Thursday, March 26, 2015

The Estrays and Lost Property Act

The Estrays and Lost Property Act (here) is pretty interesting. I stumbled across it last week while doing other research. I quickly dusted off the Black's Law Dictionary for the definition of estray:
estray (e-stray), n. 1. A valuable tame animal found wandering and ownerless; an animal that has escaped from its owner and wanders about. 2. Flotsam.
Then, of course, I had to look up flotsam:
flotsam (flot-səm), n. Goods that float on the water's surface after being abandoned at sea.
This all makes sense because Section 1 of the Act says that "Any horses, mules, asses, cattle, swine, sheep or goats found straying, the owner thereof being unknown, may be taken up as estrays in the same manner as provided for lost goods." 

Also, Section 21 of the Act says that "Any raft, timbers or plank found floating adrift on any water course within the limits or upon the borders of this State, the owner thereof being unknown, may be taken up in the same manner as provided for lost goods."

So, if both estrays and flotsam are treated as if they are lost goods, the question becomes how exactly should lost goods be treated. It turns out that the Act effectively outlaws the ancient playground theory of "finders keepers, losers weepers." 

Section 27 of the Act provides that "If any person or persons find any lost goods, money, bank notes, or other choses in action, of any description whatsoever, such person or persons shall inform the owner thereof, if known, and shall make restitution of the same, without any compensation whatever, except such compensation as shall be voluntarily given on the part of the owner." 

If the owner is not known, and if the value of the lost property is more than $100, the Act requires the finder to file an affidavit in the circuit court that contains a description of the found property. The court shall then enter an order stating a description and the value of the property. That order shall be "transmitted to the county clerk to be recorded in his estray book," and also filed in the office of the county clerk. 

After the county clerk receives that order, the county clerk shall publish notice in a public newspaper for three consecutive weeks. If the owner does not claim the property within one year of publication, ownership vests in the finder. A very cumbersome process, but the Act provides liability for double the value of the property if the finder sells, trades, destroys or otherwise disposes of the found property without complying with the Act.

Lastly, I found it odd that Section 27 includes "choses of action" in the list of property that could possibly be found in this state causing them to become subject to the terms of the Act. In order to try to make sense of this, I went back to the Law Dictionary:
chose in action. 1. A proprietary right in personam, such as a debt owed by another person, a share in a joint-stock company, or a claim for damages in tort. 2. The right to bring an action to recover a debt, money, or thing. 3. Personal property that one person owns but another person possesses, the owner being able to regain possession through a lawsuit.
Oh ya, that's right. A proprietary right in personam. I can't tell you how many times I have been walking down the street, something catches my eye, and I've said to myself "well look at that...there's a chose in action on the ground."

Saturday, March 21, 2015

The Illinois Gender Violence Act

Last December, a doctor who practiced in Yorkville and Naperville was arrested on charges of criminal sexual assault. The Kendall County State's Attorney's Office alleges that the doctor inappropriately touched or fondled several female patients between 2012 and 2014. Kendall County detectives are looking for additional victims.

The victims of the sexual assaults are entitled to damages from the offending doctor, and depending on the circumstances, may also be entitled to damages from the hospitals and clinics that employed the doctor. Obvious theories of common law recovery include sexual battery, assault, and intentional infliction of emotional distress, among others. 

These victims, however, should not overlook the Illinois Gender Violence Act (the "Act"). The Act provides for a private cause of action for anyone who has been subjected to gender-related violence. Gender-related violence is defined as "a physical intrusion or physical invasion of a sexual nature under coercive conditions satisfying the elements of battery under the laws of Illinois, whether or not the act or acts resulted in criminal charges, prosecution, or conviction." 

Victims of gender-related violence may bring a civil action for damages, injunctive relief, or other appropriate relief. In an action brought under the Act, the court may award actual damages, damages for emotional distress, or punitive damages. A judgment may also include attorney's fees and costs.

If anyone has questions about the applicability of the Illinois Gender Violence Act, please do not hesitate to send a confidential email HERE.  

Friday, March 20, 2015

Appellate Court Reflects on Exculpatory Clauses

In Hawkins v. Capital Fitness, Inc., 2015 IL App (1st) 133716 (here), Michael Hawkins sued his health club for negligently installing a wall mirror that fell on him while he was exercising. The trial court entered summary judgment in favor of Capital Fitness because the exculpatory clause in the plaintiff’s membership agreement barred negligence actions against the fitness center. The following provision of the exculpatory clause does appear to exempt Capital Fitness from injuries caused by faulty maintenance of its facilities.
THIS HOLD HARMLESS FROM [sic] AND WAIVER AND RELEASE OF ALL LIABILITY INCLUDES, WITHOUT LIMITATION, (i) INJURIES, DAMAGES OR DISEASES WHICH MAY OCCUR AS A RESULT OF (A) YOUR USE OF ANY FACILITY OR ITS IMPROPER MAINTENANCE, (B) YOUR USE OF ANY EXERCISE * * * EQUIPMENT, (C) IMPROPER MAINTENANCE OF ANY EXERCISE * * * EQUIPMENT OR FACILITIES * * * AND (ii) INJURIES OR MEDICAL DISORDERS RESULTING FROM EXERCISE, OR USE OF EQUIPMENT OR FACILITIES, AT THE FACTILITY * * *  (Emphasis added).

The appellate court acknowledged that “[a] literal reading of the membership agreement reveals that Hawkins released Capital Fitness of all liability from injury, no matter the source, cause, or circumstance.” So, it would seem that the appellate court should have affirmed the entry of summary judgment for the defendant since the plaintiff claimed that the club’s maintenance crew improperly hung the mirror and the disclaimer held Capital Fitness harmless for improper maintenance of the club’s facilities.   
                     
But according to the appellate court, the ultimate question was whether the mechanism causing the injury was a type contemplated by the parties when they executed the membership agreement. Vacating the entry of summary judgment, the court concluded that reasonable minds could differ on whether the mirror-falling incident was an ordinary risk associated with the use of a fitness facility. Presumably, dropping a barbell on your throat constitutes a risk associated with using a fitness club, while a scalding shower, a defective closet door, or an unhinged mirror might not be the type of risk one assumes when agreeing to a fitness center’s exculpatory clause.

Hawkins will aid plaintiffs who assert that a genuine issue of material fact exists as to whether an injury sustained while using a health club or other sports or recreational venue, was caused by a mechanism contemplated by the parties at the time they agreed to the exculpatory clause. The argument against summary judgment is further bolstered by the strict construction of an exculpatory clause against the party who relies on it.

Thursday, March 12, 2015

25 cats is 23 too many.

Today's Westlaw Headnote of the Day:

Twenty-five cats, however cleanly, were twenty-three cats too many, and eviction would lie, should tenant not comply with edict that two were aplenty. Dunbar Paint Supply Corp. v. Hunt, 232 N.Y.S.2d 637 (N.Y.City Civ.Ct., 1962)

Wednesday, February 18, 2015

Local Circuit Court Rules

Last November, the Illinois State Bar Association’s Task Force on Law School Curriculum held a public hearing in Rockford. Participants offered suggestions on how law schools could better prepare new lawyers. Comments were predictable centering on better writing skills and transactional and litigation preparedness. A senior practitioner added that schools should stress the importance of local court rules. And it is true that most lawyers learn the hard way that local court rules vary from circuit to circuit in Illinois.

For example, the local rules for Winnebago and Boone Counties limit briefs and memoranda to 15 pages. DuPage, Kane, DeKalb, and Kendall Counties limit briefs and memoranda to 10 pages, and Lake and McHenry Counties limit opening memoranda to 15 pages and replies to 5 pages. Courtesy copies must be supplied to the judge 7 days before the hearing in DuPage and McHenry Counties but only 5 days prior to the hearing in Lake County. Lake County uniquely requires that copies of cited out-of-state opinions be supplied to the court.

Southern Illinois University School of Law posts what it describes as links to “Illinois Circuit Court Rules on the Internet.” At one time the list was a great resource. But today it is so hopelessly out-of-date that it is useless. Links to selected northern Illinois local circuit court rules follow.

Cook County (here)
DeKalb and Kendall Counties (here)
DuPage County (here)
Kane County (here)
Lake County (here)
McHenry County (here)
Will County (here)
Winnebago and Boone Counties (here)

Tuesday, February 10, 2015

Governor Rauner Sued the Unions

Governor Rauner came out swinging in a lawsuit against public sector labor unions that is expected to go all twelve rounds. At issue is the section of Illinois Public Labor Relations Act that allows covered employees to refrain from organization and collective bargaining, but still requires those employees to "pay their proportionate share of the costs of the collective bargaining process..." In other words, you don't have to be a member of the union, but you still have to pay the union.  

The Governor's lawsuit alleges that the so-called "fair share" provisions are coerced political speech that violate the First Amendment of the United States Constitution. The lawsuit points out that the collective bargaining process is inherently political in nature because labor unions are some of the most powerful and politically active organizations in the state. The Governor's theory is that "compulsory fees constitute a form of compelled [political] speech" and that employees who do not want to join the unions cannot be forced to contribute money to a political cause with which they do not agree. 

The lawsuit also notes that in fiscal year 2015, general fund pension costs total more than $7.5 billion, which consume 24% of the states general revenues. To highlight the problem, the lawsuit notes that a state government employee represented by the unions who earns an average annual salary of $38,977 over the course of a 26-year government career contributes approximately $40,539 to the State's pension system, but is entitled to receive $821,588 in pension benefits over a twenty-year retirement, plus retiree health care. I'm no math major, but that does not seem right. 

Here is the complaint:


Thursday, January 29, 2015

Landlord-Tenant Law Seminar

I will be speaking at a Landlord-Tenant law seminar in Naperville, Illinois on February 19th. The title to the seminar is Landlord-Tenant Law, Leases, Evictions, Litigation, and Settlement. I will be speaking on Landlord-Tenant Bankruptcy Issues. The seminar's advertisement can be viewed HERE.

Wednesday, January 21, 2015

A $1.5 Billion Clerical Error

In 2001, General Motors obtained a $300 million loan from a group of lenders that included J. P. Morgan Chase Bank. J. P. Morgan obtained a security interest in real estate owned by GM. J. P. Morgan then perfected its security interest by properly filing two separate UCC-1 financing statements, making it a secured lender. 

In 2003, General Motors needed another $1.5 billion. GM borrowed the money from a different group of lenders that also included J.P. Morgan. This time, J.P. Morgan obtained a security interest in a significant portion of GM's equipment and fixtures at forty-two facilities throughout the United States. Again, J.P. Morgan perfected its security interest by properly filing one UCC-1 financing statement, making it a secured lender for purposes of the larger loan.

In 2008, GM decided to pay off the $300 million dollar loan. GM contacted its attorneys at Mayer Brown LLP to prepare documents that would release the liens on GM's real estate once the loan was paid off. Apparently, a partner at Mayer Brown assigned this work to an associate, who then assigned the work to a paralegal. The paralegal obtained a UCC lien search which revealed all three UCC-1s, the two for the $300 million loan and the one for the $1.5 billion loan.

You can probably guess what happened next. Mayer Brown prepared a closing checklist and proposed UCC termination statements for all three liens. The closing checklist and draft documents were circulated to J.P. Morgan and its counsel, Simpson Thacher & Bartlett LLP. No one who reviewed the documents noticed anything out of the ordinary. After the $300 million loan was paid in full, all three UCC termination statements were filed with the Delaware Secretary of State, including a termination statement on the $1.5 billion loan.

In 2009, GM filed bankruptcy. As part of the scramble for assets, the Official Committee of Unsecured Creditors discovered that J. P. Morgan was not secured on the $1.5 billion like it thought it was. The Committee then filed suit to declare J. P. Morgan unsecured. J. P. Morgan argued that the UCC termination statement was ineffective because UCC Section 9-509(d)(1) provides that termination statements are only effective if "the secured party authorizes the filing." J. P. Morgan argued that it could not have "authorized" the filing of the release on the $1.5 billion loan because it did not intend to terminate that security interest, nor did it instruct anyone else to do so on its behalf.

The case eventually made it to the Second Circuit Court of Appeals. The Second Circuit pointed out that what J. P. Morgan intended to accomplish was not the relevant issue when determining whether it "authorized" the filing. The relevant inquiry was what actions J. P. Morgan had authorized to be taken on its behalf. The Court found that J. P. Morgan, directly and through counsel, had plenty of opportunities to review the closing documents. Each time, it consented to the closing checklist and all three UCC termination statements. Therefore, the incorrect UCC termination statement was effective because it was "authorized" by the secured party as required by the Uniform Commercial Code.

The Second Circuit's opinion can be found HERE.  

Sunday, January 18, 2015

DuPage County Register Cited in U.S. Supreme Court Opinion

The Supreme Court opinion released last week in Whitfield v. United States (here) cites articles from the New York Times, the Washington Post, and the DuPage County Register. Pretty good company for a local newspaper. Unfortunately, it will not help the Register’s circulation since the paper went out of business in 1970. (The DuPage County Register and several other weekly papers merged to become the Arlington Heights Herald and later the Daily Herald (here)). The Whitfield case provided the Court with the opportunity to interpret 18 U.S.C. § 2113(e) which enhances the penalty for bank robbery when the offender “forces any person to accompany him” (emphasis added) in the course of committing or fleeing from a robbery.

After a botched bank robbery, Whitfield fled into the home of Mary Parnell. Once inside, he guided Ms. Parnell from the hallway to a computer room, a distance of between 4 and 9 feet. Whitfield argued that the word “accompany” as used in § 2113(e), required substantial movement and that his short trip with Ms. Parnell did not qualify. The Fourth Circuit Court of Appeals disagreed concluding that, “[a]lthough Whitfield required Mrs. Parnell to accompany him for only a short distance within her own home, and for a brief period, no more is required to prove that a forced accompaniment occurred.” The Supreme Court agreed, observing that it is “natural to speak of accompanying someone over a relatively short distance, for example: from one area within a bank ‘to the vault.’” For this proposition the Court cited a story titled, “Addison State Bank Robbed” that appeared in the April 6, 1928, issue of the DuPage County Register. The article stated that the “bandit accompanied [the teller] to the vault.”

Justice Scalia and his clerks deserve credit for finding this 87 year old story in an obscure and defunct newspaper. But with the internet not much stays hidden. The 1928 article is here.