An insurance company defended a construction firm against a claim by a condo association for defective design and construction of a building, as it thought the claim arose during the company’s policy period. The insurance company was not estopped from later denying payment for the claim when it was discovered that the claim had in fact arisen 10 years before the policy went into effect.

In 2002, the Blue Moon Lofts Condominium Association filed a complaint against The Structural Shop, Ltd in Illinois state court seeking damages arising out of TSS’s allegedly defective design and construction of a building. Blue Moon served notice of action to TSS’s registered agent, Thomas Donohoe on November 2002. TSS never responded to the notice or appeared in the state court action to defend itself, leading in May 2003 to the state court declaring the company in default. In 2009, the state court entered a default judgment and set the damages amount at $1,356,435 plus costs.

Many years later, Essex Insurance Company sold TSS a policy for claims first made against TSS from May 2012 to May 2013. Essex knew nothing about the prior litigation. For a time, both TSS and Essex believed that Blue Moon had failed to properly serve TSS in 2002, and thus had first brought notice of the claim to TSS in 2012 when it attempted to collect the default judgment. Laboring under this mistaken belief, TSS petitioned the state court to vacate the default judgment. The court granted the motion and vacated the judgment. TSS then informed Essex of the developments and Blue Moon’s claim. Essex, unaware that Blue Moon had properly served TSS in 2002, considered the claim to have arisen during the policy period and thus acted on its duty to defend TSS. Continue reading ›

Testimonies are generally reserved for trials, so when the editor of The New York Times, James Bennet, testified before a judge who was deciding whether to dismiss a case, the hearing itself was already highly unusual.

Normally, a motion to dismiss asks the judge to consider the merits of the case and whether it’s worth the court’s time to pursue the matter. If anyone is brought in to testify, it’s not until after the judge has determined that the claims have merit and the case should move forward.

But Judge Jed S. Rakoff of the Federal District of Manhattan, went off-script when he summoned Bennet to testify before making his decision regarding whether to dismiss Sarah Palin’s case against The New York Times.

Palin sued the major newspaper after it published an editorial, written by Bennet, linking Palin to a mass shooting in Tucson, Arizona on January 8, 2011, in which 6 people were killed and 13 wounded, including Representative Gabrielle Giffords. Continue reading ›

For too long, law enforcement and the courts have refused to acknowledge the real-world damage that can be done by online hate, but that attitude seems to be turning around. In just the past few months, one internet “troll” has been ordered to pay a total of more than $20 million to three different targets of his online vitriol.

Andrew Anglin is the publisher of a neo-Nazi website called The Daily Stormer that has targeted (among others) a black female college student, a Jewish real estate agent, and an Arab-American comedian. In June, the comedian won a $4.1 million lawsuit against Anglin, and shortly after that, Anglin was ordered to pay the real estate agent $14 million.

The most recent award against Anglin is for $725,000 for targeting Taylor Dumpson, the first African American female student body president of American University. The award includes $500,000 as punishment for his actions, plus $124,000 in legal fees and costs, and $101,000 to compensate Dumpson for the damage she suffered.

Dumpson was the target of racist hate and vitriol from the day she was sworn in as student body president of American University, back in May of 2017, when bananas hanging from nooses were found all over campus. Many of the bananas had messages written on them, including references to her predominantly black sorority, and to a gorilla that was killed at the Cincinnati Zoo in 2016.

After news outlets reported on the bananas in nooses around the American University campus, Anglin published Dumpson’s personal information on The Daily Stormer and allegedly encouraged harassment against her. Two of Anglin’s followers, Brian Ade and Evan McCarty, responded to Anglin’s call by allegedly harassing Dumpson online with racist and demeaning messages and threats. Continue reading ›

If you’ve used Facebook at all in the past few years, you’ve probably noticed that every time you post a photo with one of your friends, Facebook automatically suggests you tag that person. While that might seem innocent enough, the facial recognition technology Facebook uses to accomplish that is highly controversial and possibly illegal.

Facial recognition technology is a relatively recent development and it didn’t take long for it to become controversial. With the abundance of cameras all around us, facial recognition technology allows owners of the technology to find us just about everywhere we go, which is why Facebook is now facing a class action consumer lawsuit on behalf of millions of Illinois users.

According to the lawsuit, Facebook used its facial recognition technology to gather and store biometric data on its users without their consent, which violates the Illinois Biometric Information Privacy Act of 2008. Facebook tried to have the class action dismissed and to force each plaintiff to sue them individually, knowing the costs of filing the lawsuit would prohibit most, if not all the plaintiffs from pursuing legal action.

But the court said the class action was the proper format for this particular lawsuit. Facebook appealed that decision, and the appellate court recently upheld the lower court’s ruling, allowing the class action to proceed as is. Continue reading ›

A manufacturer of yachts was sued by a disgruntled buyer for breach of contract after the yacht he ordered was not usable in waters in the European Union as he originally specified. The buyer lost in court, however, because he argued that the yacht was a total loss, and the company presented evidence that the conversion to allow the yacht to operate in Europe would cost less than $2,000, and that it had repaired other small defects for free.

Porter, Inc. is an Indiana company that manufactures boats under the Formula and Thunderbird trade names. In September 2012, Erich Schwaiger attended a boat show in Friedrichshafen, Germany, and met Alfred Zurhausen, the owner of Poker-Run-Boats, one of Porter’s international dealers of Formula boats. Schwaiger expressed interest in ordering a Formula yacht with supercharged engines and high-end accessories and furnishings. Zurhausen later met Schwaiger in Munich to discuss the options and pricing in more detail. Schwaiger later, through one of his companies, SelectSun, executed a contract with Poker-Run-Boats in October 2012. The yacht and custom-built lift cost Schwaiger approximately $1 million.

The contract required that the boat be CE certified, so that it would be authorized for operation in the European Union. Porter did not, however, manufacture the boat to meet that specification due to a miscommunication during the ordering process that Porter had with one of its domestic dealers, International Nautic. Schwaiger took delivery of the yacht in Germany in May 2013. He used the boat throughout much of the 2013 season in Europe. During the first few months, Porter covered a series of minor warranty repairs at no charge to Schwaiger. By the end of August, however, Schwaiger was fed up with the yacht, complaining to Poker-Run-Boats of problems with the boat’s engines, steering column, exterior gel coating, and interior furnishings. Schwaiger then returned the yacht to Poker-Run-Boats with instructions to sell it. When the boat did not immediately sell, Schwaiger sued. Continue reading ›

Do you ever think that all pop songs sound the same? If you have, you might not be the only one who’s had that thought. Several musicians lately have sued better known musicians, claiming their success comes, at least in part, from stealing parts from older, lesser-known songs. Lately, the musicians filing the lawsuits demanding compensation for their stolen work have been successful in court, leaving many people asking about the difference between inspiration and infringement.

The latest musician to achieve success in the courtroom is Marcus Gray, who goes by Flame in the music industry. Gray wrote a Christian rap song called “Joyful Noise,” which was released in 2008. When Katy Perry released “Dark Horse” five years later, Gray sued, claiming Perry’s song had stolen important elements of “Joyful Noise,” and that the alleged theft was a significant factor in the song’s success, which included holding the top spot on Billboard’s Hot 100 list for four weeks in 2014.

Perry’s attorneys argued before a federal jury in Los Angeles that the musical elements the two songs had in common with each other, such as a few notes that were repeated in a pattern, are basic elements of music, rather than intellectual property that could be protected by copyright.

Whether Perry was even aware of Gray’s song when she and her five collaborators came together to write “Dark Horse” is not entirely clear, but even if she had been aware of it, could she have used it as inspiration for her own song without going so far as to steal it? These copyright lawsuits have forced juries (and the music industry) to consider the difference between inspiration and infringement, and it’s not yet clear where that line will land. Continue reading ›

An electrical subcontractor sued the general contractor after the general contractor withheld $58,000. The general contractor claimed that it was owed a setoff for work performed by other electricians, but the trial court found that the money spent by the general contractor was not within the scope of the original agreement, and the electrical contractor had performed additional work and worked overtime to complete the project, despite delays caused by other contractors. The Illinois appellate court affirmed, finding that the trial court had not made a determination against the manifest weight of the evidence.

Hunter Construction Services entered into a general contract to construct a Buffalo Wild Wings restaurant in Dickinson, North Dakota. Hunter had built 14 similar stand-alone Buffalo Wild Wings prior to the North Dakota project. Hunter reached out to Mormat Electrical & Construction Services, LLC to be the electrical subcontractor on the project. Mormat had worked on other Buffalo Wild Wings projects and understood the general scope and labor requirements, even though the North Dakota project was larger than most. Mormat agreed, and Hunter and Mormat entered into an oral subcontract for electrical work. The electrical budget was $135,000, and Mormat was responsible for all the electrical labor and wiring over 120 volts, including the wiring and installation of all light fittings and fixtures as well as the equipment connections related to heating and cooling, kitchen appliances, and mechanical equipment. The scope of work necessitated a four to five man electrical crew.

Prior to entering into the contract, Mormat, a nonunion contractor, informed Hunter that it could not acquire a North Dakota electrical permit because it did not employ an electrician capable of being licensed in North Dakota. Hunter and Mormat agreed that a local contractor would need to be present on site to pull the necessary permits and perform inspections. Integrity Electrical was hired directly by Hunter on a time and material basis to provide the permit and supervision for the project. Continue reading ›

When a franchisor learned that its franchisee was building a competing app and planning to launch a new business in direct competition with it, it sued, seeking an injunction to prevent the launch of the app and business during the litigation. The district court granted the injunction, and the appellate court affirmed in part, with regards to the injunction’s limits on competition. The appellate panel did, however, remand for the district court to consider imposing a higher security bond, given the sweeping nature of the terms of the injunction.

Auto Driveway Franchise Systems, LLC is a franchisor for commercial vehicle transportation services. Jeffrey Corbett was one of Auto Driveway’s franchisees. Through his company, Auto Driveway Richmond, LLC, Corbett ran Auto Driveway franchises in Richmond, Virginia, Nashville, and Cleveland. Corbett’s three businesses were governed by separate, but substantively identical franchise agreements with Auto Driveway. Each agreement included a non-compete clause, a non-disclosure clause, and a five-year term set to expire in 2016. The expiration dates came and went, and both parties continued dealing as though the contracts were still in place.

At some point in 2017, Auto Driveway learned that Corbett had been taking actions in apparent violation of the franchise agreements. Corbett was building an app to complete against the app Auto Driveway had hired Corbett to build for itself, using Auto Driveway’s proprietary work product as a starting point. Corbett was set to launch his new app through a new company, InnovAuto, that also provided auto transportation services in direct competition with Auto Driveway. Auto Driveway sued, seeking an injunction to prevent Corbett from selling or using the app.The district court granted Auto Driveway a preliminary injunction, finding that Corbett was harming consumer goodwill and was taking Auto Driveway customers through his competing business. Corbett then appealed. Continue reading ›

Nick Sandmann achieved fame earlier this year when a short video clip of him standing face-to-face with a Native American by the name of Nathan Phillips went viral back in January. Sandmann, who is wearing a “Make America Great Again” hat in the video clip, was chastised on social media as a racist who had taunted a Native American.

After the video went viral, several news organizations reported on the incident, including the Washington Post, NBC, and CNN. Sandmann sued all of them for allegedly defaming him by misrepresenting his actions and failing to report the full story.

Shortly after the video went viral, it was revealed that the Native American group was there with the Indigenous People’s March and Sandmann and his classmates were students from Covington Catholic High School in Kentucky, who was in Washington D.C. for The March for Life. But it turned out those two groups weren’t the only ones outside the Lincoln Memorial that day. The third was a group of Black Hebrew Israelites who, it turned out, were heckling the students and other visitors to the memorial, claiming they were the result of incest and sodomy. The students pointed out to the group of Black Hebrew Israelites that their comments about sodomy were homophobic. Continue reading ›