Illinois Trading had tried to stem its financial troubles by obtaining loans from the Transportation Alliance Bank (“TAB Bank”), giving the bank a security interest in its assets. By the time VLM brought its lawsuit, TAB Bank had already seized all of Illinois Trading’s assets. But the PACA-created trust made VLM’s claim superior to the bank’s security interest. See Patterson Frozen Foods, Inc. v. Crown Foods Int’l, Inc., 307 F.3d 666, 669 (7th Cir. 2002). VLM amended its complaint to add a fifth claim—against TAB Bank—for seizing and converting PACA trust assets.
Prior to this amendment, however, VLM had moved for a consolidation of the preliminary-injunction hearing with a trial on the merits. The district court granted the motion. Everyone understood that the consolidated injunction and merits hearing pertained only to Counts I through IV—the claims by VLM against Illinois Trading—and not Count V, which pertained to the bank. When the district court issued its opinion, however, it not only resolved Counts I through IV, it also entered judgment for TAB Bank on Count V, holding that VLM failed to present any evidence on that claim. VLM appeals the judgment on Count V, arguing that it had insufficient notice that the court would treat the consolidated preliminary-injunction/ merits hearing as a final hearing on that claim. We agree and reverse with respect to Count V.
Judge(s): Diane Sykes
Jurisdiction: U.S. Court of Appeals, Seventh Circuit
Related Categories: Civil Procedure , Civil Remedies , Communications , Constitutional Law , Contracts , International , Maritime , Transportation
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