Page 4 - John Hundley 2009

icing, LLC v. Nelson, 382 Ill.App.3d 1184, 890 N.E.2d 940 (2008), the court reversed judgment for plain-
tiff because the papers showed the mortgage at issue was held by a similarly-named limited partnership.
Because a mortgagee under the Mortgage Foreclosure Law is defined as the holder of the debt secured
by the mortgage or one claiming through a mortgagee as successor, absent a showing that the partner-
ship had assigned its interest to the plaintiff LLC, there was no basis for judgment in favor of the LLC, “a
stranger to the mortgage,” the court said. Mandy Combs, Mcombs@lotsharp.com; John Hundley, Jhundley@lotsharp.com
Bank Preemption Litigation Continues . . .

Treadway v. Nations Credit Fin. Serv. Corp., No. 05-06-0425 (Ill. App. 5th Dist. Nov. 26, 2007), a focus
for our report on preemption of state regulation of bank charges (“State Regulation of Bank Charges Often
Preempted,” Sharp Thinking #2, Dec. 2007), has been superseded with a new decision on other grounds
(383 Ill.App.3d 1124, 892 N.E.2d 534 (2008)), but litigation over whether state-law claims against banks
are preempted continues. For example, in Johnson v. First Banks, Inc., 382 Ill.App.3d 907, 889 N.E.2d
233 (2008), the 5th District Appellate Court said federal law preempts state-law claims against both
national and state banks for charging non-customers fees for cashing checks written by their
depositors. Plaintiff had alleged that conditioning the check-cashing on such a fee constituted a wrongful
dishonor under the Uniform Commercial Code (810 ILCS 5/4-402). In an alternative holding, the court
said non-customers lack standing under that provision. Mandy Combs, Mcombs@lotsharp.com
Income Withholding Threat Goes National . . .

Employer indifference to orders for income withholding for child support continues to result in draconian
consequences. In analyzing Marriage of Miller, 227 Ill.2d 185, 879 N.E.2d 292 (2007), last year, we noted
that its facts (the recalcitrant employer was the father of the employee ordered
to make support) did not encourage sympathy for the employer (“Income
Withholding Act Poses Employer Threat”, Sharp Thinking #3, Jan. 2008). In
Marriage of Gulla, 382 Ill.App.3d 498, 888 N.E.2d 585 (2008), there was no
such insidious relation, and the employer was located in Mississippi with,
apparently, none of the Illinois contacts that ordinarily would support
jurisdiction by an Illinois court. However, because federal law requires that
child support orders be enforceable nationwide, the employer was held liable
under the withholding order – resulting in $369,000 in penalties for failing to comply with a $3,000-a-
month withholding order for approximately a one-year period. As noted previously, such penalties
accrue at the rate of $100 per day and compound with each payroll. John Hundley, Jhundley@lotsharp.com
Employer Can’t Thwart FMLA By Firing in Advance . . .

Defining who is an “eligible employee” under the Family & Medical Leave Act continues to be a concern
for courts and employers. See “New Decisions Highlight Employer Duties Under Family & Medical Leave
Act,” Sharp Thinking #12, Sept. 2008. In Reynolds v. Inter-Industry Conf. on Auto Collision Repair, 2009
WL 104329 (N.D. Ill. 2009), the court ruled that an employer may not terminate an employee who has
worked less than the 12-month eligibility period for requesting future leave for which the employee would
be FMLA-eligible when the leave would begin. The court reasoned that the determination of whether one
is an eligible employee must be made as of the date the leave is to start, so the employer could not thwart
that protection by acting prior to that date. Mandy Combs, Mcombs@lotsharp.com
John\Sharp Thinking\#18.doc.
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