May 21, 2009

De Novo Standard Of Review For Judgment Based On Contract Construction

Jeffrey Covinsky was CEO of Hannah Marine Corporation. He sued the company after it refused to pay him pursuant to a “golden parachute” clause in his employment contract. In turn, Hannah counterclaimed against Covinsky for breach of fiduciary duty. The trial court gave Covinsky summary judgment on his claim. Hannah appealed.

The First District Illinois Appellate Court analyzed the proper standard of review of a summary judgment in a contract action. The appellate court acknowledged the usual review standard for summary judgments is de novo (circuit court ruling gets no deference). However, “Whether a breach of contract has occurred generally is not a legal question subject to de novo review, but rather a question of fact which will not be disturbed unless the finding is against the manifest weight of the evidence.”

In this case, the trial court’s ruling was based only on an interpretation of the contract, and no question of fact was involved. So the appellate court chose the de novo standard. Here’s the court’s explanation:

“[W]here only the construction of a contract is at issue, the legal effect and interpretation of the contract is a question of law, and summary judgment is proper." … The parties disputed whether Covinsky resigned or was involuntarily terminated but, given the court's decision that paragraph 7(g) applied regardless of whether Covinsky voluntarily resigned or was involuntarily terminated, the court determined that it did not need to make this factual determination and resolved the case by construing the parties' employment contract. We review the court's grant of summary judgment de novo.

Read the whole opinion, Covinsky v. Hannah Marine Corp., No. 1-08-0695 (2/17/09), by clicking here.

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May 14, 2009

Re-Opening Estate Decided Under Manifest Weight Standard

Kathleen Savio’s death in 2003 first was ruled by the coroner to be an accident. But after her body was exhumed and additional autopsies conducted in 2007, the coroner ruled that Kathleen’s death likely was a homicide. Kathleen’s father and siblings then asked the court to reopen Kathleen’s estate, to have the executor removed, and to name the father and one of the siblings as new executors. The trial court granted that request.

Kathleen’s former husband, Drew Peterson, and the executor, James Carroll, appealed. The parties argued over the proper standard of appellate review. Peterson and Carroll asserted that the trial court’s ruling should get no deference on appeal.

But the Third District Illinois Appellate Court sided with the father and sibling, and ruled that the proper standard of review of an order to reopen an estate is “the manifest weight of the evidence.” Here’s the court’s analysis:

Peterson and Carrol argue that a de novo standard of review should be applied because this issue involves a question of statutory interpretation … and because the trial court's ruling was not the result of an evidentiary hearing. Savio's father and siblings, on the other hand, argue that a manifest weight of the evidence standard is appropriate and cite general case law regarding the removal of an executor to support that conclusion … Although we have reviewed the case law in this area, we have found no clear statement of the standard of review that should be applied to a trial court's decision on a petition to reopen a decedent's estate. We note, however, that contrary to the argument of Peterson and Carrol, the issue before this court in the present case does not involve an interpretation of the probate law in Illinois. Rather, the issue involves the application of that law to the facts of the present case and a factual determination of whether the possible wrongful death claim is a newly discovered asset … Therefore, we will apply a manifest weight of the evidence standard of review to this issue and will not reverse the trial court's decision on this issue unless it is against the manifest weight of the evidence. A trial court's ruling is against the manifest weight of the evidence only if it is unreasonable, arbitrary and not based on evidence, or when the opposite conclusion is clearly evident from the record …

In the end, the trial court’s ruling was affirmed. Read the whole opinion, In re Estate of Savio, No. 3-08-0294 (2/4/09), by clicking here.

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May 6, 2009

Attorney Sanctions In Seventh Circuit Compared

For a statistical comparison among the federal appellate courts of sanctions orders against attorneys, take a peek at the Fall 2008 edition of the Seventh Circuit Review. The analysis concludes: “The Seventh Circuit issued the fourth-most sanctions overall and issued the most serious sanctions. In the end, the data suggests that the Seventh Circuit may be ‘nitpicking’ to a certain degree, but that there are other circuits that are nearly as critical of attorneys.”

Here’s the whole article by Patrick Austermuehle, “Just a Bunch of Fusspots and Nitpickers? That Pretty Much Sums It Up,” 4 Seventh Cir. Rev. 34.

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May 5, 2009

Rules After Remand; Jurisdiction Over Fee Petition After Appeal Notice Is Filed

Two important rulings arise from this landlord-tenant dispute.

After remand from the appellate court — which did not include instructions for how to proceed — the tenant asked the trial court for leave to amend its complaint to add a new item of damages. The trial court denied the tenant’s request because, it said, it did not have jurisdiction to do so.

Must the appellate court give specific directions to the trial court in an order of remand? The First District Illinois Appellate Court said “No.” Then what is the trial court’s authority and obligation after the appellate court sends the case back to the trial court? Here’s how the appellate court answered the question, complete with the standard of review:

Following a remand, the circuit court is obligated to exercise its discretion within the bounds of the remand … Whether it has done so is a question of law, and a reviewing court decides that legal question de novo …

A reviewing court is not required to provide specific directions in an order reversing a judgment and remanding a cause … In such a case, the circuit court is required to examine the reviewing court's decision and to proceed in a manner that conforms with the views expressed therein. … Where a cause has been remanded without particular instructions, the circuit court is not precluded from allowing the plaintiff to amend or supplement his pleadings, as long as the amendment is not inconsistent with the legal principles expressed by the reviewing court …

In this case, our prior decision did not include specific instructions, nor did it indicate that the cause was remanded for the limited purpose of resolving the two identified factual questions. Rather, we held that judgment on count IV could not be granted as a matter of law while those questions remained unanswered … A plaintiff is permitted to amend its pleadings to specifically state a damage claim, provided the amendment was not proscribed by the reviewing court's decision … This court's general remand order did not restrict the court's jurisdiction to allow amendment of the pleadings, and Suburban's proposed amendment seeking recovery of rent was not inconsistent with the our prior ruling. Therefore, we find that the circuit court erred in determining that it lacked jurisdiction to permit Suburban's proposed second amended complaint.

The second issue was whether the trial court had jurisdiction over a fee petition that was filed within 30 days of the final judgment, but after the notice of appeal was filed. The trial court ruled it did not have jurisdiction to hear the fee petition because the tenant already appealed. But the appellate court disagreed. Here is the appellate court’s thinking:

A circuit court retains jurisdiction for 30 days after its entry of a final order or judgment … A circuit court has jurisdiction to entertain a petition for fees filed within 30 days of the entry of a final judgment without regard to a previously filed notice of appeal … In addition, a circuit court has jurisdiction to address a timely-filed fee petition regardless of whether the fee request is considered to be part of the original action or collateral to the original claim … The filing of a postjudgment petition for fees renders a prior notice of appeal premature …

In this case, Associated's [Landlord] petition for fees was timely filed within 30 days of the entry of summary judgment in its favor. The filing of Associated's fee petition rendered Suburban's [Tenant] December 17, 2007, notice of appeal premature. Therefore, Suburban's first notice of appeal did not deprive the circuit court of jurisdiction to rule on the petition for fees …

Read the whole case, Suburban Rebuilders v. Associated Tile Dealers Warehouse, No. 1-07-3531 (2/10/09), by clicking here.

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May 2, 2009

Appeal Of Post-Judgment Motion Not Saved By Rule 303

Bridgette Glickman, owner of a condominium unit, fell on ice in a stairway at the condo building. She sustained multiple fractures to her ankle. Among others, she sued the condominium association for negligent maintenance of the stairway.

The trial court dismissed Glickman’s complaint against the association because the accident happened before the association elected its first board of managers. The case proceeded against the other defendants − the developer and the designer of the building. Glickman appealed the dismissal of the association within the mandated 30-day deadline. About four months later, she asked the trial court for permission to file an amended complaint against the association.

The trial court denied Glickman’s request to amend, so she made the denial part of her appeal. The First District Illinois Appellate Court affirmed the ruling that Glickman’s request came too late for the trial court to decide. The filing of Glickman’s notice of appeal did not relieve the trial court of jurisdiction. But her failure to file the request to amend within 30 days did. Here’s what the appellate court stated:

As a general rule, the trial court is divested of jurisdiction over a cause upon the filing of a notice of appeal … However, under the recently amended version of Supreme Court Rule 303(a)(2) … the trial court retains jurisdiction over a timely filed postjudgment motion … Because Glickman's motion involved the party that was dismissed from the lawsuit and since it was not filed within the 30 days allowed under Rule 304(a) … it was not timely filed and the trial court no longer had jurisdiction over the dismissed party. Therefore, the trial court's denial of Glickman's motion for leave to file an amended complaint is affirmed.

Don’t fret, though, if your sympathy is with Ms. Glickman. The dismissal of Glickman’s complaint against the association was reversed. Read the whole case, Glickman v. Teglia, No. 1-08-0392 (2/19/09), by clicking here.

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