Page 32 - Sharp-Hundley 2012

geographical term, which it found unnecessary due to the limited prohibited customer base. “This
covenant does not prohibit defendant from preparing taxes or providing related services to the general
public, or to plaintiff’s or H&R Block’s clients generally. She is only prohibited from serving those clients
she serviced while employed by plaintiff. This limited restriction reasonably balances defendant’s right to
earn a living with plaintiff’s right to protect its customer relationships and its investment in developing
defendant’s skills”, the court said. Zabaneh Franchises, LLC v. Walker, 2012 IL App (4th) 110215.

Unsophisticated Consumer Must Represent Significant Population . . .

The “unsophisticated consumer” remains the standard under Fair Debt Collection Practices Act §
1692g (see Sharp Thinking No. 63 (May 2012)), but even that “uninformed, naïve and trusting”
hypothetical individual has “a rudimentary knowledge about the financial world”, is capable of “making
basic deductions and inferences,” and is not confused by mere “puffery,” the 7th Circuit ruled recently.
Moreover, Zemeckis v. Global Credit & Collec. Corp., 679 F.3d 632 (7th Cir. 2012), makes clear that the
claimed “unsophisticated consumer” must represent “a significant fraction of the population” in order to
obtain treatment of the alleged confusion as a disputed matter of fact.

. . . But Is “Not A Dimwit,” Court Says

Summarizing case law similar to that analyzed in Zemeckis, another panel in the Seventh Circuit has
subsequently concluded that the unsophisticated consumer “is not a dimwit.” However, in Lox v. CDA,
Ltd., __ F.3d __, 2012 WL 3124781 (2012), the court said the unsophisticated consumer is not presumed
to know relevant legal precedent. Accordingly, the court found actionable a threat to collect legal fees in
circumstances where they could not be awarded.

Plaintiff’s Own Conduct Justifies Alleged Retaliatory Discharge

A plaintiff cannot state a cognizable wrongful discharge claim (see Sharp Thinking No. 50) (Aug.
2011)) by claiming her employer discharged her for complaining of inadequacies for which she herself
was responsible, a panel of the Appellate Court has ruled. In Ulm v. Mem. Med. Ctr., 2012 IL App (4th)
110421, the plaintiff allegedly complained of shortcomings in record-keeping for which she, as operations
manager of health information, was responsible.

More Rule 9011 Sanctions Imposed

Noteworthy uses of Federal Rule of Bankruptcy Procedure 9011, discussed in Sharp Thinking No. 55
(Dec. 2011), continue to arise. In In re Blue Pine Group, Inc., 457 B.R. 64 (9th Cir. BAP 2011), a
Bankruptcy Appellate Panel affirmed sanctions of $109,528 for an attorney’s filing of a Chapter 7
bankruptcy on behalf of a corporation which in fact had not properly authorized the filing. Similarly, in
Lamar Crossing Apts., L.P., 2011 WL 6155714 (6th Cir. BAP 2011), another panel affirmed sanctions of
$42,299.08 for the filing of a limited partnership’s bankruptcy without proper authorization. Moreover, in In
re Love, 461 B.R. 29 (Bankr. N.D. Ill. 2011), a court ordered the debtor’s attorney to disgorge all but $250
of his fee for putting the debtor into a Chapter 13 bankruptcy when she should have been in Chapter 7.

-- John T. Hundley, 618-242-0246, Jhundley@lotsharp.com
John\Sharp Thinking\#71.doc

●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●
THE SHARP LAW FIRM, P.C.

1115 Harrison, P.O. Box 906, Mt. Vernon, IL 62864 • Telephone 618-242-0246 • Facsimile 618-242-1170 • www.thesharpfirm.com

Business Transactions • Litigation • Financial Law • Problem Finances • Real Estate • Corporate • Commercial Disputes • Creditors’ Rights •
Arbitration • Administrative Law • Employment Matters • Estate Planning • Probate • Family Law

Terry Sharp: Tsharp@lotsharp.com; John T. Hundley: Jhundley@lotsharp.com; Rebecca L. Reinhardt: Rreinhard@lotsharp.com;
Bentley J. Bender: Bbender@lotsharp.com

Advertising Material