Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

The Directors & Officers Liability policy contains an insured vs. insured exclusion that removes the duty to defend or indemnify for “Loss on account of any Claim ... by or on behalf of any Insured or Company in any capacity.” The allocation clause provides: “If ... Insureds incur an amount consisting of both Loss covered by this Policy and loss not covered … because the Claim includes both covered and uncovered matters, such amount shall be allocated between covered Loss and uncovered loss based upon the relative legal exposures of the parties to covered and uncovered matters.” Five plaintiffs sued SCBI and directors and officers, asserting fraud, civil conspiracy, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The insurer declined to advance defense costs or otherwise indemnify SCBI, citing the exclusion. Two plaintiffs are former directors of SCBI who are insureds; a third is also included in the definition. The district court dismissed, finding no duty to defend or to indemnify. The Seventh Circuit held that the insurer has no duty to defend or indemnify the claims brought by the three insured plaintiffs, but must defend and indemnify with respect to the two non-insured plaintiffs. View "Miller v. St. Paul Mercury Ins. Co." on Justia Law

Hill and his wife incorporated a tax service business, run out of their apartment, then obtained the names, birth dates, and social security numbers of real individuals and filed approximately 121 false tax returns for the tax year 2005, amounting to approximately $525,460 in false filings. In total, the IRS issued approximately $353,500 in tax refunds, which were electronically transferred to value cards which Hill was able to redeem for cash. Hill pled guilty to conspiracy to defraud the U.S.,18 U.S.C. 286 and one of 20 charged counts of fraud in connection with identity theft, 18 U.S.C. 1028(a)(7) and was sentenced to 92 months in prison. The Seventh Circuit affirmed, finding the sentence reasonable. View "United States v. Hill" on Justia Law

After being arrested for weapons crimes stemming from his possession of a loaded handgun, defendant contacted his girlfriend and asked her to file a complaint with the Chicago Police Department, alleging that his arresting officers planted the gun on him and arrested him falsely. She did so, and CPD initiated an investigation. As part of its investigation, CPD contacted the girlfriend, who immediately recanted her complaint and confessed that she had no actual knowledge of what transpired during defendant’s arrest. CPD terminated its investigation. Federal authorities assumed jurisdiction and charged defendant with being a felon in possession of a firearm, 18 U.S.C. 922(g). He pled guilty, but appealed his sentence, arguing that the district court improperly enhanced his base offense level for obstruction of justice, predicated on the false complaint he lodged with CPD. The Seventh Circuit affirmed. View "United States v. Selvie" on Justia Law

In 2007, Nelson, a minority shareholder and major creditor of RTI sued CHSWC alleging conspiracy with RTI’s majority shareholders to use RTI’s Chapter 11 bankruptcy to enrich themselves, tortious interference with RTI’s loan contract with Nelson, and abusing the bankruptcy process. The Bankruptcy Court found that RTI’s Chapter 11 petition was not filed in bad faith. The district court dismissed Nelson’s federal suit and remanded state law claims to state court. The Seventh Circuit concluded that because RTI had no assets and had terminated business, the adversary proceeding was moot; reversed the remand of state-law claims; and held that dismissal of the abuse-of-process claim did not require dismissal of state-law claims. On remand the district court dismissed, reasoning that the state law claims were predicated on allegation that RTI’s bankruptcy filing was improper, and finding “undisputed facts” and that partial recharacterization of Nelson’s debt as equity was proper. The Seventh Circuit affirmed, reasoning that nothing of legal significance happened after the last appeal. View "Nelson v. Welch" on Justia Law

Medlock was a student at Indiana University, living in a single room in a dormitory. As part of a routine “health and safety inspection,” two University resident assistants searched Medlock’s dormitory room for safety hazards. Medlock was not present at the time. When the resident assistants entered the room, they discovered marijuana in plain sight, and notified University police, who later entered Medlock’s room and seized the drugs. The Dean summarily suspended Medlock for one year. After exhausting internal appeals, Medlock sought a preliminary injunction, citing violation of his Fourth Amendment rights. The district court denied his motion. The Seventh Circuit dismissed an appeal as moot because the suspension had expired.

In 2000, C&D hired Jones, who had periodic leg and back pain and bouts of anxiety, requiring him to see a physician once every two or three months and to undergo tests two or three times per year. He took prescription medication. In 2003, C&D implemented an attendance policy that assesses points for policy violations. Points are not assessed for preapproved leave under the Family and Medical Leave Act, 29 U.S.C. 260. By October 1, 2009, Jones had accrued two and one-half points; three points results in termination. In September 2009, Jones spoke with C&D’s FMLA Coordinator, about his medical condition. His treating physician, Lubak, faxed FMLA certifications indicating that Jones required periodic treatment. Jones missed his entire scheduled shift on October 1. He claims to have left a voicemail for his supervisor prior to his absence, but the company disputes this. On October 1, he visited the doctor’s office to check on paperwork and obtain a prescription refill, but was never examined or evaluated by Dr. Lubak. C&D terminated Jones’s employment. The district court granted C&D summary judgment, reasoning that Jones was not entitled to leave on October 1 because he did not receive medical treatment. The Seventh Circuit affirmed.

An informant, endorsed as reliable, stated that he saw known meth cook Barttelt brew meth at a specific hunting cabin; that he had seen an anhydrous ammonia tank at the cabin within the week; that a locked cable blocked the drive; and that Barttelt drove a green Mercury Grand Marquis. At the property, the officer found a cable blocking a driveway; a vehicle approached the gate. Observing unusual movements, officers approached the maroon Chevrolet Beretta, recognized the driver but not the passenger, requested that they exit the car, learned that the passenger was Barttelt, and smelled anhydrous ammonia. The driver indicated that Barttelt was cooking meth. A search of the cabin, authorized by a warrant, based on information learned during the stop, revealed a lab. The district court denied a motion to suppress. The Seventh Circuit reversed. Stopping a car just to identify occupants is deliberate enough to justify suppression when there is neither probable cause to believe nor reasonable suspicion that the car is being driven contrary to laws governing operation of motor vehicles or that the car or occupants are subject to seizure or detention in connection with the violation of other law. The court did not address the sufficiency of Barttelt’s interest in the cabin.

Plaintiff and his mother lived in public housing. His mother was arrested and charged with possession of cocaine and resisting law enforcement officers; she later pleaded guilty. Less than one month later she received notice that her arrest violated her lease agreement, that she had 30 days to vacate, and that she could contest termination of her lease during the eviction procedure. The Housing Authority subsequently filed an eviction action in Indiana state court. Before that hearing, plaintiff sought a preliminary injunction. The district judge conducted a telephonic hearing and denied the motion, based mainly on the Anti-Injunction Act, 28 U.S.C. 2283, and in consideration of "the principles of equity, comity, and federalism that restrain a federal court, while recognizing the respect due the courts of a sovereign state." The state court ruled in favor of the Housing Authority, issuing an order for immediate possession of the property and eviction. The Seventh Circuit dismissed, as moot, an appeal from the denial of an injunction.

Defendant pleaded guilty to two counts of knowingly and intentionally using a communication facility in committing, causing, or facilitating a drug trafficking crime, 21 U.S.C. 843(b). The district court sentenced him to 48 months’ imprisonment on Count I and 39 months on Count II, to run consecutively. The Seventh Circuit affirmed. The district court was within its discretion in imposing consecutive sentences and adequately addressed arguments under the U.S.S.G. 3553(a) factors and otherwise followed the correct sentencing procedure. The seriousness of the underlying offense trumped the positive aspects of defendant’s personal characteristics.

Defendant’s llama escaped its pen and wandered off and he was charged with misdemeanor abandonment under the Illinois animal cruelty statute. Rather than hire a lawyer, defendant pled guilty and paid a $525 fine. Three years later, he pled guilty to a federal charge for possession of several hundred marijuana plants. The marijuana conviction called for a mandatory minimum 10 years in prison. But for the misdemeanor llama conviction, defendant could have avoided the mandatory minimum by qualifying for the statutory safety valve, 18 U.S.C. 3553(f), and his guideline sentencing range would have been 18 to 24 months in prison. Counting the llama conviction as one criminal history point, his second point, prevented use of the safety valve, which is limited to defendants with no more than one point. The Seventh Circuit vacated the sentence of 10 years, finding that the llama conviction is similar to misdemeanors listed in U.S.S.G. 4A1.2(c) as offenses that should not count for any criminal history points. Application of that provision would have allowed the district court to reach the result that it felt was just here. .