Commercial Banking, Collections, and Bankruptcy

Public Act 98-764 (corrected)

Topic: 
Mechanics Lien Act
(Mulroe, D-Chicago; Kelly Burke, D-Oak Lawn) provides that language barring certain agreements does not prohibit an agreement to subordinate a mechanics lien to a mortgage lien that secures a construction loan if that agreement is made after more than 50% of the loan has been disbursed to fund improvements to the property. Allows contractual provisions to be binding between the owner and contractor or a contractor and subcontractor that no lien or claim may be filed or maintained or that a contractor’s lien must be subordinated to the interests of any other party as long as it is not otherwise prohibited by this Act. Deletes language providing that the only admissible evidence of specified conditions of a contract as against a subcontractor or material supplier shall be proof of actual notice thereof to him or her before his or her contract is entered into. Deletes language providing that certain subordination provisions of contracts is not binding on the subcontractor unless set forth in its entirety in writing in the contract between the contractor and subcontractor or material supplier. Effective July 16, 2014.
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Burzlaff v. Thoroughbred Motorsports, Inc.

Federal 7th Circuit Court
Burzlaff v. Thoroughbred Motorsports, Inc.
Civil Court
Jury Instructions
Citation
Case Number: 
No. 13-2520
Decision Date: 
July 10, 2014
Federal District: 
E.D. Wisc.
Holding: 
Affirmed
In action under Wisc. Lemon Law in which plaintiff demanded that defendant-manufacturer of motorized tricycle either replace tricycle or refund purchase price after said tricycle had been out of service for repairs for 71 days during first year, Dist. Ct. did not err in modifying Wisc. Pattern Jury Instructions for Lemon Law claims by informing jury that plaintiff could recover if he gave authorized repair facility opportunity to repair tricycle, as opposed to giving defendant itself same opportunity, as set forth in standard jury instruction. Said instruction modification reflected intent of Lemon Law, and record showed that plaintiff had followed defendant’s instruction to take tricyle to defendant’s authorized repair shop. Ct. rejected defendant’s contention that plaintiff could only recover if he had tendered tricyle to defendant to make said repairs.

Suesz v. Med-1 Solutions, LLC

Federal 7th Circuit Court
Suesz v. Med-1 Solutions, LLC
Civil Court
Fair Debt Collection Practices Act
Citation
Case Number: 
No. 13-1821
Decision Date: 
July 2, 2014
Federal District: 
S.D. Ind., Indianapolis, Div.
Holding: 
Reversed and remanded
Dist. Ct. erred in dismissing plaintiff-debtor’s lawsuit alleging that defendant-creditor violated section 1629i of FDCPA by filing debt collection claim in Indiana township small claims court, even though contract that formed basis of debt was not signed in said township and plaintiff did not live there. While Dist. Ct. found that relevant “judicial district” included all township small claims courts within county that plaintiff lived so as to give defendant wide choice of venues, Ct. of Appeals, in overturning Newsom, 76 F.3d 813, found that “judicial district or similar legal entity” as contemplated in section 1692i of FDCPA is smallest geographic area that is relevant for determining venue in court system in which case is filed. As such, for cases brought in Indiana, defendant was required to bring its debt collection action in plaintiff’s township small claims court. This en banc opinion replaced earlier panel opinion that had upheld Dist. Ct.’s dismissal of plaintiff’s action.

Gambino v. Koonce

Federal 7th Circuit Court
Gambino v. Koonce
Civil Court
Collateral Estoppel
Citation
Case Number: 
No. 13-2756
Decision Date: 
July 2, 2014
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
Bankruptcy Ct. did not err in granting plaintiff-creditor’s requested relief in adversary proceeding seeking declaration that debt established in prior state court judgment, in which creditor had prevailed in action alleging that debtor used forged documents to gain title to creditor’s properties, was non-dischargeable pursuant to 11 USC section 523(a)(2)(A), after finding that debtor was collaterally estopped from re-litigating issue of his intent in obtaining creditor’s properties. Ct. rejected debtor’s contention that collateral estoppel did not apply because his fraudulent intent was not actually litigated in prior state court action, where Ct. observed that state court could not have rendered judgment in favor of creditor without deciding that debtor obtained said properties in fraudulent manner. Moreover, state court’s finding of fraudulent intent was necessary to its judgment in creditor's favor.

House Bill 5322

Topic: 
Condominiums and common-interest communities
(Burke, D-Evergreen Park; Raoul, D-Chicago) amends the two acts that govern condos and common-interest communities so that communication may include “electronic transmission” for differing purposes under the two Acts. It creates procedures to do this that also require consent of the unit owner. It also prohibits secret ballots in elections for common-interest communities. Sent to the Governor.
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Property Tax Sales and Bankruptcy after Alexandrov v. LaMont

By Andrew J. Hawes
July
2014
Article
, Page 346
The seventh circuit recently held that a homeowner debtor can extend the deadline to redeem property sold at a tax sale by declaring Chapter 13 bankruptcy. Find out what it means.

House Bill 8

Topic: 
Employment and pregnancy
(Flowers, D-Chicago; Hutchinson, D-Chicago Heights) amends the Illinois Human Rights Act to prohibit unlawful discrimination by an employer for pregnancy and require reasonable accommodation to a job applicant or employee for issues related to pregnancy or childbirth. Passed both chambers.
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Senate Bill 3286

Topic: 
Service of process
(Jacobs, D-Moline; Verschoore, D-Rock Island) amends the Code of Civil Procedure to require an employee of a “gated residential community” to grant entry into the community to an authorized process server who is attempting to serve process on a defendant or witness who resides within or is known to be within the community. This access would include common areas and common elements. The term “gated residential community” includes condominium associations, housing cooperatives, or private communities. Passed both chambers.
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House Bill 4783

Topic: 
Condominium Property Act
(E. Chris Welch, D-Westchester; Steans, D-Chicago) makes the following declarations unenforceable as against public policy if the declarations affect the common elements or more than one unit and require any of the following before the board can take legal action on behalf of the association: (1) consent of a percentage of unit owners, (2) arbitration, (3) mediation before an action may be filed in court, or (4) a restriction or delay in the board’s ability to bring an action affecting the common elements or more than one unit. An otherwise unenforceable provision may be enforced after the election of the first-unit owner board of managers if it is approved by a unit-owner percentage vote of not less than 75% of the total in the aggregate of the undivided ownership of the common elements.
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Iroanyah v. Bank of America

Federal 7th Circuit Court
Iroanyah v. Bank of America
Civil Court
Truth in Lending Act
Citation
Case Number: 
No. 13-1382
Decision Date: 
May 28, 2014
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
Dist. Ct. did not err in finding that defendants violated Truth in Lending Act (TILA) by failing to supply correct number of copies of notice of right to cancel mortgage prior to plaintiffs closing on mortgage to purchase home. However, Dist. Ct. did not err in dismissing plaintiffs’ action seeking to rescind mortgage under TILA by proposing to repay balance of loan via interest-free installments over time frame of original mortgage loan, since Dist. Ct. had discretion to require plaintiffs to make full repayment of loan as condition to enforcing plaintiffs’ rescission rights under TILA and then dismissing their rescission claim when plaintiffs failed to repay loan within 90-day period. Ct. rejected plaintiffs’ claim that, in spite of their inability to satisfy instant tender requirement, they had unconditional right to rescission based on defendants' violation of TILA, and that they were entitled to both reduction of all interest and fees associated with loan and had right to make installment payments over life of loan as part of their rescission rights.