Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in granting second motion for summary judgment by third-party plaintiff-manufacturer of bucket truck in action seeking defense and indemnification from third-party defendant-employer of injured employee in underlying action by injured employee, who alleged damages arising out of use of bucket truck, where instant action was based on lease agreement in which third-party defendant agreed to release, indemnify and hold third-party plaintiff harmless in all claims seeking damages arising out of use of bucket truck by employees of third-party defendant. While third-party defendant argued that indemnification language in subsequent monthly invoices issued by third-party plaintiff, that required third-party defendant to train its employees on use of bucket truck, without containing specific indemnification language in lease agreement, superseded indemnification language in lease, Ct. found that third-party plaintiff could enforce indemnification clause in lease since indemnification language in invoice and lease was not inconsistent.

Dist. Ct. did not err in finding in favor of respondent-bank in instant citation to discover assets proceeding seeking to hold bank responsible for balance of debtor’s $387,931.25 debt to plaintiff where: (1) bank had been served with citation to freeze two banks accounts identified as belonging to debtors; and (2) bank unfroze said accounts that had contained over $700,000 of debtors' money after receiving copy of Dist. Ct. order that identified which of several of debtors’ bank accounts were to remain frozen. While text of Dist. Ct. order could have been more clear, bank could reasonably construe order as allowing it to unfreeze said accounts, where Dist. Ct. had identified specific accounts that were to remain frozen and limited freeze order to said accounts.

In Chapter 7 bankruptcy proceeding, Bankruptcy Ct. did not err in dismissing adversary action by debtor seeking under section 506(a) of Bankruptcy Code to “strip off” second mortgage on debtor’s home under circumstances where value of home was less than outstanding balance of first mortgage. Instant second mortgage held by creditor could not be voided under section 506(a) where, as here, creditor did not file claim in instant bankruptcy proceeding, and thus creditor is free to foreclose its lien outside of bankruptcy when, as practical matter, value of debtor’s home exceeds amount of first mortgage. Moreover, under Dewsnup, 502 US 410, section 506(d) of Bankruptcy Code does not allow Bankruptcy Ct. to “squeeze down” fully valid lien to current value of property to which it is attached.

In adversary proceeding filed by debtor in his Chapter 13 bankruptcy petition, Bankruptcy Ct. did not err in rejecting debtor’s contention that federal govt.’s lien of $136,898.93 was “void” for all but $1,625, which represented total of debtor’s personal assets. In general, liens pass through bankruptcy unaffected, and under Dewsnup, 502 US 410, section 502(d) of Bankruptcy Code did not allow debtor to void lien. Rather, govt. had unsecured claim for remaining portion of its lien that was not satisfied after tender of debtor’s personal assets. Ct. rejected debtor’s claim that holding in Dewsnup did not apply because Dewsnup concerned Chapter 7 bankruptcy petition.

Dist. Ct. did not err in granting defendant’s motion for summary judgment in action alleging that defendant’s power adapter to its laptop computer contained design defect that allowed adapter to overheat and burn plaintiff’s arm when she fell asleep on couch. Dist. Ct. found that plaintiff’s evidence was insufficient to establish that adapter was unreasonably dangerous under either consumer-expectations or risk-utility tests, and although Ct. of Appeals found that there was sufficient evidence to create triable issue under consumer-expectations test, plaintiff’s failure to challenge Dist. Ct.’s determination with regard to risk-utility test meant that she could not prevail on any remand since, under Illinois law, analysis of risk-utility test prevails in design defect case if consumer-expectations and risk utility tests produce conflicting results.