Chicago Business Litigation Lawyer Blog

Continued Employment for a Short Time Is Not Adequate Consideration for Post-Employment Restrictive Covenant, Appeals Court Decides

July 29, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

Lubin Austermuehle DiTommaso’s Illinois breach of contract litigation attorneys were pleased to see a split Illinois Third District Court of Appeal decision clarifying the circumstances under which a post-employment restrictive covenant is valid. The decision came in Brown & Brown v. Patrick Mudron, No. 03-CH-1363 (Ill. 3rd March 11, 2008), in which a Florida insurance company sued a former employee for breaching a restrictive covenant in her employment agreement.

Diane Gunderson, the employee, worked for a Joilet, Ill. company that was taken over by Brown & Brown. Brown asked Gunderson to sign a new employment agreement with them, and in fact, fired an employee who refused to do so. The agreement said Gunderson’s employment could be terminated any time for any reason and prohibited her from soliciting or servicing any of Brown’s employees for two years after ending her employment with the company. She signed the agreement, but resigned seven months later and went to work for a competitor. Brown sued, alleging that Gunderson had breached the restrictive covenant at her new job. The trial court granted summary judgment in favor of Gunderson because it couldn’t find any evidence that she had breached the covenant, and Brown appealed.

The majority started by disposing of a “choice of law” provision in the contract requiring all disputes to be resolved in Brown’s home state of Florida. Illinois law applies anyway, the court wrote, because Illinois has a greater interest in the case and moving it to Florida would be against Illinois public policy interests. International Surplus Lines Insurance Co. v. Pioneer Life Insurance Co. of Illinois , 209 Ill. App. 3d (1990).

Homeowner May Sue for Lending Fraud by Mortgage Insurer, Seventh Circuit Rules

July 19, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

In a case based on the federal Truth in Lending Act (TILA) and Illinois Consumer Fraud and Deceptive Business Practices Act, the Seventh Circuit has ruled that a victim of a bait-and-switch scheme for title insurance may sue his lender. Doss v. Clearwater Title Co., No. 07-2400 (7th Cir. Dec. 24, 2008). Charles Doss refinanced his mortgage in 2004, using a company called The Loan Arranger that did indeed arrange a loan for Doss with Franklin Financial Company. Franklin asked Doss to get title insurance, which he did through Clearwater Title Company.

Clearwater turned out to be an unlicensed company with a secret affiliation with The Loan Arranger. Doss was told via closing documents that the title insurance cost was $500, but was actually charged $1,470. In late 2006, Doss sued all three companies plus JP Morgan Chase, which held his mortgage, and Saxon Mortgage Services, Inc., which serviced it. However, Chase and Saxon had filed for foreclosure against Doss earlier in that year, and in response to the lawsuit, filed papers claiming that Doss had no claim because he had already sold his home. Doss replied that their quitclaim deed was a forgery and that indeed, he had filed documents showing he was still the owner. The trial court sided with Chase and Saxon and dismissed the homeowner’s claims.

Doss appealed; while the appeal was pending, an Illinois trial court found that the property had not changed hands. The Seventh Circuit first examined the claim by Chase and Saxon that the trial court had no jurisdiction under the TILA because Doss had sold the property. That was irrelevant, the court said, because the question was whether Doss had actually sold the property. On the dismissal itself, the Seventh found that the trial court should have treated the sale allegations by Chase and Saxon as a motion for summary judgment, which would have given Doss a chance to present and support his own assertions. This would have led the trial court to conclude that there was indeed a genuine issue of material fact in the case and continued the litigation, the opinion said.

Federal Reserve Board Handbook on the Fair Debt Collection Practices Act Provides a Very Good Summary of the Act — Our Chicago, Naperville, Waukegan, Wilmette, Northbrook and Wheaton Civil Litigation Attorneys Assist Victims Of Abusive Debt Collectors

July 18, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The Federal Reserve Board has prepared an excellent summary of consumer rights available under the Fair Debt Collection Practices Act (“FDCPA”) in an online handbook on the FDCPA. You can view the handbook by clicking here.

Our consumer rights private law firm handles individual and class action unfair debt collection and other consumer fraud cases that government agencies and public interest law firms such as the FTC may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. Lubin Austermuehle DiTommaso is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

Our Naperville, Aurora, Waukegan, Joliet, Elgin, Highland Park, Northbrook, Wilmette, Wheaton, Oak Brook, and Chicago consumer civil litigation lawyers provide assistance in fair debt collection, consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Chicago area consumer protection lawyers who can assist in lemon law, unfair debt collection, junk fax, prerecorded telephone solicitations, and other consumer, consumer fraud or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.

Illinois Probate Law Allows Executors to Set Multiple Deadlines for Claims Against Estates, Appeals Court Decides

July 13, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

A legal malpractice plaintiff who is also the executor of an estate may issue new creditor notices to avoid having his case dismissed, the First District Court of Appeal decided March 31. In Jaason v. Sullivan, No. 1-08-1254 (Ill. 1st Dist. March 31, 2009), the executor, Erik Jaason, filed a Chicago legal malpractice lawsuit against Barbara J. Sullivan and B.J. Sullivan & Associates for alleged mistakes in a will Sullivan prepared for Alexander Koepp.

In his complaint, Jaason alleges that Koepp instructed Sullivan to prepare a will giving Jaason the right to purchase Koepp’s home for $150,000, at Jaason’s discretion. However, Koepp’s home was already held in joint tenancy with his wife, Karsti Koepp. Thus, upon Alexander Koepp’s death in November of 2006, the property was outside the purview of the will and passed to Karsti Koepp under the joint tenancy, leaving Jaason with no option to purchase it. He sued Sullivan in December of 2007 for legal malpractice, alleging that her failure to recognize and take action on the joint tenancy fell outside the applicable standard of care.

In response, Sullivan filed a motion to dismiss the suit as time-barred. The Illinois Code of Civil Procedure requires that, in cases where probate has been opened, plaintiffs must file their claims for legal malpractice within the time given for claims against the estate or the time given for contesting the validity of a will — whichever is greater. The six-month window for contesting the will had clearly elapsed in the 13 months since Koepp’s death. To make a claim against an estate, creditors in Illinois have three months from the date they receive a notice of the death in the mail, or six months from the date of publication of the death as a legal notice, whichever is later.

Incorrect Breakdown of Principal and Interest Does Not Violate FDCPA Requirement for ‘Truthful Information,’ Seventh Circuit Rules

July 8, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

In a Fair Debt Collection Practices Act class action, the Seventh U.S. Circuit Court of Appeals has ruled that a bill collector’s failure to correctly break down a bill into principal and interest does not violate that Act. Wahl v. Midland Credit Management, No. 08-1517 (7th Cir. Feb. 23, 2009) was a class action lawsuit alleging that debt collectors violate the FDCPA when they send out bills that state the correct total amount but break down the charges incorrectly.

Plaintiff Barbara Wahl had just $66.98 on a credit card when she sustained a stroke and racked up much larger medical bills during a time when she couldn’t work. The credit card went unpaid and eventually, the balance was $1,149.09, mostly in interest and late fees. Midland purchased the debt in January of 2005 and started sending demand letters to Wahl. The letter at issue arrived April 15, 2005, listing both the “current balance” and “amount due” at $1,160.57. On the back side, it listed the “principal” as $1,149.09 and the “accrued interest” as $11.48. This was followed by a similar letter listing a higher interest. The letters construed the “principal” as the total value of the debt Midland had bought, including interest accrued with the original creditor.

Wahl filed a proposed class-action lawsuit in federal court for the Northern District of Illinois. One of her two claims was that Midland had violated the FDCPA by incorrectly stating that the principal on her account was $1,149.09 rather than breaking down the original principal, the original interest and the new interest. Debt collectors are not required by law to break down charges, it said — but when they do, the law requires that the breakdown not contain false or misleading information. On cross-motions for summary judgment, the trial court ruled in favor of Midland. Wahl appealed.

First District Rules Insurer Must Defend Private Security Company in Chicago Fire Damage Lawsuits Despite ‘Joint Venture’

June 29, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

A private security company’s agreement with a competitor does not foreclose insurance coverage in lawsuits filed against the first company alone, the First District Court of Appeal has ruled. Clarendon America Insurance Company v. B.G.K. Security Services, Inc., No. 1-07-2994 (Ill. 1st Dec. 19, 2008), arises out of a 2003 fire at a Cook County-owned building at 69 West Washington Street in Chicago. Twenty-two lawsuits resulted from the fire. Clarendon, which insures BGK, had filed for declaratory judgment that it had no duty to defend BGK in those suits.

Clarendon’s argument focuses on language in its policy, specifying that the insured parties include “[a]ny organization you newly acquire or form, other than a partnership, joint venture or limited liability company…” It used that language to argue that coverage for BGK in the 22 fire lawsuits should be excluded, because BGK had entered into a joint venture with another security company, Aargus Security Systems, Inc. Both sides filed for summary judgment in the trial court, and the trial court sided with BGK. Clarendon appealed, arguing both the summary judgment language and that it should have been allowed to complete discovery because the record was unclear.

By contrast, BGK argued that Clarendon has a duty to defend because the lawsuits name BGK rather than the joint venture, and BGK is also the insured named by the insurance policy. The appeals court agreed. Pointing out that the joint venture is extrinsic evidence, the court reasoned that this evidence involves facts that could drastically change the underlying litigation (the fire lawsuits) by affecting BGK’s liability. That would make it an impermissible consideration under Illinois caselaw, the court wrote, and thus, the trial court was right to exclude it.

Appeals Court Dismisses Chiropractor’s Class Action Lawsuit Against Insurer for Alleged Underpayment and Breach of Contract

June 22, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

In a proposed class-action insurance fraud lawsuit, the Illinois Third District Court of Appeal has ruled that a chiropractor may not sue a workers’ compensation insurer. In Martis v. Grinnell Mutual Reinsurance Company, No. 3-08-0004 (Ill. 3rd March 27, 2009), chiropractor Richard Martis sued Grinnell Mutual Reinsurance Company after Grinnell’s billing employees incorrectly paid Martis too little for treating an injured worker.

In February of 2006, Martis began treating an employee of Water Management Corp. of Illinois who had been injured on the job. He was to be paid by Water Management’s workers’ compensation policy, issued by Grinnell. When he submitted his bills to Grinnell, the insurer’s outside billing firm applied PPO discounts to those bills even though Martis did not have a PPO agreement with Grinnell. Thus, Grinnell underpaid Martis. He responded with a proposed class-action lawsuit encompassing all Illinois health care providers who had been underpaid by Grinnell in the same way, through incorrect PPO discounts.

The complaint by Martis alleged conspiracy, unjust enrichment, breach of contract and violations of the Illinois Consumer Fraud Act. The trial court granted Grinnell’s motion to dismiss the conspiracy and unjust enrichment counts. However, it certified the class of health-care providers as to the breach of contract claim. Grinnell appealed the denial of its motion to dismiss the breach of contract claim and the class certification to the Third District.

Best Websites to Learn About Consumer Law Issues — Our DuPage, Lake, and Cook County, and Chicago Illinois Consumer Lawyers Can Assist You in Illinois Debt Collector Abuse Lawsuits

June 21, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

As Illinois consumer attorneys we were pleased to see that the Illinois Attorney General has a very informative website highlighting the protections provided by Illinois and Federal Law against abusive debt collection practices. You can link to the website here.

The Attorney General’s website describes how the Fair Debt Collection Practices Act, the Illinois Collection Agency Act and the Illinois Consumer and Deceptive Business Practices Act can protect Illinois residents from debt collector abuse:

If you use credit cards, owe money on a loan or are paying off a home mortgage, you are a “debtor.” If you fall behind on your payments to these creditors, you may be contacted by a debt collector. You should know that the Federal Fair Debt Collection Practices Act, the Illinois Collection Agency Act and the Illinois Consumer Fraud and Deceptive Practices Act all provide protections guaranteeing that debt collectors treat you fairly. These laws do not, however, forgive any legitimate debt you owe. Personal, family and household debts are covered under the Federal Fair Debt Collection Act. This includes money owed for medical care, charge accounts or car purchases.

New FTC Question and Answer Brochure on the Federal Debt Collector Abuse Law — Know Your Rights — Our Chicago, Naperville, Wheaton and Waukegan Attorneys Can File Suit to Stop Abusive Debt Collectors

June 18, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

A very informative brochure just published by the Federal Trade Commission contains the following very useful questions and answers regarding the Fair Debt Collection Practices Act:

What debts are covered?

Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.

Video Describing 4 Common Types of Consumer Fraud — Our Chicago Attorneys Handle Many Types of Individual and Class Action Consumer Fraud Lawsuits

June 18, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

Our Chicago, Wheaton, Naperville and Waukegan, Illinois consumer fraud attorneys found the below video on 4 common types of consumer fraud to be informative.

Based in Chicago, Wilmette and Oak Brook, Ill., Lubin Austermuehle DiTommaso handles informercial, stock broker, auto dealer and RV dealer fraud and other consumer fraud litigation for clients in Wheaton, Naperville,Waukegan, Evanston, Joliet, Aurora, Elgin, Lisle and in other parts of Illinois, the Midwest and throughout the United States. In addition to helping individuals and families, our Chicago class action attorneys have successfully handled numerous consumer rights class actions. If you believe you’re a victim of fraud and misrepresentations or a deceptive business practice, please contact us as soon as possible to learn about your rights at a free consultation.