Elizabeth Greisz v. Household Bank (Illinois), N.A., and Golden Seal Heating & Air Conditioning, Inc.

Citation: 176 F.3d 1012Docket: 98-3635

Court: Court of Appeals for the Seventh Circuit; June 7, 1999; Federal Appellate Court

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Elizabeth Greisz filed a lawsuit against Household Bank and Golden Seal Heating & Air Conditioning under the Truth in Lending Act and Illinois consumer protection laws. The district court denied class action certification and dismissed the suit, citing the incompetence of the plaintiff's attorney, Joseph A. Longo, as the main reason. The court highlighted concerns about the lawyer's ability to adequately represent the class, noting that class actions can be abused, particularly when individual claims are small and oversight of the attorney's conduct is limited. 

The court referenced the requirement under Fed. R. Civ. P. 23(a)(4) for courts to evaluate not only the class representative but also the attorney's competence before certifying a class action. Longo's track record included multiple criticisms from judges, with one describing his complaint as the worst seen in two decades. Issues included improper use of family members as named plaintiffs, untimely appeals, failure to ensure clients could opt out of class actions, forum shopping, unreasonable settlement demands, and a general lack of procedural knowledge, all leading to unsuccessful outcomes in his cases.

In Urso v. United States, 72 F.3d 59 (7th Cir. 1995), the court criticized the actions of a legal representative on various grounds. In Estate of Henry v. Folk, 285 Ill.App.3d 262, the court noted improper service of process by leaving summons with a saloon customer. In a class action, the representative sent a nonlawyer for oral argument and attempted to jail opposing counsel for alleged discovery abuses. Acting pro se in a consumer protection case, he lost and was sanctioned for incompetence (Longo v. AAA-Michigan, 201 Ill.App.3d 543; Longo v. Michel, 1993 WL 476967; Longo v. Glime, 1991 WL 32356). The district judge correctly denied class certification and dismissed the suit due to the representative's history. 

The named plaintiff, after purchasing a dual furnace-air conditioner for $5,080, claimed it should be $4,010 and refused to pay, leading to this lawsuit. The court denied class certification and granted summary judgment for defendants, except for part of a Truth in Lending claim against Household Bank. The bank offered $1,200 plus costs and fees under Rule 68, but the plaintiff, influenced by Longo, refused. The court dismissed the remaining claims, stating there was no case or controversy since the bank's offer exceeded potential trial damages. The plaintiff alleged a lack of required Truth in Lending disclosures but had no actual damages; thus, her potential recovery was limited to $1,000 plus costs. The bank's offer effectively resolved the dispute, eliminating federal jurisdiction. The court observed that continuing the lawsuit after receiving a settlement offer was unjustified, noting the representative's mistaken belief that pursuing additional fees was beneficial.

A party that successfully wins a lawsuit and secures reasonable attorney's fees cannot claim additional fees if they reject a settlement offer that includes those fees. The rejection of the defendant's offer by Longo led to a loss of both his and Greisz’s potential recovery, amounting to $1,200, and further highlighted Longo's incompetence. Had the bank proposed a settlement before class certification, it could have complicated the lawsuit by potentially eliminating other plaintiffs. However, in this case, the offer came after the court denied class certification, making it an offer of complete relief for Greisz, who could have accepted it without forfeiting her right to appeal the class certification denial.

The other claims against the bank were dismissed correctly, with no additional commentary necessary on those issues. The state law claims failed primarily due to Greisz's inability to demonstrate any actual damages, as emotional distress alone does not satisfy the legal requirements for recovery under Illinois law. The rejection of the Rule 68 offer of judgment consequently dismissed the only potentially valid claim against the bank. Although the offer was limited to Greisz's claims, it did not encompass all her claims, meaning the judge mistakenly dismissed the suit without addressing the merits of the possibly valid claim. Longo failed to contest this point, resulting in a waiver. The court affirmed the lower court’s decision.