Commercial Banking, Collections, and Bankruptcy

IP of A West 86th Street 1 LLC v. Morgan Stanley Mortgage Capital Holdings, LLC

Federal 7th Circuit Court
IP of A West 86th Street 1 LLC v. Morgan Stanley Mortgage Capital Holdings, LLC
Civil Court
Contract
Citation
Case Number: 
No. 11-2891
Decision Date: 
June 11, 2012
Federal District: 
S.D. Ind., Indianapolis Div.
Holding: 
Affirmed
Dist. Ct. did not err in granting defendant’s motion for summary judgment in action alleging that defendant breached loan agreement with plaintiff calling for defendant to maintain certain escrow funds where defendant sold its interest in said agreement to third-party entity that was controlled by agent of plaintiff (who had negotiated original agreement with defendant on behalf of plaintiff), and where defendant had allowed agent to apply said escrow funds to lower purchase price of assignment. Terms of loan agreement permitted defendant to transfer its interest in agreement to third-party and permitted agent to act on behalf of plaintiff when granting consent for defendant to transfer its interest in loan agreement to third-party. Fact that third-party failed to fulfill its obligation to maintain escrow funds on behalf of plaintiff as required under original loan agreement did not render defendant’s assignment anything other than assignment.

Senate Bill 3764

Topic: 
Article 9 of the UCC
(Harmon, D-Oak Park; Zalewski, D-Chicago) conforms Article 9 of the Uniform Commercial Code to the 2010 amendments as proposed by the Uniform Law Commission. Passed both chambers. (See the June Illinois Bar Journal article by Michelle Nijm that discusses this bill in more detail.)
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House Bill 4665

Topic: 
Residential construction and radon
(McAsey, D-Lockport; Collins, D-Chicago) creates the Radon Resistant Construction Act. It requires all new residential construction include passive radon resistant construction. “New residential construction” is any original construction of a single-family home or a dwelling containing two or fewer apartments, condominiums, or townhouse. “Passive radon resistant construction” includes an installed pipe that relies solely on the convective flow of air upward for soil-gas depressurization and may consist of multiple pipes routed through conditioned space from below the foundation to above the roof. Passed both chambers.
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Senate Bill 3792

Topic: 
Mechanics Lien Act
(Althoff, R-Crystal Lake; Tyron, R-Crystal Lake) requires work to be done or materials furnished within three years for residential property and five years for any other kind of property. Senate Bill 3792 sunsets on January 1, 2016, and the limitation then reverts to three years for any kind of property at that time. Passed both chambers.
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House Bill 5434

Topic: 
Post-judgment collections
(Williams, D-Chicago; Haine, D-Alton) makes three changes to citations and body attachments. (1) Requires a citation to be served by personal service or abode service as provided in Supreme Court Rule 105 attaching a copy of the statutory Income and Asset Form created by this bill. (2) Prohibits a payment order from being issued against a person unless the form was served on the debtor, the debtor has an opportunity to assert exemptions, and the payments are from nonexempt sources. (3) No order of body attachment or other civil order for the incarceration may be issued for a respondent on a charge of indirect civil contempt unless the respondent has first had an opportunity to appear in court to answer after personal service or abode service of notice as provided in Section 2-203. Exempts enforcement for a violation of a municipal ordinance. Passed both chambers. (See the June Illinois Bar Journal article by Adam Lasker that discusses this bill in more detail.)
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Puritan Finance v. Bechstein Construction

Puritan Finance v. Bechstein Construction
Illinois Appellate Court
Civil Court
Collections
Citation
Case Number: 
2012 IL App (1st) 112261
Decision Date: 
Monday, June 4, 2012
District: 
1st Dist.
Division/County: 
Cook Co.,1st Div.
Holding: 
Affirmed.
Justice: 
HOFFMAN
A claim does not accrue under Section 9-404(a)(2) of the UCC until a cause of action has accrued. Even though defendant construction company had performed services for cartage company prior to its assignment of its accounts receivable, no cause of action had accrued against cartage company, and thus defendant could not rely on those services as basis for setoff against plaintiff assignee's claim. (HALL and KARNEZIS, concurring.)

Dearborn Maple Venture v. SCI Illinois Services

Dearborn Maple Venture v. SCI Illinois Services
Illinois Appellate Court
Civil Court
Collateral Estoppel
Citation
Case Number: 
2012 IL App (1st) 103513
Decision Date: 
Tuesday, April 24, 2012
District: 
1st Dist.
Division/County: 
Cook Co., 2d Div.
Holding: 
Affirmed in part and vacated in part; remanded with directions.
Justice: 
CUNNINGHAM
(Modified upon denial of rehearing 5/29/12.) Dispute over earnest money contract in redevelopment of property.for construction of new funeral home and high-rise condominum. Court entered judgment, after bench trial, for funeral home company and against developers for $1.757 million. Collateral estoppel inapplicable, as developers failed to show with "clarity and certainty" that arbitration award had already determined issue in suit of whether Plaintiff was entitled to additional payment under earnest money contract. Parties had three separate agreements, each with its own purpose, although executed in connection with same business deal, and arbitration award did not preclude suit. Continuity exception applies to circumvent general rule of successor corporation's nonliability, as two corporations had sufficient common identity of ownership and management. (CONNORS and HARRIS, concurring.)

House Bill 5823

Topic: 
Health Care Services Lien Act
(Thapedi, D-Chicago; Mulroe, D-Chicago) does three things to the Health Care Services Lien Act. (1) Proportionately reduces subrogation claims or other claims of right of reimbursement for medical expenses in the same proportion that the claimant’s recovery is reduced because of comparative fault or uncollectability of the full value of the full claim because of limited liability insurance or from any other cause. (2) Requires a party asserting a subrogation claim or other right of reimbursement to bear the pro rata share of the claimant’s attorney’s fees and litigation expenses. (3) Allows petitions to adjudicate rights under this Act to be served on interested adverse parties by personal service, substitute service, or registered or certified mail. House Bill 5823 exempts any health-care provider's liens and work comp, UIM, and UM cases. This bill may be voted on today by the House Judiciary Committee I and the House.
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Ross Advertising v. Heartland Bank and Trust Company

Ross Advertising v. Heartland Bank and Trust Company
Illinois Appellate Court
Civil Court
Res Judicata
Citation
Case Number: 
2012 IL App (3d) 110200
Decision Date: 
Tuesday, May 22, 2012
District: 
3d Dist.
Division/County: 
Will Co.
Holding: 
Affirmed.
Justice: 
HOLDRIDGE
Advertising company and its guarantors sued bank which had issued revolving line of credit for one year secured by promissory note, alleging breach of contract, breach of implied duty of good and fair dealing, and tortious interference with contract and business relations. Court properly entered summary judgment for bank, as all claims barred by res judicata or collateral estoppel. Final judgments were entered by courts of competent jurisdictions. Same cause of action was litigated in prior cases filed by bank against Plaintiffs. Under transactional test, res judicata applies, as claims asserted by Plaintiff in both cases arise from same core of operative facts: same loan transaction between same parties (or their privies) and same actions taken by Defendants (bank and its loan officer). Breach of implied covenant of good faith and fair dealing is not a recognized cause of action in Illinois (CARTER and WRIGHT, concurring.)

Van Straaten v. Shell Oil Products Co., LLC

Federal 7th Circuit Court
Van Straaten v. Shell Oil Products Co., LLC
Civil Court
Fair and Accurate Credit Transactions Act
Citation
Case Number: 
No. 11-8031
Decision Date: 
April 18, 2012
Federal District: 
N.D. Ill., E. Div.
Holding: 
Reversed and remanded
Dist. Ct. erred in finding that defendant violated provisions of Fair and Accurate Credit Transactions Act (Act) when it printed on receipts at its gas pumps last four digits of what defendant called customer's account number as opposed to last four digits of primary account number contained on magnetic strip of credit card. While Act mandates that defendant not display more than last 5 digits of "card number" when printing receipts, Act does not define "card number," and plaintiffs conceded that digits defendant chose to print did not leave them at risk for identity theft. Moreover, plaintiff did not establish that defendant's practice of printing last four digits of account number constituted willful violation of Act where it was unclear that customer account number was not relevant number for purpose of enforcement of Act.