{ "id": 4260184, "name": "DOUGLAS D. DANNEWITZ et al., Plaintiffs-Appellants, v. EQUICREDIT CORPORATION OF AMERICA et al., Defendants-Appellees", "name_abbreviation": "Dannewitz v. Equicredit Corp. of America", "decision_date": "2005-11-10", "docket_number": "No. 1\u201404\u20142132", "first_page": "82", "last_page": "87", "citations": [ { "type": "official", "cite": "362 Ill. App. 3d 82" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "12 C.F.R. \u00a7 34.4", "category": "laws:admin_compilation", "reporter": "C.F.R.", "weight": 3, "year": 2005, "pin_cites": [ { "page": "(a)(10)" }, { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "12 U.S.C. \u00a7 371", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 3, "year": 2000, "opinion_index": 0 }, { "cite": "N.J. Stat. Ann. \u00a7 56:8", "category": "laws:leg_statute", "reporter": "N.J. Stat. Ann.", "opinion_index": 0 }, { "cite": "Ohio Rev. Code Ann. \u00a7 1321", "category": "laws:leg_statute", "reporter": "Ohio Rev. Code Ann.", "pin_cites": [ { "parenthetical": "LexisNexis 2002" } ], "opinion_index": 0 }, { "cite": "239 F. Supp. 2d 745", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 9330908 ], "weight": 2, "year": 2002, "pin_cites": [ { "page": "753" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/239/0745-01" ] }, { "cite": "307 F. Supp. 2d 1191", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 9272104 ], "weight": 2, "year": 2004, "pin_cites": [ { "page": "1205-06" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/307/1191-01" ] }, { "cite": "539 U.S. 1", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 8896908 ], "weight": 7, "year": 2003, "pin_cites": [ { "page": "11" }, { "page": "10" }, { "page": "11" }, { "page": "10" } ], "opinion_index": 0, "case_paths": [ "/us/539/0001-01" ] }, { "cite": "12 U.S.C. \u00a7 86", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 2000, "opinion_index": 0 }, { "cite": "537 U.S. 51", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 9190636 ], "weight": 3, "year": 2002, "opinion_index": 0, "case_paths": [ "/us/537/0051-01" ] }, { "cite": "458 U.S. 141", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 636558 ], "weight": 3, "year": 1982, "opinion_index": 0, "case_paths": [ "/us/458/0141-01" ] }, { "cite": "211 Ill. 2d 251", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 8451324 ], "weight": 2, "year": 2004, "pin_cites": [ { "page": "257" }, { "page": "258" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/211/0251-01" ] }, { "cite": "12 U.S.C. \u00a7\u00a7 85", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 2, "opinion_index": 0 } ], "analysis": { "cardinality": 641, "char_count": 12598, "ocr_confidence": 0.775, "pagerank": { "raw": 5.820026684284582e-08, "percentile": 0.36218559460416416 }, "sha256": "f91af200a1c1979c0484943325a69fee864622b2bb5d83ee9f7f4631edd754ba", "simhash": "1:bd7e463e4d91bbd1", "word_count": 2096 }, "last_updated": "2023-07-14T16:28:25.526171+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "DOUGLAS D. DANNEWITZ et al., Plaintiffs-Appellants, v. EQUICREDIT CORPORATION OF AMERICA et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE O\u2019BRIEN\ndelivered the opinion of the court:\nPlaintiffs, Douglas and Ellyn Dannewitz, appeal a judgment of the circuit court denying plaintiffs\u2019 motion for partial summary judgment and granting defendant EquiCredit Corporation of America\u2019s motion for summary judgment. On appeal, plaintiffs contend: (1) the circuit court erred in granting the defendant\u2019s motion for summary judgment and finding that plaintiffs\u2019 claims under the Illinois Interest Act (815 ILCS 205/4 et seq. (West 2002)) and the Illinois Consumer Fraud and Deceptive Business Practices Act (Illinois Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2002)) were preempted by the National Bank Act (12 U.S.C. \u00a7\u00a7 85, 86 (2000)); and (2) the circuit court erred in denying the plaintiffs\u2019 motion for partial summary judgment. We affirm.\nThe pleadings allege that on November 18, 2000, plaintiffs obtained a mortgage loan from HomeGold, Inc., a loan corporation then organized and existing under the laws of South Carolina. The mortgage included a choice of law provision stating that the loan was to be \u201cgoverned by federal law and the law of the jurisdiction in which the property is located.\u201d The note also included a prepayment penalty providing that if plaintiffs made full prepayments within \u201c60 months of the date of [their] loan, [they] agree to pay the note holder a prepayment fee.\u201d\nA former assistant general counsel for EquiCredit attested in an affidavit that the defendant later purchased plaintiffs\u2019 loan from HomeGold. He further attested that the defendant is a Delaware corporation, headquartered in Florida, doing business in Illinois. Defendant is a wholly owned subsidiary of Bank of America.\nDouglas Dannewitz testified in a deposition that in June 2001 he and his wife were selling their home to be closer to his terminally ill father. They received a payoff letter from defendant outlining the prepayment penalty of $9,354.32. He requested that the prepayment penalty not be assessed against him; his request was refused, and he was forced to pay the penalty in order to prevent defaulting on the sale of his home. Dannewitz testified that until he requested the payoff letter, both he and his wife were unaware of the prepayment penalty. Dannewitz was forced to borrow $9,500 from his dying father to purchase a new home closer to his parents. He was still repaying the loan to his father\u2019s estate at 6% interest rate at the time of the deposition.\nPlaintiffs filed a two-count complaint against defendant alleging violations of the Illinois Interest Act (815 ILCS 205/4 et seq. (West 2002)) and the Illinois Consumer Fraud Act (815 ILCS 505/1 et seq. (West 2002)) based on the inclusion of an allegedly unlawful prepayment penalty in plaintiffs\u2019 residential mortgage loan. Plaintiffs moved for a partial summary judgment on the issue of whether defendant\u2019s actions constituted a violation of the Illinois Interest Act. The circuit court denied the plaintiffs\u2019 motion for partial summary judgment. Defendant filed a motion for summary judgment on the basis that the National Bank Act preempts plaintiffs\u2019 claims under the Illinois Interest Act and the Illinois Consumer Fraud Act. The circuit court granted defendant\u2019s motion for summary judgment. Plaintiffs filed this timely appeal.\nA motion for summary judgment is properly granted if the pleadings, depositions and admissions on file, together with affidavits or exhibits, demonstrate there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Abrams v. City of Chicago, 211 Ill. 2d 251, 257 (2004). The proper standard of review for an order granting summary judgment is de novo. Abrams, 211 Ill. 2d. at 258.\nPlaintiffs contend that the circuit court erred by granting defendant\u2019s motion for summary judgment and finding that federal law preempts the plaintiffs\u2019 claims against defendant under the Illinois Interest Act and the Illinois Consumer Fraud Act. The preemption doctrine, rooted in the supremacy clause of the United States Constitution, requires courts to examine whether it was Congress\u2019s intent for federal law to preempt state law in any given case. Fidelity Federal Savings & Loan Ass\u2019n v. de la Cuesta, 458 U.S. 141, 73 L. Ed. 2d 664, 102 S. Ct. 3014 (1982). There are three ways in which federal laws and statutes can preempt state law: (1) when the language of the federal statute expressly preempts state law; (2) when the scope of the statute indicates Congress intended federal law to occupy the field exclusively; or (3) when state law is in actual conflict with federal law. Sprietsma v. Mercury Marine, 537 U.S. 51, 154 L. Ed. 2d 466, 123 S. Ct. 518 (2002).\nIn the National Bank Act, Congress gave national banks and their subsidiaries the power to \u201ctake, receive, reserve, and charge on any loan or discount made *** interest at the rate allowed by the laws of the State, Territory, or District where the bank is located.\u201d 12 U.S.C. \u00a7 85 (2000). Congress also provided that the \u201ctaking, receiving, reserving, or charging a rate of interest greater than is allowed by section 85 of this title, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon.\u201d 12 U.S.C. \u00a7 86 (2000). The United States Supreme Court has held that the National Bank Act completely defines what constitutes the taking of usury by a national bank, referring to the state law only to determine the maximum permitted rate. Beneficial National Bank v. Anderson, 539 U.S. 1, 156 L. Ed. 2d 1, 123 S. Ct. 2058 (2003). The Supreme Court has further held that sections 85 and 86 of the National Bank Act \u201csupersede both the substantive and the remedial provisions of state usury laws and create a federal remedy for overcharges that is exclusive.\u201d Beneficial, 539 U.S. at 11, 156 L. Ed. 2d at 10, 123 S. Ct. at 2064.\nHere, defendant is a subsidiary of a national bank, to which the National Bank Act applies. Plaintiffs, however, contend that where loans are made by a non-national bank and subsequently purchased by a national bank, the National Bank Act does not apply. Plaintiffs cite to Flowers v. EZPawn Oklahoma, Inc., 307 F. Supp. 2d 1191 (N.D. Okla. 2004), as support. Flowers is inapposite. Flowers\u2019 claims were based upon a nonbank\u2019s violation of a state law, there were no claims made against a national bank, and no support that the county bank named was the actual lender. Flowers, 307 F. Supp. 2d at 1205-06.\nPlaintiffs also cite Goleta National Bank v. O\u2019Donnell, 239 F. Supp. 2d 745 (S.D. Ohio 2002), in support for their claim. Goleta is also unpersuasive. Goleta National Bank brought suit seeking to restrain the superintendent of financial institutions of the Ohio Department of Commerce from enforcing the Ohio Small Loan Act (Ohio Rev. Code Ann. \u00a7 1321 (LexisNexis 2002)), against ACE Cash Express, Inc. (ACE), a company Goleta contended was acting as its agent in making loans to Ohio consumers. Goleta contended that the National Bank Act preempted the superintendent\u2019s authority to enforce the Ohio Small Loan Act against ACE. The court found that Goleta lacked standing to bring its claim because the underlying state claims were being made against ACE and not the national bank itself. The court found there \u201cis nothing in the [National Bank Act] that prevents Ohio from regulating the activities of a lending institution located in Ohio and making loans to Ohio citizens if such loans are in fact made by that lending institution and not by a national bank.\u201d Goleta, 239 F. Supp. 2d at 753.\nHere plaintiffs make state claims against a subsidiary of a national bank, which is distinguishable from the cases cited by the plaintiffs.\nPlaintiffs further rely on the Office of the Comptroller of the Currency\u2019s (OCC) Interpretive Letter #1016, of February 2005. In the Februaiy 2005 letter, acting chief counsel Daniel P Stipano responded to a request for clarification in the cases of Wells Fargo Bank v. Harris, No. ESX \u2014 L\u2014467\u201402 and Bank One National Ass\u2019n v. Feinstein, No. F \u2014 11450\u201400. In Wells Fargo, Delta Funding made a mortgage loan to Alberta Harris and later assigned the mortgage to Wells Fargo as \u201cTrustee for Delta Funding Home Equity Loan Trust 2000 \u2014 1.\u201d As trustee acting on behalf of the investors in Home Equity Loan Trust 2000 \u2014 1, Wells Fargo filed suit against Ms. Harris alleging that she had defaulted on the loan made by Delta. In Bank One, Delta Funding made a mortgage loan to Dequilla Robinson and later assigned the mortgage to Bank One National Association as \u201cTrustee in Trust for the Registered Holders of Delta Funding Home Equity Loan Asset-Backed Certificates Series 1999 \u2014 3.\u201d As trustee acting on behalf of the investors in Delta Asset-Backed Certificates Series 1999 \u2014 3, Bank One filed suit against Jack Feinstein, the administrator of Ms. Robinson\u2019s estate, seeking to foreclose on the real estate she had pledged as collateral for the loan made by Delta.\nIn Wells Fargo and in Bank One, Ms. Harris and Mr. Feinstein alleged defenses based on the New Jersey Consumer Fraud Act (New Jersey Act) (N.J. Stat. Ann. \u00a7 56:8 \u2014 1 (West 2001)). Wells Fargo and Bank One (the Banks) asserted that federal law authorizing national banks to make and purchase real estate loans (12 U.S.C. \u00a7 371 (2000); 12 C.F.R. \u00a7 34.4(a)(10) (2005)) preempted the state law defenses under the New Jersey Act. The OCC found no federal preemption. The OCC stated:\n\u201c[I]n no sense, under the facts presented, can the Banks be viewed as making a real estate loan under 12 U.S.C. \u00a7 371 and 12 C.F.R. \u00a7 34.4. The Banks did not originate the loans. They did not fund the loans at inception. Nor did they \u2018purchase\u2019 the loans as part of any real estate lending program comprehended by the regulation. *** [TJhe Banks act as trustees for the benefit of investors in the trusts. The substance of the transaction is that the investors, not the Banks, are purchasing the loans that have been made by Delta. The investors own the beneficial interest in the loans held by the Banks as trustees. And the effect of any liability for violation of the [New Jersey Act] ultimately falls on the investors. Nowhere do the Banks allege that they themselves, as opposed to the trusts they represent, are exposed to liability for any violation of the [New Jersey Act]. For all these reasons, 12 U.S.C. \u00a7 371 and 12 C.F.R. \u00a7 34.4(a) simply do not apply to the transactions by which the Banks acquired legal title to the loans***.\u201d Office of the Comptroller of the Currency, Interpretive Letter #1016 (February 2005).\nUnlike the situation described in Interpretive Letter #1016 in which the national banks were trustees and the beneficial interest was owned by investors, the defendant in the present case purchased and held the loan directly, acting on its own behalf and not as a trustee for a third party. Because this loan differs from the cases and situation presented to the OCC, the interpretation of the OCC letter of February 2005 is inapplicable here. Thus, the National Bank Act is disposi-tive.\nThe circuit court relied upon Beneficial in making its decision to grant the defendants\u2019 motion for summary judgment. We agree. In Beneficial, the Supreme Court held that because section 85 and section 86 of the National Bank Act \u201cprovide the exclusive cause of action for [usury] claims, there is, in short, no such thing as a state-law claim of usury against a national bank.\u201d Beneficial, 539 U.S. at 11, 156 L. Ed. 2d at 10, 123 S. Ct. at 2064. Thus, the circuit court did not err in determining that the National Bank Act preempted the Illinois Interest Act and the Illinois Consumer Fraud Act, and the circuit court\u2019s grant of summary judgment was not error.\nBecause defendant\u2019s motion for summary judgment is affirmed, we need not address the circuit court\u2019s denial of the plaintiffs\u2019 motion for partial summary judgment.\nFor the foregoing reasons, we affirm the circuit court.\nAffirmed.\nGALLAGHER, P.J., and O\u2019MARA FROSSARD, J., concur.", "type": "majority", "author": "JUSTICE O\u2019BRIEN" } ], "attorneys": [ "Edelman, Combs, Latturner & Goodwin, L.L.C., of Chicago (Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Tara L. Goodwin, and Jeremy E Monteiro, of counsel), for appellants.", "Dykema, Gossett, Rooks & Pitts, L.L.C., of Chicago (Arthur F. Radke, Ralph T. Wutscher, and Julie C. Keller, of counsel), for appellees." ], "corrections": "", "head_matter": "DOUGLAS D. DANNEWITZ et al., Plaintiffs-Appellants, v. EQUICREDIT CORPORATION OF AMERICA et al., Defendants-Appellees.\nFirst District (5th Division)\nNo. 1\u201404\u20142132\nOpinion filed November 10, 2005.\nEdelman, Combs, Latturner & Goodwin, L.L.C., of Chicago (Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Tara L. Goodwin, and Jeremy E Monteiro, of counsel), for appellants.\nDykema, Gossett, Rooks & Pitts, L.L.C., of Chicago (Arthur F. Radke, Ralph T. Wutscher, and Julie C. Keller, of counsel), for appellees." }, "file_name": "0082-01", "first_page_order": 100, "last_page_order": 105 }