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

Chessie is a railroad authorized to operate one mile of track in Melrose Park, Illinois. It has apparently been many years since trains have run on that track. Krinos owns and operates an adjacent industrial facility. A spur and side track run over Krinos’s property; Chessie says it has easements to use those tracks. Chessie alleges that Krinos constructed a sewer line and did drainage work, burying parts of its tracks and creating a slope directing runoff that damaged other parts. After Chessie notified Krinos, Krinos removed the dirt from one track and did additional damage. Chessie filed suit, alleging trespass, negligence, and violation of 49 U.S.C. 10903. Section 10903 requires rail carriers to receive permission from the Surface Transportation Board before abandoning parts of their lines. Krinos counterclaimed, alleging that Chessie did not have easements to use the spur and side tracks and seeking a declaratory judgment, quiet title, and ejectment. The district court agreed that section 10903 did not create a private right of action and granted Krinos summary judgment. Chessie did not show that it had easements over Krinos’s property, and an independent contractor, not Krinos, caused the alleged intrusion. The Seventh Circuit affirmed. Section 10903 does not create an implied right of action. Chessie was not entitled to change its negligence theory after discovery. View "Chessie Logistics Co., LLC v. Krinos Holdings, Inc." on Justia Law

Plaintiff owned and lived on a 400-acre estate and horse farm in Barrington Hills, Illinois, leasing the horse farm, “Horizon Farms,” to their company, Royalty Farms, LLC, which managed the farm’s operations. Their mortgage was foreclosed in 2013. The Forest Preserve District of Cook County bought the property at the foreclosure sale. Royalty Farms was not a party to the foreclosure proceeding, but the court entered a Dispossession Order, directing Plaintiff to vacate the property. The Forest Preserve District apparently tolerated the continued presence of several horses while plaintiff continued visiting the property daily to care for them. After nine months Plaintiff was arrested and prosecuted for criminal trespass. She was acquitted because the judge could not conclusively determine that she had been told not to enter the property. A year later she filed suit, claiming false arrest and malicious prosecution. The Seventh Circuit affirmed the dismissal of the suit. Regardless of whether Plaintiff entered the property as an employee of Royalty Farms, there was probable cause to arrest Plaintiff for criminal trespass; she acknowledged receiving an emailed warning and defying it and she was aware of the court order. View "Squires-Cannon v. Forest Preserve District of Cook County" on Justia Law

The Sisters own Blue Island buildings: a convent, a church, and a boarding school that closed long ago. The buildings were used as a public high school until 2009. Affordable wanted to use the buildings as a recovery home, providing lodging, meals, job training, religious outreach, and other services to adult men fighting drug or alcohol addiction. The Sisters agreed; the few remaining nuns would continue to occupy the convent and the Sisters would obtain rental income. Occupancy would prevent vandalism. With the mayor’s approval, Affordable moved 14 staff members into the buildings. The city required installation of a sprinkler system in the sleeping rooms. Affordable had already moved in 73 men without the required special‐use permit. Affordable filed suit. The court denied a preliminary injunction. The residents vacated. Four subsequently suffered fatal overdoses. Affordable obtained a recovery house license from the Illinois Department of Human Services, which does not require sprinklers in buildings fewer than four stories high. The court granted Affordable partial summary judgment on preemption grounds but rejected claims under the Illinois Religious Freedom Restoration Act that would have been entitled Affordable to damages and attorneys’ fees. The Seventh Circuit affirmed. Affordable did not argue that the sprinkler requirement would have substantially burdened its religious exercise even if it had complied. Affordable was not excluded from Blue Island or even required to install a sprinkler system. View "Affordable Recovery Housing v. City of Blue Island" on Justia Law

The property owners, participants in the “Section 8” federal rental assistance program (42 U.S.C. 1437f(a)), sued the Wisconsin Housing and Economic Development Authority for allegedly breaching the contracts that governed payments to the owners under the program, by failing to approve automatic rent increases for certain years, by requiring the owners to submit comparability studies in order to receive increases, and by arbitrarily reducing the increases for non-turnover units by one percent. Because Wisconsin Housing receives all of its Section 8 funding from the U.S. Department of Housing and Urban Development (HUD), the Authority filed a third-party breach of contract claim against HUD. The district court granted summary judgment in favor of Wisconsin Housing and dismissed the claims against HUD as moot. The Seventh Circuit affirmed, noting that the owners’ Section 8 contracts were renewed after the challenged requirements became part of the program. “The doctrine of disproportionate forfeiture simply does not apply,” and Wisconsin Housing did not breach any contracts by requiring rent comparability studies in certain circumstances or by applying a one percent reduction for non-turnover units. View "Evergreen Square of Cudahy v. Wisconsin Housing & Economic Development Authority" on Justia Law

In consolidated cases, the debtors obtained Federal Housing Administration-insured residential mortgage loans and subsequently defaulted due to financial hardship. The law firms represented the loan servicing agents in filing Illinois foreclosure complaints, using the statutory complaint template (Illinois’ Mortgage Foreclosure Law, 735 Ill. Comp. Stat. 5/15-1504(a)), which includes the language: “Names of defendants claimed to be personally liable for deficiency, if any[,]” and, “[a] personal judgment for a deficiency, if sought.” The firms included both allegations, and identified debtors to be personally liable for any deficiency. The debtors filed suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, alleging that the FHA does not authorize deficiency judgments where borrowers suffered a financial hardship. They submitted a letter from the FHA responding to a Freedom of Information Act request, stating: There have been zero foreclosed FHA loans in Illinois in which the pursuit of a deficiency judgment was authorized. FHA is not currently pursuing deficiency judgments.” The district court dismissed. The Seventh Circuit affirmed. Debtors did not identify any law, regulation, or FHA policy requiring a mortgagee to obtain authorization from the FHA prior to including the two allegations at issue in their state-foreclosure complaint. View "Zuniga v. Pierce & Associates" on Justia Law

Plaintiffs’ Indianapolis home had a mortgage serviced by J.P. Morgan Chase. In 2011 plaintiffs accused Chase of paying the wrong homeowner’s insurer using $1,422 from their escrow account. They had switched insurers without telling Chase. When Chase learned of the change, it promptly paid the new insurer and informed plaintiffs that their old insurer would send a refund. Chase told them to forward the refund to replenish the depleted escrow. When the refund came, plaintiffs kept the money. Chase adjusted their mortgage payment to make up the shortfall. When plaintiffs refused to pay the higher amount, the mortgage went into default. Instead of curing, they requested information under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601–2617, which requires the bank to correct account errors and disclose account information. They demanded that Chase reimburse their escrow. Chase sent a complete account history. Plaintiffs divorced, ending their 25-year marriage. They sued Chase, claiming that its response was inadequate under RESPA and caused more than $300,000 in damages—including the loss of their marriage— and claiming breach of the implied covenant of good faith and fair dealing. The Seventh Circuit affirmed summary judgment for Chase. Chase’s response complied with its RESPA duties. To the extent that any requested information was missing, plaintiffs suffered no actual damages. Nor did Chase breach the duty of good faith and fair dealing, assuming that Indiana would recognize the implied covenant in this context. View "Perron v. J.P. Morgan Chase Bank, N.A." on Justia Law

Mrs. Edelson filed a Chapter 13 bankruptcy petition. She and her husband, who did not join her petition or file his own, held their Chicago home as “tenants by the entirety,” until seven months before the petition, when they conveyed it to the husband’s living trust. The conveyance states that “the beneficial interest” in the trust is held by the Edelsons, “husband and wife, as tenant[s] by the entirety.” The bankruptcy petition named Loventhal, Mrs. Edelson’s former husband, as an unsecured creditor for $92,000. Mrs. Edelson proposed a payment plan that would give Loventhal $16,000 over five years and designated the residence as exempt. Loventhal argued that the transfer to the husband’s trust eliminated the tenancy by the entirety. The bankruptcy judge, district court, and Seventh Circuit rejected his argument, citing 11 U.S.C. 522(b)(3)(B): “any interest in property in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety” is exempted “to the extent that such interest … is exempt from process under applicable nonbankruptcy law,” and Illinois law, which exempts tenancies by the entirety from process to satisfy judgment “against only one of the tenants.” While the trust instrument includes provisions inconsistent with tenancy by the entirety, the Joint Tenancy Act forbids any construction that would sever the tenancy by the entirety. View "Loventhal v. Edelson" on Justia Law

In 2007, the Diedrichs executed a mortgage note. Ocwen began foreclosure proceedings in 2010. The Diedrichs entered into a loan modification agreement in 2011. After the Diedrichs began making payments pursuant to that agreement, they became concerned about whether their escrow account was being correctly administered and whether they were being charged improper fees. On February 22, 2013, the Diedrichs sent Ocwen a letter, requesting standard information about their account including the names of employees working on their account, the history of payments from their escrow account, and a statement of interest rates, as permitted by the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605(e)(1)(B). On March 7, Ocwen responded with a form letter, setting forth Ocwen policies regarding information requests; another later, dated March 30, stated that Ocwen would take another 15 days, as permitted by RESPA, to review the inquiry. On April 22, Ocwen sent a letter stating that it could not identify a problem with the account and asking the Diedrichs to identify which month and report they disputed, explain the dispute, and send evidence. The Diedrichs sued, alleging violations of RESPA. The Seventh Circuit affirmed, agreeing that Ocwen’s responses were insufficient and violated RESPA, but that the allegations of damages were “conclusory and vague.” View "Diedrich v. Ocwen Loan Servicing, LLC" on Justia Law

For 60 years, a butcher shop operated on property in Black Earth that is zoned for commercial use, as a legal nonconforming use. In 2001, BEM purchased the property. After 2009, the volume and frequency of slaughter increased. By 2011, neighbors were complaining about increased traffic, trucks blocking the road, livestock noise, foul odors, improper storage of animal parts, and the presence of offal, blood, and animal waste in the streets. Steers escaped from the facility three times and had to be shot dead on Village streets. In 2013, the Village held several public meetings, and, because citations had no effect on BEM’s behavior, ordered BEM to propose an acceptable plan for relocating its slaughter activities. BEM did not relocate. After several delays, the Village threatened litigation. As a result of that threat, the USDA refused to guarantee a bank loan to BEM. BEM lost its financing, closed, and sued the Village and board members. The Seventh Circuit affirmed summary judgment for the defendants. Even if the threat of litigation could, itself, constitute a due process violation and were a sufficiently direct cause of BEM’s alleged deprivations, there is no evidence that the process accorded to BEM was inadequate. Procedural due process generally requires only “notice and an opportunity to be heard.” View "Black Earth Meat Mkt., LLC v. Village of Black Earth" on Justia Law

A 49-count indictment charged 51 Outlaws Motorcycle Club members with racketeering, mail and wire fraud, money laundering, drug trafficking, extortion, running an illegal gambling business, witness tampering, and firearms offenses; 19 were charged under the Racketeer Influenced and Corrupt Organizations statute. The indictment included a forfeiture notice. The FBI executed search warrants on Indiana clubhouses and residences and seized items bearing the Outlaws insignia. The FBI sought forfeiture of patches, shirts, hats, belt buckles, signs, mirrors, flags, calendars, and pictures, which were use to deter other groups from infringing on Outlaw territory. In plea agreements, 18 Outlaws agreed to forfeiture. The court received Carlson’s letter, which it interpreted as a motion to intervene under 18 U.S.C. 1963(l)(2). Carlson asserted that he was entitled to direct notice, having been elected by the collective membership to manage Outlaws' indicia and memorabilia, which were owned by the collective membership, not by individuals. The government had provided notice to each defendant and had posted notice on the of government forfeiture website. The district court denied Carlson’s motions, finding that Carlson had not shown that the government was aware of Carlson or his alleged interest, nor demonstrated a property interest. The Seventh Circuit affirmed, citing Indiana law: “[o]wnership cannot be conferred by a wave of a magic semantic wand.” The asserted collective ownership mechanism was “designed solely ‘to insulate from forfeiture.” View "United States v. Bowser" on Justia Law