Articles Posted in US Court of Appeals for the Seventh Circuit

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Carroll and Lizzie Raines purchased their Mundelein home in 1975 as joint tenants. When Raines’ wife died, he became the sole owner until his 2009 death. Raines died intestate with six heirs. In 2007, Raines had filed federal income taxes for tax years 2000, 2001, 2003, and 2004. The IRS assessed taxes, penalties, and interest that remained unpaid. In 2010, the government recorded a notice of a $115,022.42 federal tax lien with the Lake County Recorder of Deeds. The Notice incorrectly identified “Carrol V. Raines” as the debtor, omitting the second “l” from his first name, and failed to include a legal description or permanent index number, but did correctly identify the property address. Raines’ heirs conveyed their interest in the property to Chicago Title Land Trust, which made improvements and capital investments in the property. In 2017, the government instituted proceedings to foreclose the tax lien, naming Chicago Title, other financial institutions, and municipal entities. The district court found that the defendants had adequate notice of the lien, which conformed to 26 U.S.C. 6323, so the government could enforce the lien. The Seventh Circuit affirmed, upholding a determination that the Affidavit of Bond, a title insurance executive who has conducted thousands of title searches and prepared thousands of title reports, commitments, and insurance policies, was inadmissible because it consisted of undeclared expert testimony and improper legal conclusions. The errors did not make the Lien undiscoverable. View "United States v. Z Investment Properties, LLC" on Justia Law

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In 2005, Joliet proposed to condemn and raze New West's apartments as a public nuisance. By 2017 the district court held that Joliet is entitled to condemn the buildings, set just compensation at $15 million, and held that New West cannot obtain relief against the city under federal housing discrimination statutes. The Seventh Circuit affirmed. The parties then disputed the status of a reserve fund, about $2.8 million, that the Department of Housing and Urban Development (HUD) held for the federally-subsidized apartment complex. New West argued that the money came from rents to which it was entitled by contract with HUD and that, once it no longer had responsibility for the buildings, HUD must write it a check. The district court recognized that the fund was not part of the condemnation or housing-discrimination suits, but nonetheless rejected New West’s claim and concluded that the fund should accompany the buildings. The Seventh Circuit vacated. HUD controls the reserve fund and is the only entity that can use or disburse it; HUD was dismissed as a party in 2013. The court lacked authority to order HUD to do anything. New West needs to file a new action, seeking an order that the federal government pay it a sum of money, in the Court of Federal Claims, under the Tucker Act or in the district court. “In either forum, the judge should start from scratch, disregarding the missteps in the condemnation suit.” View "Joliet v. New West, L.P." on Justia Law

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Surviving Mustang fighter planes are collectors’ items. In 1965 Vartanian bought a Mustang, serial number 44-74543 and kept it in a Fulton County New York hangar. In 1985 Vartanian's representative could not find it. Vartanian suspected Martin, who had promised to restore the plane. Vartanian’s lawyer unsuccessfully demanded that Martin return the plane. Vartanian complained to the FAA, the FBI, and local police. Martin denied taking Vartanian’s plane. Martin later registered with the FAA a Mustang, serial number 44-63655. Martin asserts that it was cobbled together using parts from a plane that crashed in Nicaragua plus components acquired from several sources. In 1998 Martin sold 44-63655 to Greenhill. Vartanian learned about this transaction in 2002 or 2003 by reading a magazine article that incorrectly identified it as 44-74543. Vartanian hired another lawyer, who died before filing suit. Vartanian did not follow up until after learning in 2013 that there were irregularities in the serial numbers of several of Martin’s planes. Vartanian demanded that Greenhill return the plane. Greenhill sought a declaratory judgment of ownership. Vartanian filed counterclaims. The Seventh Circuit affirmed that the counterclaims were untimely and that the aircraft is free of Vartanian's claim. Although federal law provides the registration system, state law supplies the rules for determining ownership, 49 U.S.C. 44108(c)(1). For conversion claims, Illinois law establishes a five-year limitations period that starts when the injured party “knows or reasonably should know” of the injury and its cause. Vartanian knew in 1985 that his Mustang had vanished; he suspected Martin immediately and knew long ago what serial number Martin was using. Even if Illinois would not apply a statute of limitations, the doctrine of laches would remain. View "Greenhill v. Vartanian" on Justia Law

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The Liebharts own three houses on a block in Watertown, Wisconsin. Part of the block was previously occupied by a factory, built in 1920 and last owned by SPX. The factory manufactured power transformers containing polychlorinated biphenyls (PCBs), a carcinogenic chemical banned by the EPA in 1979. Studies revealed that the factory's concrete floor was generally contaminated. In 2014, SPX demolished the building with the assistance of the defendants. The Liebharts sued, alleging that dust and debris containing toxic chemicals migrated onto their properties, contaminating their yards and jeopardizing their health and the health of their tenants. Following discovery and the submission of expert witness reports, the district court granted the defendants summary judgment with costs. The Seventh Circuit vacated. Although the district court adequately evaluated the expert witnesses and did not abuse its discretion in its procedural decisions, the court set the bar unnecessarily high for the plaintiffs to show a violation of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6901, and the Toxic Substances Control Act (TSCA), 15 U.S.C. 2601. RCRA requires only that harm “may” be imminent; similarly, TSCA does not impose a heightened standard. The parties should have another opportunity to litigate whether a substantial and imminent endangerment to health exists. View "Liebhart v. SPX Corp." on Justia Law

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In 2006 Trinity borrowed about $2 million from a bank, secured by a mortgage. The bank sold the note and mortgage to ColFin, which relied on Midland to collect the payments. In 2013, Midland recorded a “satisfaction,” stating that the loan had been paid and the mortgage released. The loan was actually still outstanding. Trinity continued paying. In 2015, ColFin realized Midland’s mistake and recorded a document canceling the satisfaction. Trinity stopped paying. ColFin filed a state court foreclosure action. Trinity commenced a bankruptcy proceeding, which stayed the foreclosure, then filed an adversary action against ColFin, contending that the release extinguished the debt and security interest. The bankruptcy court, district court, and Seventh Circuit rejected that argument and an argument that the matter was moot because the property had been sold under the bankruptcy court’s auspices. There is a live controversy about who should get the sale proceeds; 11 U.S.C. 363(m), which protects the validity of the sale, does not address the disposition of the proceeds. Under Illinois law, Trinity did not obtain rights from the 2013 filing, which was unilateral and without consideration; no one (including Trinity) detrimentally relied on the release, so ColFin could rescind it. ColFin caught the problem before Trinity filed its bankruptcy petition, so a hypothetical lien perfected on the date of the bankruptcy would have been junior to ColFin’s interest. View "Trinity 83 Development LLC v. Colfin Midwest Funding LLC" on Justia Law

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Spiegel has lived in a Wilmette condominium building for 22 years. In 2015, the McClintics bought a unit in the building. The McClintics, apparently in violation of association rules, do not live in the building but use the building pool almost daily. To document the violations, Spiegel photographed and filmed them. Corrine McClintic filed police reports. Spiegel was not arrested but officers threatened him with arrest for disorderly conduct if his conduct persists. Spiegel sued Corrine and the Village, arguing that they conspired to violate his constitutional rights and that Corrine intruded upon his seclusion, in violation of Illinois law, by photographing the interior of his condominium. The Seventh Circuit affirmed the dismissal of his complaint. Spiegel has not identified a constitutional violation or shown that he suffered damages from the alleged intrusion upon his seclusion. The mere act of filing false police reports is not actionable under 42 U.S.C. 1983 and it is unclear whether McClintic’s reports contained falsehoods. Spiegel’s claim that the officers refused to listen to his explanations for why his conduct was lawful is not enough to establish a conspiracy. Spiegel has not plausibly alleged an express Wilmette policy to enforce the disorderly conduct ordinance unconstitutionally. He merely alleges that officers received reports of a disturbance and advised an apparent provocateur to stop his surveillance. View "Spiegel v. McClintic" on Justia Law

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A Zestimate is an estimated value for real estate, generated on the Zillow website by applying a proprietary algorithm to public data, such as location, tax assessment, number of rooms, and recent selling prices. Zillow does not inspect the building nor adjust for whether a property is attractive or well-maintained. Zillow states that its median error (comparing a Zestimate with a later transaction price) is less than 6%. The Zestimate is off by more than 20% in about 15% of all sales. Zillow informs users that Zestimates may be inaccurate. Plaintiffs learned that the Zestimates for their parcels were below the amounts they hoped to realize. Zillow declined requests to either to increase the Zestimates or remove the properties from the database. Plaintiffs sued, citing the Illinois Real Estate Appraiser Licensing and Uniform Deceptive Trade Practices Acts. The Seventh Circuit affirmed dismissal. The plaintiffs lack a private right of action under the appraisal statute, which makes unlicensed appraisal a crime; an administrative agency may impose fines for unlicensed appraisal and issue cease-and-desist le\ers that can be enforced by injunctions. Illinois courts create a non-statutory private right of action “only in cases where the statute would be ineffective, as a practical ma\er, unless such action were implied.” Given the multiple means of enforcing the licensing act, and the penalties for noncompliance, a private action is not necessary. The Trade Practices Act deals with statements of fact, while Zestimates are opinions. View "Patel v. Zillow, Inc." on Justia Law

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The church converted a single-family residence in a Markham residential district into its house of worship. For more than 15 years, the congregation gathered at the house for worship services, choir rehearsals, and Bible studies. As the church grew, it remodeled the house,w which brought the church into contact with the city’s administration through permit applications and property inspections. The city denied a conditional use permit and sought a state court injunctions. The church challenged the zoning code under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. 2000cc (RLUIPA), and the Illinois Religious Freedom Restoration Act. The district court ordered the church to apply for variances, which the city granted, along with a conditional use permit. The court then granted the city summary judgment, ruling the church’s claims were not ripe when filed and rendered moot. The Seventh Circuit reversed. The district court focused on the church not applying for parking variances before the lawsuit; that issue is related only tangentially to the church’s claims, which concern zoning use classifications. The ripeness of the church’s claims does not hinge on pursuit of parking variances that will not resolve them. Nor can a conditional use permit moot the church’s claim that such a permit is not needed. The key question is whether operating a church on the property is a permitted or conditional use. View "Church of Our Lord and Savior Jesus Christ v. Markham" on Justia Law

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Websites like Airbnb serve as intermediaries, providing homeowners a forum for advertising short-term rentals of their homes and helping prospective renters find rooms and houses for temporary stays. Chicago’s 2016 Shared Housing Ordinance requires interested hosts to acquire a business license; its standards include geographic eligibility requirements, restrictions on how many units within a larger building can be rented, and a list of buildings where such rentals are prohibited. Approved hosts are subject to health, safety, and reporting requirements, including supplying clean linens and sanitized cooking utensils, disposing of waste and leftover food, and reporting illegal activity known to have occurred within a rented unit. Keep Chicago Livable and six individuals challenged the Ordinance. The Seventh Circuit remanded for a determination of standing, stating that it was not clear that any plaintiff had pleaded or established sufficient injury to confer subject matter jurisdiction to proceed to the merits. The individual owners did not allege with particularity how the Ordinance (and not some other factor) is hampering any of their home-sharing activities; the out-of-town renters did not convey with sufficient clarity whether they still wish to visit Chicago and, if so, how the Ordinance is inhibiting them. All Keep Chicago Livable contends is that the alleged uncertainty around the Ordinance’s constitutionality burdens its education and advocacy mission; it does not allege that it engages in activity regulated by the Ordinance. View "Keep Chicago Livable v. Chicago" on Justia Law

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Ronkowski own 120 acres of undeveloped land in Bayfield County, Wisconsin. Since acquiring the property in 1972, Ronkowski has accessed it via an unpaved road that crosses over neighboring land, including land owned by the U.S. Forest Service. Ronkowski brought suit under the Quiet Title Act seeking recognition of an easement to access their property by way of the unpaved road. The Seventh Circuit affirmed Ronkowski had not established entitlement to an easement. Ronkowski did not make the required showing for an easement by necessity or an easement by implication because the existing forest service road provided them an alternate route by which to reach their property. Ronkowski could not demonstrate that the easement was necessary to access the property; even if traveling by way of forest road would be “inconvenient, difficult or require a high clearance vehicle,” there was no evidence that it is impossible. View "Ronkowski v. United States" on Justia Law