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

In 1994 Hartman’s father gave him a muzzle-loading rifle that was designed to use black powder as a propellant. The gun ignited newer, pelletized propellants erratically. In 2008, Hartman installed a kit on his gun. The kit was sold by KR Warranty, the maker of the rifle; it modified the muzzleloader and enabled it to ignite new propellants more reliably. The next day, Hartman was sighting in his “upgraded” muzzleloader when the gun unexpectedly discharged as he was trying to load it. The ramrod and a patched round ball passed through Hartman’s hands and arm, inflicting serious injury. Hartman sued KR for negligence and strict liability. The district court dismissed. Indiana has a 10-year statute of repose for products-liability actions and the gun was 14 years old. The Seventh Circuit affirmed. There are exceptions to the statute, for “any reconstruction or reconditioning … which has the effect of lengthening the useful life of a product beyond what was contemplated when the product was first sold” and for situations where a manufacturer “merely … incorporat[es] a defective component into an old product.” Hartman cannot satisfy either exception. View "Hartman v. Ebsco Indus., Inc." on Justia Law

On March 28, 2008, while Salata was cleaning property owned by Weyerhaeuser, she slipped and fell, claiming loose floor tiles were the cause. On March 8, 2010, Salata filed suit. The parties attempted voluntary mediation, but when they could not reach a settlement, Salata’s then-attorneys, were allowed to withdraw, and Salata’s current counsel, Elrabadi, took over on March 14, 2012. On February 26, 2013, Weyerhaeuser moved to dismiss for failure to comply with the court’s discovery order under FRCP 37, and for a want of prosecution under Rule 41(b); Weyerhaeuser also requested attorney’s fees. The court held a hearing on the motion. Elrabadi failed to appear. The court declined to impose sanctions, but dismissed the case with prejudice for want of prosecution. On May 9, 2013, Elrabadi filed a Motion to Reinstate. Ultimately, the court denied the motion. The Seventh Circuit affirmed. View "Salata v. Weyerhaeuser Co." on Justia Law

Gambino filed a state lawsuit to clear his title to three properties, claiming that defendants (including Koonce) used forged deeds and other fraudulent documents to improperly gain title. An Illinois state court found that Koonce acted with fraud and malice and ordered him to pay compensatory and punitive damages. After the state appellate court affirmed, but before Koonce satisfied the judgment, Koonce filed for bankruptcy. Gambino filed an adversary action against Koonce in bankruptcy, seeking to have the state judgment declared non-dischargeable under 11 U.S.C. 523(a)(2)(A) and (a)(6). The bankruptcy court found that Gambino had conclusively established that Koonce’s debt was non-dischargeable and that Koonce was collaterally estopped from relitigating the issue of his intent. The district court and Seventh Circuit affirmed, rejecting a claim that the issue of fraudulent intent was not actually litigated in state court. The state court could not have decided that Koonce slandered Gambino’s title or assessed punitive damages without first deciding whether he did so with fraudulent intent. View "Koonce v. Gambino" on Justia Law

Anderson alleges that he was sexually abused by priests and other employees of the Catholic Church in the 1950s and 1960s and that, as a result of the abuse, he requires continuous psychological counseling and spent most of his adult life in penal institutions. The district court dismissed. The Seventh Circuit affirmed. The complaint explicitly acknowledged that the claims were barred by the Illinois statute of limitations or statute of repose. A 1991 statute of repose for actions based on childhood sexual abuse requires that all such claims be brought within two years of the date that the victim discovers, or by reasonable diligence should have discovered, that the abuse occurred, “but in no event … more than 12 years after the date on which the person abused attains the age of 18 years,” 735 ILCS 5/13-202.2(b). Although the statute was repealed effective January 1, 1994, the repeal does not avoid the impact as to Anderson because his claims were extinguished prior to the repeal. The court rejected claims of estoppel and waiver. View "Anderson v. Catholic Bishop of Chicago" on Justia Law

Parmalat, a large Italian food and dairy company, entered bankruptcy in Italy and Bondi was appointed “extraordinary commissioner,” the equivalent of a bankruptcy trustee. In 2004 Bondi instituted, in New York, a proceeding under the since-repealed section 304 of the U.S. Bankruptcy Code to enjoin any action against Parmalat with respect to property involved in the Italian bankruptcy, to consolidate claims against the company. Months later, Bondi filed suit in Illinois, against Thornton, an accounting company, claiming that Thornton contributed to the collapse of Parmalat by conducting fraudulent audits of in violation of Illinois tort law. The case was removed to federal court. The New York district court declined to abstain in light of the Illinois suit and granted Thornton summary judgment, on the ground that the doctrine of in pari delicto barred Parmalat’s claim against the accounting company. The Second Circuit vacated and remanded with instructions to remand to Illinois state court. The Illinois district court declined to remand to state court and upheld the in pari delicto ruling. The Seventh Circuit held that the district court was required to remand to the state court, but noted that the New York litigation remained unresolved. View "Bondi v. Grant Thornton Int'l" on Justia Law

The Foreign Sovereign Immunities Act (FSIA) allows civil claims against foreign governments for acts of state-sponsored terrorism, 28 U.S.C. 1605A. A 1985 EgyptAir hijacking by Abu Nidal terrorists, supported by the Syrian government, resulted in the shootings of Baker and Pflug, who survived with permanent disabilities. Rogenkamp was also shot and died. Ultimately, 58 of the 95 passengers and crew were killed. Several civilian contractors working with the U.S. military in Iraq were kidnapped in 2004 by al-Qaeda in Iraq, also sponsored by the Syrian government; some were killed. Under the FSIA, both sets of plaintiffs secured judgments against Syria, designated by the U.S. government as a state sponsor of terrorism. Both groups’ judgments remain unsatisfied, and both have sought to satisfy them in part by attaching Syrian assets. The district court held that the Gates plaintiffs’ liens on Illinois assets are entitled to priority over those of the Baker plaintiffs. The Seventh Circuit affirmed. The Gates plaintiffs have complied with the requirements of the FSIA and have established a priority lien on the Syrian funds at issue, under the “winner-take-all system” established by the legislation. View "Gates v. AT&T Corp." on Justia Law

Seven years after Plyler installed a Whirlpool microwave oven and eight hours after using that oven, a houseguest woke him because of a fire in the microwave. Firefighters extinguished the fire. Plyler claims that he injured his elbow and knee while he ran into and out of his house and that he experienced post-traumatic stress disorder. At trial on negligent recall and strict liability claims, a fire department investigator could not identify a specific cause of the fire. Plyler blamed the fire on a product defect that had led Whirlpool to recall microwaves in 2001. Whirlpool’s Director of Global Product Safety testified that the ovens posed a fire hazard only if they contained splattered food. uncleaned for an extended time, and were running at the time of the fire. After Whirlpool discovered that 1.8 million microwaves contained the defect, it issued a recall through the Consumer Product Safety Commission, mailed notices to owners who had submitted a product registration card, and released news announcements. Although the average recall leads to repair or replacement of 10 to 15 percent of affected units, Whirlpool repaired 75 percent of the recalled microwave. Plyler stated that he kept his microwave clean; that he never received notice; that he paid for it with a credit card; and that Whirlpool should have been able to contact him. The jury found in favor of Whirlpool. The Seventh Circuit affirmed, rejecting challenges to rulings that limited Plyler’s testimony to his observations and that allowed questions about the relationship between the fire and his divorce.View "Plyler v. Whirlpool Corp." on Justia Law

Brothers Patrick and Thomas each owned one‐third of the stock of Commercial Light, a Chicago electrical contractor. Between 1982 and the 2008 sale of the company, Thomas was the CEO, board chairman, and president. The other officers were the company’s treasurer, and its executive vice‐president. The board of directors had only two members: Thomas and a lawyer. Patrick took no part in the company’s management. Patrick sued, claiming that when Morris became executive vice‐president in 1992, he, with Thomas’s approval, started jacking up the salaries and bonuses paid so that the compensation of the three officers soared, totaling $22 million between 1993 and 2000, and that the lawyer on the board rubber‐stamped Thomas’s compensation decisions. The Seventh Circuit affirmed a jury verdict finding breach of fiduciary duty. The jury did not have to find that the compensation was excessive in order to find a breach of fiduciary duty by concealment. Illinois allows as a remedy for breach of fiduciary duty a forfeiture of all the fiduciary’s earnings during the period of breach. The court speculated on why the highly-educated Patrick did not discover the concealment until several years after the sale, but noted that the appeal only concerned jury instructions. View "Halperin v. Halperin" 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 general contractor of a Wisconsin construction project, hired Harsco to supply scaffolding. Krien, injured in a fall when a plank on a scaffold on which he was standing, broke, sued Harsco. The parties settled his claim for $900,000. Harsco filed a third‐party complaint against the contractor, seeking indemnification plus interest and attorneys’ fees. The district judge granted the contractor summary judgment. The Seventh Circuit reversed and remanded after examining the complex provisions of the contract between the two. The plank may or may have been supplied by Harsco and may or may not have been defective, as claimed by Krien, who could not sue Riley in tort, because against his employer his only remedy for a work‐related accident was a claim for workers’ compensation, but there has never been judicial resolution of these questions, because Krien’s suit was settled before there was any judgment. Indemnification, however, is a form of insurance, and could apply even if the party seeking indemnification was negligent. Riley’s duty to indemnify Harsco extends to legal expenses incurred by Harsco in defending against Krien’s suit and in litigating this suit. View "Krien v. Harsco Corp." on Justia Law