Commercial Banking, Collections, and Bankruptcy

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.
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House Bill 25

Topic: 
Small Estate Affidavit
(Flowers, D-Chicago) and House Bill 162 (Chapia LaVia, D-Aurora) makes a number of changes to the Small Estate Affidavit statute. (1) Requires that the affidavit state that the burial and funeral expenses, medical bills, credit card bills, and real property taxes (instead of funeral expenses) have been or remain to be paid. (2) Makes a number of changes if there is a surviving spouse as follows. (a) If there is a surviving spouse, and the surviving spouse is unable to prepare the small estate affidavit or has declined to do so, the affiant must state the reason that the affiant has prepared the small estate affidavit rather than the surviving spouse. (b) If the reason for the surviving spouse's inability to prepare the affidavit is medically related, a letter from the surviving spouse's physician should be attached attesting to that effect. (c) If the surviving spouse is the affiant, he or she shall affirm that he or she was not separated from the decedent (3) If there is no surviving spouse and there is one or more minor children, the affiant must be a court-appointed guardian for one or more of the children. Referred to House Rules Committee.
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Senate Bill 1746

Topic: 
New filing fee
(Trotter, D-Chicago; Harris, D-Chicago) creates a $10 fee to be paid by civil litigants who file an appearance and defendants who are convicted or plead guilty to any felony, misdemeanor, traffic, municipal, or conservation offense to pay for the Supreme Court E-Business Plan. The E-Business Plan is to develop and maintain an automated point-of-access case and statistics management system. It will will include applications for e-filing, e-guilty, and e-signatures as well as trial court and probation data exchanges. Senate Bill 1746 is scheduled for hearing in House Judiciary Committee on Sunday, Jan. 6, 2013.
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Bank of America National Association v. Bassman FBT

Bank of America National Association v. Bassman FBT
Illinois Appellate Court
Civil Court
Mortgage Foreclosure
Citation
Case Number: 
2012 IL App (2d) 110729
Decision Date: 
Monday, June 18, 2012
District: 
2d Dist.
Division/County: 
Du Page Co.
Holding: 
Affirmed.
Justice: 
HUDSON
(Supplemental opinion on denial of rehearing 12/7/12.) Court properly granted summary judgment of foreclosure and sale. New York law applies, as contract's choice-of-law provision specifies that New York law governs the trust, and no aspect of pertinent New York law is contrary to Illinois public policy. Under New York law, Defendants have standing to attack transaction only if it is void, regardless of whether it was ratified. A trustee's ultra vires acts are not void but voidable. Pooling and services agreement (PSA), which gave Plaintiff authority to foreclose, manifests intent to limit rights under PSA to those who are parties to it, and Defendants are not third-party beneficiaries of PSA. (HUTCHINSON and ZENOFF, concurring.)

House Bill 3636

Topic: 
Mechanics Lien Act
(Burke, D-Evergreen Park; Mulroe, D-Chicago) does three things in response to the LaSalle Bank National Association vs. Cypress Creek opinion. (1) Requires that the owner or interested person’s demand for suit to be commenced or answered within 30 days must contain this language in at least 10-point, boldface type: “Failure to respond to this notice within 30 days after receipt, as required by Section 34 of the Mechanics Lien Act, shall result in the forfeiture of the referenced lien.” (2) Defines a “lien creditor” as someone who does work or furnishes material under this Act for improvements. A lien creditor is preferred over other encumbrances except that previous encumbrances are preferred only to the extent of the value of the land at the time the contract was made for the improvements, and each lien creditor is preferred to the value of all later improvements regardless of whether the lien creditor provided those improvements. (3) If the sale proceeds are insufficient to satisfy claims of both prior encumbrances and lien creditors, the sale proceeds are to be distributed as follows: (a) Any previous encumbrance has a paramount lien in the portion of the proceeds attributable to the value of the land at the time of making of the contract for improvements. (b) Any lien creditors have a paramount lien in the portion of the proceeds attributable to all later improvements made to the property. It has an immediate effective date. House Bill 3636 is in the House awaiting concurrence on Senate Amendment No. 2.
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