Commercial Banking, Collections, and Bankruptcy

In re: Dennis

Federal 7th Circuit Court
In re: Dennis
Civil Court
Bankruptcy
Citation
Case Number: 
Nos. 18-2899 & 18-2952 Cons.
Decision Date: 
June 27, 2019
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Bankruptcy Ct. did not err in finding that overpayments made to debtors arising out of payments made under Illinois Child Care Assistance Program, as well as Supplemental Nutrition Assistance Program, were not domestic support obligations entitled to certain priority in debtors’ Chapter 7 and 13 bankruptcy petitions. Bankruptcy Ct. could properly find that: (1) said debts were general unsecured dischargeable debts; and (2) said debts were not sufficiently akin to alimony, maintenance or support to spouse or children, even though said payments were intended to be used to support debtors’ children. This is so, Ct. concluded, because debtors did not owe govt. money for support payments, and because instant debts merely represent overpayments that debtors were not entitled to, rather than domestic support obligations that debtors had failed to pay.

SelectSun GmbH v. Porter, Inc.

Federal 7th Circuit Court
SelectSun GmbH v. Porter, Inc.
Civil Court
Damages
Citation
Case Number: 
No. 18-3149
Decision Date: 
June 25, 2019
Federal District: 
N.D. Ind., Ft. Wayne Div.
Holding: 
Affirmed

Dist. Ct. did not err in entering judgment in favor of defendant-manufacturer after conducting bench trial on plaintiff-purchaser’s claim that defendant breached its sales contract and breached express and implied warranties, where plaintiff asserted that yacht built by defendant had certain mechanical problems and had exhaust system that failed to meet specifications for European Union certification as required by instant contract. Dist. Ct. could properly conclude that plaintiff failed to prove damages to reasonable certainty on either its breach of contract or breach of warranties claims, where plaintiff sought return of $1 million purchase price plus financing costs, rather than cost of specific damage to yacht or current value of yacht. Also, plaintiff failed to rebut defendant’s evidence that yacht could be made European Union compliant for only $2,000.

House Bill 834

Topic: 
Equal Pay Act of 2003

(Moeller, D-Elgin; Castro, D-Elgin) amends the Equal Pay Act of 2003 to make it unlawful for an employer to require an employee to sign a contract or waiver that would prohibit the employee from disclosing or discussing information about the employee’s wages, salary, benefits, or other compensation. It also makes it unlawful for an employer to seek the wage or salary history, including benefits or other compensation, of a job applicant from any current or former employer with exceptions if it is a matter of public record or if the job applicant is a current employee and is applying for a position with the same current employer. Makes other changes. Sent to the Governor and would take effect 60 days after it becomes law (March 1, 2020). 
 

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In re: Fulton

Federal 7th Circuit Court
In re: Fulton
Civil Court
Bankruptcy
Citation
Case Number: 
Nos. 18-2527 et al. Cons.
Decision Date: 
June 19, 2019
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Dist. Ct. did not err in four consolidated actions in finding that creditor-City of Chicago in instant Chapter 13 bankruptcy petitions violated automatic stay provision contained in section 362(a)(3) of Bankruptcy Code by continuing to hold debtors' vehicles after debtors had filed bankruptcy petitions until debtors paid off accrued parking tickets and impoundment fees. Under Thompson, 566 F.3d 699, creditor must comply with automatic stay provision and return vehicle to debtor upon debtor filing bankruptcy petition. As such, Dist. Ct. could properly order defendant to return vehicles to debtors and then require defendant to seek any protection for their interests in said vehicles within Bankruptcy Code, rather that allow defendant to retain vehicle to pressure debtors to pay off fines and fees to detriment of other creditors. Ct. rejected defendant’s claim that: (1) property seized prior to debtor filing bankruptcy petition is not property of bankruptcy estate; (2) instant stay provision contemplates debtor filing turnover action to retrieve his or her vehicle; (3) under section 363(a)(3), passive retention of vehicle is not “act” of control over vehicle; and (4) without retaining possession of vehicle to protect its interests, defendant was helpless to prevent loss or destruction of vehicle.

In re: Wade

Federal 7th Circuit Court
In re: Wade
Civil Court
Appellate Procedure
Citation
Case Number: 
No. 18-2564
Decision Date: 
June 14, 2019
Federal District: 
N.D. Ill., E. Div.
Holding: 
Appeal dismissed

Ct. of Appeals dismissed debtor’s interlocutory appeal from Bankruptcy Ct. order that denied their motion for sanctions against law firm that had filed lien on their home during pendency of their Chapter 13 bankruptcy petition, where debtors alleged that filing of said lien violated automatic stay provisions of 11 USC section 362(a). Record showed that: (1) debtors had filed similar bankruptcy petition that they voluntarily dismissed two months prior to filing instant bankruptcy petition; and (2) Bankruptcy Ct. denied sanctions request, since, under 11 USC section 362(c)(3), automatic stay terminated 30 days after filing of instant bankruptcy petition, where debtors’ prior petition had been pending within preceding year. Moreover, although Bankruptcy Ct had granted debtors’ request to certify Bankruptcy Ct.'s order for direct appeal to Ct. of Appeals under 11 USC section 158(d)(2)(A), instant appeal required dismissal because debtors had failed to file petition for permission to appeal said order under Rule 8006(g) of Federal Rules of Bankruptcy Procedure, which was “mandatory” claim-processing rule that had to be enforced when invoked by instant creditor.

Senate Bill 1134

Topic: 
Foreclosure service by publication

(Harmon, D-Oak Park; Bristow, D-Alton) allows service by publication for foreclosure if the defendant resides outside of or has left the State, on due inquiry cannot be found, is concealed within the State so that process cannot be served upon him or her, or that the place of residence of the defendant cannot be ascertained. If the defendant’s residence is known, that must be alleged in the plaintiff’s affidavit seeking service by publication. Publication must be made in some newspaper published in the county in which the action is pending or, under certain circumstances, in a newspaper published in an adjoining county. Requires the clerk to send a copy by mail addressed to each defendant whose place of residence is stated in the affidavit within 10 days of the first publication of the notice. 

Passed both chambers. Effective January 1, 2020 if the Governor signs the bill into law. 

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House Bill 2287

Topic: 
Financial crimes

(Gabel, D-Evanston; Fine, D-Glenview) allows a civil action to be commenced within 10 years of the last act committed in furtherance of the crime for an action arising out of theft of property exceeding $100,000 in value; identity theft; aggravated identity theft; financial exploitation of an elderly person or a person with a disability; or other or any offense set forth in Article 16H or Section 17-10.6 of the Criminal Code of 2012. But if any other law provides for a longer limitation period, then the longer limitation period applies.

Passed both chambers. Effective July 1, 2019 if the Governor signs the bill. 

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Senate Bill 181

Topic: 
Post-judgment changes

(Mulroe, D-Chicago; Martwick, D-Chicago) makes the following changes to post-judgment proceedings. (1) Provides that a judgment creditor is entitled to prosecute citations to discover assets (instead of supplementary proceedings) for the purposes of examining the judgment debtor or any other person. (2) Deletes language providing that it is not a prerequisite to the commencement of a supplementary proceeding that a certified copy of the judgment has been returned wholly or partly unsatisfied. (3) Provides that summons shall be returnable not less than 21 nor more than 40 days (rather than 30 days) after the date of issuance. (4) Provides that summons shall be served with one copy (rather than four copies) of the interrogatories and that a summons shall be served in the same manner as provided by the Illinois Supreme Court Rule for additional relief on a party in default.

Passed both chambers and takes effect immediately if the Governor signs it into law. 

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House Bill 88

Topic: 
Consumer debt and collections

(Guzzardi, D-Chicago; Martinez, D-Chicago) provides that a “consumer debt judgment” of $25,000 or less draws interest at the rate of 5% per annum. A consumer debt judgment may be revived by filing a petition to revive the consumer debt judgment no later than 10 years after its entry. If a judgment or consumer debt judgment becomes dormant during an enforcement proceeding against wages, the enforcement may continue to conclusion if the enforcement is done under court supervision and includes a wage-deduction order or turn-over order and is against an employer, garnishee, or other third party respondent.

Passed both chambers. If signed into law by the Governor, it will take effect on January 1, 2020 and applies to all consumer debt judgments entered into after this date.

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House Bill 3677

Topic: 
Uniform Partition of Heirs Property Act

(Didech, D-Highwood; Crowe, D-Wood River) amends the Illinois Partition Act to create a new set of procedures regulating the partition of property held in tenancy in common by one or more cotenants who are related or who acquired an interest in the property from a person related to the tenant by blood, marriage, or adoption.  The Act applies only if one or more of the following conditions exist:

(1) 20 percent or more of the interests are held by cotenants who are related; (2)  20 percent or more of the interests are held by an individual or related entity who acquired title from a relative during the relative’s life or at death; or (3) 20 percent of the cotenants are relatives.

If the Act applies, the court is required to determine the fair market value of the property and give the cotenants who do not seek a partition of the property by sale the opportunity to purchase the interest of any cotenant who seeks to partition the property by sale. If no cotenant purchases the property and the property is not susceptible to being partitioned in kind, the Act provides the method by which the property is to be sold and costs apportioned.

Passed both chambers.

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