Articles Posted in Contract Litigation

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Noncompete agreements have always been controversial for the way they intend to or unintentionally restrict employees from gaining employment after leaving a job where a noncompete agreement was signed. In 2017, the Illinois General Assembly addressed concerns about noncompete clauses found in low-wage employees. Effective January 2017, the Illinois Right to Work Act prohibits private-sector employers from entering into noncompete agreements with low-wage employees, rendering such agreements facially illegal and void.

This Illinois law is similar to other states that have passed legislation that also limits the employer’s ability to restrict low-wage employees in noncompete contracts in the private-sector.

For example, in the last couple of years, Alabama, Hawaii, New Mexico, Nevada, Oregon, Utah and Washington have passed laws that restrict the enforceability of noncompete agreements. Other states, including New Jersey and Pennsylvania, have proposed legislation that mirrors restrictions in enforceability of noncompete agreements.

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A breach of lease case resulted in a $278,198 default judgment, which was Count II of a Complaint brought by A.L. Dougherty Real Estate and Phyllis K. Dougherty. The complaint was filed against Cube Global LLC and March Fasteners Inc.  The complaint alleged that Cube Global was liable as March’s alter ego.

A bench trial was held.  The plaintiff presented evidence that Cube Global, which was incorporated while the lease case was pending, wound up with all of March Fastener’s assets and customers.

With the underlying decree boosted by fees, costs and interest, the judgment against Cube Global was $676,222. The judgment was against Su Chin Tsai, whose 16-year-old daughter was listed as Cube’s incorporator, and it totaled $435,584.

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The issue in this case was whether the financial condition of Wexford Health Sources, the defendant in this federal lawsuit, is relevant for Federal Rule of Civil Procedure 26(b) to apply. This rule limits discovery to that which is “relevant to any party’s claim or defense.” If a corporate defendant’s wealth may not be considered when assessing punitive damages, it is not “relevant,” but if it may be properly considered then, of course, it is relevant. In this U.S. Federal District Court of Illinois (Central District) lawsuit, the initial question to be answered was whether Wexford’s financial condition could be investigated through discovery; this was answered mostly by the case of Zazu Design v. L’Oréal, 979 F.2d 499 (7th Cir. 1992).

In Zazu, a case relied upon by Wexford, the defendant in this case, the court considered the defendant’s appeal in a trademark infringement action. The court reversed and remanded, finding that the plaintiff did not have superior rights in trademark to the defendant and, even if it had, the damages award was excessive.

Regarding the punitive damages award, the court noted that although courts “take account of a defendant’s wealth when an amount sufficient to punish or deter one individual may be trivial to another,” such may not be the case when the defendant is a corporation. The court explained:

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The United States Court of Appeals for the Seventh Circuit in Chicago has affirmed in part and reversed in part the district court’s decision regarding a third-party lawsuit.

Sam Chee was driving with his wife, Toni Chee, in August 2010 when their car slammed into a tree. Toni was seriously injured and taken to a hospital where she died within a week. The estate of Toni Chee filed two lawsuits. One was against Sam Chee for negligent driving and another was against the hospital and the attending physicians claiming medical negligence was a cause of Toni’s death.

The defendants in the medical malpractice claim filed a third-party action against Sam Chee, seeking contribution or other compensation from him should the medical defendants be held liable to the estate.

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Three Illinois workers and two public worker unions waited for the U.S. Supreme Court to weigh in on a carbon copy of their union-fee dispute. The case they were waiting on from the Supreme Court was Friedrichs v. California Teachers Association. Because of the death of Supreme Court Associate Justice Antonin G. Scalia, there was 4-4 split on the issue of whether mandatory payment of union fees for nonmember public workers is a First Amendment violation.

Because of the spit decision,  the 9th U.S. Court of Appeals ruling in Friedrichs stands, but does not create a national precedent.

“Our case is in a strong position to be the next case on this topic that the Supreme Court takes up,” said attorney Jacob H. Huebert of the Liberty Justice Center, which represents the three plaintiff workers challenging whether union fees should be paid for nonmembers.

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Jose Adame paid $145,000 for a house that was being sold by joint tenants, Arnold and Arthur Lynch. There was a problem with the warranty deed that Arnold signed in June 2005.

In 2002, Arnold was in a coma following a car accident. The judge appointed James Brya as plenary guardian of Arnold’s estate and person. Arnold eventually regained consciousness. But the guardianship was never canceled. This meant that the warranty deed signed by Arnold, who was still under the court’s guardianship orders, was invalid or void.

Arnold died intestate ten months after the closing, leaving Arthur as the sole heir. In 2009, the Cook County public guardian was appointed as plenary protector of Arthur’s estate and person.

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On Oct. 28, 2013, Robert Skahill signed a contract with Metropolitan Properties & Development Inc. The contract called for him to buy the property from Metropolitan for $3.1 million.

Skahill was required to put down $50,000 as earnest money of which $5,000 was due on the signing of the contract and the remaining $45,000 to be paid following the Nov. 18 inspection.

He Skahill paid $5,000, but never paid the remaining $45,000 in earnest money.

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Alena Hammer owned and resided in a house located in Villa Park, Ill. Her mortgage was serviced by AmTrust Bank until AmTrust failed and was taken over by the FDIC in November 2009. The mortgage did not include an escrow account, and Hammer paid her real estate taxes and property insurance separately.

Hammer, 65, entered into a loan modification agreement with the FDIC as receiver for AmTrust in June 2010. She had been laid off from her job the year before. Hammer’s mortgage loan was then transferred to the defendant Residential Credit Solutions (RCS) in August 2010. RCS began rejecting the plaintiff’s monthly mortgage payments in September 2010 and refused to acknowledge the existence of the loan modification agreement.

RCS then pursued two separate foreclosure actions against Hammer despite the fact that she was still up to date on her monthly payments as required under the loan modification agreement.

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Cynthia DeCornmier suffered serious injuries when she fell from her motorcycle on a motorcycle training course. Before the beginning of the training course, DeCornmier signed a release of all claims that may have resulted from or arising out of her participation in the training course. The release document stated in bold letters that it covered all claims she may have, including without limitation, all claims resulting from the negligence of those involved in the course.

In spite of the release that was signed in advance of the motorcycle training course, she filed a lawsuit against Harley-Davidson and Gateway Harvey-Davidson alleging that they were negligent and reckless by directing her to perform motorcycle maneuvers on a range that was icy and slippery. In the lawsuit, DeCornmier maintained that the liability release document that she signed in advance was unenforceable against claims of gross negligence or recklessness.

The defendants Harley Davidson and Gateway Harley-Davidson, filed motions for summary judgment, which the trial judge granted dismissing DeCornmier’s case.

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The Illinois Supreme Court has reversed the Illinois Appellate Court in a case centering on an application for legal malpractice insurance. In this case, one of the partners of the law firm of Tuzzolino and Terpinas (T&T) filled out a renewal form for legal malpractice with ISBA Mutual for himself and for the firm. In the application, he was asked whether there were any circumstances that would give rise to an unreported legal malpractice claim. The attorney who filled out the form answered “no.” In fact, a legal malpractice claim had already been brought against one of the firm’s attorneys, Mr. Tuzzolino, but was not yet reported to the firm’s

insurer.

The attorney who filled out the form, Mr. Terpinas, did not sign his name to the form. He claimed to have become aware of the claim against Mr. Tuzzolino about a month later and then reported the claim to ISBA Mutual.

As ISBA was then on notice of the claim and the errant application form, it filed a lawsuit for rescission of the insurance policy in March 2009. There were cross-motions for summary judgment filed and the trial court granted ISBA’s motion for summary judgment. The trial judge found that ISBA was entitled to rescission of the policy in its entirety and that it had no duty to defend Terpinas or the law firm because of the errantly completed form.

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