H.D. Smith, LLC v. Meds 2 Go Express Pharmacy, Inc. et al

Filing 22

OPINION: The Court GRANTS Defendants' Motion to Withdraw Default Admissions (d/e 21). Defendants' August 15, 2017 response to the Request to Admit which includes the admission to 195 facts will stand. The deadline for the completion of fa ct discovery is extended for Plaintiff only to November 1, 2017. All other dates in the Scheduling Order remain the same. Plaintiff's Motion to Deem Facts Admitted (d/e 19) is DENIED. (SEE WRITTEN OPINION.) Entered by Judge Sue E. Myerscough on 8/29/2017. (GL, ilcd)

E-FILED

Tuesday, 29 August, 2017 03:49:24 PM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
H.D. SMITH, LLC, a Delaware
limited liability company,

)
)
)
Plaintiff,
)
)
v.
)
)
MEDS 2 GO EXPRESS
)
PHARMACY, INC., a West Virginia )
Corporation, and PHILIP
)
MICHAEL ,
)
)
Defendants.
)
___________________________________ )
)
MEDS 2 GO EXPRESS
)
PHARMACY, INC., a West Virginia )
Corporation, and PHILIP
)
MICHAEL ,
)
)
Counter-Plaintiffs,
)
)
H.D. SMITH, LLC, a Delaware
)
limited liability company,
)
)
Counter-Defendant.
)

No. 16-cv-3280

OPINION
SUE E. MYERSCOUGH, U.S. District Judge.
This cause is before the Court on the Motion and Brief to
Deem Facts Admitted (d/e 19) filed by Plaintiff H.D. Smith, LLC,
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and the Motion to Withdraw Default Admissions (d/e 21) filed by
Defendants Meds 2 Go Express Pharmacy, Inc. (Express
Pharmacy), and Philip Michael. The Court GRANTS Defendants’
Motion to Withdraw Default Admissions because doing so
promotes the presentation of the merits of the action and any
prejudice to Plaintiff is cured by the Court extending the discovery
deadline for Plaintiff. Plaintiff’s Motion to Deem Facts Admitted is
DENIED.
I. JURISDICTION
This Court has subject matter jurisdiction pursuant to 28
U.S.C. § 1332(a). Complete diversity exists between the parties.
Plaintiff is a single member Delaware limited liability
company. Compl. ¶ 1 (d/1-1); Residency Statement (d/e 6). The
single member is H.D. Smith Holdings, LLC, a Delaware limited
liability company. See Residency Statement. H.D. Smith
Holdings, LLC, is also a single member limited liability company,
and its single member is H.D. Smith Holding Company, a Delaware
corporation. Id. H.D. Smith Holding Company’s main office is
located in Springfield, Illinois. Id.

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Defendant Express Pharmacy is a West Virginia corporation
that operates in Alum Creek, West Virginia. Compl. ¶ 2; Notice of
Removal ¶ 4 (d/e 1). Defendant Michael is a citizen of West
Virginia who resides in Charleston, West Virginia. Notice of
Removal ¶ 5.
In addition, the amount in controversy exceeds $75,000
exclusive of interest and costs. In the Complaint, Plaintiff seeks
damages in the amount of $103,835.17.
II. BACKGROUND
In September 2016, Plaintiff filed a complaint against
Defendants in the Seventh Judicial Circuit, Sangamon County,
Illinois. Defendants removed the action to this Court.
The complaint alleges the following. Plaintiff is engaged in
the business of selling health products. In October 2015, Express
Pharmacy entered into a Credit Agreement with Plaintiff. From
approximately July 1, 2016 through August 25, 2016, Plaintiff
provided health products to Express Pharmacy but Express
Pharmacy refused to pay the customary charges and associated
taxes and fees that were due. Plaintiff brings a breach of contract,
quantum meruit, and action on account stated claim against
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Express Pharmacy (Counts I, II, III) and a claim against Philip
Michael, who executed an individual guarantee (Count IV).
Defendants filed an Answer and Counterclaim (d/e 2). The
Counterclaim contains claims for breach of contract, breach of the
covenant of good faith and fair dealing, and promissory estoppel.
Defendants allege that Express Pharmacy entered into a contract
with Plaintiff whereby Express Pharmacy would purchase
controlled medications from Plaintiff and sell them to customers
with valid prescriptions. Defendants specifically allege that, in
July 2016, Plaintiff suddenly stopped supplying controlled
medications to Pharmacy Express, without any warning or
explanation. Pharmacy Express has allegedly suffered damages
because of Plaintiff’s abrupt termination of shipments of controlled
medications.
In December 2016, United States Magistrate Judge Tom
Schanzle-Haskins entered a Scheduling Order (d/e 13). The
Scheduling Order granted the parties until September 1, 2017 to
complete fact discovery.
On June 8, 2017, Plaintiff served upon Defendants a Request
to Admit Facts and Genuineness of Documents (Request to Admit)
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pursuant to Federal Rule of Civil Procedure 36. The Request to
Admit listed 228 facts. Defendants’ response was due on or before
July 11, 2017. Defendants did not timely respond.
On August 1, 2017, Plaintiff filed a Motion and Brief to Deem
Facts Admitted (d/e 19). On August 15, 2017, Defendants
responded to the Motion and moved to withdraw the default
admissions. See Resp. (d/e 20). Defendants also reported that
they responded to the Request to Admit and admitted 195 of the
228 facts. The only explanation for the delay is the statement that
“Defendants are involved in two separate criminal matters, which
have required much of their counsel’s attention.” Resp. at 2.
On August 25, 2017, Plaintiff filed a Reply. While replies are
generally not permitted for motions other than motions for
summary judgment, the Court will accept Plaintiff’s document as a
response to Defendants’ motion to withdraw the default
admissions. See CDIL-LR 7.1(B)(3) (“No reply to the response is
permitted without leave of Court.”).
III. ANALYSIS
In their Motion to Withdraw Default Admissions, Defendants
assert that, even though the response to the Request to Admit was
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served 35 days late, the matter should proceed on the merits
because discovery has not yet concluded and Plaintiff is not
prejudiced by the tardy response. Defendants also indicate that
the parties reached an agreement that Defendants would respond
to Plaintiff’s outstanding Interrogatories and Request to Produce by
August 22, 2015.
Plaintiff argues that Defendants could have requested an
extension of the 30-day period to respond to the Request to Admit
but failed to do so. Instead, Defendants did not respond to the
Request to Admit until August 15, 2017, over a month after the
deadline and just two weeks before fact discovery closed. Plaintiff
asserts it will suffer prejudice because Defendants failed to
respond to the Request to Admit until two weeks before the
discovery deadline, which leaves little time for Plaintiff to conduct
follow-up discovery. Plaintiff also notes that, while the parties did
reach an agreement to extend the deadline for Defendants to
respond to Plaintiff’s Interrogatories and Request to Produce, the
agreement was reached only after Plaintiff sent a meet-and-confer
letter.

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Pursuant to Rule 36 of the Federal Rules of Civil Procedure, a
party may serve on another party a written request to admit the
truth of any matter within the scope of Rule 26(b)(1) relating to:
“(A) facts, the application of law to fact, or opinions about either;
and (B) the genuineness of any described documents.” Fed. R. Civ.
P. 36(a)(1). A matter is admitted unless the party answers or
objects within 30 days after being served. See Fed. R. Civ. P.
36(a)(3) (also noting that a court may order or the parties may
stipulate to a longer or shorter time for responding).
In this case, Defendants failed to timely respond to the
Request to Admit. Therefore, the facts therein are deemed
admitted. See Moses v. U.S. Steel Corp., 946 F. Supp. 2d 834,
840-41 (N.D. Ind. 2013) (because the plaintiff did not answer the
request for admissions within the time specified, the matters
therein were deemed admitted). The Court has the discretion,
however, to permit the withdrawal of the admissions “if it would
promote the presentation of the merits of the action and if the
court is not persuaded that it would prejudice the requesting party
in maintaining or defending the action on the merits.” Fed. R. Civ.

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P. 36(b); see also Simstad v. Scheub, 816 F.3d 893, 899 (7th Cir.
2016).
The Court will exercise that discretion here. In doing so, the
Court does not condone Defendants’ untimely response to the
Request to Admit. Furthermore, Defendants’ excuse for failing to
timely respond was vague. Nonetheless, allowing withdrawal of the
admissions promotes the presentation of the case on the merits
and any prejudice to Plaintiff can be cured by extending the
discovery deadline for Plaintiff.
As noted by Defendants, allowing withdrawal of the
admissions would promote the presentation of the merits of the
case because the admissions would otherwise conclusively
establish at least some of the claims in Plaintiff’s complaint and
Defendants’ counterclaim. For example, Plaintiff asked Defendants
to admit that Michael did not send written notice of revocation of
the individual guarantee and did not receive a written release of
the individual guarantee. One of Defendants affirmative defenses
is that Plaintiff released “Defendant” from any liability. See Answer
and Counterclaim, Eighth Defense. If the admissions are
withdrawn, the claims will proceed on the merits.
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As for prejudice, Plaintiff bears the burden of establishing
that withdrawal of the admissions would result in prejudice. See
Banos v. City of Chi., 398 F.3d 889, 893 (7th Cir. 2005) (finding
that the defendant met its burden of establishing it would suffer
prejudice if the admissions were withdrawn where the plaintiffs
sought to revive a previously abandoned theory and the defendant
had been subjected to long delays and voluminous discovery);
Matthews v. Homecoming Fin. Network, No. 03 C 3115, 2006 WL
2088194, at *3 (N.D. Ill. July 20, 2006) (“The party who obtained
the admissions bears the burden of proving that withdrawal of the
admissions will result in prejudice.”). When considering prejudice,
courts consider the difficulty the party opposing the motion to
withdraw would face by having to prove facts that the party
thought were admitted. See Blow v. Bijora, Inc., 855 F.3d 793,
800 (7th Cir. 2017) (citing Perez v. Miami-Dade Cnty, 297 F.3d
1255, 1266 (11th Cir. 2002) (noting that prejudice “relates to the
difficulty a party may face in proving its case” because of the
sudden need to obtain evidence previously admitted)); Matthews,
2006 WL 2088194, at *3 (a party does not show prejudice for

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purposes of Rule 36 by showing that he will have to argue the
merits of the case if the admitted facts are withdrawn).
Plaintiff argues it will suffer prejudice because discovery
closes September 1, 2017, which limits Plaintiff’s ability to conduct
follow-up discovery. The Court can, however, eliminate any such
prejudice by extending discovery—for Plaintiff only—to November
1, 2017. See Simstad, 816 F.3d at 899 (finding that the court did
not abuse its discretion by permitting the defendants to withdraw
their default admissions, noting that any possible prejudice was
mitigated by the court reopening discovery for the plaintiffs alone).
Therefore, the Court will allow Defendants to withdraw the default
admissions.
IV. CONCLUSION
For the reasons stated, the Court GRANTS Defendants’
Motion to Withdraw Default Admissions (d/e 21). Defendants’
August 15, 2017 response to the Request to Admit—which
includes the admission to 195 facts—will stand. The deadline for
the completion of fact discovery is extended—for Plaintiff only—to
November 1, 2017. All other dates in the Scheduling Order remain

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the same. Plaintiff’s Motion to Deem Facts Admitted (d/e 19) is
DENIED.
ENTER: August 29, 2017
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE

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