Window World of Chicagoland v. Window World, Inc.

Hampton's contracts with Window World, allowed Hampton to use WW trademarks. WW alerted Hampton that their dealings were subject to the Illinois Franchise Disclosure Act, and that Hampton had 35 days to elect between rescinding the contracts and signing a franchise agreement. Hampton did neither, but filed suit, alleging violation of the Act and fraud. WW sued under the Lanham Act (Suit 2). Hampton returned a waiver of service, but did not hire a lawyer for Suit 2. Hampton dismissed Suit 1, without prejudice, but did not respond to Suit 2. WW successfully moved for default, then for default judgment. All motions and notices were in the electronic filing system, but Hampton was not using that system and did not respond. The court entered a default judgment for $100,000 in damages and costs, and an injunction. Hampton continued calling his business Window World, but did not make payments or pay the judgment. Hampton closed the business, then filed Suit 3, presenting the same claims as Suit 1, and sought to reopen Suit 2 and set aside the judgment. The judge concluded that Hampton’s failure to follow the electronic filings, plus his professed belief that Suits 1 and 2 had been dismissed together, amounted to excusable neglect, but conditioned reopening of Suit 2 on payment of $33,000. Hampton did not pay. The court reinstated the default judgment. Suit 3 was dismissed; Hampton’s claims in Suit 3 were compulsory counterclaims in Suit 2. The Seventh Circuit affirmed. If the suits are separate, claim preclusion blocks Hampton’s current claims; if they are consolidated, law of the case leads to the same outcome. View "Window World of Chicagoland v. Window World, Inc." on Justia Law