Steven Malitz - Commercial Litigation Victories

  • Obtained Rare Pre-Judgment Injunction Freezing Bank Accounts. Malitz obtained an injunction freezing $1 million in the bank accounts of a business and its attorney, when they refused to account for funds that should have been escrowed. The court later extended the injunction and ordered the turnover of the funds. The result was extraordinary because Malitz persuaded the judge to issue the injunction without requiring notice to defendants for fear they would deplete the funds, without the posting of a bond (which would have been exorbitant), and before a trial on the merits.
  • In another pre-judgment attachment victory, Malitz represented a foreign manufacturer of truck accessories in a suit against a distributor that failed to pay for accessories sold to a truck manufacturer. Malitz obtained the pre-judgment attachment freezing the assets of the distributor, and then obtained a turn-over order of the funds.
  • Successful Fraud Suit against Telecom Carrier Despite Tariff and Bankruptcy. Malitz sued a national telecommunications carrier in Chicago when the carrier failed to initiate service, resulting in substantial losses to Malitz’ business client. The carrier then went bankrupt in Delaware and moved to disallow the claim, arguing its publicly-filed tariff barred the claim. Malitz then argued before the bankruptcy court that the tariff was inapplicable and could not block a claim for consumer fraud. Faced with Malitz’ threat of an onslaught of similar claims, the carrier agreed to pay the claim. The success was noteworthy because a tariff will generally prevent a claim against a utility, but Malitz creatively found a way around the tariff.
  • Win in Arbitration Against Telecommunications Carrier. Malitz successfully defended a merchant bank in arbitration brought by a national telecommunications carrier for breach of contract. Despite the fact that the tariff and the contract prohibited any claim for setoff or damages by the merchant bank, Malitz persuaded the arbitration panel that the provider, by interrupting service, breached the contract and the Federal Communications and Illinois Public Utilities Acts. Malitz obtained a unanimous, zero-liability finding by the arbitration panel.
  • Successfully Pierced Veil of Company Due to Fraud and Insolvency. Malitz’ manufacturing company client sold metal goods to a purchaser that failed to pay and then sold its assets, leaving no proceeds to pay for the goods. Malitz sued the officers, directors, and shareholders of the debtor corporation for fraud, arguing they caused the debtor to order goods while insolvent and had no intention or ability to pay for them. Malitz forced a substantial settlement before trial despite that the debtor had no assets; the officers, directors, and shareholders of a corporation are generally not liable for the debts of the corporation; and the asset sale was commercially reasonable. Malitz has successfully litigated such fraud and breach of duty claims against shareholders, officers, and directors in state and federal courts throughout the United States.
  • Shut Down Rogue Freight Forwarder Franchisee and Re-Took Territory. Malitz successfully represented an international freight forwarder against a licensee for violating an agreement prohibiting him from competing against the company in the Northern Illinois territory he had been granted. Due to the unlawful competition, Malitz obtained two separate injunctions in state court prohibiting the licensee from interfering with the company taking back the licensee’s business, and from conducting any further business under the license agreement, and as a freight forwarder. To avoid entry of the injunctions, the licensee filed for bankruptcy in Chicago. Malitz had the bankruptcy dismissed within 30 days as a “bad faith filing.” The licensee then removed the matter to federal court and Malitz had the matter remanded to state court within 24 hours.  The injunctions stood and the client had the opportunity to rebuild its business in the coveted Northern Illinois territory.
  • Successfully Defended Retailer in Defamation Suit. Malitz represented a major retailer in a defamation action filed by a shopper when the asset protection associate telephoned the shopper’s employer and accused her of shoplifting. Despite the fact that two, unbiased non-parties (including another asset protection associate) corroborated the shopper’s defamation allegations, and the shopper demanded an exorbitant sum from the retailer, Malitz uncovered evidence that the shopper did indeed steal and the asset protection associate may not have been working on the day of the alleged call, leading to a minimal settlement before trial.
  • Obtained Dismissals for Foreign Defendants on Procedural Technicalities. Malitz represented a California resident sued by an Illinois business for failing to pay for repair services and specially-manufactured goods. Malitz successfully moved to dismiss the suit because the Illinois courts lacked jurisdiction over the California resident, which effectively forever terminated the litigation. In another such case, Malitz’ client, a Maryland physician, was sued in Illinois for failing to pay for medical equipment. Malitz moved to dismiss for lack of personal jurisdiction and forum non conveniens. The judge disagreed, finding the Illinois courts indeed had jurisdiction over the Maryland physician. Undeterred, Malitz asked the judge to reverse himself. On reconsideration, the motion to dismiss was granted and the lawsuit was dismissed with prejudice. While defenses on the merits were questionable in both cases, Malitz’ use of procedural technicalities quickly and inexpensively ended both cases. Malitz has successfully defended many cases employing such technical procedures in courts throughout the nation.
  • Defended Charity in UCC Case Despite Confirmation of Incorrect Sample. Malitz defended a charity in a contract case brought by a vendor of fasteners. The charity, which is in the business of assembling fan devices, provided the vendor with a sample fastener for reproduction. The vendor promised to calculate the specifications of the sample and deliver 700,000 in quantity. The vendor incorrectly calculated the specifications of the sample but the charity approved the vendor’s incorrect specifications of the sample. When the charity rejected the fasteners upon delivery, the vendor sued the charity for the contract price. Arguing a mutual mistake between the parties as to the correct specifications of the sample fastener, Malitz moved for summary judgment and forced a nuisance settlement on the eve of trial. Malitz then persuaded the charity’s insurer to pay the settlement, despite its initial denial of coverage for such breach of contract claims.
  • Enforced Judgment by Seizing Assets from Third Party Despite Bank Liens. On behalf of a substantial creditor, Malitz obtained a judgment against an insolvent debtor that already owed its banks millions and had given a blanket lien on all assets. Due to the bank liens, the debtor could pay no creditors. To repay its banks, the debtor assigned its brass molds to a third party that was using the molds to produce goods. The debtor would then distribute those goods for the third party and would earn commissions from the third party. The debtor would then pay its commissions over to the banks to pay down the loans. Having no ability to collect from the judgment debtor, Malitz seized the debtor’s molds from the third party, effectively halting production of the goods and the commissions flowing to the debtor’s banks. Although the banks were fully secured and had no obligation to pay Malitz’ client, Malitz nonetheless forced the banks to share the debtor’s commissions on a monthly basis until the judgment was paid in full.
  • Shuttered and Took Over Rogue Currency Exchange for License Law Violations. Malitz led a team of attorneys in achieving a significant victory in the first of a number of such suits to be filed against rogue businesses acting as currency exchanges without licensure. The Firm represents many currency exchanges. On behalf of one such currency exchange, Malitz sought an emergency injunction and damages for unfair competition against a business cashing checks for a fee without a currency exchange license. The business claimed it was exempt under Illinois law because it was engaged in the business of selling tangible personal property at retail—the so called “merchant’s exemption.” Malitz sent in an investigator and successfully proved the business was principally engaged in the business of wiring funds for a fee and, therefore, could not meet the statutory definition of a merchant. The judge agreed and granted the extraordinary injunctive relief, restraining the business from cashing checks for a fee or otherwise rendering any services requiring licensure as a currency exchange. Malitz’ tactics enabled his client to take over the rogue currency exchange.
  • Defended Corporate Investigations Firm in Interference Litigation. Malitz successfully defended his corporate investigation client against a large damage claim for intentional interference with contract, assault, false imprisonment, and invasion of privacy. A consulting firm entered into a multi-million dollar contract with a national retailer. Malitz’ client was retained by the retailer to investigate one of its own corporate officers, who was suspected of accepting secret payments in exchange for entering into the consulting contract and approving large invoices for such services. After Malitz’ client rendered its investigative report, the officer was removed and the consulting contract was terminated. The consultant then sued the retailer for breach of contract, and Malitz’ client for intentionally interfering with the consulting contract, causing its termination. Additionally, one of the consultant’s employees sued the client for assault, false imprisonment, and invasion of privacy in connection with the investigation. Our client’s insurer denied coverage due to an exclusion for intentional acts. Regardless, Malitz persuaded the insurer to pay for his client’s defense. Through extensive discovery (including the deposition of a TV personality), Malitz all but proved the client had conducted a lawful investigation and the consulting contract was justifiably terminated for reasons having nothing to do with the investigation. On the eve of trial, Malitz then forced the consulting firm to accept a small settlement, and convinced the insurer to pay the entire settlement. Further, the claims for assault, false imprisonment, and invasion of privacy were dismissed, with no payout to the consultant’s employee. This victory vindicated the rights of the client, which had undoubtedly conducted a lawful investigation and fulfilled its duties under the law.