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

Idento makes robotic milking machines in the Netherlands. BouMatic, LLC, based in Wisconsin, entered into an agreement for purchasing and reselling those machines in Belgium. BouMatic claims that Idento breached the agreement by selling direct to at least one of BouMatic’s Belgian customers and by failing to provide parts and warranty service. The district court dismissed, ruling that commercial transactions in the European Union do not expose Idento to litigation in Wisconsin even though BouMatic has its headquarters there, the parties exchanged drafts between Wisconsin and the Netherlands, and Idento shipped one machine to Wisconsin. After exploring the nature of the business entities, the Seventh Circuit vacated for consideration of personal jurisdiction in light of the contract language. Litigants cannot confer subject matter jurisdiction by agreement or omission, but personal jurisdiction is a personal right that a litigant may waive or forfeit. View "BouMatic LLC v. Idento Operations BV" on Justia Law

The Ho-Chunk Nation, a federally recognized Indian Tribe, operates casinos in Wisconsin and nets more than $200 million annually from its gambling operations. Cash Systems, one of three businesses involved in this case, engaged in issuing cash to casino customers via automated teller machines and kiosks, check-cashing, and credit- and debit-card advances. Whiteagle, a member of the Nation, held himself out as an insider and offered vendors an entrée into the tribe’s governance and gaming operations. Cash Systems engaged Whiteagle in 2002 as a confidential consultant. Cash Systems served as the Nation’s cash-access services vendor for the next six years, earning more than seven million dollars, while it paid Whiteagle just under two million dollars. Whiteagles’s “in” was his relationship with Pettibone, who had been serving in the Ho-Chunk legislature since 1995. Ultimately, Whiteagle, Pettibone, and another were charged with conspiracy (18 U.S.C. 371) to commit bribery in connection with the contracts with the Ho-Chunk Nation and substantive bribery (18 U.S.C. 666). Whiteagle was also charged with tax evasion and witness tampering. Pettibone pleaded guilty to corruptly accepting a car with the intent to be influenced in connection with a contract. Whiteagle admitted that he had solicited money and other things of value for Pettibone from three companies, but denied actually paying bribes to Pettibone and insisted that he and Pettibone had advocated for Whiteagle’s clients based on what they believed to be the genuine merits of those clients. Convicted on all counts, Whiteagle was sentenced, below-guidelines, to 120 months. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence on the bribery charges, the loss calculation, and admission of certain evidence.View "United States v. Whiteagle" on Justia Law

Spitz, a freelance copywriter, developed a plan to market “pet safe plants” to the burgeoning pet supplies market. She pitched the idea to Amerinova, a company that develops and licenses plant varieties. Although Amerinova expressed interest, the project stalled. When Spitz discovered that Proven Winners, a company partially owned by the owners of Amerinova, had described some of its plants as “pet friendly” on its website and plant tags, she sued Proven Winners and its owner, Euro. The district court entered summary judgment in favor of Proven Winners and Euro. The Seventh Circuit affirmed. Spitz did not identify any legal theory that would make Proven Winners and Euro accountable for a contract allegedly reached with Amerinova.View "Spitz v. Proven Winners N. Am., LLC" on Justia Law

Shuffle makes consumer grade automatic card-shuffling equipment. Wolff distributes casino grade gaming equipment. In 2010 the two signed a letter of intent that Shuffle, with financial assistance from Wolff, would develop casino-grade shuffling equipment, and Wolff would become its exclusive distributor. Before development of the new equipment was completed, Shuffle ended the relationship and sought a declaratory judgment that the agreement was not an enforceable contract. Wolff counterclaimed, claiming breach of contract, fraud, and unjust enrichment. The district judge granted summary judgment in favor of Shuffle with respect both to its claim for declaratory relief and to Wolff’s counterclaims, essentially rescinding the agreement. In its complaint, Shuffle acknowledged that it would have to return $124,940 earnest money to Wolff, but the order failed to mention the earnest money. Shuffle ignored Wolff’s request for a refund. Wolff moved, under FRCP 60, that the court order Shuffle to refund the money. The judge entered a post-judgment order requiring the refund, without mentioning Rule 60 or any other ground for amendment. The Seventh Circuit affirmed, stating that “if the flaw lies in the translation of the original meaning to the judgment, then Rule 60(a) allows a correction.” The correction just made explicit what the parties must have assumed; that with the draft agreement rescinded the earnest money had to be returned. View "Shuffle Tech Int'l, LLC v. Wolff Gaming, Inc." on Justia Law

Trump Tower Chicago is a 92-story building with 486 residential condominium units, 339 hotel condominium units, retail space, a health club, ballrooms, meeting rooms, restaurants, a hair salon, and other facilities. When the owner of a hotel condominium unit is not occupying the unit, building management can rent it to a visitor; rental income is divided with the owner’s share credited against his annual maintenance fee. Plaintiff, an 80-year-old CPA and financial planner, agreed to buy two hotel condominium units in 2006 for $2.2 million. She bought them as an investment and already owned other investment condominium units, including a residential unit in Trump Tower Chicago. The agreement gave TrumpOrg “the right, in its sole and absolute discretion, to modify the Condominium Documents.” Plaintiff asked TrumpOrg to give her the right to terminate the agreement and get her deposit back if she disapproved of any such changes. TrumpOrg refused. Plaintiff signed the agreement, even though TrumpOrg had already made three changes. The next year, TrumpOrg made changes that greatly curtailed owners’ rights in the hotel facilities. Plaintiff refused to close. TrumpOrg did not seek to compel her to close, but did not return her down payment, $516,000 and canceled the purchase agreement. Plaintiff sought damages under the common law of contracts, the Illinois Consumer Fraud and Deceptive Business Practices Act, the Condominium Property Act, and Illinois Securities Law. The district court ruled in favor of the defendants. The Seventh Circuit affirmed. View "Goldberg v. 401 N. Wabash Venture, L.L.C., " on Justia Law

Northern, operated by VanDuinen, was a general contractor on public construction projects, legally required to obtain surety bonds. Hanover was Northern’s bonding agent and required Northern to enter into an Indemnity Agreement, which VanDuinen signed in his individual capacity and as Northern’s President. The Midway Airport Project was financed by the FAA and managed by Parsons. In 2008 Northern won the bid and began subcontracting. in 2009 subcontractors complained that Northern failed to pay them in accordance with the bonds and contracts. Work was halted, resulting in a separate complaint, by Parsons, for failure to complete the Project as required. The FAA opted to retain possession of remaining contract funds, $127,086.00, pending resolution of the disputes and completion of the work. Hanover received claims from subcontractors McDaniel ($127,452.78) and Rex Electric ($78,495.00) and a claim for performance from Parsons. Hanover demanded collateral under the Agreement. Northern refused to post collateral or to indemnify Hanover. In 2009 McDaniel filed for bankruptcy; the bankruptcy trustee sued Hanover seeking payment for work performed. In 2012, Hanover paid the trustee $127,452.78 to resolve both McDaniels’s and Rex Electric’s claims. Hanover resolved Parson’s claim by stepping in as general contractor and arranging for completion of the Project. Parsons paid Hanover the $127,086.00 of contract funds the FAA had withheld. Hanover sued Northern and VanDuinen. The district court granted summary judgment in Hanover’s favor. The Seventh Circuit affirmed. The Agreement is unambiguous. Northern breached it, and Hanover is entitled to contractual damages. View "Hanover Ins. Co. v. Northern Bldg. Co." on Justia Law

In 2003, a joint venture formed between llcs, TABFG and NT Prop, to trade securities. TABFG was responsible for trading and was comprised of three individual traders. NT Prop was to fund the venture, and included two limited liability corporations: NT Financial and Pfeil Commodities. The sole member of Pfeil Commodities was Richard Pfeil, the “money man.” NT Prop was managed by Pfeil’s attorney, and another. NT Prop provided $2 million start-up money and the traders earned profits of $3.4 million. Before forming TABFG, the traders were employees of SIG and were subject to restrictive covenants. The Agreement provided for payment of attorneys’ fees and costs necessary to escape the restriction. The traders sought a declaratory judgment. SIG responded by adding TABFG and NT Prop to the lawsuit, seeking disgorgement of profits. SIG obtained an injunction covering nine months after their departure from SIG, ending the joint venture. The parties failed to agree to a final accounting, but TABFG needed funds for a defense in the SIG lawsuit. Pfeil caused NT Prop to distribute $360,000 to TABFG, $533,023.69 to NT Financial, and $2,742,182.02 to Pfeil Commodities. TABFG sued, alleging that Pfeil, who was not an officer, director or manager of NT Prop, engineered a distribution of the bulk of the joint venture funds to himself and tortiously caused NT Prop to breach its obligations to TABFG under the Agreement. The district court judge agreed and awarded $957,659.68. The Seventh Circuit affirmed. View "TABFG, LLC v. Pfeil" on Justia Law

The Halims own named WR Property Management. The company’s predecessor had contracted to buy natural gas from CES for the Halims’s 41 Chicago-area rental properties. CES delivered, but the company stopped paying and owed about $1.2 million when CES cut off service and filed suit. An Illinois court awarded $1.7 million, including interest and attorney fees. The company did not pay; the Halims had transferred all of its assets to WR. CES filed a diversity suit under the Illinois Fraudulent Transfer Act. The district court granted CES summary judgment and entered a final judgment for $2.7 million on fraudulent‐conveyance and successor‐liability claims. The Seventh Circuit affirmed, stating: “If the Halims are wise, they will start heeding the adage: if you’re in a hole, stop digging.” View "Centerpoint Energy Servs., Inc. v. WR Prop. Mgmt., LLC" on Justia Law

Greving has lived and farmed in southeastern Wisconsin since 1971. In 2003 he began contracting to sell his grain to Northern Grain, an Illinois-based grain buyer. Northern Grain claimed that Greving repudiated several contracts formed years after the parties first began contracting and sought almost $1 million in damages. When Greving refused to arbitrate, Northern Grain sought an order compelling arbitration. The Illinois district court dismissed for lack of personal jurisdiction. The Seventh Circuit affirmed. Greving lacks minimum contacts with Illinois that would permit the district court, consistent with the due process clause, to exercise specific personal jurisdiction over him. Greving only set foot in Illinois once, to attend a seed-corn meeting in 2003, months before the parties entered into the first of their contracts, where he met Wilson, who became his contact with Northern Grain. Even assuming that his attendance at the meeting would enter the “personal-jurisdiction calculus for the later-formed contracts at issue,” there is no indication that Greving attended the meeting in an effort to find grain buyers. Virtually everything else about Greving’s contractual relationship with Northern Grain was based in Wisconsin. View "N. Grain Mktg., LLC v. Greving" on Justia Law

Alforookh manages and operates restaurants under franchise agreements with IHOP. He created companies to hold the franchises, including A&F. Alforookh and A&F are in Chapter 11 bankruptcy proceedings. Their primary assets are 17 IHOP franchise agreements and corresponding building and equipment leases. Generally, Chapter 11 debtors may assume or reject executory contracts any time before confirmation of a plan, 11 U.S.C. 365(d)(2). Unexpired leases of nonresidential real property, however, must be assumed within 120 days, subject to a 90-day extension. A&F did not assume the building leases within 120 days or seek an extension, so IHOP claims that those leases were rejected and that the franchise agreements and equipment leases expired. A&F argued that because the building leases are just one part of the larger franchise arrangement, section 365(d)(2)’s more generous time limit applies to the whole arrangement, including the building leases. The bankruptcy judge deemed the building leases rejected and the franchise agreements and equipment leases expired. A&F’s request for a stay pending appeal was rejected by the bankruptcy and district courts. The Seventh Circuit granted an emergency motion and issued a stay order freezing the status quo during the pendency of the appeal and subsequently held that a continued stay was warranted. View "A&F Enters., Inc. II v. IHOP Franchising, LLC" on Justia Law