Articles Posted in Business litigation

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Kraft is a well-known manufacturer of food products sold in grocery stores.  It has been selling packaged cheeses sold under the trademarked “Cracker Barrel” label.  Kraft has been selling under that name for more than 50 years.  Thousands of grocery stores carry Kraft cheeses bearing that label. Kraft does not sell any non-cheese products under the name Cracker Barrel. 

Cracker Barrel Old Country Store (CBOCS) is a well-known chain of low-priced restaurants. It opened its first restaurant in 1969. There are more than 620 restaurants now operating, many of them located just off major highways.

When Kraft learned that CBOCS planned to sell a variety of food products, such as packaged hams in grocery stores under its logo, “Cracker Barrel Old Country Store” (the last three words are in smaller type in the logo), Kraft filed this lawsuit. Kraft claimed that many customers would be confused by the similarity of the companies’ logos and would think that food products so labeled were Kraft products. 

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Bank of America (“Bank”) lost about $34 million when Knight Industries went bankrupt. In the Bank’s lawsuit under federal diversity jurisdiction, it was alleged that Knight’s directors and managers looted the company and that its accountants neglected to detect the fraud. The parties had agreed that Illinois law applied. The district court dismissed all of the Bank’s claims on the pleadings on a motion. 

The accounting firm, Frost, Ruttenberg & Rothblatt, P.C. were Knight’s accountants.The accountants sought to invoke the protection of Illinois law under 225 ILCS 450/30.1, which provides that an accountant is liable only if the accountant himself/herself committed fraud or “was aware that a primary intent of the client was for the professional services to benefit or influence the particular person bringing the action.”  The district court here concluded that the bank’s complaint did not allege plausibly that the accounts knew that Knight’s “primary intent” was to benefit the bank. 

The lawsuit alleged that the accountants knew that Knight furnished copies of the financial statements to its lenders, including the Bank. But the district court judge observed that auditors always know that clients send statements to lenders (existing or prospective). The statute would be ineffectual if knowledge that clients show financial statements to third parties were enough to demonstrate that the client’s “primary intent” was to benefit a particular lender.

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The Illinois Appellate Court has affirmed a decision of a Cook County Circuit Court judge with respect to the forum-selection clause found in a service contract. MillerCoors, headquartered in Chicago, is the second largest brewer in the United States with approximately 30% market share. In 2007, MillerCoors approached Entec regarding parts procurement and management services.

On March 1, 2010, Entec and MillerCoors entered into a contract wherein Entec agreed to provide parts procurement for MillerCoors breweries in Georgia, North Carolina, Virginia and Ohio. The agreement between the parties was a standard contract that MillerCoors had used in the past. The document included a forum-selection clause indicating that all litigation that may arise involving the contract could be brought against MillerCoors in Colorado.That part of the contract was not discussed or negotiated by the evidence that the court reviewed. The contract was nevertheless signed by the parties.

During the course of the contract, MillerCoors understood that some of its suppliers reported that Entec had failed to pay them.  This was true even though MillerCoors had paid Entec. MillerCoors began receiving complaints and notices of mechanic’s liens, and some suppliers threatened to cease providing supplies to MillerCoors.

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The Illinois Third District Appellate Court has held  that the large hardware chain Menards was entitled to insurance coverage under the automobile insurance policy issued to the insured, the customer, who was injured while a Menards employee loaded her car. 

In this case, Ruby Bohlen purchased gravel and bricks from a Menards store in Champaign, Ill.  She brought her car around to the loading area where her car was to be loaded by an employee of Menards. While the Menards employee was loading the bricks, Bohlen tripped and fell on debris near her car and was injured. 

Bohlen filed a lawsuit against Menards claiming that Menards was negligent in failing to provide a safe place for its customers.  As part of the complaint, Bohlen claimed that Menards chose not to remove debris from the aisles, sidewalks and other areas of the store. 

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Edward Myles, a truck driver, claimed that he lost earnings due to the defendants’ unfair acts and practices. The claim stemmed from the defendants’ breach of contract relating to the sale of commercial trucking equipment.

Mr. Myles claimed loss of revenue due to the defendants’ intentional interference with a third-party contract.

The defendants denied all of the plaintiff’s claims and filed a counterclaim seeking to recover the unpaid balance on the equipment.

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The Illinois Seventh Circuit Court of Appeals has agreed with the federal district court in dismissing the lawsuit brought by James Nation. Mr. Nation served as the CEO of the Spring Air Co., which owned and licensed a mattress brand.

After the company was acquired by HIG Capital in 2007, Mr. Nation accepted a severance plan, which would have paid him $1.2 million over 15 months provided he did not work for Spring Air’s competitors through Dec. 31, 2008. In August 2008, the company stopped making the payments because of financial shortfalls.

In January 2008, Spring Air requested additional financing from American Capital and HIG. With $40 million of new capital, American Capital acquired four of the seven board seats. By a vote of this new board in August 2008, the severance payments to Mr. Nation and three other former executives were stopped. In September 2008, Mr. Nation began work at Serta in violation of the severance agreement.

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The Illinois Appellate Court has affirmed a ruling by a Cook County Circuit Court judge arising from a class-action suit filed by Ronald Costello who represented the class. He claimed that he and others suffered flooding on their property during August 2001 storms.

The lawsuit arose out of the City of Chicago’s implemented Rainblocker System, a sewer inlet intended to prevent backup from sewers following a heavy rain. The city hired Harza Environmental to develop this project. The same program worked successfully in Evanston, Illinois. Four pilot studies were done in different Chicago neighborhoods by Harza with a variety of levels of flooding. The studies proved successful and the city went ahead with the Rainblocker System.

It was alleged that during August 2001 storms, streets in the city flooded above the curb level because of the incorrect assumptions made by Harza. The lawsuit complained that the city should have done more tests and therefore, was negligent. In December 2005, the lawsuit was certified as a class.

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The Illinois Appellate Court 1st District 4th Division has affirmed a decision by Cook County Circuit Court Judge James N. O’Hara. The plaintiff Joseph Abbas was the president and principal partner of a luxury car dealership known as Bentley of Downers Grove, Gold Coast Bentley and Gold Coast Lamborghini.

Charter One was Abbas’ principal business lender. Defendant Michael Weininger is an attorney, principal partner of his own law firm and Charter One’s legal representative.

In early 2009, Abbas’ dealership began experiencing financial difficulties and Abbas agreed to sell it to Joseph Perillo. Abbas and Perillo completed a purchase agreement on Aug. 10, 2009.

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The Illinois Appellate Court has ruled that a condo resident was justified in not paying more than $2,000 in condo fees because the roof above and the brick facade outside her unit had not been properly prepared.

The plaintiff, Lisa Carlson, had been threatened with eviction for non-payment of her condo dues totaling $2,143. Her attorney filed an appeal under the Forcible Entry and Detainer Act (FED). The court found that the condo association had breached its duty to maintain and repair common elements of the building.

The decision was reported in the Chicago Daily Law Bulletin.

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A trial judge in the circuit Court of Cook County has denied a request for a preliminary injunction in the case of a business whose owners wanted to build a gas station alongside another gas station in Oak Forest.

Oak 159th Inc. owned a BP gas station at the corner of 159th and Central Avenue in Oak Forest, Illinois. Two sides of the gas stations were on 159th Street and Central Avenue. The other two were on the parking lot of a shopping center. The shopping center was owned and managed by Inland Real Estate.

One of the tenants of the shopping center, Food4Less, a supermarket, leased a portion of the parking lot. The supermarket received permission from Inland Real Estate and the City of Oak Forest to build a gas station on its portion of the parking lot, which was immediately east of the BP station.

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