned by Plaintiffs that was sought
to be garnished and not a checking account. (Paras. 16 and 17).
When a complaint references a document that is central to the claim
the document is considered part of the pleadings. Mueller v. Apple
Leisure Corporation, 880 F.3d 890, 895 (7th Cir. 2018). Therefore,
the savings account contract, including the list of authorized
fees, is part of the Complaint.
The OCC letter is not evidence but is a record memorializing
an agency’s interpretation of the statute and regulations that it
administers and may be considered the same as any source of law.
The OCC has determined that national banks are authorized to charge
service fees for the garnishment process and a court may consider
such a determination.
Monroe Retail Inc. v. RBS Citizens N.A.,
589 F.3d 274, 283-84 (6th Cir. 2009).
This is reasonable.
A bank
that is subject to a garnishment is obligated to answer the
interrogatories served on it correctly, file them with the clerk
of court, serve notice on the parties, and follow the orders of
the court.
If the bank mistakenly fails to freeze the asset, it
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could lead to liability to the judgment creditor. A charge of
$125.00 is not unreasonable, although whether it is or not does
not bear on the issue of alleged violation of the Illinois Consumer
Fraud Act.
(See the next section.)
The Plaintiffs’ Motion to
strike certain documents in BOA’s Motion to Dismiss is denied.
B.
Defendant’s Motion to Dismiss
A claim of violation of the Consumer Fraud Act (the “Act”)
may
be
based
on
either
deceptive
conduct
or
unfair
conduct.
Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 417 (2002).
The elements of a claim are (1) a deceptive act or practice by the
defendant; (2) the defendant’s intent that the plaintiff rely on
the deception, and (3) the occurrence of the deception during the
course of conduct involving trade or commerce. Id. (citation
omitted). The Act also includes “unfair” as well as deceptive
conduct. To be unfair, factors considered are whether the practice
offends
public
policy,
whether
it
is
immoral,
unethical,
oppressive, or unscrupulous, and whether it causes substantial
injury to consumers. Id. (citation omitted). Here there is no
deceptive conduct.
The Plaintiffs agreed to the fees in a clearly
disclosed written agreement.
because
Plaintiffs
had
a
The amount of the fees is not unfair
choice—i.e.,
go
with
a
bank
that
maintained lower fees—and they do not claim that they had a lack
of choice.
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Plaintiffs contend that the circuit court ordered BOA to
refund the fee charged and it did not do so.
Assuming this is
true (BOA contends that it has in fact refunded the fee to
Plaintiffs but did not do so immediately because of an oversight),
it still does not amount to fraud.
Assuming BOA is guilty of
violating a state court order, the correct procedure would be to
request an order of contempt from the Circuit Court.
Failure to
return a $125.00 fee in violation of a state court order does not
constitute fraudulent conduct, nor does it justify a federal
lawsuit.
Plaintiffs
enrichment.
cannot
also
maintain
a
claim
for
unjust
Unjust enrichment does not constitute an independent
cause of action but is a condition that may be brought about by
unlawful or improper conduct as defined by law, such as fraud,
duress or undue influence, or based on a contract implied in law.
Touton v. Continental Casualty Company, 877 F.3d 725, 741 (7th
Cir. 2017).
Here there is no fraud, duress, or undue influence
and the parties have a contract so there is no basis for a contract
implied in law.
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IV.
CONCLUSION
For the reasons stated herein, Plaintiffs’ Motion to Strike
is denied.
Defendant’s Motion to Dismiss is granted.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated: 12/19/2018
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