Articles Posted in Business litigation

A contract was entered into between Beckett Media LLC and OnRamp Technologies to allow Beckett to use OnRamp’s applications and websites for “inventory management and sales solution.” According to the contract, “in the event of any litigation of any controversy or dispute arising out of or related to this agreement, the prevailing party shall be entitled to an award of reasonable attorneys’ fees and costs.”

On Oct. 1, 2010, Beckett filed a lawsuit against OnRamp claiming breach of contract, unjust enrichment and violation of the Uniform Deceptive Trade Practices Act and the Consumer Fraud of Deceptive Business Practices Act.

During the trial, the parties voluntarily dismissed the claims about violation of the two deceptive practices act. Beckett filed an amended complaint for unjust enrichment, breach of contract and replevin, seeking the return of its server as well as money damages incurred by OnRamp’s refusal to return the server.

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The Illinois Appellate Court for the First District has affirmed a judgment that pierced the corporate veil of a closely held corporation and then awarded the plaintiff attorney fees connected to this litigation. The case was reported to be one of first impression in Illinois.

Steiner Electric sold electrical products on credit to Delta Equipment Co., a corporation wholly owned by an individual, Leonard Maniscalco. Although there were many attempts to collect payment, Steiner finally sued Delta and obtained a default judgment for the purchase price plus interest, attorney fees and costs. By the time judgment was entered, Delta no longer existed. Steiner  filed suit against Maniscalco and Sackett Systems Inc., another corporation wholly owned by Maniscalco. That lawsuit sought to pierce Delta’s corporate veil and hold both Maniscalco, individually and Sackett Systems Inc., liable for the default judgment.

Steiner was successful in proving that it was entitled to pierce the veil wherein both Maniscalco and Sackett Systems appealed from that order.

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The Illinois Appellate Court for the Third District has held that persons with claims against a corporation dissolved for more than 5 years could not recover against the corporation’s liability insurers.

In this case, defendant insurers included Employers Insurance Co. of Wausau, TIG Insurance Co. and Travelers Casualty and Surety Co.  The claimants were numerous individuals who were former employees of Sprinkmann Sons Corp. of Illinois who were diagnosed with mesothelioma and lung cancer.  The claimants brought a lawsuit against the former Sprinkmann company, its previous owners and its liability insurers in 2011.

The former Sprinkmann company, however, had been dissolved in 2003 with certain of its assets having been sold to a new corporation, Sprinkmann Insulation Inc.  The new Sprinkmann company did not acquire any liabilities or insurance policies of the older dissolved Sprinkmann company.

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In a landlord-tenant case that included a bankruptcy, the Illinois Appellate Court weighed in on the law of unjust enrichment and constructive trust. The case involved the payments on a commercial lease, a bankruptcy and the legal principles.

The commercial lease tenant — Montgomery Ward — had filed for bankruptcy protection in 1997. Montgomery Ward had defaulted on its lease that same year. A proof of claim was filed and approved for the commercial landlord, DiMucci LLC. DiMucci defaulted on its loan from GALIC. GALIC filed a motion in the bankruptcy court in the case seeking an assignment of DiMucci’s claim against Montgomery Ward. The court allowed the assignment of the allowed bankruptcy claim of $640,000 for the default in lease payments.

In February 2001, the check in the amount of the assignment — $638,537.50 —  was received by DiMucci LLC, which was supposed to deliver the payment of $640,000 to its lender, GALIC. Instead, DiMucci LLC pocketed the check. The lender’s insurer, National Union, then filed a state court action against the landlord’s officer to recover the $640,000. The trial judge granted summary judgment for the plaintiff on its unjust enrichment and constructive trust counts. The defendant, landlord officer, appealed.

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On April 6, 2012, nine graduates from DePaul University College of Law filed a class-action lawsuit on behalf of themselves and all others who were similarly situated against DePaul. They were making claim that the university and particularly its law school violated the Illinois Consumer Fraud Act and committed common-law fraud and negligent misrepresentation.

The law school graduates claimed that DePaul published “employment and salary statistics that deceptively overstated the percentages of recent graduates who had obtained full-time legal employment with salaries in excess of $70,000.”

The law school graduates said they relied on DePaul’s statistics by entering law school and borrowing tens of thousands of dollars to pay their tuition and taking out loans to pay such tuition. The plaintiffs wanted DePaul to pay a percentage of the tuition they paid as well as the lifetime income they would have earned based on DePaul’s statistics.

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This was a breach of contract case that started out in the Chancery Division of the Circuit Court of Cook County and then became a law matter tried before a jury. In this case, a verdict of $971,858 was the outcome in a lawsuit brought by the Harold O. Schulz Co. Inc. for work it did as a general contractor in the renovation and construction work at 1435 and 1431 N. Astor Street in Chicago.

The work was done from 2007 through 2010.  The two property addresses consisted of three residential buildings, including a 20,000-square-foot historic mansion built in 1894, a coach house and an adjacent residence.

The main house involved in this lawsuit was inhabited by Jay Prtizker, Mary Pritzker and her family.

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Menzies Aviation and CenterPoint Properties Trust entered into a 10-year lease for a warehouse near Chicago’s O’Hare International Airport in 2007.  CenterPoint owned the warehouse, while Menzies operated an aircargo handling business that included the use of 15,000- and 30,000-pound forklifts.  The warehouse was a single-story, 185,000-square-foot structure built in 1998.

The warehouse had a 6-inch concrete slab that did not show any damage in 2007.  However, by January 2009, the concrete slab was cracking and scaling along the surface and was damaged along the contraction joints.

This type of wear was not typical, but rather was caused by Menzies’ use of heavy forklifts.

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The U.S. Court of Appeals for the Seventh Circuit in Chicago has affirmed a decision by a trial judge that led to the forfeiture of an oil and gas franchise. Emmanuel Joseph operated a British Petroleum (BP) service station in Chicago.  Sasafrasnet, LLC was the authorized distributor of BP products.  Joseph was the franchisee with Sasafrasnet being the franchisor. 

In November 2010, Sasafrasnet served Joseph with notice of its intent to terminate the franchise. The termination was based on the three occasions when Sasafrasnet’s attempt to debit Joseph’s bank account to pay for fuel deliveries was declined because of insufficient funds. 

In May 2011, Joseph sought a preliminary injunction to stop the termination. The U.S. District Court judge denied the request finding that Joseph chose not to show “sufficiently serious questions going to the merits to make such questions fair ground for litigation.” Joseph appealed the denial to the Seventh Circuit Court of Appeals. The appeals court first returned the matter to the trial judge for additional findings and conclusions on whether Joseph’s insufficient funds denials amounted to “failures” under the Petroleum Marketing Practices Act (PMPA). PMPA is a federal law that regulates the sales of many petroleum products by producers of oil and gas products to franchised dealers who sell to the public.

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The Illinois Appellate Court has reversed and remanded a decision by a circuit court judge regarding a contract.  Global Care S.C. was a medical services corporation that leased several office suites from K&K Holdings. The term of the leases was seven years.  The lease was to end on July 31, 2011.  The original leases were signed on July 30, 2004.

On Oct. 13, 2006, a rider was attached to the original lease, which terminated one of Global Care’s rental suites and added a new one. 

The rider removed Global Care’s ability to terminate the lease early, requiring six months’ notice and payment.  The payment schedule attached to the rider provided for rental payments through Oct. 31, 2013.  There was nothing in the addendum to the rider that extended the lease though October 2013. 

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Kraft is a well-known manufacturer of food products sold in grocery stores.  It has been selling packaged cheeses sold under the trademarked “Cracker Barrel” label.  Kraft has been selling under that name for more than 50 years.  Thousands of grocery stores carry Kraft cheeses bearing that label. Kraft does not sell any non-cheese products under the name Cracker Barrel. 

Cracker Barrel Old Country Store (CBOCS) is a well-known chain of low-priced restaurants. It opened its first restaurant in 1969. There are more than 620 restaurants now operating, many of them located just off major highways.

When Kraft learned that CBOCS planned to sell a variety of food products, such as packaged hams in grocery stores under its logo, “Cracker Barrel Old Country Store” (the last three words are in smaller type in the logo), Kraft filed this lawsuit. Kraft claimed that many customers would be confused by the similarity of the companies’ logos and would think that food products so labeled were Kraft products. 

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