Commercial Banking, Collections, and Bankruptcy

Central States Southeast and Southwest Areas Pension Fund v. Messina Products, LLC

Federal 7th Circuit Court
Central States Southeast and Southwest Areas Pension Fund v. Messina Products, LLC
Civil Court
ERISA
Citation
Case Number: 
Nos. 11-3513 & 12-1333 Cons.
Decision Date: 
February 8, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed and reversed in part and remanded
In action alleging that employer and related entities owed $3.1 million in withdrawal liability when employer (Messina Trucking) permanently ceased to have obligation to contribute to multiemployer pension fund, Dist. Ct. erred in finding that owners of Messina Trucking, who also owned and leased several residential properties adjacent to Messina Trucking, as well as leased property from which Messina Trucking conducted its operations, were not engaged in “trade or business” that would have rendered owners jointly liable for withdrawal liability incurred by Messina Trucking. While Multiemployer Pension Plan Amendments Act does not impose liability for withdrawing employers on purely passive investment entities, under SCOFBP, 668 F.3d 873, instant leasing of property to Messina Trucking by owners of Messina Trucking constituted “trade or business” that subjected said owners to withdrawal liability incurred by Messina Trucking.

House Bill 1447

Topic: 
Consumer fraud and attorney's fees
(Thapedi, D-Chicago) requires that the court use the “Laffey Matrix” prepared by the U.S. Department of Justice in awarding attorney’s fees to the prevailing party under the Consumer Fraud and Deceptive Business Practices Act. Excludes cases in which the hourly rate for attorney’s fees is limited by statute. Just introduced.
View Full Text of Legislation

Farnick v. Fed. Deposit Ins. Corp.

Federal 7th Circuit Court
Farnick v. Fed. Deposit Ins. Corp.
Civil Court
Banking
Citation
Case Number: 
No. 11-1601
Decision Date: 
February 5, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Vacated and remanded
Dist. Ct. lacked jurisdiction to consider plaintiffs’ action against defendant-insolvent bank alleging that said bank engaged in deception by failing to base their interest rates on certain index rate as promised by said bank, where record showed that FDIC was substituted as party defendant after it had been appointed receiver for insolvent bank, and where FDIC removed action to federal court under section 1819(b)(2)(A) of FIRREA. Under section 1821(d)(3)(d)(13) of FIRREA, FDIC has statutory authority to administer claims against insolvent bank for which it has been appointed receiver, and courts lack jurisdiction to consider such claims where, as here, plaintiffs failed to previously present their claim to FDIC. Ct. rejected plaintiffs’ claim that real defendant was successor bank to insolvent bank, after noting that allegations of misconduct in complaint were solely against insolvent bank.

Veluchamy v. Fed. Deposit Ins. Corp.

Federal 7th Circuit Court
Veluchamy v. Fed. Deposit Ins. Corp.
Civil Court
Banking
Citation
Case Number: 
No. 10-3879
Decision Date: 
February 4, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
In Administrative Procedure Act (APA) seeking monetary recovery arising out of allegations that defendant-FDIC-Corporate misled plaintiffs-owners of bank into making further investment of $30 million in effort to rescue bank from insolvency and also prevented plaintiffs from converting said investment into personal deposits accounts so that they could obtain deposit-level priority in post-insolvency distribution scheme, Dist. Ct. did not err in dismissing said cause of action where APA prohibited plaintiffs from seeking monetary damages against said defendant. Moreover, plaintiffs could not assert similar FIRREA claim against FDIC-Receiver seeking recovery for its separate denial of plaintiff’s request to convert their $30 million further investment into personal deposit accounts, since said claim was not against bank, but rather was against FDIC in its regulatory capacity, which is not recognized as valid claim under section 1821(d) of FIRREA.

Fairfield National Bank v. Chansler

Fairfield National Bank v. Chansler
Illinois Appellate Court
Civil Court
Banking
Citation
Case Number: 
2013 IL App (5th) 110530
Decision Date: 
Tuesday, January 22, 2013
District: 
5th Dist.
Division/County: 
Hamilton Co.
Holding: 
Reversed and remanded with directions.
Justice: 
GOLDENHERSH
A financial institution may become liable for any instrument it accepted, but the form of the acceptable document is left to discretion of institution, under Illinois Trust and Payable on Death Accounts Act. UCC gives financial institutions the right to accept, and account, for a reasonable time after the death of a client. If court determines that interpleader accepted written instruments, then change of beneficiaries was effective under the Act and interpleader is not liable for having accepted the instruments. (CHAPMAN and STEWART, concurring.)

Gillespie Community School Dist. No. 7 v. Wight & Co.

Illinois Supreme Court PLAs
Civil Court
Statute of Limitations
Citation
PLA issue Date: 
January 30, 2013
Docket Number: 
No. 115330
District: 
4th Dist. Rule 23 Order
This case presents question as to whether trial court properly dismissed plaintiff-school board’s fraudulent misrepresentation action as being time-barred under five-year limitation period set forth in section 13-205 of Code of Civil Procedure, where said action arose out of defendant-architect’s alleged failure to provide plaintiff with adequate information regarding risk of mine subsidence at construction site of new school. Record showed that new school was completed in 2002, that mine subsidence did not take place until approximately seven years later, and that contract between parties indicated that any limitations period began to run at time plaintiff occupied new school. In its petition for leave to appeal, plaintiff argued that five-year limitations period set forth in section 13-205 did not apply to instant fraudulent misrepresentation claim.

Bartlow v. Costigan

Illinois Supreme Court PLAs
Bartlow v. Costigan
Civil Court
Employee Classification Act
Citation
PLA issue Date: 
January 30, 2013
Docket Number: 
No. 115152
District: 
5th Dist.
This case presents question as to whether trial court properly granted defendant’s motion for summary judgment in plaintiffs’ action seeking declaration that Employee Classification Act is unconstitutional after defendants made preliminary determination that plaintiffs-contractors had failed to properly classify 10 subcontractors in violation of said Act. Appellate Court rejected plaintiffs’ claim that said Act violated notions of due process and equal protection, after finding that: (1) said Act satisfied any due process concerns where defendant must seek any penalties, sanctions or other remedies against plaintiffs by bringing action in circuit court where defendant has burden to establish any violation of said Act; and (2) fact that Act is limited to construction industry did not constitute violation of equal protection or special legislation.

In the Matter of Porayko

Federal 7th Circuit Court
In the Matter of Porayko
Civil Court
Bankruptcy
Citation
Case Number: 
No. 12-2777
Decision Date: 
January 28, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
In bankruptcy proceeding in which creditor sought finding that his citation to discover assets petition that had been served on debtor prior to debtor’s filing of bankruptcy petition constituted lien on debtor’s bank account containing $10,000 that had priority over claims of other creditors, Dist. Ct. did not err in finding that citation petition created lien in favor of said creditor on value of said bank account. Under 735 ILCS 5/2-1402(m), citation to discover assets petition creates lien on all “nonexempt personal property” under debtor’s control, and value of debtor’s bank account qualified as personal property under section 2-1402(m)(1). Ct. rejected Trustee’s contention that no lien was created since creditor served citation petition directly on debtor as opposed to bank.

Senate Bill 36

Topic: 
Local governments and debt collection
(Silverstein, D-Chicago) allows local governments to immobilize vehicles of debtors as part of the post-judgment collection process. Immobilization may not occur until the judgment debtor has had the opportunity to appear and contest the immobilization at the citation hearing or fails to appear. If a unit of local government immobilizes a vehicle, it shall affix a notice of immobilization to the vehicle at the time the restraint device is attached to the vehicle. The judgment debtor must follow the procedures listed on the notice to pay the applicable costs within 24 hours of the immobilization. If the judgment debtor fails to respond within 24 hours of the immobilization, the unit of local government may tow and impound the vehicle. The impounded vehicle is eligible for auction or public sale if the judgment debtor fails to pay all applicable costs within 21 days after the vehicle is towed and impounded. Referred to the Senate Committee on Assignments.
View Full Text of Legislation