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Car fraud can lead to criminal charges in addition to civil suits for consumer fraud as a recent criminal prosecution in Georgia demonstrates.

Police apprehended two employees of Newman, Georgia Nissan franchised dealer. The charges are that they fraudulently altered car purchase documents and forged customers signatures in order to overcharge customers.

A customer of the dealership, Iryna Alfieri claimed that she did not purchase any add-ons or extended warranties when she acquired her Nissan in September. However, these items were still included as part of the deal. Police discovered that the electronic signatures on that portion of the paperwork differed from those on the rest of the documents.

Newnan police wrote in its report that “Ms. Alfeiri [sic] stated that she has tried to get this matter reversed with the dealership[,] however they have not been inclined to address the issue.”

In December, Lindsay Collins, another customer, asserted that the dealership refused to accept the return of her vehicle, which she was attempting to return under the lemon law. She also alleged that her paperwork included forged signatures, and police identified an “apparent difference” in the signatures she pointed out.

On the same day, Justin Steele, another customer, claimed that he had purchased a 2018 Ford F-150 XLT from the same dealership. The dealership, however, listed the vehicle as a Ford F-150 Platinum on the loan application. This could be a part of a practice known as “power-booking,” in which dealers misrepresent the trim level of a vehicle, inflating its value to obtain higher rates from financial institutions. In this case, the difference between the two vehicles was more than $14,000.

The two men accused of this fraud appeared in court for their arraignment hearing where they pleaded not guilty. Continue reading ›

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According to state law enforcement officials, a used car dealer’s business had to close down because it was accused of deceitfully earning more than $70,000 from sales.

Police claim that Ilham Driouich, aged 23 from Enola, and Anas Soubai, aged 28 from Harrisburg, dishonestly obtained $74,750 from 18 distinct clients by defrauding customers into purchasing unsafe cars or keeping down payments even though the consumers never received the cars they had wanted to purchase.

The couple, who were married, were the proprietors of Power Auto Sales, LLC, situated at 7841 Paxton Street in Swatara Township.

Driouich was accused of engaging in illegal activities, fraudulent business practices, theft by deception, receiving stolen property, and violating the board of vehicles act.

Soubai was accused of impersonating a notary public or holder of a professional or occupational license.

As per police, the two used fake inspection stickers, publicized inaccurate model years, and rolled back odometer readings to make the used cars appear to be worth a lot more than they really were.

The police also asserted that they offered warranties that were nonexistent and initiated the sale of cars via Facebook Marketplace prior to receiving a permit to carry out their business.

Police added that the dealership allegedly failed to offer consumers mandatory vehicle documentation and sold cars that were not fit for the road to unsuspecting car buyers who were under the impression that they were purchasing roadworthy cars.

“Not only did these activities compromise the safety of these clients and other drivers on the highways of the Commonwealth of Pennsylvania, but they also caused monetary losses on cars that either needed further repairs or could not be established as roadworthy,” stated the police report.

The police also discovered that the pair had allegedly obtained a 2019 Maserati Ghibli that was stolen in Ohio, which they bought at a significantly lower price than its actual value without a title, and then allegedly informed potential buyers that they had misplaced the title.

 

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A defamation claim should be dismissed under the “substantial truth” defense where the “gist” or “sting” of the allegedly defamatory material is true.” Harrison v. Chicago Sun-Times, Inc., 341 Ill.App.3d 555, 563 (1st Dist. 2003) (reporter defendant’s use of the word “kidnapped” conveyed the gist or sting that would have been conveyed by the correct phrase “wrongful removal under federal and international child abduction law”). “Substantial truth” makes an allegedly defamatory statement non-actionable even when the statement is an inaccurate characterization of criminal behavior. That is so even when a statement is “not technically accurate in every detail.” Accord, Bertha v. Daily Herald Newspaper, 2022 IL App (2d) 210695, ¶ 20. See also Lemons v. Chronicle Pub. Co., 253 Ill.App.3d 888 (4th Dist. 1993) (reporter’s words were substantially true because the reporter’s and plaintiff’s characterizations of the conduct were similar).

The substantial truth of a statement is normally a jury question, but where no reasonable jury could find that substantial truth had not been established, the question is one of law.  Harrison, 341 Ill. App. 3d at 563.t Dist. 2003)

Harrison was a notable case in Illinois that involved a claim of defamation against a prominent newspaper, the Chicago Sun-Times. The case was decided by the Illinois Appellate Court in 2003 and had significant implications for media law in the state including reiterating the substantial truth defense.

The plaintiff in the case was Michael Harrison, a former employee of the Chicago Transit Authority (CTA) who had been fired from his job. The Sun-Times published a series of articles about Harrison’s termination, which included allegations of misconduct and corruption. Harrison sued the newspaper for defamation, arguing that the articles had damaged his reputation and caused him to suffer financial harm.

The trial court granted summary judgment in favor of the Sun-Times, finding that the newspaper’s statements about Harrison were either true or protected by the First Amendment’s guarantee of freedom of the press. Harrison appealed the decision to the Illinois Appellate Court, which affirmed the trial court’s ruling.

The Sun-Times argued that its articles about the plaintiff’s termination from the CTA were substantially true. The newspaper had conducted an extensive investigation into the circumstances of the termination, and had based its reporting on official documents and interviews with CTA officials. The articles accurately reported the substance of those documents and interviews, the newspaper argued, and any minor inaccuracies or omissions were not material to the overall story.

The Illinois Appellate Court agreed with the Sun-Times, finding that the articles were substantially true and therefore not defamatory. The court noted that the newspaper’s reporting was based on official documents and interviews with CTA officials, and that the articles accurately conveyed the substance of those sources. The court also found that the plaintiff had not shown that any inaccuracies or omissions in the reporting were material to the overall story or had altered its meaning.

The defense of substantial truth can be a powerful tool for defendants in defamation cases, particularly in cases involving public figures or matters of public interest. By demonstrating that a statement is substantially true, defendants can often avoid liability for allegedly defamatory statements even if they contain some minor inaccuracies or omissions.

Another one of the key issues in the case was whether the Sun-Times had acted with actual malice in publishing the allegedly defamatory statements about Harrison. Under U.S. defamation law, public figures like Harrison must prove that the defendant acted with actual malice – that is, with knowledge that the statements were false or with reckless disregard for their truth or falsity – in order to succeed in a defamation claim.

The Appellate Court in Harrison v. Chicago Sun-Times, Inc. found that there was no evidence that the newspaper had acted with actual malice. The court noted that the Sun-Times had conducted an extensive investigation into Harrison’s termination and had based its reporting on official documents and interviews with CTA officials. The court also found that the Sun-Times had accurately reported the content of those documents and interviews, and had not fabricated or distorted any facts.

The court’s decision in Harrison v. Chicago Sun-Times, Inc. reaffirmed the importance of the First Amendment’s protections for freedom of the press, particularly in cases involving public figures. It also highlighted the high standard of proof that public figures must meet in order to succeed in a defamation claim, emphasizing the need to prove actual malice on the part of the defendant and to defeat a substantial truth defense.

Harrison was a significant case in the evolution of media law in Illinois and the United States, underscoring the importance of a free and independent press in holding public officials accountable and informing the public.

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In the case of Pickering v. Owens-Corning Fiberglas Corp., 265 Ill. App. 3d 806, the plaintiff sought punitive damages against the defendant for the defendant’s failure to warn consumers of the dangers associated with asbestos exposure. Punitive damages are damages awarded in addition to compensatory damages and are intended to punish the defendant for their wrongful conduct and to deter similar conduct in the future.

In this case, the plaintiff sought to discover the net worth of the defendant as part of their efforts to establish punitive damages. The defendant objected to the request for net worth discovery, arguing that it was irrelevant to the issue of punitive damages and that it was overly burdensome and intrusive.

The court held that net worth discovery was relevant to the issue of punitive damages and that the defendant had a duty to disclose its net worth. The court noted that punitive damages are intended to punish the defendant and that the amount of punitive damages awarded should be proportionate to the defendant’s ability to pay. The court also noted that net worth discovery is a common practice in cases involving punitive damages. Continue reading ›

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Plaintiff seeks damages from Defendants under the Illinois Consumer Fraud and Deceptive Business Practices Act, including punitive damages, which are expressly recoverable under the Act. 815 ILCS 505/10a.

Illinois courts mandate allowing for punitive damages net-worth-related discovery, when, such damages are available as a matter of law. In Pickering v. Owens-Corning Fiberglas Corp., 265 Ill. App. 3d 806, 823-24 (5th Dist. 1994), the Court stated:

It is well settled that evidence of a defendant’s net worth and pecuniary position may be introduced in a case in which punitive damages is an issue (citation omitted). No Illinois case, of which we are aware, limits the scope of financial discovery relating to punitive damages.

Similarly, in Cripe v. Leiter, 291 Ill.App.3d 155, 160 (3d Dist. 1997), the Appellate Court affirmed a contempt order against a Defendant who had argued that his personal income tax returns were not discoverable because they were inadmissible and irrelevant.

Net worth evidence is discoverable and may be admitted at trial to set punitive damages commensurate with a defendant’s wealth so that it is sufficient to adequately punish it. Tague v. Molitor Motor Co., 139 Ill. App. 3d 313, 318 (5th Dist. 1985) ($17,000 in punitive damages arising from $1,000 in actual damages was justified due to defendant’s net worth). The financial status of the defendant is important and relevant because an amount sufficient to punish one individual may be trivial to another. The amount of the award “should send a message loud enough to be heard but not so loud as to deafen the listener.” Dubey v. Pub. Storage, Inc., 395 Ill. App. 3d 342, 359, 918 N.E.2d 265, 281–82 (1st Dist. 2009). For that reason, a “plaintiff seeking punitive damages is entitled to engage in discovery relating to the defendant’s financial worth in advance of trial.” N. Dakota Fair Hous. Council, Inc. v. Allen, 298 F. Supp. 2d 897, 899 (D.N.D. 2004). Continue reading ›

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“The focus of the crime fraud exception is on the intent of the client (citation omitted), not the legitimacy of the services provided by the attorney. An attorney may be completely innocent of wrongdoing, yet the privilege will give way if the client sought the attorney’s assistance for illegal ends.” People v. Radojcic, 2013 IL 114197, ¶ 49.

A lawyer’s participation in intentional breaches of fiduciary duty triggers the crime-fraud exception even though a fiduciary breach is no necessarily a crime or act of common law fraud. Intentional fiduciary breaches are regularly called constructive fraud however and give rise to the crime fraud exception. See Mueller Indus., Inc. v. Berkman, 399 Ill.App.3d 456, 469-73 (2d Dist. 2010) abrogated by People v. Radojcic, 2013 IL 114197 on other grounds (“In concluding that an intentional breach of fiduciary duty may serve as the fraud necessary to establish the crime-fraud exception, we take note of Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky.1991). … The Kentucky Supreme Court held that the breach of fiduciary duty was ‘on an equal par with fraud and deceit.”’) Lawyers who aid and abet fiduciary breaches and other torts are subject to suit. As Thornwood, Inc. v. Jenner & Block, 344 Ill. App. 3d 15, 28–29 (1st Dist. 2003), as modified on denial of reh’g (Nov. 10, 2003) recognized, a lawyer may not “escap[e] liability for knowingly and substantially assisting a client in the commission of a tort.” Continue reading ›

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The litigation privilege does not apply when a defamatory communication is made to people who have no legitimate “connection to the lawsuit.” Edelman, 338 Ill. App. 3d at 166. The Edelman rule applies whether or not a lawsuit has been filed, whether or not the complaint was shown to outsiders or its underlying allegations just discussed with them, and whether or not the complaint was a draft or filed version.

Nothing in Edelman supports holding that publication of a lawsuit in the court file immunizes the plaintiff in that case from libel claims if he publishes the lawsuit’s claims outside of the litigation.

The Edelman court made its findings based on facts about one attorney who had received a “draft or final” brief and another who had received a draft, all distributed after a bankruptcy trustee moved to reopen the bankruptcy estate. 338 Ill. App. 3d at 162. The court did consider an attorney’s receipt of a final, filed brief. But whether the briefs were in draft or final form was irrelevant to the holding that the allegedly defamatory communications made to two attorneys were not privileged. Id. at 166. Because neither attorney had a relationship to the litigation, the absolute privilege did not apply. Id. “Illinois has never extended the privilege to other persons without a connection to the lawsuit.” Id., citing, Kurzcaba v. Pollack, 318 Ill. App. 3d 686, 704 (1st Dist. 2000), and Thompson v. Frank, 313 Ill. App. 3d 661, 664 (3rd Dist. 2000).

Kurczaba did not reject he privilege only because the case involved an amended complaint not yet filed with leave of court. But, that court actually opined, “Assuming, arguendo, that defendant had a right to disseminate the Malus complaint with the ad, we nonetheless would find that the dissemination was also not protected by the attorney litigation privilege because the groups defendant disseminated the materials to extended beyond those covered by the privilege.” 318 Ill. App. 3d at 703. Continue reading ›

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Labovitz v. Dolan, 189 Ill. App. 3d 403 (1st Dist. 1989) is a case that was heard by the Appellate Court of Illinois, First District, Second Division. The case involved a dispute between Joel Labovitz and a group of investors, who were referred to as the “Labovitz Group,” and Charles F. Dolan and a group of investors, who were referred to as the “Dolan Group.”
The dispute centered around a real estate development project in Chicago. The Labovitz Group had entered into a joint venture agreement with the Dolan Group to develop a commercial real estate property in Chicago. The agreement specified that the parties would share equally in the profits and losses of the project. However, after the project was completed, the Dolan Group refused to distribute any profits to the Labovitz Group, claiming that there were no profits to distribute.

The Labovitz Group then filed a lawsuit against the Dolan Group, alleging breach of contract and fraud. The trial court ruled in favor of the Dolan Group, finding that there were no profits to distribute and that the Labovitz Group had failed to prove their fraud claims.

The Labovitz Group appealed the trial court’s decision to the Appellate Court of Illinois. The appellate court overturned the trial court’s decision, finding that the Dolan Group had breached the joint venture agreement and that the Labovitz Group was entitled to an equal share of the profits. The appellate court also found that the Dolan Group had committed fraud by misrepresenting the financial condition of the project.

One of the key issues in this case was the interpretation of the joint venture agreement. The appellate court found that the agreement was clear and unambiguous in its terms and that the Dolan Group had breached the agreement by failing to distribute profits to the Labovitz Group.

Another important issue in this case was the question of fraud. The appellate court found that the Dolan Group had made misrepresentations about the financial condition of the project, which constituted fraud under Illinois law.

Labovitz highlights the importance of clear and unambiguous contracts in business transactions. It also underscores the importance of honesty and integrity in business dealings and the legal remedies that are available to parties who have been wronged.  The case also highlights that controlling partners or owners owe very high fiduciary duties to other limited partners. shareholders or LLC members. The decision relies upon what has become the most celebrated pronouncement characterizing the fiduciary relationship that exists among partners, Chief Judge Benjamin N. Cardozo stated for the court in the case of Meinhard v. Salmon (1928), 249 N.Y. 458, 463–64 that:

“… copartners, owe to one another … the duty of the finest loyalty. Many forms of conduct permissible in a workaday world for those acting at arm’s length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the ‘disintegrating erosion’ of particular exceptions. [Citation] Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd. It will not consciously be lowered by any judgment of this court.”
The case found that Dolan’s discretion to withhold cash was not absolute; it was limited by an implied covenant of good faith and fair dealing implicit in every Illinois contract and by his fiduciary duty to his partners. “Good faith between contracting parties requires that a party vested with contractual discretion must exercise his discretion reasonably and may not do so arbitrarily or capriciously.” The Court held:
It is also clear, however, that despite having such broad discretion, Dolan still owed his limited partners a fiduciary duty, which necessarily encompasses the duty of exercising good faith, honesty, and fairness in his dealings with them and the funds of the partnership. (See: Couri, 95 Ill.2d 91, 69 Ill.Dec. 117, 447 N.E.2d 334; Mandell, 86 Ill.App.3d 437, 41 Ill.Dec. 323, 407 N.E.2d 821; Dayan, 125 Ill.App.3d 972, 81 Ill.Dec. 156, 466 N.E.2d 958; Foster Enterprises, 97 Ill.App.3d 22, 52 Ill.Dec. 303, 421 N.E.2d 1375.) It is no answer to the claim that plaintiffs make in this case that partners have the right to establish among themselves their rights, duties and obligations, as though the exercise of that right releases, waives or delimits somehow, the high fiduciary duty owed to them by the general partner—a gloss we do not find anywhere in our law. On the contrary, the fiduciary duty exists concurrently with the obligations set forth in the partnership agreement whether or not expressed therein. Indeed, at least one of the authorities relied upon by defendants is clear that although “partners are free to vary many aspects of their relationship inter se, … they are not free to destroy its fiduciary character.” Saballus, 122 Ill.App.3d at 116, 77 Ill.Dec. 451, 460 N.E.2d 755.
Thus, the language in the Articles standing alone does not deprive plaintiffs of the trial they seek against Dolan for breach of fiduciary *413 duty.

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Yes, it is possible to sue a lawyer in a shareholder derivative action in certain jurisdictions including Illinois. A shareholder derivative action is a lawsuit brought by a shareholder on behalf of a corporation against a third party. The lawsuit is typically brought when the corporation has been harmed by the actions of a third party, but the corporation’s management has failed to take action.

In a shareholder derivative action, the shareholder acts as a representative of the corporation and brings the lawsuit on the corporation’s behalf. If the shareholder is successful in the lawsuit, any damages or remedies awarded go to the corporation, not to the individual shareholder.

In some cases, the corporation’s harm may be caused by the actions of the corporation’s own lawyers. For example, if a lawyer provides negligent or inadequate legal advice to the corporation, causing the corporation to suffer damages, the corporation’s shareholders may be able to bring a shareholder derivative action against the lawyer on behalf of the corporation.

In order to bring a successful shareholder derivative action against a lawyer, the shareholders must be able to show that the lawyer breached their duty of care to the corporation and that this breach caused harm to the corporation. The shareholders must also show that they have exhausted all other available remedies, such as asking the corporation’s management to take action against the lawyer.

In conclusion, it is possible to sue a lawyer in a shareholder derivative action if the lawyer’s actions have harmed the corporation. However, such lawsuits can be complex and challenging, and it is important to seek the advice of a qualified attorney before pursuing this type of legal action. Continue reading ›

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The family of Marvin Gaye rocked the music world in 2015 when they sued Robin Thicke and Pharrell Williams for copying elements of Gaye’s hit, “Got to Give It Up,” in their own hit, “Blurred Lines.” Up until the jury sided with Gaye’s family, most musicians had assumed the musical elements in question were public domain.

That lawsuit seems to have opened up the floodgates, given the number of copyright lawsuits that have been filed in the music industry in the past eight years. Not all the lawsuits have ended in the plaintiffs’ favor, but enough have to give musicians pause when writing a new song.

The latest copyright lawsuit to make headlines in the music industry involves another Gaye song, “Let’s Get It On.” Instead of Gaye’s family, this copyright lawsuit has been filed by the family of Ed Townsend, who was the primary songwriter and owned 2/3 of the royalties on the song.

The case hinges on two chord progressions that are similar, but not identical. Even a musical expert testifying on behalf of the plaintiffs admitted the two chords have slight differences, but he maintained that they are interchangeable.

An attorney for the plaintiffs showed the jury a video of Sheeran performing a mashup of the two songs in question. The attorney claimed that Sheeran’s ability to move seamlessly from one song to the other proves that Sheeran stole the chord progression from the 1973 hit. Continue reading ›

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