Cases

Messer Strickler, Ltd. Successfully Aids Landlord in Distress for Rent on “Cocktail” in Lakeview

Many Illinois landlords are not aware of the remedies available to them under the Illinois Distress for Rent statute, 735 ILCS 5/9-301 et seq. A Distress offers the Landlord a huge advantage through a quick, summary process that is guaranteed to get the tenant’s attention. An old common law remedy codified, the law allows a lessor to seize the personal property of a tenant who has failed to pay rent. Once a seizure is made, the lessor files a distress warrant with the clerk of the court along with a detailed inventory of the property distrained as soon as practicable. The action then proceeds to a determination by the court on the amount owed by the tenant. After receiving a favorable judgment in the proceeding, the landlord is awarded the amount of rent due and the judgment is enforceable against the seized property, which is sold at auction to satisfy the judgment. The tenant may only receive its property back prior to a determination on the merits by posting a bound in twice the amount of the rent claimed.

Known as a “self-help” remedy, a distress for rent is not without its potential pitfalls. A distress for rent could open up the landlord to potential counterclaims from the tenant if not exercised properly. For example, many times a lease provides for additional sums due to the landlord upon default, such as late fees, attorneys’ fees, or penalties. These sums, if not clearly defined as “rent” under the lease may not be satisfied through a distress. Thus, a landlord who seizes a tenant’s property for additional sums owed under the lease may find themselves in hot water. As a result, it is vital that seasoned legal counsel be consulted before exercising a distress.

Nevertheless, when faced with what can be a long and arduous eviction process in circuit court, a distress for rent can be just what a landlord needs to mitigate its damages. Messer Strickler, Ltd. has served as a resource for landlords for many years on such issues. Most recently, Messer Strickler, Ltd. facilitated a successful distress for rent for its commercial landlord client, 3357-59 N. Halsted Street, LLC (“Halsted”). Halsted was owed in excess of $85,000 in backed rent by tenant With a Stick, Inc. d/b/a Cocktail, which formerly operated a bar at the corner of Roscoe and Halsted streets. The Distress allowed Halsted to seize property from the bar to help satisfy the overdue rent. Halsted was so pleased with the results that it graciously allowed Messer Strickler, Ltd. to identify it in this post. You can read more about the distress through local news sources at:http://www.windycitymediagroup.com/lgbt/Cocktail-property-seized-over-rentdebts/41211 .html.

Contact Nicole Strickler at (312) 334-3442 for further information.

Employers Beware: New "Facebook Law" Has Far-Reaching Consequences for Businesses

Due to the passage of the so called “Facebook law” (the “Act”), starting on January 1, 2013, it will be illegal for Illinois employers to: (1) “request or require an employee or prospective employee to provide any password or other related account information in order to gain access to the employee’s or prospective employee’s account or profile on a social networking website;” and (2) “demand access in any manner to an employee’s or prospective employee’s account or profile on a social networking website.”  820 ILCS 55/10(b).  The law leaves no exceptions, even for openings that require thorough background checks.  Under the Act, a job applicant or employee may file a complaint with the Illinois Department of Labor (IDOL), which will then investigate the complaint.  If IDOL discovers that the employer violated the Act, then IDOL may commence an action in the circuit court.  If the complaint is not resolved by IDOL and IDOL does not commence an action, the Act provides the aggrieved party with a private right of action.  If the employee or prospective employee prevails in such action he or she is entitled to $200 plus actual damages, reasonable attorneys’ fees, and costs. MarylandandCaliforniacurrently have similar laws on the books, with at least ten other states considering following suit.  Such a patchwork of state laws may prove problematic to national employers, who will need to ensure that their policies comply with each of the state laws in effect.  Additionally, on April 27, 2012, the Social Networking Online Protection Act was introduced in the U.S. House of Representatives.  If passed, this law would impose similar restrictions on employers under federal law.  However, a federal law won’t lessen the burden on employers from complying with state laws that are more restrictive.

Though the Act was primarily intended to protect applicants from having to turn over passwords, by including employees in its provisions the law is likely to result in serious, unintended consequences for employers who may have legitimate reasons for wanting to see what employees are putting on these sites.  For example, employers investigating alleged workplace misconduct or violations of the law may find themselves in hot water under the statute.  Increasingly, employees use personal social networking sites for business-related purposes, such as communicating with customers, suppliers, or other employees.  Because the Act includes no exceptions to the ban on requesting social media passwords, it may prevent employers from investigating serious misconduct, such as harassment or dissemination of confidential information.  It may also hinder investigations into illegal activity, such as misappropriation of trade secrets or violations of securities or financial laws.  Likewise, the Act could frustrate discovery during litigation where a party is seeking relevant evidence contained in an employee’s social networking account.   Given these uncertainties, employers must take care when conducting investigations and responding to litigation requests so as not to unintentionally violate the Act.

Even employers in states without “Facebook laws” should think twice before requesting password information from job applicants and employees.  It is illegal to discriminate against an applicant or employee because of that person’s race, sex (including pregnancy), religion, national origin, age, or disability.  If such protected characteristics are disclosed from the social networking site and the prospective employee is not hired or a current employee is subject to adverse employment action, the employer runs the risk of a discrimination claim being brought.  Even if the protected characteristics had nothing to do with the employer’s decision, the fact that the employer had access to the information could be enough to cause trouble for the employer.  Likewise, the employer would be hard-pressed in proving ignorance of the protected category.  Further, because “Facebook laws” have attracted a lot of media attention, it might be bad publicity for employers to carry on a policy of requesting password information.  Moreover, sought-after job applicants may choose not to work for employers who demand such information.  Additionally, employers who request passwords from employees and prospective employees, could subject themselves to negligence suits if the employer could have discovered evidence from the social networking site of an employee’s potential for dangerous conduct.  Finally, taking action against an employee or applicant for complaining on a social networking site about the conditions of employment could run afoul of the National Labor Relations Act by chilling workers’ willingness to exercise their Section 7 rights—basic rights extended to employees to engage in “concerted activities” for the purpose of collective bargaining or other “mutual aid or protection.”

In light of this new law,Illinoisemployers should review their hiring and investigative practices and make sure all individuals involved in the hiring process or disciplinary process are aware of and comply with the following:

  • Do not ask employees or prospective employees for their social media passwords or information that would identify their social media account or profile (such as their screen name)
  • Do not request or demand that employees or prospective employees allow you access to their social media account or profile, even if you do not request that they disclose their password

Further, all employers, whether doing business in a state with a “Facebook law” or not, should keep the following in mind:

  • Any information learned about an employee or prospective employee through social media can be used against you if the individual suffers adverse employment action.

Contact Katherine Olson at (312) 334-3444 for further information.

Invoicing – Ways to Increase Your Recovery 300%

When a customer fails to pay, many businesses assume that is the end of it, or at best, a money-losing proposition to try to do anything about payment. But it does not have to be that way.  In fact, by using a simple invoice form, you can increase both the likelihood of recovery and the amount you recover -- substantially.

For example, a court recently awarded judgment for a business in an amount almost three-times (300%) of the original amount due.  How is that possible?

Your invoice forms say a lot.  Most businesses focus on the product, quantity or price on the invoice.  But by including a few simple words, a “magic phrase,” if you will, on each and every invoice, your business will not only have a better chance of getting paid, but getting paid more.  These words are universally recognized and so commonplace that few think to object to them.

The key to success is found not only the “magic words” that evoke these protections, but in the easy and repetitive use of the form in business with your customers.

Once your business sets up the program, a quick and inexpensive process, there is nothing that your business will need do further as the program becomes self-implementing.

Court Rules Collection Law Firms May Use “Account Stated” Cause of Action in California Without Running Afoul of the FDCPA

The use of alternative causes of action, even if such causes of action are inconsistent, is routine in litigation. Legal collection firms are no different. Prudent collection lawyers may assert more than one legal theory as a basis to collect on a defaulted debt in order to ensure their client’s collection of a validly owed amount. Recently, this area of practice has been the subject of attack by consumer attorneys, who allege that the use of alternative causes of action is misleading or deceptive to unsophisticated debtors. In a case filed in the Southern District of California, two clients of MS recently faced such an attack. MS clients, an asset purchaser and law firm, were sued in a federal action alleging that the use of an “account stated” cause of action as an alternative legal theory to collect a defaulted credit card debt was misleading, deceptive, and otherwise unconscionable under the Fair Debt Collection Practices Act, 15 U.S. C. §1692 et seq. Plaintiff argued that Defendants conduct was deceptive because an account stated cause of action requires the creation of a new contract, which never existed in the case.

MS took the offensive in filing an early motion for judgement on the pleadings and arguing that Plaintiff had failed to plead facts stating a plausible cause of action. The Court granted MS’ motion agreeing that the law “embraces the use of common counts to recover unpaid credit card debt.” The Court further found that Plaintiff’s allegations in his complaint relevant to the purpose and merits of the state court suit were nothing more “than conclusory allegations not entitled to the assumption of the truth.” In adopting MS’ arguments as to the frivolous nature of Plaintiff’s claims, the Court noted that it would entertain a defense request for sanctions in the even Plaintiff attempted to file a similarly deficient amended complaint.

To view or download a copy of the opinion click here. Please contact Nicole M. Strickler, (312) 334-3442, with any questions regarding the opinion.

Messer Strickler, Ltd. Obtains Dismissal in FCRA Case in S.D. of California

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Notably, there has been a recent uptick in the number of lawsuits filed by consumers alleging improper access of their credit reports in violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §1681 et seq.  The FCRA imposes civil liability against “[a]ny person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose. . .” 15 U.S.C. §1681(n)(b). One permissible purpose is the receipt of a consumer report for use “in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the. . .collection of an account of the consumer.” 15 U.S.C. §1681b(a)(3)(A); Pyle v. First Nat. Collection Bureau, 2012 WL 1413970, at *3 (E.D. Cal. 2012). As credit reports can be valuable tools for analyzing a consumer’s ability to repay, those engaged in the collection of debts often pull credit reports relying on their ability to do so under §1681b(a)(3)(A). Opportunistic consumer debtors have recently attempted to use the FCRA’s prohibition on furnishing reports to their advantage. In an apparent attempt to avoid their obligations on their debt, consumers have been filing lawsuits against those in the debt collection industry alleging that their credit report has been pulled without a permissible purpose. Many times, the allegations in these lawsuits use the same “form” language and simply conclude, without any facts, that the agency pulled the report “without a permissible purpose in violation of the FCRA, 15 U.S.C. §1681(b). “

In a recent case located in the Southern District of California, a consumer brought a claim against an MS client alleging that the client “obtained [his] consumer credit report. . .with no permissible purpose. . . [because] [p]laintiff has never had any business dealings or any accounts with or made application for credit from, made application for employment with, applied for insurance from, or received a bona fide offer of credit from the Defendants.” MS moved for involuntary dismissal arguing that Plaintiff’s vague and conclusory allegations could not support a claim under the FCRA. The Court agreed and dismissed the case, concluding that “[p]laintiff has failed to set forth sufficient facts to show that Defendants’ actions were not permissible under the FCRA.” MS plans to use this beneficial decision in the defense of other similar “form” complaints against its clients.

To view or download a copy of the opinion click here. Please contact Nicole M. Strickler, (312) 334-3442, with any questions regarding the opinion.