Beck v. American Honda Finance Corporation
Filing
53
OPINION by U.S. Magistrate Judge Tom Schanzle-Haskins. Plaintiff's Motion for Settlement Conference 44 is ALLOWED. Plaintiff's Motion for Sanctions 45 is DENIED. The parties are ordered to appear before Judge Schanzle-Haskins on Wedne sday, September 10, 2014, at 1:30 p.m. for the purpose of participating in a settlement conference. The Plaintiff is directed to appear in person. The Defendant is directed to appear by its counsel and also by a representative with the authority to settle this matter on behalf of Defendant. See written order. (LB, ilcd)
E-FILED
Wednesday, 20 August, 2014 11:06:45 AM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS, SPRINGFIELD DIVISION
TERESA M. BECK,
Plaintiff,
v.
AMERICAN HONDA
FINANCE CORPORATION
d/b/a HONDA FINANCIAL
SERVICES,
Defendant.
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No. 12-cv-3133
OPINION
TOM SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE:
This matter comes before the Court on Plaintiff’s Motion for
Settlement Conference (d/e 44) (Settlement Motion), and Plaintiff’s Motion
for Sanctions (d/e 45) (Sanctions Motion). The parties consented to having
the matter heard before this Court. Order entered May 29, 2014 (d/e 43).
The Settlement Motion is ALLOWED. Defendant American Honda Finance
Corporation d/b/a/ Honda Financial Services (Honda) has no objection to
the Settlement Motion. For the reasons set forth below, the Sanctions
Motion is DENIED.
Page 1 of 13
BACKGROUND
Plaintiff Teresa M. Beck brought this action against Honda for making
alleged illegal telephone calls to her cellular telephone in violation of the
Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA). Amended
Complaint (d/e 16). Beck filed the action on May 9, 2012. Beck was
represented by counsel when she filed this case. Beck’s attorney was
registered with this Court’s electronic filing system (CM/ECF or PACER)
and received filings electronically.
Beck filed bankruptcy during the pendency of this case. On May 22,
2013, Beck’s counsel filed a motion to withdraw as counsel (d/e 23). The
Court allowed the withdrawal on the next day. Text Order entered May 23,
2013. On June 4, 2013, the Bankruptcy Court dismissed Beck’s
bankruptcy, leaving Beck to proceed pro se in this matter. Letter from
Bankruptcy Trustee dated June 5, 2013. Beck was given extensions of
time to find new counsel, but was unsuccessful. See Text Order entered
June 24, 2013; Text Orders entered August 2, 2013.
On September 4, 2013, this Court directed Beck and counsel for
Honda “to meet and confer and tender proposed supplemental deadlines to
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move this litigation forward.” Text Order entered September 4, 2013
(Cudmore, M.J.).
On September 11, 2013, Beck sent an email to counsel for Honda.
The body of the email stated:
I will be representing myself in the American Honda Finance
case. We will need to move forward and provide the judge with
dates prior to 9/23/13. Because your client continues to refuse
settlement discussions I will follow through with the deposition
as previously scheduled. Please give me your first available
date for the deposition. The names and positions of everyone
included in the deposition will remain as it was prior to the
disruption of this case; that is, as my prior attorney had
scheduled it. Please send me the names and positions of
everyone from Honda so I can confirm their attendance. It is my
understanding that your client does not deny using automatic
dialing devices; please confirm that with me so we can continue
with the deposition.
Sanctions Motion, Attachment A, Email from Beck to Bruce Terlep, dated
September 11, 2013.
On September 23, 2013, Honda filed Defendant’s Report Regarding
Rule 26(f) Conference with Plaintiff (d/e 31) (Discovery Plan). The
Discovery Plan contained no certificate of service. Counsel for Honda later
stated that he presumed the Discovery Plan was served on Beck by the
CM/ECF system. Transcript of Proceedings on May 29, 2014 (d/e 49)
(Transcript), at 20.
Page 3 of 13
Counsel for Honda violated two Local Rules by not serving Beck and
by not including a certificate of service. The Local Rules require a
certificate of service on all filings and do not allow pro se parties to receive
filings by the electronic CM/ECF system without first securing leave of
court. Local Rule 5.3(C) and 5.5(B)(1).
On the same day, September 23, 2013, Beck filed a Motion to Extend
(d/e 32). Beck asked for a sixty-day extension of time due to family illness.
Beck stated that she would consent to being deposed and wanted to
depose two Honda representatives under Rule 30(b)(6).
On September 24, 2013, Magistrate Judge Cudmore entered the
following Text Order:
TEXT ORDER by Magistrate Judge Byron Cudmore: Pro se
Plaintiff directed to review Defendant's Report Regarding Rule
26(f) Conference 31 and submit pro se Plaintiff's proposed
dates by 10/4/2013. If Plaintiff fails to respond, Defendant's
dates will be adopted by the Court. (LB, ilcd) (Entered:
09/24/2013)
The CM/ECF Notice of Electronic Filing states that this Text Order
was mailed to Beck. Beck did not respond.
On October 15, 2013, Magistrate Judge Cudmore entered the
following Text Order setting the discovery schedule:
TEXT ORDER by Magistrate Judge Byron Cudmore: Pro se
Plaintiff's Motion to Extend 32 DENIED. The Court has
reviewed Defendant's Report Regarding Rule 26(f) Conference
Page 4 of 13
with Plaintiff 31 and finds the dates proposed therein to be
satisfactory. New deadlines imposed as follows: All Fact
Discovery due by 12/31/2013; Plaintiff`s Expert Disclosure due
by 1/1/2014; Defendant`s Expert Disclosure due by 2/1/2014;
Expert Discovery due by 3/15/2014; Dispositive Motions due by
4/1/2014. Final pretrial conference and trial not scheduled at
this time. (LB, ilcd) (Entered: 10/15/2013)
The Clerk of Court mailed this Text Order to Beck. Remark entered
October 15, 2013.
On May 29, 2014, Honda filed Defendant’s Proposed Pretrial
Order (d/e 42) (Proposed Pretrial Order). The Proposed Pretrial
Order also did not include a certificate of service. The District Court
held a hearing in this matter on May 29, 2014 (Hearing). Beck
received a copy of the Proposed Pretrial Order during the Hearing.
Transcript of Proceedings (d/e 49), at 23. Beck also stated at the
Hearing that she had a copy of the Discovery Plan. Id., at 20.
On June 9, 2014, Beck filed the Settlement Motion and the
Sanctions Motion. Beck seeks sanctions because Honda failed to
serve her with the Discovery Plan and Proposed Pretrial Order.
ANALYSIS
Beck asks for sanctions under Federal Rules of Civil Procedure
5(a), 11, 26(a), 26(g), and 37; 28 U.S.C. § 1927; 720 ILCS 5/32-2(a)
Page 5 of 13
and 5/33-3(a)(b)(c); and the Court’s inherent power. The Court
addresses each basis for sanctions in order.
Rule 5(a)
Rule 5(a) requires parties to serve filings on opposing parties. Fed.
R. Civ. P. 5(a). Honda violated Rule 5(a) by not serving the Discovery Plan
on Beck.1 Rule 5(a) does not contain a provision authorizing sanctions for
violations. The Court can impose a sanction if the failure to serve resulted
in any prejudice to the opposing party. Gillo v. Gary Community School
Corp., 2014 WL 3767680, at *3 (N.D. Ind. July 31, 2014). In this case, the
failure to serve did not result in any prejudice. The Court notified Beck
immediately that the Discovery Plan had been filed and gave her time to
respond and propose her own discovery schedule. The Court further
mailed Beck a copy the October 15, 2013, text order setting the discovery
schedule. Beck, therefore, knew of the approved discovery schedule in a
timely fashion. She was not prejudiced by any lack of notice.
Beck argues that Honda caused an unreasonable delay by proposing
time for additional discovery. Beck argues that additional discovery was
unnecessary. The argument is unpersuasive. Beck stated in her
September 11, 2013, email that she wanted to take at least one additional
1
Beck received a copy of the Proposed Pretrial Order on the day it was filed. Therefore, there was no
failure to serve her with that document.
Page 6 of 13
deposition. She also acknowledged in her Motion to Extend (d/e 32) that
both sides wanted to take depositions. She, therefore, knew that additional
discovery would be necessary. She further asked for a sixty-day extension
of time. She was not prejudiced by the revised discovery schedule. The
Court finds no showing of prejudice by Honda’s failure to serve the
Discovery Plan. The request for sanctions under Rule 5(a) is denied.
Rule 11
Beck asks for sanctions under Rule 11. Rule 11 states that an
attorney who signs a filing represents to the Court that: (1) the filing is not
being presented for an improper purpose such as to harass or cause
unnecessary delay; (2) the claims, defenses and legal contentions are
warranted by existing law or nonfrivolous arguments for changes in the law;
(3) the factual contentions have evidentiary support or likely will have
support after further investigation; and (4) the denials of factual
contentions are warranted on the evidence or based on belief or lack of
information. Fed. R. Civ. P. 11(b). A party seeking Rule 11 sanctions must
do so by separate motion and must serve the motion on the opposing party
21 days before filing it in court. Fed. R. Civ. P. 11(c).
Beck improperly served the Sanctions Motion under Rule 11. She
served and filed the Sanctions Motion on June 9, 2014, rather than waiting
Page 7 of 13
the prescribed 21 days before filing. Therefore, the request for sanctions
under Rule 11 is not properly before the Court.
In addition, Beck fails to demonstrate that counsel for Honda violated
Rule 11(b) in filing the Discovery Plan. Beck argues that Honda caused
unreasonable delay by proposing additional discovery. As discussed
above, the record does not support this contention. The case had stalled
when Beck’s counsel withdrew. The Court directed the parties to propose
a new discovery schedule to get the case moving. Honda responded by
proposing a revised discovery schedule that completed fact discovery in
approximately 75 days and all discovery in 5 months. Beck responded by
asking for a sixty-day extension of time. Beck also stated that she wanted
to take two Rule 30(b)(6) depositions. Under these circumstances,
Honda’s proposed schedule would not cause any unreasonable delay.
Beck presents no basis for sanctions under Rule 11.
Rules 26(a), 26(g), and 37
Beck argues that Honda violated rule 26(a)(4) by not serving the
Discovery Plan. Sanctions Motion, at 6. Beck is incorrect. Rule 26(a)
directs parties to make certain mandatory discovery disclosures. Rule
26(g) states that all discovery responses must be signed. Rule 37
authorizes this Court to sanction a party for violations of Rule 26(a). Fed.
Page 8 of 13
R. Civ. P. 26(a), 26(g), and 37(c). Rule 26(a)(4) states that all mandatory
disclosures under Rule 26(a) must be in writing, signed, and served. The
Discovery Plan was not a mandatory disclosure required under Rule 26(a);
therefore, Rule 26(a)(4) does not apply. Rule 26(g) requires all discovery
responses to be signed. The Discovery Plan was not a response to a
discovery request. Counsel for Honda also signed the Discovery Plan
electronically. Discovery Plan, at 3; see Local Rule 11.4. Rule 26(g) does
not apply.
Beck argues that Honda also violated Rule 26(a) because she
requested names of Honda representatives in her September 11, 2013,
email and Honda did not provide any names. The lack of a response to
Beck’s email is not a violation of Rule 26(a). Rule 26(a) requires a party to
make certain disclosures at the initial phase of the case and in connection
with expert witnesses. Fed. R. Civ. P. 26(a). Rule 26(a) does not require a
party to respond to email requests. Beck’s email, furthermore, was not a
formal discovery request made under any other discovery rule. See Fed.
R. Civ. P. 27-36. Beck fails to demonstrate a violation of Rule 26, and so,
fails to demonstrate a right to sanctions under Rule 37.
Page 9 of 13
28 U.S.C. § 1927
Section 1927 provides:
Any attorney or other person admitted to conduct cases in any
court of the United States or any Territory thereof who so
multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy personally
the excess costs, expenses, and attorneys' fees reasonably
incurred because of such conduct.
28 U.S.C. § 1927. This Court has discretion to sanction an attorney for
violating §1927:
We have explained that a court has discretion to impose § 1927
sanctions when an attorney has acted in an “objectively
unreasonable manner” by engaging in “serious and studied
disregard for the orderly process of justice,” Pacific Dunlop
Holdings, Inc. v. Barosh, 22 F.3d 113, 119 (7th Cir.1994);
pursued a claim that is “without a plausible legal or factual basis
and lacking in justification,” id.; or “pursue[d] a path that a
reasonably careful attorney would have known, after
appropriate inquiry, to be unsound,” Kapco Mfg. Co. v. C & O
Enters., Inc., 886 F.2d 1485, 1491 (7th Cir.1989). We have also
interpreted § 1927 “to impose a continuing duty upon attorneys
to dismiss claims that are no longer viable.” Dahnke v.
Teamsters Local 695, 906 F.2d 1192, 1201 n. 6 (7th Cir.1990).
Jolly Group, Ltd. v. Medline Industries, Inc., 435 F.3d 717, 720 (7th Cir.
2006). In addition, sanctions under § 1927 should be imposed, “only in
instances of a serious and studied disregard for the orderly processes of
justice.” Kiefel v. Las Vegas Hacienda, Inc., 404 F.2d 1163, 1167 (7th Cir.
1968).
Page 10 of 13
Honda’s counsel acted in an objectively unreasonable manner when
he did not comply with Local Rules 5.3(C) and 5.5(B)(1) by not serving the
Discovery Plan and not filing a certificate of service. Honda’s counsel,
however, did not demonstrate a serious and studied disregard for the
orderly process of justice. He misunderstood the rules regarding electronic
filing with pro se litigants. As explained above, the error caused no
prejudice or delay in the proceeding. The Court, in the exercise of its
discretion, determines that no sanction is appropriate under § 1927.
720 ILCS 5/32-2 and 720 ILCS 5/32-2
Beck argues that sanctions are appropriate under 720 ILCS 5/32-2
and 720 ILCS 5/32-2. These are state criminal statutes. Such criminal
statutes do not authorize this Court to impose sanctions in civil matters.
Moreover, Beck presents no evidence of a violation of either.
Section 5/32-2 provides, in part:
§ 32-2. Perjury.
(a) A person commits perjury when, under oath or affirmation,
in a proceeding or in any other matter where by law the oath or
affirmation is required, he or she makes a false statement,
material to the issue or point in question, knowing the statement
is false.
720 ILCS 5/32-2(a). Beck argues that Honda’s counsel committed perjury
at the Hearing. This is clearly wrong. Honda’s counsel was not under
Page 11 of 13
oath. Furthermore, Beck only has demonstrated that Honda’s counsel
made a mistake about electronic filing. She failed to demonstrate that
counsel made a false statement on a material issue knowing the statement
to be false. There was no perjury.
Section 5/33-3 provides, in part:
§ 33-3. Official Misconduct. A public officer or employee or
special government agent commits misconduct when, in his
official capacity or capacity as a special government agent, he
commits any of the following acts:
....
(b) Knowingly performs an act which he knows he is forbidden
by law to perform;
720 ILCS 5/33-3(b). Section 5/33-3 applies to public officials exercising
public authority. See People v. Lanigan, 353 Ill.App.3d 422, 428, 818
N.E.2d 829, 900 (Ill. App. 1st Dist. 2004). The statute does not apply to
private attorneys representing clients in private civil matters. Beck further
fails to demonstrate any knowing wrongful conduct.
The Court’s Inherent Power
Beck argues that this Court should sanction Honda under its inherent
authority to sanction parties that litigate in bad faith or attempt to perpetrate
a fraud on the Court. See Chambers v. NASCO, Inc., 501 U.S. 32, 44-45
(1991). In this case, the Court sees no fraud or bad faith. Counsel for
Honda violated two Local Rules when he filed the Discovery Plan. That is
Page 12 of 13
all that occurred. The Magistrate Judge notified Beck of the filing of
Honda’s proposed discovery schedule and gave her time to propose her
own schedule. Shortly thereafter, the Magistrate Judge mailed Beck a
copy of the text order setting the discovery schedule when it was entered.
She suffered no prejudice. The Court finds no reasons to impose any
sanction.
THEREFORE Plaintiff’s Motion for Settlement Conference (d/e 44) is
ALLOWED, and Plaintiff’s Motion for Sanctions (d/e 45) is DENIED. The
parties are ordered to appear before the undersigned on September 10,
2014 at 1:30 p.m. for the purpose of participating in a settlement
conference. The Plaintiff is directed to appear in person. The Defendant is
directed to appear by its counsel and also by a representative with the
authority to settle this matter on behalf of Defendant.
ENTER:
August 20, 2014
s/ Tom Schanzle-Haskins
UNITED STATES MAGISTRATE JUDGE
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