ILLINOIS ADOPTS FEDERAL DOCTRINE OF ADVERSE DOMINATION. In a case of first impression, the Illinois Appellate Court, 1st District, has recognized the equitable Federal Doctrine of Adverse domination which tolls the statute of limitations for claims by a corporation against its officers and directors during the time that those officers and directors remain in control. Plaintiff, the successor general partner of a limited partnership, sued officers and agents of the former general partner, alleging the conversion of $2.4 million. Lease Resolution Corp. vs. Dennis Larney and Midland Capital Corporation, No. 1-98-2569 (9-23-99) Cook Co. http://www.state.il.us/court/1999/1982569.htm Look for an appeal to the Illinois Supreme Court.
PUBLIC, LEGISLATORS RESISTANT TO E-COMMERCE TAXATION. Nearly 75% of the public opposes an Internet sales tax, according to a recent Gallup Poll, and 36% of Internet users who are registered voters would refuse to vote for a political candidate who supports taxes on Internet purchases. Concerned that the Advisory Commission on Electronic Commerce, created by Congress last year, was studying "how to tax the Internet, rather than whether to tax [it]," House GOP leaders have written a letter to the Advisory Commission, expressing their opposition to E-Commerce taxation.
DIMINUTION IN VALUE IS PURELY ECONOMIC LOSS, NOT "PHYSICAL INJURY" SO AS TO TRIGGER INSURANCE COVERAGE. Discovery of a defective plumbing system did not trigger policy coverage to repair or replace it, the 1st District Appellate Court has ruled. Overruling Eljer Mfg., Inc. vs. Liberty Mutual Insurance Co., 972 F2d 805 (7th Cir., 1992), the Court held that the "physical injury" requirement to invoke coverage under the typical comprehensive general liability policy is not triggered by the discovery, but that since repair and replacement may result in physical damage, policy coverage would be activated, and it is not necessary to wait until the plumbing springs leaks. Travelers Insurance Co. vs. Eljer Manufacturing, Inc., Nos. 1-98-2881 and 1-98-2883 (cons.) (9-9-99) Cook Co. When posted, the case will be found at http://www.state.il.us/court/appellates/1999/1982881.htm
SELF-STORAGE FACILITY HAS LIEN ON unowned property. Even though the person storing property in a self-storage facility does not own or control the property, and has no right to possession of the property, by statute, the http://www.legis.state.il.us/ilcs/ch770/ch770act95.htm, the owner of the self-storage facility has a lien on all such property. Estate of Downs vs. Webster, No. 3-98-0744 (9-3-99) Knox Co. When posted, the decision can be found at http://www.state.il.us/court/appellates/1999/3980744.htm
NON-COMPETE AGREEMENT UPHELD; POSNER DISSENTS. Construing Illinois law, which is antagonistic to non-compete agreements, the 7th Circuit has upheld a non-compete agreement in a case in which defendant's competing temporary industrial staffing business gained 12 clients of its former employer shortly after beginning to compete in violation of the non-competition agreement. Chief Judge Possner dissented on the ground that defendant had not taken any trade secrets of his employer, as is required under Illinois law. Read Possner's dissent for a comprehensive review and analysis of Illinois law with regard to non-compete agreements. Outsource International, Inc. Vs. Barton, No. 98-2808 (9-17-99) Appeal, N.D.Ill., E. Div. Aff'd http://www.kentlaw.edu/7circuit/1999/sep/98-2808.html.
REQUIREMENT TO USE "BEST EFFORTS" GRANTS REPRIEVE TO LOOP LAWYER-SUBTENANT. After subleasing premises at 3 1ST National Plaza from Sublessor which was subject to early termination, loop lawyer learned that Sublessor gave notice to Lessor of early termination, but did not advise him. However, lease clause requiring Sublessor to use "best efforts…to assist in relations" with Landlord imposed independent duty to notify him of its decision to terminate, so that he could pursue negotiations directly with Landlord. Coleman vs. Madison Two Associates, No. 1-98-1064 (9-10-99) Cook Co. http://www.state.il.us/court/appellates/1999/1981064.htm
"LET BUYER BEWARE" PREVAILS IN SPITE OF UCC. Innocent purchaser of Chevrolet Camaro purchased in the ordinary course of business was not protected by the Uniform Commercial Code provision for Protection of Buyers of Goods 810 ILCS 5/9-307(1). Plaintiff bank had delivered its certificate of title to the Secretary of state, listing itself as lienholder, as required by statute, thereby perfecting its security interest. Thereafter, debtors placed Camaro with auto dealer, who sold it to Defendant. Defendant argued that 810 ILCS 5/9-307(1) applied to him, as it protected a buyer against a security interest created by his seller. But court ruled that seller to defendant did not create security interest, and so instead, 307(2) applied. http://www.legis.state.il.us/ilcs/ch810/ch810act5articles/ch810act5Sub49.htm. and defendant lost the car and his money. Milledgeville Community Credit Union vs. Corn, No. 2-98-0670 (Sept 2, 1999). http://www.state.il.us/court/1999/2980670.htm
STATUTE OF FRAUDS DEFEATS CLAIM, BUT PLAINTIFF ENTITLED TO QUANTUM MERUIT. Pursuant to complex contract for services partly in writing, and partly oral, Plaintiff claimed fees due him, and Defendant countered that oral modification did not comply with Statute of Frauds. However, the Court ruled that Illinois law permits parol evidence of oral modifications which are not prior to or contemporaneous with the signing of the agreement, and will admit evidence of later oral modifications through parol evidence. But Illinois law also prohibits enforcement of such agreement unless it can be completed within 1 year, which this agreement could not, although Plaintiff entitled to quantum meruit for his services. Fischer vs. First Chicago Capital Markets, Inc., No. 98-2656 (9-20-99) Appeal, N.D. Ill, Rev'd and Rem'd. http://www.kentlaw.edu/7circuit/1999/sep/98-2656.html