Chicago Business Litigation Lawyer Blog

Are you a consumer with questions or concerns related to potential fraud and do not know what government agency to contact? The Chicago Federal Reserve Bank provides a web page that allows you to link to government agencies that may help you. The web page has links to federal and state banking agencies, federal and state securities agencies, and state insurance agencies located in Illinois, Indiana, Iowa, Michigan, and Wisconsin. You can also link to various useful financial , insurance, and banking tools, and to lists of financial services regulators, and consumer complaint filing information. Click here to link to the Chicago Federal Reserve Fraud web page.

If you need legal assistance in pursuing a civil lawsuit because government regulators cannot help you in recovering money lost due to fraud, our private sector lawyers can assist you by clicking here to contact us.

Our law firm helps Chicago area consumers who are victims of auto and RV fraud or who purchased vechicles that are lemons to pursue lawsuits to regain their lost investment. For more information about our Nationwide Consumer Rights lawyers click here.

There are many practical ways to protect yourself from auto and RV fraud or from purchasing a lemon vechicle.

The National Association of Consumer Advocates provides the following well thought out advice on how to avoid auto fraud:

Auto Fraud Purchasing a new or used automobile is a major investment for the average American today. Not only is there the initial cost of the automobile itself to consider. In a commuter society, reliable transportation is a key factor to financial prosperity for most Americans. Many of us depend on our cars to get to the places where we can earn more money, so that we can not only pay off the car loan, but also the car insurance, the mortgage, the credit card, and the household bills. Having a dependable vehicle is as central as ever to the way most Americans earn their daily bread.

The last thing an auto buyer should expect after buying a new or used car are problems that result from auto fraud, which occurs when the seller of the vehicle either fails to disclose the complete history of the car you are buying, or alters or destroys evidence pertaining to any part of the vehicle's age, condition or inherent or acquired defects. Auto fraud can come in a variety of forms when purchasing a used car. Odometer rollbacks, salvage or flood vehicles, yo-yo sales, credit consolidation sales, and resale of damaged vehicles without full disclosure are all examples of auto fraud.

SIX QUICK STEPS TO AVOID AUTO FRAUD:
Tip 1: Make friends with a mechanic
A mechanic can be your best friend when it comes time to purchase a car. More than anybody else, a good and experienced mechanic can tell you the specific problems to watch out for when buying a particular brand or model of a car, and can also tell you which cars are relatively hassle-free. Based on what type of car you are looking for, your needs for the car could widely vary. Once you know the type of vehicle you want, twenty minutes talking to a friendly mechanic can help you determine the best manufacturer.

Tip 2: Arrange for financing through your bank or credit union
Whenever possible, you'll want to seek financing approval from your bank or credit union before shopping for your car. Banks almost always offer a substantially lower rate than what a used car dealership will offer. If you have a prior lending history with your bank and are in good standing, you can usually receive up to 90 per cent financing. Car dealerships make huge profits by providing their own financing to auto buyers, so they want you to borrow from them. By securing an auto loan through your bank for an amount you can afford before purchasing a car, you'll find yourself in far more control when negotiating a final price.

Tip 3: Ask for a copy of the warranty, take it home and read it
Many used car dealers are notorious for providing "dealer warranties." While the big print in these documents promises comprehensive coverage and prompt service for the vehicle you buy, it is the small print that dealers refer to when something actually does go wrong with your car. The phrase "wear and tear items not included" is a common one in dealer warranties, and one you will hear over and over again if your car begins to have problems.

Remember that car dealers are always trying to increase the final sales cost of your car through add-ons and features. A dealer warranty is often pitched as a vital add-on by the car salesperson, but unfortunately, when push comes to shove the true value of the warranty is sometimes questionable. Make sure you clarify exactly what is covered with the car salesman. If your concerns are not explicitly answered in the warranty, ask for a signed, authorized amendment from the dealer with the correct wording that you are seeking.

Tip 4: If necessary, amend the warranty to protect yourself from Lemon fraud
After you have satisfied yourself that you are getting adequate repair and maintenance coverage for the price of your warranty, you'll want to make sure the following statements are somewhere on the warranty:

"THIS CAR HAS NOT BEEN RETURNED TO A DEALER OR MANUFACTURER BECAUSE OF LEMON LAW DEFECTS OR COMPLAINTS."

"THIS CAR HAS BEEN INSPECTED FOR COLLISION DAMAGE AND COLLISION REPAIRS AND HAS BEEN FOUND TO BE FREE OF COLLISION DAMAGE OR REPAIRS."

If these statements aren't on the warranty, insist that they be added, acknowledged and signed by an authorized representative of the dealership.

Tip 5: Take it for a long spin
Leave a copy of your driver's license with the dealer and take the car out for a while. Drive the car in multiple road conditions: city streets with heavy traffic, highways with open spaces, straight and curvy roads, and hills. Test the brakes, steering, features, air conditioning and gauges. If you can arrange it, pick up your new friend the mechanic and bring his highly trained ear along for the ride. Let him take a look under the hood. If he likes what he sees, and you have faith in his judgment, then you are probably in good shape.

Tip 6: Don't be in a rush
Above all else, don't let a car salesman rush or cajole you into a one-day, stop and shop sale. Avoid impulse buying. It is to the salesman's benefit, and only his benefit, if the sale happens quickly. It is to your benefit to do as much research as possible to insure you purchase a safe and reliable vehicle. You should be prepared to spend at least two weeks doing adequate research before making a used car purchase.

Lemon Law
State lemon laws have been created to protect consumers when they have purchased a defective vehicle. Typically, a lemon law requires a manufacturer to provide a refund or replacement for a defective new vehicle that is not repaired within a reasonable number of attempts. Most such laws provide for refund or replacement when a substantial defect cannot be fixed in 4 tries, a safety defect within 2 tries or the auto is out of service for 30 days, within the first 12-18,000 miles/12-24 months.

Beyond state lemon laws, a consumer has the right to a refund or replacement of a lemon vehicle under the Uniform Commercial Code (UCC). The main difference is the UCC law does not define a lemon so it's up to a court to decide if an auto company must give you a refund or or a new car. The federal Magnuson-Moss Warranty Act provides for the award of attorney fees from the manufacturer if you have to sue to return a lemon under the UCC. Many state lemon laws also provide for attorney fees.

Practical Tips for Using Lemon Laws
Success in using state lemon laws depends upon keeping good records and providing the right notice to your vehicle’s manufacturer:

Repair Record: Keep close track of the number of repair attempts and the time the car is out of service. Submit a written, dated list of problems to the dealer each time the car is in for repairs (keep a copy). List the symptoms your car has; for example, "stalling" instead of "check carburetor." This establishes a record of what problem was addressed even though the dealer may work on different parts in attempting to fix the problem. Insist on getting a copy of the repair order that lists the symptoms described, repairs done, any parts replaced, and the time the car was in the repair shop.

Notice Required: You must follow your state's notice requirement before you are entitled to a refund or replacement. Where written notice to the manufacturer is required, send a certified, return receipt letter stating your vehicle's need for repair to the manufacturer's consumer relations office and to the nearest zone/regional office listed in your owner's manual or warranty booklet. Make sure you send this notice by the time you take the car in for the repair attempt that qualifies it as a lemon. Give the dealer a copy of this letter when you deliver the car for repair; keep a copy.

Your Refund Or Replacement: After you believe your vehicle qualifies as a lemon and you have followed the above steps, ask the manufacturer for a refund or replacement. You may have to pay a small offset for use of the car but no more than for the mileage up until the first repair attempt which qualified you for the lemon law. If the manufacturer has a valid arbitration program that is incorporated into your written warranty, you may be required to go through arbitration to get your refund or replacement.

The National Association of Consumer Advocates provides the following advice about Debt Collector Abuse:

Debt Collection Abuse (FDCPA)

In spite of federal and state legislation, debt collectors continue to abuse consumers in order to unfairly pressure them into paying debts. These abuse tactics are often intended to scare or intimidate consumers, sometime with threats of violence or arrest. Other debt collectors will try to pile on illegal interest or fees to make the debt seem larger that it actually is. In some instances, these debts are time-barred, discharged in bankruptcy, or not owed for other reasons.

The Federal Fair Debt Collection Practice Act (FDCPA) bars all forms of unfair, abusive and deceptive collection practices. While the statute provides a laundry list of potential violations, this list is not exclusive. The statute also provides a general prohibition on any form of deception, abuse, or unfair treatment.

Here's a general rule of thumb you can use to interpret this: If your mother would be upset about you treating other people the way that you were treated by the debt collector, then the conduct probably violates the FDCPA.

What Are My Rights?
Federal and state laws give you rights against bill collector harassment. Collection agencies and debt collectors are required to provide you with a notice of your rights within 5 days of the first communication with you. Below are all listed in section 1692c of the FDCPA:

You have the absolute right to demand that a debt collector cease communication. You just have to write a letter setting forth your demand. If you notify the collector that you refuse to pay the debt, that notice also serves as a cease communications notice. In either event, the debt collector may no longer communicate with you except to notify you that he is exercising specific rights.

Debt collectors are prohibited from collecting debts that are not owed. You have the right to demand that the debt collector prove you owe the money. This process is known as "validation" of the debt. Debt collectors must notify you of this right, and if you request validation in writing within 30 days of receiving your notice of rights, the debt collector must either validate the debt to you or cease collection efforts.

What Should I Do?
You should gather and organize all the information you can about the debt, as well as the collection efforts of any past or current collectors who contacted you. The past correspondence provides important information about the kinds of charges and interest that have been added to the debt.

If you have copies of your credit reports, you will need those also. The credit reports also contain historic information about the debt, including the time it was incurred, when it was defaulted, and who may have collected it previously

If you have any notes about the debt or any taped conversations, threatening letters, or any communication whatsoever with the collector, these can be extremely valuable in reconstructing the collection efforts and any abuse. Whenever you are contacted by a collector, you should note the date, time, person you are speaking to and the content of the call including any abusive language or threats. If at all possible, you should keep these notes together in one central spot.

If you have any witnesses who can corroborate that you were abused, you should get a brief statement from that witness in their own words. These statements will help to refresh the witnesses' memories when you get to trial and provide information to your attorney.

We assist Chicago area consumers in pursuing lawsuits for Debt Collector Abuse. Statutory damages of up to $1000 plus attorneys fees and costs are available under the FDCPA. Emotional distress and actual damages can be recovered as well. For more information about our law firm. Go to our website by clicking here. If you want to provide us with information about a potential lawsuit so we can contact you click here.

In a mutual fund’s shareholder dispute, the Seventh U.S. Circuit Court of Appeals ruled on May 19 that an investment advisor’s fiduciary duty to shareholders does not require that the advisor’s fees be “reasonable” by any legal definition. In Jones v. Harris Associates L.P., 07-1624 (7th Cir. 2008), the circuit affirmed a summary-judgment ruling in favor of the mutual fund manager by the U.S. District Court for the Northern District of Illinois.

Three shareholders in the Oakmark complex of mutual funds sued the fund’s advisor, Harris Associates, contending that the fees they paid toward Harris’s compensation were too high. The bulk of the opinion (which the majority called “the main event”) concerned section 36(b) of the Investment Company Act, an amendment to the 1940 act added in 1970. That law gives investment advisors at registered investment companies a fiduciary duty to shareholders with regard to any compensation they or their affiliates receive. However, said the Seventh Circuit, “a fiduciary duty differs from rate regulation.... Section 36(b) does not say that fees must be ‘reasonable’ in relation to a judicially created standard. It says instead that the adviser has a fiduciary duty.” The court goes on to note that fiduciary duty is well-defined in trust law and does not foreclose an advisor’s ability to negotiate for compensation.

In doing so, the court disapproved caselaw from Gartenberg v. Merrill Lynch Asset Management, Inc., 694 F.2d 923 (2d Cir. 1982). That case requires that “[t]o be guilty of a violation of §36(b) . . . the adviser-manager must charge a fee that is so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm’s-length bargaining.”

In addition to the amendment, the plaintiffs’ case relied on multiple parts of the original Investment Company Act, all of which were deemed moot for various reasons by the majority.

In an insurance contract dispute, the Seventh U.S. Circuit Court of Appeals ruled April 23 that a liability insurer has no duty to defend a village from litigation alleging intentional misconduct, but not negligence. St. Paul Fire and Marine Insurance Company v. Village of Franklin Park, No. 06-2924 (7th Cir. 4/23/2008) is a contract dispute between an insurer and an Illinois township accused in separate litigation of severely underfunding its mandatory firefighters’ pension fund.

Under Illinois state law, municipalities must establish and administer pension funds for their firefighters. Firefighters in Franklin Park sued under that law, alleging that the village had intentionally underfunded their pension fund for more than 30 years. After the suit was filed in state court in January of 2002, the village asked its liability insurer, St. Paul, to defend it under a policy that covered disputes over employee benefits plans. The insurer declined, and the village disputed this, but did not sue. In late 2004, St. Paul filed in federal court, seeking a declaratory judgment that it had no duty to defend the village. In March of 2006, the district court granted that judgment, ruling that St. Paul’s contract created a duty to defend against negligence, not the intentional wrongdoing alleged by the firefighters. The village appealed both the judgment and the denial of a motion to reconsider. The Seventh Circuit affirmed.

In its opinion, the three-judge panel agreed with St. Paul that the firefighters’ allegations were not a “loss” under the meaning of the policy, pointing to caselaw that distinguishes between loss and money that was illegally or unethically withheld from its rightful owner.

Even if the outcome of the firefighters’ suit required the Village to move amounts earmarked for other uses or collect more taxes, the Village would not suffer a “loss” under the policy because it would still only be paying an amount offset by a benefit it had already received—either having the use of extra tax money or having the ability to collect fewer taxes. See Level 3, 272 F.3d at 911. Were the rule otherwise, Franklin Park could avoid its pension fund obligations entirely by levying no taxes and making no contributions. It would be absurd to think that in such a situation, the effect of a court finally requiring the Village to make the contributions would be a covered “loss” that St. Paul was required to cover.

Until recently, under the Illinois Vehicle code (625 ILCS 5/18c–7402(1)(b)), trains that blocked any road crossing for more than 10 minutes were subject to traffic tickets. That law was overturned in January when the state Supreme Court ruled that the blocked-crossing law violates the Commerce Clause of the U.S. Constitution and the Federal Railroad Safety Authorization Act (FRSA). The opinion in Eagle Marine Industries, Inc. v. Union Pacific Railroad Company, 102462 (January 2008), a business dispute, reversed a preliminary injunction against Union Pacific issued by a circuit court in Sauget, near St. Louis, and upheld by an appeals court. It relies on the same court’s decision earlier that month in The Village of Mundelein v. Wisconsin Central Railroad, 103543 (January 2008), which upheld an appellate court’s decision to vacate a large fine against the railroad.

In Mundelein, the village issued a $14,000 fine to Wisconsin Central under a local ordinance that prohibited a train blocking a highway-grade crossing for more than 10 minutes unless it had broken down or was continuously moving. The Wisconsin Central train blocked such a crossing for 157 minutes. At the ensuing trial, the court rejected the argument that the FRSA preempted the local law. However, that decision was reversed on appeal.

The Illinois Supreme Court agreed, saying that Mundelein’s ordinance, which is based on Illinois’ state law, interfered too much with the FRSA. Because Eagle Marine relied on the state law, the court said, it had to decide that case in the same way as Mundelein. Thus, the Illinois blocked-crossing provision and any local laws based on it were preempted by FRSA and therefore void.

The Illinois Supreme Court handed a victory to plaintiffs throughout Illinois with its 2006 ruling in an insurance dispute over whether insurers must cover the costs of a junk fax class action lawsuit for an insured covered for an “advertising injury.” In Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 2006 Ill. LEXIS 1655, the state Supreme Court ruled that business insurers have a duty to defend “junk fax” class action lawsuits.

The underlying dispute in the Illinois Supreme Court case started when private investigator Ernie Rizzo filed a proposed class action lawsuit against Swiderski Electronics for sending him “junk faxes.” Unsolicited advertisements sent via fax violate both the federal Telephone Consumer Protection Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. Swiderski had an insurance policy from Valley Forge Insurance Company, which insured Swiderski against a personal or advertising injury that arises out of “Oral or written publication, in any manner, of material that violates a person’s right of privacy[.]” The insurer claimed that because the faxes had not revealed Rizzo’s own personal information, they did not invade his privacy and thus were not covered. They also claimed that sending information via fax does not constitute publication.

The insurer asked a trial court for a declaratory judgment stating it was not obligated to cover Swiderski; all parties filed cross-motions seeking summary judgment. The trial court ruled in favor of Swiderski, as did the appellate court and, eventually, the Illinois Supreme Court. That court rejected Valley Forge’s arguments, rejecting the claim that faxing is not “publication,” using the plain meaning of the word. It also ruled that privacy under the federal TCPA and caselaw includes the right to be left alone:

The receipt of an unsolicited fax advertisement implicates a person’s right of privacy insofar as it violates a person’s seclusion, and such a violation is one of the injuries that a TCPA faxad claim is intended to vindicate.

That contradicts the a 2004 decision by the Seventh U.S. Circuit Court of Appeals in American States Insurance Co. v. Capital Associates of Jackson County Inc., 392 F.3d 939, which found no duty to defend under very similar circumstances. The Seventh Circuit’s earlier ruling said privacy rights may include the right to seclusion in some cases, but “advertising injury” clauses do not, so insurers have no duty to defend in junk fax cases. Because the Seventh is bound by Illinois Supreme Court precedent in cases involving Illinois law, the more recent ruling overturns American States, handing a victory to plaintiffs and businesses who are plagued by unwanted junk faxes.

In a business fraud lawsuit pitting a bank against its security vendor, the Illinois Appellate Court for the 1st District ruled May 1 that an attachment order must be voided under the Illinois Attachment Act if plaintiffs fail to file an attachment bond beforehand. In ABN Amro Services Company, Inc. v. Navarrete Industries, Inc., No. 1-07-0089 (Ill. App. 2008), the appeals court voided such an order and remanded it to the trial court.

The case arose from alleged fraud by INS, which provided security for multiple Chicago-area La Salle Bank branches. A fraud investigator discovered that Armando Navarrete of INS was fraudulently overbilling the banks by an alleged $15.9 million, then paying kickbacks to the banks’ vice president for security, George Konjuch. The bank filed a lawsuit in September of 2006 against INS, Konjuch, Navarrete and another INS employee, alleging fraud, civil conspiracy and constructive trust, plus breach of fiduciary duty against Konjuch. (Konjuch and Navarrete have since been indicted by a federal grand jury for the scheme.)

At the same time, plaintiffs asked for a temporary restraining order, a preliminary injunction and an order of statutory prejudgment attachment, all of which were attempts to keep the alleged conspirators from absconding with the money. Upon receiving notice of these filings, defendants immediately filed motions to void the restraining order and the prejudgment attachment. After hearings, the trial court dissolved the restraining order and denied the preliminary injunction, but declined to vacate the attachment order. Both sides appealed.

On appeal, the First District considered only Konjuch’s motion to vacate the attachment order. Using the plain language of the Illinois Attachment Act, the court concluded that plaintiffs are absolutely required to file a bond before they may be granted an attachment order:

Unfortunately, the result of declaring the order void results in a waste of resources in this case. While plaintiffs clearly attempted to comply with the statute, they failed to do so. This issue could not be resolved by simple amendment because of the absolute mandatory command of the statute, therefore the mootness and aider by verdict doctrines do not apply. The order is simply void. A liberal construction of the Act cannot cure this defect and the order must be dismissed.

Thus, the three-judge majority reversed and remanded the case to the Circuit Court of Cook County.

The Federal Judicial Center's "Managing Class Action Litigation: A Pocket Guide for Judges" is an excellent research tool for class action lawyers and judges. The Manual covers in a very informative and useful manner many of the basic issues that come up in class-actions. By covering the judge's perspective it helps class action attorneys prepare the issues in a manner that will persuade the Court. To review the Manual click on this link Managing Class Action Litigation: A Pocket Guide for Judges.

The Seventh U.S. Circuit Court of Appeals recently issued an opinion limiting class-action lawsuits regarding “firm offers of credit” under the federal Fair Credit Reporting Act. In Murray v. New Cingular Wireless Services, 2008 WL 1701839 (7th Cir. April 16, 2008), the Seventh Circuit also limited the scope of its 2004 decision in Cole v. U.S. Capital, Inc., 389 F.3d 719 (7th Cir. 2004). In that decision, the court said that when companies offer “a token line of credit” along with consumer goods, that credit offer must have value to the customer.

Among the issues addressed by the court are:
* Under Cole, an offer of credit entangled with an offer of merchandise must be valuable. However, Cole does not apply to “pure offers of credit” not entangled with another offer. The FCRA requires only that an offer of credit be firm, not that it be valuable to most or all of its recipients.
* An offer of “free” merchandise may be an offer of credit under some circumstances. In Murray, consumers complained that Cingular obtained their credit information in order to offer a “free phone.” However, since the free telephone was contingent on signing up for a service plan, it was not truly free. Thus, the offer of free merchandise was an offer of credit under the FCRA’s meaning.
* Advertisements need not contain all the terms of the credit under the FCRA; nothing in that law requires it. Indeed, wrote the majority, an initial offer containing the full terms of credit would be “turgid,” cumbersome and uninformative.
* Creditors may reserve the right to vary the terms of an offer and still extend an offer considered “firm” under the FCRA -- under some circumstances. The issue requires discovery, said the court.
* Small type cannot be considered “conspicuous,” at least in the offer at issue in Murray. In that instance, disclosures were printed in six-point type under advertising copy printed at more than twice the point size. However, the violation was not willful in this case because the law was not settled when the offer was made.

The decision is being hailed as a victory for defendants in FCRA class actions, but plaintiffs should note that several important issues are still open to litigation, especially with regard to varying terms of credit and disclosures made in very small type.

Murray combines three appeals from lower courts in the Midwest, all of which were putative class actions alleging violations of the FCRA. Murray v. New Cingular Wireless Servs., Inc., 432 F.Supp.2d 788 (N.D. Ill. 2006); Bruce v. KeyBank N.A., 2006 WL 3743749 (N.D. Ind. December 15, 2006); Price v. Capital One Bank (USA), N.A., 2007 WL 1521525 (E.D. Wis. May 22, 2007).

The Illinois Appellate Court for the 1st District ruled May 7 that a legal malpractice class action against the law firm DLA Piper Rudnick Gray Cary could not go on because it was filed well after a tolling agreement ended. In Joyce v. DLA Piper Rudnick Gray Cary LLP, 1-07-1966 (Ill.App. May 7, 2008), the court upheld the dismissal of a purported class action by stockholders of 21st Century Telecom Group, a Chicago telephone company, pursuant to a tolling agreement between 21st Century and DLA Piper.

The underlying dispute started in 1999, when 21st Century agreed to merge with competitor RCN. DLA Piper attorneys drafted a merger agreement with a mistake that lowered the price of the stock 21st Century shareholders were to receive by $19 million. In response, Edward Joyce, the stockholders’ representative, made a tolling agreement with DLA Piper, in which the statute of limitations was tolled unless a stockholder lawsuit was filed against the firm on or before December 31, 2002. The firm agreed not to avail itself of any statute of limitations defense until after that day. This agreement was amended four times, each time altering only the date. The last agreement set that date at August 21, 2005.

Joyce filed a legal malpractice class action in Cook County against DLA Piper on August 30, 2006. After some procedural disputes, including a finding by the trial court that the filing was timely, the firm won a motion to dismiss based on plaintiff’s lack of standing as a non-client. The plaintiffs appealed and the defendant cross-appealed on the trial court’s decision that the suit was timely.

The appeals court upheld that cross-appeal, finding that the plaintiffs were barred because they filed nearly a year after the last agreement expired. The court rejected the defendants’ contention that it was timely because each amended tolling agreement constituted a new contract that extended the statute of limitations.

Writing for the three-judge majority, Justice Grieman found the tolling agreement unambiguous in setting an end date of August 31, 2005. “Indeed, to accept plaintiff’s argument would require this court to allow plaintiff the benefits of the first four amendments without fulfilling the requirement of filing suit by the specified dates imposed by any of the amendments.”

The majority declined to take up the issue of whether the 21st Century shareholders could be considered clients of DLA Piper.

Our firm obtained a favorable verdict in a consumer fraud case with Terrill v. Oakbrook Hilton Suites & Garden Inn 788 NE2d 789 (2nd Dist 2003). In that case, our client, Cathy Terrill, was overcharged for a hotel room; her bill contained a charge for “taxes” that included an undisclosed non-tax charge for security services. This case was part of a set of class actions in Du Page County from 2000 to 2007 (Oakbrook Terrance Hotel Overcharge Class Actions), all of which alleged that hotels misled and overcharged their customers by including non-tax charges as “taxes” on their bills.

In Terrill, the Oakbrook Terrace Hilton moved for summary judgment at the trial court, claiming the Hotel Operators Occupation Tax Act (35 ILCS 145/3(f)) and Illinois Supreme Court precedent barred Terrill’s suit. The trial judge denied that motion and the hotel appealed. It claimed that because the security fees paid for extra security from Oakbrook Terrace law enforcement -- a local government entity with the power to collect taxes -- it had already paid the extra money to the state Department of Revenue and could not be sued.

The Illinois Second District Court of Appeal rejected that argument, calling it “untenable at best”:

It is clear, given the facts of this case, that defendant misapprehends the concept of accountability. Because defendant remitted the 2% service fee to Oakbrook Terrace instead of the Department, defendant cannot use the Act or case law to shield itself from direct liability. Unjust enrichment principles are based on the idea that no one ought to enrich himself unjustly at the expense of another.

Thus, Terrill’s claim was not barred and the suit was allowed to proceed. The case went back to the appellate court in a later, unpublished decision, in which the court struck Hilton's response brief and affirmed the trial court's grant of summary judgment and award to the Class of 100% of the tax overcharges plus prejudgment interest and attorneys fees and costs. Class members ultimately received a check in the mail for 98% of the over charge. Our firm is proud of our leadership role in this case and others where consumers and businesses have recouped tax and billing overcharges billing fraud class actions, as well as our role in setting precedent with published cases. We have experience handling many types of fraud and business fraud cases and have litigated fraud cases in Chicago, and throughout the country. If you are a victim of fraud, consumer fraud or deceptive billing practices you can contact one of our experienced fraud attorneys by clicking here.