The dog ate my homework...

...and the cat downloaded my child pornography.

Keith R. Griffin, of Martin County, Florida, was charged Wednesday with 10 counts of possession of child pornography after detectives found more than 1,000 child pornographic images on his computer, according to a news release.

Griffin told detectives he would leave his computer on and his cat would jump on the keyboard. When he returned, there would be strange material downloaded.

Damn perverted cats. That is why I like dogs. Full article here.

Successor Liability

Last month I took a very large default judgment against a local construction company. Their attorney claims that they have "gone out of business" and that a "new corporation" is now in control. I sometimes drive by their office/warehouse which is located on prime real estate right on a local highway. They seem to be operating at full strength. They have about a dozen vans and trucks out front with their name on them, along with what appears to be a large amount of inventory, equipment, tools, etc.

A search of the Secretary of State's website reveals that my defendant corporation is dissolved, but that there are several different, newer corporations in existence. The new corporations' names are all very similar to that of my defendant and they are all seem to be run by the same people. I have served the president of my corporate defendant with a citation to discover assets and I believe that he is also the president of the new corporations.

In preparation for his citation, I have been researching the areas of fraudulent conveyances and successor liability. Conveyances of assets from one party to another can be set aside if a court finds that there was an intent to defraud the creditors of the transferring party. A discussion of the laws relating to fraudulent conveyances will be discussed more fully in a later post.

This post deals with successor liability. Successor liability comes into play when one company buys the assets of another company. Generally, the purchaser tries to buy those assets free and clear of the seller's debts and liabilities. When successor liability is imposed, a creditor of the seller can proceed against the assets of the purchaser.

There are four categories of successor liability recognized by Illinois courts. See Vernon v. Schuster, 179 Ill.2d 338 (1997). I will comment briefly on each.

Intentional assumption of liabilities

To make this determination, you need to look to the purchase contract between the two organizations. The general rule is that the purchaser does not assume the liabilities of the seller absent a specific contractual agreement to the contrary.

De facto mergers

The courts will look to whether there was a continuation of the enterprise of the seller corporation. For instance, is there a continuity of management, personnel, physical location, assets, or general business operations? Are the owners of the old corporation now working at the new corporation? Etc. If so, you may argue that it is a de facto merger and that successor liability should attach.

The business continuation exception

For this theory, the courts will look to see if there is a continuity of ownership in the two organizations. For instance, is there a continuity of officers, directors, or shareholders? If so, you can argue that the new company is simply a continuation of the old company. This argument should be used when the assets were seemingly purchased for fair market value. If they were not, see the last category.

Fraudulent schemes to escape liability

If the seller's shareholders sell the assets of the company for less than fair market value to another company in which they also hold an ownership interest, or to other "insiders," the courts can impose successor liability.

Did you see Dean Pernell's picture this morning?

Less than one year after leaving NIU and taking over as Dean at the Florida A&M University College of Law, Dean LeRoy Pernell has succeeded in gaining full accreditation for the school from the American Bar Association.

Full article here.

New Search Feature

A new search box appears about half-way down on the right side of this blog. You can now search all of the content and links which have appeared on this site.

Great client.

I'm sure most of you have heard about the defamation suit filed by the Cook County landlord against one of its tenants for comments allegedly made by the tenant on twitter.

I don't have any comments about the merits of that lawsuit. But I do like the mentality expressed by the landlord's representative in the Sun-Times article this morning.

"We're a sue first, ask questions later kind of an organization," he said, noting that the company manages 1,500 apartments in Chicago and has a good reputation it wants to preserve.

I need more clients like that guy.

Mandatory Arbitration is a Mandatory Waste of Time

Those of you who practice civil law know that cases which are deemed less than a particular jurisdictional amount are assigned to the mandatory arbitration call. Presumably, this is supposed to provide a more efficient way of disposing of "lesser" cases. Unfortunately, it does the exact opposite. Anyone that has participated in mandatory arbitration will know what I am driving at.

There really is no great victory at an arbitration hearing. Case in point. Assume, as a plaintiff, you put on your absolute best case and the abitrators give you a great award. The judgment is not worth the paper it is written on. Since the other party has the right to reject the award, pay a nominal fee, and proceed to trial, your great award will last a mere 30 days. Likewise, if a defendant obtains a low judgment or the ultimate victory, a not guilty, the plaintiff will reject the award and proceed to trial. Hence, you are left with a plaintiff who must tries his or her best to present a case that is strong, but not too compelling, since ultimately that good award will be rejected and a defendant who must make sure that a not guilty does not occur.

What are you left with? A long delay in getting the case to arbitration and one side having to pay an additional fee so that you can proceed to jury trial when you should have been on that path to begin with.

The better option would be an optional arbitration system. If two parties would like to see if they can resolve the case before a 1 or 3 panel arbitration, they can share the fees and reject without consequence. Indeed, cases are often disposed of more efficiently, with both parties relatively comfortable with the outcome, during voluntary mediation.

Agreed Orders

Can a party vacate an agreed order? That was the question answered by the court in Rolseth v. Rolseth, 907 N.E.2d 897 (Ill.App. 2 Dist. 2009), which originated out of Kane County.

In that case, the former husband petitioned to declare the nonexistence of a parent-child relationship between him and two of his former wife's children for whom he had been paying child support. That petition was resolved by way of an agreed order. Thereafter, the former wife filed a motion to vacate the agreed order. Her motion was denied and she appealed.

The appellate court noted that an agreed order is not an adjudication of the parties' rights, but rather a record of their private, contractual agreement. The court further noted that once an agreed order is entered, it is generally binding on the parties and cannot be amended without the consent of each party.

There are exceptions to that general rule, however. After a discussion of the case law and statutes dealing with modifying and vacating agreed orders, the court held that agreed orders may be modified or vacated only upon a showing that meets the standard applied to Section 2-1401 petitions, which require a showing of a meritorious defense or claim as to the underlying issue.

New Forms Archive

Check out the new Forms Archive section beneath the contributors' names on the right side of the page. After posting a link to a new subpoena form that I created this morning, I thought that we should have a place where all of the contributors could post their forms. It would be nice to eventually have form complaints, motions, etc.

If anyone wants to post a form, let me know and I can send you the link for full access. Also, if anyone desires a form, post a request and one of our contributors will hopefully be able to upload a copy.

New Subpoena Form

As of June 1, 2009, subpoenas in Illinois civil actions can now be issued by attorneys. This is obviously more convenient than driving to the courthouse every time you need to issue a subpoena.

735 ILCS 5/2-1101 now provides that "An attorney admitted to practice in the State of Illinois, as an officer of the court, may also issue subpoenas on behalf of the court for witnesses and to counties in a pending action."

I am not aware of any circuit clerks that have printed new forms yet. I have heard some lawyers say that they are using the old forms, but just signing their own name on the line where the circuit clerk used to sign.

There is a new form being circulated on the ISBA email exchange which provides a spot for issuance by the clerk, or issuance by an attorney. I have modified the form to suit my personal preferences.

Here is a link to the document. Feel free to modify this form for your own use.