A District Court judge in Illinois has denied a motion to dismiss filed by a property management service in a lawsuit claiming it and a collection law firm violated the Fair Debt Collection Practices Act and state law over eviction proceedings that attempted to collect an unauthorized administrative fee.
The background: The case stems from an eviction and collections action filed in Illinois state court related to unpaid condominium assessments. As part of that action, ledgers attached to the eviction complaint included a $200 charge labeled as a “Late Admin Fee – Collections Admin Charge.” The fee was not a late charge tied to assessments, but rather an administrative charge imposed when the account was referred for collection, according to the plaintiff.
- The plaintiff alleged that nothing in the condominium declaration or bylaws authorized this type of administrative or collection-related fee to be passed on to a unit owner. Despite that, the fee was included in the amount sought through the eviction process.
- Facing the risk of eviction, the plaintiff ultimately paid the disputed charge along with attorneys’ fees and costs, then filed suit alleging violations of the FDCPA, the Illinois Consumer Fraud and Deceptive Business Practices Act, and unjust enrichment.
- The property management service moved to dismiss, arguing that the plaintiff lacked standing, suffered no actual damages, voluntarily paid the charge, and could not pursue unjust enrichment due to the existence of contractual documents governing the condominium relationship.
The ruling: Judge April M. Perry of the District Court for the Northern District of Illinois rejected each of the defendant’s arguments at this stage of the case.
- First, aleging payment of a debt that was not owed constitutes a concrete injury and confers standing for the plaintiff to sue, Judge Perry ruled, adding that being forced to pay an unauthorized fee under threat of eviction is sufficient.
- Addressing the state consumer fraud claim, the judge found that the alleged payment of an unauthorized fee, along with additional attorneys’ fees and costs, qualified as actual damages. The judge also declined to apply the voluntary payment doctrine at this stage of the proceedings, writing that allegations the plaintiff had “little choice” but to pay due to eviction risk raised factual questions not appropriate for early dismissal.
- The unjust enrichment claim also survived, with Judge Perry finding no express contract between the plaintiff and the property management service that would automatically bar the claim.
