Chicago Business Litigation Lawyer BlogAs we enter the final quarter of 2019, employers must begin to look ahead and begin preparing for a number of new employment laws that will take effect January 1, 2020. Even though employers have nearly 100 days to review and revise their employment policies, they should start familiarizing themselves now with the new requirements, training management in compliance, and preparing to implement any new procedures come the start of 2020. Continue reading ›
Articles Posted in Business Disputes
Purchasers of Defective RV Not Required to Allow Seller to Cure Defect in Order to Revoke Acceptance
When two people purchased an RV that was later found to have a defect that substantially impaired its value, the purchasers were not required to give the seller of the RV time to cure the defect before being able to revoke their acceptance and receive a refund of their purchase price. The Illinois Supreme Court held that Illinois’ statute only required allowing the seller time to cure a defect if the purchaser had accepted a commercial unit with knowledge of a defect and an agreement with the seller which contemplated the seller repairing the defect.
In April 2014, Kimberly Accettura and Adam Wozniak purchased a new 2014 Palomino RV from Vacationland, Inc. for $26,000.25. They took possession of the RV a week later. That June, they discovered water leaking into the RV from the emergency exit window. The plaintiffs then brought the RV back to Vacationland for repair, which Vacationland performed without charge.
In July 2014, the plaintiffs took the RV to Michigan. During a rainstorm, the RV continued to leak extensively into the dinette area, damaging the walls and causing electrical failure. The plaintiffs towed the RV back to Vacationland for repair later that month. Vacationland was unable to repair the defect itself, so one of its employees told the plaintiffs that it would have to send the RV to the manufacturer for repair. Neither Vacationland’s employees or the manufacturer could give the plaintiffs an estimate for how long a repair would take. On Aug. 2, before the manufacturer picked up the RV, the plaintiffs called Vacationland and verbally revoked acceptance of the RV. Despite this, the manufacturer still picked up and repaired the RV. When the RV was returned to Vacationland at the end of September, Vacationland called the plaintiffs and told them that the RV was ready for pick up. At this point, the plaintiffs’ attorney sent a letter to Vacationland confirming the earlier revocation of acceptance of the RV. Continue reading ›
Court Should Have Looked to Course of Parties’ Dealings to Determine Fair Time to Pay Invoices
After two companies got into a dispute about the timeframe for payment of invoices, the 7th Circuit Court of Appeals found that the district court had erred in not considering the parties’ course of dealings to determine what a fair time to pay would have been.
In 1999, Valley Drive Systems, Inc. began manufacturing parts for Arctic Cat, Inc. In 2002, Driveline assumed control of Valley Drive Systems, Inc.’s assets. In June of that year, Driveline and Arctic Cat entered into a contract where Driveline would provide specifically-manufactured hubs, axels/half-shafts, outer and inner tie rods, shift shafts, and steering stops. The contract made Driveline a “just-in-time supplier” for Arctic Cat. Driveline provided its goods and filled orders daily with regular deliveries to Arctic Cat. Continue reading ›
Insurer Required To Replace All Siding On Building When Matching Siding For Damaged Sides Not Available
A condo association held an insurance policy on its condo buildings. In 2014, a hail and wind storm damaged the siding on several of the buildings. The storm, however, damaged only the south and west-facing sides of the buildings. The association’s insurer initially paid the association several million to repair the damage, which covered the replacement cost of siding for the south and west sides of the buildings. The association found, however, that matching siding was no longer produced. The insurer refused to pay the cost of replacing the siding on all sides of the building, so the association sued. The district court ruled in favor of the association, and the insurer appealed. The appellate panel affirmed. The panel found that requiring the insurer to replace all sides of the building was a sensible construction of the contract, given that replacing the siding such that two sides of the building did not match the other two would reduce the value of the properties and keep the insured from being made whole.
Windridge of Naperville Condominium Association held an insurance policy via Philadelphia Indemnity Insurance Company. In May 2014, a hail and wind storm-damaged buildings owned by Windridge. These buildings were insured by Philadelphia Indemnity. The storm directly damaged the siding only on the buildings’ south and west sides. Philadelphia Indemnity paid Windridge $2.1 million for the damage, which covered the replacement of the siding on the south and west sides.
Windridge, however, sought replacement of the siding on all four sides of the building, as matching siding for the south and west sides was no longer available. Philadelphia Indemnity refused to pay those costs, arguing that it was only responsible for replacing the siding that was directly damaged by the storm. The district court granted summary judgment for Windridge, and Philadelphia Indemnity appealed. Continue reading ›
Tax Lien Purchaser Loses $1 Million Breach of Contract Suit against the Law Bulletin
A company that purchases tax liens in order to obtain tax deeds to properties sued Law Bulletin for breach of contract over a misprinted hearing date in a Take Notice, which the company alleged cost it $1 million when the circuit court denied the company’s tax deed application due to the misprint. Following a trial, the jury entered a verdict in favor of Law Bulletin and against the company finding that the company had not fully performed its obligations under the parties’ contract. The First District Appellate Court affirmed finding that the trial court had not committed an error in denying the company’s pre-trial motion for summary judgment or mid-trial motion for a directed verdict.
Every year, Wheeler Financial purchased hundreds of tax liens from the Cook County Treasurer’s Office at the annual auction to sell tax liens on properties with delinquent tax bills. Under the Illinois Property Tax Code, if the property owner fails to satisfy a tax lien by paying the amounts due within the applicable redemption period, the tax lien purchaser may obtain fee simple title to the property. To obtain title to the property, the tax lien purchaser must apply to the circuit court for a tax deed and publish a Take Notice in a newspaper giving the property owner certain information including the hearing date on which the petition for tax deed will be heard by the court.
Law Bulletin publishes these Take Notices in its newspaper, the Chicago Daily Law Bulletin. Wheeler Financial used the Law Bulletin exclusively to publish its Take Notices for 15 years, publishing between 1000 to 1600 Take Notices annually with the Law Bulletin during that time. In one instance, Law Bulletin misprinted the hearing date for the tax deed for a particular property. When the circuit court discovered that the wrong hearing date had been published in the Take Notice, it denied Wheeler Financial’s petition for a tax deed. Continue reading ›
Discovery Responses Doom Mechanic’s Lien Claim Appellate Court Rules
The First District Appellate Court of Illinois recently affirmed the entry of summary judgment against the plaintiff in a commercial breach of contract and mechanic’s lien dispute. In upholding the grant of summary judgment, the Court found that the plaintiff’s discovery responses doomed its mechanic’s lien claim, providing yet another example of why it is crucial for a party to carefully review its discovery responses – something the best commercial litigation attorneys make painstaking efforts to do.
The case stems from a dispute arising over an alleged verbal contract between the plaintiff, MEP Construction, LLC, and defendant, Truco MP, LLC, to build out the defendant’s restaurant. According to the plaintiff’s complaint, under the oral contract, it agreed to provide “construction management and other related services” to the defendant for a cost of $791,781.16 (though the parties later agreed to have the plaintiff do an additional $80,000.00 of work). The plaintiff further alleged that it “fully performed” its contractual obligations, but the defendant only made partial payment of $612,447.15 and refused to pay anything further. The plaintiff later recorded a mechanic’s lien naming the defendant and others and claiming an amount of $251,870.45 was owed to it.
In August 2017, the plaintiff filed a three-count complaint against the defendant alleging breach of contract and seeking to foreclose on the mechanic’s lien. In the course of discovery, the defendant issued a document request to the plaintiff asking for all documents showing all payments that the plaintiff had made for work performed either “by MEP or at the direction of MEP.” The plaintiff’s response to the document request stated that all “contractors, subcontractors and material were paid directly by Truco.” The defendant also sought production of all contracts between the plaintiff and “any and all contractors, sub-contractors or other persons with whom MEP contracted for purposes of performing work” at the property. The plaintiff responded to this request by stating that all contractors and subcontractors “contracted directly with Truco” and were paid directly by Truco. Continue reading ›
Insurance Company not Prevented From Later Denying Payment for Claim it Initially Defended
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 ›
Appeals Court Awards Damages to Subcontractor, Denying Set-Off For General Contractor
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 ›
LUBIN AUSTERMUEHLE JOINS NEXTLAW REFERRAL NETWORK CREATED BY DENTONS THE LARGEST LAW FIRM IN THE WORLD
(July 28, Chicago) – DiTommaso Lubin, PC announced it has joined Nextlaw Referral Network, enabling it to connect its clients to high-quality lawyers around the world. Nextlaw Referral Network is the largest legal referral network in the world, with more than 650 member firms, 30,000 lawyers covering 200+ countries.
Peter Lubin of DiTommaso Lubin said, “By joining Nextlaw Referral Network, we can now provide our clients with the best of all worlds by continuing to serve them where we currently have offices, while also being able to direct them to top tier lawyers in other jurisdictions where they need legal counsel and business advice. We can build on our trusted relationships with our clients by putting the full resources of the global, legal powerhouse at their disposal.”
Jeff Modisett, Nextlaw Referral Network CEO said, “We’re proud to have DiTommaso Lubin, PC as part of our network. We’re only as good as the quality of our member firms and DiTommaso Lubin makes us stronger and better able to meet the needs of our other members’ clients in the Chicago metropolitan area and Illinois.”
If You Received Money as Part of a Lawsuit Settlement, That Money Is Subject to Taxation
If you recently received money as part of a settlement or award for a lawsuit, have you thought about how that settlement or award will affect your taxes? Depending on the nature of your claim, you’ll probably have to pay taxes on that money, just like you would on any other form of income. Whether you’ve already received your award, or you’re thinking of settling a legal dispute, here’s what you need to know:
The Origin of the Claim
Not all awards come in the form of monetary payment. For example, if you sue your employer for loss of income, for whatever reason, then any award you receive will be taxed as wages. If, on the other hand, you bought a car that turned out to be defective and you sue the manufacturer, you might be able to treat any award you receive as a reduction in the price you paid for the car.
Physical Injuries and Illness vs. Emotional Distress
If you sue your employer for physical injuries sustained while on the job, or if you sue your doctor for medical malpractice, those awards are not subject to taxation. While you can also sue for “emotional distress” caused by the incident, any amount granted for that will be taxed. Continue reading ›