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Bloomberg reports that AIG and three other insurance companies settled a class action lawsuit which originally arose out of charges brought by New York Attorney General Elliot Spitzer regarding fake insurance quotes used to steer insurance buyers to certain carriers. The article states:

AIG, Liberty Mutual Holding Co., Travelers Cos., Inc. and XL Group Plc (XL) agreed to settle the case with buyers of insurance policies sold from 1998 through 2004. Five other insurers agreed to settle a related set of claims over non-excess casualty policies.

“We are pleased to have reached an agreement to resolve this matter,” said company spokesman Mark Herr in an e-mailed statement. “Through this settlement, AIG brings an end to another long-standing lawsuit about events from many years ago.”
Zurich Financial Services AG (ZURN), the largest Swiss insurer, and Arthur J. Gallagher & Co., an insurance broker, previously settled the case pending in federal court in Trenton, New Jersey. Zurich, based in the Swiss city of the same name, agreed to pay $121.8 million to clients and $30 million in attorneys’ fees. Gallagher, based in Itasca, Illinois, agreed to pay $28 million to clients and $8.9 million in attorneys’ fees.

To read the full article click here.

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When large companies fail to properly compensate their employees, a class-action lawsuit is usually the most efficient means to resolve the legal claims between the two parties. At DiTommaso Lubin, our Chicago Fair Labor Standards Act lawyers fight for the rights of those who are due unpaid wages, and our lawyers are always striving to find ways to best serve our clients’ interests. As a firm that focuses on wage and hour class-actions, we are always watching for new court decisions in the area, and our Orland Park overtime lawyers recently found one such case in the federal Northern District of Illinois, Eastern Division Court.

Slayton v. Iowa College Acquisition Corp. is a case brought by a plaintiff who worked for Defendant as an Admissions Advisor for Kaplan University, where she and other putative class members were paid an hourly wage and were frequently required to work more than forty hours a week, but were not paid overtime. Plaintiffs alleged that Defendant required them to arrive at work prior to their shifts in order to perform certain job duties without compensation. Upon filing the putative class-action, the named plaintiff proposed two sub-classes — one for overtime violations of the Illinois Minimum Wage Law (IMWL), and one for unpaid wage violations under the Illinois Wage Payment and Collection Act (IWPCA) — and sought to certify them under Federal Rule of Civil Procedure 23(b)(3). Defendant did not dispute that the proposed class met the numerosity and adequate representation requirements of the rule, but did argue that Plaintiffs could not meet the commonality and typicality requirements.

In denying class certification, the Court found that Plaintiffs did not establish that Defendant engaged in standardized conduct to toward members of the proposed class. While there was evidence that Defendant required Plaintiffs to arrive early, it was unclear that Defendant had a widespread policy to not record that time. The Court also held that typicality was not established because not all the class representative’s claims had the same essential characteristics of the claims of the class at large and consequently, no common questions of law or fact predominated over the individual claims of the class members.

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Unpaid overtime lawsuits continue to proliferate as businesses seek to cut costs by cutting corners. Home Media Magazine reports that the largest privately owned video rental chain in the country, Family Video based in Gleview Illinois has been hit with an unpaid overtime class-action suit. Family Video employs more that 6,500 workers according to the artice. The article reports that the suit alleges:

[F]ormer employee Darvette Smith was not fairly compensated for standard and overtime hours worked at three Family Video store locations in Des Moines, Iowa, from November 2008 to January 2011.

The suit claims .. Family Video with 730 stores in 19 states violated provisions of the Fair Labor Standards Act in an effort to strictly manage its labor costs. Unpaid work included assisting customers, opening stores, maintenance, making required phone calls, completing inventory-related tasks, stocking shelves, and closing down stores, which required balancing cash registers and making off-site bank deposits.

You can read the full article by clicking here.

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The issues faced by our clients, and particularly our business clients, are often complex both factually and legally. Our Palatine business lawyers recently discovered a case filed in Du Page county that illustrates how business legal issues can, and often do, dovetail with personal legal issues. Prignano v. Prignano demonstrates the importance of obtaining legal advice before making business agreements and contracts that include will and probate issues.

In Prignano v. Prignano, the widow of George Prignano, a man who owned several businesses with his brother Louis, sued that brother for allegedly failing to honor an agreement that the survivor of the two brothers would buy the decedent brother’s share of their co-owned businesses. The Prignano brothers jointly owned two corporations, Sunrise Homes and Rainbow Installations, and were equal partners in 710 Building Partnership. The Plaintiff widow alleged that the Defendant had an oral agreement with her deceased husband George whereupon Louis would purchase George’s share of their three businesses with the proceeds from life insurance policies purchased for that purpose. Plaintiff also alleged that she and Defendant had an oral agreement that Defendant would purchase his brother’s share of the businesses from Plaintiff.

After George’s death, Defendant, who was the executor of George’s estate, allegedly kept George’s share of the businesses and the life insurance payments for himself unbeknownst to Plaintiff. When Plaintiff discovered this, she filed suit against him for fraud, breach of fiduciary duty, breach of contract, and unjust enrichment. The trial court ruled in her favor on all counts and awarded her damages and prejudgment interest. Defendant then appealed the trial court’s finding of liability and the award of prejudgment interest.

On appeal, the Second District of the Appellate Court of Illinois reaffirmed the trial court’s finding that both oral agreements (between the brothers and between Plaintiff and Defendant) were valid and enforceable due to the testimony of third parties who were aware of the oral agreement between the brothers, and the existence of a written agreement that was drawn up after the oral contract between Plaintiff and Defendant was initially formed. The Court also found that Defendant owed a fiduciary duty to Plaintiff as he was a corporate officer and partner in the businesses, and upon George’s death, his interest in the businesses was transferred to Plaintiff. As such, the Court held that Defendant owed Plaintiff a duty to exercise “the highest degree of honesty and good faith” in dealing with Plaintiff, and Defendant breached that duty. The Court then vacated the trial court’s judgment on the unjust enrichment claim because Plaintiff was victorious on her breach of contract claim. The Court stated that unjust enrichment does not apply when there is a breach of contract under Illinois law. Finally, the Court reaffirmed the award of prejudgment interest because Plaintiff had been deprived of money that was rightfully hers, and Defendant should not profit from his wrongful retention of the funds.

Prignano v. Prignano exemplifies why business owners should have all of their business agreements and contracts reviewed by a trained legal professional. Family business owners, in particular, should guard against casual or oral agreements, as personal relationships can be strained when there is a misunderstanding regarding such agreements. If you are unsure about the legality or legitimacy of your business agreements, or are currently in a dispute, you should consult a discerning Chicago and Naperville business attorney to determine your rights.

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The Chicago Tribune Reports that aggressive debt collectors are clogging the Cook Courts with many new debt claims and that their poor record keeping practices and other missteps are resulting in judgments sometimes entering for debts that have already been repaid. You can read the full article by clicking here.

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The holiday season is a busy time for many corporations and particularly for those tied to the retail industry, increased holiday business usually means that employees have to work longer hours to keep up with consumer demands. Our Aurora overtime attorneys came across a case that illustrates what can happen when employers fail to compensate employees who work extra hours during such times of increased workflow.

In Nunes v. Chicago Import Inc. Plaintiffs worked for Defendant as warehouse laborers responsible for loading and unloading merchandise from delivery trucks and keeping the warehouse organized. In performing these duties, Plaintiffs routinely worked over forty hours per week, and worked seven days a week during the month of December. Plaintiffs were paid a flat rate of $300.00 per week for the first three weeks of the month, and were paid $400.00 for the fourth week. They were paid an additional $50.00 per week in December, but never received hourly or overtime wages for their services. Plaintiffs then filed suit alleging violations of the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law (IMWL), and asked the Court to issue an Order to Authorize Notice to Similarly Situated Persons under FLSA Section 216(b).

The Court granted Plaintiffs’ motion, holding that it was proper to leniently review the pleadings at this early stage of the litigation. As such, the five sworn declarations submitted by the Plaintiffs established that the representative and pending class members were sufficiently similarly situated to proceed with a class action. Defendants made objections that the proposed notice was too broad, and should not include administrative or executive staff. The Court agreed with Defendant and ordered adjustments to the form of the notice to exclude such employees, but otherwise found in favor of the Plaintiffs and granted their motion to authorize notice.

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