Chicago Business Litigation Lawyer Blog

Our Chicago class action attorneys recently noted that the U.S. District Court for the Northern District of Illinois has conditionally certified a wage and hour class action alleging that Illinois Bell Telephone failed to pay overtime to its hourly employees. In Russell v. Illinois Bell Telephone Co., 08 C 1871 (filed April 1, 2008), Constemecka Russell alleges that Illinois Bell regularly required her and other hourly employees to work off the clock, and sought to conditionally certify these employees as a class and notify them of the action. Several of her colleagues have joined and submitted affidavits supporting her allegations. The case is pending, but the judge granted those motions Sept. 15 over most of Illinois Bell's objections.

U.S. District Judge Matthew Kennelly's opinion granting certification and notice repeats many of Russell's allegations about the unpaid overtime. Russell worked in sales for the company at a call center, and she alleges that she was paid only for time she spent logged into the call center's computer system. However, there were certain work tasks that she had to perform without being logged in, during lunch and rest breaks, including tasks like filling orders as well as time spent logging onto the computers and opening software programs. She estimated that she spent between 15 minutes and an hour per day doing this unpaid work, which sometimes would have entitled her to overtime.

In response to Russell's request for class certification and notice, Illinois Bell argued that class certification is inappropriate because it doesn't use the phone system to keep time, and thus there is no common policy or practice linking the proposed plaintiffs. The court was unimpressed by this argument. It pointed to multiple assertions by Russell that company practice was to require unpaid work before and after time on the phone, as well as affidavits by joining plaintiffs stating that managers explicitly instructed them to work off the clock. It also dismissed arguments that written policies were evidence that Illinois Bell complied with the law.

Illinois Bell also took issue with the notice Russell proposes to send potential plaintiffs, arguing that including the names of the judges involved might mislead recipients into thinking the judge endorses this lawsuit. The court dismissed this argument, pointing out that the letter is not on court letterhead, contains no judicial signatures and in fact contains an explicit disclaimer that the court has not taken a position in the case. Illinois Bell also objected to Russell's request for telephone numbers and partial Social Security numbers of potential plaintiffs, arguing that both privacy and the Illinois Rules of Professional Conduct bar their release. The judge agreed with respect to the Social Security numbers, but granted the telephone numbers, saying the interest in locating class members outweighs privacy concerns about home telephone numbers.

In the Sept. 15 ruling, the district judge granted only conditional certification; the court may choose to revoke certification if it believes the assembled class of plaintiffs isn't similar enough. That decision is pending, and as experienced Chicago class action lawyers, we know it is not likely to happen quickly. If you believe you might be part of a class of employees also forced to work off the clock, DiTommaso-Lubin may be able to help your pursue your own overtime class action. For a free consultation on your rights as an employee, contact us today.

A statement that a car has not been involved in an accident and "it's fine" can constitute common-law fraud and a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, the First District Court of Appeal has ruled. In Hanson-Suminski v. Rohrman Midwest Motors, Inc., 1-07-0755 (Nov. 7, 2008), a customer successfully sued after she discovered that her used car had been in an accident, even though the dealer who sold it to her had told her it was not. The appeals court rejected the dealership's arguments that both the decision and the financial award were erroneous.

The plaintiff, Traci Hanson-Suminski, bought a used 2002 Honda Civic from defendant Arlington Acura in Palatine, Ill. On the test drive, she asked the salesman if the car had been in an accident, to which he replied "No, it's fine." She did not take the car to an independent mechanic or get a Carfax sheet, nor did the salesman advise her that she could do so. She discovered that the car had indeed been in a rollover accident causing "moderate or severe" damage the following year, when she tried to trade it in. At trial, witnesses testified that the car had a "green light" at the auction where the dealership bought it, indicating no title problems, but that a car in good condition should have been more expensive. The plaintiff prevailed on her common-law fraud claim at a jury trial and on her Consumer Fraud Act claim at a bench trial. To avoid an illegal double recovery, the judge ruled that the Consumer Fraud Act claim would be satisfied with the jury's common-law fraud verdict.

On appeal, the defendant argued that the plaintiff should not have prevailed on her Consumer Fraud Act claim, in part because she failed to show that fraud could have been avoided with reasonable prudence, and because the salesman's statement was mere "puffery." In its opinion, the appeals court cited Harkala v. Wildwood Reality, Inc., 200 Ill. App. 3d 447, 453 (1990), to show that the plaintiff had no obligation to double-check the salesman's statement that the car had not been in an accident. Furthermore, it said, a car's accident history is not a matter of public knowledge, as that case required. "Puffery" is a legal term for exaggerations used in advertising, which no reasonable person would believe. Because it was reasonable to believe the salesman was not lying, and it is not reasonable to think that car salespeople always claim cars are accident-free, the court said, it dismissed the puffery claim as without merit.

The defendant also appealed as to damages, arguing that the amount of damages was excessive because it was based on "optimal retail value" of the car rather than the price the plaintiff actually paid. The court disagreed, pointing to caselaw saying that absolute certainty of an item's value is not required in consumer fraud damages awards; there must only be adequate basis for the award in the record. The defendant then argued that the Consumer Fraud Act award was barred by the common-law fraud award and the doctrine of election of remedies -- which says that a plaintiff who makes two inconsistent legal claims for the same injury must choose which remedy to rely on, or the second is waived. However, the appeals court noted that both fraud claims were part of the same action and that in fact one claim was satisfied by the judgment of the other, so election of remedies did not apply.

DiTommaso-Lubin has an active practice in auto dealer and RV dealer fraud, including consumer fraud class actions. If you believe you're a victim of deceptive practices by an auto dealer or have bought a "lemon," please contact our Chicago class action and consumer attorneys today to learn about your rights and the legal remedies available to you.

As Naperville, Oak Brook, Wheaton, and Chicago business trial lawyers with substantial experience in shopping center claims, we were interested to see a recent decision by the First District Court of Appeal on the obligations of people who guarantee a lease. A change in the lease and a directed verdict at trial do not relieve a couple of their liability as guarantors of a commercial lease, the court has ruled. In Chicago Exhibitors Corporation v. Jeepers! Of Illinois and Swento, 1-06-3313 (Aug. 30, 2007), the court ruled that a guaranty agreement written to survive changes to the lease is enforceable even if the lease is assigned to a new tenant who changes it without the guarantor's approval.

Harvey and Cherry Swento owned a business that leased space from a predecessor landlord to Chicago Exhibitors Corporation (CEC). To sweeten that lease, the Swentos in 1991 personally guaranteed their lease payments and all of their other obligations as tenants, with a clause specifying that the guaranty would survive changes to or assignment of the lease. In 1997, they sold their business to Jeepers! of Illinois, Inc. and executed an agreement in which Jeepers! indemnified them from losses stemming from their personal guaranty. Jeepers! then failed to pay its rent, causing CEC to demand an amendment to the lease that reaffirmed the Swentos' personal guaranty. CEC declined to recognize the transfer of lease obligations from the Swentos' company to Jeepers! until rent was paid in full and Jeepers! executed its own guaranty.

Jeepers! never did take on the guaranty, but it failed to pay its rent again several times. In an effort to avoid eviction, it agreed to several changes to the lease in January of 2001. The Swentos did not sign this amendment, even though it called for the ratification of all guarantors. When CEC eventually sued Jeepers! for unpaid rent and repairs, it included the Swentos as guarantors. In the trial, the Swentos asserted that the January 2001 amendment was a material change that discharged them from their obligations as guarantors; CEC successfully moved in limine for a ruling that it was not. The parties then agreed to move straight to the damages phase of the trial, so the judge granted a directed verdict on liability. The Swentos were eventually found liable for unpaid rent and damages as well as attorney fees. They appealed the in limine motion, the directed verdict and the award of attorney fees.

In its decision, the appeals court found that the January amendment to the lease was not material enough to release the Swentos from their obligations. In Illinois, changes to a contract must make the guarantor's obligations materially different from what they originally signed, including a substantial increase in risk. None of the changes in the amendment changed the Swentos' financial obligations, the court said, so it was not a material enough change to release them from their guaranty. Nor was the Swentos' lack of control over Jeepers! enough to constitute an increase in risk, especially since their original guaranty was written to endure despite changes in the lease.

The Swentos also argued that a directed verdict denying them a chance to defend themselves was inappropriate because they never signed the January 2001 amendment, which they argued superseded the lease and thus waived CEC's rights against them. The court found those arguments unconvincing, but more importantly, pointed out that they are waived on appeal because the Swentos failed to raise them at trial. Finally, the appeals court rejected the Swentos' argument that they shouldn't be held responsible for an agreement they didn't sign, again saying that the January 2001 changes to the lease were not material enough to release them from their obligations. Thus, the trial court's decision was unanimously affirmed.

With offices in Chicago and Oak Brook, Ill., DiTommaso-Lubin handles commercial real estate litigation of all kinds, including a variety of contractual disputes and shopping center tenant matters. If you have a legal problem regarding a shopping center or another real estate matter, we would like to help. To set up a confidential consultation with our Chicago business and real-estate trial attorneys, please contact our Oak Brook business and real-estate trial attorneys today.

As Chicago class action attorneys, our firm has been able to help many Illinois tenants protect their rights under a special state law that not every renter knows about. The Illinois Security Deposit Interest Act requires many Illinois landlords to pay their renters the interest on security deposits. The law applies to landlords of buildings with 25 or more rental units, and to deposits held six months or more. Under those circumstances, the law requires landlords to pay interest on security deposits once a year, after the end of the yearly rental agreement, except when the renter owed unpaid rent. Landlords who willfully fail to do this can be sued for the amount of the withheld interest, as well as attorney fees and court costs.

That was the case in Wang v. Williams and Royal Rentals, 343 Ill.App.3d 495, 797 N.E.2d 179, 277 Ill.Dec. 832 (Sept. 10, 2003). Zhiyuan Wang of Carbondale sued his landlord, Royal Rentals, for failing to return his security deposit, failing to pay interest during the two years he rented from Royal, consumer fraud and breach of contract. The trial court dismissed his interest claim and his breach of contract claim, both of which were based on the Security Deposit Interest Act, because Wang's lease included a provision stating "TENANTS agree to waive right to interest on security deposit." Wang appealed to the Fifth District Court of Appeal.

On appeal, Royal Rentals argued that legal rights, including Wang's rights under the Security Deposit Interest Act, can be waived when the right in question is conferred only for the benefit of individuals rather than the public. The court found this unconvincing. It pointed out that the Security Deposit Interest Act protects the rights of renters, a class of people. In support, it cited several cases, including Gittleman v. Create, Inc., 189 Ill. App. 3d 199, 545 N.E.2d 237, 240 (1989), a similar case in which tenants sued their landlord for a security deposit refund and interest. That lease had a provision reading "It is understood that the security deposit is net of security deposit interest, if any." That court found for the tenants, saying the provision was intentionally vague about how interest should be paid and suggesting that the landlord used that vagueness to try to circumvent the Security Deposit Interest Act.

On the Wang case's breach of contract matter, the plaintiff pointed out that Illinois contracts incorporate relevant parts of Illinois law unless otherwise specified. Royal Rentals argued that Wang's lease didn't implicitly incorporate the Security Deposit Interest Act because it included explicit provisions to the contrary. However, the appeals court said, language in a lease may not supersede state law. Indeed, the Royal Rentals provision, which the court called "an apparent attempt to circumvent the Act," showed that interest on a security deposit is an essential element of a lease, it wrote. Thus, it reversed the trial court on both counts and remanded the case for trial.

This case is important because it establishes that renters cannot waive their rights under the Security Deposit Interest Act, and that renters are a protected class of people, rather than protected individuals. As Illinois tenants' rights lawyers, we believe those are important legal tools for renters seeking to protect their legal rights. At DiTommaso-Lubin, we handle tenants' rights cases as both individual cases and as class actions involving renters with complaints against the same landlord. If you think you may have a case under the Security Deposit Interest Act or another landlord-tenant law, you can contact our Chicago class action lawyers for a free consultation on your case and your rights.