Kyler Moje v. Federal Hockey League LLC
Filing
Filed opinion of the court by Judge Easterbrook. AFFIRMED. Richard A. Posner, Circuit Judge; Frank H. Easterbrook, Circuit Judge and Diane S. Sykes, Circuit Judge. [6675759-1] [6675759] [15-1097]
Case: 15-1097
Document: 27
Filed: 07/07/2015
Pages: 6
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15-‐‑1097
KYLER MOJE,
Plaintiff-‐‑Appellee,
v.
FEDERAL HOCKEY LEAGUE, LLC,
Defendant-‐‑Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 14 C 500 — Sara L. Ellis, Judge.
____________________
ARGUED MAY 29, 2015 — DECIDED JULY 7, 2015
____________________
Before POSNER, EASTERBROOK, and SYKES, Circuit Judges.
EASTERBROOK, Circuit Judge. As in Choice Hotels Interna-‐‑
tional, Inc. v. Grover, No. 14-‐‑3294, also decided today, the de-‐‑
fendant’s lawyer failed to file essential documents, leading
to the entry of a default judgment, and the defendant wants
another shot at litigation.
Kyler Moje, playing for the Danville Dashers of the Fed-‐‑
eral Hockey League, one of the minor leagues in professional
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hockey, lost an eye to high-‐‑sticking during a game against
the Akwesasne Warriors. He sued Oakley, Inc., which made
the visor that Moje blames for offering inadequate protec-‐‑
tion, and the League itself. Instead of notifying its liability
insurer and letting it defend the tort suit, the League hired
John A. LoFaro, of Syracuse, New York. LoFaro promised to
represent the League’s interests but did not do so.
The League learned about potential trouble a month after
the suit began, when Oakley’s attorney called Dan Kirnan,
the League’s President, to ask why it had not filed an answer
to the complaint. Kirnan asked LoFaro what was up, and
LoFaro said that an answer had been filed. He sent the
League a purported copy. The court’s docket did not reflect
any filing, however, and Moje asked the judge to enter a de-‐‑
fault. LoFaro did not respond—nor did he do anything after
the district court entered the default and permitted Moje to
prove up his damages. On June 11, 2014, four months after
the suit began, the district court entered a final judgment of
$800,000 against the League. Kirnan maintains that he first
learned about this in October 2014, after Moje commenced
collection proceedings. At last Kirnan notified the League’s
insurer, which undertook to defend under a reservation of
rights (the League’s delay in notification, and the entry of a
final judgment, had an obvious potential to prejudice the in-‐‑
surer). In December 2014 a lawyer hired by the insurer en-‐‑
tered an appearance for the League and filed a motion under
Fed. R. Civ. P. 60(b)(1) to set aside the judgment. The district
court’s denial of that motion led to this appeal.
As in Choice Hotels, a lawyer failed to mount a defense of
the suit, a default judgment was entered, and the district
court denied a Rule 60(b) motion. In Choice Hotels the motion
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was filed more than a year after judgment and so depended
on Rule 60(b)(6), the catchall section, which limits relief to
extraordinary circumstances. In this case, by contrast, the
motion was filed only six months after judgment and so
could invoke Rule 60(b)(1), which allows relief on account of
“mistake, inadvertence, surprise, or excusable neglect”. The
League maintains that “excusable neglect” led to the default
judgment. The district court saw “neglect” but did not think
it “excusable.” LoFaro has never offered an explanation for
the combination of inaction and deceit. (To be more precise,
LoFaro has never been called on to explain his conduct. We
are reporting the League’s allegations, but LoFaro may not
agree with its description. As far as we can tell the League
has not filed a complaint with the legal-‐‑ethics panel in New
York—but LoFaro is not in good standing anyway, as he has
failed to pay his dues.)
The League wants us to bypass the question whether Lo-‐‑
Faro’s conduct is excusable and concentrate on its own
knowledge and conduct. Yet the Supreme Court held in Pio-‐‑
neer Investment Services Co. v. Brunswick Associates L.P., 507
U.S. 380, 396–97 (1993), the leading decision on the meaning
of “excusable neglect” in federal procedure, that a lawyer’s
errors are imputed to the client for the purpose of this
phrase. To obtain relief, the Court held, a litigant must show
that both its own conduct and its lawyer’s fit the category of
“excusable” neglect.
Usually this concentrates attention on counsel, for most
errors will be chalked up to counsel alone. There is one po-‐‑
tentially important exception to this norm, however. As the
Supreme Court discussed in Maples v. Thomas, 132 S. Ct. 912,
922–23 (2012), and we repeated in Choice Hotels, a lawyer’s
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abandonment of the client ends the agency relation. Aban-‐‑
donment leaves the client responsible for its own conduct,
but not for the lawyer’s—and then the question becomes
whether the litigant’s conduct constituted excusable neglect.
To simplify matters we shall assume that LoFaro prom-‐‑
ised to represent the League yet abandoned his client. That
leaves the question whether the League has shown its own
excusable neglect. Pioneer gives an expansive definition to
“neglect,” a word that it held to include negligence, see 507
U.S. at 387–95. With respect to “excusable,” the Court wrote:
the determination is at bottom an equitable one, taking account
of all relevant circumstances surrounding the party’s omission.
These include … the danger of prejudice to the debtor, the length
of the delay and its potential impact on judicial proceedings, the
reason for the delay, including whether it was within the reason-‐‑
able control of the movant, and whether the movant acted in
good faith.
Id. at 395 (footnote omitted). The open-‐‑ended nature of these
factors means that appellate review is deferential. In re Cano-‐‑
py Financial, Inc., 708 F.3d 934, 936 (7th Cir. 2013); Milwaukee
Branch of the N.A.A.C.P. v. Thompson, 116 F.3d 1194, 1197 (7th
Cir. 1997).
The thin record that the League built in the district court
does not compel a ruling in its favor. Two things dominate:
first, the League failed to tender the defense of Moje’s suit to
its insurer when it received the complaint; second, the
League failed to act prudently after being alerted by Oakley
that there was a problem.
Instead of turning to its insurer, which any sensible busi-‐‑
ness should have done, it hired LoFaro. Why? The only rea-‐‑
son the League has given is that he had provided satisfacto-‐‑
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ry legal services to Kirnan (and perhaps the League) in earli-‐‑
er years. But what kind of legal services? LoFaro’s web site
describes his practice as “Personal Injury ~ Criminal Law
DWI, Speeding, and all Traffic Related Matters”. See
http://lofarolaw.com. That list of specialties does not imply
aptitude for the defense of a million-‐‑dollar tort suit in Chica-‐‑
go. LoFaro practices in Syracuse, New York, and is not ad-‐‑
mitted to the bar of the Northern District of Illinois.
Even if he were a wizard of tort defense, why keep the
insurer in the dark? The League has never offered a reason.
After a co-‐‑defendant told the League that no answer had
been filed on its behalf, it did not take precautions such as
notifying the insurer, engaging counsel in Chicago, or check-‐‑
ing the district court’s docket (which can be done from any
desktop computer). A check of the docket would have re-‐‑
vealed that LoFaro did not file an appearance as the
League’s attorney and did nothing to protect its interests.
Because LoFaro had not filed an appearance, Moje’s lawyer
would have sent all filings, such as the request for a default
judgment and his proof of damages, directly to the League,
which sat on its hands. The League cannot escape a substan-‐‑
tial share of the responsibility for the outcome.
Abandoned clients who take reasonable steps to protect
themselves can expect to have judgments reopened under
Rule 60(b)(1), but the League is not in that category. Its rem-‐‑
edy, if any, is against LoFaro. If he has inadequate (or no)
malpractice insurance, and cannot satisfy a malpractice
judgment, that too reflects the League’s choice; it could have
insisted on proof of adequate coverage. It would be inap-‐‑
propriate to send Moje, who bears no responsibility, back to
square one of his tort suit.
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No. 15-‐‑1097
AFFIRMED
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