Articles Posted in Business Litigation

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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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In 2011, Gloria Won intended to purchase a residence from Grant Park 2 LLC. Since the deal she anticipated fell apart, Won filed a breach of contract and breach of fiduciary duty lawsuit against Grant Park 2. In that suit, Won alleged that Grant Park 2 chose not to meet the contractual closing date and willfully intended to deprive her of the return of her earnest money deposit that she gave for the intended purchase.  In responding to the lawsuit, Grant Park 2 filed an answer, affirmative defenses and counterclaims.

In August 2011, Won filed a motion for summary judgment.  The motion was denied by the court, which found that there were issues of fact existing regarding an oral agreement that would have extended the closing date.  However, after hearings discussing the issue of fact in the case, Won refiled her motion for summary judgment again in January 2012.  Grant Park 2 filed a cross-motion for summary judgment in response. 

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The mediation of cases involves opposing positions. A mediation session begins with a brief opening statement by the mediator laying out for the parties and lawyers that the process that is about to take place will remain confidential.  The mediator in most settings will mention a few exceptions and explain confidentiality when the parties and their representatives meet in caucus, which is with the mediator in private. 

Before the mediation session begins, attorneys would be wise to inform their clients exactly what the process is all about and the distinctions between the terms — confidentiality and privilege. 

At the outset, and well before the day of mediation, the parties would be asked to review and sign the mediation agreement. Most mediation agreements contain language of confidentiality and references to privilege in outlining the mediation process.

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Non-competition agreements are usually a part of an employment agreement that the company develops; employees have access to company secrets, trade secrets and customer lists, all of which can be detrimental if known by those outside the company, including competitors. It has long been the case that the traditional non-competition agreements are difficult to enforce. In the case of Reliable Fire Equipment Co. v. Arredondo, 2011 Ill. 111871, the Illinois Supreme Court reaffirmed the three-part rule of reason test courts have used to determine enforceability of an employment-based non-compete clause. In Reliable, it was held that a restrictive covenant is reasonable if it:  (1) is not greater than is required for the protection of a legitimate business interest of the promissee (usually an employer); (2) does not impose an undue hardship on the promisor (usually an employee); and (3) does not injure the public.

Illinois courts have held that traditional business interest requires a company to show a support for the non-competition agreement, but that is ill-defined. The test set out in the Reliable Fire case would require that extensive pretrial discovery be conducted in order to know if the employer has the facts to make out a case.

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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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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 jurisdiction. 

The trial judge had relied on an opinion that lacked precedential value that undermined that court’s holding, so said the opinion of appellate court Justice Robert E. Gordon. The Illinois Appellate Court reversed the trial court’s ruling dismissing the case.

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