Cavalry Portfolio Servs. v. Rocha

CUNNINGHAM

Held
(Note: This syllabus

constitutes no part of

the opinion of the court

but has been prepared

by the Reporter of

Decisions for the

convenience of the

reader.)

In an action to collect an assigned debt where the judgment entered for plaintiff incorrectly stated that a trial was held, even though defendant did not appear for trial and an ex parte judgment was entered, the denial of defendant's petition under section 2-1401 of the Code of Civil Procedure to vacate the judgment was reversed and the cause was remanded, since defendant had a meritorious claim that the assignments of the debt did not comply with section 8b of the Collection Agency Act. Decision Under Review

Appeal from the Circuit Court of Cook County, No. 10-M1-165794; the Hon. Rhoda D. Sweeney, Judge, presiding Judgment Reversed and remanded. Counsel on Appeal

Robert Habib and Jason Knuckey, both of Chicago, for appellant.

Shindler Law Firm, of Schaumburg (Anthony P. Bernardi, of counsel), for appellee. Panel

JUSTICE CUNNINGHAM delivered the judgment of the court, with

opinion.

Presiding Justice Hoffman and Justice Karnezis concurred in the

judgment and opinion.

¶ 1 This appeal arises from a judgment that was entered against defendant-appellant Gerardo Rocha (Rocha) on February 28, 2011, and also a May 16, 2011 order that denied Rocha's petition to vacate judgment pursuant to section 2-1401 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-1401 (West 2010)). On appeal, Rocha argues that: (1) the trial court erred in denying his section 2-1401 petition to vacate the judgment because he presented a meritorious defense; (2) plaintiff-appellee Cavalry Portfolio Services (Cavalry Portfolio) failed to prove an account stated or that the parties entered into a contract; and (3) the trial court erred in denying his section 2-1401 petition to vacate the judgment because he acted with due diligence in contesting the original action and filing the section 2-1401 petition. For the following reasons, we reverse the judgment of the circuit court of Cook County and remand the matter for further proceedings.

¶ 3 On July 20, 2010, Cavalry Portfolio filed a complaint against Rocha in the circuit court of Cook County alleging breach of contract. Cavalry Portfolio claimed that Rocha opened a credit card or line of credit account with Washington Mutual Bank and subsequently defaulted by failing to make payments, resulting in a balance due to Cavalry Portfolio in the amount of $12,320.20. The complaint alleged that Cavalry Portfolio was an assignee of Cavalry SPV I, LLC, and Cavalry SPV I, LLC, was an assignee of Washington Mutual Bank. Attached to the complaint were the following: account statements from Washington Mutual Bank stating that ownership of Rocha's account had been transferred to Chase Bank; and account statements from Chase Bank. Also attached to the complaint were: letters that assigned the rights, title, and interest of unspecified accounts from Chase Bank to Riverwalk Holdings, Ltd., from Riverwalk Holdings, Ltd., to Cavalry SPV I, LLC, and from Cavalry SPV I, LLC, to Cavalry Portfolio. ¶ 4 On September 2, 2010, Rocha was served by substitute service. On September 8, 2010, Rocha filed an appearance through counsel. On November 15, 2010, both parties appeared and the matter was set for trial on February 28, 2011. Rocha was given 28 days to answer or otherwise plead. However, Rocha did not file an answer to the complaint. On February 28, 2011, neither Rocha nor Rocha's counsel appeared for trial and an ex parte judgment was entered against Rocha in the amount of $12,670.20. The trial court order indicates that a judgment was entered against Rocha, after trial. On May 5, 2011, Rocha filed a section 2-1401 petition to vacate the judgment. Rocha's section 2-1401 petition stated that he became aware of the judgment on May 2, 2011. The petition stated that Rocha had a meritorious defense because Cavalry Portfolio did not have standing to proceed pursuant to section 8b of the Collection Agency Act (Act) (225 ILCS 425/8b (West 2008)). The petition also stated that Rocha acted with due diligence in contesting the judgment by filing the petition as soon as he learned of the judgment. Attached to the petition was Rocha's affidavit, which stated that he had not incurred the expenses set forth in the complaint, he was not aware of who the plaintiff was, and he was never shown any documents transferring any of his accounts to the plaintiff. ¶ 5 On May 16, 2011, the trial court denied Rocha's section 2-1401 petition without a hearing. On June 14, 2011, Rocha filed a timely notice of appeal.