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

Manpower, an international staffing firm, is the parent of Right Management in Paris, France. A building in which Right leased space collapsed, so that Right’s offices were inaccessible. Right relocated without having access and incurred replacement costs and lost income from the interruption of operations. A local insurance policy, issued by ISOP’s French affiliate, provided primary coverage, and a master policy, issued by ISOP and covering Manpower’s operations worldwide, provided excess coverage over the local policy’s limits. Right received $250,000 under the local policy pursuant to a provision covering losses caused by lack of access by order of a civil authority. Another $250,000 was paid under the master policy, exhausting the $500,000 sublimit under a similar lack‐of‐access provision. Manpower also claimed that, under the master policy, it was entitled to reimbursement for business interruption losses and the loss of business personal property: about $12 million. ISOP denied the claim. The district court held that Manpower was covered under the master policy for business interruption losses and loss of business personal property and improvements, but excluded Manpower’s accounting expert, without whom Manpower could not establish those damages and held that the master policy was not triggered because the losses were also covered under the local policy, which had to be fully exhausted before master policy coverage was available. The Seventh Circuit reversed exclusion of the expert and entry of judgment against Manpower on the business interruption claim, but affirmed judgment for ISOP on the property loss claim. The master policy did not provide coverage for Manpower’s property losses.View "Manpower, Inc. v. Ins. Co. of the State of PA" on Justia Law

Under a 2008 master contract, governed by Minnesota law, Lyon, a Minnesota finance firm, had a right of first refusal to provide lease financing for Illinois Paper’s customers. Lyon had the option to purchase office equipment supplied by Illinois Paper and lease the equipment to Illinois Paper’s customers who were interested in that type of financing. Illinois Paper expressly warranted that “all lease transactions presented ... for review are valid and fully enforceable agreements.” Lyon purchased a copy machine from Illinois Paper and leased it to the Village of Bensenville for a term of six years. The Illinois Municipal Code provides that municipal equipment leases may not exceed five years. When the Village stopped paying, Lyon sued Illinois Paper for breach of the contractual warranty. The district court concluded that the warranty was a representation of law, not fact, and was not actionable in a suit for breach of contract or warranty. The Seventh Circuit certified the question to the Minnesota Supreme Court, noting that Minnesota adheres to the maxim that a person may not rely on another’s representation of law, so where reliance is an element of a tort claim (such as fraud), representations of law are not actionable. View "Lyon Fin. Servs., Inc. v. IL Paper & Copier Co." on Justia Law

Wilson worked as an admissions representative, recruiting students to enroll in CEC’s culinary arts college. CEC admissions representatives worked under a contract that gave them a bonus for each student they recruited, above a threshold, who completed a full course or a year of study. In 2010, the U.S. Department of Education issued regulations prohibiting this kind of arrangement; new rules were scheduled to take effect in July 2011. CEC decided announced to its admissions representatives that it would cease paying bonuses at the end of February 2011 and that no bonuses would be regarded as earned by that date unless the relevant student had completed the year of study or course by that time. Wilson sued, asserting that CEC owed him bonuses for “pipeline” students, whom he had recruited and who were on target to complete a full course or year of study between March and June 2011. The district court dismissed. The Seventh Circuit reversed, finding that Wilson successfully pleaded that CEC exercised its right to terminate the agreement in bad faith and in violation of the implied covenant of good faith and fair dealing. View "Wilson v. Career Educ. Corp," on Justia Law

Representing a class of truck owner-operators, Walker sued Trailer Transit, a broker of trucking services, for breach of contract in Indiana state court. Trailer Transit removed the suit to federal court under the Class Action Fairness Act (CAFA), section 1332(d)(2). Walker argued that notice of removal was untimely because it was filed more than 30 days after Trailer Transit “first ascertained” that the class’s theory of damages could result in recovery of more than $5 million. The district court denied a motion to remand. The Seventh Circuit affirmed. The earliest possible trigger for removal was Walker’s response to Trailer Transit’s requests for admission seeking clarification of the theory of damages. Even that response did not affirmatively specify a damages figure under the class’s new theory, so the removal clock never actually started to run View "Walker v. Trailer Transit, Inc." on Justia Law

Healix and HHI compete in the business of infusion therapy services: administration of substances such as pharmaceuticals intravenously or by any method other than ingestion. Some medical care providers offer these services to patients in their offices. Healix and HHI provide support. In 2007 Healix recruited the Clinic as a new customer. The Clinic had two members: Keller, a physician, and Porter, a nurse practitioner. Under their five-year contract, Healix would provide services after the Clinic built an in-office pharmacy and hired staff to work there. The Clinic was responsible for the cost of construction. Healix required Keller and Porter to execute personal guarantees and took a security interest in accounts receivable. Four months after signing the contract, the Clinic notified Healix that it would not fulfill its responsibilities. The Clinic was in breach, but Healix did not sue. One month later, the Clinic entered into a contract with HHI. Healix learned of the new contract and sued HHI for copyright and trademark infringement and for tortious interference with a contract. The intellectual property claims were dismissed. After a trial, the district judge rejected the tortious-interference claim. The Seventh Circuit affirmed, finding lack of causation because the evidence indicated that the Clinic would have “walked away” regardless of HHI’s actions. View "Healix Infusion Therapy, Inc. v. HHI Infusion Servs., Inc.." on Justia Law

Health and Hospital Corporation of Marion County, Indiana is a municipal corporation that operates a major hospital and other facilities, including a health center operated in partnership with Citizens Health to serve the medically under-served population in Indianapolis. The health center was funded in part by a Section 330 Grant, awarded by the federal Health Resources and Services Administration, which is part of the Department of Health and Human Services. Section 330 grants fund qualifying health centers that provide primary health care services to medically under-served populations, 42 U.S.C. 254b. A In 2012, Health and Hospital decided to terminate the partnership with Citizens and relinquish the federal grant, which still had several years of funding remaining. Citizens sued Health and Hospital, HRS, and others in an effort to retain the grant funds. The district court granted defendants summary judgment, concluding that Citizens had no contractual, statutory, or constitutionally cognizable interest in the grant. The Seventh Circuit affirmed, finding that Health and Hospital was the grantee; Citizens had no constitutionally-protected entitlement to the grant; and the terms of the contract between Health and Hospital and Citizens clear; there was no obligation to renew. View "Citizens Health Corp. v. Sebelius" on Justia Law

Four upper-level managers at Tradesmen, a construction staffing company, formed a competing company in 2009. Tradesmen filed suit alleging breach of contract, misappropriation of trade secrets and confidential information, breach of duty of loyalty, tortious interference with contractual relations, tortious interference with business expectancy, conversion, and civil conspiracy, and seeking a declaratory judgment with respect to covenants not to compete and injunctive relief. Proceedings against one defendant were stayed, due to bankruptcy. The district court granted summary judgment to the remaining defendants, except with respect to the declaratory judgment count, but found that the covenants had already expired. The district court denied attorney’s fees. The Seventh Circuit held that because of the stay, the summary judgment ruling was not a final decision, so that it lacked jurisdiction on appeal under 28 U.S.C. 1291, except with respect to the request for injunctive relief (28 U.S.C. 1292(a)(1)). The court affirmed on that issue, reasoning that Tradesmen failed to show that it suffered any harm, let alone irreparable harm, from the remaining defendants’ actions. View "Tradesmen Int'l, Inc. v. Black" on Justia Law

Reynolds acquired Pactiv in 2010 under an agreement that calls for severance pay to any non‐union employee terminated without cause, within a year, as a result of the acquisition. Pactiv established a severance‐pay plan with implementing terms, including a requirement that the departing worker execute a separation agreement in a form acceptable to the company, releasing all other claims against Pactiv. Within a year, Pactiv directed Rupert to relocate. He declined. Pactiv acknowledged entitlement to severance pay and sent him an agreement, which required that Rupert promise, for the next year, not to work for competitors in research and development, solicit sales of competing goods and services, or try to hire Pactiv employees. He had not previously been subject to a restrictive covenant and declined to sign. Pactiv withheld severance benefits. The district court held that Rupert was entitled to benefits because the formal plan, governed by ERISA, lacks any language conditioning benefits on signing a restrictive covenant; material terms must be in writing, 29 U.S.C.1102(a)(1). The Seventh Circuit vacated, noting that Rupert did not ask for benefits under Pactiv’s plan, but asked for benefits under the acquisition agreement, repeatedly asserting that the plan is irrelevant to his claim. The court remanded for consideration under that agreement. View "Pactiv Corp. v. Rupert" on Justia Law

DeGuelle, an accountant, worked from 1997 to 2009 in the tax department of S.C. Johnson & Son. He alleges that during his employment he discovered that the company had committed tax fraud. The company fired him. He took confidential corporate tax documents with him when he left and accused the company, in a newspaper, of tax fraud. The company sued him in Wisconsin state court for breach of contract, conversion, and defamation. He counterclaimed for wrongful termination and breach of contract, claiming retaliation for his opposing the alleged tax fraud. The company moved for summary judgment, attaching an affidavit from a tax lawyer at Kirkland & Ellis denying tax fraud. DeGuelle, litigating pro se, filed no counter-affidavits. The state court granted summary judgment; a court of appeals affirmed. DeGuelle filed a federal suit, charging both federal and state violations, all growing out of the alleged tax fraud. Following a remand, the district judge, after the state court ruled, granted summary judgment in favor of the company, reasoning that the finding by the Wisconsin court that there had been no tax fraud bound the court by the doctrine of issue preclusion. The Seventh Circuit affirmed. View "DeGuelle v. Camilli" on Justia Law

Allen suffered a fatal heart attack in 2009, leaving a wife of three years, Arlene, and three adult children from a previous marriage. At the time of Allen’s death, his daughter and her children lived with Allen and Arlene. Allen had a will bequeathing $100,000, but his assets passed outside of probate, leaving his estate with insufficient funds for the bequest. Allen had designated his children as beneficiaries of assets, including a home, life insurance policies, retirement accounts, and other savings accounts. Allen had one life insurance policy as part of his compensation package as a pharmacist, which provided $74,000 in basic coverage and $341,000 in supplemental coverage. If the policyholder failed to designate a beneficiary by his date of death, the proceeds would pass to the policyholder’s spouse by default. The insurer never received any indication that Allen wished to designate a beneficiary. In the days following Allen’s death, however, the children found a change-of-beneficiary form, allegedly completed by their father more than a year before his death, but never submitted. The district court ruled in Arlene’s favor, finding that even if Allen had filled out a change-of-beneficiary form he had not substantially complied with policy requirements for changing beneficiaries. The Seventh Circuit affirmed. View "Kagan v. Kagan" on Justia Law