Warning - Collection Scam

We have learned that certain scam artists are using our name and calling individuals to attempt to collect nonexistent obligations.  The calls are coming from area code 872.  We do not collect debts owed by individuals and warn anyone receiving such communications to disregard them and to notify local law enforcement.  We do not contact any individual debtors ever - so if someone is using our name to collect from individuals you can be certain that the caller is involved in a scam.

One of the numbers used was 872-213-9369.

Sadly, this scam has continued.  Now victims are being contacted by an edwardclinton@live.com.  This is not us and we do not collect from individuals or make any threats.

We have reported this to various law enforcement agencies to no avail.

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Seventh Circuit Construes Written Contract With Confusing Handwritten Amendment

QUALITY OIL, INCORPORATED v. KELLEY PARTNERS, INCORPORATED, Court of Appeals, 7th Circuit 2011 - Google Scholar:

This is a classic case of contract interpretation. Lawyers often become alarmed when they learn that their clients have made handwritten amendments to their written contracts. Here Quality Oil and Kelley Partners entered into a transaction under which Quality loaned Kelley $150,000. The loan was to be forgiven over a five year period as Kelley purchased certain motor oil products from Quality.

The confusion was created when the clients added a handwritten clause to the Agreement as follows:

"On July 1, 2003, Quality Oil, an Indiana auto-lubricants distributor for Exxon Mobil Corp., and Kelley Partners, an independent operator of automotive quick-lube facilities in Illinois, entered into a "Product Payback Loan and Supply Agreement." Under the Agreement, which by its terms is governed by Indiana law, Quality Oil agreed to loan Kelley Partners $150,000 "at no cost," and Kelley Partners in turn agreed to purchase its motoroil requirements from Quality Oil.^[1] Specifically, in Paragraph 4 of the Agreement, Kelley Partners agreed to

purchase from Quality Oil . . . at least eighty-five percent (85%) of [Kelley Partners'] requirements of motor oils during the term of this Agreement. [Kelley Partners] further agrees to purchase not less than two hundred twenty-five thousand (225,000) gallons of Mobil motor oil and 225,000 Mobil branded filters within 60 months from the date hereof.

Immediately following this language in the typewritten contract is the handwritten notation that is central to Kelley Partners' appeal. It states as follows: "This Supply Agreement will terminate after 225,000 gallons and 225,000 filters of Exxon/Mobil is purchased or 60 months, whichever comes first." The president of Kelley Partners and owner/general manager of Quality Oil initialed this handwritten provision and signed the Agreement in two places."

Quality Oil sued Kelley and the district court entered summary judgment in favor of Quality Oil. The Seventh Circuit affirmed and explained its reasoning as follows:

"The same is true of Kelley Partners' interpretation of the contract at issue here. It would make no commercial sense for Quality Oil to forgive its loan to Kelley Partners after five years regardless of how much motoroil product Kelley Partners purchased. This was a loan and supply contract, after all. Under Paragraph 4 of the Agreement, Kelley Partners bound itself to purchase at least 85% of its motor-oil needs from Quality Oil during the term of the Agreement. Paragraph 6 and Exhibit A imposed a Premature Termination Penalty on any early termination, and Paragraph 7 required that if Kelley Partners sold its business, it was to assign its obligations to its successor or remain liable under the Agreement. Reading the contract as a whole and harmonizing all of its provisions shows that Kelley Partners' literal interpretation of the handwritten provision is commercially absurd."

Kelley argued that the contract expired in 60 months so it had no duty to repay the loan. The Seventh Circuit held that this was incorrect and would make the contract commercially unreasonable.

Comment: cases like this one cause corporate lawyers to tear their hair out - but the Court did an excellent job of deciphering the true meaning of the contract.

Edward X. Clinton, Jr.

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The Necessary Steps To Collect a Business Debt

1. Before selling any goods or rendering a service, make the customer/debtor sign a written agreement, preferably one providing that the customer must pay legal fees if he does not pay.

2. Deliver the goods or service and make sure that the debtor acknowledges the receipt of same.

3. Invoice the debtor.

4. Send a reminder invoice.

5. Send emails or written correspondence to the debtor that support your position that the debtor accepted the goods and/or services.

6. Try to negotiate a resolution with the debtor, including offering a payment plan.

7. Initiate collection action.

By far the most important step is to document the transaction in writing so that the debtor cannot claim that the goods and/or services were not delivered.

Edward X. Clinton, Jr.

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Asset Exchange II, LLC v. First Choice Bank, Illinois Appellate Court

In this recent decision of the Illinois Appellate Court for the First District, the Court rejected a claim by a borrower that the 365/360 interest calculation method violated the Illinois Interest Act. According to the Court, Asset Exchange is a limited liability company owned by "two sophisticated businessmen." On December 14, 2007, Asset Exchange entered into a commercial loan agreement with the Defendant Bank whereby the Bank agreed to loan $1,250,000 to Asset Exchange. The interest rate was 8.25%, computed on a 365/360 basis. The loan states: "'the annual interest rate for this Note is computed on a 365/360 basis; that is by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.'" Plaintiff claimed that, by using a year of less than 365 days, the Bank was wrongfully using a definition of "year" that was in violation of the Illinois Interest Act and thus charged and received more interest than was due. The Bank moved to dismiss on the ground that the Interest Act does not apply to commercial loans. The trial court agreed and the Appellate Court affirmed. The Appellate Court noted that prior Illinois decisions have held that the Interest Act does not apply to corporations. See Computer Sales Corp. v. Rousonelos Farms, Inc., 190 Ill. App. 3d 388, 392 (1989). The Appellate Court rejected the breach of contract claim because (a) the terms of the Note were unambiguous and (b) the Bank complied with the terms of the Note. Comment: this is a victory for Banks as the 365/360 interest calculation method is commonly used in commercial transactions. Edward X. Clinton, Jr.

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