Thursday, March 10, 2016

A party who represents herself... You know the rest...

I'm reading a case about a pro se plaintiff who was sanctioned for her behavior at trial. The case is somewhat interesting and may stand for the proposition that a party can be liable for the opposing party's legal fees based upon his or her misconduct, even in the absence of a contract or statute providing for legal fees. The case is Harvey v. Carponelli, 117 Ill.App.3d 448 (1st Dist. 1983). There's also good language in there about holding pro se litigants to the same procedural standards as attorneys.

Anyway, all I really wanted to point out is the following paragraph from the case. For some reason this description of the trial made me laugh out loud. I'm just glad it wasn't me who had to oppose this lady.
"Plaintiff's first witness was called and examined. The trial judge found that the entire line of questioning by plaintiff as pro se counsel indicated a lack of awareness of the issues raised by [her] in her fourth amended complaint. The entire testimony of this witness was stricken as irrelevant. Next, plaintiff called herself as a witness. After taking the stand, she was allowed to read questions to herself from her notes for 1 1/2 days. She asked herself at least one question to which she answered "I don't know." 
Oh man... One and half days? And she was answering "I don't know" to her own questions!! I would have had a heart attack. 

Friday, February 12, 2016

$2,000 per hour?

Gibson, Dunn & Crutcher LLP is a global law firm with more than 1,000 lawyers spread between 18 offices. Ted Olson is one of their managing partners. Mr. Olson is widely regarded as one of the best lawyers in the country, if not the world. He has argued 62 cases before the U.S. Supreme Court, including Bush v. Gore, Citizens United, and the case that overturned California's ban on same-sex marriages. His biography on the law firm's website says that he has prevailed more than 75% of the time before the U.S. Supreme Court.   

Mr. Olson was also involved in the Tony Bostic case that overturned Virginia's ban on same-sex marriages. Mr. Bostic and his spouse, as the prevailing parties in a civil rights lawsuit, became entitled to reimbursement of their legal fees. As part of that process, Gibson Dunn's bills have recently become public and are now making the rounds on the legal blogs. I have embedded them below.  

These guys know how to bill, holy cow. Gibson Dunn was only involved in the case for approximately 14 months. Their final bill was $1,378,771.00. The invoices are categorized by partner time, associate time, and paralegal time. The partners' rates run from $795 to $1,800 per hour. The associates' rates are between $425 and $740 per hour. The paralegals' rates are between $255 and $385.

Mr. Olson is the only lawyer on these statements billing at $1,800 per hour. However, I found articles on the internet from 2012 that set Mr. Olson's billing rate at $1,800 per hour back then. His rate was still $1,800 on these invoices and his time entries end in September 2014. It is reasonable to conclude that he has increased his billing rate since September 2014, especially considering that he had been billing at the same rate at least as far back as 2012. I wonder if he's now at $2,000 per hour.

If you've ever wondered what it would cost to have one of the best law firms in the world on your side, today is your lucky day. Just imagine receiving this bill in the mail at the conclusion of your case. If you are unable to view the file below, I have also linked to the bills HERE.

Wednesday, February 10, 2016

Illinois Real Estate Tax Sales

A real estate tax sale can be aside aside in bankruptcy court if it was for less than "reasonably equivalent value." In re Smith, 2016 U.S. App. LEXIS 934 (7th Cir. 2016). The Smith case dealt with several technical bankruptcy and fraudulent transfer issues, which will not be explained here, but I wanted to pass along this section of the opinion that explains the Illinois real estate tax sale process. I do not have any prior experience with tax sales and I did not know that potential buyers actually bid downwards on the redemption interest rate they'd be willing to accept. This case says that 85% of winning bids are at zero percent. If no one redeems the tax bill, plus the prevailing interest rate, the winning bidder gets an unencumbered deed to the property. Here is how the 7th Circuit explained the two most common methods for selling delinquent real estate taxes, including the system used in Illinois:
States generally choose one of three methods for collecting delinquent property taxes: the overbid method, the interest rate method, and the percentage ownership method. Georgette C. Poindexter, Lizabethann Rogovoy & Susan Wachter, Selling Municipal Property Tax Receivables: Economics, Privatization, and Public Policy in an Era of Urban Distress30 Conn. L. Rev. 157, 174 (1997). This case requires us to compare the overbid and interest rate methods, so we focus on them. 
The overbid method is probably the auction system more familiar to most readers: the bidding price begins at the total amount of taxes and interest due, and potential buyers then offer higher bids up to the total price they are willing to pay in return for (eventual) fee simple title. See, e.g., Colo. Rev. Stat. Ann. § 39-11-115 (West 2015). The fair market value of the property is at least in theory the ceiling for amounts that might be bid. The winner of this competitive bidding receives rights to the property. See In re Grandote Country Club Co., 252 F.3d 1146, 1152 (10th Cir. 2001) (explaining the competitive nature of the Colorado overbid system). A redemption period typically follows, during which the delinquent taxpayer or a mortgage lender may pay off the tax debt and reclaim the property. If the property is not redeemed, the winning bidder may bring an action for quiet title to the property. See, e.g., Colo. Rev. Stat. Ann. § 39-11-120 (West 2015). 
The interest rate method used by Illinois is quite different. At the county tax auction, bidders vie to purchase the tax lien, not the property itself. They do so by bidding down. See BCS Services, Inc. v. Heartwood 88, LLC, 637 F.3d 750, 752-53 (7th Cir. 2011). Bids are expressed not as a total price for the property but rather as decreasing interest percentages. Id. These percentages are the penalty interest rates that the buyer may demand from the delinquent taxpayer (or mortgage lender) to redeem the property. Id. In Illinois, the bids therefore work down from a statutory ceiling of eighteen percent. Zero percent is the floor. 35 Ill. Comp. Stat. 200/21-215 (2015). 
Under this system, the lowest bidder wins and is granted the lien and a certificate of purchase. In re LaMont, 740 F.3d 397, 400-01 (7th Cir. 2014). And if the delinquent taxpayer and any mortgage lenders fail to redeem in the subsequent two years, the buyer takes the property free and clear. Id., citing 35 Ill. Comp. Stat. 200/21-350 (2015). 
In the vast majority of tax sales in Illinois, the penalty percentage paid by the winning bidder is zero percent. BCS, 637 F.3d at 752 (almost 85 percent of the winning bids). The purchase price of the property, taking into account the risk of redemption, is therefore usually nothing more than the sum of the delinquent taxes.

Friday, February 5, 2016

ISBA Issues Report on Recent Law School Graduates

The Illinois State Bar Association has issued its Report and Recommendations of the Special Committee on the Impact of Current Law School Curriculum on the Future of the Practice of Law in Illinois (here). The Report explores ways to ensure that law school graduates are “prepared for the realities facing new lawyers in today’s legal marketplace.” According to the Report, the top complaint of experienced attorneys about their new colleagues is the inability to write clearly, concisely, and accurately. The Report also concludes that graduates fall short in:

Drafting Legal Documents
Recognizing Legal Issues
Performing Legal Research
Organizational Skills
Exposure to Alternative Dispute Resolution Methods
Problem Solving
Professionalism and Work Ethic
Understanding Civil Case Chronology:
Business Skills
Practical Application of Evidence Rules

Friday, January 15, 2016

Gambling Bankruptcy Court

When a person files bankruptcy, all of his property is transferred into a theoretical pot known as the bankruptcy estate. The bankruptcy trustee can then sell items from the bankruptcy estate to pay back the creditors, subject to certain limitations and exemptions.

A 73-year-old man from Michigan recently filed bankruptcy. One of his assets at the time was his right to receive $1,000 per month for life pursuant to a Michigan Lotto "Cash for Life" jackpot that he won back in 1984. The cash payments for life became part of the bankruptcy estate and were subsequently auctioned by the trustee. The catch, however, is that as soon as the debtor dies, the payments will stop

How much would you pay to receive $1,000 per month for the rest of a 73-year-old bankruptcy debtor's life? The winning bid was $40,026. It's kind of ironic that gambling is probably what lead the old dude into bankruptcy to begin with, but then his creditors had to gamble in an attempt to get their money back. If he lives for another 20 years, the winning bidder will have hit the jackpot.

HERE is a link to a news article about the bankruptcy sale.

Thursday, December 10, 2015

Husemans Usually Win Big Cases

Most people have probably googled their own name at some point. But I took it one step further. I did a nationwide Lexis search for published court opinions involving Husemans. It turns out that three Husemans have had their cases heard before state supreme courts, two in Illinois and one in Indiana. 

We're two out of three and we're on a hot streak considering that we won the last two. It has been a while though ... our last victory before the Illinois Supreme Court came in 1914.

Here are the three cases:

Huseman v. Sims, Supreme Court of Indiana, December 30, 1885: 

This case originated out of Dearborn County, Indiana. Mr. Huseman (his first name was not identified), due to unfortunate circumstances that were probably outside of his control but which were not explained in the court's ruling, had apparently fallen behind on his rent. His landlord obtained a judgment against him for $1,059.25. Mr. Sims was the county sheriff. At the instruction of the landlord, Mr. Sims, as sheriff, seized Mr. Huseman's property in order to sell it and pay off the judgment. 

Mr. Huseman contended that the seized property was exempt from execution, so he sued the sheriff. Huseman lost at trial and then appealed. The Indiana Supreme Court found that Mr. Huseman did not properly raise his exemptions at trial, so the sheriff's execution was proper. 

Huseman loses on a technicality. 

Sassenberg v. Huseman, Supreme Court of Illinois, October 16, 1899:

This case originated out of Bureau County, Illinois. The Sassenbergs were the heirs of a man who had once owned a farm in Bureau County consisting of 120 acres. John and Anna Huseman claimed to be the rightful owners of the farm, having purchased it prior to the decedent's passing. The Sassenbergs challenged the Husemans' deed as a forgery and attempted to acquire title to the farm. 

The trial court believed that the Husemans were honest people who had legally acquired the farm. The Strassbergs appealed. The Illinois Supreme Court found that the witnesses who testified at trial were credible, including the decedent's daughter who witnessed the execution of the deed and the notary public. 

The Supreme Court affirmed that the Husemans were honest, trustworthy people. Big win for the Husemans, not that it was ever really in doubt.

Bruns v. Huseman, Supreme Court of Illinois, December 16, 1914:

This case originated out of Whiteside County, Illinois. Anna Mary Huseman, who was 80 years old at the time, owned a farm consisting of 157 acres. Ms. Huseman verbally authorized a man named Vernon C. Freeman to sell her farm. Mr. Freeman allegedly sold the farm to Mr. Bruns for $8,500 and took $500 down. Mr. Freeman presented a deed to Ms. Huseman, which she signed, but it was never delivered to Mr. Bruns or recorded with the county. Mr. Bruns sued Ms. Huseman for specific performance in order to force the sale of the farm for the remaining $8,000. Testimony at trial indicated that the farm may have been worth up to $125 per acre, or $19,625. Ms. Huseman resisted the specific performance of the alleged contract due to an allegedly fraudulent scheme between Mr. Freeman and Mr. Bruns to obtain title to the farm for a grossly inadequate price.

The trial court ruled that an agent's authority to bind the owner to a sale of real estate must be in writing pursuant to the statute of frauds. Therefore, Mr. Freeman did not have authority to sell the farm for $8,500. The Supreme Court affirmed.

Another big win for the Huseman family. Hopefully we can keep the streak alive if we find ourselves before the Supreme Court again. 

Saturday, December 5, 2015

Defendant’s Name Must Appear on Face of Summons

The sample summons in Illinois Supreme Court Rule 101(d) requires “naming all defendants.” Illinois Supreme Court Rule 131(c) states that in multiple party cases, “it is sufficient in entitling documents, except a summons, to name the  . . . the first-named defendant with the usual indication of other parties (emphasis added).” So, what happens when a plaintiff files an action against several defendants, naming one defendant and adding the “et al” designation to each summons? Is the failure to include a defendant’s name in the caption of the summons a barrier to obtaining personal jurisdiction over that defendant even if the defendant is served? Arch Bay Holdings v. Perez (here), provides the answer.

Arch Bay filed a foreclosure action against a husband, wife, and other defendants. Each summons listed the husband by name followed by “et al.” The wife was served but did not appear. The court entered a default judgement against her. The trial court rejected the wife’s 2-1401 petition which claimed a lack of personal jurisdiction because her name did not appear on the summons. The Appellate Court, Second District, reversed.

The appellate court held that the model summons in Rule 101(d) requires that the names of all defendants appear in the caption of the summons. The fact that the wife’s name appeared on an attached list of defendants to be served did not cure the defect. And even thought the wife was served, “the missing name from the face of the summons was a barrier to obtaining personal jurisdiction” over her.

Saturday, November 7, 2015

Financial Exploitation of an Elderly Person or a Person with a Disability

Effective January 1, 2016, the Illinois Criminal Code will be amended to include a new crime called "financial exploitation of an elderly person or a person with a disability." The new crime is a Class 4 felony if the value of the property is $300 or less and goes up to a Class 1 felony if the value is greater than $50,000.  

The new statute also creates a civil cause of action with the same name. The civil cause of action is available whether or not the defendant has been charged or convicted of a criminal offense under this section.  The civil cause of action provides for treble damages plus attorneys' fees to the victim or the estate of the victim.

A person commits financial exploitation of an elderly person or a person with a disability when he or she "stands in a position of trust or confidence with an elderly person or a person with a disability and he or she knowingly and by deception or intimidation obtains control over property of an elderly person or a person with a disability or illegally uses the assets or resources of an elderly person or a person with a disability."  

The statute defines "elderly" as someone over 60 years of age. The statute also provides that a person stands in a position of trust or confidence with an elderly person or person with a disability when he (i) is a parent, spouse, adult child or other relative by blood or marriage of the victim; (ii) is a joint tenant or tenant in common with the victim; (iii) has a legal or fiduciary relationship with the victim; (iv) is a financial planning or investment professional; or (v) is a paid or unpaid caregiver for the victim.

The new statute is located at 720 ILCS 5/17-56.

Sunday, October 25, 2015

Child Representatives Enjoy Absolute Immunity

In Davidson v. Gurewitz (October 20, 2015) (here), the Appellate Court, Second District, held that a child representative appointed under section 506(a) of the Marriage and Dissolution of Marriage Act enjoys absolute immunity from malpractice liability.

Pursuant to section 506(a)(3), the trial court appointed Thomas Gurewitz as the child representative of the divorcing parent’s minor child. After the trial court entered the judgment of dissolution, the mother sued Gurewitz for malpractice. The mother claimed that Gurewitz completed his duties as a child representative on October 1, 2012, when the parties entered into a parenting agreement that settled all issues relating to the best interests of the child. The plaintiff further alleged that instead of withdrawing from the case after completing his duties, Gurewitz participated in the trial by cross-examining the plaintiff and making a closing argument. According to the malpractice complaint, Gurewitz’s unauthorized actions resulted in the entry of a judgment “replete and filled with vindictiveness relating to [plaintiff].”

Gurewitz moved to dismiss the malpractice action arguing that it was barred by the doctrine of absolute immunity. The appellate court acknowledged that section 506(a) does not, by its terms, immunize child representatives. But the court determined that the common law affords immunity to court-appointed child representatives. Thus, the Second District aligned itself with the First District’s decision in Vlastelica v. Brend (here), finding that absolute immunity is necessary so that a child representative can “fulfill his obligations without worry of harassment and intimidation from dissatisfied parents.”