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

In 2019, Laney financed a Ford Edge from Second Chance, agreeing to pay attorney’s fees in the event of default. Four months later, Laney filed a Chapter 13 bankruptcy petition. The bankruptcy court ordered Laney to amend his original plan to account for Chance's “Claim 3” for the Edge as a “910 claim” (debts for personal vehicles purchased less than 910 days before the filed bankruptcy petition must be paid in full, 11 U.S.C. 1325(a)). Laney amended the plan but failed to provide for full payment. Chance again objected and requested attorney’s fees for filing the same objection twice. The bankruptcy court again ordered Laney to amend the plan and allowed Chance to file an affidavit of attorney’s fees. Laney’s second amended plan accounted for the full outstanding principal and interest but not for attorney’s fees.The bankruptcy court confirmed the plan, which listed the Edge claim to be paid in full with interest. At the court’s request, Second Chance amended Claim 3 to include attorney’s fees, but labeled it as “Claim 9,” which led Laney to object. The court concluded that Claim 9 would be treated as an amendment to Claim 3. Laney unsuccessfully argued that the claim violated 11 U.S.C. 1327(a). The district court and Seventh Circuit affirmed. The bankruptcy court provided compelling reasons for allowing the post-confirmation amendment; the attorney’s fees were reasonable and necessary. View "Laney v. Second Chance Auto, Inc." on Justia Law

Innovel hired Diakon to take furniture from warehouses to customers’ homes. Plaintiffs, two of Diakon's drivers, were citizens of Illinois who drove out of Innovel’s Illinois warehouses and made deliveries to customers in Illinois, Indiana, and Missouri. They signed “Service Agreements” that classify the drivers as independent contractors yet include detailed expectations for the drivers, covering uniforms, business cards, truck decals, and how to perform deliveries and installations. The Agreements select Virginia law to govern the parties’ relations and authorize Diakon to deduct fees and penalties from the drivers’ pay for truck rental fees, insurance, workers’ compensation coverage, damaged merchandise, and customers’ refused deliveries.Plaintiffs sued, alleging that Diakon misclassified them as independent contractors when they were employees under Illinois law. Illinois courts apply a three-part test to determine employee status, which is more likely to classify workers as employees than is Virginia law, which would treat the plaintiffs as contractors. The Illinois Wage Payment and Collections Act allows deductions from pay only if the employee consents in writing at the time of the deduction.The district judge certified a class but ruled in favor of Diakon. The Seventh Circuit reversed. The plaintiffs’ claims arise from their work in Illinois, not from their contracts. The Illinois Act governs payment for work in Illinois regardless of what state’s law governs other aspects of the parties' relations. View "Timothy Johnson v. Diakon Logistics, Inc." on Justia Law

Hernandez coerced hundreds of victims—mostly minors—to produce sexually explicit images and videos of themselves, then extorted the victims. He often posted the results online or sent them to the victims’ friends and families. He threatened to murder, rape, kidnap, and injure his victims and their friends and family and encouraged some victims to kill themselves. Hernandez used at least 169 different accounts under countless aliases. He used the Tor Network to make his geographic location virtually impossible to trace. A minor victim allowed officers to use the victim’s online identity to send a video to Hernandez containing embedded code that revealed his IP address.Hernandez pled guilty, without an agreement, to 41 counts: production of child pornography; coercion and enticement of minors; distribution and receipt of child pornography; threatening to use explosive devices; extortion; threats to kill, kidnap, and injure other persons; witness tampering; obstruction of justice; and retaliation. A PSR disclosed that the government would seek $10,000 in restitution each for eight minor victims, mandatory under 18 U.S.C. 2259(b)(2)(B), (c)(3). Hernandez objected to an offense-level enhancement but said nothing about restitution.Hernandez was sentenced to 75 years’ imprisonment plus payment of $10,000 for each of 11 victims—three were added in an amended judgment. Hernandez argued that the government did not prove his victims’ losses or, alternatively that the judgment was not properly amended. The Seventh Circuit affirmed without reaching the merits. Hernandez failed to raise the issues with the district court; the omission was part of Hernandez’s sentencing strategy, so he waived the arguments. View "United States v. Hernandez" on Justia Law

Williams, an inmate, suffers from chronic tendinitis and has been prescribed pain medication. After injuring his finger, Williams was seen by a doctor. Williams’s finger did not require further treatment, but in an apparent error, Williams was removed from his pain medication. The next day Williams filed a “Request for Health Care” form, indicating that he was still experiencing pain and was no longer receiving his medication. Williams was seen by a nurse, who allegedly caused him further knee pain by making him do exercises while shackled. His medication was not reinstated and Williams continued to experience pain in his knee. As required by state grievance policies, Williams tried to informally resolve his complaints but Indiana’s policy requires that formal grievances be filed within 10 business days of the incident. Williams did not meet that deadline, believing that prison officials needed to respond to his informal grievance attempts before he could file a formal grievance. After Williams received a response he filed a formal grievance, but it was untimely.In Williams's suit under 42 U.S.C. 1983, the district court granted the defendants summary judgment. The Seventh Circuit affirmed. The Prison Litigation Reform Act requires a prisoner to exhaust all available remedies in the prison’s administrative-review system before filing suit in federal court. Williams did not do so and his argument that he had good cause for his failure to timely file a formal grievance is unexhausted and waived. View "Williams v. Rajoli" on Justia Law

Corwell’s insurance broker told him that Coventry would essentially provide free life insurance for a couple of years before an assignment of the policy to those who had funded it from the beginning, at no expense or risk to the insured. In 2006, Corwell, age 78, applied to Sun Life for a $5 million life insurance policy, indicating that his family L.P. would be the primary beneficiary and Corwell would be the owner. The annual premium, $300,000 per year, exceeded Corwell’s income almost every year. Corwell falsely stated that the premiums would not involve premium financing. Sun would not have issued the policy if it had known that Corwell would be using a non-recourse loan to pay the premiums. At the end of the loan’s 30-month term, Coventry notified Corwell that the balance was $569,572; Corwell could either repay it or relinquish the policy. As expected, Corwell relinquished the policy, which the lender sold to Coventry. Sun Life rejected a 2017 death claim and sought a declaratory judgment that the policy was void as an illegal wagering contract, procured for the benefit of strangers who lacked an insurable interest, in violation of Illinois law. The district court granted Sun summary judgment and allowed it to keep almost all of the premiums.The Seventh Circuit affirmed with the exception of part of the premiums. Illinois law looks beyond the form of the transactions and considers the substance to determine whether a purchase was supported by an insurable interest. This funding arrangement was an unlawful wager by strangers on Corwell’s life. View "Sun Life Assurance Company of v. Wells Fargo Bank, N.A." on Justia Law

Circle Block owns and operates a downtown Indianapolis hotel with more than 200 guest rooms, a business center, and spa and fitness facilities. In March 2020, state and county governments adopted public health measures in response to the spread of COVID-19, prohibiting public gatherings of more than 50 people. An Indiana stay-at-home order restricted travel and mandated the closure of all non-essential businesses. Hotels were considered essential businesses “to the extent they are used for lodging and delivery or carryout food services.” By March 19, only six guest rooms were occupied. A month later, the hotel suspended operations, while continuing to incur expenses. Circle Block filed an unsuccessful claim under its commercial property insurance policy, which included business income and extra expense coverage, civil authority coverage, dependent property coverage, communicable disease coverage, and business access coverage; each required “direct physical loss or damage” to property. The policy had a “mortality and disease” exclusion.The Seventh Circuit affirmed the dismissal of the case and denied a motion to certify questions of state law to the Indiana Supreme Court. Circle Block did not allege any direct physical loss or damage; a mere loss of use or functionality was not sufficient. Nor were allegations that virus particles had attached to surfaces at the hotel enough to show direct physical loss or damage. View "Circle Block Partners, LLC v. Fireman's Fund Insurance Co." on Justia Law

NBA Properties owns the trademarks of the NBA and NBA teams. In 2020, a Properties investigator accessed HANWJH’s online Amazon store and purchased an item, designating an address in Illinois as the delivery destination. The product was delivered to the Illinois address. Properties sued, alleging trademark infringement and counterfeiting, 15 U.S.C. 1114 and false designation of origin, section 1125(a). Properties obtained a TRO and a temporary asset restraint on HANWJH’s bank account, then moved for default; despite having been served, HANWJH had not answered or otherwise defended the suit. HANWJH moved to dismiss, arguing that the court lacked personal jurisdiction over it because it did not expressly aim any conduct at Illinois. HANWJH maintained that it had never sold any other product to any consumer in Illinois nor had it any “offices, employees,” “real or personal property,” “bank accounts,” or any other commercial dealings with Illinois.The Seventh Circuit affirmed the denial of the motion to dismiss and the entry of judgment in favor of Properties. HANWJH shipped a product to Illinois after it structured its sales activity in such a manner as to invite orders from Illinois and developed the capacity to fill them. HANWJH’s listing of its product on Amazon.com and its sale of the product to counsel are related sufficiently to the harm of likelihood of confusion. Illinois has an interest in protecting its consumers from purchasing fraudulent merchandise. HANWJH alleges no unusual burden in defending the suit in Illinois. View "NBA Properties, Inc. v. HANWJH" on Justia Law

In 2014, Cooperative, a Wisconsin-based governmental entity that services 35 public-school districts, hired Simon as an Alternative Program Lead Teacher at REACH Academy. Simon taught, managed paraprofessionals, developed integrated education plans, and communicated with parents, school districts, social workers, and law enforcement officials. In 2016, a student kicked a door into Simon’s head, which caused a concussion. Simon took Family and Medical Leave Act (FMLA) leave and was cleared to return to full-time work with no restrictions weeks later. Cooperative did not allow Simon to return to her previous position, having determined that doing so would present an “unreasonable risk.” Cooperative placed her in a support position with duties resembling those of a paraprofessional and requiring her to split her time between schools. Although Simon received the same salary and benefits in her new role, it involved significantly less responsibility, independence, and discretion.The district court found that Cooperative had violated the FMLA by not returning Simon to an equivalent position following her leave and that only declaratory—rather than injunctive—relief was appropriate based on Cooperative’s hiring trends, the unavailability of Simon’s previous role, and Simon’s new job elsewhere, and awarded Simon attorney’s fees of $59,773.62. The Seventh Circuit affirmed. The FMLA’s use of the term “equitable relief” encompasses declaratory relief. Simon suffered prejudice from Cooperative’s failure to return her to an equivalent position. The district court did not err in finding that attorney’s fees were available under the circumstances. View "Simon v. Cooperative Educational Service Agency #5" on Justia Law

Larry Nassar, who was affiliated with USAG, sexually assaulted hundreds of female athletes. After Nassar’s conduct was revealed, USAG faced multiple lawsuits and investigations. USAG and its insurers, including Liberty, litigated questions about insurance coverage in an adversary proceeding before a bankruptcy court. In a previous appeal, the Seventh Circuit affirmed the decision that Liberty had a duty to defend USAG. There were ancillary disputes over the amounts of attorneys’ fees that Liberty owed USAG. While an appeal was pending, USAG sought to enforce the order entitling it to reimbursement. Liberty resisted, asserting that large portions of the fees USAG claimed were not reasonable and necessary. The bankruptcy court recommended that the district court award USAG nearly all the requested fees. The district court adopted most of the bankruptcy court’s findings and entered judgment for USAG.The Seventh Circuit affirmed. The lower courts correctly concluded that USAG was entitled to a presumption that the fees it incurred were reasonable and necessary despite Liberty’s challenges to the nature of USAG’s supervision of outside counsel and the proportion of fees paid by USAG. The particular form of supervision suggested by Liberty and the policyholder’s full payment of all the fees it incurred are not prerequisites for that presumption. Liberty failed to rebut the presumption. View "USA Gymnastics v. Liberty Insurance Underwriter, Inc." on Justia Law

Galvan, a citizen of Honduras, borrowed a van from his employer, Gomez. He drove to Gomez’s home to return the vehicle and shared a meal with Gomez's family. For unknown reasons, Galvan eventually pulled out a handgun, fired several shots, took the keys from Gomez, and drove away in the van. Gomez called the police. Less than two hours later, police received a report of a man with a gun at an apartment complex. Galvan had threatened men in the complex while brandishing a handgun. Police found Galvan leaning on Gomez’s van, arrested Galvan, and found a handgun in the driver’s seat. Galvan pled guilty to possessing that handgun as an alien unlawfully in the U.S., 18 U.S.C. 922(g)(5). A state court charge for armed robbery of Gomez’s van was dismissed.The district court found that the sentencing guideline for robbery governed Galvan’s firearm-possession offense because he had used the same handgun when he robbed Gomez, U.S.S.G. 2B3.1(a) & 2K2.1(c)(1)(A) and that Galvan fired the handgun in connection with the robbery, increasing his offense level by seven. Galvan’s sentencing range was 63-78 months in prison. The district court sentenced Galvan to 70 months. The Seventh Circuit affirmed. Ample evidence supported the court’s finding that the same gun was involved in both episodes. A preponderance of the evidence established that Galvan discharged a firearm “during” the robbery under Indiana law. View "United States v. Galvan" on Justia Law