7th Circuit Contract Law News - U.S. Seventh Circuit
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Recent Contract Law Decisions

Got all that?

Javier Munoz pled guilty in 2007 to possession and distribution of cocaine charges. As part of his pretrial release terms, he agreed to show up to court as needed. After entering his guilty plea pursuant to a plea agreement, but before actual sentencing, he fled to Mexico.

Five years later, U.S. Marshalls tracked him down, extradited him, and he faced sentencing. This time, however, the government wasn't feeling nearly as generous and recommended a higher sentence than the plea bargain provided for. The probation officer's presentence report added upward adjustments for additional drugs, obstruction of justice, and possession of a dangerous weapon. It also deleted credits for acceptance of responsibility.

Voluntary Payment Provision: Don't Rush to Do the Right Thing

As children, we're encouraged to do the right thing. Make a mistake? Admit it. Tell a lie? Confess. Hurt someone? Apologize.

As adults, all that do-good nonsense becomes a thing of the past. We can't be forced to incriminate ourselves. We should never admit fault at the scene of an accident.

While the Seventh Circuit Court of Appeals admires a business that strives to do right by its customers, it acknowledges that the law is governed by the adult-world CYA rules. Those people who approach the world with a childlike perspective? They're just suckers who voided their insurance coverage.

Think Before You Sue: Did Your Client Satisfy Duties After Loss?

How much documentation must Indiana policyholders provide to their insurers to collect on a claim? According to the Seventh Circuit Court of Appeals, it’s everything the insurer asks for in the “Your Duties After Loss” section of the policy, as long as the company doesn’t badger policyholders with irrelevant demands.

Seventh Circuit Sides with Alltel in Arbitration Case

You have a cell phone, and most likely a contract for the service plan that goes with that cell phone. So when you run into problems with your wireless provider, are you tempted to use your legal know-how to challenge the arbitration clause in your cell phone contract? If you are, keep in mind that the Seventh Circuit Court of Appeals, like the Supreme Court, favors arbitration clauses.

This Seventh Circuit arbitration case hits close to home because we can remember a time where we faced a similar battle.

City-Sanctioned Fines Not 'Debts' Under FDCPA

Is a debt-collection law firm retained to collect fines for a city obligated to comply with the Fair Debt Collection Practices Act (FDCPA)?

Apparently not.

The Seventh Circuit Court of Appeals ruled this week that city-levied fines are not debts under the FDCPA.

Homeowner Wins Right of Rescission Appeal on Hypertechnicality

The Seventh Circuit Court of Appeals thinks that the Truth in Lending Act (TILA) is “hypertechnical,” but that won’t stop the court from enforcing the letter of the law.

This week, the Seventh Circuit ruled that a Wisconsin borrower could proceed with a right of rescission action regarding a mortgage that was supposedly finalized in 2007 because the lender did not provide him with an adequate number of copies of a TILA-mandated disclosure.

TILA requires a creditor to provide the borrower with “clear and conspicuous” notice of his right to rescind (Notice) certain transactions, including mortgages, within three business days following the transaction.

Rose Acre Chickens Out of Commercial General Liability Indemnity

A commercial general liability policy may cover patent infringement defense in some jurisdictions, but it does not cover a price-fixing case defense in the Seventh Circuit Court of Appeals.

Rose Acre, the nation's second-largest producer of eggs, was charged with conspiring to fix the price of eggs in violation of the Sherman Act. Rose Acre asked its liability insurers to defend it in the class action suits, arguing that the complaints sought damages for what Rose Acre's policies called "personal and advertising injury."

Seventh Circuit Rejects Quantum Meruit Claim for Ditched Contract

It's no longer a bus shelter or a trash can. It's "street furniture." The difference? Advertising revenue. Much like other European exports H&M or The Office, street furniture is taking America by storm. Vendors make lucrative bids to cities to secure the rights to street furniture; then they install and maintain the fixtures, which they finance through advertising.

Corporación Europea de Mobiliario Urbano, S.A., a Spanish firm, places street furniture within the European Union. Its Delaware subsidiary, Cemusa, wanted to break into the United States market, so it hired White Pearl Inversiones as a consultant. Together, White Pearl and Cemusa decided to target the ultimate prize in street furniture markets: New York City.

When are class actions appropriate? This question has been addressed by many courts and most recently, by the U.S. Supreme Court.

The U.S. Supreme Court took a look at a Seventh Circuit Court of Appeals case to answer that question, reports Chicago Business. The case involved the sale of Sears dryers, which were advertised to be made of "all stainless steel". The lawsuit was brought by Chicago class action attorney Clinton Krislov, on behalf of himself and half a million other dryer-buyers.

Be warned: If you owe the bank, your passport could be seized!

There’s obviously more to it than that but in the case of Mr. and Mrs. Veluchamy, the bank came after more than just the shirts off their backs when they defaulted on a $39 million loan from Bank of America.

Pethinaidu and Paremeswari Veluchamy, of the multi-million dollar Veluchamy Enterprises in Chicago, defaulted back in 2009, on a massive loan from Bank of America. BoA sued them for breach of contract and the district court entered a judgment against the Veluchamys in 2010.