Commercial Banking, Collections, and Bankruptcy

House Bill 2231

Topic: 
Lyft and Uber

(Gong-Gershowitz, D-Glenview; Martwick, D-Chicago) amends the Transportation Network Providers Act (Lyft and Uber) to delete statutory language that provides that TNCs are not common carriers, contract carriers, or motor carriers on or after January 1, 2024. Passed both chambers. 

Senate Bill 1748

Topic: 
Civil litigation

(Halpin, D-Chicago; Williams, D-Chicago) amends the Code of Civil Procedure to do two things. (1) If a defendant seeks an examination of the plaintiff during discovery, it allows the plaintiff to have an additional person to be present and video record the examination. (2) Amends the statute giving a preference for a trial setting by lowering the age of a party from 70 to 67 and includes the surviving spouse or next of kin in a wrongful death action. It requires the case to commence within one year of the motion granting the preference unless the court finds that the moving party does not have a substantial interest in the case as a whole. If any new party is added to a lawsuit after the trial setting, any party may move the court to reschedule the trial to commence up to one year after the date a new defendant appeared and answered the complaint or up to one year after the date a plaintiff was added to the lawsuit. The court shall (now, may) grant a motion for preference in setting for trial if a party or, in the case of a wrongful death action, the surviving spouse or next of kin, shows substantial physical or financial hardship or alternatively shows good cause that the interests of justice will be served by granting a preference in setting for trial within one year of the hearing on the motion. Allows any party to move for a trial continuance of up to six months for good cause shown. Applies to actions commenced or pending on or after it becomes law. Passed both chambers. 

House Bill 2624

Topic: 
Court documents and accessibility

(Syed, D-Palatine; Ram Villivalam, D-Chicago) creates the Court Record and Document Accessibility Act to harmonize the statutes with Supreme Court Rule 8. It clarifies definitions and standardizes access to court records if there are restrictions on its distribution. Passed both chambers. 

House Bill 2098

Topic: 
Amends the Residential Real Property Disclosure Act

(Tarver, D-Chicago; Sims, D-Chicago) provides that "seller" does not include a beneficiary who has both (1) never occupied the residential real property and (2) never had management responsibility for the residential real property. Passed both chambers. 

House Bill 1268

Topic: 
Probate

(Collins, D-Chicago; Johnson, D-Waukegan) allows a person who has been convicted of a felony to act as an executor if: (1) the testator names that person as an executor and expressly acknowledges in the will that the testator is aware that the person has been convicted of a felony before the execution of the will or codicil; (2) the person is not prohibited by law from receiving a share of the testator’s estate; (3) the person was not previously convicted of financial exploitation of an elderly person or a person with a disability, financial identity theft, or a similar crime in another state or in federal court; and (4) the person is not incarcerated in a state or federal prison. Passed both chambers. 

House Bill 3314

Topic: 
Consumer contracts

(Guzzardi, D-Chicago; Halpin, D-Rock Island) creates the Consumer Contract Reciprocal Attorney’s Fees Act. If a consumer contract allows for the recovery of attorney’s fees in an action brought by a “commercial party,” the court may award reasonable attorney’s fees to the defendant if he or she prevails in the action. This bill applies to any action filed on or after Jan. 1, 2024. Exemptions include if the commercial party doesn’t request attorney’s fees in its complaint or each party to the consumer contract was represented by counsel in the negotiation of the consumer contract. Passed both chambers. 

Paloian v. Dordevic

Federal 7th Circuit Court
Civil Court
Bankruptcy
Citation
Case Number: 
No. 22-2500
Decision Date: 
April 27, 2023
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Record contained sufficient evidence to support Bankruptcy Ct.’s order directing defendant-debtor’s mother to turnover to debtor’s bankruptcy estate fifty-percent of stake in company, where Bankruptcy Ct. could properly find that defendant served as debtor’s nominee with respect to said stake, and that equitable ownership of said stake belonged to debtor. While defendant argued that either she had significant financial stake in said company or that she was nominee on behalf of third-party who had significant financial stake in said company, record showed that debtor had invested $773,250 in company that was used, in conjunction with $1,000,000 construction loan in startup costs for said company. Moreover, there was no documentary support for defendant’s claims, and testimony from other partner in company also did not support defendant’s claims. Record also showed that debtor had placed stake in company in defendant’s name in anticipation of collection activities against her.

Sullivan v. Flora, Inc.

Federal 7th Circuit Court
Civil Court
Copyrights
Citation
Case Number: 
No. 22-2386
Decision Date: 
March 31, 2023
Federal District: 
W.D. Wisc.
Holding: 
Affirmed and reversed in part and remanded

Dist. Ct. erred in granting plaintiff’s motion for summary judgment in proceeding to determine damages in plaintiff’s copyright infringement action, where Dist. Ct. granted plaintiff’s request for 33 separate statutory damages awards that reflected plaintiff’s claim that defendant had infringed on copyrights covering 33 illustrations. Instant proceedings was result of Ct. of Appeals remand, after Ct. of Appeals held that record contained insufficient evidence under independent economic value test to determine whether plaintiff was entitled to 33 separate statutory awards or was entitled to some lower number of awards. Dist. Ct. erred in: (1) finding that defendant had waived issue as to whether certain illustrations would not support finding of separate statutory damages award; and (2) ruling on summary judgment based on same record that Ct. of Appeals had previously found was insufficient to make such determination. Dist. Ct. also erred in granting plaintiff’s summary judgment motion, where there was some evidence indicating that: (1) plaintiff had produced and distributed instant illustrations as two collective products and not separate illustrations; (2) plaintiff registered illustrations in only two copyrights; and (3) certain illustrations were used only as solid color background textures, which might not have any independent economic value.

Dordevic v. Layng

Federal 7th Circuit Court
Civil Court
Bankruptcy
Citation
Case Number: 
No. 22-2501
Decision Date: 
March 9, 2023
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Bankruptcy Ct. did not err in directing counsel for debtor to completely disgorge all of his attorney’s fees received from debtor as sanction for counsel’s failure to file updated Rule 2016 disclosure statement of fees that debtor had paid to counsel. Record showed that: (1) debtor’s counsel originally reported in his Rule 2016 disclose statement that debtor had paid him $5,000 in attorney’s fees, while U.S. Trustee learned through discovery that debtor had actually paid counsel $21,500; and (2) counsel failed to file updated 2016 statement in spite of three reminders by Trustee to do so. Trustee thereafter filed motion to have counsel forfeit all fees paid by debtor, and Bankruptcy Ct. granted said motion. District Ct, thereafter affirmed Bankruptcy Ct. order, and Ct. of Appeals affirmed Dist. Ct., after noting that: (1) Rule 2016 statement is due within 14 days of filing bankruptcy petition; (2) attorneys are required to inform Bankruptcy Ct. of any update to information contained in said disclosure statement; and (3) Bankruptcy Ct. could properly discount counsel’s explanation that he was unfamiliar with his obligations under Rule 2016, where counsel had been involved in more than 350 other bankruptcy cases.

Fidelity and Deposit Co. of Maryland v. TRG The Venture Two, LLC

Federal 7th Circuit Court
Civil Court
Bankruptcy
Citation
Case Number: 
No. 22-1724
Decision Date: 
March 3, 2023
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Bankruptcy Ct. did not err in finding creditor in contempt of Bankruptcy Ct.’s Chapter 11 confirmation order and imposing $9.5.million sanction. Record showed that: (1) creditor issued performance bonds to debtor to cover debtor’s promise to develop certain municipal properties and obtained from debtor separate indemnity agreement that bound debtor to reimburse creditor for any losses generated by said bonds; (2) debtor filed for Chapter 11 bankruptcy protection; (3) Bankruptcy Ct. entered into confirmation plan that contained injunction that prevented creditor from seeking payment on claims that creditor had agreed to extinguish; (4) debtor thereafter sold its development interests in municipalities’ land to third-party, which believed that it bought land free and clear of any claims that had been extinguished by bankruptcy plan confirmation order; and (5) as municipalities sued creditor to collect on performance bonds for debtor‘s failure to complete development of said properties, creditor interpleaded third-party in unsuccessful attempt to enforce debtor’s pre-petition indemnity obligations against third-party as debtor’s successor. Bankruptcy Ct. could properly conclude that there was no fair ground of doubt that creditor’s interpleading of third-party amounted to flagrant violation of agreed-to terms of instant confirmation plan. Moreover, pre-petition clams extinguished upon plan confirmation did not spring back into existence upon post-confirmation asset sales.