Articles Posted in Business Litigation

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The Illinois Appellate Court has reversed a decision by a Cook County judge in a case involving two statutes of limitation, which were possible choices in a breach of contract case.

On Aug. 2, 2002, the plaintiff, Advanced Credit Inc. (ACI), and the defendant Samuel Linares signed a promissory note in the amount of $8,000 at an interest rate of 20%. The note required Linares to pay ACI $8,000 plus interest on demand. On Dec. 1, 2004, ACI demanded the loan’s repayment. Linares did not pay. Nothing was done at that time.

On Aug. 25, 2010, ACI filed a lawsuit in the Circuit Court of Cook County demanding enforcement of the note. ACI alleged that the amount due, including principal and interest after giving Linares credit for payments made, was $20,192. In addition, ACI demanded a per diem interest at $2.67 plus attorney fees and court costs.

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The plaintiff, DaVinci Graphics, entered into a purchase agreement in 2009 to buy the Brownfield News magazine for $425,000.  The sellers were the defendants in this case. As part of the deal, DaVinci paid $100,000 up front with the remainder of the purchase price to be paid in installments.

After DaVinci took control of the magazine and started publication, DaVinci personnel came to believe that the magazine’s financials were not consistent with the representations made by the defendant sellers in the sales agreement. This revelation was discovered before the first installment payment was due. 

Pursuant to the contract, in the event of a dispute, DaVinci was to deposit the remaining installment payments ($325,000) into an escrow account. DaVinci then filed this lawsuit alleging fraud and breach of contract.

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A breach of contract case was interrupted by the death of the individual plaintiff, Theodore Sarche. Mr. Sarche’s death led to his law firm moving to appoint a special representative under Section 2-1008(a) of the Illinois Code of Civil Procedure.

An affidavit was later supplied by Sarche’s sole surviving child, Michael Sarche, who attested that he authorized his father’s law firm to continue prosecuting the case against the defendant. 

Michael Sarche did not open a probate estate because his father had limited assets. Michael was living in Colorado. Based on Michael’s instructions, the law firm moved to substitute Carol Mohica, a paralegal at the law firm, to act as plaintiff under the special representative piece of that statute.

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When a company is acquired in an asset sale, successor liability applies for pending claims under the Fair Labor Standards Act, even if the acquiring company disclaims liability for such claims. 

The Seventh U.S. Circuit Court of Appeals in Chicago affirmed the decision by a district court judge in a case involving the asset sale of JT Packard & Associates.  Packard provided maintenance in emergency technical services for equipment designed to protect computers and electrical devices from being damaged by power outages. 

In 2006, Packard’s stock was sold to S.R. Bray Corp.  In 2008, several workers sued Packard for violations of the Fair Labor Standards Act (FLSA).

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