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Articles Posted in Breach of Fiduciary Duty

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Illinois Appellate Court Affirms in Part, Reverses in Part — Lawsuit Involving Limited Liability Corporation Members and Prejudgment Interest

In this appeal, the defendant Michael Maschmeyer’s conduct as a member of the plaintiff, Chicago Roof, Deck and Garden LLC (CRDG), led to an appeal regarding the claimed interest owed CRDG. Plaintiffs Darren Flynn and Tomasz Bartosiewicz owned the rest of the membership interest. After a bench trial, the trial…

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Illinois Freedom to Work Act Makes Some Noncompete Contracts Illegal

A new law in Illinois prohibits employers from entering into noncompete contracts with employees who earn $13 per hour or less. The Illinois Freedom to Work Act (Public Act 099-0860) became effective on Jan. 1, 2017. The law makes it illegal for an Illinois employer to enter into a “covenant…

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Illinois Appellate Court Reverses Trial Judge Who Denied Filing a Second Amended Complaint

The 1st District Appellate Court has reversed in part, vacated in part and remanded a decision by a Cook County judge in a case involving the use of trust money and investments. Arie Zweig was the trustee of the Arie Zweig Self Declaration of Trust dated June 28, 1990. He…

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Illinois Appellate Court Finds No Evidence of Bad Faith in Estate Dispute

The Rev. Timothy O’Malley and William O’Malley were two of Eileen O’Malley’s sons. In 1996, Eileen O’Malley experienced the first signs of dementia. The same year, Eileen and Timothy opened a joint checking account with First Midwest Bank Corp. Eileen instructed that the account statements be sent to the Palos…

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U.S. Court of Appeals Finds Confidentiality Agreement for Design and Production of a Tablet Computer Unenforceable

An industrial design firm, nClosures, produced metal cases for tablet computers, such as the iPad. Ian LeBlanc designed a case for nClosures in early 2011 called the Rhino Elite. In May 2011, the co-founders of nClosures attended a tradeshow in Chicago to showcase the Rhino Elite prototypes. At the tradeshow,…

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Court Holds That Individual Shareholder Should Have Brought Lawsuit as a Derivative Action Rather Than as a Separate, Individual Claim

Daniel Nickell filed a lawsuit against the officers and directors of Engineer Support. He claimed it had improperly diverted financial benefits by backdating stock options, which decreased the value of the corporation for its shareholders. Nickell was a shareholder of Engineer Support Systems Inc. (ESSI). ESSI merged with DRS Technologies…

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Illinois Attorneys Have a Duty in Wrongful-Death Actions to Decedent’s Beneficiaries

Leona Smith, the mother of Perry Powell, was appointed guardian of her son’s person but not his estate after a judge ruled that Powell was disabled because of severe mental disability. Powell’s father died, allegedly because of medical malpractice. Attorneys were hired by Smith, who then acted as special administrator…

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Illinois Appellate Court Orders Punitive Damages Against Decedent’s Estate

F. Gary Kovac, the plaintiff in this matter, sued the estate of Kenneth L. Barron Jr. for compensatory damages and exemplary or punitive damages. In the majority of jurisdictions, punitive damages are not allowed after the death of the defendant tortfeasor. Kovac and Barron owned 50% of three different corporations.…

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Illinois Appellate Court Finds Trust Dispute Can Remain in Cook County Court

In an Illinois Appellate Court decision, it was found that a trust’s beneficiaries had sufficient minimum contact with the state simply through their ownership interest of a trust administered by an Illinois resident. In May 2012, a Cook County associate court judge dismissed the trust dispute case for lack of…

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Shareholder’s Right to Sue for Breach of Fiduciary Duty by Baxter International Directors and Officers Allowed

This shareholder derivative lawsuit arose out of a long and unsuccessful effort by Baxter International Inc. to fix various problems with a medical device called Colleague Infusion Pump. The plaintiff in the case, Westmoreland County Employee Retirement System (Westmoreland) alleged that Baxter’s directors and officers breached their fiduciary duties by “consciously…

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