Federal Cases Citing the HAMP and an Illinois Judge's Power to Stay Foreclosure Proceedings

*** As an introductory note, the information below was drafted by me for work. I have removed all identifying information to maintain confidentiality. The memo below covers the effect of legislation passed in Illinois in July 2010 that closes the loop hole that the HAMP created. Please note that no Illinois cases dealing with the HAMP were cited because at the time this was drafted, I could not find any. Enjoy!

Federal Cases Citing the HAMP and an Illinois Judge’s Power to Stay Foreclosure Proceedings

You have asked me to find federal cases that specifically cite the Home Affordable Modification Program (HAMP) and to determine whether a judge has the power to stay foreclosure proceedings while a mortgagor is in the process of loan modification. I have reviewed case law in California and Florida, and have consulted the Illinois Compiled Statutes.


In the case of Phu Van Nguyen v. Bac Home Loan Servs., L.P., 2010 U.S. Dist. Lexis 105704 (N.D. Cal., Oct. 1, 2010), the judge cited the HAMP and laid out what qualifies an individual for the program in detail. Id. at 6. The plaintiff in Phu Van Nguyen alleged that the mortgagee had breached its implied covenant of good faith by not notifying the plaintiff of the plaintiff’s HAMP eligibilities or HAMP guidelines. Id. at 11-12. The court went on to say that, “…numerous courts have considered claims…and concluded that mortgage loan borrowers do not have standing as ‘intended beneficiaries’ of HAMP [Servicer Participation Agreement, or] SPAs.” Id. at 13, citing Escobedo v. Countrywide, 2009 WL 4981618 (S.D. Cal. Dec. 15, 2009) at 3. The Escobedo court went on to say that, "…a qualified borrower would not be reasonable in relying on the [HAMP] Agreement as manifesting an intention to confer a right on him or her because the [HAMP] Agreement does not [mandate] that a [loan servicer] modify eligible loans." Escobedo, 2009 WL at 3. What this means for the client is that he has no guaranteed protection under the HAMP and is not guaranteed a loan modification under HAMP, so the bank can proceed with the foreclosure if it wishes.


Florida federal courts have ruled similarly. For example, in Zoher v. Chase Home Fin., 2010 U.S. Dist. Lexis 109936 (S.D. Flo., Oct. 15, 2010), where the court found that, “[t]he purpose of the program is to delay or avoid foreclosures by offering incentives to servicers to modify home loans…” and that,” [f]inding an implied private right of action for mortgagors would discourage servicers from participating in the program because they would be exposed to significant litigation expenses.” Id, at 9 -10. Under Florida precedent, the client has no redress available to him under federal law if Countrywide does not approve his loan modification.


Turning to Illinois law, a client may have relief under 735 ILCS 5/15-1508(d-5), effective as of July 23, 2010, which provides in pertinent part that, “ …the court that entered the judgment shall set aside a sale … upon motion of the mortgagor at any time prior to the confirmation of the sale, if the mortgagor proves by a preponderance of the evidence that (i) the mortgagor has applied for assistance under the Making Home Affordable Program … and (ii) the mortgaged real estate was sold in material violation of the program's requirements for proceeding to a judicial sale.” What this means for the client is that if the bank does go through with the foreclosure proceeding to where the judge orders a judicial sale, the client can go back to court and stop the sale from going through.


While a judge does not specifically have the power to stay a foreclosure proceeding, the client may file a Motion to Stay Judicial Sale, but he must be in the process of refinancing his home with a loan modification that will cover the existing mortgage and costs and be able to provide sufficient proof when the judge orders a judicial sale. In the end, the client will most likely have to continue with the foreclosure proceeding before he can take action to prevent the sale of his home.

Warm Holiday Wishes*

*The wishes provided herein represent the sentiment of the sender as of the date written and may not reflect the sender’s sentiments on the date this is first received or anytime hereafter. The sender reserves the right to deny the sender ever wished the recipient wishes, whether warm, cold or any temperature whatsoever. Also, the wishes are not dependent on the warmth and may be just wishes, with all the privileges accorded to the state of wishing, including grandiosity but not excluding practicality. The wish, whether warm, neutral or cold, is under no obligation to come true, but does not exclude the possibility that it may come true.

Plainfield Passes New Business Registration Ordinance.

In October, Plainfield, IL adopted a new business registration ordinance. Here is the complete text of the ordinance.  The ordinance amends the Village Code in several ways. The most significant new section outlines a process by which a business owner can challenge the suspension or revocation of his business license.

Section 4-431 provides that a business license can be revoked or suspended for a number of different reasons. For instance:

(1) Fraud, misrepresentation or an incorrect statement contained in the initial or renewal application.
(2) Conviction of any misdemeanor or felony.
(3) Conducting the business as to constitute a breach of the peace, or a menace to the health, safety or welfare of the public or a disturbance of the peace or comfort of residents of the village.
(4) Expiration or cancellation of any required bond or insurance.
(5) Actions unauthorized or beyond the scope of the license granted.
(6) Violation of any provisions of the village’s Building Code, Zoning Ordinance, Fire Protection Code or any other provision of the village’s Code or local Fire Protection Codes.
(8) Refusal of the owner to cooperate with Village inspections.

Once the village learns that a business owner has violated any of the provisions outlined above, the village president shall immediately suspend the owner's license. Notice of the suspension must be served personally or by certified mail.

The notice shall contain a statement of facts upon which the village president has acted in suspending the license. Upon service of the notice of suspension the licensee shall cease all business related activity at the location that is the subject of the license. The licensee shall have the right to make demand upon the village clerk for a hearing to be held within five (5) business days of the village’s receipt of the licensee’s demand for hearing.

Upon the filing of such a demand with the village clerk, the village president shall set a date and time for the hearing. All such hearings shall be held at the village’s principal place of business, or at such other public location designated by the village president. At the hearing the licensee, and any other interested person, shall have the right to present evidence as to the facts upon which the village president based the suspension of the license, and any other facts which may aid the village president in determining whether this article has been violated.

If after such hearing the village president finds this article has been violated, he shall within three (3) business days after the hearing file with the village clerk for public inspection and serve upon the licensee and all interested persons participating in the hearing, a written statement of the facts upon which he bases such findings and shall affirm or vacate the suspension and/or issue an order of revocation of the license. If after such hearing the village president finds this article has not been violated, he shall immediately reinstate the license.

A small claims fiasco

Although small claims cases may seem easy to manage, attorney's would be wise not to underestimate the challenges that can arise in such cases. So many things can go wrong with a small claims case. First, the fact that a low dollar amount is at stake sometimes tends to give one a false sense of ease. When you have lawsuits with high dollar potentials sitting on your desk and screaming for you attention, you tend to put small claims on the back burner. Second, in many cases you are not even getting paid or getting paid very little. Some of the small claims cases that I handled were on a pro bono basis for friends. Basically, I felt bad charging for cases where the dollar amount was merely in the hundreds. But, as my friend Steve always says, "you get what you pay for." Third, a pro se party is often involved, and judges tend to be sympathetic. And, if the pro se party happens to be the Plaintiff, you may not even know by examining the complaint or even after the party presents its case in court what exactly the suit is all about. And, if you don't know what the party is suing for, you don't know how to defend it. Fourth, judges have discretion per Supreme Court Rule 286b to conduct an informal hearing. And, just how they conduct this informal hearing is anyone's guess. Every small claims judge I have been in front of, handled the situation differently.

Recently, I had a case where a pro se Plaintiff handed my client cash to bail her son out of jail. My client got a receipt and put his name on the slip for the check to be returned to his address. The check didn't come back to his house for three months. In the meantime the individual who was bailed out of jail borrowed substantial sums of money from my client. My client apparently lent the individual all this money because he was promised he could keep the check that was coming back from the bail money. The Plaintiff, of course, insisted the money was hers and that her son had no authority to use this money to secure loans from friends.

My initial impression of the case was that we were gonna lose big time. Every small claims hearing that I had attended was conducted very informally with Rule 286b being invoked by the judge himself. And, every time this happened the judge focused less on procedure and rules and more on getting to the truth of the matter. This meant as 286b says "At the informal hearing all relevant evidence shall be admissible and the court may relax the rules of procedure and the rules of evidence." Furthermore, the Plaintiff had a cancelled check from an account that was clearly hers made out to cash in the bail amount and that was dated from the day that bail was posted. Also, my client was going to have to stipulate that she handed him the money. I assumed this because I believe the judge was going to ask him this question regardless of whether the Plaintiff knew how to cross-ex him or not. This was how my other experiences had been.

So, with all that in mind, I took the approach that I was going to have to invoke Rule 286b if the judge didn't do so himself and try to get hearsay evidence in to demonstrate that representations were made to my client by the individual who was bailed out of jail. To my surprise the judge did not invoke the rule. This was the first time this happened to me in small claims with a pro se defendant. I was worried that the Plaintiff could win her case because I didn't think she had to prove that much to prevail and I figured that the judge would still go easy on her. My thought was that the only way I could win was if I could raise doubt over the source of the money that was handed to my client. And, the only way I could adequately do that was to bring in hearsay evidence. So, I invoked the Rule. The judge looked surprised and asked "Counsel, are you sure you want to do that?" I said I was sure. Looking back, that was probably a mistake but I couldn't have known that at the time. As things turned out, the judge was pretty hard on her. He limited her testimony significantly. She did manage to get the bail receipt and cancelled check in to evidence. I didn't object for reasons explained above. And, I stipulated that my client received cash from her.

When I cross examined her, I tried to raise doubt about the source of the funds handed to my client and I tried to ask questions that would make it look like my client could have legitimately believed that the money belonged to the individual bailed out jail and not the Plaintiff. Finally, I questioned my client about hearsay statements made by the individual bailed out jail. The judge stopped me instantly. "Mr. Krause, what is the relevance of all this." I tried to explain the probative value of my questions. "Mr. Krause, I don't want to get into these hearsay conversations that your client participated in." I responed, "your honor, I invoked Rule 286b?" The judge said, "I said I would relax the rules of evidence, not throw them out." So, it became clear to me that hearsay wasn't neccesarily welcome even in 286b situations. I thought "all relevant evidence" was allowed. That is not neccessarily the case. In fact, I am still not sure what the law on this matter is but I know I can't take it for granted in the future. After that, I thought I was going to lose. To my surprise, the judge found in favor of my client. He said the Plaintiff didn't meet her burden of proof. I actually still don't know what kind of case it was. Was it a conversion or trover case? The judge didn't mention what elements she had to meet or that she failed to meet. Whatever it was, I completely failed to spot the issue but still managed to prevail. In any event, I know small claims is nothing to take lightly.

ABA Journal Top 100 Blogs

Once again, the Northern Law Blog did not make the Top 100 legal blogs in America as chosen by the ABA Journal. I didn't know that blogs had to submit themselves for consideration, which we have now done.

We are now recognized by the ABA Blog Directory:

http://www.abajournal.com/blawg/Northern_Law_Blog

Let's start a year-long push for inclusion in next year’s Top 100 rankings. I don't know exactly what that should entail, but I believe that it all starts with quality content. We need to increase the number of contributing writers and increase the number of submissions from each contributor.  Next, I believe that we need to increase our subscription base.

If anyone else has any suggestions, please let me know. Also, if you have not already subscribed to receive new posts via email, please do so now. And, tell your friends. Thanks!

The Plainfield Village Code Specifically Authorizes Texting While Driving.

I live in Plainfield, IL. I just read in the winter newsletter that the Village Board passed a negligent driving ordinance last month. The ordinance amends the Village Code to make it unlawful for any person to "negligently operate" a motor vehicle upon any roadway or public way--certainly an honorable intention. But I pulled it up online to check it out and I believe it specifically authorizes me to text while driving.

Negligently is defined as, among other things, engaging in inattentive actions. Inattentive actions include, among other things, the use of an electronic communication device. Electronic communications devices include, among other things, cell phones and PDAs capable of being used for the purpose of composing, reading or sending an electronic message. Here is the full text of the ordinance.

Then the ordinance declares that "This section is not intended to prohibit the use of an electronic communication device during the safe operation of a motor vehicle."

Cool. So, when I am driving through downtown Plainfield, as long as I am safely operating my car, I can text, watch youtube videos, tweet, and compete in online poker tournaments.

The argument is that you could never operate your car safely while doing any of those things. But keep in mind that police can pull you over if they see you texting, even if you have not made any other traffic infractions. If that happened, I believe you could at least argue this defense to the village prosecutor with a straight face. Of course, I can argue anything with a straight face, as you can tell from the preceding paragraphs. ;)

Illinois Civil Union Law

On Wednesday, December 1, 2010, the Illinois Senate passed the Illinois Religious Freedom Protection and Civil Union Act, which, when signed by the Governor, will become effective June 1, 2011. The law allows both homosexual and heterosexual couples ages 18 and older to enter into a "Civil Union."

I have been following this law for some time and it, in a nutshell, gives a "Party to a civil union" (I would have used "domestic partner") all of the legal rights of a spouse in Illinois. A non-exclusive list of the big changes:

A "Party to a civil union" gains legal rights to:

• Make medical decisions without a Healthcare POA;
• Have hospital visitation when visitation is limited to family;
• Share nursing home rooms;
• Spousal coverage under employer based health insurance plans;
• Share in state pensions;
• Receive inheritance without estate planning documents;
• File suit over a wrongful death;
• Invoke privilege to not have to testify against a partner.

What the law does not and cannot allow (because of the federal Defense of Marriage Act):

• receiving a Social Security survivor's benefit;
• filing joint federal tax returns;
• receiving any other federal benefits reserved for a spouse.

Keep in mind that the value of partner benefits is treated as income and taxed by the federal government for income tax purposes. Further, a partner would not automatically have an interest in the other partner's 401(k), so a beneficiary designation form would have to be updated to pass the assets to the surviving partner. Last, any religious body, Indian Nation or Tribe or Native group is free to decide whether or not to solemnize or officiate a civil union.

A full text version of the act can be found here. Next year should be a stellar year for wedding planners, photographers, caterers, and anyone else in the wedding industry!

Target the Dog - Part II

I wrote a post about Target the dog a couple of weeks ago. You will recall that Target the dog was living the good life as a national hero until she was mistakenly euthanized by a county animal control officer.

A commenter suggested that the attorney who filed suit on behalf of Target's owners would run into tort immunity problems. Governmental tort immunity would certainly be raised as a defense in that case, but I think the plaintiff would ultimately prevail. Keep in mind that complete text books have been written on this subject and I am certainly no expert, so I would welcome any feedback in the comments section. Even though Target was killed in Arizona, I will analyze the situation by applying Illinois law.

At issue would be the Local Government and Governmental Employees Tort Immunity Act. 745 ILCS 10/1 et seq. The Act provides different immunities for public entities and public employees. If I had more time, I could probably come up with a theory why the public entity should not enjoy immunity, but the easier case is the one against the employee who killed the wrong dog. Once liability is proven against the employee, I believe that the employer/entity would be obligated to indemnify the employee. Section 2-303 of the Act specifically says that nothing in the Act shall relieve a local public entity of its duty to indemnify its employees.

With respect to employees, immunity is granted to those who serve in a position involving the determination of policy or the exercise of discretion. See Section 2-201. Immunity is not granted to employees for ministerial acts. A governmental employee acts judicially or exercises discretion when he selects and adopts a plan in his official capacity, but as soon as he begins to carry out that plan, he acts ministerially and is bound to see that the work is done in a reasonably safe manner. See Greene v. City of Chicago, 73 Ill.2d 100 (1978).

Without a doubt, the Animal Control office had a policy in place dictating which dogs would be put down, how it would be done, how long they would be kept before it happened, etc. They don't automatically kill every dog that comes through the door. The original article even referenced a procedure whereby the County tried to reach the dogs' owners by posting pictures of stray dogs on their website and giving owners time to claim their dogs.

It is my position that the employee, and possibly the County, owed a duty to follow the procedures in place. If protocol would have been followed, Target would not have been killed. Because the employee was acting ministerially and was not exercising discretion, I believe he or she is liable for negligence.

Again, there are probably exceptions to the exceptions with regard to the Tort Immunity Act, so please let me know if my analysis is faulty.

Paypal Donations

A Paypal button has been added to offset the cost of publicizing and growing the Northern Law Blog. The Blog owes many thanks to the writers who have contributed their time and efforts to build the blog to what it is today, but we are currently exploring the possibility of print and digital advertising to expand our contributor and subscription base even further.

We also plan to continue our sponsorship of the NIU Law School Alumni Golf Outing, which we have done for the past two years. Of course, in lieu of monetary donations, we would also accept published articles for reprinting or new blog submissions. Thank you for your consideration.

A Landmark Case in the Making.

I have been following the development of animal law in Illinois for several years. Check here and here for prior posts relating to damages for injuries to pets. This is very much an emerging area of law and one that has not received a whole lot of publicity, until now. Unless a settlement is reached quickly, there is the potential for a landmark case to come out of Arizona for the wrongful death of Target - a dog and national hero.

According to the NY Times, Target saved the lives of American soldiers in Afghanistan when it and two other dogs confronted a suicide bomber that had entered the barracks. The dogs barked and snarled until the man detonated his bomb. One of the dogs died in the blast. Five soldiers were injured, but none were killed. The two surviving dogs were flown back to the U.S. by a charity and adopted by military families. Target was adopted by an Army medic who witnessed the incident and treated the wounded soldiers.

Target returned to a hero's welcome. She was on the Oprah Winfrey Show. She had her own facebook page. She was on the news on every television network. Then she wandered from her family's back yard and was captured by County Animal Control. Animal Control put the dog's picture on their website in an attempt to notify the owner. The owner immediately saw the picture and paid the pound's recovery fee online. But before the owner could come pick up the dog, a staff member mistook Target for another dog and euthanized her.

The unidentified woman has been placed on administrative leave. The County has ordered an investigation. The County has also provided grief counselors to the family. Oh ya, and the family has already talked to a lawyer. Even if a lawsuit is never filed, this case has the potential to be one of the largest settlements ever for the wrongful death of a pet.  I will be interested to see how this turns out.  If anyone hears any news in the future, please share it with me.

Share Your Haiku About Life as a Lawyer or Law Student

This week, the ABA is asking for haikus related to your life as a lawyer or law student. 

A few examples...

A J.D. opens doors
To amazing adventures
Seek and you shall find

In my snuggie now
Trying to write a paper
Procrastinating

raised hand in first class
made intelligent comment
now known as gunner

Read/share law-related poetry here.

Are Completion Dates Required on Mechanics Liens?

Illinois' Mechanics Lien Act dates back at least to 1903. It's amazing that an issue as fundamental as what exactly needs to appear on the face of the lien remains unresolved. There is currently a split between the 1st and 2nd districts regarding whether the contract completion date needs to appear on the face of the lien.

The 1st District requires completion dates in mechanics liens. In Merchants Environmental Industries, Inc. v. SLT Realty Ltd. Partnership, 314 Ill.App.3d 848 (1st Dist. 2000) the court noted that a mechanics lien is not enforceable unless it is recorded within 4 months of completion of the work. The court went on to say that "while section 7 itself does not expressly require inclusion of the completion date in the lien claim, nevertheless that requirement must be inferred."

The court asserted that the primary purpose for requiring the lien claim to be filed within a specified time is so third persons dealing with the property may have notice of the existence, nature and character of the lien as well as the times when the material was furnished and labor performed, and thus be enabled to learn from the claim itself whether it was such as can be enforced. Without a completion date, the court noted, a person examining the lien claim would not know whether the four-month filing requirement had been met.

The 2nd District, on the other hand, does not require completion dates. The court recently issued its opinion in National City Mortgage v. Bergman, 02-09-0934, October 20, 2010. In that case, the court held that the Mechanics Lien Act must be strictly construed. In strictly construing the statute the court found nothing in section 7 requiring a claimant to state the date of the completion of the contract. The plain language of section 7 instructs the lien claimant only to: (1) file the claim within four months after the completion of the work; (2) verify the lien by affidavit of the claimant or an agent or employee; (3) include a brief statement of the contract; (4) set forth the balance due; and (5) provide a sufficiently correct description of the lot or lots.

The safe practice is to include the completion date. I have to assume that everyone who reads this blog already does that. I should note that the contractors in the Merchants and Bergman cases both filed their liens without the aid of an attorney.  So, if any of my clients are still reading at this point, let this be a lesson to you.  Call me the next time you need a lien prepared. 

Chicago Bears Watch Party

Chicago Bears Watch Party

Hosted by the NIU Law Alumni Council and Student Bar Association

Sunday, November 14, 2010 (vs. Vikings)

Side Bar Grille (221 N. LaSalle, Chicago)

11:30 a.m. - 3:30 p.m.

FREE Food and Drinks. Games and Prizes!

Please RSVP IMMEDIATELY to lawevents@niu.edu or 815.753.9655

Four More Home Repair and Remodeling Act Cases Petition Illinois Supreme Court for Leave to Appeal

The following is a guest post from Nathan Hinch. Mr. Hinch works at Mueller & Reece, LLC in Bloomington. He also writes at the Hinch Law Blog.

In the wake of the Illinois Supreme Court's recent decision in K. Miller Construction Co. v. McGinnis, ILSC Case No. 109156, the Court's November Docket book includes four more Home Repair and Remodeling Act cases in the Leave to Appeal Docket. This means a party in each of these cases has sought to appeal the decision of the Illinois Appellate Court, but the Illinois Supreme Court has not yet determined whether or not it will grant the appeal and hear the case. The four cases have all been discussed on the Hinch Law Blog previously, as follows:

Artisan Design Build v. Bilstrom , ILSC No. 109371, discussed here.
Fandel v. Allen, ILSC No. 109887, discussed here.
Roberts v. Adkins, ILSC No. 109909, discussed here.
Universal Structures, LTD. v. Buchman , ILSC No. 110842, discussed here.

The Court will likely announce by the end of the month whether or not it will hear appeal of these cases. Stay tuned.

Nathan Hinch
Mueller & Reece, LLC
202 North Center Street, Suite 1
Bloomington, Illinois 61701
309-827-4055

NIU Law Review Online

For the past several months, Jason Meares, the 2010-11 Editor-in-Chief of the NIU Law Review, and the Board of Editors have been working on increasing the presence of the NIU Law Review on the internet. He follows in the footsteps of the previous boards who also aimed at increasing the Review's readership through the internet.

Last year, under the direction of the then Editor-in-Chief, Steve Boldt, the NIU Law Review published its first issue of their online journal, which can be found here. The online journal allows the Board to publish more content and make that content available to a large audience.

The Review's website has undergone some changes with web hosting and design over the past six months. Thanks to the efforts of the 2010-11 Board of Editors, volumes 26 through 30 are now available online.

Here are some highlights from these issues:

• Alex Geocaris, 2010-11 Managing Editor, wrote about the new "search incident to arrest" exception to the warrant requirement of the 4th Amendment expounded by Arizona v. Gant.
• Also writing about the warrant requirement of the 4th Amendment , Daniel Kegl wrote about the "single -purpose container" exception and the inconsistent application by the federal courts.
• Jason Meares argues that the exclusion of settled defendants when determining liability pursuant to Illinois Code of Civil Procedure section 2-1117—as decided in Ready v. United/Goedecke Services, Inc.—is against the intentions of the statute and unsound policy.
• And, my article about Illinois' Winery Shipper's License, Granholm v. Heald, and the dormant Commerce Clause can be found in volume 30 issue 2.

Victory!!!!! (Kinda)

The Illinois Second District Appellate Court has overturned the $100 trauma center fee that was assessed to Ernesto Valle of Aurora following his conviction for murder. Unfortunately for Mr. Valle, the Appellate Court upheld his murder conviction.

The trauma center fee applies to people receiving orders of supervision for driving under the influence of drugs or alcohol, people convicted of certain weapons offenses and people convicted of certain drug offenses — but not murderers. The appellate prosecutors admitted the fee was assessed in error.

I wish I could have met this guy.

This weekend I read the obituary of Nicholas G. Manos in the Chicago Tribune. I had not heard of Mr. Manos before, or the Rock Island Railroad bankruptcy case, but I guess that just shows my inexperience in these matters.

According to his daughter, who witnessed the incident, Mr. Manos delivered probably one of the greatest opening lines of all time at oral argument. Here is the story:

"On the day of final arguments in the Rock Island Railroad bankruptcy case in the late 1970s, attorney Nicholas G. Manos stepped up to the lectern for one of the biggest moments of his life.

Silence fell over the crowded federal district courtroom as Mr. Manos looked straight into the judge's eyes and said:

"Your honor, I can hardly wait to hear what I am about to say."

With that, the courtroom exploded with laughter. Mr. Manos' daughter, Stathy White, who witnessed the moment, said the comment illustrated her father's intelligence and charisma.

"That really says a lot about the confidence that he had," she said. "He had a wonderful wit about him, and his presence was unmatched."

After the trial, Mr. Manos drafted a reorganization plan for the ailing railroad that satisfied all sides. In 1983, the plan was approved by the Supreme Court and the Interstate Commerce Commission, making it one of the most successful railroad reorganizations in history."

Awesome. I wish I had the guts to pull off something like that.

Job opening: Chicago-based AMA seeks JD with bioethics experience

The American Medical Association (AMA), the nation’s largest professional Association of physicians, seeks a Senior Research Associate in Ethics Policy. In this role you will assist the Director of Ethics Policy and the Council on Ethical and Judicial Affairs (CEJA) in the development of ethics policy, educational outreach, Federation Relations, and Board of Trustees assignments.


Requirements

• Juris Doctor (JD) degree minimum with experience in bioethics law required. Additional experience in clinical ethics and/or physician education preferred.
• Must have strong research, analytical, and writing skills.
• Demonstrated ability to work with minimum supervision.
• Strong interpersonal skills and verbal communication skills.
• Strong organization and prioritization skills.
• Ability to analyze changes in health care environment and develop appropriate policy responses.

For more information visit:  Senior Research Associate - American Medical Association

Analytics

I hope everyone enjoys the new look of the Law Blog. One of the recent additions to the site is the counter that appears on the bottom right-hand side of the page. By the time you read this post, we will probably be over 10,000 hits.

As I write this we are at 9,939 hits, most of them coming in the past couple of months. We are gaining more and more publicity every day. We are averaging about 110 hits per day considering that we have received 2,738 hits so far this month.

One of the other new features is an analysis of the Blog's visitors, including where they come from, how they got here, etc. I can tell you that A LOT of people find this blog through google searches. For those of you interested in growing your own practices, I can't stress enough the importance of having your name appear in a google search.  Did I mention that the Law Blog is currently accepting contributing writers?

How many of you have picked up a telephone book for information in the past month? Me neither. But I probably perform about 20 google searches per day. To illustrate how beneficial having your name attached to popular search terms is, I wanted to share the Top 5 posts in Northern Law Blog history. The vast majority of these hits came through google searches.  You will see that picking the right topic on which to write can make a Law Blog writer a de facto expert in no time.

TOP FIVE POSTS IN LAW BLOG HISTORY

1.  Illinois Vehicle Window Tint Law by Waseem Mateen - 2,616 hits.  (Wow.)

2.  Tips on the Oral Argument by Waseem Mateen - 206 hits.

3.  Foreclosure Mediation in Will County by Mike Huseman - 125 hits.

4.  New Subpoena Form by Mike Huseman - 115 hits.

5.  Pre-Foreclosure Grace Period in Illinois by Berton J. Maley - 114 hits.

(Click on the title of each post to re-visit them.  I am still working on making these links appear brighter without throwing off the color scheme of the whole page.)

Restricted Drivers, Look Out: Illinois Police Have a Reasonable Suspicion to Pull You Over.

On October 21, 2010, the Illinois Supreme Court announced Illinois police can pull over drivers that are driving on a restricted drivers permit. Using Terry and its progeny, the Court reasoned that an officer has a reasonable suspicion that a driver is unlicensed when (1) the registered owner's license has been revoked and (2) the person driving the vehicle resembles the photograph of the owner. Being issued a restricted driving permit (RDP) does not negate the officer's reasonable suspicion.

Restricted driving permits are issued to “hardship” cases for under 625 ILCS 5/6-205. These licenses allow otherwise unlicensed drivers to drive for employment, emergency medical services, education, and alcohol treatment.

In People v. Close, LaSalle police pulled the defendant over for driving while license revoked. The arrest happened on a Sunday evening while the defendant was wearing a tank top, baseball cap, and sunglasses. The officer ran the defendant’s plates and found the vehicle owner’s license to be revoked. The officer’s mobile computer also indicated that the owner was issued a RDP; however, the computer did not indicate the terms of the RDP. The officer initiated a traffic stop to determine whether the driver was within the scope of his RDP. At trial, the officer indicated the day of the week and the defendant's apparel suggested that the defendant was not en route to work.

The Court was particularly swayed by the statutory construction of the RDP provision. Under 625 ILCS 5/6–303, an RDP is a statutory defense to the crime of unlicensed driving. Because the state can make a prima facie case of unlicensed driving despite the issuance of a RDP, the Court reasoned that officers have no duty to determine whether a driver is within the scope of his RDP before initiating a Terry stop.

The Court specifically rejected the Second District case, People v. Johnson, 379 Ill. App.3d 710 (2d Dist. 2008). The facts in Johnson are startlingly similar to those in Close. The officer ran the plates on a passing vehicle and discovered the owner’s license was revoked. The Johnson defendant also was issued a RDP. The officer noted that the arrest occurred on Sunday, which is not a traditional work day. Based on the officer's belief that the driver was not on his way to work, the officer conducted a traffic stop to determine the scope of the RDP. The Second District Court held that an officer did not have a reasonable suspicion.

Justice Burke issued the only dissenting opinion. She notes that the correct test to apply is the "totality of the circumstances" test, and the majority holding is out of line with this legal ruler. Under the "totality of the circumstances," an officer would have to take into account the driver's RDP and articulate facts that would suggest the driver was outside those terms.

I had previously written about this case in the December 2009 issue of Kane County Bar Briefs. I argued that the Illinois Supreme Court should have rejected both the Third and Second District holding. Instead, I suggested that the driver's appearance and day of the week were articulable facts supporting an officer’s reasonable belief that the driver was acting outside the scope of his RDP. Neither the majority nor the dissenting opinion to that view.

People v. Close, Docket No. 108459 (Oct. 21, 2010).

Welcome Christopher Sparks!

The Northern Law Blog is pleased to announce the addition of Christopher Sparks as a contributing writer.  Chris graduated manga cum laude from the NIU College of Law in May 2010.  While at NIU, Chris was on the Law Review and participated in Moot Court.  

It is great to add another accomplished writer to the Blog.  We're glad to have you Chris! 

Kane County's New Domestic Violence Diversion Program May Not be Such a Good Deal

On October 1st, the Kane County State's Attorney's Office introduced a new domestic violence diversion program. It is supposedly the first of its kind in Illinois. According to State's Attorney John Barsanti, the program could provide counseling, supervision, and the eventual dismissal of charges for an estimated 180 first-time offenders per year if they successfully complete the program.

Potential diversion candidates must be first-time offenders and must apply for the program within three months of their arrest. In order to be accepted, the alleged battery must not have resulted in medical attention, not have involved a weapon, and not have been eligible to be charged as a felony. If the defendant meets these criteria, and if the alleged victim consents, the defendant could enter the diversion program.

If accepted, the defendant must plead guilty to the charges as they are written, pay $450 in fines, $200 to a domestic violence shelter, and consent to a plenary order of protection. Defendants must undergo counseling, receive medical or substance evaluations if necessary, and after the completion of the program the guilty plea will be vacated. If the program is not completed successfully, the defendant will be sentenced under the domestic battery statute, which is a Class A misdemeanor.

I am not so sure that this is such a good idea for domestic battery defendants. You know why I think that? Because the program was introduced by the STATE'S ATTORNEY'S OFFICE at a PRESS CONFERENCE!!! The State's Attorney's Office does not usually help people who are charged with crimes. And if they did, they wouldn't call in the media to witness it. The State's Attorney's Office is in the business of locking people up. They lock up people without any regard whatsoever to the effect it will have on the family, the costs involved to the county, or any other type of logic. They just want to lock people up.

Defense lawyers should not even think about this program without first considering the possible defenses to the charge. Remember the State must prove the charges beyond a reasonable doubt. The diversion program requires an admission of guilt. You lose the case from day one.

You also need to determine whether the witness is prepared to testify at trial. I think the real reason behind this program is the reluctance of most witnesses/victims to testify at trial. If the State can't produce a witness, they can't secure a conviction. I wish I had access to the statistics, but I believe that many, many more domestic violence cases get dismissed than actually go to trial. Each time that I am in the domestic violence courtroom in Kane County, I see them dismiss at least a dozen cases per day. Maybe one or two actually go to trial.

Take your chances at trial. The State has the burden. Don't roll over on day one and subject your client to a plenary order of protection, anger management, etc., etc., etc. If the State wants to disqualify him or her from the program after several months, they will probably be able to do so. Then your client still gets the conviction after going through a year of court monitoring and aggravation.

Collecting from Cosigners

I never knew this before today, so I thought I would pass on the information.  It is unlawful to take collection actions against a cosigner without sending them a 15 day notice to pay pursuant to the Illinois Consumer Fraud and Deceptive Business Practices Act.

The Act provides that "No person may .... take any collection action regarding a cosigner of an obligation unless prior thereto, such person has notified the cosigner by first class mail that the primary obligor has become delinquent or defaulted on the loan, that the cosigner is responsible for the payment of the obligation and that the cosigner must, within 15 days from the date such notice was sent, either pay the amount due under the obligation or make arrangements for payment of the obligation."  815 ILCS 505/2S.

Any person violating this Section commits an unlawful practice within the meaning of the Act and, in addition, is liable in a civil action for actual damages, plus reasonable attorney's fees.

How to Protect Yourself from Identity Theft

Identity theft can happen to anyone, anytime. Identity thieves don’t just steal your property, they steal you! In our modern world, it is easy for someone to steal your social security number (SSN) to get a job, credit card, loan, or control of your records. Your social security number is the only means of identifying yourself to the IRS, credit bureaus, and other important financial entities. The damage caused by identity thieves is difficult to detect, can cost you thousands of dollars, and can take hundreds of hours to fix. Your SSN is your lifeline to the Internal Revenue Service (IRS) because with your SSN, the IRS determines how much money you earned, for which credits and deductions you qualify for, and how much your refund should be.

One form of identity theft is employment fraud. People commit identity fraud when they steal your SSN to work under your name. When you file your income tax returns, the IRS will see the thief’s fraudulent use of your number and assume that you underreported your income. This will result in a higher tax liability, reduction of refund, and ineligibility for some tax credits, along with penalty and interest payments.

Thankfully, there are several easy ways to protect yourself, such as never carrying your social security card on your person. Also, photocopy both sides of all of your ID’s, credit, and bank cards, so that if your purse or wallet is stolen, you can prove your identity to banks and the government. Keep these items in a safe, preferably locked, place in your home or office. Write, “Please see ID” on the back of all your credit and bank cards, too, to protect yourself. To avoid phishing scams, remember that the IRS contacts taxpayers only through postal mail and will never send you an email or call you. Keeping all of this information in mind can help you to retain greater security over not only your financial and credit identity, but also your life.

If you think you are a victim of identity theft, call your local police station to file a report. After that, contact your bank and credit card companies, with photocopies in hand, to freeze or place a fraud alert on your accounts. Also try to contact the three major credit reporting bureaus to alert them that someone stole your SSN and request that a fraud alert or freeze be placed on your information. A fraud alert notifies financial institutions that someone may try to fraudulently use your SSN, whereas a freeze disallows any action taken under your SSN. When you have a fraud alert in effect, a business must call you at your home or work phone to verify any financial or credit action taken under your SSN.

Next, call the IRS Identity Protection Specialized Unit (800-908-4490) to let them know of your suspicions. Finally, contact the Federal Trade Commission at 877-ID-THEFT; the FTC records all identity theft complaints so the issue can be monitored at the national level. Please note that action taken by the IRS and the FTC may take a considerable amount of time, so the faster you act, the faster you can get your life back.

If you are facing IRS or tax-specific identity theft problems, contact the Taxpayer Advocate Service (877-777-4778). The Taxpayer Advocate Service is designed to help analyze your tax issues and act as a go-between for you and the IRS. Always open all communication from the IRS and respond to it quickly.

Identity theft is a terrible crime, but knowing how to protect yourself and how to limit damage after an attack is the most important tool in the battle over you.

Site Maintenance

Please excuse the mess on the blog this weekend. As you can see, we are undergoing major design changes. Thank you for your patience.

Custer's Last Stand

Matthew C. Custer, pro se, appealed his speeding ticket conviction and won. The appellate court noted at the outset that Mr. Custer was prosecuted under a Rockford municipal ordinance which was punishable by fine only, so the proceeding was civil in nature, not criminal. Therefore, the City was not required to prove defendant's guilt beyond a reasonable doubt, but only by a preponderance of the evidence. And he still prevailed. This guy is a local legend.

At issue was the Illinois statute which provides that electronic speed-detecting devices shall not be used within 500 feet beyond any speed limit sign. If a radar, or other electronic speed-detecting device, is used in violation of this section, evidence obtained thereby shall be inadmissible in any prosecution for speeding. 625 ILCS 5/11--604(b)(West 2008).

A Rockford police officer measured Mr. Custer's speed at 45 mph in a 30 mph zone using radar. The police officer, however, clocked the defendant while he was still within 500 feet of the speed limit sign. Mr. Custer attached to his brief photographs, maps, and diagrams showing that the location of his alleged speeding was less than 500 feet beyond a speed-limit sign, but the judge still admitted the radar evidence.

The legislative intent underlying the 500-foot rule was "to give a driver time to adjust to the speed limit before subjecting him to radar detection," which the Rockford police failed to do in this case.  For that reason, the judgment of the Circuit Court of Winnebago County was reversed.

City of Rockford v. Custer, 02-09-0743 (September 23, 2010).

Admissibility of Writings and Recorded Statements

I am slowly going through the new Illinois Rules of Evidence, which will become effective on January 1, 2011.  I will be writing about some of the more interesting ones.  The new rules are on the Supreme Court's website here.

Rule 106 concerns the remainder of writings and recorded statements. Here is the rule:

When a writing or recorded statement or part thereof is introduced by a party, an adverse party may require the introduction at that time of any other part or any other writing or recorded statement which ought in fairness to be considered contemporaneously with it.

This would probably not be an issue in a case where you have completed discovery. That way, if my opponent offers only part of a document, I will simply offer the rest of it during my case because I will have a copy going in.

But this rule could become useful in small claims court. I have seen lawyers try to introduce only parts of documents a couple of times. Mainly in credit card cases where the plaintiff only seeks to admit certain paragraphs or pages of the 25 page cardholder agreement.

With an objection under this rule, you would hope that they don't even have the complete document with them. That way even the portion that they have should be excluded.

NIU Law School is the 13th Best Value in the Country.

preLaw Magazine and the National Jurist have ranked this country's law schools by value.  Law schools make the Best Value rankings if they meet three criteria:  Their bar pass rate is higher than the state average; their average indebtedness after graduation is below $100,000; and their employment rate nine months after graduation is 85 percent of the class or higher.

NIU ranks 13th on their list, higher than any other law school in Illinois. Click here for the full explanation of the rankings from NationalJurist.com.

2010 Best Value Law Schools: The Top 20

1 Georgia State University
2 Brigham Young University , UT
3 University of Louisville
4 University of Nebraska--Lincoln
5 University of Kansas
6 University of New Mexico
7 University of Mississippi
8 Florida State University
9 University of Memphis
10 Florida International
11 University of Tennessee
12 University of South Carolina
13 Northern Illinois University
14 University of Kentucky
15 University of Georgia
16 University of Alabama
17 Texas Tech University
18 Louisiana State University
19 University of North Dakota
20 University of Florida

New Illinois Rules of Evidence

The Illinois Supreme Court has announced the Illinois Rules of Evidence, which are effective January 1, 2011. 

Click here to see the new rules on the Supreme Court's website.

He's still not paying his bills.

I wrote about Bryan Siewin back in February 2009. At that time, someone broke into his house, caused about $70,000 worth of damage, and spray painted "Pay Your Bills" all over the walls.

Well, it seems that he didn't quite learn his lesson. He was been sued by Von Tobel lumber in an attempt to recover payment for approximatley $375,000 worth of lumber that they sold him.

Here is the latest article from the Northwest Indiana Times.

My Pregnancy, My Home, My Choice?: Regulating Home Births in Illinois

In the state of Illinois around 1,000 babies are born at home every year, as opposed to hospital delivery. Most women who choose home births usually do so for religious reasons, financial reasons or pure personal preference. Regardless of the reason, under Illinois law the only legal home births are those attended by a physician or a nurse midwife, an advanced-practice nurse with a secondary degree in midwifery. However, according to the Illinois Department of Vital Health Statistics, licensed home-birth practitioners work in only 7 out of 102 Illinois counties mostly in Cook and Lake counties, which means most of Illinois home births are done illegally or unattended since many home-birthed babies are born in rural locations.

Due in part to such low numbers of licensed home-birth professionals, State Representative Robyn Gabel, Democrat of Evanston, has been pushing for change via the Home Birth Safety Act. Supporters of the bill say it toughens homebirth standards and protects pregnant women, but those opposed to the bill argue that home births are inherently more dangerous than births in medically supervised settings.

The “to regulate homebirths or not?"/"to allow homebirths or not?" debate has been a 30-year struggle with the state legislature, including a push to license direct-entry midwives. The State Senate passed the Home Birth Safety Act in May and a House vote is pending. Perhaps all parties involved should peruse the children's book “We’re Having A Homebirth” to gain a better understanding of what rights and responsibilities are at stake.

Read the NY Times’ story about Illinois Home Births here.

Landlord Lien vs. Bank Lien

The landlord owned a commercial building. The tenant signed a lease that stated that all alterations and additions to the building which are permanently affixed to the premises automatically become the property of the landlord without any payment to tenant.

The tenant installed several large machines which became permanently affixed to the floor. At that time, the tenant also gave security interests in the machinery to its bank. The tenant then stopped paying rent, stopped paying its loan from the bank, and abandoned the machinery.

The landlord filed a distress warrant seeking to distrain the machinery. The bank filed a replevin action seeking attachment of the same machinery.

Illinois law grants a landlord a common law lien on its tenant's property for the non-payment of rent that is perfected by the filing of a distress warrant and inventory with the clerk of the court. 735 ILCS 5/9-302.

Unfortunately for the bank, the collateral at issue were trade fixtures. In order to perfect a lien against trade fixtures, the secured party must record its financing statement with the county recorder's office. 810 ILCS 5/9-501.

Therefore, the landlord's perfected security interest trumped the bank's unperfected security interest.

Southwest Bank of St. Louis v. Poulokefalos 01-09-2387 (June 4, 2010).

Home Repair and Remodeling Insurance - If You Are Liable Under the HRRA, Your HRRA-required Insurance May Not Cover You

The following is a guest post from Nathan Hinch. Mr. Hinch works at Mueller & Reece, LLC in Bloomington. He also writes at the Hinch Law Blog.

If you are familiar with the Illinois Home Repair and Remodeling Act (the HRRA), you know that the law requires home repair and remodeling contractors to carry certain minimum insurance, including the following:

"...public liability and property damage insurance in the amount of $10,000 per occurrence for home repair or remodeling not in conformance with applicable State, county, or municipal codes, unless the person has a net worth of not less than $1,000,000 as determined on the basis of the person's most recent financial statement, prepared within 13 months." (emphasis added).

There is a long line of cases analyzing what is and is not an "occurrence" in the context of a contractor's commercial general liability (CGL) insurance policy. That issue is beyond the scope of this post, but suffice it to say that it is a complicated and hotly contested area of the law, perhaps especially so in Illinois. Throw the HRRA into the mix, and you have the recent case of West Bend Insurance Company v. The People of the State of Illinois, Case Number 1-08-1693 (Ill. App. 1st District, May 27, 2010).

West Bend is actually a consolidated opinion of four lawsuits against a contractor, Father and Sons Contractors, Inc, by the Illinois Attorney General and three private homeowners under the HRRA and the Illinois Consumer Fraud and Deceptive Business Practices Act, among other claims. The contractor tendered defense to its insurer, West Bend. West Bend filed suit in all four cases seeking a declaratory judgment that it had no duty to defend or indemnify the contractor. The trial court granted West Bend's motion for summary judgment and the contractor appealed.

The contractor in this case had an endorsement in its CGL policy that covered "improper home repair and remodeling," limited liability to "'property damage' arising out of 'improper home repair and remodeling' - $10,000 per 'occurrence,'" and excluded "'improper home repair and remodeling' knowingly performed by the insured." (emphasis added).

The Appellate Court held that the complaints against the contractor did not allege any occurrences, but instead alleged "deliberate fraud and intentional acts of faulty workmanship;" and did not allege any "property damage," because that term in this context refers to damage to the property of others, not mere economic losses of the insured. Finally the Court held that the exclusion in the policy of "improper home repair and remodeling knowingly performed by the insured" bars coverage, since the complaints did not allege mere negligence by the contractor. For these reasons, the insurance company had no duty to defend or indemnify the contractor. In other words, the contractor had the home repair and remodeling insurance required by the HRRA, but still was not covered. Contractors, check with your insurer and your attorney so you understand what your CGL policy does and does not cover in advance, so you are not hit with a surprise.

Nathan Hinch
Mueller & Reece, LLC
202 North Center Street, Suite 1
Bloomington, Illinois 61701
309-827-4055

This isn't Russia, is it Danny?

The Kane County State's Attorney's Office has launched a Holiday Alcohol Testing program that will require certain offenders to submit to alcohol testing twice a day during major holidays, once in the morning and once in the evening.

As part of the program, the court can order a person already convicted of DUI to take part in the holiday testing program. Those who qualify would be people who have been ordered by the court not to drink — most likely repeat DUI offenders, or a person deemed by the court as "high risk" and likely to violate the terms of his sentence.

Testing periods not only fall during all major holidays, but also during SUPER BOWL WEEKEND and during MARCH MADNESS!!!!

Holy cow!! Not drinking is one thing, but if I had to drive up to the courthouse for a breath test during the March Madness games, I would be really angry!!

Also, is it really a good idea to require these people to be on the road during the holidays? The article in today's Aurora Beacon stated that the program started on Labor Day weekend. Two people out of 17 failed their breath tests. And the State's Attorney made them drive to the test center for the breath tests!!!

I can't wait for someone to be seriously injured as a result of this new policy. We'll see how brilliant it is then.

Ownership of Funds in a Joint Account

One of the quickest ways to collect money due on a judgment is to garnish a bank account. Problems arise, however, when the account is held by joint owners, but the judgment is only against one of the account holders. This situation often arises in the context of husband and wife.

Under Illinois law, there is a presumption that each owner of a joint account owns all funds in that account. In other words, there is a presumption that a deposit by one person into a joint account is essentially a gift to the other person which he can then use how he pleases. Therefore, a judgment creditor establishes a prima facie case for turnover when it shows that the judgment debtor is one owner of a joint account.

The burden then shifts to the debtor to prove what part of the funds, if any, belong solely to the non-debtor joint owner. Factors used in determining the ownership of funds in a joint account include: 1) control over the funds in the account; 2) contribution of funds by each party; 3) whether any contribution by one party constituted a gift to the others; 4) who paid taxes on the earnings from the account; and 5) the purpose for which the account was established.

The case law weighs heavily in favor of the judgment creditor. The first factor seems to be the most important. If both parties use the account for their mutual benefit, it does not really matter who put the money into the account. In order to overcome the presumption of donative intent, the debtor must satisfy at least a couple of the five factors above. They basically have to show exclusive control over the account.

This is a factual determination that can be shown through the use of bank statements, bank signature cards, canceled checks deposited into or drawn on the account, loan repayment coupons or other loan documents, payroll records, etc. Remember that the burden is on the debtor, so without strong documentary support, I would argue that they have not met their burden to overcome the creditor's presumption.

Florida Foreclosure Lawyer Financially Flush.

The owner of one of Florida's largest foreclosure firms made more than $17 million last year, not including the money he received from the sale of a related business that he started to provide support services to his law firm. That business sold for $93.5 million.

Click here for juicy details relating to the types of cars, houses, and boats that he owns.

Kane County Permanent Courtroom Change

Bankruptcy court in Kane County is switching rooms. Effective immediately, Judge Barbosa will now be sitting in courtroom 250 at the Kane County Courthouse, instead of courtroom 140.

All Kane County hearings should now be noticed for courtroom 250. All hearing times and the building address remain the same.

Update on the Distress Warrant

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!

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.

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.

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.

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.

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.

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.

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.

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Corporate Voting Deadlocks

If you are ever asked to draft corporate bylaws or an operating agreement on behalf of a client, I suggest that you add the following provision:

Voting Deadlock. In the event of a deadlock in the vote of the members or managers, the decision shall be made using the method of "paper, rock and scissors." A representative of each side of the issue shall face each other with their arms in a right angle of 90 degrees as the elbow with fists closed and the right fist on top of the left fist. An independent participant, if available, or either of the representatives will be responsible to count to three in approximately one (1) second intervals. With each count, each representative shall lightly touch the left fist with the right fist to the cadence of the count and, at the count of three, each representative will signify whether he or she is selecting "paper," "rock," or "scissors." "Paper" shall be represented by the right hand fully extended, palm down. "Rock" shall be represented by the right hand in a full fist. "Scissors" shall be represented with the right hand in a fist with the index and third finger extended. The outcome of the issue shall be decided by the representative who wins the contest by the best two out of three sessions using the following rules:

i. A display of paper defeats a display of rock;

ii. A display of rock defeats a display of scissors; and

iii. A display of scissors defeats a display of paper.

The winning representative shall decide the issue conclusively on behalf of the company.

Driver rear-ends car, sues the other driver.

I had a debate a couple of years ago with some former law school classmates about whether a rear-end collision could ever be someone else's fault.

I was at a tavern with some assistant state's attorneys. They were saying that a rear-ender could never be the front car's fault. I took the position that you should never say never, but at that time I could not articulate a fact pattern whereby the front car would be at fault.

Well, according to the Sun Times, a Cook County plaintiff is helping me make my argument. A motorist is suing a student driver and his instructor for a 2008 crash triggered by the pupil making a "sudden stop at a green light."

That is a novel theory and I hope it works, if only for bragging rights the next time I am out with prosecutor buddies, but I have my doubts. Why wasn't the plaintiff keeping a proper look-out?

Can anyone else out there think of a scenario where a rear-ender could be the front car's fault?

A man who represents himself has a fool for a client.

Here is today's West Headnote of the Day. This reminds me of a good story from law school:

Evidence at a preliminary hearing that the accused asked the witness "How do you know it was me when I had a handkerchief over my face?" was properly admitted at trial for robbery as an admission. Nance v. United States, 299 F.2d 122 (D.C. Cir. 1962)

When I was at NIU, I worked at the DeKalb County State's Attorney's Office as a Rule 711 intern. I spent about half of my time in the felony division preparing for a murder trial. That case did not go to trial until after I graduated, passed the bar, and was working in private practice. But I still followed the case pretty closely in the newspaper.

The defendant fired several lawyers leading up to trial. The judge eventually allowed him to represent himself. He didn't do too bad, I guess, throughout the course of the trial, but he really blew it during closing arguments.

He stood before the jury and asked them "Please, please do not convict me of these crimes that I have committed."

Oops!

Presumptions in the Law

West's Headnote of the Day

157 Evidence

157II Presumptions

157k53 k. Nature and Scope in General.

Presumptions are the bats of the law, flitting in the twilight but disappearing in the sunshine of actual facts. Taufen v. Estate of Kirpes, 230 P.3d 199 (Wash. Ct. App. 2010)

Class Action Lawsuit Over iPhone 4?

I'm sure most of the technophiles out there have heard about the iPhone 4's poor reception and dropped call problems. Maybe some of you have even experienced it for yourself. If you have, you might want to consider contacting the law firm of Kershaw, Cutter, and Ratinoff, LLP. They are investigating a potential class action lawsuit against Apple for the poor reception quality, dropped calls, and weak signal received by the new iPhone 4. More information here.

What Happens If Appellee Does Not File An Opposition Brief?

Steven R. Merican publishes the Illinois Appellate Lawyer Blog. He recently wrote an interesting blog about the appellate court's options when the appellee does not file a response brief.

There will not be an automatic default against the party who failed to respond. It is possible to lose an appeal even though your opponent did not file a response brief. See the full post here.

The Presumptions of Gift vs. Loan

Brad Barnes sued Rose Michalski to enforce the repayment of an alleged loan. Plaintiff's complaint alleged that he lent defendant $27,000 and that she had not repaid the money. Defendant's answer alleged that the money was a gift.

There was considerable testimony at trial concerning the relationship of the parties. Both plaintiff and defendant were swingers. They were both married to other people and the four of them routinely met at their houses, hotels, or certain campgrounds to practice their self-described lifestyle of "swinging."

The appellate opinion spent considerable time examining the presumptions that should have arisen at trial. The court found the law presumes a gift if someone transfers property to his or her spouse or family member. The burden would then shift to the transferor to prove that it was a loan and not a gift.

However, there is no presumption of a gift to a friend, even a close friend. Their apparently is also no presumption of a gift to a swinging colleague. In this case because the parties were not related, the presumption was of a loan. The burden then shifted to the defendant to prove it was a gift. The only evidence offered in support of the gift theory were defendant's own self-serving statements.

Also as there was no written contract, nor was there ever any discussion of the repayment terms when the money was exchanged, defendant argued that plaintiff could not meet its burden in proving that it was a loan.

The court found that the common law does not require plaintiff to prove the "terms of repayment" to obtain a judgment for repayment of a loan. Pursuant to the Restatement of Contracts, if a loan omits the terms of repayment, the court can supply the terms.

14th Hole Alumni Golf Outing

Law Blog Contributors Network in Naperville

Northern Law Blog contributors Mike Huseman, Brian Krause, and Matt Kooperman (far right) network at a DuPage County Bar Association event on Thursday evening on the rooftop patio of the Two Nine Bar in Naperville. Also pictured is Adam Wirtz from the Wirtz Law Offices, LLC (second from right).