Unused Gift Cards

With the holidays right around the corner, I thought I would update you on the law surrounding the expiration of gift cards.  The topic was in the news recently because U.S. Sen. Richard Blumenthal has introduced a bill to congress that would prohibit expiration dates and non-activity fees on gift cards (press release HERE).  The bill would also require companies in bankruptcy to honor outstanding gift cards.  I don't have any other information on this bill, or the likelihood of its passage, so if anyone else has any information you can let us know in a comment.

I do know, however, that the Illinois Consumer Fraud and Deceptive Practices Act has offered strong protections in this state for several years.  The Act prohibits gift certificates, gift cards, or credit slips obtained from the return of merchandise from expiring any sooner than 5 years from their issuance.  The Act also bars any non-activity charges whatsoever.  815 ILCS 505/2SS. 

Five years is a long time to have a gift card sitting around, but the federal law will ban any expiration dates at all.  I think five years is plenty.  I'm just thinking from the business' perspective.  There has to be a point in time when the business can write-off the amount of the unused gift card and credit that money back onto their books.  What do you guys think?

Rene Cruz becomes Judge in Kane County

Aurora attorney and NIU Law alum Rene Cruz has been named a Judge in Kane County. HERE is a link to an article in the Aurora Beacon and HERE is a link to the Illinois Supreme Court's press release.  

Writs of Attachment (Body Writs)

Illinois enacted a new body attachment statute last summer. Until then, it was my understanding that a rule to show cause had to be personally served upon the defendant before a body writ would issue.

This new statute, which I have copied and pasted below, seems to say that rules to show cause can now be served by personal or abode service.  Has anyone entered a body writ following abode service of a rule?  If so, in which county??


 (735 ILCS 5/12-107.5) 
    Sec. 12-107.5. Body attachment order.
    (a) No order of body attachment or other civil order for the incarceration or detention of a natural person respondent to answer for a charge of indirect civil contempt shall issue unless the respondent has first had an opportunity, after personal service or abode service of notice as provided in Supreme Court Rule 105, to appear in court to show cause why the respondent should not be held in contempt.
    (b) The notice shall be an order to show cause.
    (c) Any order issued pursuant to subsection (a) shall expire one year after the date of issue.
    (d) The first order issued pursuant to subsection (a) and directed to a respondent may be in the nature of a recognizance bond in the sum of no more than $1,000. 
    (e) Upon discharge of any bond secured by the posting of funds, the funds shall be returned to the respondent or other party posting the bond, less applicable fees, unless the court after inquiry determines that: (1) the judgment debtor willfully has refused to comply with a payment order entered in accordance with Section 2-1402 or an otherwise validly entered order; (2) the bond money belongs to the debtor as opposed to a third party; and (3) that any part of the funds constitute non-exempt funds of the judgment debtor, in which case the court may cause the non-exempt portion of the funds to be paid over to the judgment creditor. 
    (f) The requirements or limitations of this Section do not apply to the enforcement of any order or judgment resulting from an adjudication of a municipal ordinance violation that is subject to Supreme Court Rules 570 through 579, or from an administrative adjudication of such an ordinance violation. 
(Source: P.A. 97-848, eff. 7-25-12.)

Corporate Counsel Job Opening in Glenview, IL

Position Profile: 

 
Anixter is seeking a Senior Counsel–Corporate & Securities for its global Legal team in Glenview, IL.  This position will manage a wide variety of legal work in the areas of SEC, M&A, corporate governance, corporate finance, and compliance. 
 
Responsibilities: 
 
The Senior Counsel’s responsibilities will cover the entire spectrum of corporate and securities matters that would typically confront a public U.S. company of this size and complexity, including: 
 

• Supporting the preparation of SEC filings, including 10-Ks, 10-Qs, 8-Ks, Section 16 filings, proxy statements, registration statements, etc.
• Staying abreast of, and ensuring compliance with, federal and state securities and corporate laws, as well as applicable rules and regulations of exchanges and industry organizations that affect public company reporting or compliance and public M&A, including Sarbanes-Oxley, Dodd Frank, ISS, Glass Lewis, etc.
• Supporting internal processes and procedures for SEC compliance and M&A, including SEC filings, sub-certification, and trading blackout processes.
• Based on size, complexity, and location, assisting on and/or taking lead role on mergers, acquisitions, joint ventures, and minority investments, on both a domestic and cross-border basis.  
• Assisting with the corporate secretarial support for the Company’s Board of Directors.  
• Supporting the Company’s financing activities.
• Collaborating with, advising, and supporting a broad range of departments and functions domestically and internationally, including Internal Audit, Finance, Treasury, and others as needed.
• Assisting with coverage of general corporate and commercial matters, including reviewing commercial and other contracts, as needed.
• Assisting in various other compliance activities throughout the Company, including, without limitation, the development and implementation of annual and long-term strategic compliance initiatives for the Company.
• Assisting in and/or managing the investigation of potential compliance violations and Hotline calls, and monitor investigation trends, if apparent, to identify risk areas for further adjustments to the Company’s compliance initiatives.
• Participating in regional and global compliance meetings.
• Managing outside counsel.

  
Requirements: 
 
The successful candidate will have 7+ years of legal experience with a law firm and/or corporate legal department. A strong background in SEC, M&A, corporate governance and corporate finance is required.  In addition to excellent legal and analytical skills as a corporate attorney, the right candidate will possess outstanding communication and interpersonal skills and an ability to interface with a broad range of senior business executives, and other colleagues and professionals.  

• Juris Doctorate and current bar admission is required.
• At least 7 years of securities and public company reporting experience in a law firm and/or corporate legal department.
• Both public and private M&A experience in a law firm and/or corporate legal department.
• Pragmatic and business-focused mindset with demonstrated ability to take ownership, and to manage multiple projects simultaneously with ability to focus on critical priorities with minimal supervision.
• Highly polished and effective negotiation, communication, and drafting skills, including those suitable for interaction with senior managers and executives.
• Proven ability to lead and execute all facets of challenging transactional engagements—from preliminary/conceptual advice, through structuring, due diligence, negotiating, drafting, closing, integration and post-closing conflict resolution.

Preferred Requirements: 
 

• Prior in-house experience a plus
• Previous experience managing one or more people is a benefit.

Contractor Permanently Barred From Future Home Repair or Remodeling Work

As loyal Blog followers will recall, I have written extensively about the Illinois Home Repair and Remodeling Act (the "Act") for the past several years.  (For instance, the consequences for failure to deliver the Consumer Rights Brochure, the availability of equitable remedies for contractors without written contracts, and an analysis of my Illinois Supreme Court case involving the Act's applicability to subcontractors.)

Until now, all of the published cases involving the Act have involved private disputes between homeowners and contractors.  You will recall, however, that the Act allows the Attorney General or the State's Attorney of any county to bring an action in the name of the people to remedy violations of the Act.  Section 35 of the Act says that all remedies, penalties,and authority granted the Attorney General or State's Attorney under the Consumer Fraud and Deceptive Practices Act shall be available to him or her for enforcement of the Home Repair and Remodeling Act.

In 2009, Attorney General Lisa Madigan filed five lawsuits in Cook County against contractors for violations of the Act.  (See her press release HERE.)  Last week, the First District appellate court issued an opinion in People v. Steven R. Smith.  The State alleged that Mr. Smith violated by the Act, the Consumer Fraud and Deceptive Business Act, and the Roofing Industry Licensing Act.  The State alleged that he was in the business of providing home repair services despite not being a licensed contractor, that he failed to give the Consumer Rights Brochure, and that he took partial payments on jobs but then failed to complete the jobs or refund the money.  

Mr. Smith defended the case pro se (never a good idea ... unless you're THIS GUY).  Mr. Smith failed to answer several paragraphs of the complaint and key allegations were deemed admitted.  As a result, summary judgment entered against him in the trial court.  The court entered a civil penalty of $50,000 against Mr. Smith and also permanently enjoined him from engaging in future home repair or remodeling work in Illinois.  

Mr. Smith argued on appeal that the permanent injunction prohibiting him from future home repair or remodeling work was unduly harsh because it barred him from performing an otherwise lawful activity upon which he depended for his livelihood.  The Appellate Court first noted that a permanent injunction was an available remedy under Section 7(a) of the Consumer Fraud Act.  That section states that "The Court, in its discretion, may impose an injunction..."  So, the Appellate Court stated that it would not disturb the trial court's exercise of discretion absent an abuse of that discretion.  After examining Mr. Smith's widespread practice of accepting deposits from customers but then not performing the work, the Court found that the injunction was reasonable because it was specifically tailored to prohibit the activity underlying Mr. Smith's previous illegal acts.  

So, if Mr. Smith is caught doing home repair and remodeling work in the future, even if doesn't swindle anybody next time, he could be found in contempt of court for the violation of the permanent injunction.

The 7-Year-Old Bankruptcy Debtor

I was doing some bankruptcy research and I came across a case involving a 7-year-old bankruptcy debtor.  I could just stop right there because that is all I really wanted to tell you, but I guess I will give some further explanation.

The case involved a minor child who inherited a house from her father.  During her father's illness, the family fell behind on the mortgage.  After the death of her father, she also began receiving social security survivor's benefits.  Although she was not personally liable on the mortgage, the debtor and her mother wanted to save the house.  

The mother filed a Chapter 13 case as "next friend and mother" of the debtor.  The lender was the only creditor.  The Chapter 13 plan proposed cure the arrearage and make current  mortgage payments with the social security benefits.  The lender did not object to the confirmation of the plan.  The trustee objected, however, on the grounds that the debtor was not eligible for Chapter 13 relief because a parent lacks authority to file bankruptcy on behalf of a minor, absent state court approval.  

The Court first examined whether minors can file bankruptcy.  The Court found no provision of the Bankruptcy Code that requires a Chapter 13 debtor be an adult.  The only requirement is that a Chapter 13 debtor must be an "individual with regular income" pursuant to Section 109(e).  The Court then analyzed the Federal Rules of Bankruptcy Procedure.  For instance, Rule 1016 authorizes the continuation of a case when the debtor becomes incompetent during the administration of a case.  The Court could not infer from the rules that the drafters intended any opinion with respect to the eligibility of an incompetent to file bankruptcy in the first place.  

The final question was whether the mother was required to comply with any appointment or qualification procedures under state law before filing the petition as "next friend" of the minor.  The Court pointed out that  Federal Rule of Civil Procedure 17 (Capacity to sue or be sued) would normally control this issue.  However, Fed.R.Civ.Pro. 17 is not specifically made applicable to bankruptcy cases by the Bankruptcy Rules.  So, the Court turned to the "gap filling" function of Bankruptcy Rule 9029(b).  Rule 9029(b) provides flexibility to the court in regulating practice when there is no controlling law.  That Rule states: "Procedure When There is No Controlling Law.  A judge may regulate practice in any manner consistent with federal law."  

After determining that it could apply Fed.R.Civ.Pro. 17, the Court used that Rule to hold that a minor who lacks a general guardian may sue by next friend and that no special appointment process for the next friend is required.  

HERE is a link to the case.

Latina Women: The Hidden Struggle

The Women’s Law Caucus and Latino/a Law Student Association of NIU-COL is co-sponsoring the presentation, Latina Women: The Hidden Struggle. It will be held on Monday November 12 at 6pm in the Riley Courtroom at Swen Parson Hall, Northern Illinois University. We invite alumni, guests and any other interested parties to come out for our evening presentation. To begin, Professor Arriola will be presenting the obstacles that women on the U.S./Mexican border face. In the second half, Professor Maddali will discuss the difficulties Latina women in the United States face. The presentation will be followed by a reception in the Marshall Gallery.