Illinois Construction Law Blog : Illinois Construction Lawyer & Attorney : Foran Glennon Palandech & Ponzi Law Firm : Chicago IL

In Stewart v. Gino's East, et al. (N.D. IL, Doc. No. 07 C 6340), the defendants, restaurants that accept credit cards for payment, were sued under the Fair and Accurate Credit Transactions Act (FACTA) in a class action alleging they violated the FACTA by not removing the expiration dates of credit cards from their customer's receipts.  One of the defendants brought a third-party action against a company that installed the software and hardware used for the credit card transaction for breach of contract.  The third-party complaint attaches the contract.  It is a short agreement entitled "Construction Contract" and appears to be a standard contract used by the defendants for the contractor installing the equipment and allows the architect final approval on the remediation of unsatisfactory work.

The third-party complaint alleges that the description of the services provided in the contract meant that the contractor would assure that the software and hardware were in compliance with all applicable laws, including FACTA.  The contractor brought a motion to dismiss and argued that nothing in the contract obligated it to make sure the system was in compliance with FACTA and pointed to provisions of the contract arguing that they were not ambiguous and precluded a complaint against the contractor. 

The court found that the provisions pointed to by the contractor were silent about the system or hardware complying with FACTA (after all, it reads like a contract for the installation of the machines):

• "You do hereby warrant, that all material and equipment supplied for this job shall be new and free from faults and defects, and standard written equipment warranties shall be included and delivered to owner and also included is an one year warranty (from completion of the contract work) on all workmanship and materials."

The court went on to hold that other provisions could be interpreted to mean that compliance with FACTA was included in the contract:

• [the contractor] is "authorized to furnish all labor and equipment to do the POS set up for the building"

• "[t]he work is intended to be complete and fully useable as a finished product or system."
  
• "that all material and equipment supplied for this job shall be new and free from faults and defects."

Finding that these contractual provisions might be interpreted to require the system, as installed, would be compliant with FACTA.  The court denied the motion to dismiss, pointing out that these ambiguities created a question requiring future litigation.

Now, obviously, the court, and we, don't have all the facts about the nature of the agreement, but if it was just an agreement for the work on the installation of the equipment, then the ambiguities have created an issue and possible liability in a situation where absolutely none was intended.  Again, it might seem like a pain to have lawyers reviewing your agreements and helping negotiate even something as small as this contract must have seemed, but there is a reason such a big deal is made over contractual language.

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In Bjork v. Draper (Doc. No. 2-06-1145, 2^nd Dist), neighbors of a house located in the Lake Forest Historic District, included in the National Register of Historic Places, brought suit against the house owners to enforce the terms of a "Conservation Easement" (an easement agreement that creates a type of land preservation agreement that is enforceable between parties normally granted pursuant to the Illinois Real Property Conservation Rights Act) which the neighbors felt the home owners were violating with alterations to their home and subsequent amendments to the easement entered into between the home owners and the Lake Forest Open Lands Association which was the conservation entity that had been granted the easement.

The terms of the easement included a right for the amendment of the easement as well as a statement that the purpose of the easement was to assure that the property would be "retained forever predominately in its scenic and open space condition, as lawn and landscaped grounds."

The trial court heard the neighbors' claims regarding interpretation of the easement, the amendments that the owners and the Association had entered into, and determined that a portion of the landscaping improvements that the owners had made pursuant to a third amendment were in violation of the easement.  The court also determined that the two prior amendments to the easement, allowing the owners to expand their driveway and to construct an addition to their home, were valid.

The neighbors appealed the decision of the trial court and the appellate court found that all the amendments violated the easement's statement of purpose regardless of the provisions in the easement allowing for amendment.  The court then remanded the decision to the circuit court for a determination in line with its opinion regarding exactly which improvements, if any, the owners would be forced to remove from their property.

Dealing with these types of regulations in a construction context is always challenging, but usually negotiating construction terms around conservation easements can be handled in a manner that can increase the historic value and preservation of the structures.  Here, the opinion reveals that the owners took steps to comply with the easement, hired an attorney and negotiated with the Association, it was the neighbors who brought the suit.  These facts are not inconsequential and show why the court in remanding the case, emphasized that the trial court could eventually determine that none of the improvements would need to be removed.

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Illinois farmers are a tough bunch.  So it's not surprising that as a pro se defendant and appellant, farmer Peter Schultz, was instrumental in allowing the court to deliver one of the nine cases in existence dealing with the Illinois Drainage Act (70 ILCS 605/1 et seq.) 

This act is important to anyone developing a parcel of land and many contractors.  It establishes the Drainage Districts in the State and also governs taxation and contracting and bidding on projects with the Districts.  It provides the process by which determinations regarding drainage from one parcel to the next are made, along with establishing a procedure for adjudicating issues involving drainage.

In Halpin v. Schultz, Doc. No. 3-06-0767 (3^rd Dist.) the appellate court was faced with a trial court's decision granting Mr. Schultz' neighbors the right to enter onto his land and install new drainage tiles.  The neighboring farm wanted to extend their drainage tiles beyond their property, connect them to Schultz' and thereby, arguably, change the course of drainage on their property.  Schultz argued that the tiles between the property were never connected, and shouldn't be connected.  This is important given that, in addition to excess water, many toxins from pesticides and sewage from livestock also end up in being transported through these types of tiles and can effect the quality of groundwater in the area and the growth of crops.

At trial, the plaintiffs did not introduce any evidence comporting with the Drainage Act's requirements that a dominant landowner seeking to extend and replace tiles on a subservient landowners property show that the tiles would then drain at an exit point off the property of the subservient landowner.  In other words, if the neighbors wanted to drain in the direction of Schultz' property, they were required to show that they would be draining "through" Schultz' property and that the water would exit into a proper ditch or culvert beyond Schultz' property.  They failed to introduce any evidence to that effect and the appellate court reversed the trial court's decision outright.

Additionally, the court noted the severe constitutional implications involved in letting one private land owner assert rights with regard to another individual's lands. 

• "The law does not favor the expropriation of private property for the public good without just compensation.  Even less attractive is the expropriation of private property for the private benefit of an adjoining property owner."

The judgment of the trial court was reversed.

Justice Holdridge dissented asserting that a different standard of review should be applied and framed the issue of this case, not as one addressing the interpretation of the Drainage Act, but of one regarding the trial court's determination of the evidence in competing testimony and felt that the trial judge did not create reversible error in his determination regarding the course of the natural drainage of the properties at issue.

Holdridge saw this case as a question of whether certain new improvements on portions of the neighbors land, namely the creation of a two-acre pond and the development of a housing division on a portion of the property had created a new "natural" flow of water where water that may previously not have traveled over Shultz' land.  However, addressing these questions under the act would require more time and effort than the plaintiffs may want to put into this matter.  And, without an attorney, perhaps Shultz was unequipped to properly raise these issues.

Developments, ponds, and farms aside, the act of construction on open land can raise a host of issues that, if not properly considered at the time of construction, can lead to a mess of litigation, which can be a headache, unless, of course, you know how to farm.

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We've blogged at length about HB 2094 and the reintroduction of the Structural Work Act.  The action deadline for the bill has been extended to May 9.  It is likely, now that the fervor has died down that the bill is being held as a playing chip between differing factions in the House for getting some other legislation passed. 

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The Moorman Doctrine has been applied to those providing professional services since Anderson Electric, Inc., v. Ledbetter Erection Corp. 115 Ill. 2d 146 (1986).

The Doctrine has several exceptions but often forces parties to a contract for services to seek redress for damages they have incurred by suing on the terms of the contract rather than in tort.  The Moorman decision has long been a tool of attorneys representing construction clients for limiting the issues and available remedies of different parties to construction disputes.

In designing a building or performing work under contract on a structure, the doctrine often operates in limiting the manner in which a professional can be sued unless some error has resulted in damage to other property or personal injury or property damage resulting from a sudden and calamitous or dangerous occurrence.

In Loman v. Freeman, (Doc. No. 104289, April 17, 2008), the Illinois Supreme Court had occasion to visit the "sudden or dangerous" exception to the doctrine in the scintillating context of veterinary medicine... and, sadly, decided against addressing the merits of the topic in favor of a procedural rule that bars consideration of arguments not adequately defined or argued in the briefs.  In Loman, the plaintiffs' race-horse required surgery.  Plaintiffs claimed they only authorized the vet to perform two procedures, and that a third procedure performed by the vet, was unauthorized and did irreparable damage to the horse, rendering it unfit for racing.  Plaintiffs sued on two theories, one in negligence claiming that the vet performed unauthorized surgery on the animal, and secondly on a count of conversion, claiming that the unauthorized surgery amounted to an unauthorized assumption of the right to possession or ownership of the horse.  We are concerned only with the first claim in negligence.

The defendants claimed that the Moorman Doctrine applied and that the plaintiffs were barred from bringing suit in negligence.  The district court agreed and dismissed the plaintiffs' case, the appellate court reversed the matter stating that the unauthorized surgery amounted to a sudden and dangerous occurrence under the Moorman Doctrine's exception; the defendants appealed to the Illinois Supreme Court.

The Supreme Court noted that the application of the "sudden and dangerous" exception to the conduct of the professional and not to the failure of a product contracted for was an awkward one, also pointing out that the application of the exception to veterinary surgery under this sort of theory could lead to the absurd result that veterinary surgery would fall under the exception, but veterinary practices resulting in, for example, misdiagnosis, would not.  The Court then went on to state that it would not consider the issue since it was not adequately briefed.

In his dissent, Justice Freeman pointed out something we often see in economic loss cases --confusion -- with half the opinion of the majority referred to the count as one in negligence, and half the opinion referred to a "contractual" relationship between the parties.  In providing assistance Justice Freeman pointed to the possibility that the court could reclassify the action as a contractual issue of bailment and proceeded to discuss the law of bailments and their contractual nature along with the bailment theory's ability to provide negligence-theory based relief in the contractual setting.  The issue is particularly interesting in that Justice Freeman argued that under a bailment scenario, a professional contracting to perform services is held to "exercise the proper degree of care and diligence about the work" (Slip Op. at 22) and notes that "generally, the bailee will be liable for losses that are proximately the result of the bailee's own negligence."

"Under the bailment, the bailee has a duty to exercise the skill or knowledge pertaining to the "nature of the business... Bailees will be liable for losses that result from their negligence or, more precisely, for their failure to exercise the skill or knowledge pertaining to the nature of their business."  (Slip Op. 23-24).

Justice Freeman went on to state that addressing the claim at issue under the bailments theory would arguably resolve every issue in the case.

Unfortunately, the Court decided not to address the "sudden and calamitous" issue.  Additionally, failing to fully flesh out the dicta concerning applying the exception to the acts of a person and not to something happening with the product will doubtlessly need to be addressed at some point.

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John Parnass over at Washington Construction Law, an excellent Washington State Construction Law resource, is reporting on this article from the Law Blog of the Wall Street Journal.  The Donald is suing his attorneys over the fees they billed in representing him in a construction matter.

Great quotes from Trump regarding the underlying dispute and legal case over the breach of the earth-moving contract in the construction of a Golf Course:

"I have a Ph.D. in legal fees. I know when fees are fair and when they are not."

"Ninety percent of the conversations I had ... were about legal fees, not the case,"

"We won the case because I'm a great witness."

Whether or not they've got their own TV Show, clients should work with attorneys to establish a beneficial fee structure and ensure that they're getting value for their money.

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Just a quick update.  The good people over at the Michigan Construction Law Update have posted this entry regarding a recently published "Contractor's Guide to Michigan Construction Law."  Several of the authors for the guide are also authors for the MI Construction Law Update.  The guide is available for download from the Associated General Contractors of Michigan's website here.

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As we continue to follow HB 2094, we are pleased to present the 1907 edition of the Structural Work Act.  We'd like to thank our friends over at the Cook County Law Library for having an in-tact copy of the 1908 Code.  The spine of the book can be seen to the left.

As you can see, not much is different between the HB 2094 proposed act and the 1907 version.  Except the penalties.  It used to be that the penalty for violation could cost an architect $25 to $200, now it would be a "petty offense."

In one of the cases that established the "good faith" exception to the exclusionary rule exercised for 4^th Amendment violations (United States v. Leon, 468 US 897 (1985)), Justice Blackmun delivered a concurring opinion addressing decisions based on  empirical data and offered some guidance regarding how the law should approach its own determinations when they are premised on empirical evidence:

    "As the Court's opinion in this case makes clear, the Court has narrowed the scope of the exclusionary rule because of an empirical judgment that the rule has little appreciable effect in cases where officers act in objectively reasonable reliance on search warrants. Because I share the view that the exclusionary rule is not a constitutionally compelled corollary of the Fourth Amendment itself, I see no way to avoid making an empirical judgment of this sort, and I am satisfied that the Court has made the correct one on the information before it. Like all courts, we face institutional limitations on our ability to gather information about "legislative facts," and the exclusionary rule itself has exacerbated the shortage of hard data concerning the behavior of police officers in the absence of such a rule. Nonetheless, we cannot escape the responsibility to decide the question before us, however imperfect our information may be, and I am prepared to join the Court on the information now at hand.
    "What must be stressed, however, is that any empirical judgment about the effect of the exclusionary rule in a particular class of cases necessarily is a provisional one. By their very nature, the assumptions on which we proceed today cannot be cast in stone. To the contrary, they now will be tested in the real world of state and federal law enforcement, and this Court will attend to the results. If it should emerge from experience that, contrary to our expectations, the good-faith exception to the exclusionary rule results in a material change in police compliance with the Fourth Amendment, we shall have to reconsider what we have undertaken here. The logic of a decision that rests on untested predictions about police conduct demands no less."

If the Supreme Court of the United States can recognize that empirical evidence can lead to the need to reconsider its own rules then, when:

"It is the intent of the General Assembly that this Act is to be liberally construed to effectuate its beneficial purpose of protecting persons engaging in occupations of working in and about construction, repairing, alteration, or removal of buildings, bridges, viaducts, and other structures. This liberal interpretation exists so as to provide workers with a safe place to work and to afford relief to injured workers."

a state legislature drafting a law designed for a purpose (Worker Safety) should also revisit its law with empirical evidence and determine if the standards set out in that law can accomplish that goal.  The point is exacerbated by the fact that Structural Work Act was in effect from 1907 to 1995.  There should be plenty of data out there to determine if the standards and rules set forth by this statute should be updated.

The real question then is, have methods, means and ability of contractors and construction trades to provide for safety changed such that the standards should be augmented?  Is it sound law that the physical requirements of structures under the act should just read as they did in 1907, given that the industry has advanced?  What about OSHA requirments? 

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There's an interesting article in April's Architectural Record by Alec Applebaum concerning owner's rep work and the possibility of expanding the role of the designer to create new forms of business for an architect's firm.

Anybody undertaking a design-build arrangement will need to be familiar with rules about general contractors, safety and understand the significant liability risks associated with such a role.  In addition, undertaking owner's rep work could implicate a host of fiduciary responsibilities not considered.  Serious consideration regarding the qualifications and ability that is required to take on any expanded role is important.

We've had plenty of previous discussions about the types of liability a general contractor can face.  We have also been following a piece of legislation in the Illinois House of Representatives that would likely change the face of §414 liability cases.  In following these types of cases under Illinois law in the construction industry we have seen courts rule both ways when considering whether or not a GC undertook to control the work of its subcontractors.  

Now we have another...  In Calderon v. Residential Homes of America, et al. No. 1-07-1470 (2008) we've been given another piece of information concerning what amounts to control under the §414.  In Calderon, the plaintiff was roofing and injured himself while carrying shingles up a ladder to a roofing job.  The defendant was the GC and had a contract that instructed its subs to review a manual regarding safety that was kept in the GC's office and had a site superintendent who went around the job daily to ensure work progress.  The testimony during depositions revealed that the GC's superintendent was not aware that the shingles were transported by ladder rather than by crane or conveyor, and that the superintendent was not instructing the subs regarding how to perform their work, but was reviewing the site for progress.  The court upheld the trial court's grant of summary judgment and found that the facts (which can be read here in the opinion) did not amount to "control" sufficient to establish liability under the §414 exceptions.

There are plenty of minutia to consider when assuming a new role.  Jumping into any unfamiliar type of business arrangement means assuming new risks that you should be prepared for.

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In American Multi-Cinema, Inc., v. MCL REC, LLC, et al. (N.D. of Illinois, Doc. No. 06 C 0063)  a lessee, AMC, filed for a declaratory judgment seeking a determination regarding its lease.  They want to know if the lease requires them to pay for the hot and cold water that runs in their portion of the building. (That's right... don't feel bad about having this dispute with your landlord every time the water bill arrives, apparently it doesn't matter if you're renting a garage space in Port Byron, or if you're running one of the nicest theaters in downtown Chicago, it's important to know who's paying for the water).

Under protest, AMC paid the balance of the water bill to its previous landlord prior to the sale of the property to a new landlord and then filed an action seeking a declaration regarding the duties imposed by its lease against the old landlord and brought in the new landlord after the sale was complete.  The two landlords then filed claims against each other regarding whether or not either of them owed money, indemnification, or a defense to each other concerning AMC's declaratory action.  They based these claims on their own sale agreement.  The end result of AMC's action will determine who foots the bill for the hot and cold water; AMC, or the current landlord.

The original landlord brought a motion for summary judgment on the cross-claim of the second landlord and the court rendered this opinion.  The court granted the original landlord's motion for summary judgment, in part with regard to the indemnification clause in the sale agreement, but held that there was a question of fact regarding when and what the parties knew about AMC's disputes and contentions over the water bill before, during, and after the sale.

As a practice pointer, make sure the due diligence is in order before you sign off on that asset purchase agreement.  Additionally, see the court's footnote 1, reminding the parties that under the Northern District's local rules, tabs and indexes of the exhibits (local rule 5.2(c)) need to be filed.  R. David Donoghue over at the Chicago IP Litigation Blog has also commented on the failure of many counsel to fully follow the lesser-known federal rules.

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Just a quick update on HB 2094, which we talked about here.  The bill has now been amended to reflect that the chief sponsor is Representative Fritchey.  Rep. Fritchey is also the representative who sponsored the Contractor Prompt Payment Act that went into effect last year.  The Judiciary Committee has recommended that the bill be passed, and various state agencies are now filing their own notes asserting that the bill will have little impact on State and Agency spending.  Many Illinois Construction lawyers are following this bill.  A simple Google search for "HB 2094 Illinois" shows that construction attorneys from all sides and lobbying groups operating for different interests all have something to say.  Interestingly, we have yet to see many scientific reports concerning the bill's preamble regarding construction safety.  If our readers have the studies concerning construction safety and net increases after the original version of this bill was repealed in 1995 we would like to report on them.  Additionally, if anyone has any information concerning the actual 1907 act and its text, it would be interesting to see how this act differs from the 1907 standards.

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In Ambrosia Land Investments, LLC, v. Peabody Coal Company (7^th Circ., Doc. No. 07-1945) the Seventh Circuit tackled the fascinating question of whether or not the Illinois Construction Statute of Repose applied to a coal mine.  While we may not think this would be interesting to everyone, the construction statute of repose is actually a fun topic, and the 7^th Circuit did a great job of covering the topic.

Along with a poignant discussion of the relevant Illinois case law regarding the statute, the court held that a coal mine on a piece of property would constitute an "improvement to real property for statute of repose purposes."  The court went on to find that the former mine owner was being sued as an owner of the mine and not as a party engaging in construction-related activities, so the plaintiff's case for damages to its property from mine subsidence did not fall under the activities covered by the statute.

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In  West American Ins. Co., v. Trent Roofing, et al. (ILND, Doc. No. 06 C 1239) the evidence before the court was that the plaintiff's building burned when a roofer caught the place on fire with a torch.  The roofer performing the work was a man named Eller.  A man named Covelli had applied for permits in the name of a different entity called Trent Roofing.  Trent Roofing performed no work on the building.  No written contract existed between Trent Roofing and the plaintiff or any other party.  Trent also presented evidence that it never authorized Covelli to obtain permits under the Trent Roofing name.

The court found that no contractual duty existed between Trent and the plaintiff.

The interesting portion of the courts decision is at Slip Op. 5, where the court refutes the plaintiff's allegations that independent statutes such as OSHA regulations, the Illinois Roofing Industry act, and the City of Burbank's building and fire code, created some form of duty that Trent Roofing owed to the plaintiff.  Too often parties point to the existence of regulatory statutes, that give no right of private action to individuals, in an attempt to show that a duty exists or that some duty of care was breached.  Here, the court dismissed the claims that these statutes created a duty of care and granted Trent Roofing's Motion for Summary Judgment.

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In MD Electrical Contractors, Inc., v. Fred Abrams (Il. Sup. Ct. 2008; Doc. No. 104000)  the plaintiff had sued under the theory of quantum meruit, stating that it had no contract with the defendant for electrical work performed on the defendant's home.  The defendant claimed that the Home Repair and Remodeling Act prohibited a suit by the plaintiff.  The circuit court had reasoned that quantum meruit was a legal theory that implied a contract where none existed.  Since the Home Repair and Remodeling Act was against the contract, and the subcontactor fell under it, the court could not imply a contract where the act would forbid such a contract.  The Appellate Court had disagreed and remanded the decision.  And now, the Supreme Court's decision has squarely stated that the act does not apply to subcontractors.

• The Home Repair and Remodeling Act applies only to those who contract directly with the Home Owner.

The court refused to address the intriguing issue of whether or not a sub-contractor could have any recourse in quantum meruit, or outside the Mechanic's Lien Statute.

In a strong-toned dissent, Justice Freeman points out that the complaint was insufficient on its face to offer the factual issues that the court relied upon in determining this matter.  The complaint asserts that MD Electrical was a sub-contractor, but there is no evidence of that fact anywhere in the record.  The dissent goes on to argue that the court did not have to reach the issue of the Home Repair and Remodeling Act's application to sub-contractors and should not have done so.

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We've previously discussed the Illinois construction statute of repose (735 ILCS 5/13-214).  The benefits it conferred to design professionals and others by the statute's ten-year limitation cannot be underestimated. 

In Ryan v. Commonwealth Edison Company (Doc. No. 1-06-3309, 1^st Dist. Ill. App.) the Illinois first district appellate court has broken with itself and sided with the third district in asserting a "status/activity" distinction for claims that will be barred under the statute of repose.

The court was confronted with the issue of whether Com Ed's duty to maintain a transformer that exploded and injured the plaintiff was separate and apart from its installation work and therefore, not subject to the statute of repose.  The court found that Com Ed's status as an installer and any claims that arose from the installation might fall under the statute of repose, but made a determination that since Com Ed had a duty to maintain the equipment (derived from its capacity as the power supplier and not its status as the installer) the statute would not apply.

• Now that we have a definite split, we could see the Illinois Supreme Court address the "status/activity" distinction.  More importantly, because the court made the determination regarding Com Ed's duty in this case, we should be alert for more judicial determinations of ongoing duty.  Will the decision only apply to utility companies supplying services which necessitate a duty to maintain equipment?  Even apart from any undertaking to maintain structures/equipment after installation?  Even when the duty has been contracted or left in the hands of some other entity like a municipality?

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In Cincinnati Insurance Company v. Taylor Morley, Inc., (Doc. No. 06-cv-1035-MJR, S.D. Il, 2008) the Southern District of Illinois has issued a coverage opinion reaffirming the substantive Illinois law.   Construction defects alleged by a buyer against a builder and claims by buyers against a builder for diminished property values because of the builders failure to fulfill its contract and construct a "championship golf course" around which their homes were to have been built, are not afforded coverage under a CGL policy. 

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    It's not often that we get a 97 page opinion from an appellate court, even more rare is the occasion that any such opinion would be of interest to the industry.  This week, we were happy to find both in Cordeck Sales, Inc., v. Construction Systems, Inc., et al., (Doc. No. 1-06-3702, 1^st Dist).

    In Cordeck, a developer had gone belly-up on a multi-million dollar condo development.  Multiple mechanics liens were filed by the various entities involved in the construction for work performed, the lender filed a claim to foreclose its mortgage, and a receiver had been appointed to sell the individual units and collect the proceeds into a pot from which the resolved disputes would be compensated.  The opinion doesn't go too far in creating any substantively new nuances to the statute that Representative George Scully has called "a patchwork of quilts...of patches put on this quilt over the past hundred years" (Slip op. at 44).  Some clarifications and holdings are still important.  Of interest are:

• A reminder that the dates of the contracts are the attachment dates for the liens of contractors and subs.  They will be instrumental in establishing the priority of liens against third parties and other claimants.
• The date of recordation for a mortgage will establish the date of a mortgage for the determination of priority in the scheme of liens and claims against third parties.
• Construction Managers can have liens, even on contracts prior to the 2004 and 2006 amendments to the Act.
• Amendments to a recorded lien for amounts of work done over time past the date of the first recorded lien can still affect the assertions of rights against the owner, but may not have affect as to the right in priority or assertions against third parties.
• Fees earned on a project are not inherently "unalienable."

Of note to many practitioners:

• If a deponent is claiming a fifth-amendment right against self incrimination in answer to questions, the determination regarding the propriety of such an assertion will be made on a question by question basis in the trial court.

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In Trtanj v. The City of Granit City (Ill. App. Ct., 5^th District, No. 5-07-0002), the plaintiffs owned a house that was filled with sewage after a thunderstorm.  During the thunderstorm, three sewage lift stations that normally operated to transport sewage through the city's system were left without power.  The city took two to three hours in getting the sewage systems back online.  As a result of the rainfall and issues with a clay pipe connecting the plaintiffs' property to the city's system, water and sewage backed up into the plaintiff's home.  Prior to the motion for summary judgment brought by the city, the city's superintendent of water testified that it should only take 15 minutes to set up a temporary lift system and 15 minutes to get it operational.

The plaintiffs brought an action in 2002 and later amended their complaint in 2005 alleging negligence in the design, construction, operation and maintenance of the sewer system, that the backup was a temporary nuisance, and also brought an action in trespass against the city.  The city responded in a motion for summary judgment that the claims were barred under the statue of repose (735 ILCS 5/13-214), that the tort immunity act applied (745 ILCS 10/2-201) to protect the city from suit, and that it was not liable because the backup occurred during an extraordinary rainstorm.

The trial court granted the motion for summary judgment and the plaintiffs appealed.

The appellate court found that material issues of fact existed where the city had known about the outside water infiltration into the sewer system through the plaintiff's clay pipe; and where the city's own superintendent of streets had testified that it should only take 15 minutes to set up the temporary pumps, not the two to three hours that it did take.

In adjudicating the repose claim, the court said that the statute of repose applied only to the construction and improvements of real property.  Because the plaintiff had alleged that the design installation and construction of the sewer station was at fault, the court found that these allegations were barred by the statute of repose when the design, construction and installation had occurred more than ten years prior to the filing of the lawsuit. 

The court went on to find that the statute did not protect the city from the claims that the maintenance and operation of the sewer system and the lift stations that occurred after their installation and within the ten year period were negligent.

The court cited a previous case, Prochnow v. Elpaso Golf Clib, Inc., 253 Ill. App. 3d 387, finding that while those claims that involved the design, construction, supervision, observation or management of the construction were exempt if the acts were outside of the ten year period, the persons responsible for possession or control and suppliers of the materials used in the maintenance and operation were subject to liability for reason of construction defects.

The court then went on to address the city's claim of immunity.  Holding that the statute protects only those acts of a municipality that are shown to be both an exercise of discretion and a policy determination, the court stated that acts which are ministerial are not protected.  After a discussion of the differences between policy determinations, acts of discretion, and ministerial acts, the court found that because the city's operation of the sewage system was subject to statutory and regulatory guidelines the actions were ministerial, and that there were material issues of fact concerning whether or not the city complied with those guidelines.  "Once a municipality decides to perform pubic work, the municipality must perform the public work with reasonable care and in a nonnegligent manner" (Slip Op. at 13).

The court also found that the determination of what might amount to an extraordinary sum of rainfall was not before the court and presented a question of fact for the jury.

The appellate court reversed the trial court's grant of summary judgment to the extent it was inconsistent with the appellate opinion.

Of note to design professionals and construction companies is the application of the ten year statute of repose.  Getting done with the work and getting out will start the clock running on the ten year period.  However, if follow up maintainance work is performed, that work is still potentially the subject of litigation. More importantly for many claimants is the willingness of the court to interpret the immunity statute and discern between policy, discretion, and ministerial acts.  It should not be overlooked that too often courts are willing to apply the immunity statute without adherence to the guidelines or undertaking the analysis to determine the exact nature of the act, perhaps inspections, construction, and maintenance can all be pled correctly to make certain the municipality has to explain its actions rather than simply pleading immunity.

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Here's a reminder from the Northern District of Illinois Bankruptcy Court.  In Vancil v. Tres Amigos (docket #06-71254) the owner of a property, Tres Amigos, was looking to extinguish liens filed by two subcontractors of Vancil.  Tres Amigos brought the action to extinguish the liens where the two subs had not properly served Tres Amigos with their 90 day notices under the Illinois Mechanic's Lien Act.

A problem arose when the Court noted the Tres Amigos had never made one of the subs a party to the action and that it failed to assert a claim against the other sub, which was a co-defendant.  The Court pointed out the Tres Amigos would likely have prevailed on its claim, had it not failed to properly plead actions for which relief could be granted against the subcontractors.

• The lesson learned here:  Make sure all your ducks are in a row before time, effort and money are spent asking the Court for relief that cannot be granted.

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    A case from the Northern District (Smith v. The Village of Norridge), involving actions brought by an individual against the police, a landlord shopping center and its tenant, emphasizes the significance of indemnity provisions in a contract.

   At issue are cross-claims filed by the landlord of the facility arguing that the tenant is required to indemnify the landlord under a paragraph of the lease which reads that the tenant must:

"[i]ndemnify and save Landlord ... harmless from and defend against any and all demands,claims, actions, damages, costs and expenses, including [costs and attorneys' fees] arising from the conduct or management of the business conducted by Tenant."

  The lease contained a similar provision requiring the tenant to procure insurance for such acts and that the insurance was required to cover the landlord as well.  The cross-claims are pled as breach of contract actions stating the because the contract contains the indemnity provisions, the tenant's failure to indemnify (and obtain insurance in the second claim) amounts to a breach of the contract.

  The court disagreed with the tenants' argument that the Illinois Landlord-Tenant Act (765 ILCS 705/1(a)), which provides:

"(a) Except as otherwise provided in subsection (b), every covenant, agreement, or understanding in or in connection with or collateral to any lease of real property, exempting the lessor from liability for damages for injuries to person or property caused by or resulting from the negligence of the lessor, his or her agents, servants or employees, in the operation or maintenance of the demised premises or the real property containing the demised premises shall be deemed to be void as against public policy and wholly unenforceable."

would bar this action.  The Court found that the provision would apply if the claim against the tenant had been one for indemnity for the negligent acts of the landlord.  However, the landlord pled an action for breach of contract, and the acts alleged as the root of the claims were intentional, so under two separate rationales, the ILTA did not apply.

 
  Accordingly, the court denied the tenant's motion to dismiss the cross claims.

 

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SWPlaza III, LLC v. TSA Stores, Inc., is a Central District opinion dealing with the termination of a lease in a shopping center after a tornado damaged the tenant's commercial store.  The lease contained a provision allowing the tenant to terminate the lease if the damage reached a specific percentage of the total reconstruction cost (35%); the tenant's estimate exceeded the percentage limit and it terminated the lease.  The landlord sought to enforce the lease and claimed that the estimates provided by the tenant were made in bad faith.  The Court held that a significant issue of fact existed regarding the propriety of the estimates.

• In what will undoubtedly become a cited case should House Bill 5293 be passed amending the requirements and standards in Illinois for expert testimony, the Court went through an extensive analysis of the qualifications of a construction contractor providing estimates and his ability to offer testimony as an expert under Daubert.

Illinois Construction Blog

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    Here's a Seventh Circuit decision (Foskett v. Great Wolf Resorts, et al.) full of information regarding claim accrual for negligent design, indemnification, and the theory of risk allocation.  Two parties had entered into an asset purchase agreement with mutual indemnification clauses.  Buyer and Seller had agreed to a sunset provision in Seller's indemnification provision.  A claim accrued after the sunset provision and, on appeal, the court enforced the provision.

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    In an eminent domain case, Marseilles Hydro Power, LLC v. Marseilles Land and Water Co., arising under the Federal Power Act, and involving the interesting issue of deed construction and proper drafting, the Seventh Circuit has laid out some interesting points regarding deed construction premised on prior recordings and conveyances, along with an affirmation of the eminent domain standards applicable to the Federal Power Act.

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In an interesting case which has applied the Illinois Supreme Court's recent Buenz decision, the appellate court found that an ordinance which included an indemnification provision would be read to apply against Nicor in favor of the Village of Wilmette where the ordinance the city passed granting a fifty year easement to Nicor to "place, maintain and operate its gas pipes under the streets of Wilmette, in consideration for which Nicor would provide gas for use by the Village."  While the court properly applied Buenz, it summarily dismissed an issue that likely should have garnered more attention:  The Illinois Construction Contract Indemnification for Negligence Act (740 ILCS 35/1 et seq.)  The court simply states that Nicor's authority for the proposition does not apply, but fails to offer any merit to the idea or state why it doesn't apply. 

By invoking Buenz, using the term "consideration" and even allowing the Village to argue that "its contract with Nicor included a provision indemnifying" the village for its own negligence...  (See page 3 of the opinion) certainly we have a contract.  Whether it's a contract for an easement or whether the contract can be said to touch on issues implicated by the anti-indemnification statute should have been explored by the court.  Or, if the court wanted to say that a contract for an easement, no matter what the activities allowed under the easement are, should not be construed as a contract or agreement for construction... then it should have done so.  Instead, we are left to wonder exactly what the rational for not applying the statute to the agreement between Nicor and Wilmette that includes maintenance of the wires was, when Section 1 of the anti-indemnification act states that it applies to contracts or agreements:



• "With respect to contracts or agreements, either public or private, for the construction, alteration, repair or maintenance of a building, structure, highway bridge, viaducts or other work dealing with construction, or for any moving, demolition or excavation connected therewith, every covenant, promise or agreement to indemnify or hold harmless another person from that person's own negligence is void as against public policy and wholly unenforceable."

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In two interesting cases involving construction negligence on the jobsite, the first district has reversed and upheld directed verdicts for third-party defendants who were subcontractors and the employers of the plaintiffs. 

• In Oldenstedt v. Marshall Erdman and Assoc. Inc., the first district upheld a directed verdict for the third-party employer and also addressed the issue of prejudice in closing statements (finding that failure to object at the time of closing resulted in waiver.)

• In Jones v. DHR Cambridge Homes, Inc., the court found that a directed verdict for the third-party defendant would be overturned, but because the consequence of the directed verdict had been to prevent the third party from presenting both liability and damages evidence, the third-party defendant would be allowed to address both at retrial.

An additional similarity and two interesting discussions involving the use of special interrogatories are contained in both opinions.

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In what is sure to be a contested issue, the new House Bill 5572 is a proposition to require written notice from the contractor to the owner of a single-family, owner-occupied dwelling, prior to filing a lien against any property of the owner.

• Given that there is no time provision installed in this legislation, and that it does not include a method for serving the notice, and that the term "any" could be construed in multiple ways, it is likely that we'll see some revisions of this bill before it could be incorporated into the mechanic's lien act.

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There's certainly a difference between "registration" and "licensure"...

We've come across quite a few architects and engineers who seem to forget that a professional design firm needs to be registered.  It's an extra step, in addition to the professional's individual licensure and registration that's required in Illinois.  But what exactly is the impact of forgetting to register?

Here's an interesting case from the Central District of Illinois, pointing out that a contract will not be voided, and a developer's claim for restitution will not stand even if a professional forgets to register the design firm.  In Brethren v. OSM (C.D. Ill. 06-3161) the court points out that even though a firm may forget to register, the work was still done by a licensed professional and as such, there is no claim. 

Now, if the professional performing the work was unlicensed, certainly the restitution claim would be able to go forward.  The only real teeth the registration law has to compel the registration of the firm comes from the statute authorizing penalties for such a failure to register, 225 ILCS 305/21.  Work by a licensed architect is still work by a licensed architect.

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Two new bills have been introduced to change the Condominium Property Act.

• HB 5037 - Will allow municipalities the ability to appoint receivers for distressed condominium properties and eventually have the properties sold.  Of interest is the definition of  "distressed condominium property":

"Distressed condominium property" means a parcel containing condominium units which are operated in a manner or have conditions which may constitute a danger, blight, or nuisance to the surrounding community or to the general public, including but not limited to one or more of the  following conditions:  

(A) the building is substantially unoccupied, or  has serious violations of any applicable local building code;  

(B) 60% or more of the condominium units are in foreclosure or are units against which a judgment of foreclosure was entered within the last 18 months;

(C) there has been a recording of more condominium units on the parcel than physically exist;

(D) any of the essential utilities to the parcel or condominium units is either terminated or threatened with termination;

(E) there is a delinquency on the property taxes for at least 60% of the condominium units; or

(F) the board of managers has not met within the last 12 months or is otherwise not functioning."

While the act gives the receiver the power to enter into a sales contract for the property with court approval, it appears to be silent regarding any applicable standards for pricing the sale, or achieving any form of FMV.   

• HB 5189 - In a possible response to a fluctuating real estate market, the bill would amend the act to statutorily provide that owners can rent up to 20% of the properties and that no condo board can enact rules to the contrary. 

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The concept of having to obtain a surety bond shouldn't be of any new relevance to anyone doing public work.  Knowing the full extent of the provisions in the surety instrument and having a chance to properly negotiate might not seem all that important to a contractor who plans on completing its obligations.   Negotiating those terms or being aware of the full force of any personal indemnity provisions could be the difference between large-scale financial ruin and being able to get out of trouble with your reputation and bank account in tact.  On the flip-side, knowing whom you're granting surety to, and whether or not they're worth it is equally important.

The recited facts in United Fire v. Bartlett Bituminous should allow everyone to understand that the plaintiff will likely never see its money. (The defendants didn't even bother to respond to a motion for summary judgment.)  With the amount in controversy close to exceeding six million dollars, the point well taken is actually two-fold; one, sometimes you should cut your losses and know when you're sunk and two, performing research on the assets and background of the company you're dealing with is research worth doing.  A little foresight can go a long way.

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In a decision sure to be pertinent to landlords and honing their pleadings in disputes with tenants, the First District has decided that attorney's fees should not be awarded in breach of contract actions against tenants.  After reading Willis v. NAICO Real Estate, perhaps landlords will want to consider exactly how and under what statutes/agreements they look to recoup money from tenants.

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©    Maintaining the copyright in a design can give an architect or engineer another tool in ensuring payment and completion of the contract.  The right to come in and take back the designs or to seek an injunction has teeth and copyright is a limited issue in most standard form contracts.  While disputes based on the licenses and the copyright terms of the contract carry meat, the A/E might consider registering their plans with the US Copyright Office prior to turning them over to other parties.

        Having the protection of the registered copyright allows for the statutory provisions of US Copyright law to be used as well as seeking the remedy under the contract and can offer the added benefit of allowing the A/E to seek to recoup statutory damages as well as legal fees.  A short primer is available from the office, and the limited fee, especially on designs that may be used multiple times can offer an added assurance that payment in full will occur.  

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    For anyone practicing law in today's information age, the constant fees and assessments put forth by different counties for access to recorded documents, court filings, or any other public record is well known.  In fact, the charges for information can sometimes be exorbitant if someone is getting involved in multi-party litigation.

    This newly proposed Senate Bill #2175 should come as a welcome proposal to the small practioner concerned about handing over the expense of accessing public data to a client.

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The new ConsensusDOCS forms were published late last year and will be the subject of the ABA Construction Industry Forum's 2008 Fall Meeting.  With all the buzz we thought it would be pertinent to sit down and read these documents.  This posting is one of many expected to come regarding the new ConsensusDOCS.

            The language implying a fiduciary duty hasn't changed much over the years and is often described by the courts as a "relationship of trust and confidence" between parties.  With that definition entrenched in case law we thought it a bit peculiar that the normal contracting relationship between an architect and an owner would be particularly described as one of "trust and confidence" in ConsensusDOCS 240 section 2.2. 

In the construction setting, plaintiff's with claims have been seeking to impose a fiduciary relationship in one form or another on contractors and architects to gain more damages and a heightened standard of care for some time.  Thankfully, many courts have often struck down the concept of parties contracting for construction services as entering into a fiduciary relationship thus allowing plaintiff's to bring causes of action outside the normal breach of contract claim or based on a heightened standard of care.  (See, 262 F. Supp. 2d 1004; 812 F. Supp. 72)

With the concept of "trust and confidence" and its implication of a fiduciary relationship in mind, it's odd that the ConsensusDOCS Guidebook from October 31, 2007, would explicitly delineate that the contracting parties should not be agreeing to a heightened standard of care:

• "Standard of Care (Section 2.1): A definition of the standard of care applicable to architectural and engineering services performed under this Agreement is not included in this Agreement (previous additions of AGC contracts did include such a definition). The drafters of the new Consensus documents determined that it would be better for the design professionals to be held to a standard imposed on them by their own profession, rather than one defined by this Agreement.

• "Contractors and Owners should not modify this Agreement by adding language that would hold any design professional to a standard of care that is above that which is customary and normal for design professionals in the same time and location, because that might result in the unintended consequence of voiding errors and omissions coverage available to the respective design professionals."

 
But then go on to say that the A/E is accepting a relationship of trust and confidence in Section 2.1 of document 240:

 

• "Relationship of the Parties (Section 2.2): This provision requires the Architect/Engineer (A/E) to accept the relationship of trust and confidence in exercising its skill and judgment in furthering the interests of the Owner and expressly affirms the A/E's representation that it possesses the requisite skill, expertise, and licensing to perform the required services. The new language is preferable, but it should be noted that it was not included in the previous AGC 240 Owner-Designer professional Agreement, no longer published."

       It is also a bit boggling that understanding the implication of the "trust and confidence" language, that no other provision in the document would specifically state that nothing in the contract should be construed as creating a fiduciary relationship between the parties.  Perhaps the authors just thought such a provision unnecessary given the lack of case law supporting a fiduciary relationship in such a setting.  But why then be specific as to the language of "trust and confidence" between the parties?  Why not just state that the parties agree to "good faith and fair dealing" or accept a "contractual relationship for the provision of A/E services"?  And, even if a standard of care is not affected by the language, could "trust and confidence" through its fiduciary implications mean that there are now added duties that the A/E must be aware of?

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        In this recent opinion from the First District, the Court has upheld that a general's control through asserting its authority to stop work due to safety violations by its sub; the mandate that the sub hold weekly safety meetings and submit the minutes of those meetings for the general's review; and the subs contractual obligation to submit a site-specific safety plan all amount to enough retained control to present an issue of fact as to the general's liability under §414 of the restatement of torts.

            §414 states in relevant part that:

            "One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care."

            In the case of Wilkerson v. Schwendener (1-06-2653) the plaintiff was the employee of a sub and was placing some joists on a second floor of a retirement home project when his co-worker handed him a joist and struck him in the foot.

            The general had won summary judgment on the issue of §414 liability where it claimed to not have retained control of its subs work.  The Court found that the general had retained control where it required its sub to (1) comply with a 21 part list of safety regulations generated by the general; (2) hold weekly safety meetings and submit the minutes of those meetings; (3) prepare and submit a site-specific safety plan; and (4) attend the general's weekly safety meetings.  Additionally, at some point prior to the plaintiff's accident the general had sent a letter to the sub stating that the sub needed to get its safety program in order or the general "WILL STOP" (yes, it was all caps in the actual letter) the sub from continuing its work.

            The Court noted that generally, just having a supervisory role over safety would not have implicated the general in §414 liability, but here, with all the factors taken into account, and the threat of stopping the work if safety was not performed properly, the general did retain sufficient control and with it, liability.

            This raises some interesting questions regarding safety.  We know that a general wants to eliminate workplace accidents and that if it is not in charge of workplace safety, its subs might not toe the line (as here).  We also know that a general can't be everywhere at once on a job site.  So what should a general do now?  Should they be standing back and not getting involved in safety programs and full-on supervision?  Would that increase the number of accidents, but shield generals from liability under §414?  It seems a bit ridiculous that because a general was concerned with safety (preventing accidents) and interceded in different ways to increase safety (increase the prevention of accidents) that it should be held to be liable under §414 where its sub didn't have adequate safety in place in order to protect its own employees but where it did try to get the sub to conform to the plan and put adequate protections in place.  If the general hadn't had a plan and hadn't butted in, and hadn't threatened to stop the subs work, the accident would have happened, probably sooner, but it would be able to stand back and have a better argument against §414 liability.  The general didn't control all the safety, and unless there's a reason to believe that the sub would have put in place different and better safety measures than it could under the general's program, it's a bit ridiculous to say that the general should be at fault because it took certain steps to get the safety program of its lackadaisical subcontractor.

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            This is an interesting decision from the Northern District, the plaintiff, a surety company paid out on bonds to subcontractors when the bank that a general had deposited the money into took the funds the general had for payment to the subs to satisfy the general's obligations to the bank.

            The surety had three theories, conversion, a claim for a trust under the mechanic's lien act, and constructive trust.  The court found that because the surety was not suing as subrogee to the general, but rather as subrogee on the funds it paid out to the subs and because it had failed to allege that the bank had knowledge that the funds were for the subcontractors none of the counts could lie.  The Court also held that the bank was not implicated or obligated under the terms of the mechanic's lien act.

            While it initially looks like the failure of the plaintiff to properly plead the facts necessary to maintain the claim resulted in the dismissal, much of the language used implied that in order to maintain the actual claims, the surety should step in as subrogee to the general and not to the sub. 

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    These pesky forum selection clauses keep popping up, but in this interesting twist, the court is now enforcing them when they're not part of the original contract or negotiations with someone, but arrive after work has been started on the back of a purchase order.  In Compass Environmental, Inc. v. Polu Kai Services, LLC, it was Polu Kai's fault for not objecting to or raising an issue about the forum selection clause printed on the back of a purchase order.  But, even if they had, what were they to do when they had already started work on the project?  Would it be an actionable repudiation if Polu Kai had just walked, four days into its job, after it received its purchase order and didn't like the terms printed on the back... terms which weren't negotiated between the parties beforehand and now appear to be deemed accepted unless action is taken?

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            We haven't seen as much discussion as would seem to be merited by the provisions of the Illinois Contractor Prompt Payment Act (815 ILCS 603/1 et seq.).   This act has written itself into every construction contract in the State of Illinois (excepting public works, single family homes and buildings with fewer than 12 family units, of course).  This lack of constructive commenting is likely because the Act didn't become law until August 31, 2007.  However, from the comments and criticisms we have seen, there's an extremely important and sure to be contested issue that needs to be addressed:  Is it possible to "opt" out of the provisions of the Act?

The original version of the House Bill (HB 0743) that introduced what later became the Act included language at the beginning of Section 10 which read:

• "Construction contracts.  All construction contracts shall be deemed to provide the following unless they expressly exclude the provisions of this Act"

            This provision was the sole subject of Senate Committee Amendment No. 1, which was adopted by the Senate and the House and incorporated into the Act and struck the "unless they expressly exclude the provisions of this Act" language from the Act.

            This creates a strong argument for anyone wishing to claim that it was the express intent of the legislature to not allow parties to "opt" out of the act.  Combine this with the ideas that the public policy of the act was to ensure prompt payment to contractors and subs as defined by the Mechanic's Lien act; to allow contractors and subs an additional recourse should payments not be forthcoming; to shorten the time it takes for payment and approval of work, and we end up with a decent case that parties could end up contracting around the act for naught.

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    For those interested in timing requirements on their mechaninc's liens and those having had the arduous experience of title searches or property transfers recorded but not appearing of record during the process, the Illinois House Bill 4698 may come as a welcome relief.  HB 4698 proposes a change to the Conveyances Act and the Counties Code, which, if enacted would require, not only that deeds be filed within 7 days of execution, but would also require that any party with an interest in the property be notified of the deed as well.

    Previously, the recorders office only sent notice to the previous owner of record.  Now, with recorders sending notice to any "party with a record of interest in the property," could the recorders' notices be relied on in filing the lien claims and naming parties?  Will a recorder's determination of a "party with recorded interest", or the failure to notify a recorded party of interest be actionable?

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            For those out-of-state contractors, architects, and builders working on projects in some other place for Illinois' residents, there are some interesting lessons in the Fourth District's Isringhausen v. Prime Contractors and Associates, Inc., opinion regarding keeping yourselves from being subjected to Illinois law.

            It should come as no surprise that a Florida company working on building a house in Florida that was contacted and did no business in Illinois was not subject to Illinois jurisdiction.  But, what if the Florida contractor was advertising here in Illinois, or had made a few trips to Illinois to complete the contract?  What if the escrow or some other portion of the contract were to be completed in Illinois so that the contractor, although minimally, were availing itself of Illinois law?  It would be wise to work out the full details for out-of-state construction both for owners in Illinois and contractors elsewhere, lest the parties find themselves in costly litigation hundreds or even thousands of miles away.

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    An owner can face multiple claims from a host of parties beyond the initial construction phases.  Where rental units are concerned, the duty to maintain a premises when renting or managing a property can be set both contractually and by common law.

            In the recent decision Young v. Prairie Management & Development, Inc., the First District Appellate Court was confronted with the issues of the duty to maintain the locks and common areas of a property and the possible existence of a common law duty to protect tenants from the actions of third-party criminals.

            In a win for owners across the state, the Court found that an honest substantial effort to maintain a property through regular checking and repair was just good ownership and not the creation of a duty to protect tenants from third-party criminal acts.

Our hats off to FGPP's own Bob Boylan for bringing home this victory.

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    Yesterday's Seventh Circuit opinion, IFC Credit v. United Business, should be of interest to anyone out there contracting and agreeing to waive a trial by jury.  The Court found that state law will control a determination about the validity of bench-trial agreements (jury-waiver clauses) in federal cases brought under diversity jurisdiction. 

    Apparently, it may create a possible circuit split between the Courts as well. 

    The failure to have an attorney review or negotiate the terms of a contract appear to no longer be a decent defense to jury-waiver clauses.

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