Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in dismissing for failure to state cause of action plaintiff’s complaint seeking rescission of contract for purchase of yet-to-be-built condominium and two parking spaces in Trump Tower on grounds that developer’s decision to put parking spaces on sixth floor lowered value of his investment and increased amount of maintenance fees plaintiff would be required to pay. Plaintiff failed to establish any material change in contract where contract contemplated that placement of parking places on sixth floor was possibility. Ct. further found that implied promise of good faith and fair dealing on part of defendant was sufficient to defeat plaintiff’s claim that instant contract was unenforceable due to lack of mutuality even though parties had different remedies for opposing party's breach of contract. Moreover, Ct. rejected plaintiff’s claim that instant contract violated Interstate Land Sales Full Disclosure Act by failing to provide plaintiff with information regarding defendant’s ability to terminate contract.

Dist. Ct. erred in reversing Bankruptcy Judge order that discharged debtor’s student loan debt after finding that debtor established undue hardship if said debt was not discharged in her bankruptcy proceeding. Record showed that debtor could not presently or in foreseeable future pay student loans, and that plaintiff lived with parent in rural area, where few jobs were available, and lacked Internet access and transportation to assist her in job search.

Bankruptcy Judge erred in finding that appointment of interim trustee within two years after filing of instant bankruptcy petition served to extend limitation period for filing adversary proceedings under section 546(a)(1) of Bankruptcy Code, even though interim trustee was not appointed permanent trustee until after two-year limitations period for filing adversary proceedings had elapsed. Section 546(a)(1) provides for one year extension of applicable limitations period for filing adversary proceedings only when permanent trustee is appointed within initial two-year limitations period, and thus instant adversary proceedings were untimely. Fact that instant permanent trustee was also interim trustee did not require different result.

Dist. Ct. did not err in granting plaintiff’s motion for summary judgment in action alleging that defendant breached his agreement to guarantee plaintiff’s $15.5 million loan to limited liability company of which defendant was managing member. Ct. rejected defendant’s claim that plaintiff fraudulently induced him into signing agreement by promising to assist limited liability company with sale of company’s investments, where defendant produced no writing containing alleged promises as required by Ill. Credit Agreement Act. Ct. also found that Rule 38 sanctions were appropriate for defendant having filed frivolous appeal where defendant conceded that limited liability company was in default on loan, and where defendant failed to present coherent argument that would provide even colorable basis for reversing Dist. Ct. judgment or come to grips with applicable law and facts.

Dist. Ct. did not err in dismissing plaintiffs’ action alleging that defendant-bank negligently evaluated their ability to repay $282,500 home mortgage loan, and that said loan contract was unconscionable. Plaintiffs could not state valid negligence claim where plaintiffs alleged nothing more than typical mortgagor-mortgagee relationship that was insufficient to give rise to any duty owed by defendant to plaintiffs. Moreover, plaintiffs could not establish that instant mortgage contract was unconscionable under Indiana law where: (1) plaintiffs used mortgage broker to obtain instant loan at 5.875 percent interest; (2) plaintiffs had complied with terms of loan for seven years; and (3) there was nothing in record to indicate that plaintiffs did not understand terms of loan or that instant mortgage process was irregular.

Dist. Ct. did not err in granting under doctrine of successor liability plaintiff’s motion to substitute instant defendant, which had purchased assets of plaintiff’s employer, in action alleging that plaintiff’s employer had violated FSLA in failing to pay plaintiffs overtime. While current defendant objected to substitution where it had purchased employer’s assets under condition that it would be free of all employer’s FSLA liabilities, Dist. Ct. could properly find that successor liability applied under federal standards, even though it would not apply under Wisc. law, where: (1) successor liability is appropriate in suits to enforce federal labor and employment laws, including FSLA actions, even though purchaser of assets disclaimed liability as condition of purchase; (2) allowing current defendant to take assets without assuming liabilities would give said defendant windfall; and (3) instant $500,000 FSLA judgment was modest in relation to $22 million asset purchase. Ct. observed, though, that: (1) successor liability would not have applied if employer had sold its assets in piecemeal fashion; and (2) current defendant did not argue that successor liability should not apply where, as here, employer was insolvent at time of asset purchase, and where application of doctrine would therefore upset priority of competing creditors.

Dist. Ct. did not err in granting defendant’s motion for summary judgment in breach of contract action alleging that defendant improperly terminated contract calling for plaintiff to provide defendant with financial and consulting services that plaintiff claimed was for duration of defendant’s professional basketball career. Dist. Ct. could properly find that subject contract covered at most four years where plaintiff conceded in prior deposition that new contract would be drafted after completion of defendant’s initial four-year basketball contract, and instant contract otherwise lacked provisions for compensation beyond said four-year period. Moreover, plaintiff could not counter concessions made in his deposition with subsequent sworn written statement. Also, while defendant terminated contract in third year, plaintiff failed to present sufficient evidence to support any remedy for loss of income arising out of fourth year of contract. Finally, Dist. Ct. did not err in dismissing on res judicata grounds plaintiff’s tortious interference with prospective business advantage claim based on Illinois law, where plaintiff’s similar claim based on California law had been dismissed for failure to state cause of action.