Commercial Banking, Collections, and Bankruptcy

Carroll v. Takada

Federal 7th Circuit Court
Carroll v. Takada
Civil Court
Bankruptcy
Citation
Case Number: 
No. 14-3576
Decision Date: 
July 18, 2017
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Dist. Ct. did not err in affirming Bankruptcy Ct. order that sustained Trustee’s objection to debtors’ claim for $30,000 exemption arising out of one debtor’s interest in Trust proceeds given to her after her parents had deceased. Language in Trust gave debtor vested right to one-third of trust residuum 60 days after her father’s death, which was prior to time debtors filed their Chapter 7 bankruptcy petition. As such, said Trust proceeds became part of bankruptcy estate subject to distribution to debtors’ creditors. Fact that instant issue was resolved via Trustee objection rather than as separate adversary proceeding did not require different result, since Trustee was merely responding to debtors’ own contention that proceeds were exempt from bankruptcy estate under section 522, as opposed to more accurate contention that Trust proceeds fell under section 541(c)(2) as property that was excluded from bankruptcy estate altogether.

Gary Jet Center, Inc. v. AFCO AvPorts Management LLC

Federal 7th Circuit Court
Gary Jet Center, Inc. v. AFCO AvPorts Management LLC
Civil Court
Contracts Clause
Citation
Case Number: 
No. 16-1233
Decision Date: 
July 13, 2017
Federal District: 
N.D. Ind., Hammond Div.
Holding: 
Affirmed

Dist. Ct. did not err in granting defendant-Airport Authority’s motion to dismiss section 1983 action by plaintiff-entity providing services to airlines at airport, alleging that defendant’s notice to plaintiff that it intended to amend its rules and regulations to require that plaintiff pay defendant 1.5 percent of its revenues and increase its rent payments to defendant violated Contracts Clause of Constitution, because said amendments impaired plaintiff’s rights as contained in existing lease agreement with defendant. Plaintiff could not bring Contracts Clause action because it failed to show that it did not have available remedy in form of breach of contract action. Moreover, because defendant’s primary argument is that parties had agreed pursuant to prior settlement agreement that amended rules and regulations would govern terms of parties’ lease, instant dispute is matter of contract interpretation that could be resolved in breach of contract action without resolution of any constitutional claim. Ct. noted, though, that if defendant raised its regulatory authority as defense in future contract action, plaintiff could refile Contracts Clause claim in federal court.

Prime Choice Services, Inc. v. Schneider Logistics Transloading and Distributing, Inc.

Federal 7th Circuit Court
Prime Choice Services, Inc. v. Schneider Logistics Transloading and Distributing, Inc.
Civil Court
Contracts
Citation
Case Number: 
No. 16-4197
Decision Date: 
June 28, 2017
Federal District: 
E.D. Wisc.
Holding: 
Vacated and remanded

Dist. Ct. erred in granting defendant’s motion for new trial on issue of damages with respect to jury’s verdict on defendant's counterclaim, alleging that plaintiff had repudiated its contract with defendant that resulted in defendant incurring extra expenses to have third-parties perform services at issue in instant contract, under circumstances where jury had agreed with defendant that plaintiff had wrongfully repudiated said contract, but that defendant was not entitled to any damages. Dist. Ct. can only grant defendant’s Rule 59 motion for new trial under circumstances where defendant shows that jury’s verdict constituted miscarriage of justice, and defendant failed to establish this standard, where jury could have reasonably believed that zero damages was appropriate either because defendant had failed to mitigate its damages, or because defendant could have convinced plaintiff to return its employees to job site without defendant incurring any additional expense by merely paying plaintiff what it had owed to plaintiff at time plaintiff withdrew its employees from job site. (Dissent filed)

Barnes v. Lolling

Barnes v. Lolling
Illinois Appellate Court
Civil Court
Bankruptcy
Citation
Case Number: 
2017 IL App (3d) 150157
Decision Date: 
Tuesday, June 27, 2017
District: 
3rd. Dist.
Division/County: 
Fulton Co.
Holding: 
Affirmed.
Justice: 
Holdridge

Plaintiff sued Defendants for personal injuries she sustained during an accident. The accident took place while Plaintiff’s bankruptcy proceeding was pending. Plaintiff did not disclose her potential cause of action to the bankruptcy trustee or schedule the cause of action as an asset of the bankruptcy estate. Plaintiff filed the personal injury claim five months after the bankruptcy court discharged her debts and closed the bankruptcy case. Defendants filed a motion for summary judgment alleging Plaintiff’s claim was barred under the doctrine of judicial estoppel, because she failed to disclose the claim during the bankruptcy proceedings, which the Court granted. Court properly granted Defendant’s motion, because all of the prerequisites for judicial estoppel were met. Plaintiff took inconsistent positions by failing to inform the bankruptcy court of her new asset of a personal injury claim, thus representing that no claim existed, and filing the personal injury cause of action. She intended the courts in each proceeding to accept the truth of the facts she alleged. Moreover, she received a benefit from the bankruptcy proceeding by having her unsecured debt discharged without having to increase her payments to her creditors in light of the claim. Additionally, Plaintiff lacked standing to bring the personal injury lawsuit until she moved to reopen the bankruptcy proceeding so that she could schedule the claim as an asset of the bankruptcy estate.

1st Source Bank v. Neto

Federal 7th Circuit Court
1st Source Bank v. Neto
Civil Court
Venue
Citation
Case Number: 
No. 17-1058
Decision Date: 
June 26, 2017
Federal District: 
N.D. Ind., S. Bank Div.
Holding: 
Affirmed

In prosecution on breach of contract action involving contract to purchase airplane, Dist. Ct. did not err in denying defendant’s motion seeking antisuit injunctive relief to prevent plaintiff from proceeding in similar action against defendant in Brazil, where airplane was located. While defendant argued that Brazil litigation was vexatious and duplicative, venue clause in subject contract allowed plaintiff to bring duplicative actions in venue where airplane was located, as well as in instant Dist. Ct. Moreover, Brazil action was not unreasonable, since airplane that could be used to satisfy instant alleged debt was located there. Also, filing of subsequent lawsuit in Brazil was not vexatious, where, at time of filing of Brazil action, plaintiff had subjected defendant in instant action to only one discovery request, one deposition and one mediation.

House Bill 189

Topic: 
Omnibus condo legislation

(Thapedi, D-Chicago; Raoul, D-Chicago) makes numerous changes affecting community associations and condos. Among those changes is the requirement that associations and condos that have 100 or more units to use generally accepted accounting principles in fulfilling their accounting obligations. 

House Bill 189 also changes some parts of the statute governing the examination of a condo association’s records. It authorizes reasonable attorney’s fees and costs to a unit member who prevails in an enforcement action if seeking to examine or copy (1) all contracts to which the association is a party or under which it or the unit owners have obligations; and (2) the books and records for the association’s current fiscal year and the last 10 fiscal years. It also reduces the time in which an association must make these records available from 30 business days to 10 business days or it will be considered a denial of the request.

It also amends the right to examine and copy the ballot and proxy information and current listing of the names, addresses, email addresses, telephone numbers, and weighted vote of all voting members. A member must have a purpose that relates to the association to exercise this right, and the board may ask for the member to so certify. The member may not seek these records for a “commercial purpose” that is defined as use in any form for sale, resale, or solicitation or advertisement for sales or services. House Bill 189 makes it discretionary instead of mandatory on whether the association must charge for the retrieval or copying of these records.

Passed both chambers; effective January 1, 2018 if the Governor signs the bill. 

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House Bill 302

Topic: 
Unclaimed Life Insurance Benefits Act

(Martwick, D-Chicago; Collins, D-Chicago) expands last year's original Unclaimed Life Insurance Benefit Act that required insurance companies to perform a check of policies in force (not lapsed) as of January 1, 2017 against the Social Security Death Master File. Insurance companies must now check all policies that are currently in force or were in force as of January 1, 2000, unless the company shows proof that they did not keep electronic records, in which case they must check all current policies and all policies in effect as of January 1, 2012.

Passed both chambers; effective January 1, 2018 if the Governor signs it.

 

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Senate Bill 584

Topic: 
Illinois Administrative Procedure Act

(Barickman, R-Bloomington; Andersson, R-Geneva) ensures that the appeals by citizens in administrative review actions are not thrown out of court for a scrivener’s error that is called a “misnomer.” Senate Bill 584 amends the Administrative Procedure Act and the Administrative Review Law to provide a means for correcting good-faith failures to perfectly name necessary parties in actions for administrative review. The proposed legislation would do several things to resolve this problem.

Requires that final administrative orders list all of the parties of record together with their last known address of record. The final order must also include whether there are any agency rules requiring a motion for reconsideration as a part of obtaining a reviewable final administrative decision and, if so, the citation to the rule.  

Prohibits an action for administrative review to be dismissed for lack of jurisdiction based on the misnomer of any agency that is properly served with summons issued in the action within the applicable time limits. It also prohibits dismissal for failure to perfectly name an agent if a timely action of administrative review has been filed that identifies the final administrative decision under review and makes a good faith effort to properly name the administrative agency.

Allows a court to correct misnomers for an erroneous identification of the administrative agency that was made in good faith.

Passed both chambers; effective on the Governor’s signature.  

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Senate Bill 885

Topic: 
Installment Sales Contract Act

(Koehler, D-Peoria; Gordon-Booth, D-Peoria) creates the Installment Sales Contract Act. It will require that sales of residential real estate by installment contract conform to the Act. “Residential real estate” means real estate with a dwelling structure excluding property that is sold as a part of a tract of land consisting of four acres or more that is zoned for agricultural purposes.

It applies to sellers that enter into an installment sale contract more than three times during a 12-month period to sell residential real estate. Within ten days of the date of sale the seller must record the contract or a memorandum of the contract with the recorder of deeds. It prohibits the installment sale contract from forbidding the buyer to record the contract or a memorandum of the contract. Makes it a violation of the Consumer Fraud and Deceptive Business Practices Act to knowingly violate the Installment Sales Contract.

Passed both chambers; effective January 1, 2018 if signed into law. 

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