Illinois Appellate Court Affirms Enormous Award For Retaliatory Discharge

Holland v. SCHWAN'S HOME SERVICE INC., Ill: Appellate Court, 5th Dist. 2013 - Google Scholar:

This is a retaliatory discharge case in which the plaintiff claimed that he was fired for exercising his rights under the workers compensation act. After a trial, the jury awarded plaintiff about $600,000 in compensatory damages and $3.6 million in punitive damages.

The majority affirmed the jury verdict, concluding that the defendant worked an injured employee until he sustained further injuries. The court comments:

The evidence presented at the trial introduced the jury to an employer that intentionally worked an injured employee beyond his medical restrictions to the point that he suffered from severe pain from a work-related injury. When the employee's treating physician took him off work for recovery and treatment, it retaliated against the injured employee by terminating his employment. The need to deter employers from engaging in this type of reprehensible conduct is obvious and substantial. In light of the evidence considered and weighed by the jury, we will not overturn its assessment of punitive damages as being excessive or unconstitutional. 

There is also a strong dissent, filed by Justice Spomer, which argued that the employee was never fired at all, merely demoted. Thus, there was no retaliatory discharge.

In recent years, there has been much fuss over the Illinois Workers Compensation Act and some have argued that the Act is unfair to employers. This case is also controversial and, in my view, is a strong candidate to be reviewed by the Illinois Supreme Court.

Edward X. Clinton, Jr.

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The Account Stated - A Useful Legal Tool for Creditors

American Express Centurion Bank v. Gabay, 94 AD 3d 795 - NY: Appellate Div., 2nd Dept. 2012 - Google Scholar:


A creditor can often pursue payment on many theories. One of the most useful is the account stated. An account stated requires the creditor to show that there was a history of transactions and that the conduct of the debtor demonstrates that the debtor did not dispute the balance due. The advantage of account stated is that it avoids the defense to a breach of contract action that the goods or services were inferior. The other advantage is that a lawsuit based on an account stated can rely on the debtor's failure to challenge invoices as proof that the invoices stated the correct amounts.


This is some language from a New York case that sets out the requirements for an account stated:


"An account stated is an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due" (Fleetwood Agency, Inc. v Verde Elec. Corp., 85 AD3d 850, 851 [2011][internal quotation marks omitted]). "An agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account" (American Express Centurion Bank v Cutler, 81 AD3d 761, 762 [2011])."


Comment: if you have series of uncontested invoices and no real defense to payment the account stated is often the legal theory of choice. However, if the debtor complained promptly or contested the invoices, the account stated theory will not work. The best alternative is a breach of contract claim.
Edward X. Clinton, Jr.

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Trade Secrets Claim Rejected Where Company Did Not Protect Trade Secrets

FAIL SAFE LLC v. SMITH CORPORATION, No. 11–1354., March 29, 2012 - US 7th Circuit | FindLaw:

The Seventh Circuit affirmed the district court's rejection by summary judgment of certain trade secret claims.  The district court found that the plaintiff had failed to take reasonable measures to protect its trade secrets and had, in fact, voluntarily disclosed those secrets to the Defendant corporation.  The Seventh Circuit affirmed.

The Seventh Circuit summarized its decision as follows:

"This case is about whether a plaintiff can sustain a trade secret or unjust enrichment claim when that plaintiff fails to take any protective measures to safeguard its proprietary information. Business relationships do not always develop under formulaic circumstances. But where one company fails to take any protective steps to shield its proprietary information, it cannot then expect the law to protect it when the relationship sours. For this reason, we affirm."


Comment: these are words to live by for small businesses trying to protect trade secrets.


Edward X. Clinton, Jr.

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Tax Season Reminder - Deal In Writing With The IRS!

Recently, a client contacted us about problems with the IRS.


The client had made a payment, but the payment was not properly credited by the IRS.  The client had spent many hours on the telephone with the IRS, but the calls had not resolved the problem.


Please understand this:  when dealing with the IRS - ALWAYS, ALWAYS CORRESPOND IN WRITING.


By writing I mean a letter with a stamp, preferably certified.  Also keep a copy of the letter.  The IRS is required to respond to correspondence.  It is not bound by what an employee said on the 800 number line.  Indeed, the employee may not even be required to keep a log of calls and what happened on the phone calls.  In sum, calling the IRS is a complete waste of time and should be avoided at all costs.


If the IRS sends a notice that you failed to pay a tax or made a mistake on your return, respond with a letter to the IRS.  Be professional and polite.  Don't waste time calling the IRS on the phone.  The organization is a 19th century dinosaur.


If you send a check to the IRS, include the tax i.d. number and identify the tax year that the check relates to.


Edward X. Clinton, Jr.

www.clintonlaw.net

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