Commercial Banking, Collections, and Bankruptcy

Palomar v. First American Bank

Federal 7th Circuit Court
Palomar v. First American Bank
Civil Court
Bankruptcy
Citation
Case Number: 
No. 12-3492
Decision Date: 
July 11, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
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 re: Ryan

Federal 7th Circuit Court
In re: Ryan
Civil Court
Bankruptcy
Citation
Case Number: 
No. 12-3398
Decision Date: 
July 8, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
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.

Ferraro v. Hewlett-Packard Co.

Federal 7th Circuit Court
Ferraro v. Hewlett-Packard Co.
Civil Court
Product Liability
Citation
Case Number: 
No. 12-2616
Decision Date: 
July 3, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
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.

In re Illinois Bell Link-Up II and Late Charge Litigation

In re Illinois Bell Link-Up II and Late Charge Litigation
Illinois Appellate Court
Civil Court
Class Actions
Citation
Case Number: 
2013 IL App (1st) 113349
Decision Date: 
Friday, June 28, 2013
District: 
1st Dist.
Division/County: 
Cook Co., 3d Div.
Holding: 
Affirmed.
Justice: 
PIERCE
Class action suit was filed for damages from Illinois Bell's assessment of late payment charges on consumer bills mailed without a dated postmark. After reaching settlement, AT& T changed billing procedures, no longer dating outside of envelope with mailing date but printing string of unidentifiable numbers on the bill itself. Class counsel appealed circuit court's denial of class's motion for summary judgment and motion to enforce settlement agreement. Court properly denied class's motion for summary judgment on issue of damages, as class counsel failed to maintain his burden to show damages proximately caused by breach of settlement agreement and actual losses due to breach. (STERBA and HYMAN, concurring.)

Senate Bill 56

Topic: 
Mortgage Foreclosure Article
(Collins, D-Chicago; Cassidy, D-Chicago) does three things. (1) Defines a “bona fide tenant” substantially consistent with the 2009 federal Protecting Tenants at Foreclosure Act. (2) Requires a petitioner to wait 90 days (unless the lease term is longer than 90 days) before a forcible entry and detainer action may be used to terminate the possessory rights of a bona fide tenant in residential real estate. Orders of possession issued in the foreclosure proceeding will continue to be entered against the mortgagor. (3) Addresses the deficiency issue in the 2010 McGahan case as to what procedure the mortgagee must follow if a mortgagor dies. If the survivor holds a 100% interest in the property because the survivor is the deceased mortgagor’s surviving joint tenant or surviving tenant by the entirety, a special representative for the deceased mortgagor need not be appointed. Passed both chambers.
View Full Text of Legislation

House Bill 1203

Topic: 
Counties Code and legal descriptions
(Sosnowski, R-Rockford; Althoff, R-McHenry) deletes the requirement that the required notice for a text or map amendment to include a metes and bounds legal description of the property affected as long as the notice does include the common street address or addresses and property index number (“PIN”) of all the parcels of real property contained in the affected area. Passed both chambers.
View Full Text of Legislation

Senate Bill 56

Topic: 
Mortgage Foreclosure Article
(Collins, D-Chicago; Cassidy, D-Chicago) does three things. (1) Defines a “bona fide tenant” substantially consistent with the 2009 federal Protecting Tenants at Foreclosure Act. (2) Requires a petitioner to wait 90 days (unless the lease term is longer than 90 days) before a forcible entry and detainer action may be used to terminate the possessory rights of a bona fide tenant in residential real estate. Orders of possession issued in the foreclosure proceeding will continue to be entered against the mortgagor. (3) Addresses the deficiency issue in the 2010 McGahan case as to what procedure the mortgagee must follow if a mortgagor dies. If the survivor holds a 100% interest in the property because the survivor is the deceased mortgagor’s surviving joint tenant or surviving tenant by the entirety, a special representative for the deceased mortgagor need not be appointed. Passed both chambers.
View Full Text of Legislation

Senate Bill 2306

Topic: 
Privacy and the workplace
(Radogno, R-Lemont; Mautino, D-Spring Valley) clarifies that an employer may request the password or gain access to the social-networking website of an employee or prospective employee if necessary to screen employees or applicants before hiring or to monitor or retain employee communications as required under Illinois insurance laws, federal law, or by a self-regulatory organization as defined in the Securities Exchange Act of 1934. Passed both chambers.
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Sams Hotel Group, LLC v. Environs, Inc.

Federal 7th Circuit Court
Sams Hotel Group, LLC v. Environs, Inc.
Civil Court
Contracts
Citation
Case Number: 
No. 12-2979
Decision Date: 
May 31, 2013
Federal District: 
S.D. Ind., Indianapolis Div.
Holding: 
Affirmed
Dist. Ct. did not err in finding that limitation of liability clause contained in contract between plaintiff-owner of hotel and defendant-architectural firm to provide architectural services for construction of new hotel served to limit defendant’s damages in claim alleging that defendant breached said contract by providing poor quality services, even though $4.2 million judgment had been entered in plaintiff’s favor on said claim. Instant clause provided that defendant’s total liability from any breach of contract stemming from errors or omissions would be limited to $70,000 fee that defendant had received under said contract, and Ct. found that said clause applied under Indiana law, even though clause failed to explicitly refer to defendant’s own negligence, where instant case concerned two sophisticated commercial entities seeking to allocate risks between themselves.

Parkway Bank and Trust Company v. State Farm Fire and Casualty Company

Parkway Bank and Trust Company v. State Farm Fire and Casualty Company
Illinois Appellate Court
Civil Court
Conversion
Citation
Case Number: 
2013 IL App (1st) 122387
Decision Date: 
Monday, May 20, 2013
District: 
1st Dist.
Division/County: 
Cook Co.,1st Div.
Holding: 
Affirmed.
Justice: 
ROCHFORD
Bank filed declaratory judgment alleging that insurer refused to tender policy proceeds for fire loss on property on which bank was named as mortgagee under policy. Contractor forged bank's endorsement on check insurer issued for fire loss. Bank's only remedy is conversion action against the bank which cashed the check based on forged endorsement, under Section 3-420 of UCC. Thus, court properly granted summary judgment for insurer.(HOFFMAN and CUNNINGHAM, concurring.)