Commercial Banking, Collections, and Bankruptcy

Public Act 102-6

Topic: 
Prejudgment interest

(Harmon, D-Oak Park; Hoffman, D-Belleville) requires prejudgment interest at the rate of 6% from the date the action is filed in personal injury or wrongful death cases. Exempts punitive damages, sanctions, statutory attorney’s fees, and statutory costs and exempts the State and other governmental entities from being assessed. Prejudgment interest is applicable only to the difference between the judgment and the highest rejected offer (within the applicable time frames). Prejudgment interest may not be added if the judgment is equal to or less than the amount of the highest written settlement made by the defendant not accepted or rejected by the plaintiff within 90 days of the offer or rejection. For any personal injury or wrongful death occurring before July 1, 2021, the prejudgment interest shall begin to accrue on the later of July 1, 2021 or the date the action is filed. Effective July 1, 2021.

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Senate Bill 642

Topic: 
Judicial Districts Act of 2021

(Harmon, D-Oak Park; Tarver, D-Chicago creates the Judicial Districts Act of 2021 to create new appellate and supreme court districts outside of Cook County. The judicial circuits are left intact but may be moved to a new judicial district. The appellate courthouses remain where they currently sit to continue to act as the appellate courthouse for that district.  

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Senate Bill 642

Topic: 
Judicial Districts Act of 2021

(Harmon, D-Oak Park; Tarver, D-Chicago creates the Judicial Districts Act of 2021 to create new appellate and supreme court districts outside of Cook County. The judicial circuits are left intact but may be moved to a new judicial district. The appellate courthouses remain where they currently sit to continue to act as the appellate courthouse for that district.  

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Diebel v. Hoeg

Federal 7th Circuit Court
Diebel v. Hoeg
Civil Court
Statute of Limitations
Citation
Case Number: 
No. 20-3378
Decision Date: 
May 25, 2021
Federal District: 
S.D. Ind., Indianapolis Div.
Holding: 
Affirmed

Dist. Ct. did not err in dismissing on limitations grounds plaintiff's lawsuit seeking declaration that parties' 1992 settlement agreement allowed plaintiff to retain shares of stock that plaintiff had owned in closely-held corporation. Under Indiana law, plaintiff had two years to bring instant lawsuit, and record showed that: (1) corporation had cancelled plaintiff's shares of stock in 1992; (2) at some point between 1992 and 1998, plaintiff stopped identifying himself as one of corporation's investors who was entitled to corporation's profits for income tax purposes; and (3) after January of 1998, plaintiff never tried to learn from corporation how much income he should report and otherwise did not pay any federal tax on any of corporation's profits. At some point after 2017, instant lawsuit was filed, and Dist. Ct. could properly find that plaintiff's cause of action accrued no later than 1998. Moreover, Ct. rejected plaintiff's contention that corporation's refusal to recognize him as shareholder was continuing wrong, such that he could bring instant lawsuit at any time.

Triumph Community Bank v. IRED Elmhurst LLC

Triumph Community Bank v. IRED Elmhurst LLC
Illinois Appellate Court
Civil Court
Citation to Discover Assets
Citation
Case Number: 
2021 IL App (2d) 200108
Decision Date: 
Thursday, April 22, 2021
District: 
2d Dist.
Division/County: 
Du Page Co.
Holding: 
Affirmed.
Justice: 
SCHOSTOK

Commercial mortgage foreclosure case against defendants, the mortgagor (loaned $11.62 million by Plaintiff) and 2 guarantors. Court entered judgment against guarantors. Plaintiff, as assignee of bank, successor interest to FDIC, solely as receiver for bank, issued citations to discover assets upon the guarantors. Plaintiff then filed motion for judgment against 2 corporate officers of guarantors for violating citations, and court granted the motion. Mortgage servicer filed petition to intervene, which court denied. Once the funds were transferred into guarantor's operating accounts, the funds "belonged" to them within meaning fo section 2-1402(f)(1) of Code of Civil Procedure, and transfer of those funds out of operating accounts was a violation of the citations. Under Rule 277(h), trial court had discretion as to nature of sanction to impose against corporate officers for violating the restraining provision and a finding of contempt was not a prerequisite to imposing a sanction. Trial court terminated citations after it entered judgment against corporate officers, which appellate court affirmed. Mortgage servicer's appeal is thus moot, as there is no longer a supplementary proceeding in which to intervene. (BRIDGES and ZENOFF, concurring.)

Rexing Quality Eggs v. Rembrandt Enterprises, Inc.

Federal 7th Circuit Court
Rexing Quality Eggs v. Rembrandt Enterprises, Inc.
Civil Court
Damages
Citation
Case Number: 
Nos. 20-1726 & 20-1727 Cons.
Decision Date: 
April 22, 2021
Federal District: 
S.D. Ind., Evansville Div.
Holding: 
Affirmed and reversed in part and remanded in part

In action seeking declaration that plaintiff was excused from its obligation to purchase eggs under contract it had with defendant, Dist. Ct. did not err in granting  summary judgment on defendant's counterclaim seeking damages for plaintiff's repudiation of contract based on defendant's theory of damages under Iowa Commercial Code, section 554.2706 that pertained to resale of eggs that plaintiff should have purchased from defendant, where defendant sold eggs at price that was lower than what defendant would have received under contract. Ct. rejected plaintiff's contention that defendant could not use resale remedy, where eggs at issue under contract never came into existence, since: (1) Iowa Code section 554.2706(2) explicitly makes resale remedy available to sellers, even when goods had not come into existence at time of breach; and (2) question as to whether defendant acted in commercially reasonable manner following plaintiff's repudiation of contract was resolved in defendant's favor by jury, and plaintiff had not otherwise challenged jury's finding on appeal. Also, plaintiff's argument that jury lacked evidence to calculate defendant's damages based on market price was waived, where plaintiff failed to bring timely post-verdict motion challenging jury's verdict. Too, Dist. Ct. erred in denying defendant's request for pre-judgment interest at rate set forth in contract, plus attorney's fees, even though Dist. Ct. determined that interest rate set forth in contract violated Iowa's usury law, where Business Credit Exception under Iowa Code section 535.2(2)(a)(5) to usury law applied to interest rates set forth in instant contract that essentially involved extension of credit arising out of plaintiff's failure to pay amounts set forth in invoices.

Wisconsin Central Ltd. v. Soo Line Railroad Co.

Federal 7th Circuit Court
Wisconsin Central Ltd. v. Soo Line Railroad Co.
Civil Court
Contracts
Citation
Case Number: 
No. 19-3129
Decision Date: 
March 31, 2021
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Dist. Ct. did not err in granting defendant-railroad's motion for summary judgment in plaintiff-railroad's action, seeking indemnification for environmental cleanup expenses associated with property that plaintiff had purchased from defendant, where both parties had entered into settlement agreement with third-party and EPA that called for both parties to share in payment of said costs. Language in purchase agreement called for plaintiff to pay all environmental costs associated with property if no claim to said costs had been lodged within 10 years of date of purchase, and record showed that neither third-party, EPA or state agency asserted "claim" (as that term is understood under Minnesota law) by filing lawsuit or initiating agency action within applicable 10-year period. Moreover, indemnification clause in purchase agreement covered all claims for environmental matters relating to defendant's ownership of property, and claims which instant parties settled with EPA and third-party all arose out of dumping waste on subject property or from other actions taken by defendant's predecessors in support of operation of defendant's railroad lines on said property. As such, plaintiff was responsible for all environmental costs contained in settlement agreement.

Zurich American Ins. Co. v. Ocwen Financial Corp.

Federal 7th Circuit Court
Zurich American Ins. Co. v. Ocwen Financial Corp.
Civil Court
Insurance
Citation
Case Number: 
No. 19-3052
Decision Date: 
March 12, 2021
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Dist. Ct. did not err in entering judgment in favor of plaintiff-insurance company in action seeking declaration that it had no duty to defend defendant-insured debt collector in underlying claim filed by debtor, who alleged that defendant violated Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), and related common-law actions by attempting to collect on mortgage loan that had been discharged in bankruptcy by making 58 calls to debtor's cell-phone. Debtor's action was not covered by policy that contained exclusions for actions under TCPA, as well as for underlying conduct that formed basis of violation of enumerated laws, including debtor's FDCPA claim. In this regard, underlying  allegations that defendant caused debtor's phone to ring repeatedly with intent to annoy debtor violated FDCPA, which was excluded conduct under instant policy. Also, debtor's underlying complaint that "some or all" of calls made to debtor's cell-phone were accomplished by using one of four ATDS phone systems reinforced notion that debtor was alleging that defendant had violated TCPA.

Senate Bill 72

Topic: 
Electronic Wills and Remote Witnesses Act

(Crowe, D-Maryville) provides that an electronic will shall be executed by the testator or by some person in the testator's presence and at the testator's direction, and attested to in the testator's presence by two or more credible witnesses. Provides for the revocation of an electronic will. Provides that an electronic will is a digital asset and any person or business in possession of an electronic will is a custodian.

Provides that a person may witness any document, other than a will, using audio-video communication between the individual's signing the document and the witness. Provides for remote attestation for a will and methods for determining a signer's or testator's identity.

Provides for the verification of an electronic will when a petition to have an electronic will admitted to probate is filed. Provides for: admission of a paper copy of an electronic will; admission of a will attested to by a witness who is physically present; admission of a will attested to by a remote witness; and admission of a will signed under the Electronic Commerce Security Act.

Provides that nothing prohibits any party from introducing evidence of fraud, forgery, compulsion, or other improper conduct which in the opinion of the court is deemed sufficient to invalidate the will when being admitted. Provides for: formal proof of a will with a remote witness; formal proof of an electronic will; and formal proof of a will witnessed under the Electronic Commerce Security Act.

Senate Bill 72 has just been introduced. 

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Senate Bill 47

Topic: 
Real Property Transfer on Death Instruments

(Barickman, R-Bloomington ) amends the Real Property Transfer on Death Instrument Act to make numerous changes since its enactment in 2012 to reflect practitioners' experience with the original Act. It has just been introduced. The changes are as follows: 

(1) The definition of owner is revised to reflect that only individuals acting in their own personal capacity can execute a TODI.

(2) The term “residential real estate” is replaced throughout the text with the term “real property.” Illinois is the only state to date that limits the availability of a TODI to residential real estate. 

(3) Clarifies that a TODI can transfer the real property to the beneficiary in any form of ownership recognized and valid under state law. 

(4) Clarifies that a TODI can designate the trustee of a trust that may be amended, modified, revoked or terminated after the date the TODI is executed, and a trustee under a will of another individual who has predeceased the owner.

(5) Clarifies that a TODI may not be admitted to probate as the will of the owner or as a codicil to the owner’s will.

(6) Clarifies that a TODI witnessed by only one witness, even if notarized, is not a valid TODI. It also clarifies that the attestation clause language and formalities to be followed in executing the TODI require only “substantial compliance.”

(7) Clarifies that the owner may transfer the real property at any time without regard to the fact a TODI is filed. A transfer of the real property effectively revokes the TODI, not by means of a revocation, but by the doctrine of extinction by ademption.

(8) Regarding the default rules that govern when two or more beneficiaries are designated, Illinois law presumes when property is deeded or transferred to two or more parties, the parties take equal shares as tenants in common and not as joint tenants unless otherwise indicated. Stating the default rule, though perhaps not legally necessary, will avoid a possible ambiguity and clarify the default rule governing lapses and concurrent ownership.

(9) Clarifies that unless waived by the surviving spouse, a TODI is subject to renunciation by the surviving spouse and provides the procedure by which the rights are to be exercised.

(10) Clarifies the currently vague language on the rights of creditors with more specific language borrowed from the Uniform Law Commission but consistent with long-standing Illinois law.

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