Chicago Business Litigation Lawyer Blog

Video About Your Lemon Law Rights — Our Chicago Lemon Law and Auto Fraud Lawyers File Suit to Recover Damages for Purchasing a Car that is Lemon or due to Auto Fraud

October 30, 2010 | Peter S. Lubin and James V. DiTommaso

About the Lemon Law — powered by eHow.com

Our Chicago auto-fraud lawyers focus on bringing suit for auto-fraud claims. We recently settled a suit involving purchase of $9,000 used car that was in reality 3 different cars welded together for $100,000. Our fees come from the recovery and we only get paid if we win or settle your case. We have has similar large six figure or near six figure settlements for clients who purchased certified used cars that in fact were rebuilt wrecks.

If you believe you purchased a motorcycle, car, rv or other product that is a lemon, have been a victim of auto fraud, auto dealer fraud, auto repair fraud or have been deceived into buying a flood car, rebuilt wreck or salvage vechicle DiTommaso Lubin may be able to help rectify the problem. We or experienced co-counsel are prepared to file suit in the right case in the Chicago area or anywhere in the country. For a free consultation on your rights as an employee, contact us today.

Bank of America Loses Motion to Dismiss in Unpaid Overtime Class Action Brought By Its Call Center Employees

October 30, 2010 | Peter S. Lubin and James V. DiTommaso

A federal court in Kansas denied Bank of America motion to dismiss an unpaid overtime lawsuit brought by the Bank’s call center employees.

The call center employees claim Bank of America forced them to work without pay during meal breaks and before and after their regular hours due to laying off too many employees and under staffing decisions designed to lower costs and increase the Bank’s profits. The lawsuits brings class-action claims under the laws of different states and collective action claims under the Fair Labor Standards Act.

To read the Court’s opinion click here.

A New York City Federal Judge Allows Chevron to Depose Opposing Counsel

October 30, 2010 | Peter S. Lubin and James V. DiTommaso

A New York City federal court has allowed Chevron to depose the opposing plaintiffs’ attorney judge. The Court took this unusual step in the toxic tort case against Chevron involving oil contamination in Lago Agrio, Ecuador. Most court’s generally bar the litigants from deposing opposing counsel calling it harrassment.

Judge Kaplan found that there was evidence in video out takes from a documentary film about criminal prosecutions arising from the contaimination claims that made it appear as if Plaintiffs’ counsel, Donziger had worked with an expert in Ecuador to cause Chevron’s lawyers from Gibson Dunn & Crutcher to be indicted there on criminal charges.

Judge Kaplan ruled: “The outtakes contain substantial evidence that Donziger and others were involved in ex parte contacts with the court to obtain appointment of the expert; met secretly with the supposedly neutral and impartial expert prior to his appointment and outlined a detailed work plan for the plaintiffs’ own consultants; and wrote some or all of the expert’s final report that was submitted to the Lago Agrio court and the Prosecutor General’s Office, supposedly as the neutral and independent product of the expert.”

Wal-Mart Overtime Lawsuit Settled in California for Up to $86,000,000 Repaid to Allegedly Cheated Workers

October 30, 2010 | Peter S. Lubin and James V. DiTommaso

In our work as Illinois and nationwide wage and hour attorneys, we frequently see workers who have been misclassified as exempt from overtime. Whether this was an honest mistake or an intentional attempt to save money, it effectively “steals” wages from the misclassified employees. DiTommaso Lubin stands up for the rights of workers in Chicago, Illinois and throughout the country who are victims of overtime wage theft, including misclassified employees as well as those pressured to work off the clock; lie on timesheets; or simply not paid an overtime rate. Our Oak Brook, Waukegan and Chicago unpaid overtime lawyers handle both individual and class action employment cases. Based in Chicago and Oak Brook, Ill., our Chicago Fair Labor Standard’s Act attorneys represent clients throughout Illinois, the Midwest and the United States.

DiTommaso Lubin’s Chicago Attorneys Represent Workers in the Chicago Area and Throughout the Country in Unpaid Overtime and Other Wage Payment Class Actions

October 30, 2010 | Peter S. Lubin and James V. DiTommaso

In our work as Chicago overtime attorneys we frequently see workers who have been misclassified as exempt from overtime. Whether this was an honest mistake or an intentional attempt to save money, it effectively “steals” wages from the misclassified employees. DiTommaso Lubin stands up for the rights of workers in Chicago, Illinois and throughout the country who are victims of overtime wage theft, including misclassified employees as well as those pressured to work off the clock; lie on timesheets; or simply not paid an overtime rate. Our Oak Brook, Northbrook, Aurora, Elgin, Joliet and Chicago unpaid overtime lawyers handle both individual and class action employment cases. Based in Chicago and Oak Brook, Ill., our Chicago Fair Labor Standard’s Act lawyers represent clients throughout Illinois, the Midwest and the United States.

Law.com Reports: “National Class Action Status Granted in Conseco Life Insurance Case”

October 30, 2010 | Peter S. Lubin and James V. DiTommaso

National Class Action Status Granted in Conseco Life Insurance Case
By Petra Pasternak
October 26, 2010
Instead on alleging fraud based on state consumer fraud statutes this article explains that this class action against Conseco relies on a breach of contract claim for the life insurance carrier’s alleged failure to honor the terms of similar life insurance policies. The article describes the Federal Judge Ilston’s decision to approve class certification because Judge Ilston concluded contract law is subtantially the same in throughout the different States:

The plaintiffs alleged that Conseco was breaching nearly 10,000 “LifeTrend” insurance policies … including improper premium charges and improper deductions from policyholders’ accounts — could result in losses of tens of thousands of dollars per policyholder. …
Conseco tried to smack down class certification … But Illston wrote that Conseco was exaggerating any variations when it came to breach-of-contract.
“Contrary to Conseco’s representations, several courts have recognized that the law relating to the element of breach does not vary greatly from state to state,” Illston wrote.

This trend to to allow use of contract law to obtain national class certification is a breath of fresh air. Class actions are the only way to protect against this type of mass breach of contract by a large insurer. Absent a national class action many victims in smaller states would obtain no redress.

You can read the entire article by clicking here.

Market Watch Reports “Dollar Tree Stores, Inc’s Hourly Employees Bring Class Action to Seek Unpaid Wages and Overtime, Nationwide”

October 29, 2010 | Peter S. Lubin and James V. DiTommaso

Market Watch reports that two Dollar Tree employees have brought a collective action under the Fair Labor Standards Act for alleged failure to pay overtime and minimum wages.

To view the full article click here.

If you believe you might be part of a class of employees forced to work off the clock or have othewise been denied overtime pay, DiTommaso Lubin may be able to help your pursue your own overtime class action. For a free consultation on your rights as an employee, contact us today.

Federal Lawsuit Asks Judge to Rule That Social Media Contact Violates Non-Compete Clause

October 27, 2010 | Peter S. Lubin and James V. DiTommaso

The U.S. District Court for Minnesota is hearing a test case for how restrictive covenants are affected by social media. Our Chicago restrictive covenant litigation lawyers were extremely interested to read about TEKSystems, Inc. v. Hammernick in a June 15 ComputerWorld article. According to the article, information technology staffing firm TEKSystems is suing a former employee who once helped recruit IT professionals for the company to place at other businesses. That former employee, Brelyn Hammernick, is accused of violating her non-solicitation, non-compete and non-disclosure agreements with TEKSystems through her use of the social media website LinkedIn. The company claims Hammernick violated her agreements by connecting with at least 20 TEKSystems contract employees, among other things. Other defendants are Horizontal Integration, Hammernick’s new company, and two colleagues who moved there from TEKSystems, Quinn VanGorden and Michael Hoolihan.

According to the federal complaint, Hammernick signed an agreement not to work for a competitor of TEKSystems for 18 months after leaving her job there and within a 50-mile radius of the company’s Edina, Minnesota office. The agreement also restricted her from recruiting employees and clients of TEKSystems for the same 18-month period, including people who had been contract employees for up to two years beforehand, and from revealing the company’s confidential information. The complaint accuses Hammernick of violating all three provisions after moving to Horizontal Integration, a direct competitor. In addition to connecting with former colleagues on LinkedIn, the company accuses her and her two colleagues of using their knowledge of TEKSystems’ clients to solicit them for Horizontal Integration and soliciting several contract employees to move to Horizontal Integration. TEKSystems asked for substantial financial damages as well as injunctions enforcing the restrictive covenants.

This case contains numerous more conventional restrictive covenant issues, but our Illinois non-compete litigation attorneys are also very interested in the novel issue of whether social media contact is in itself a violation of a non-solicitation clause. Without knowing more about the situation, we suspect that the district court will not accept this argument. In itself, connecting with someone on LinkedIn or another social networking site does nothing more than give both people access to each other’s contact information. This could be considered an “electronic Rolodex,” and no court would uphold a non-solicitation agreement that requires an ex-employee to discard her Rolodex. In fact, the language of the agreement, as laid out in the complaint, prohibits contact with TEKSystems employees only for the purpose of soliciting them away from the company. For this reason, we think TEKSystems will have an uphill battle on that claim.

Fifth District Court of Appeal Declines to Compel Arbitration in Shareholder Derivative Claim

October 26, 2010 | Peter S. Lubin and James V. DiTommaso

Our Aurora, Ill. shareholder derivative claim lawyers were interested to see an appellate case that examined whether a limited liability corporation can be a party to a case brought under its own operating agreement. In Trover v. 419 OCR Inc. et al., No. 5-09-0145 (Ill. 5th, January 12, 2010), Joseph Trover sued 419 OCR Inc., O’Fallon Development Group LLC, Mark Halloran and Steve Macaluso, alleging a variety of shareholder complaints and fraud claims over a real estate deal that had gone sour. Trover, individually and as the trustee of a trust in his name, was part of a limited liability company called the Far Oaks Development Group. Other members of Far Oaks were defendants Halloran and Macaluso as well as non-defendant Garrett Reuter. Far Oaks owned land around a golf course that the members wished to develop. Reuter, Halloran and Trover also were part of a business called Far Oaks Golf Club, LLC.

In 2005, members of FODG agreed to sell and assign the company’s interest in the land to 419 OCR Inc., which was owned by Halloran and Macaluso, in order to gain a tax advantage. Trover claims he relied on the defendants and the advice of an attorney when he agreed to this. Halloran and Macaluso allegedly made an oral promise to pay the Golf Club the price of land to be sold, as well as a sum to be determined. Trover claims this was supposed to be put into writing. However, it was not included in the contract that transferred the land to 419 OCR, and it was never put into writing in other ways.

Halloran and Macaluso then proceeded to develop the land, sell lots and make a profit. Part of the interest in the land was transferred to another business called the O’Fallon Development Group. Trover’s lawsuit claims that FODG never received any money based on that land sale. Count I alleged breach of the oral contract against 419 OCR; Count II alleged breach of contract against the O’Fallon Group, which assumed obligations under the contract because of unity of ownership. Count III was a shareholder derivative action brought by Trover on behalf of FODG, alleging breach of fiduciary duty and corporate waste by Macaluso and Halloran. Count IV was a similar shareholder derivative action, brought by the Golf Club against Halloran only. Count V alleged fraud by Halloran and Macaluso individually, accusing them of making false representations when they said the sale price of the land would be paid back to the Golf Club.

After the lawsuit was filed, the defendants filed a motion to compel arbitration as required by the broadly worded operating agreements behind FODG and the Golf Club. The trial court denied this motion, and the defendants filed the interlocutory appeal that went before the Fifth District.

The appeals court upheld the trial court’s decision on four of the five counts. The transfer of the land from FODG to 419 OCR was within the scope of the operating agreements, the court found, but 419 OCR and O’Fallon were not parties to that agreement. Illinois law does not allow courts to compel arbitration among entities that were not parties to the arbitration agreement, the court wrote. Thus the trial court was correct to deny arbitration as to Counts I and II.

Counts III and IV are shareholder derivative actions, the court wrote, so compelling arbitration would require a finding that an LLC is a party to the agreement that creates itself. This is an issue of first impression in Illinois, the court noted. Relying on language in the Illinois Limited Liability Company Act, the court found that LLCs are not parties to their own agreements, because “A limited liability company is a legal entity distinct from its members.” The operating agreement specifies that it is between the signers, and the signers did not indicate that they were signing on behalf of either LLC in the case. And the agreement specifically states what actions members must take to legally bind the LLC. That shows that members knew how to do so but did not. Thus, the appeals court upheld the trial court on Counts III and IV as well.

The defendants were luckier with Count V, which named Halloran and Macaluso as individuals. Because both Halloran and the plaintiff signed the operating agreement with the arbitration clause, the court wrote, they are bound by it. Macaluso did not sign the original operating agreement, but he did buy 100 shares of each LLC after the fact. That makes him a member under the Illinois LLC Act, the court wrote, and binds him to everything in the agreement. Thus, he has the right to compel arbitration. For all of those reasons, the appeals court reversed the trial court as to Count V but upheld on the other counts, and sent the case back to trial.

Company’s Indemnification Claim Barred by Res Judicata, First District Decides

October 20, 2010 | Peter S. Lubin and James V. DiTommaso

A company involved in an underlying federal patent infringement case may not re-litigate the question of whether its software provider should indemnify it from that case, the First District Court of Appeal has ruled. As Chicago business attorneys, we were interested to read the ruling in Peregrine Financial Group v. TradeMaven LLC, No. 1-08-1111 (Ill. 1st 2009). This case springs from an intellectual property case filed in Chicago federal court, in which Trading Technologies, Inc., a software company, accused competitor TradeMaven and commodities brokerage firm Peregrine of infringing its software patents. TradeMaven and Peregrine came to separate settlements in that case, but Peregrine then sued TradeMaven in state court for multiple causes of action, including indemnification. The trial court graned TradeMaven’s motion for summary judgment on the indemnification count, and the First upheld it.

Peregrine licensed TradeMaven’s electronic trading software in 2004. In the licensing agreement, TradeMaven warranted that its software did not violate the rights of any third party, including intellectual property rights. It later agreed to indemnify Peregrine for expenses related to claims of infringement of “any property right.” Less than a year later, Trading Technologies filed its suit. Peregrine claims it sought and received assurances from a TradeMaven officer that TradeMaven would cover Peregrine’s costs in the suit. However, Peregrine did not file any claims against TradeMaven in that litigation. TradeMaven settled in January of 2006, at which time Peregrine sent it a letter reminding it of the indemnification obligation.

Peregrine settled in March of 2006, on the same day that TradeMaven amended its settlement to include additional payment. TradeMaven claims it made that payment in exchange for Trading Technologies executing a general release in Peregrine’s favor. Peregrine claims it didn’t ask for this payment and that the payment did not extinguish its indemnification rights or discharge its obligations. In connection with the settlements, the court later put forth a consent judgment that included language stating that each party would pay its own attorneys’ fees. Peregrine later sent TradeMaven a letter reminding it that it still owed Peregrine indemnification, and when TradeMaven did not indemnify Peregrine, Peregrine sued for indemnification, breach of contract, breach of warranty and tortious interference. The trial court dismissed the warranty claim and granted partial summary judgment on indemnification, saying the consent judgment blocked that claim under the doctrine of res judicata. After a motion to reconsider was denied, Peregrine appealed.

Peregrine’s first argument on appeal was that TradeMaven did not meet its burden of proving res judicata because the indemnification cause of action was not a cause of action in the federal patent infringement case. The appeals court disagreed. Both cases arose out of the underlying license agreement, the First wrote, which means both arose from the same transaction, circumstances or factual nebulae, as required by the law. It also dismissed Peregrine’s claim that its lawsuit was distinct from the patent infringement lawsuit because it brought no claims against TradeMaven in the patent infringement case. This is true, the court said, but Peregrine could have claimed indemnification at any time during the case, since indemnification was part of the licensing agreement. Peregrine was demonstrably aware of its rights and had incurred costs and fees, the court said.

The court next examined Peregrine’s argument that it had no obligation to bring a claim for indemnification during the federal case because the cause had not accrued. In support, it cited Guzman v. C.R. Epperson Construction, Inc., 196 Ill. 2d 391 (2001), in which the Illinois Supreme Court ruled that a third-party claim for indemnification does not accrue until a defendant settles or has a judgment entered. However, the First said Guzman did not apply because in this case, Peregrine was not a third party, but a named defendant. Furthermore, it noted, Guzman used Illinois law and had an implied indemnification contract, not federal law and an express indemnification contract, as in this case. It also rejected two other arguments based on caselaw, saying this case is more like Threshermen’s Mutual Insurance Co. v. Wallingford Mutual Insurance Co., 26 F.3d 776 (7th Cir. 1994), in which the Seventh Circuit, applying Wisconsin law, found that an insurance company could and should have raised its indemnification claim during the underlying case.

Finally, the First rejected the argument that equity should prevent it from allowing TradeMaven to avoid its obligations under the license agreement, especially since it had said it would. The court said it may be sympathetic, but that Peregrine had made its own predicament and that it would not upset res judicata on that basis alone. Thus, the First upheld the trial court’s decision to grant summary judgment on indemnification.