Illinois Department of Insurance Cautions Insurers re Y2K Loss Exclusions. The Illinois Director of Insurance has sent notice to all Illinois insurers advising that blanket exclusions on commercial policies for Y2K losses are prohibited unless supported by valid underwriting data. Since this problem has never happened before, there is no valid underwriting data. Some commercial insurers are sending their customers "surveys" regarding their Y2K status, in an attempt to gather information for underwriting purposes. Depending on your client's response, the insurer may acquire enough information to justify excluding coverage. If your client doesn't respond, the insurer may be permitted to terminate coverage without penalty. See the Department's home page at http://www.state.il.us/ins/default.htm, and search for Year 2000. **Watch this space for an upcoming Y2K issue. **
H.R. 30 "Financial Information Privacy Act" Prohibits Obtaining Consumer Information by False Pretenses. A new proposed "Financial Information Privacy Act of 1999," has been introduced as House Resolution 30. The Bill would prohibit the act of obtaining consumer information by false pretenses from a financial institution, or deceiving any party to release information, or even employing someone to get the information, knowing that they might violate the Act. The Bill contains civil and criminal penalties, and if passed, may impact learning the location of defendants, securing asset information, and collecting of judgments. For the complete text, see http://thomas.loc.gov and search for HR 30.
Change to Employee Handbook Not Binding on Employee Who Stays. An employer's unilateral modification to its employee handbook to disclaim any employment contracts and institute an at-will employment relationship is not binding to those employees who were hired before the modification, as being without consideration. Continuation of employment constitutes consideration only in a case where the employer who had no employment handbook merely codified existing rules. Doyle vs. Holy Cross Hospital, No. 83875 (2-19-99). Full text at http://www.state.il.us/court/supremes/83875.htm
"Consultant Privilege" No Defense to Action for Interference with Contract. A business and computer system consultant advised plaintiff to cease its installation of a computer software system consultant said would not work, in favor of another program with which he was familiar (but which did not have a necessary component). When the system he preferred failed, plaintiff sued him for interfering with its contract with the previous software company. Defendant consultant could not rely on the privilege, the court ruled, because he gave advice outside the area of his employment, and he did it for his own financial gain. J.D. Edwards &Co. Vs. Podany, No. 9802486 (2-22-99) Appeal N.D.Ill., E.Div., Aff'd. For full text, see http://www.kentlaw.edu/7circuit/1999/feb/98-2486.html
D&O Policy Collides with "Insured versus Insured" Provision. Presence of officer of one of plaintiff's subsidiary corporations as one of several plaintiffs in underlying lawsuit permitted defendant-insurers to deny coverage based on "insured versus insured" exclusion in policy. However, insurers could not deny all coverage, but only portion based on that officer's involvement. Level 3 Communications, Inc. vs. Federal Insurance Co. and Pacific Insurance Co., # 98-2094.For complete text, see http://www.kentlaw.edu/7circuit/1999/feb/98-2094.html
"Voluntary Payment Doctrine" Defeats Plaintiff's Contract Claim. Plaintiff cell phone user's action against Ameritech alleged that, in spite of his contract's price guarantee, the company had illegally charged him an additional $.02/minute interconnect fee. Although such additional charges were illegal, plaintiff's claim was defeated by the voluntary payment doctrine, which requires only that money was voluntarily paid under a claim of right to the payment, and with knowledge of the facts by the person making the payment. Dreyfus vs. Ameritech Mobile Communications, Inc., 298 Ill.App.3d 933, 700 N.E.2d 162, 233 Ill.Dec. 61 (1998).
Proposed New Legislation - Eminent Domain, Illinois, Senate Bill 26 Expect a proposed comprehensive rewrite of Illinois' eminent domain statute this legislative session. Among other things, Senate Bill 26 sponsored by Senator Petka (R-Plainfield) is expected to prohibit the government from condemning private property, and then selling it to another private party, and to require a condemning plaintiff to notify defendant landowner before making any public announcement.
Proposed New Legislation - RULPA I, House Bill 478 House Bill 478 (Cross, R-Yorkville) would change the law to provide that an assignment of a partnership interest entitles the assignee to share in the financial gains or losses of the partnership, to the extent of the assignment. It would also provide (unless the partnership agreement is to the contrary) that the granting of an encumbrance against a partnership interest of a partner would not cause the partner to cease to be a partner; that the assignee would have no liability as a partner solely as a result of the assignment; and that a limited partnership could acquire a partnership interest.
Proposed New Legislation - RULPA II, House Bill 477 House Bill 477, also sponsored by Cross, R-Yorkville, would provide that a limited partnership agreement controls when a general partner may withdraw, and may also provide that the general partner is prohibited from withdrawing from the partnership. In addition, the bill proposes that the partnership agreement may also provide that a general partner may not assign a partnership interest in a limited partnership before its dissolution and winding up, and proposes several other changes in partnership law.
Airport Hangar Leased by Corporation was "Other Office" In a case of first impression in Illinois, the Appellate Court has ruled that a hangar leased by a corporate employer at an airport was an "other office" within the meaning of the venue provisions of the Code of Civil Procedure. In the record were the facts that the corporation's airplane, registered to the employer, was housed at the hangar, that employer's two full-time pilots reported there for work every day, that the hangar was equipped with a telephone and desk, and that a large sign on the hangar indicated the company's presence there. Melliere vs. Luhr Bros., Inc., 1000 WL 14291 (Ill.App.5 Dist.)