Articles Posted in Breach of Contract

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This is a case in which the U.S. Court of Appeals for the 7th Circuit in Chicago found that the defendant had contracted with an out-of-state buyer. The court found that the buyer performed all contractual obligations in his own state; however, the required sufficient minimum contacts were not found to establish personal jurisdiction in the plaintiff’s state of Wisconsin.

Marvin Greving was a Wisconsin resident who lived and ran a farm in Walworth County, Wis., since April 1971.  Greving and his wife conducted their personal and business matters only in Wisconsin.  Greving has a Wisconsin driver’s license, Wisconsin insurance and pays taxes in that state. In addition, Greving purchased all of his supplies for his farm from Wisconsin vendors.

In 2003, Greving attended a meeting at an insurance agency in Rochelle, Ill. At that meeting, Greving met Tom Wilson, a grain originator from Northern Grain LLC.  Northern Grain is organized under Delaware law, but is located in Harmon, Ill.

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James Werner, who was also the defendant in this case, was the insurer producer for Office Furnishings Ltd. and Brathan Property LLC. Brathan Property owned a commercial building at 725 S. 25th Avenue in Bellwood, Ill., where Office Furnishings maintained a warehouse for its office furniture business.  Werner obtained insurance coverage for Office Furnishings and Brathan Property with American Family Insurance.

American Family required its own application to be signed by the insureds, in this case Office Furnishings and Brathan Property, which was done in a meeting on Dec. 17, 2002.

On Jan. 31, 2003, the roof of the warehouse shattered due to extreme cold weather and high winds, which caused serious property damage to the building and its contents. Office Furnishings and Brathan Property submitted a claim for their losses, including $1,349,872 in estimated roof replacement costs, $729,295 for inventory damage and $88,074, which represented the cost of a temporary roof.

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Craig Yale was a limited liability member of Wolcott LLC, a real estate development operation.  The two plaintiffs, Dr.Biplob Dass and Brett Garry, brought a lawsuit against Wolcott LLC, claiming they were duped when purchasing a garden condominium unit from Wolcott.

In the complaint it was alleged that the unit flooded several times;   they also discovered that the promised inspection and repair work that would have eliminated the water hazard had not been done by Wolcott.  At first, Dass and Garry did not know that Craig Yale was a member of the limited liability company. 

When Wolcott filed for bankruptcy protection and its debts were discharged, Dass and Garry sued Yale. The trial judge in the case dismissed the fraud claim against Yale based on §10-10 of the Illinois Limited Liability Company Act.  On appeal, the Illinois Appellate Court affirmed by stating that Dass and Garry “do not argue that Yale defrauded them in his individual capacity and do not argue that Yale should be liable through the doctrine of piercing the corporate veil.”

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In December 2007, the plaintiffs, Brothers Future Holding LLC and Custom Gourmet Concepts LLC purchased a vacant meat packing plant located at 2684 N. 900 East Road in Ashkum, Ill.  The plaintiffs planned to use the property to start up a new custom contracting cooking company. The plaintiffs hired Assurance Agency, which was an insurance brokerage firm to procure insurance for any loss or damage to the property, and the brokers were to obtain a policy through Indiana Insurance Co.

Between Nov. 27, 2009 and Dec. 7, 2009, the real property was severely damaged by vandals and thieves who broke into the premises, cut and removed copper pipes, stripped copper from all of the electrical wiring and refrigeration systems and stole other fixtures and equipment for a total property loss of $2,272,168. However, the defendants — the insurance brokers — chose not to obtain ongoing vacancy coverage for the property, causing plaintiffs’ insurance claim for the loss to be denied by the insurer, Indiana Insurance Co.

The plaintiffs’ lawsuit asserted that the defendants knew that the building was vacant and that the plaintiffs had specifically requested vacancy insurance coverage.

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According to a recent Chicago U.S. District Court decision, a Maine aircraft repair company cannot be brought into a court in Illinois. The decision was based on an argument that because the company’s website can be accessed in Illinois, jurisdiction would lie in U.S. District Court.

In the written opinion issued by Chief U.S. District Court Judge Ruben Castillo, the lawsuit was dismissed.

Clover Technologies LLC, based in Ottawa, Ill., filed a lawsuit against Oxford Aviation Inc. of Oxford, Maine. 

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Judge Ronald Whyte reached a decision in the Northern District of California wherein he upheld Major League Baseball’s (MLB) exemption holding that the power to relocate a baseball team franchise is within the business of baseball and that the business of baseball remains exempt from federal antitrust laws. The lawsuit brought by the city of San Jose claimed that the Oakland Athletics should be allowed to relocate from its current home in Oakland, housed at the Oakland Coliseum, to a new stadium in San Jose, Calif.  The new stadium has not been built.

Under the MLB constitution, each baseball team is assigned a particular geographic area. In this case, the Athletics operate in the territory consisting of Alameda and Contra Costa Counties. In 2011, the A’s signed a 2-year option contract to purchase land in San Jose for the purpose of building a new stadium there. The stadium would be the new home of the Oakland A’s. In addition, there was an option for a third year on the contract for an additional $25,000. San Jose is outside of the Athletics’ operating territory. Allowing the A’s to relocate would require the majority approval by MLB’s team  owners. 

San Jose argued that MLB violated federal antitrust law by intentionally delaying the owners’ vote for four years, or until after the A’s option to purchase the land in San Jose had expired. This would effectively prevent the Oakland Athletics from moving to San Jose. In addition, another complication is the fact that San Jose is within the geographical territory of the San Francisco Giants.

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Tire Services Co. and AA Truck & Trailer Repair entered into an agreement that called for plaintiff Tire Services to sell approximately $450,000 worth of tires to AA Truck. AA Truck agreed and took delivery, but paid just $231,142 of that amount before it stopped making payments in December 2009. 

When the payments stopped, Tire Services filed suit in the Circuit Court of Cook County against AA Truck for the balance remaining unpaid, — $223,326 pursuant to the parties’ contract.

AA Truck claimed that it stopped making payments because the sales terms were confusing and that allegedly Tire Services changed the prices of the tires it sold to AA Truck. 

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Conxall Corp. was the supplier of custom cables and connectors to its customer, Mine Safety Appliances Co. (MSA), the third-party defendant in this case. 

MSA later provided drawings and 3-D (3-dimensional) models to the defendant ICON Systems to enable it to offer a quote and supply the same product.

The plaintiff Conxall contended that the drawings were trade secrets. ICON argued that the drawings and files contained no information that was actually secret or otherwise unknown in the industry. In furtherance of that argument, it maintained that the drawings and models were not needed to create ICON’s product, that ICON’s product was an improvement on Conxall’s product and that MSA had no duty to keep the materials confidential.

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In January 2003, Michael Henderson, the defendant, wanted to rehabilitate real estate he owned. He submitted a loan application to the plaintiff, National Lending Services Inc. National Lending approved Henderson’s loan. The loan provided for an adjustable rate interest in which the interest only was paid until the loan matured on June 1, 2004. 

Henderson signed a trust agreement providing that National Lending would distribute the loan funds as necessary to Chicago Title & Trust, which would then pay the construction companies that were doing the rehab work on the property.

Every month, Henderson would pay $185.83 as the interest payment required on the note. When the note matured in June 2004, rather than paying the remainder of the $322,983.41 that was due, he continued to make monthly interest payments. Finally, on Dec. 2, 2010, National Lending filed a lawsuit against Henderson for the unpaid balance of the note, plus per diem additional charges. Henderson appeared pro se in the case. 

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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 disregard(ing) their responsibility to bring Baxter into compliance with the 2006 Consent Decree and related health and safety laws.” 

The breach was alleged to have caused Baxter to lose more than $550 million after the Food and Drug Administration (FDA) mandated a recall of the Colleague Infusion Pumps in 2010. Westmoreland was a shareholder that sustained a significant stock value loss; it claimed the loss was caused by Baxter’s board’s and officers’ breach of fiduciary duty.

In the mid-1990s, Baxter was manufacturing and selling a product called the Colleague Infusion Pump (Pump), an electronic medical device used to deliver intravenous fluids to patients. The FDA closely regulates the medical device industry and required that companies comply with “current good manufacturing practices” and “quality system regulations” (see 21 C.F.R. Part 820), when manufacturing such medical devices. Between 1999 and 2005, the pumps were suffering from a range of defects, some relating to the manufacturing process and others to flaws in the machinery. The FDA discovered some of these problems during its inspections on Baxter’s facilities. The FDA sent a series of warning letters to Baxter in which it detailed Baxter’s failure to bring its manufacturing process into compliance with quality-controlled standards. In October 2005, the FDA took the drastic step of filing a complaint in federal court seeking forfeiture of all of Baxter-owned Colleague Infusion Pumps. 

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