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

DEA obtained a search warrant for Perryman’s Indianapolis home. Agents arrived at the property, read Perryman his Miranda rights, then searched the home. In the master suite, they found fentanyl, baggies, a digital scale, and a loaded AR-15 rifle, three to four steps away from the fentanyl, along with men’s shoes and clothes. Perryman’s girlfriend, Moore, lived elsewhere but had signed the lease for the home. Moore said that the drugs, money, and gun were not hers. The agents read Perryman his Miranda rights for a second time. He agreed to talk. He admitted that the drugs were his, then provided the agents with the name of his drug supplier but said the rifle “belonged to a girlfriend.”Perryman was indicted for possessing fentanyl with intent to distribute, 21 U.S.C. 841(a)(1), possessing a firearm in furtherance of a drug trafficking crime, 18 U.S.C. 924(c)(1), and possessing a firearm while a convicted felon, 922(g)(1). The court excluded questioning concerning the disciplinary record of Sergeant Jones, who participated in the search of Perryman’s home. Jones’ 15-year-old disciplinary offense resulted in a reprimand and stemmed from an unrelated investigation. The Seventh Circuit affirmed Perryman’s convictions, rejecting challenges to the sufficiency of the evidence and, under the Confrontation Clause, to the exclusion of evidence relating to Jones’ disciplinary record. View "United States v. Perryman" on Justia Law

Under a 2014 policy, United pilots only accrued sick time during the first 90 days of military leave. Moss, a pilot and a Lieutenant Colonel in the Marine Corps Reserves, sued, alleging violations of the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. 4301, which requires employers to provide employees on military leave any seniority-based benefit the employee would have accrued but for the military leave. He claimed that sick time is a seniority-based benefit that should have continuously accrued or sick-time accrual was available to pilots on comparable periods of leave.The district court granted United summary judgment. The Seventh Circuit affirmed. For a benefit to be seniority-based, the benefit must be a reward for length of service. Sick leave is not such a reward but is "a future-oriented longevity incentive." United’s sick-time accrual policy contains a work requirement and is in the nature of compensation, not a reward for long service. . View "Moss v. United Airlines, Inc." on Justia Law

BGC secured a $3.1 million mortgage loan from Romspen for the Arlington commercial property. Following a Foreclosure Judgment but before the sale of the property, the parties negotiated an agreement. Romspen agreed to forbear from exercising remedies for 60 days and to reinstate the loan and extend the maturity date for two years. BGC agreed to make a $1.6 million payment on the loan. Meanwhile, BGC learned that Romspen had filed a lien against BGC’s 1907 property. BGC had planned to refinance the 1907 Property to make the payment on the Arlington property required by the Forbearance Agreement. Romspen agreed to make “commercially reasonable efforts” to remove the lien. When BGC failed to provide proof of a refinancing plan for the Arlington Property, Romspen refused to remove the lien on the 1907 Property.After the foreclosure sale of the Arlington Property, BGC sought to file a counterclaim alleging that Romspen had breached the Forbearance Agreement. Romspen sought an order confirming the sale of the property. The Seventh Circuit confirmed the denial of BGC’s motion and the sale of the Arlington Property. Romspen did not breach the Forbearance Agreement because it made “commercially reasonable efforts” to remove the lien on the 1907 Property. Romspen was on solid ground in requesting some concrete proof of BGC's refinancing efforts before agreeing to remove the lien. View "Romspen Mortgage L.P. v. BGC Holdings LLC - Arlington Place One" on Justia Law

Santiago, a severely disabled Chicago resident, would leave her van parked on the street near her home for extended periods of time. In 2018, pursuant to the Chicago Municipal Code, her van was towed, impounded, and destroyed. She sued the city on her own behalf and on behalf of others similarly situated, challenging the constitutionality of various aspects of the ordinance. The district court granted, in part, her motion to certify her suit as a class action. With respect to the “Tow Class,” the court concluded that Santiago “is asserting only a facial challenge: the ordinance is unconstitutional because it fails to require adequate notice before a vehicle has been towed.” Concerning the Vehicle Disposal Class, the court rejected Chicago’s assertion that state law requires the class to show prejudice from the city’s failure to strictly follow its ordinance.The Seventh Circuit vacated. The class certification order does not fully demonstrate the “rigorous analysis” required by FRCP 23 and constituted an abuse of discretion. Considering whether questions of law or fact common to class members predominate begins with the elements of the underlying cause of action. The district court did not discuss any of the elements of the underlying causes of action or what the causes of action are. View "Santiago v. City of Chicago" on Justia Law

The Davises took out a mortgage on their residence in 2005. After they defaulted on the loan and filed for bankruptcy, Jerome Davis, a licensed attorney who represented himself, received a bankruptcy discharge. The bankruptcy court later held that the discharge did not extend to the debt Davis owed CitiMortgage. Rather than appeal, Davis first attempted to remove CitiMortgage’s foreclosure action to federal court, alleging that CitiMortgage’s efforts to obtain a personal deficiency judgment contravened his bankruptcy discharge. He then filed a separate suit alleging unfair debt collection practices against CitiMortgage. Davis lost in each of those proceedings. CitiMortgage was awarded attorney fees and costs, 28 U.S.C. 1447(c) when the court remanded the foreclosure proceeding for lack of federal question jurisdiction.The Seventh Circuit dismissed Davis’s appeal, stating that it lacked jurisdiction to review the remand order. Davis waived his arguments challenging the attorney fees and costs award. The court upheld the dismissal of Davis’s suit against CitiMortgage; all of Davis’s claims center on his contention that the debt owed CitiMortgage was subject to his 2018 discharge. The court took judicial notice that the bankruptcy court had held the opposite in Davis’s adversary proceeding. View "Davis v. CitiMortgage, Inc." on Justia Law

Dollar General contracts separately with Capstone and CHEP for work at its Marion, Indiana distribution center. Dollar General owned certain power equipment at the distribution center, including all pallet jacks. Capstone and CHEP employees were permitted to use Dollar General’s jacks. Dollar General personnel were responsible for maintaining the jacks. Capstone and CHEP employees who had an issue with a jack were to take it to the Dollar General maintenance shop and fill out a “red tag.”Capstone employed Seekins to unload trucks at the distribution center. Seekins lost his left foot as a result of an accident involving a jack and sued CHEP. Seekins alleged that the jack had possibly been used by a CHEP employee before Seekins and that CHEP’s alleged failure to remove the jack from service meant that CHEP effectively supplied it to Seekins.The district court entered summary judgment, holding that CHEP did not owe Seekins a duty of care under Indiana negligence law. The Seventh Circuit affirmed. CHEP was not a “supplier” as that term is used in the Indiana statute. The sharing of equipment owned, controlled, and maintained by a third company does not create a duty of care. View "Seekins v. CHEP USA" on Justia Law

Mashallah sells handcrafted jewelry at its Chicago store. Ranalli’s operates a bar and restaurant. Both purchased West Bend all-risk commercial property insurance policies. In March 2020, in response to the COVID-19 pandemic, Illinois Governor Pritzker ordered all individuals to stay at home except to perform specified “essential activities” and ordered “non-essential” businesses to cease all but minimum operations. Restaurants were considered essential businesses and permitted to sell food solely for off-premises consumption. Ranalli’s was restricted to filling takeout and delivery orders. Mashallah was not classified as an essential business and had to cease its retail activities. Both businesses sustained heavy financial losses. Their West Bend policies are materially identical. West Bend agreed to pay for actual business income lost and necessary extra expenses incurred if they were caused by “direct physical loss of or damage to” the businesses’ properties. Both policies contain virus exclusions. West Bend denied their claims.The Seventh Circuit affirmed the dismissal of contract and bad faith claims and a claim that West Bend’s retention of full premiums—despite decreased risks occasioned by the reduction in insureds’ business operations—constituted unjust enrichment, requiring rebates. The virus exclusions barred coverage for the purported losses and expenses and the businesses failed to allege viable legal bases for rebate of premiums. View "Mashallah, Inc v. West Bend Mutual Insurance Co." on Justia Law

In March 2020, in response to the rapidly expanding COVID-19 pandemic, Illinois Governor Pritzker issued an order mandating the temporary closure to the public of restaurants, bars, and movie theaters; a subsequent order required all non-essential businesses to shut down partially and temporarily. Bradley operates a Quality Inn & Suites with a restaurant, bar, and general event space and suspended in-person dining at the restaurant and bar, and canceled previously scheduled weddings and meetings.Bradley’s general business property insurance policy from Aspen requires “direct physical loss of or damage to” covered property; its loss of use exclusion bars coverage for “loss or damage caused by or resulting from … [d]elay, loss of use or loss of market” and another exclusion bars coverage for “loss or damage caused directly or indirectly by … [t]he enforcement of or compliance with any ordinance or law: (1) Regulating the construction, use or repair of any property; or (2) Requiring the tearing down of any property.”Affirming the district court, the Seventh Circuit held that the term “direct physical loss of or damage to” property does not apply to a business’s loss of use of the property without any physical alteration. The loss of use exclusion and the ordinance or law exclusion in this policy provide separate bars to coverage. View "Bradley Hotel Corp. v. Aspen Speciality Insurance Co." on Justia Law

In March 2020, the Dallas County government issued orders restricting the operations of local businesses in light of the COVID-19 pandemic. Hotels were permitted to continue to provide lodging, and delivery and take-out food services, subject to social-distancing rules. Crescent owns the Dallas Ritz-Carlton hotel, which offers guest rooms, a restaurant and bar, general event space, a salon, spa, and fitness center. Crescent alleges that COVID-19 rendered the air in the hotel unsafe and diminished the functional space available, causing significant losses of income. Crescent also alleges that it incurred expenses to install plexiglass partitions and hand sanitizer stations, to display signs throughout the hotel, and to move furniture to permit social distancing. Crescent’s Zurich insurance policy requires “direct physical loss or damage” to covered property and includes an exclusion for losses attributable to any communicable disease, including viruses, and a microorganism exclusion, which bars coverage for losses “directly or indirectly arising out of or relating to mold, mildew, fungus, spores or other microorganisms of any type, nature, or description, including but not limited to any substance whose presence poses an actual or potential threat to human health.”The Seventh Circuit affirmed the dismissal of Crescent’s suit against Zurich. The phrase “direct physical loss or damage” requires either “a permanent [dispossession] of the property due to a physical change … or physical injury to the property requiring repair.” The microorganism exclusion independently bars coverage for the hotel’s claimed losses. View "Crescent Plaza Hotel Owner, L.P. v. Zurich American Insurance Co." on Justia Law

On March 15, 2020, in response to the rapidly expanding COVID-19 pandemic, Illinois Governor Pritzker issued an order mandating the temporary closure to the public of restaurants, bars, and movie theaters. On March 20, another order required all non-essential businesses to shut down partially and temporarily. As a result of these orders, the plaintiffs (businesses) were each required to close or dramatically scale back operations. The businesses held materially identical commercial-property insurance policies, issued by Cincinnati Insurance Company, providing coverage for income losses sustained on account of a suspension of operations caused by “direct physical loss” to covered property. The policies also provided coverage for income losses sustained as a result of an action of civil authority prohibiting access to covered property, when such action was taken in response to “direct physical loss” suffered by other property. Cincinnati denied their claims.The Seventh Circuit affirmed the dismissal of each suit. The businesses did not adequately allege that either the virus that causes COVID-19, SARS-CoV-2, or the resulting closure orders caused “direct physical loss” to property; the loss of use, unaccompanied by any physical alteration to property, does not constitute “direct physical loss” under the relevant insurance policies. View "Sandy Point Dental, P.C. v. Cincinnati Insurance Co." on Justia Law