So, it has been awhile since I last posted. As you may recall, we had filed a distress warrant in DuPage County. Regrettably, before it could be litigated properly, the tenants filed bankruptcy. We had to stop all proceedings immediately due to the automatic stay and a judge ordered us to return their property after the Defendants filed an emergency motion. So, we got the stay lifted but the tenants ended up abandoning the property anyway. I was happy that our clients got to re-let the premises but I would have liked to have seen what would have happened if the tenants had not filed bankruptcy. Would our security interest in the seized property be upheld by the court? Fortunately, we had another similar situation in Kane County. That warrant was issued, the property was seized, and the matter is up for a hearing here in September. Hopefully, this one will get litigated so we can all see if the courts will uphold these actions. Stay tuned!
Tuesday, August 31, 2010
Monday, August 30, 2010
Law Blog Contributor Featured in ABA Journal.
Northern Law Blog contributor Cynthia Edwards is profiled in this month's ABA Journal.The article is titled "The Job Seekers" and outlines the steps taken by three recent law school graduates as they seek full-time employment.
At the time of the interview, Cynthia was still looking for full-time work, but an editor's note indicates that after the story went to print, Cynthia took a full time job with the American Medical Association. Congratulations Cynthia!!
Click here to view the article online, or click here to view a PDF of the magazine article.
Friday, August 27, 2010
Common Law Remedies vs. Statutory Remedies
A nursing home is owed money from a former resident. The nursing home sues the former resident for breach of an oral contract and quantum meruit. The former resident invokes the Nursing Home Care Act which requires a written contract between all nursing homes and their residents. The trial court dismisses Count I for failure to have a written contract pursuant to the Act. The trial court dismisses Count II because it refuses to imply a contract where an actual written contract is required by law.
Sounds a lot like the Home Repair and Remodeling Act issues that have been going around lately, doesn't it? The First District Appellate Court thought so too. They relied on K. Miller Construction v. McGinnis case to reverse the trial court.
As I have discussed in previous posts (here and here), the McGinnis court held that the contractor's violation of the Home Repair and Remodeling Act did not preclude it from pursuing equitable recovery pursuant to quantum meruit. The court reasoned that allowing the contractor to recover via quantum meruit was not specifically disallowed by the Act and would not violate the public policy expressed by the Act.
Similarly, the Court in Carlton at the Lake, Inc. v. Barber, 01-09-0039 (May 20, 2010), allowed the nursing home to recover from its former resident under quantum meruit. The Court found that common law rights and remedies are in full force and effect unless repealed by the legislature. For that to happen, the legislative intent to abrogate the common law must be clearly and plainly expressed, and such intent will not be presumed from ambiguous or doubtful language. After a review of the Nursing Home Care Act, the Court could find no clear legislative intent to limit nursing homes' ability to recover under common law theories.
Also, allowing a common law recovery would not defeat the purposes of the Nursing Home Care Act, which was enacted "amid the concern over reports of inadequate, improper, and degrading treatment of patients in nursing homes," none of which were alleged in this case.
Sounds a lot like the Home Repair and Remodeling Act issues that have been going around lately, doesn't it? The First District Appellate Court thought so too. They relied on K. Miller Construction v. McGinnis case to reverse the trial court.
As I have discussed in previous posts (here and here), the McGinnis court held that the contractor's violation of the Home Repair and Remodeling Act did not preclude it from pursuing equitable recovery pursuant to quantum meruit. The court reasoned that allowing the contractor to recover via quantum meruit was not specifically disallowed by the Act and would not violate the public policy expressed by the Act.
Similarly, the Court in Carlton at the Lake, Inc. v. Barber, 01-09-0039 (May 20, 2010), allowed the nursing home to recover from its former resident under quantum meruit. The Court found that common law rights and remedies are in full force and effect unless repealed by the legislature. For that to happen, the legislative intent to abrogate the common law must be clearly and plainly expressed, and such intent will not be presumed from ambiguous or doubtful language. After a review of the Nursing Home Care Act, the Court could find no clear legislative intent to limit nursing homes' ability to recover under common law theories.
Also, allowing a common law recovery would not defeat the purposes of the Nursing Home Care Act, which was enacted "amid the concern over reports of inadequate, improper, and degrading treatment of patients in nursing homes," none of which were alleged in this case.
Wednesday, August 25, 2010
Law Blog Contributor Receives Scholarship
Northern Law Blog contributor Heather Darsie was awarded the Anthony A. DiGrazia Scholarship by the Phi Alpha Delta Law Fraternity. The Anthony A. DiGrazia Scholarship Program recognizes law student members of the Fraternity who through their involvement in the fraternity and their communities have begun to demonstrate PAD ideals.
Also pictured is another Law Blog contributor, Pete Bastianen, who is a member of the PAD Scholarship Committee.
For information on how to donate to the scholarship fund, please e-mail the chapter here.
Equitable Remedies under the Home Repair and Remodeling Act
Illinois' First District has already held that equitable remedies such as quantum meruit and unjust enrichment are available to contractors who do not have written contracts with homeowners or are otherwise in violation of the Home Repair and Remodeling Act. See K. Miller Construction Company, Inc. v. McGinnis 394 Ill.App.3d 248 (1st Dist. 2009).
Now, the Second District has followed suit. In Fleissner v. Fitzgerald 02-09-0805 (August 9, 2010), the court analyzed equitable remedies under the Home Repair and Remodeling Act in light of previous judicial decisions (Slepian, McGinnis, Bogard, Bilstrom, and Adkins) that have either specifically held or otherwise acknowledged that it is unlawful for a contractor to perform home repair and remodeling work without a written contract.
In Fleissner there was a consumer/homeowner who admitted to the existence of an oral contract with the contractor, admitted that work was performed per the agreement, and admitted to having paid nearly all of the contract amount. The issue was whether the contractor could recover the remaining balance due under quantum meruit or unjust enrichment theories.
While the Court acknowledged that the statute requires a written contract, the Court could not say that the oral contract in this case violated the public policy behind the Act, as there was not a consumer who was deceived by a "fly by night" contractor. Rather, the case involves an honest contractor seeking payment for performed services.
The Court then considered whether equitable relief through quantum meruit or unjust enrichment is available to a contractor relying upon an oral contract despite the Act's requirement that a written contract exist for certain home repair or remodeling work. On this issue, the Second District agreed with the McGinnis court that the Act lacks any clear and plain intent to eliminate equitable remedies available under common law.
Further, like in McGinnis, there were no allegations that the contractor was involved in any deceptive practices. The McGinnis court discounted the homeowners' position that allowing quantum meruit recovery on an oral contract would reward deceptive practices and would violate public policy. While the Act's purpose was to eliminate deceptive practices by making a written contract required for certain types of home repair or remodeling, an oral contract by itself is not a deceptive practice. Where unfair and dishonest conduct that the Act intended to eliminate is not present, the failure to work under a written contract is a "technical deficiency," which does not bar recovery by the contractor under equitable theories.
The Court held that allowing recovery under equitable theories would not defeat the purpose of the Act. The purpose of the Act is to protect consumers from "fly by night" deceptive contractors, not to bar an honest contractor from recovering for services actually performed. To hold otherwise would allow a consumer to renege on an otherwise valid oral contract after work is performed and enjoy the benefits of his improved property at the expense of the contractor.
Now, the Second District has followed suit. In Fleissner v. Fitzgerald 02-09-0805 (August 9, 2010), the court analyzed equitable remedies under the Home Repair and Remodeling Act in light of previous judicial decisions (Slepian, McGinnis, Bogard, Bilstrom, and Adkins) that have either specifically held or otherwise acknowledged that it is unlawful for a contractor to perform home repair and remodeling work without a written contract.
In Fleissner there was a consumer/homeowner who admitted to the existence of an oral contract with the contractor, admitted that work was performed per the agreement, and admitted to having paid nearly all of the contract amount. The issue was whether the contractor could recover the remaining balance due under quantum meruit or unjust enrichment theories.
While the Court acknowledged that the statute requires a written contract, the Court could not say that the oral contract in this case violated the public policy behind the Act, as there was not a consumer who was deceived by a "fly by night" contractor. Rather, the case involves an honest contractor seeking payment for performed services.
The Court then considered whether equitable relief through quantum meruit or unjust enrichment is available to a contractor relying upon an oral contract despite the Act's requirement that a written contract exist for certain home repair or remodeling work. On this issue, the Second District agreed with the McGinnis court that the Act lacks any clear and plain intent to eliminate equitable remedies available under common law.
Further, like in McGinnis, there were no allegations that the contractor was involved in any deceptive practices. The McGinnis court discounted the homeowners' position that allowing quantum meruit recovery on an oral contract would reward deceptive practices and would violate public policy. While the Act's purpose was to eliminate deceptive practices by making a written contract required for certain types of home repair or remodeling, an oral contract by itself is not a deceptive practice. Where unfair and dishonest conduct that the Act intended to eliminate is not present, the failure to work under a written contract is a "technical deficiency," which does not bar recovery by the contractor under equitable theories.
The Court held that allowing recovery under equitable theories would not defeat the purpose of the Act. The purpose of the Act is to protect consumers from "fly by night" deceptive contractors, not to bar an honest contractor from recovering for services actually performed. To hold otherwise would allow a consumer to renege on an otherwise valid oral contract after work is performed and enjoy the benefits of his improved property at the expense of the contractor.
Tuesday, August 24, 2010
Lien vs. Encumbrance
From Rhone v. First American Title Ins. Co., 340 Ill.Dec. 588 (1st Dist. 2010):
We acknowledge the distinction in case law between a lien and an encumbrance. A lien is a "legal right or interest that a creditor has in another's property, lasting usually until a debt or duty that it secures is satisfied.
An encumbrance is broader. It may include "any right to, or interest in, land which may subsist in a third party to the diminution of value in the estate, but consistent with the passing of the fee by conveyance." Encumbrances include not merely liens such as mortgages, judgment liens, or taxes, but also attachments, leases inchoate dower rights, water rights, easements, restrictions on use, or any right in a third party which diminishes the value or limits the use of the land granted.
Tuesday, August 17, 2010
Discharged Firm May Collect Contingency Fee.
In DeLapaz v. Selectbuild Construction, Inc., 394 Ill. App. 3d 969, (1st Dist. 2009), the plaintiff, Rafael DeLapaz, hired law firm Touhy & Touhy, Ltd. (Touhy) on a contingency fee basis to bring a negligence action.
Touhy lawyer James Zouras handled essentially all of the attorney work on the DeLapaz matter until he was terminated by Touhy for unknown reasons. Zouras then started a new firm and took the DeLapaz matter with him. Shortly thereafter, the matter settled and Touhy and Zouras both sought the right to be paid the contingency fee.
The trial court awarded Touhy its contingency fee and allocated a small portion of the fee to Zouras’ new firm on a quantum meruit basis. Zouras appealed.
The appellate court affirmed. The appellate court first cited the general rule that a discharged attorney (i.e., Touhy) normally is NOT entitled to the original contract contingency fee, which terminates upon discharge, but is entitled to be paid on a quantum meruit basis for services rendered prior to the discharge.
However, the appellate court relied on an established exception recognized by the Illinois courts, which holds that a discharged firm is entitled to its contract fee and the successor counsel merely entitled to a fee based on quantum meruit in cases where the overwhelming majority of that work was done at the original firm.
The courts have more discretion in allocating fees between former and successor law firms than I realized. Attorneys seeking fees in these situations should stress the relative contributions of their firm in the pleadings.
Touhy lawyer James Zouras handled essentially all of the attorney work on the DeLapaz matter until he was terminated by Touhy for unknown reasons. Zouras then started a new firm and took the DeLapaz matter with him. Shortly thereafter, the matter settled and Touhy and Zouras both sought the right to be paid the contingency fee.
The trial court awarded Touhy its contingency fee and allocated a small portion of the fee to Zouras’ new firm on a quantum meruit basis. Zouras appealed.
The appellate court affirmed. The appellate court first cited the general rule that a discharged attorney (i.e., Touhy) normally is NOT entitled to the original contract contingency fee, which terminates upon discharge, but is entitled to be paid on a quantum meruit basis for services rendered prior to the discharge.
However, the appellate court relied on an established exception recognized by the Illinois courts, which holds that a discharged firm is entitled to its contract fee and the successor counsel merely entitled to a fee based on quantum meruit in cases where the overwhelming majority of that work was done at the original firm.
The courts have more discretion in allocating fees between former and successor law firms than I realized. Attorneys seeking fees in these situations should stress the relative contributions of their firm in the pleadings.
Friday, August 13, 2010
Close NIU Law School?
Scott Summers, a candidate for Illinois treasurer and a graduate of NIU Law, has proposed "slimming down" or even "mothballing" Northern Illinois and Southern Illinois universities' law school programs.
"We have three public law schools," Summers said. "And another seven or eight private law schools and a whole bunch of unemployed lawyers and underemployed lawyers. How long can we as taxpayers continue to support this?"
While the candidate said in a recent campaign website post he was grateful for the "tiptop legal education" he received at NIU, he said he is "counting beans today, not wallowing in sentiment."
Up until 35 years ago, he pointed out, the state had a single public law school at the University of Illinois. "We got by just fine with that," he said.
Full article here.
"We have three public law schools," Summers said. "And another seven or eight private law schools and a whole bunch of unemployed lawyers and underemployed lawyers. How long can we as taxpayers continue to support this?"
While the candidate said in a recent campaign website post he was grateful for the "tiptop legal education" he received at NIU, he said he is "counting beans today, not wallowing in sentiment."
Up until 35 years ago, he pointed out, the state had a single public law school at the University of Illinois. "We got by just fine with that," he said.
Full article here.
Thursday, August 12, 2010
Credit information can no longer be used in employment decisions.
On August 10, 2010, Governor Quinn signed the Employee Credit Privacy Act (H.B. 4658) into law. The Act prohibits most employers from using an applicant’s or employee’s credit history or other credit information as a factor in any employment decision (e.g., hire, discharge, terms of employment).
The Act applies to employers of any size, but certain employers are specifically excluded from the Act’s coverage. Many governmental employers, as well as banks, savings and loan associations, other financial institutions, debt collectors, insurance companies, and surety businesses are specifically excluded from the Act’s prohibitions.
Employers may not retaliate or discriminate against a person for exercising rights under the Employee Credit Privacy Act. Employers who violate the Act may be sued and ordered to pay damages including attorneys’ fees. Further, the Act does not allow waivers of the Act’s rights and invalidates any such waivers that exist.
The effective date of the Act is January 1, 2011.
The Act applies to employers of any size, but certain employers are specifically excluded from the Act’s coverage. Many governmental employers, as well as banks, savings and loan associations, other financial institutions, debt collectors, insurance companies, and surety businesses are specifically excluded from the Act’s prohibitions.
Employers may not retaliate or discriminate against a person for exercising rights under the Employee Credit Privacy Act. Employers who violate the Act may be sued and ordered to pay damages including attorneys’ fees. Further, the Act does not allow waivers of the Act’s rights and invalidates any such waivers that exist.
The effective date of the Act is January 1, 2011.
Thursday, August 5, 2010
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