Northern Law Blog

Foreclosure Crisis--Drawing down principal

2009-11-09T10:41:00.004-06:00

One of the major issues in States such as Arizona, Nevada, and California is the amount that homeowners find themselves "underwater." Even in homes where egregious fraud is not found, homes that sold for $330k not too long ago, can now be worth $160k or less based upon the fraudulent practices around them .

This puts the homeowner in a difficult position. They can't sell their home and they won't be in a position to acquire equity for years to come.

The answer to this issue is simple in theory...draw down the principal to reflect the current market value.

How?

That's not so simple.

Last Spring, part of the Obama plan included a legislative provision that would allow certain homeowners to address their grievances in bankruptcy court. The court would have had the authority to review cases where the homeowner could have their loans modified by the judge, and effectively draw down the principal of the loan to reflect current market value.

This provision was defeated in the Senate, which prompted Sen. Dick Durbin to make his now famous statement:

"The banks--hard to believe when we're facing a banking crisis--that many of the banks created--are still the most powerful lobby on Capitol Hill. And frankly they own the place."

Major Banks are unwilling to address principal reduction. Excuses are made, but effectively the issue revolves around the detail that if they reduce one home's principal, they fear a series of phone calls requesting principal reductions across the board.

Amongst the many plans that have been brought forth to effectively reduce the principal burden on the homeowner such as the "soft second," is an idea that may still be in its infancy, but may have some legs once it becomes more well known and specifics of the plan are worked through.

The concept revolves around short sales. Banks in the southwest region of the U.S. have shown a willingness to approve a short sale at 80, sometimes 70% of the current market value of the home. Banks have also shown the ability to report the homeowners action effectively as a deed in lieu transaction, which would only put the homeowner's credit impact in peril for a year, allowing them to apply for an FHA loan after one year.

The idea would then entail finding an investor who is willing to purchase the home at the 80% of current market value, rent to the original homeowner for one year, and then resell the home to the homeowner at the FHA appraised home value at the end of the year.

In a state such as Arizona, where predatory lending practices run rampant, finding a trustworthy investor poses a problem. The investor must be willing to abide by a pre-drawn contract at time of short-sale, and sell the home back when the time comes. Many of these homeowners cannot afford a trip to court, and the snakes in the grass know this.

What if a municipal, county, non-profit, or church were to be a large-scale investor in the short-sale principal reduction plan? The entity could not only ensure stabilization of homes and families in the area, but they would potentially see a profit of near 20% at the time of sale, along with a modest monthly income from the lease of the homeowner. The homeowner would have to keep their credit clean for the time period they are "renting" and would have to then come up with a down payment to secure a loan at the end of the year. (FHA loans require 3.5% down)

Regardless of which plan is used to draw down principal, one thing is clear--principal reduction is necessary to stabilize the housing market. In some states, (Arizona for one) lenders were responsible or knew of appraisal fraud, steering practices, charging excessive or unearned fees, and targeting vulnerable populations--knowing full well that no attorney would be present at closing to represent the interests of the soon to be homeowner. If the major lenders were not complicit in these acts, they definitely knew or should have known these practices were taking place and rewarded the practices in one form or another (RICO anyone?).

The burden of losses should not be shouldered by a population that was targeted, and ended up losing any and all equity or down payments invested in the property.

At some point, the beneficiaries of the years of incompetence need to pony up.

Arpaio Deputies Caught in the Act

2009-11-05T14:48:00.004-06:00

Last week I wrote a lengthy post on Sheriff Joe Arpaio and inferenced the notion that his office follows no rule of law. It is widely known out here in the southwestern desert that the Maricopa's Sherriff's Office do as they please.

Unbelievably, one of Sheriff Joe's Deputies were caught on tape. In this video, a defense attorney is speaking to the judge. Watch the Deputy in the back, walk towards the defendant, begin to peruse the attorney's files, call another Deputy over and then steal a few documents from her.

I'm sorry for dwelling on this guy, but you just can't make this stuff up.

UPDATE: CNN's Rick Sanchez reported and showed the video during CNN's Newsroom this afternoon, calling for the attention of the Justice Department.

Penalized for settling a case?

2009-10-30T20:10:00.007-05:00

I had an arbitration hearing scheduled this week in Waukegan. It was a breach of contract case against a Lake County home builder concerning about $30,000 in unpaid invoices. I represented a material supplier. It was a simple collections case. There were no defenses.

Someone from the Arbitration Center called me about a week before the hearing to see if we were still going. I told her that I hoped the case would settle, but at that point we were still going to hearing.

I have had other cases in the past with the opposing attorney. He is a very reasonable guy and a good lawyer. Our other cases had settled. I had already called him to see what his client was proposing. They did not even try to assert a defense in their 222 disclosures. He said he would talk to his client and get back to me.

The Arbitration Center called two more times before I heard back from him. I told them I was working on it and that I would let them know if the case settled.

Opposing counsel finally got back to me the day before hearing. His initial offer was inadequate, but my client was willing to make some minor concessions to avoid having to send a witness. We went back and forth a little bit, but by 5:30 on the day before hearing, the case had not settled.

The following morning, his client was in a meeting and unavailable by telephone. By 10:00, they had not responded to our final offer. So, I took off for Waukegan (from Aurora), but left instructions with my receptionist to forward any calls to my cell phone.

At about 11:00, opposing counsel called and we settled the case while I was driving north on 294. He said he would call the Arbitration Center to let them know. I still planned to go up there to enter the order.

When I got there, the Director of the Arb Center was upset! She said that she could move for sanctions against us!!! She said that there was a local rule requiring that settlements occur at least 24 hours prior to an arbitration hearing so that they don't have to pay the arbitrators!!

I couldn't believe it. I told her to go right ahead and move for sanctions. I told her that if I could have forced the defendant to pay us earlier, I would have done that three months ago!

She then said not to worry about the sanctions, but to keep it in mind for next time.

I have since read the 19th Circuit Local Rules. I don't see anything like the rule she described. I see where she was coming from, but sanctioning us for settling the case...that would be a little ridiculous, don't you think?

Expert Testimony and the Dangers of Email

2009-10-28T02:26:00.004-05:00

A case in Illinois has recently been brought to my attention. As most of us know, expert testimony is often times essential to proving a case.

In the case that I mentioned, correspondence between the experts through email was made public.

How you ask?

Through the Freedom of Information Act.

Most experts are considered as such due to their involvement in University research. Thus they are often times, in the cases of Public Universities, State employers. Thus their emails and who knows what else (notes, research, etc.) can be viewed as public domain and thus received through the Freedom of Information Act.

This obviously can be damaging to any case and I urge each of you to inform attorneys using experts to be aware.

NIU Grad Expands the Rescue Doctrine

2009-10-26T20:00:00.000-05:00

Melinda Rowe-Sullivan (NIU Law 2003) successfully argued a matter of first impression before the Illinois Appellate Court, Third District, concerning the rescue doctrine.

Melinda represented the plaintiffs in Strickland v. Kotecki, 03-07-0831 (July 15, 2009). The plaintiffs in that case were the sister-in-law and brother-in-law of an individual who attempted to commit suicide (Kevin). Kevin's wife discovered that he was missing from the house and, for reasons not disclosed in the opinion, feared that he was about to commit suicide. She called her sister and brother-in-law for help.

The three of them eventually located Kevin's vehicle in a fenced-in business property. Kevin was in the vehicle and there was a hose running from the exhaust pipe to the passenger window. The brother-in-law jumped over the fence to rescue Kevin, but he injured his foot in the process. The brother-in-law then sued Kevin under the rescue doctrine.

The rescue doctrine had previously applied only to situations where a third party negligently places another person in danger. If someone is injured while attempting to rescue the person from danger, the rescuer can sue the third party for his or her negligence. Illinois courts had not decided whether the rescue doctrine allows a rescuer to bring a negligence action directly against a person who places himself in danger. The trial court dismissed the plaintiffs' complaint based upon that distinction and they appealed.

As this was a matter of first impression in Illinois, the appellate court looked to the laws of other states. The court found that every other state that considered this issue had allowed a rescuer to recover from people who place themselves in danger. Like the other states, this court found no logical reason to distinguish situations situations where defendants place someone else in danger from situations where defendants place themselves in danger. For that reason, the trial court's dismissal was reversed.

Great job Melinda! Another victory for NIU!

Arpaio Article

2009-10-25T05:23:00.000-05:00

For those interested, here is the Pulitzer Prize winning article by the East Valley Tribune on Sheriff Joe's office.

It's a five part piece, but if you have the time give a read.

287 g: A path to Barbarism

2009-10-25T01:51:00.000-05:00

For those of you not familiar with Immigration Law, Section 287 (g) of the Immigration and Nationality Act has caused quite a stir over the last 15 years.

287g Sec 1 states:

The Attorney General may enter into a written agreement with a State, or any political subdivision of a State, pursuant to which an officer or employee of the State or subdivision, who is determined by the Attorney General to be qualified to perform a function of an immigration officer in relation to the investigation, apprehension or detention of aliens in the United State, may carry out such function at the expense of the State or political subdivision.

Essentially the law allows localities jurisdiction in matters of federal immigration law. On the surface the law makes sense. The federal government is limited in resources and personnel dedicated to immigration and several states have had growing complaints over the years as a result. This law seemingly allows local law enforcement to fill in the gaps.

Now, 2 years ago while I was living in Illinois I may not have thought much of 287 (g). It seems to make sense and under the direction of a responsible executor, may be a useful apparatus for controlling immigration issues.

The problem 287 (g) faces is that too much authority is given to each “political subdivision” and in essence there are now hundreds of different immigration policies throughout the United States, rather than one all encompassing rule of law.

Many of you may be familiar with our infamous Sheriff Joe Arpaio from Maricopa County---self-proclaimed America’s Toughest Sheriff. He recently has made his rounds on all the national media outlets thumbing his nose at DHS and is currently under investigation by the Justice Department. He has had over 2,700 lawsuits filed against him. Until one gets a close up view of the utter disregard for rule of law and complete abuse of power his office engages in, the dangers of 287 (g) are not so apparent.

Rumors swirl of his political alliance with members of the Nazi party, his immigration sweeps of all “brown” people, and his mistreatment of prisoners. You would think that the more you dig around for truth, the more inaccurate some of the legends would be—but that has not been my experience. I have only found the truth to be more abhorrent than the myth.

He has taken the liberty of storming (literally) City Halls in pursuit of illegals, spends his time raiding car washes and indiscriminately placing traffic check points around the county arresting and/or detaining anyone of suspicion. Meanwhile, he completely disregards crime and criminals violent in nature. Not to mention his actions have resulted in suppressing community participation of reporting crimes. I recently heard one family had their home violently broken into 7 times in broad daylight before deciding to call local law enforcement. This was just due to the fear that has been associated with all police officers in the area, even though that fear is unwarranted in many cases. Not all police down here are Arpaio.

How does he decide who is suspicious? Consider this interview he recently conducted on October 8^th with CNN’s Rick Sanchez:

Sanchez: You just said you detain people who haven’t committed a crime—how do you prove they’re not illegal?

Arpaio: It has to do with their conduct, what type of clothes they’re wearing, their speech, they admit it, they may have phony ID’s. A lot of variables are involved.

Sanchez: You judge people and arrest them based on their speech and the clothes they’re wearing sir?

Arpaio: No, when they’re in the vehicle with someone who has committed a crime. We have the right to talk to those people. When they admit that they are here illegally we take action…the federal law specifies the speech, the clothes, the environment, the erratic behavior. It’s right in the law.

Oh yea? Where?

Sheriff Arpaio has also been quoted by a GQ reporter as saying, “All these people that come over, they could come with disease. There’s no control, no health checks or anything. They check fruits and vegetables, how come they don’t check people? No one talks about that! They’re all dirty.”

These are the quotes he makes publicly when he is on his best behavior.

It may be easy to take the approach that he is doing his job, these are illegals after all. But what has to be understood is that he is tearing mothers away from their crying children(American citizen children)—literally. Then you see people just trying to make a living, survive, and see them treated worse than animals or the deadliest of criminals. Watching this makes your heart sink.

There are pretty reliable rumors that Arpaio also abuses his power in regards to people he considers political enemies. Several individuals, including law enforcement officers in the area, have claimed that their homes have been bugged. Can you imagine it, a cop bugging the home or office of another cop? What world is this I have stumbled unto?

Recently, Arizona’s former governor Janet Napolitano , now acting Secretary of Homeland Security, unveiled an attempt to repair the immigrant detention system. It seems a letter written by Reps. Nydia Velazquez, D-NY and Luis Gutierrez, D-IL prompted the change.

“We do not believe that allowing state and local police to racially profile and target our immigrant communities inspires confidence in our ability to enact (comprehensive immigration reform),” the letter continued, “It is our experience that state and local law enforcement officials actually use their expanded and often unchecked powers under the program to target immigrants and persons of color. It is our opinion that no amount of reforms, no matter how well-intentioned, will change this disturbing reality.”

In Maricopa County, the new agreement would limit Sheriff Joe and his deputies to checking only the immigration status of jail inmates. The unintended consequences of which, could actually see an increase in arrests and detention in order to check immigration status among inmates.

If this is going on here, what is going on elsewhere? Who knows? And the problem with that is we now have hundreds, if not thousands, of local communities engaging in what they consider to be immigration law. Until the federal government takes control of the situation and reigns in the power it now gave away to any renegade Sheriff who wanted it, these abuses will continue.

What is the real Rule Number 1?

2009-10-23T11:38:00.000-05:00

This article talks about a criminal case in Washington state where the jury came back with a not guilty verdict. The defense lawyer then asked for the jury to be polled. When the first juror was asked to confirm the verdict, she said that she didn't actually agree with it and there must have been a mistake. After further deliberations, the jury found the defendant guilty.

This legal blog suggests that the defense lawyer violated the practice of law's Number 1 Rule, which is "when things are going in your favor, STOP TALKING!" The blog also suggests that there are at least two other Rules Number 1, "always get paid," and "avoid a personal jail sentence."

I can't decide which Rule Number 1 is my favorite. I think the one about getting paid. What about you guys? Or does anyone have any other suggestions for a new Rule Number 1?

Subcontractor's Sixty Day Notice

2009-10-22T14:59:00.000-05:00

Section 5(b)(ii) of the Illinois Mechanics Lien Act requires that subcontractors supplying services or materials to a single family, owner-occupied residence must send notice to the occupants within 60 days from the date of first supplying services or materials. That section also sets forth the contents of the notice.

The purpose of the notice is to protect the homeowner from having to pay twice for a subcontractor's work. Upon receipt of the subcontractor's notice, the owner knows that he should demand a sworn statement before paying the general contractor. The sworn statement should list all of the subs. The owner can then withhold the monies due to the subs and pay them directly, or if he receives lien waivers signed by the subs, he can pay the general contractor the whole amount.

However, is a subcontractor's failure to serve the 60 day notice fatal to its mechanics lien claim as a matter of law?

No, it is not, according to the court in Crawford Supply Company v. Schwartz, 1-09-0900 (September 25, 2009). In that case, the plaintiff was a plumbing subcontractor who filed suit to foreclose its mechanics lien. Plaintiff had properly served its 90 day notice of claim and had also recorded its lien within 120 days of completing the work. However, the plaintiff did not serve the 60 day homeowners' notice, so the defendants moved to dismiss. (Click here for a quick refresher on the timelines).

The court found it "apparent" that "the legislature did not intend for section 5(b)(ii) to be construed so technically that the Act's remedial purpose of protecting those who furnish labor or materials be undermined." This conclusion is supported, the court said, by section 5(b)(iii), which provides that notice provided after 60 days shall preserve a subcontractor's lien, but "but only to the extent that the owner has not been prejudiced by payments made before receipt of the notice."

So, the Act addresses late notices, but it does not address a complete failure to provide the notice. This is where the court stepped in to say that only upon a showing of prejudice by the homeowner will a failure to provide the notice be fatal to a subcontactor's mechanics lien claim.

GREETINGS FROM THE DESERT

2009-10-16T16:04:00.000-05:00

Thank you everyone for your warm welcome to the Northern Law Blog community. I’d also like to thank Mr. Huseman for allowing me the opportunity and space to write my musings.

For those of you who do not know me, I suppose a brief introduction is in order. I was born, raised and lived in the Chicagoland area for most of my life. I attended the University of Arizona and graduated with a degree in Philosophy and Religious Studies before venturing back to Illinois for law school in 2000. After graduating from law school I went on to do graduate work in Philosophy focusing on Political Philosophy and Ethics. Then, last year I inexplicably (weather.com: Tucson ) decided that I would return to Arizona and have been working more in the political arena than practicing law.

Ahh, but ever the two shall meet.

I realize off the bat, that this website has been devoted to most readers coming from Illinois and I will do my best to refrain from writing on Arizona subjects. I’ll try and cover issues more federal in nature, such as Immigration or housing matters, but I can’t promise anything.

Every now and then you may find a post comparing a civilized legal system (Illinois) to that of the third world atmosphere (legally and politically) where I now find myself. As I continue to discover the differences between the legal thought and conditions within the two states, I may force part of that journey unto you.

Just when I was thinking of a subject to write the first post on, a gift was presented to me by our fine AZ Supreme Court.

On October 13^th, The Arizona Supreme Court, for the first time, announced the states in which Reciprocity will be granted. (Reciprocity_List.pdf)

And you guessed it, Illinois is on the list.

Now this news will fill many of you with strange sensations. Some will be infused with a sense of enthusiasm, others ever hopeful, and still many of you may feel an unidentified impulse, strangely related to hate or spite.

Don’t worry.

These are natural events which occur when one finds him/herself in conditions (weather.com: Elmhurst ) beyond their control.

So after stepping through a few hurdles (http://www.supreme.state.az.us/admis/ ), all Illinois attorneys practicing for 5 years or more may be eligible to be licensed in Arizona.

I hope this news finds you well.

This is confusing.

2009-10-15T14:44:00.000-05:00

I represent the buyers in a potential short sale. Their contract is contingent upon the approval of the short sale offer by the sellers' lender. Pretty common right?

Well, there is a rider attached to the contract titled "Short Sale Form - Purchase and Sale Contract." It was apparently drafted by the Chicago Association of Realtors and is specific to short sale deals. It contains a drop-dead date by which the lender must approve the price, or we can declare the contact null and void.

The rider also contains the following sentence: "Buyer and Seller acknowledge and agree that all deadlines under the Contract shall begin to toll from the date Seller delivers written notice to Buyer that the Contract has been approved by the Lender."

On first glance, this appears to say that the deadlines shall begin to RUN when the contract is approved by the lender. That way the attorney review period, the inspection period, etc., do not start until we know that we actually have a deal.

However, upon closer review, it says that the deadlines shall begin to TOLL upon approval by the lender. What in hell does that mean? Black's Law Dictionary defines toll as "to stop the running of; to abate." As in, to "toll the statute of limitations." So, the sentence basically says that the deadlines shall BEGIN TO STOP upon approval by the lender. I don't think that makes any sense.

That is why I hate legalese. I try to avoid the wheretofores, heretofores, the parties of the first part, etc., in my writing. Why not just write it in plain language so that everyone can understand it?

REPOST - Illinois Vehicle Window Tint Law

2009-10-13T17:09:00.000-05:00

EDITOR'S NOTE: I spoke to Representative Bossi's office. Please see the comment section for a quick update on the status of this bill.

Illinois is potentially changing one of its most disfavored laws among motorist. It deals with window film, more commonly referred to as window tint. As it stands, drivers are not allowed to have any non-reflective or reflective tint film on the windows directly adjacent to each side of the driver, however if the new law takes force it will allow motorists to have window tint on the front drivers and front passengers windows which allows a 50% light transmittance.

The new notion rests in simple fact that drivers or passengers of motor vehicles should be able to protect themselves from skin cancer, while at the same time to protecting the environment from the harmful emissions created by the excessive and unnecessary use of vehicle air-conditioning systems.

Many states currently have similar rules regarding vehicle window tint, and it seems Illinois won’t be far behind. As of April 2nd, 2009 the Illinois House unanimously passed the bill in favor of the change. Currently the bill sits in the Illinois Senate after being given the “OK” by the Transportation committee.

Want to stay up to date? Check out the bill status at the Illinois General Assembly website:
Illinois General Assembly Vehicle Tinted Window Film Bill Status

Welcome Jim Fleckles!!

2009-10-12T15:03:00.000-05:00

The Northern Law Blog is pleased to announce the addition of another contributor to the site. For those of you who don't know him, Jim Fleckles is a 2003 graduate of the NIU School of Law. Jim works in the government relations industry in Tucson, Arizona. We look forward to hearing from Jim on a number of different topics.

Glad to have you Jim!

Bar Exam Results

2009-10-08T20:29:00.000-05:00

The week that the bar exam results are released is usually agonizing for test takers. The results are posted online, but no one knows exactly when they will be posted. For the last couple of days, many test takers have quick triggers on the keyboard and don't ever want to be too far away from a computer.

To help ease that anxiety, this year's results were going to be posted in smaller groups. Emails were supposed to go out letting people know that their groups' scores were online. They were then supposed to log in to see if they passed.

Many of this year's test takers were more frustrated than ever, however, when the IBABY website was inaccessible for long periods of time on the day that the results were posted.

Wow. That's terrible. I bet the Board of Admissions to the Bar felt horribly and issued an apology.

Nope. Guess again. They blamed the test takers. A representative from IBABY said that the test takers have no one to blame but themselves. He explained that many overanxious applicants checked the website before they received their email notification and the influx made it harder for those who had received email notification to check their results. "Some applicants are not using the system in the way it was designed to be used," he said.

In other words, they're too dumb to even check their scores without screwing up. I'll bet that made them feel a lot better.

The Consumer Rights Brochure

2009-10-04T18:00:00.000-05:00

The Home Repair and Remodeling Act has been discussed frequently on this blog. You will recall that the Act requires any person engaged in the business of home repair or remodeling (except subcontractors) to obtain a signed contract from the homeowner for projects worth more than $1,000. The Act also requires the contractor to provide the homeowner a Consumer Rights Brochure published by the Attorney General's office.

Until now, no court in Illinois had decided whether the failure to provide the Consumer Rights Brochure, by itself, was a material breach of the Act which would bar recovery by the contractor. In Artisan Design Build, Inc. v. Bilstrom, No. 2-08-0855 (September 22, 2009), the Second District has ruled that it is not. (Opinion here.)

In that case, plaintiff was hired by the homeowners to make improvements to their home. After several change orders, several partial payments, and several disagreements, the plaintiff eventually filed suit against the homeowners for approximately $208,000. The parties did have a written contract. However, the homeowners filed a motion to dismiss under the Act for plaintiff's failure to provide the Consumer Rights Brochure.

The court interpreted the Act de novo. The court noted that Section 30 of the Act specifically declares that it is unlawful for contractors to perform work for more than $1,000 without first obtaining a written contract. In contrast, Section 20, which requires the Consumer Rights Brochure, does not provide that a failure to furnish the brochure constitutes an unlawful act or otherwise has any impact with respect to the enforceability of the contractor's rights.

In its holding, the court "interpreted the plain language of the Act to mean that a contractor's failure to provide the consumer with the brochure does not vitiate the contractor's right to recover either in equity or in law."

Thank goodness. Any other result would have been absurd.

Automatic Stay Refresher Course

2009-09-25T13:31:00.000-05:00

I had a defendant file bankruptcy last week to prevent an eviction. He filed bankruptcy two days before the eviction was scheduled to occur. His hand-written petition listed my client, the landlord, as his only creditor.

What this defendant did not know, however, was that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") amended Section 362 of the code so that the automatic stay does not apply to "any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential property in which the debtor resides as a tenant under a lease or rental agreement and with respect to which the lessor has obtained before the date of filing of the bankruptcy petition, a judgment for possession of such property against the debtor."

In other words, you can't file bankruptcy to prevent an eviction when your landlord has already obtained an order of possession. He was evicted on Monday.

Job Hunting: The Good, The Bad, The Ugly

2009-09-21T21:40:00.000-05:00

In this economy, finding a decent paying legal job is not an easy journey. Finding a dream job is even more nightmarish. Luckily, the Illinois State Bar Association (ISBA) has stepped up to the plate to present,

"Job Hunting Strategies for a Lousy Economy: The Good, The Bad, and The Ugly".

This practical seminar will take place this Thursday, September 24, 2009 at the ISBA's Chicago office and provide effective job-hunting tips that will help you avoid the traps that add stress to an already stressful situation.

For more information visit: http://www.isba.org/lawed/2009/09jobhunting/

Jerk of the Day Award.

2009-09-16T16:48:00.000-05:00

Colorado attorney Mark Brennan was recently cited for contempt of court TWICE during his own DISCIPLINARY HEARING relating to allegations of past misconduct!

Then he pushed his opposing counsel!! And it is on video!!! The presiding judge actually had to admonish him that this wasn't "trial by combat"!!!!

You have to check out this link, courtesy of Lowering the Bar. Here is another article about the shoving incident.

Man gets DUI for driving his motorized wheelchair...on the interstate.

2009-09-15T15:33:00.000-05:00

What else can I say?

Full article here.

New notice required under Mechanics Lien Act.

2009-08-28T15:59:00.000-05:00

The Mechanics Lien Act was amended to require a new notice to homeowners in owner-occupied single-family residences. Contractors now must send homeowners written notice within 10 days after recording a lien against their property.

The amendment does not apply to subcontractors. The amendment is effective for contracts entered into after January 1, 2010.

Complete text of the amended section (770 ILCS 60/7).

New Home Repair and Remodeling Act case.

2009-08-26T09:18:00.000-05:00

There are now conflicting opinions between the 1st and 4th districts as to whether the equitable remedy of quantum meruit is available under the Home Repair and Remodeling Act -- Who wants to go to the Supreme Court?

On August 10, 2009, the 1st District issued its opinion in K. Miller Construction Company, Inc. v. McGinnis (Opinion here). In that case, the homeowner, a lawyer, ordered nearly $500,000 in remodeling work to his house. The general contractor did not require a written contract. Long story short, the homeowner did not pay. The contractor sued for breach of oral contract and quantum meruit (literally, "as much as he deserves") and the trial court dismissed.

The 4th District held in Smith v. Bogard, 377 Ill.App.3d 842 (2007), that permitting a recovery in quantum meruit "would run afoul to the legislature's intent of protecting consumers, would reward deceptive practices, and would violate public policy."

However, the 1st District said that it was "unpersuaded by the reasoning" in Smith. The Court then spent nearly 40 pages explaining its reasoning before it held that quantum meruit remains an equitable remedy available under the Act. The Court explained that in a case for quantum meruit, the plaintiff is only entitled to "as much as he deserves." The defendants are allowed to present evidence concerning unfinished work, shoddy work, etc., and the plaintiff's claim would presumably be reduced accordingly. Quantum meruit is a proper avenue of recovery because the nature of the remedy itself provides ample protection against abuses the passage of the Act was meant to protect.

It should be noted that the plaintiff in K. Miller v. McGinnis was a general contractor. I believe that a quantum meruit recovery is still unavailable to subcontractors, but this case definately gives us some good points to argue.

Can they sue the fence company?

2009-08-25T21:56:00.000-05:00

I'm just kidding about that one, of course. I would never advocate a lawsuit against a fence company. As most people who know me realize, I built miles and miles of fence while growing up and working for my dad's fence company. But still, it seems like the salesman for the fence company discussed below should have had a little more sense when bidding this job.

A woman in Tooele, Utah, named Paula Warr bought a model home from a company called Ivory Homes. When Ms. Warr first visited the house, it did not have a fence. She eventually negotiated a contract to purchase the house and the contract specified that the builder would provide 92 linear feet of white vinyl fence. The homebuilder then contracted with a third party fence builder, who could not get to the job prior to closing. So, the parties closed anyway, with an agreement that the fence would be installed post-closing.

Sometime later, Ms. Warr returned home from work to find that her new fence had been installed around the backyard. She began walking around the fence trying to get into the backyard, but she could not get into her backyard. There was no gate in the fence.

Now, her grass is more more than a foot tall. Her lawnmower can't fit through the kitchen and it is too heavy to lift over the fence. Her garage does not have backyard access either. "Who puts up a fence without a gate?" Warr asked. "Nobody wants to take a lawnmower through their house."

Ivory Homes says a gate was never part of the deal. A spokesperson for Ivory Homes released a statement saying that "Paula Warr's contract does have 92 lineal feet of fencing to be installed as part of the purchase agreement. However, there was no request for a gate as part of the agreement. Based on these facts, we feel that we have fulfilled our contractual obligation."

So, maybe the fence company did suggest a gate, but the homebuilder did not want to pay for one. I knew it couldn't be the fencers' fault!

Illinois Courts ....on Twitter?

2009-08-21T17:47:00.000-05:00

It seems, everyone has some type of social networking or communication web page now days. Well leave it to the Illinois courts to keep up with the trends. Below is the link to the official Illinois Courts Twitter Page, where you can find out about new opinions, programs, and more.

http://twitter.com/illinoiscourts

Required Statements to Accompany Motions for Relief from Stay

2009-08-19T17:02:00.001-05:00

Effective August 18, 2009, the Northern District of Illinois has amended the Required Statement to Accompany Motions for Relief from Stay. The new form now requires that the movant attach a payment history listing the dates and amounts of all payments received from the debtor(s) post-petition.

I had always included that information in my Motion for Relief anyway, but now it is a requirement.

Here is a link to the form in a fillable PDF.

I have also posted it to the NLB Forms Archive.

Big time.

2009-08-14T17:00:00.000-05:00

The judge in Lehman Brother's bankrupty case has approved $55.14 million in legal fees for New York law firm Weil Gotshal & Manges. Those fees were incurred in the four month period from September 2008 through January 2009.

The awarded fees amount to about $357,000 a day for the firm, or nearly $15,000 an hour around the clock. The firm employed 490 lawyers on the case. The lead partner on the file, Harvey Miller, billed 795 hours at $950 per hour, or $755,250. The firm also billed $2.77 million in expenses. Click here for a report from the Wall Street Journal.

A “fee committee” appointed by the judge reviewed fee and expense requests and found very few issues. The committee determined only $223,262 of the fees and $75,000 of the expenses did not pass muster, most because they were inadequately described in the fee petition.

The committee also recommended that in the future further explanations were needed for charges of more than 18 billable hours in a day for one person and hotel charges exceeding $500 a day. The committee also suggested overtime and working meals be limited to $20 a person and that car services only be used after 8 p.m. and limited to $100 a trip.