Chicago Business Litigation Attorney Blog

In Illinois, generally, the law regards a corporation as an entity separate and distinct from its officers, shareholders, and directors and therefore those parties will not be held personally liable for the corporation’s debts and obligations. Melko v. Dionisio, 219 Ill.App.3d 1048, 1063, 162 Ill.Dec. 623, 580 N.E.2d 586, 594 (1991). However, in certain circumstances, the corporate form may be disregarded, such as where the corporation is merely the alter ego or the business conduit of another dominating personality. See id.

In Illinois, piercing the corporate veil is a task which the courts should generally undertake reluctantly. Pederson v. Paragon Pool Enterprises, 214 Ill.App.3d 815, 819, 158 Ill.Dec. 371, 574 N.E.2d 165, 167 (1991). The Courts should not interfere with the corporate form anymore than it would a private contract, and the corporate veil should only be pierced when it appears that something in the particular situation has “gone amiss.” Tower Investors, LLC v. 111 East Chestnut Consultants, Inc, 371 Ill.App.3d 1019, 864 N.E.2d 927, 309 Ill.Dec. 686. Particularly, in breach of contract cases, courts should apply even more stringent standards to determine when to pierce the corporate veil than they would in tort cases. See id.

Illinois Courts may pierce the corporate veil if the two following requirements are satisfied. First, if there is such a unity of interest and ownership that the separate personalities of the corporation and the parties who compose it no longer exist. Second, if the circumstances are such that adherence to the fiction of a separate corporation would promote injustice or inequitable circumstances. Pederson v. Paragon Pool Enterprises, 214 Ill.App.3d 815, 819, 158 Ill.Dec. 371, 574 N.E.2d 165, 167 (1991). In a breach of contract case, “additional compelling facts,’ “such as a finding of fraud, may also be required. Main Bank of Chicago v. Baker, 86 Ill.2d at 205-06, 56 Ill.Dec. 14, 427 N.E.2d at 101-02 (1981). Where there is no evidence of any misrepresentation, no attempt to conceal any facts, and the parties possess a total understanding of all of the transactions involved, Illinois courts will not pierce the corporate veil in a breach of contract situation. See id.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

About Tamari & Blumenthal, LLC: Tamari & Blumenthal, LLC is a business litigation firm. Litigators Walid J. Tamari and Grant Blumenthal practice in the law firm's complex litigation practice group.

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Posted In: Business Litigation , Fraud , Piercing the Corporate Veil

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Illinois courts have held that for a partnership or joint venture to exist a written agreement may not be required as long as specific requirements are satisfied. The Uniform Partnership Act defines a partnership as “an association of two or more persons to carry on as co-owners of a business for profit." 805 ILCS 205//6(1) (West 2002). “A relationship between two or more parties may be considered a partnership by the courts if the parties join together to carry on a venture for their common benefit, each contributing property or services and having a community of interest in the profits of the venture." Kennedy v. Miller, 221 Ill.App.3d 513, 521, 163 Ill Dec. 934, 582 N.E.2d 200 (1991). “Partnership legal principles govern joint ventures and the only distinction of consequence between the two is that a joint venture relates to a single enterprise or transaction, whereas a partnership relates to a general business of a particular kind.” Dremco, Inc. v. South Chapel Hill Gardens, Inc., 274 Ill.App.2d 534, 538, 211 Ill.Dec. 39, 654 N.E.2d 501 (1995). Even though a written agreement may not be necessary, a bald assertion that a partnership or joint venture exists is not sufficient to plead the existence of such a relationship. Romanek, 324 Ill.App.3d at 405, 257 Ill.Dec. 436, 753 N.E.2d 1062. Therefore, the courts generally look for some sign of a venture for common benefit between the two parties and in particular for some indication of a sharing of profits. Landers-Scelfo v. Corporate Office Systems, Inc., 356 Ill.App.3d 1060, 827 N.E.2d 1051, 293 Ill.Dec. 170 (2005).

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

About Tamari & Blumenthal, LLC: Tamari & Blumenthal, LLC is a business litigation firm. Litigators Walid J. Tamari and Grant Blumenthal practice in the law firm's complex litigation practice group.

Posted by Tamari & Blumenthal, LLC | Permalink | Email This Post

Posted In: Business Litigation , Contract Formation , General Partnerships , Joint Venture Agreements

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Illinois Courts have held that in a product liability case, strict liability may be predicated on a finding that the product is unreasonably dangerous, regardless of who is at fault. Miller v. Dvornik, 149 Ill.app.2d 883, 889, 103 Ill.Dec. 139, 501 N.E.2d 160, 164 (1986). The focus when determining strict liability is whether a product is unreasonably dangerous and whether the product in its present state, without the installation of optional safety devices, is dangerous because it fails to perform in the manner reasonably to be expected in light of its nature and intended function.” Miller, 149 Ill.App.2d at 888, 103 Ill.Dec. 139, 501. An important aspect of strict liability is that proof of negligence is unnecessary. Heyen v. Sanborn Manufacturing Co., 223 Ill.App.3d 307, 315, 165 Ill.Dec. 407, 584 N.E.2d 841, 846 (1991).

Moreover, Illinois Courts have held that strict liability can be imposed upon any party who sells a product in a defective condition unreasonably dangerous to the user or consumer. Lamkin v. Towner 138 Ill.2d 510, 528, 150 Ill.Dec. 562, 563 N.E.2d 449, 457 (1990). A seller who puts a defective product into the stream of commerce runs the risk of being held strictly liable for injuries caused by the product, regardless of whether the seller actually knew of the defect, contributed to the defect or failed to discover the defect. Sims v. Teepak, Inc., 143 Ill.App.2d 865, 867, 97 Ill.Dec. 914, 493 N.E.2d 721, 723-24 (1986).

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

About Tamari & Blumenthal, LLC: Tamari & Blumenthal, LLC is a business litigation firm. Litigators Walid J. Tamari and Grant Blumenthal practice in the law firm's complex litigation practice group.

Posted by Tamari & Blumenthal, LLC | Permalink | Email This Post

Posted In: Business Litigation , Products Liability , Strict Liability

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