Tag: michael jordan

Basketball Deity Can Add Additional Plaintiff in Publicity Suit Versus Jewel Food Stores – IL ND (the ‘Kriss Kross Will Make You…Jump’ Post(??)

There’s No Way(!) I’m going to simply pull-and-post just any Google Image of His Airness and hope no one sees it (or, more accurately, takes it seriously enough to engage in some copyright saber-rattling about it).  Not after Michael Jordan is fresh off his nearly $9M Federal jury verdict in a publicity suit against erstwhile Chicago grocer Dominick’s and its parent company.  I didn’t even know he filed a companion suit – this one against Jewel Food Stores – another iconic Midwest grocery brand – pressing similar publicity claims against the chain for using his image without his permission.  Now I do.

In fact, just a couple days before that Friday night Federal jury verdict in the Dominick’s suit, Jordan successfully moved to add his loan-out company1, Jump 23, Inc. as a party plaintiff in his Jewel suit.  The Jewel case, like its Dominick’s case counterpart, stems from Jewel’s use of Jordan’s likeness in an ad congratulating him on his 2009 hoops Hall of Fame induction.

In granting Jordan’s motion to add the Jump 23 entity, the court in Jordan v. Jewel Food Stores, Inc., 2015 WL 4978700 (N.D.Ill. 2015), quite naturally, drilled down to the bedrock principles governing amendments to pleadings in Federal court as expressed in the Federal Rules of Civil Procedure.

In the Federal scheme, Rule 15 controls pleading amendments and freely allows amendments to pleadings “when justice so requires.”  Rule 15(c)(1)(C) governs where an amended claim is time-barred (filed after the statute of limitations expires) and seeks to add a new claim or a new party.  If the party or claim to be added stems from the same transaction as the earlier pleading, the amended pleading will “relate back” to the date of the timely filed claim.

Assuming an amended claim arises out of the same conduct, transaction or occurrence as the earlier (and timely) claim, the (normally) time-barred claim will be deemed timely as long as the party to be brought in by the amendment (1) received such notice of the action that it will not be prejudiced in defending the suit on the merits; and (2) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity.

While Rule 15 only speaks to bringing in additional defendants, it’s rationale extends to situations where a party seeks to add a new plaintiff.  Delay alone in adding a party (either plaintiff or defendant) usually isn’t enough to deny a motion to amend to add a new party. Instead, the party opposing amendment (here, Jewel) must show prejudice resulting from the joined party.  Prejudice here means something akin to lost evidence, missing witnesses or a compromised defense caused by the delay.

In this case, the court found there was no question that the Jump 23 entity was aligned with Jordan’s interests and its publicity claim was based on the same conduct underlying Jordan’s.  It also found there was no prejudice to Jewel in allowing Jump 23 to be added as co-plaintiff.  The court noted that Jump 23’s addition to the suit didn’t change the facts and issues in the case and didn’t raise the specter of increased liability for Jewel.  In addition, the court stressed that Jewel is entitled to use the written discovery obtained in the Dominick’s case.  As a result, Jewel won’t be exposed to burdensome additional discovery by allowing the addition of Jump 23 as plaintiff.

Take-away:

This case provides a good summary of Rule 15 amendment elements in the less typical setting of a party seeking to add a plaintiff as a party to a lawsuit.  The lesson for defendants is clear: delay alone isn’t severe enough to deny a plaintiff’s attempt to add a party.  The defendant (or person opposing amendment) must show tangible prejudice in the form of lost evidence, missing witnesses or that its ability to defend the action is weakened by the additional parties’ presence in the suit.

Jordan versus Jewel is slated for trial in December 2015.  I’m interested to see how the multi-million dollar Dominick’s verdict will impact pre-trial settlement talks in the Jewel case.  I would think Jordan has some serious bargaining leverage to exact a hefty settlement from Jewel.  More will be revealed.

  1. Loan-out company definition (see http://www.abspayroll.net/payroll101-loan-out-companies.html)

 

Integration Clause, Justifiable Reliance and Limited Guaranties: IL Basics

The limited guarantor won big in Ringgold Capital IV, LLC v. Finley, 2013 IL App (1st) 121702, a case that vividly captures how important it is for a lender to correctly document a loan.

After a borrower defaulted on the underlying loan, the plaintiff sued to foreclose its mortgage and on the guaranty.

The trial court dismissed the guaranty claim since it contained the wrong date (it had a superseded payment date) that mistakenly wasn’t changed to reflect the continued loan closing date.  Plaintiff lender appealed. 

Holding: Circuit court affirmed.  All counts pled against the limited guarantor were properly dismissed with prejudice.

Reasoning/Rules:   Siding with the guarantor, the appeals Court espoused the governing guaranty rules:

– a guarantor’s liability is determined from the text of the guaranty contract;

– A guarantor is a favorite of the law and when construing his liability, the court gives the guarantor the benefit of any doubts that arise from the contract language;

– A court will not increase a guarantor’s liability beyond the precise words of the contract;

– where a guaranty is clearly worded, it must be construed according to its plan language;

– an integration clause or merger clause in an unambiguous guaranty will preclude the introduction of parol evidence to alter or interpret the contract.

( ¶¶ 16, 19, 25)

Applying these rules, the First District rejected lender’s argument that the guaranty was ambiguous since it referred to “related loan documents.”

The court found the guaranty unambiguous based on its plain text. (¶¶ 20-24). 

The Court found the integration clause preventef plaintiff’s attempt to introduce outside evidence to change or explain the guaranty’s text. (¶¶ 27-28).

Next, the Court rejected plaintiff’s fraud in the inducement counts.  That claim fell short because defendant’s alleged representations about guaranteeing the borrower’s obligations spoke to future events and future intentions aren’t actionable fraud. (¶ 38). 

Plaintiff also failed to allege justifiable reliance (another fraud in the inducement element) on any words or acts of the limited guarantor since the lender drafted the limited guaranty and its terms were freely negotiated by both parties’ counsel. (¶ 39). 

Take-away: 

Ringgold shows that if a document is unambiguous and specific – in terms of date and amount – and contains an integration clause, the court will enforce it to the letter and disallow any attempts to change or explain its terms. 

The case also embodies a cautionary tale for lenders involved in a loan that doesn’t close as originally planned.  In such a case, it is paramount for a lender to ensure that all guaranties reflect any new loan dates.