|

Business partnerships can be tricky. When running a business, it is important to remember that there is a difference between the profits that go to pay the owners’ salaries and the money that gets invested back into the company. If one owner takes money from the company’s funds to pay for his personal expenses, he is doing a disservice to the business as well as to his business partner. Illinois law allows for the harmed owner to bring the matter to court and allege violations of Illinois corporate and partnership law and under the right circumstances seek attorneys, interest and punitive damages.

Famed local car dealer, Al Piemonte is known for promoting his dealerships in long-running television advertisements is the subject of claims of mismanagement by one of the alleged owners of his Melrose Park dealership. Piemonte owns three car dealerships in the Chicago area. Todd O’Reilly, who alleges he is a co-owner of Piemonte’s Ford dealership in Melrose Park, has recently filed a lawsuit in Cook County court against his business partner, accusing him and his third wife, Rosanna, of grossly mismanaging the company. According to the lawsuit, the successful car dealership is currently “sitting on more than $6 million in cash”. Piemonte has allegedly been using that money to fund personal expenses for himself and his family, including his adult daughter’s cell phone bill and a Mercedes for his second wife. Piemonte denies all of the claims in the lawsuit.

The complaint alleges that the company’s money has been used to pay for Piemonte’s personal credit card bills and to provide health insurance for relatives of Piemonte who have never worked for the company. Piemonte also allegedly used company money to pay for repairs on a car belonging to a family member who lives out of state and has no affiliation with the business. Additionally, Piemonte allegedly used company money to pay for pest-control treatments in his home and his sister-in-law’s home.

The complaint alleges that O’Reilly “has observed Piemonte use (the business’) money to pay for various personal expenses including clothes, massages, country club memberships, and the costs associated with remodeling his condo”. These claims must be litigated and proven.

O’Reilly’s original partnership with Piemonte allegedly allows him to purchase Piemonte’s majority share in the company for book value upon his death. After a series of recent hospitalizations and medical procedures, the 82-year-old Piemonte allegedly began to rethink the arrangement. At Rosanna’s urging, Piemonte allegedly approached O’Reilly to discuss modifying the terms of the business partnership. When O’Reilly allegedly refused, the complaint alleges that the Piemontes began allegedly excluding him from meetings and barring him from the sales floor and the service department. The lawsuit claims that the Piemontes want Rosanna’s son to take over the business instead of selling Piemonte’s shares to O’Reilly. O’Reilly has stated that he has no intention of parting with his shares in the company and that he has filed the lawsuit in order to protect his financial interests in the company.

The lawsuit alleges that the dealership “is being grossly mismanaged by Piemonte and Rosanna” and that “Piemonte has systematically controlled and used the corporation for the benefit of him and his family members … In doing so, Piemonte has been using (the dealership) as his personal piggy bank.” Piemonte denies these claims.

The lawsuit is seeking to have Piemonte repay all of the money he allegedly took from the company to pay for personal expenses; claims which he has denied. The lawsuit also asks for the court to appoint a custodian or receiver to oversee the business and on an emergency basis but Chancery Judge Neil Cohen denied the request for an appointment immediately leaving that issue perhaps open to further litigation.

Continue reading ›

|

The law recognizes that public figures are more likely to be the subject of defamatory statements than private citizens. This is especially true when a public figures dies suddenly and unexpectedly. Amid rumors surrounding the recent death of the actor, Philip Seymour Hoffman, was a report in the National Enquirer that he and the playwright, David Bar Katz, had been lovers.

Once the report came out, Katz said, “After I dropped the kids at school I looked at my phone, and I’ve gotten a million calls.” He also said that photographers were stalking him on the street. Although Katz said that he was tempted to ignore it, his friends urged him to file a libel lawsuit. Shortly after he did so, the Enquirer withdrew the article with an apology.
The report inaccurately quoted Katz as saying that he and Hoffman were lovers, that they had freebased cocaine the night of Hoffman’s death, and that Katz had seen Hoffman using cocaine many times.

It is well known that Katz and Hoffman were good friends. While they met through friends in the movie industry about fifteen years ago, they didn’t become close until later, when their children began attending the same school in Greenwich Village. They would often have breakfast together after the school drop-off. However, Katz insists that, although he and Hoffman discussed addiction, Hoffman never did drugs in front of him.

Mr. Burstein of the National Enquirer explained that the false report was an honest mistake. He said that his reporters “did a search and found someone named David Katz who appeared to be the son of David’s father. They asked, ‘Are you David Katz who is the playwright?'” He said that he was and they believed him. Burstein further explained that the man “sounded distraught. They couldn’t believe that someone would be so callous to say, ‘I’m the real David Katz'” when he wasn’t. Burstein said that the interview was conducted by a senior reporter who worked on the story with some researchers. The reporter was convinced that it was the right person.

The lawsuit was quickly settled, although Katz did not claim any money for himself. Instead, he formed the American Playwriting Foundation which will give out an annual prize of $45,000 for an unproduced play. It is to be called the Relentless Award. The foundation and the prize are both being paid for by the National Enquirer and its publisher, American Media Incorporated as a part of the settlement of the libel lawsuit. The exact amount of money that the Enquirer paid to settle the lawsuit has not been revealed, although Mr. Burstein did say that “It’s enough for the foundation to give out these grants for years to come.”

As part of the settlement, the Enquirer also provided Katz with contact details for the person who fooled them into thinking that he was David Katz. The real Katz has said that he intends to sue the man, although he hasn’t filed yet. He wants to be sure that he files the lawsuit against the correct person.

Continue reading ›

|

Any time a professional athlete’s name or likeness is used, there is usually money to be made. This is particularly true when a group of athletes have succeeded in making something very specific famous. The problem with using the athlete’s name or likeness in order to make money is the fact that the athlete is the sole owner. Therefore, any time that the likeness or name are used, the athlete must be informed and given a share of the profits.

Even those of us who are not football fans have probably at least heard of the “Super Bowl Shuffle”. It was a music video created by the six members of the 1985 Chicago Bears, also known as the “Shufflin’ Crew”. Now those members have filed a lawsuit claiming that the music video, which they say was intended to help families in need, has been used for non-charitable purposes without their permission.

The lawsuit alleges that the Super Bowl Shuffle rights owner, Julia Meyer, and Renaissance Marketing Corp., Meyer’s agent,” have marketed, distributed and sold licenses relating to the Super Bowl Shuffle Crew members’ identities, images, names, photographs, likenesses, voices and performances in the Super Bowl Shuffle without the Shufflin’ Crew’s permission.” The lawsuit further alleges that, since Red Label Records assigned its interest in the shuffle to Meyer’s husband in 1986, the defendants have benefited financially from the Super Bowl Shuffle without the consent of the plaintiffs.

The lawsuit was filed in Chicago on behalf of the six members of the “Shufflin’ Crew”, Richard Dent, Steve Fuller, Willie Gault, Jim McMahon, Mike Richardson, and Otis Wilson. However, Gault was the one who discovered that the music video was allegedly being misused and alerted the other members of the “Shufflin’ Crew” and now it looks like he might be the main plaintiff in the case. “I certainly put my name into [the lawsuit] because they made a whole lot of money off of us,” Wilson said in a statement. “Now that things are coming to light, I left it up to Willie to handle it. So I am 100 percent behind him. For my opinion, they used us and they made a lot of money and now is the time to pay up.”

Walid Tamari, a Chicago-based attorney who is representing the athletes in the current lawsuit, said that “The lawsuit provides that an important, and stated, objective of the Super Bowl Shuffle when it was produced in 1985, was to give back to Chicago’s neediest families”.

According to the lawsuit, the defendants allegedly either failed or refused to inform the members of the “Shufflin’ Crew” of the revenue that they had been receiving from manufacturing, advertising, sales, licensing and merchandising of the Super Bowl Shuffle. The lawsuit also alleges that the former football stars were also not made aware of the financial benefits received from the use of their likenesses, names, voices and performances, both in and out of the shuffle.
In order to ensure that something like this does not happen again, the lawsuit is seeking, among other things, the establishment of a constructive trust for charitable purposes that they select in order to continue the Super Bowl Shuffle’s charitable objective.

Continue reading ›

|

 

Class actions have a number of hurdles to clear before they can attain certification. Those hurdles frequently include the arbitration agreements which companies have grown increasingly fond of including in their contracts. An arbitration agreement is a provision in a contract which states that any dispute between the parties must be settled in arbitration. This usually works in favor of the company as the arbitrator is usually chosen and paid for by the company, and is therefore frequently biased in favor of the company. It also prohibits class actions, which prevents many individuals with small claims from seeking redress, as the cost of arbitration is likely to exceed their claim.

Defendants in class action lawsuits frequently try to force arbitration. Rapid Cash, a loan company, is currently facing a class action lawsuit which alleges that borrowers were subjected to default judgments by the company. Attorney J. Randall Jones is representing the plaintiffs in the class and argues that Rapid Cash waived its ability to require arbitration, and as a result, the case belongs in the district court. Rapid Cash denies that it ever waived that ability and continues to argue that the case should be heard in arbitration.

If Jones succeeds in keeping the case in the district court and obtaining class certification, the class could include almost 16,000 borrowers who were allegedly subjected to default judgment. The class alleges that Rapid Cash failed to provide the required legal notice before subjecting them to default judgment.

One of the defendants included in the lawsuit is On Scene Mediations, a company that Rapid Cash uses to enter default judgments against borrowers. Dan Polsenberg, an attorney representing Rapid Cash, says that the loan company is also unhappy with the conduct of On Scene Mediations and is willing to work with borrowers who claimed nonservice.
However, Rapid Cash claims that borrowers who were wrongfully subjected to default judgments have another legal remedy, which is to go to Justice Court to ask to have the default judgments set aside.

The company also objects to the size of the class, arguing that the parameters for members to become a part of the class are too broad. In addition to 460 borrowers who allegedly never received a notice, the class also includes 7,000 borrowers who were sent letters but never responded, and 8,000 who were sent letters which were returned as undeliverable.
Barbara Buckley, the executive director of the Legal Aid Center, said in a statement why it is so important for plaintiffs to be able to file claims as a class action. “When there are cases of just widespread fraud, it is virtually impossible to have 16,000 separate actions. And having the ability to have one judge decide for one case what the proper recourse is; in some cases it’s the only way for consumers to get relief.”

Jones said that, if the class does not get certified, only a small fraction of the plaintiffs will be able to get any relief. He pointed out that “These people are the most vulnerable in our society in terms of economic fraud and taking advantage of people in the financial arena. … You’re dealing with a constituency that doesn’t have a whole lot of options. So you need this process or else these people really won’t get any kind of remedy.”

Continue reading ›

|

 

It is a common practice for retail stores to check the bags of their employees for merchandise that the employees might be trying to take home with them illegally. However, since these bag checks are required by the employer, the employees must be paid for all of the time spent having their bags checked and waiting in line, if necessary. While this time may be only a few minutes, it can add up, day after day, to a significant loss of wages on the part of the employees. Several retail stores have already faced wage and hour class action lawsuits from employees who were not compensated for the time that they spent waiting to have their bags checked. Now Urban Outfitter is the latest retail store to face a lawsuit for allegedly failing to pay employees for the time it took to have their bags checked before they were allowed to leave.

According to the lead plaintiff, Zayda Santizo, she was allegedly a non-exempt hourly employee at Urban Outfitters and yet she and other hourly employees were allegedly required to have their bags checked outside of their normal schedules. While employees who qualify for one of the overtime exempt categories under the federal Fair Labor Standards Act (FLSA) are required to stay until their work is done, however long that takes, all hourly employees must be paid the overtime rate of one and one-half times their normal hourly rate for all time that they spend working in excess of eight hours a day or forty hours a week. According to this most recent wage and hour lawsuit, the hourly non-exempt employees at Urban Outfitters allegedly were required by their employer to stay overtime to have their bags checked, but allegedly were not paid the proper overtime rate.

The complaint alleges that the paystubs issued by Urban Outfitters were inaccurate because they allegedly did not reflect the time spent by employees waiting to have their bags checked. Under the FLSA, failure to provide employees with pay stubs which accurately reflect the time spent working and the wages earned by the employee is subject to certain penalties.

In addition to these alleged violations of the FLSA, the wage and hour class action lawsuit also alleges that Urban Outfitters violated certain state statutes as laid out by California labor law.
The wage and hour lawsuit is seeking certification of three sub-classes of current and former employees of Urban Outfitters. The first proposed sub-class includes all employees who worked for Urban Outfitters “at any time beginning four years prior to the filing of the complaint through the date notice is mailed to the class.” According to the complaint, an estimated 400 employees allegedly have the potential to be eligible to fit into this first sub-class.

The second proposed subclass includes all workers “whose employment by [Urban Outfitters] ended within three years of filing the complaint.” The third proposed sub-class includes all workers “whose employment with [Urban Outfitters] included any period of time during the period beginning one year from the date of the filing of this action.” The complaint estimates at least 200 employees have the potential to allegedly qualify for one of these last two sub-classes.

Continue reading ›

|

 

Before determining the method by which an employee is to be paid, it is usually a good idea for the employer and the employee to reach an agreement as to what exactly all of the employee’s responsibilities are. A social game developer company, Zynga, recently ran into this problem with one of its software engineers. The employee, Andrew Luo, insisted that managing other employees was not part of his job responsibilities. He therefore filed a lawsuit against Zynga for violating the federal Fair Labor Standards Act (FLSA) when it failed to pay him overtime when he worked in excess of forty hours a week. Zynga, which is now owned by Facebook, argues that managing other employees was part of Luo’s job responsibilities, so it was right to classify him as exempt from overtime compensation.

Although the FLSA requires employers to pay all of their employees the proper overtime compensation of one and one-half times the employee’s normal hourly rate of pay for all time that the employee spends working in excess of eight hours a day or forty hours in a week, the act does make exceptions for certain employees. One category of employees which may be exempt from overtime compensation is employees who manage other employees as one of their primary job responsibilities.

Because Luo insisted that he did not manage other employees, he filed a wage and hour class action lawsuit against Zynga on behalf of himself and all current and former software engineers, quality assurance, and other skilled personnel who worked for Zynga in the relevant time period.
Despite continuing to insist that it had done nothing wrong by classifying Luo as exempt from overtime compensation, Zynga proposed to settle the case outside of court. Luo agreed to the settlement on an individual basis because of the uncertainty of his status as an exempt employee under the FLSA while working for Zynga. Even when two opposing parties agree on a settlement, a federal judge is required to approve the settlement before it can be finalized. Initially, Judge Nathanael M. Cousins refused to approve the settlement because it was under seal, despite the fact that the lawsuit had been filed as a putative class action. Cousins worried that failure to make the settlement public might have an adverse effect on similarly situated employees attempting to seek redress for violations of the FLSA committed against them.

Under the terms of the settlement, Luo will receive $12,000, enough to compensate him for 144 hours of unpaid overtime. The settlement also precludes Luo from filing further claims against Zynga for payments for things like family leave. Attorneys for both sides argued that the settlement would not have any undue effect on other putative class members because “the lack of publicity makes it unlikely that similarly situated class members knew of the present lawsuit and relied on it for vindication of their own rights.” Judge Cousins agreed with this assertion. He also agreed that the settlement was fair due to the uncertainty of Luo’s exempt status under the FLSA.

Continue reading ›

|

 

Companies have been writing more and more contracts for both their customers and their employees, which require any disputes to be settled in arbitration. Companies prefer arbitration over court litigation because the company usually chooses and pays for the arbitrator. As a result, arbitrators generally tend to decide in favor of the company.

Arbitration also bars consumers and their employers from bringing class actions against the company. This is detrimental to the individual’s ability to attain redress for their claims, as many consumers and employees have small individual claims. On their own, they’re not worth the costs of bringing a suit to court, or even arbitration. Richard Cordray, director of the Consumer Financial Protection Bureau, stated that, “there are almost no disputes over amounts less than $1,000.” So, if multiple consumers suffered in the amount of $50 or $100 as a result of a company’s illegal actions, and the consumers are barred from filing a class action, then they have no way of getting compensation for their claims.

When combined, however, they may make a substantial sum, which not only might warrant bringing legal action against the company, but might also send a message to the company and to others that such conduct is wrong and punishable under the law.

Class actions also provide consumers and employees with greater leverage against large companies who are sometimes equipped a team of attorneys. An individual would have a difficult time finding and paying for sufficient representation against such a formidable foe. A class of plaintiffs on the other hand, is much more capable of attaining adequate representation.
Proponents of these arbitration agreements argue that they actually benefit consumers. For example, the U. S. Chamber of Commerce issued a letter to the federal bureau which said that “prohibiting or regulating arbitration would harm consumers more than it would benefit them. … Arbitration is at least as likely, and often more likely, than litigation in court to result in positive outcomes for consumers.”

Such assertions don’t hold up against the statistics, though. A report conducted by Public Citizen in 2007 found that, over a period of four years, in disputes between credit card companies and their consumers, arbitrators sided with the credit card companies 94 percent of the time.
Consumer advocates, on the other hand, have been arguing that any means used to deny people the right to sue or band together in class actions is unfair. The U. S. Supreme Court created much controversy when it ruled in 2011 that businesses such as phone companies, credit card issuers, and cable companies could not legally be barred from including arbitration clauses in their service contracts.

However, the Consumer Financial Protection Bureau also gets a say in the matter. According to the same financial-reform law that created the bureau in 2010, the bureau has the authority to “prohibit or impose conditions or limitations on the use” of arbitration clauses for credit cards, checking accounts, and other financial contracts.

While the federal bureau’s investigation into the legality of these arbitration agreements may mean relief for consumers, it looks like employees will have to wait. Although the National Labor Relations Board had reached a decision which barred arbitration agreements that prohibit class action suits over pay and hours, a federal appeals court recently overturned that decision.

Continue reading ›

|

 

In the tricky world of trademarks, sometimes it boils down to a simple matter of who was there first. For example, Kraft has been labeling some of its cheeses with the name “Cracker Barrel” since 1954. Fifteen years later, in 1969, Cracker Barrel Old Country Store, Inc. was founded. The low-priced restaurant has since grown to a chain of about 620 restaurants.

Recently, Cracker Barrel has announced that it plans to use its name, “Cracker Barrel Old Country Store” to sell various pork products, such as ham, lunchmeat, bacon, and jerky, to be sold in supermarket stores. After the announcement of these plans, Kraft Foods Group Brand sued Cracker Barrel for trademark infringement. The complaint argued that “consumers will be confused by the similarity of the logos and think that food products so labeled are Kraft products, with the result that if they are dissatisfied with a Cracker Barrel Old Country Store product, they will blame Kraft.”

The district court found that Kraft was likely to prevail in its claim so the court issued a preliminary injunction against Cracker Barrel Old Country Store, barring the restaurant from using its logo to sell pre-packaged meat products. Cracker Barrel appealed the decision and the case went to the Seventh Circuit Court of Appeals.

The appellate court agreed with Kraft that, if a consumer was dissatisfied with one of Cracker Barrel’s products, she might blame Kraft. As a result, said the court, “Kraft’s sales of Cracker Barrel cheeses are likely to decline.” The court further asserted that such an event was no minor consideration for Kraft and was unlikely to be an isolated incident. Instead, the court stated that, “The likelihood of confusion seems substantial and the risk to Kraft of the loss of valuable consumer goodwill and control therefore palpable.”

This remains true even though the logos of the two products are different. The court further asserted that, even if the products are sold in different parts of the store, labeling the two products with the same name is still sufficient for consumers to forget the difference between the two logos and mistakenly think that they are produced by the same company. Given that Kraft has been selling cheeses with the name “Cracker Barrel” for sixty years, the court noted that consumers by now have most likely grown familiar with the label. That familiarity might cause consumers to attribute any product bearing the “Cracker Barrel” name to Kraft, even if the logos are different. This is especially true when considering the fact that companies are constantly updating their logos in an attempt to look “fresh” and up-to-date. A consumer may assume that the “Cracker Barrel” cheese they are buying is still from Kraft, even if she does notice that the label is different.

The appellate court therefore concluded that, if Cracker Barrel was to be allowed to sell pre-packaged meat products bearing the name “Cracker Barrel Old Country Store”, the products would likely be distributed through the same channels, which would only serve to cause more confusion among consumers. For these reasons, the appellate court upheld the ruling of the district court and the injunction remains in effect.

Continue reading ›

Contact Information
Chicago Office
19 S LaSalle St #702
Chicago, IL 60603
Phone: 630-333-0333
Mailing Address
17W220 22nd St #410
Oakbrook Terrace, IL 60181
Phone: 630-333-0333 Please direct all mail correspondence to our Oakbrook Terrace address.
Highland Park Office
189 Whistler Rd
Highland Park, IL 60035
Phone: 630-710-4990
We accept the following credit cards
Credit Cards Accepted
We accept payment via Venmo at: @L-A-LAW

Please direct all mail correspondence to our Oakbrook Terrace address.

Phone: 603-333-0333
Visit our site: chicagobusinesslawfirm.com

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship.

Copyright © 2024, Lubin Austermuehle, P.C.
JUSTIA Law Firm Blog Design