Blair v. Supportkids, Inc.

222 F. Supp. 2d 1038, 2002 U.S. Dist. LEXIS 17968, 2002 WL 31115601
District Court, N.D. Illinois·Decided September 23, 2002·No. 02 C 0632·Published·Cited by 1 cases

Opinion

MEMORANDUM OPINION AND ORDER

ST. EVE, District Judge.

Walter Blair and John Gray filed suit against Supportkids, Inc., d/b/a Child Support Enforcement (“CSE”) and Richard “Casey” Hoffman, alleging that Defen *1040 dants maliciously and fraudulently sent Plaintiffs’ employers simulated order/notices requiring income withholding pursuant to the Illinois Income Withholding for Support Act, 750 ILCS 28/1 et seq. Defendants have moved to dismiss the complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (R. 8-1.) For the reasons set forth below, Defendants’ motion to dismiss is denied.

BACKGROUND

CSE is a child support collection agency that purports to represent parents owed child support obligations. (R. 24-1, Compl. at ¶ 9.) 1 CSE enters into contingent fee arrangements with individuals owed child support and attempts to collect back child support on their behalf. (Id. at ¶ 10.) Richard “Casey” Hoffman is the chief executive officer of CSE. (Id. at ¶ 8.)

Plaintiff Walter Blair was divorced in 1993. Blair contends that under the divorce decree his support obligations terminated on December 9, 1998. (R. 24-1, Compl. at ¶¶ 12, 14.) In May 2001, however, Defendants sent to Blair’s employer in Illinois a document entitled “Illinois Department of Public Aid, Division of Child Support, Order/Notice to Withhold Income for Child Support,” indicating that Blair owed $85,376.56 in child support originating from his 1993 divorce. (Id. at ¶ 12.) Blair contends that the Illinois Department of Public Aid did not authorize and had no knowledge of the order/notice. (Id. at ¶ 15.) He subsequently retained counsel to quash the order/notice. (Id. at ¶ 19.) Before the order/notice was quashed, however, Blair’s employer deducted $358 from Blair’s paycheck and sent it to CSE. (Id. at ¶ 20.)

Plaintiff John Gray was divorced in 1971. Under a divorce decree, Gray was obligated to provide $60 per week to support three children. (R. 24-1, Compl. at ¶¶ 22-23.) Gray contends that the 1971 divorce decree was informally modified and that the divorce decree was never revived. (Id. at ¶¶ 24, 26.) In October 2000, however, Defendants sent to Gray’s employer in Illinois an “Order/Notice to Withhold Income for Child Support,” a “Computation of Child Support Arrears” indicating that Gray owed $375,014.46 in child support originating from his 1971 divorce, and a one-page fax directing Gray’s employer to begin wage withholding. (Id. at ¶ 33.) After receiving these documents, Gray’s employer deducted wages in the amount of $250.00 from his paycheck. (Id. at ¶ 38). Defendants also placed liens on Gray’s home and tied up Gray’s savings-investment plan. (Id. at ¶ 36.) 2

On January 25, 2002, Blair and Gray filed suit, alleging that Defendants sent Plaintiffs’ employers simulated order/notices and related communications that fraudulently and maliciously directed the employers to withhold wages. (R. 24-1, Compl. at ¶¶ 41-51.) Plaintiffs argue that Defendants have no right to withhold wages because under Illinois law only the appropriate public agency, the obligee, or an attorney licensed to practice law in Illinois can file the order/notices. (Id. at ¶¶ 45^46.) Plaintiffs seek a declaratory judgment that CSE is not entitled to col *1041 lect $460,391.02 from Plaintiffs. (Id. at ¶¶ 52-53.) In addition, Plaintiffs seek compensatory damages, punitive damages, costs of suit, and other relief for fraud (Count II), defamation (Count III), tor-tious interference with a contract (Count IV), unlicensed practice of law (Count V), and violation of the Illinois Collection Agency Act (Count VI). (Id. at ¶¶ 54-112.) Plaintiffs assert Counts I-VI against CSE, and Counts II, IV, V and VI against Hoffman.

On March 22, 2002, Defendants moved to dismiss Plaintiffs’ Complaint. Defendants argue that: (1) the order/notice form used is proper and Defendants are authorized to issue it; (2) CSE is not engaged in the unlicensed practice of law and Plaintiffs have no standing to assert such a claim; (3) Plaintiffs have failed to properly plead fraud; (4) Plaintiffs may not claim defamation because all statements made in the orders/notices were true, and if they were not true, Defendants were protected by a qualified privilege; (5) there was no tortious interference with a contract; (6) the Illinois Collection Agency Act does not apply to CSE; and (7) the Rooker-Feld-man doctrine precludes jurisdiction over Blair’s claims.

LEGAL STANDARD

A motion to dismiss tests the sufficiency of the complaint, not the merits of the suit. Autry v. Northwest Premium Servs., Inc., 144 F.3d 1037, 1039 (7th Cir.1998). When considering a motion to dismiss, the Court views all facts alleged in the complaint, as well as any inferences reasonably drawn from those facts, in the light most favorable to the plaintiff. Doherty v. City of Chicago, 75 F.3d 318, 322 (7th Cir.1996). A complaint will survive a Rule 12(b)(6) motion to dismiss for failure to state a claim unless it appears beyond doubt that the plaintiff cannot prove any set of facts entitling him or her to relief. See Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 432 (7th Cir.1993).

ANALYSIS

I. Declaratory Judgment (Count I)

Plaintiffs seek a declaratory judgement that CSE is not entitled to collect any alleged child support payments from them. Defendants argue that the Court should dismiss this count because federal law authorizes them to issue an order/notice for income withholding to Plaintiffs’ employers. The parties disagree over the appropriate governing law.

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Blair v. Supportkids, Inc., 222 F. Supp. 2d 1038, 2002 U.S. Dist. LEXIS 17968, 2002 WL 31115601 (N.D. Ill. 2002).

222 F. Supp. 2d 1038 (Blair v. Supportkids, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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