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

Sutula‐Johnson sold office furniture. In 2010, OfficeMax adopted a compensation plan that paid a commission rate depending on the sale’s profit. Commissions were earned either when a customer paid or 90 days after the customer was invoiced, whichever came first. Sutula‐Johnson negotiated better terms and earned commissions upon invoicing. OfficeMax and Office Depot merged in 2013. Office Depot continued paid Sutula‐Johnson and her colleagues under the terms of the old OfficeMax plan. In July 2014, Office Depot announced a new compensation plan for furniture sales, effective immediately. Sutula‐Johnson claims she did not receive a copy of the new plan for several weeks. The new plan significantly changed how Sutula‐Johnson was paid and reduced her total pay. She initially refused to sign it, complaining about its application to sales already in the works but not yet invoiced. Sutula‐Johnson continued working for Office Depot for more than a year. In 2015 Sutula‐Johnson resigned and sued for breach of contract and violations of the Illinois Wage Payment and Collection Act, 820 ILCS. 115/1. The Seventh Circuit affirmed summary judgment for Office Depot on the breach of contract claims but reversed as to the statutory claims. Sutula‐Johnson accepted the new terms by continuing to work but offered evidence that Office Depot violated the Wage Act by failing to pay her commissions monthly and by failing to pay her commissions earned before she resigned. View "Sutula-Johnson v. Office Depot, Inc." on Justia Law

Fiorentini is the owner and president of a small technology company. When cancer treatment left him unable to perform his job, he received total disability benefits under a Paul Revere policy. Five years later, after Fiorentini was back at work and exercising full control of the company, Paul Revere notified him that he no longer qualified for the benefits. Fiorentini argued that he still satisfied the policy’s requirements for total disability because, although he could perform most of his job duties, he was unable to do what it takes to generate new business. Paul Revere rejected that argument, encouraging him to apply for “residual disability benefits,” which would have required Fiorentini to show that he was either unable to perform “one or more of the important duties” of his occupation or could only perform his important job duties for “80% of the time normally required to perform them” and that he earned at least 20% less than he did predisability. Fiorentini instead sued for breach of contract. The Seventh Circuit affirmed summary judgment for Paul Revere. The total disability provision does not cover the insured who has a diminished ability to perform his occupation, but rather the insured who is unable to continue it. View "Fiorentini v. Paul Revere Life Insurance Co." on Justia Law

Simpkins began working for DuPage Housing Authority (DHA) in 2009 under an “Independent Contractor Agreement” for “general labor” to rehabilitate vacant properties to make them suitable for occupants. In 2011, the rehab work slowed and Simpkins began working primarily at Ogden townhome community, for which DHA served as on‐site management. Ogden’s property manager and maintenance supervisor, DHA employees, gave Simpkins instructions and prioritized the order in which he needed to complete tasks. In May 2012, Simpkins and DHA entered into another “Independent Contractor Agreement,” covering “general labor” at Ogden. Simpkins worked full‐time and exclusively for DHA; reported his hours by invoice; and was paid bi‐weekly via check. DHA issued Simpkins 1099‐MISC tax forms, while others received W‐2 forms. Simpkins knew that DHA considered him an independent contractor and repeatedly requested to become an employee. DHA did not provide him with pension, insurance, or other benefits. In 2015, Simpkins was injured in a car accident; his relationship with DHA ended. He filed suit, claiming that DHA had repeatedly failed to pay him overtime and was required to provide him with disability benefits. The district court ruled that Simpkins was not an employee under the Fair Labor Standards Act and rejected all of his federal claims. The Seventh Circuit reversed, finding genuine issues of fact as to the control exercised by DHA, questions concerning the origin of tools and material, and ambiguity as to the termination date of the second contract. View "Simpkins v. DuPage Housing Authority" on Justia Law

In 2003, Pain Center contracted with SSIMED for medical-billing software and related services. In 2006, the parties entered into another contract, for records-management software and related services. In 2013, Pain Center sued SSIMED for breach of contract, breach of warranty, breach of the implied duty of good faith, and four tort claims, all arising out of alleged shortcomings in SSIMED’s software and services. The district judge found the entire suit untimely. The Seventh Circuit affirmed on all but the claims for breach of contract. The judge applied the four-year statute of limitations under Indiana’s Uniform Commercial Code (UCC), holding that the two agreements are mixed contracts for goods and services, but the goods (i.e., the software) predominate. The Seventh Circuit disagreed. Under Indiana’s “predominant thrust” test for mixed contracts, the agreements in question fall on the “services” side of the line, so the UCC does not apply. The breach-of-contract claims are subject to Indiana’s 10-year statute of limitations for written contracts and are timely. Pain Center licensed SSIMED’s preexisting, standardized software but received monthly billing and IT services for the life of both contracts. View "Pain Center of SE Indiana, LLC v. Origin Healthcare Solutions LLC" on Justia Law

Kenosha used Comsys as its information-technology department. Comsys had its offices inside City Hall and stored its electronic information on the City’s servers. Their contract automatically renewed from year to year unless terminated, and provided that either party “shall have the right, with or without cause, to terminate the Agreement by written notice delivered to the other party at least twelve (12) calendar months prior to the specified effective date of such termination.” In 2014, hostilities broke out between the parties: a Comsys employee because a city employee with plans to bring the IT department in-house and there were allegations of stolen email and a search of the servers. The City’s Common Council voted to end the contract. The Mayor delivered formal notice days later. The contract ended a year later. Comsys sued, alleging First and Fourth Amendment violations. The district court dismissed several claims on the pleadings and dismissed the Council’s members on the ground of legislative immunity but denied motions for summary judgment on the First and Fourth Amendment claim and official immunity claims by the Mayor, City Administrator, and the City Manager. The Seventh Circuit reversed as to those officials, finding that they did not violate clearly established law and cannot be ordered to pay damages under 42 U.S.C. 1983, and noting that trying to isolate contract administration from speech may be impossible in this situation. View "Comsys Inc. v. Pacetti" on Justia Law

Prolite Building Supply bought Ply Gem windows, which it resold to Wisconsin builders. Some homeowners were not satisfied with the windows, which admitted air even when closed. Contractors stopped buying from Prolite, which stopped paying Ply Gem. Prolite and homeowners sued. Ply Gem removed the action to federal court and counter-claimed against Prolite for unpaid bills. Additional parties intervened. The Seventh Circuit affirmed summary judgment in favor of Prolite. The court vacated the judgment on the homeowners’ claims for remand to state court. The service agreement between Prolite and Ply Gem requires Prolite to repair the Ply Gem windows in exchange for a discount and needed parts. There was no breach of that agreement. The homeowners’ claims can be resolved under supplemental jurisdiction only if they “are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy,” 28 U.S.C. 1367(a). The language of the window warranties received by the homeowners and the service agreement did not overlap. Prolite complained that Ply Gem did not do enough to ensure that its customers (the builders) remained willing to purchase Ply Gem windows. The homeowners just wanted to stop drafts and moisture. The nature of the work done differed. View "ProLite Building Supply, LLC v. Ply Gem Windows" on Justia Law

The initial six-month agreement between LimeCoral and CareerBuilder specified that all graphic designs created for CareerBuilder would constitute the exclusive property of CareerBuilder and said nothing about renewal fees. After six months, LimeCoral continued to prepare media files incorporating custom graphic designs, typically receiving $3,000 for each new design. As there was no longer a written agreement transferring ownership of the copyright, LimeCoral retained ownership and implicitly granted CareerBuilder a license to use the designs. CareerBuilder argued the license was unconditional and irrevocable; LimeCoral claimed it was subject to CareerBuilder’s alleged agreement to pay an annual renewal fee for every design that CareerBuilder continued to use. LimeCoral sued, alleging breach of copyright and breach of an alleged oral agreement to pay an annual renewal. The district court granted CareerBuilder summary judgment, finding that CareerBuilder had an irrevocable, implied license to use LimeCoral’s designs that was not conditioned upon any agreement to pay LimeCoral renewal fees. The Seventh Circuit affirmed. There was no evidence that would permit the factfinder to conclude that there was an agreement between LimeCoral and CareerBuilder that LimeCoral would be paid a fee for each renewal, and that the implied license LimeCoral granted to CareerBuilder to use the job brandings was subject to that agreement. View "LimeCoral, Ltd. v. CareerBuilder, LLC" on Justia Law

University Park hired Linear as its Village Manager through May 2015, concurrent with the term of its Mayor. In October 2014 the Village extended Linear’s contract for a year. In April 2015 Mayor Covington was reelected. In May, the Board of Trustees decided that Linear would no longer be Village Manager. His contract provides for six months’ severance pay if the Board discharges him for any reason except criminality. The Village argued that the contract’s extension was not lawful and that it owes Linear nothing. The district court agreed and rejected Linear’s suit under 42 U.S.C. 1983, reasoning that 65 ILCS 5/3.1-30-5; 5/8-1-7 prohibit a village manager's contract from lasting beyond the end of a mayor’s term. The Seventh Circuit affirmed on different grounds. State courts should address the Illinois law claims. Linear’s federal claim rests on a mistaken appreciation of the role the Constitution plays in enforcing state-law rights. Linear never had a legitimate claim of entitlement to remain as Village Manager. His contract allowed termination without cause. His entitlement was to receive the contracted-for severance pay. Linear could not have a federal right to a hearing before losing his job; he has at most a right to a hearing to determine his severance pay--a question of Illinois law. View "Linear v. Village of University Park" on Justia Law

In 2012, hackers infiltrated the computer networks at Schnuck Markets, a large Midwestern grocery store chain based in Missouri, and stole the data of about 2.4 million credit and debit cards. By the time the intrusion was detected and the data breach was announced in 2013, the financial losses from unauthorized purchases and cash withdrawals had reached the millions. Financial institutions filed a class action, having issued new cards and reimbursed customers for losses as required by 15 U.S.C. 1643(a). They asserted claims under the common law and Illinois consumer protection statutes (ICFA). The Seventh Circuit affirmed the dismissal of the suit. The financial institutions sought reimbursement for their losses above and beyond the remedies provided under the credit-debit card network contracts; neither Illinois or Missouri would recognize a tort claim in this case, where the claimed conduct and losses are subject to these networks of contracts. Claims of unjust enrichment, implied contract, and third-party beneficiary also failed because of contract law principles. The plaintiffs did not identify a deceptive guarantee about data security, as required for an ICFA claim, nor did they identify how Schnucks’ conduct might have violated the Illinois Personal Information Protection Act. View "Community Bank of Trenton v. Schnuck Markets, Inc." on Justia Law

Linderman bought an Indianapolis house in 2004 and lived there with her ex-husband, their children, and her parents. In 2013, Linderman left and stopped paying the mortgage loan. The others left in 2014. The unoccupied structure was vandalized. U.S. Bank, which owns the note and mortgage, started foreclosure proceedings. The vandalism produced insurance money that was sent to the Bank. The city notified Linderman of code violations. Linderman hired a contractor. In 2015 the Bank disbursed $10,000 for repairs. The contractor abandoned the job. The house was vandalized twice more; a storm damaged the roof. Linderman has not hired a replacement contractor or asked the Bank for additional funds but inquired about the status of the loan and the insurance money. The Bank sent a response. Asserting that she had not received that response, Linderman sued under the Real Estate Settlement Procedures Act, 12 U.S.C. 2605(e)(1)(B). The Seventh Circuit affirmed the rejection of her claims. None of Linderman’s problems with her marriage and mental health can be traced to the Bank. Linderman does not explain how earlier access to the Bank’s record of the account could have helped her; some of her asserted injuries are outside the scope of the Act. The contract between Linderman and the Bank, not federal law, determines how insurance proceeds must be handled. Contract law also governs the arrangement between Linderman and the contractor. View "Floyd v. U.S. Bank National Association" on Justia Law