Illinois LLC Manager Liability For LLC Contract Obligations – Some Basics

In 6030 Sheridan Road, LLC v. Wright Management, LLC, 2011 IL App. (1st) 093282-U, the plaintiff real estate developer sued defendants – an LLC property owner and its principal – for tortious interference with business relationship after a planned condominium conversion tanked. The plaintiff sued when the defendants terminated the condo conversion agreement because of their displeasure with the plaintiff’s handpicked real estate broker and marketing firm. The plaintiff sued claiming the defendants tortiously interfered with plaintiff’s contracts with the broker and marketing firm and caused the plaintiff to breach those contracts. The trial court granted summary judgment for the defendants.

Non-Shareholder of Closely-Held Corp. Can Be Liable Under Piercing Claim – IL Court

The Illinois First District recently considered whether a non-member of a closely-held corporation could be held personally responsible for debts of that LLC in Buckley v. Abuzir, 2014 IL App (1st) 130469, a trade secrets case involving rival Chicago-land bakeries. The plaintiff sued a corporate defendant (a competing bakery) alleging it hired away plaintiff’s top employee and stole plaintiff’s customers and secret recipes. The court entered a default judgment of over $400,000 against the corporate defendant on the plaintiff’s trade secrets claim. When collection efforts failed because the corporation was defunct, plaintiff filed a piercing claim against the individual that funded and con

Is It A Corporate Obligation? Or An Individual/Personal One? Agent of A Disclosed Principal And Br

Sometimes it’s difficult to determine who the contracting parties are. A common example is where the contract text names the parties are two corporations but it’s signed by an individual. Or, the contract signer clearly notes his corporate affiliation (by stating his job title) next to his signature, but the body of the contract states that the parties are individuals (not corporations) or that the signer is personally guaranteeing the corporate obligations. Yellow Book Sales and Distribution Co. v. Feldman, 2012 IL App (1st) 120069 illustrates the importance of signature line clarity in contracts in determining the responsible party if a contract is breached. In Yellow Book, the plaintiff

Copyright Act Doesn’t Pre-empt Shufflin Crew’s Right of Publicity Suit – Northern District of Illino

Dent v. Renaissance Marketing Corp., 2015 WL 3484464 (N.D.Ill. 2015) involves a royalty dispute over the 1985 “Super Bowl Shuffle” – a storied (locally, at least) song and video performed by several Chicago Bears football players – the Shufflin’ Crew – to commemorate the Bears’ Super Bowl thrashing of the New England Patriots that year. And while the case’s connection to football coupled with its celebrity-slash-nostalgia sensibility naturally piques a reader’s interest, the case is legally post-worthy mainly for its useful, quick-hits discussion of the operative rules governing Federal removal jurisdiction and copyright preemption. The lawsuit pits former Bears players against a marketing f

Contractual Disclaimers in Illinois: Social Relationships and Uneven Bargaining Positions

Spears v. Ass’n of Illinois Electric Cooperatives, 2013 IL App (4th) 120289 summarizes the general rules and exceptions that govern exculpatory clauses in Illinois. In the case, the plaintiff college student who signed up for a utility “pole climbing” class the defendant – a non-profit entity – offered through plaintiff’s college. Before she took the class, plaintiff signed a release that immunized the defendant from all claims and injuries that could result from the class. The plaintiff sustained a serious knee injury while descending a utility pole and sued the defendant for negligence. The defendant moved for summary judgment based on the release. The trial court denied the summar

Lindsay Lohan’s Privacy Suit Versus Rapper ‘Pitbull’ Sunk By First Amendment (2013 – NY)

Lindsay Lohan is in the legal news again, giving us an excellent opportunity to illustrate some legal principles about the unauthorized use of a celebrity’s name (be it Lindsay Lohan or Rosa Parks) in a song or other artistic work. Ms. Lohan has let her lawyers loose on the rap singer Armando Perez, better known as “Pitbull.” Mr. Pitbull has created a song that, according to Ms. Lohan, contains an “unwarranted, unauthorized, and unfavorable” mention of her name in the lyrics. Unthinkable! Specifically, Pitbull raps the following couplet: “So, I’m tiptoein’, to keep flowin’/ I got it locked up like Lindsay Lohan.” Poetry and hip-hop enthusiasts will appreciate the triple rhyme of “flowin”, “t

Getting Default Money Judgments In Copyright Lawsuits – A Case Note

Malibu Media, LLC v. Funderburg, 2015 WL 1887754 (N.D.Ill. 2015) discusses the governing standards for obtaining a default judgment in Federal court in a decidedly post-modern fact context. The plaintiff adult film producer sued the defendant for copyright infringement based on the viewer defendant’s unauthorized movie downloads. Defendant orchestrated hundreds of movie downloads over a span of about three months through the BitTorrent file sharing system. BitTorrent basically allows a user to download component parts or “bits” of a file, send them to others (“peers”) who then splice the bits together to make a cohesive whole file. When Defendant failed to respond to the Complaint, the pla

Liquidated Damages In Illinois Contracts: Some Quick Hits

Liquidated damages clauses appear frequently in a variety of commercial contracts and similar agreements. Several Illinois cases – some old and some very recent – examine liquidated damages clauses in multiple factual settings. Here are some bullet-point liquidated damages rules, gleaned from the caselaw: – Liquidated damages clauses are enforceable where: (1) the parties intended to agree in advance to the settlement of damages that migikht arise from a breach;(2) the amount provided as liquidated damages was reasonable at the time of contracting, bearing some relation to the damages which might be sustained; and (3) the actual damages would be uncertain in amount and difficult to prove; –

Landlord’s Five-Day Notice That Ends On a Sunday Dooms Eviction Suit (Illinois 1st Dist.)

Holsten Management Corp. v. Diaz, 2014 IL App (1st) 131261-U vividly illustrates the dire results that can flow from a landlord’s failure to follow statutory eviction requirements to the letter. The plaintiff landlord issued a five-day notice after the residential tenant fell behind in her rent payments. The notice was issued on a Tuesday and it expired on a Sunday. The notice specified that the tenancy would be terminated on October 21, 2012 – a Sunday. The tenant didn’t pay and about four months later, the landlord filed an eviction suit. The tenant filed a 2-619 motion to dismiss on the basis that the landlord’s notice was defective since it required payment before it was legally due.

The Illinois Commercial Real Estate Broker’s Lien Statute: A Top 10 List

The Illinois Commercial Real Estate Broker’s Lien Act, 770 ILCS 15/1 (the “Act”), provides a broker whose owed commission money with a strong remedy against a breaching property owner, buyer or tenant. Here are some of the Act’s key provisions: 1. What It Applies To: “Commercial real estate.” This is defined as any real estate in Illinois other than (i) real estate containing one to 6 residential units, (ii) real estate on which no buildings or structures are located, or (iii) real estate classified as farmland under the Property Tax Code. 770 ILCS 15/15 2. What It Doesn’t Apply To: Real estate that isn’t “commercial”, including single family residential units like condominiums, townhouses

Corporate Successor Liability In Illinois: The General Rule and Exceptions

Corporate successor liability’s focal point is whether a purchasing corporation (Company 2) is responsible for the purchased corporation’s (Company 1) pre-sale contract obligations. It’s an important question because the Company 1 will usually have no assets after the purchase. Creditors of Company 1 will then try to pin liability on Company 2. The general rule in Illinois is that a corporation that purchases the assets of another corporation is not responsible for the debts or liabilities of a transferor corporation. The rule is designed to protect good faith purchasers from unassumed liability and to maximize the fluidity of corporate assets. The four exceptions to this rule are: (1) wher

Constructive Fraud in Illinois Mechanics’ Lien Cases: A Case Study

Here’s one from the vault. While dated, the case is ironically timely because of its cogent discussion of important and recurring mechanics’ lien litigation issues. In Springfield Heating and Air Conditioning, Inc. v. 3947-55 King Drive at Oakwood, LLC, 387 Ill App 3d 906 (1st Dist. 2009), the First District examined the concept of constructive fraud and discussed when a subcontractor can bring alternative unjust enrichment and quantum meruit claims in a lien suit. The plaintiff was a subcontractor who installed HVAC materials on a construction project consisting of two adjoining properties for a total contract sum of about $400,000. When the general contractor fired it, the plaintiff li

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