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Illinois

Judgments

LVNV Funding, LLC v Trice, 952 NE2d 1232, 352 Ill Dec 6 (1st D, 2011).

Facts:Citibank sold its interest in Mark Trice's credit card account to a collection agency named LVNV Funding, LLC. In January 2008, LVNV sued Trice for the balance due and on January 15, 2009, the trial court entered a judgment in favor of LVNV for $3,303.90.

On March 3, 2009, Trice filed a motion to vacate the judgment pursuant to 735 ILCS 5/2-1401 of the Code of Civil Procedure. Trice alleged that LVNV failed to register as a collection agency, in violation of the Illinois Collection Agency Act, before filing the suit against him. The trial court denied Trice's motion to vacate without hearing evidence, saying that Trice should have notified the court before trial that LVNV had not registered as a collection agency. Trice appealed.

Holding:Reversed and remanded. The appellate court stated that the party seeking relief from a judgment must plead and prove two things: (1) that he had "a defense or claim that would have precluded entry of the judgment in the original action," and (2) that he acted with "diligence in both discovering the defense or claim and presenting the petition." However, Trice claimed that LVNV's failure to register made the judgment void and not merely voidable. When the trial court enters a void judgment, a party aggrieved by the judgment may attack it in a Section 2—1401 motion without showing diligence. The allegation that the judgment or order is void substitutes for and negates the need to allege a meritorious defense and due diligence.

The appellate court found that If LVNV had not registered in Illinois as a collection agency before it purchased Trice's debt from Citibank, it acquired no rights by its crime of attempting to act as a collection agency. If LVNV had not registered before it filed the complaint against Trice, it committed a second crime of engaging in debt collection without proper registration. The court looked to Williston which stated: "When a contracting party is required to have a license to engage in a business and violation of required licensing statute is made a crime, a contract calling for performance in violation of this requirement is illegal and void." 10 Samuel Williston & Richard A. Lord,A Treatise on the Law of Contracts, &§ 19.47 at 562 (4th Ed. 1993). The crimes, if proven, void the judgment LVNV was awarded against Trice.

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[Last update: 11-18-11]