Grochocinski v. Mayer Brown Rowe & Maw LLP et al

Filing 166

MOTION by Plaintiff David Grochocinski for leave to file Sur-Reply to Defendants' Three New Arguments or, Alternatively, to Open Merits Discovery for a Limited Purpose (Joyce, Edward)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS, EASTERN DISTRICT
DAVID GROCHOCINSKI, not individually,
but solely in his capacity as the Chapter 7
Trustee for the bankruptcy estate of
CMGT, INC.
Plaintiff,

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v.
MAYER BROWN ROWE & MAW LLP,
RONALD B. GIVEN, and CHARLES W.
TRAUTNER,
Defendants.

No. 06 C 5486
Judge Virginia M. Kendall

PLAINTIFF’S MOTION FOR LEAVE TO FILE
SUR-REPLY TO DEFENDANTS’ THREE NEW ARGUMENTS OR,
ALTERNATIVELY, TO OPEN MERITS DISCOVERY FOR A LIMITED PURPOSE
Plaintiff, through his counsel, respectfully requests leave to file (within 14 days) a
surreply to the three new arguments raised in defendants’ reply in support of their motion for
summary judgment. Alternatively, if this Court is going to allow defendants’ to challenge the
authenticity of the documents relied upon by plaintiff, most of which came from defendants’
own files, plaintiff respectfully requests that merits discovery be opened for the limited purpose
of allowing plaintiff to respond to that challenge. In support of this motion, plaintiff states as
follows.
I.

Plaintiff Should be Allowed to File a Short Sur-reply to Address Defendants’
Three New Arguments
A. Defendants’ First New Argument--That the Merits of This Case Are
Irrelevant To Their Motion Based On Maxwell.
The parties agree that defendants have not filed a traditional summary judgment motion--

i.e., a motion at the close of merits discovery arguing that there is no evidence to support one or
more elements of the claims. Instead, defendants have filed a motion based on the dicta in

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Maxwell regarding the appropriateness of sanctions as means of “policing” the filing of
“frivolous suits.” Because defendants’ motion was (and is) based on the premise that plaintiff’s
lawsuit is “frivolous,” defendants’ argument in their Reply that the merits of this case are
irrelevant is both “new” and inconsistent with the premise of their motion.
Defendants’ opening brief argued that this Court should police the litigation judgment
exercised by the plaintiff trustee, pursuant to the Seventh Circuit’s holding in Maxwell v. KPMG,
520 F. 3d 713 (7th Cir. 2008). In Maxwell, the Seventh Circuit affirmed the district court’s entry
of summary judgment against a plaintiff trustee on the ground that his claim was completely
lacking on the element of loss causation. The Court then invited the defendant to file a motion
for sanctions with the district court, explaining:
Judges must therefore be vigilant in policing the litigation
judgment exercised by trustees in bankruptcy, and in an
appropriate case must give consideration to imposing sanctions
for the filing of a frivolous suit.
520 F.3d at 718 (emphasis added).
Because the Seventh Circuit’s comment about policing a trustee’s litigation judgment
was directed at the filing of “frivolous” suits, we responded to defendants’ motion by
demonstrating that, even without the benefit of merits discovery, the trustee has already obtained
several contemporaneous documents supporting his claims.1

In other words, the trustee’s

response focused on the merits of his claims in order to dispel any notion that the claims are
frivolous. In defendants’ reply brief, however, they now argue that the merits of this case are
totally irrelevant to their motion. (Reply at 1-2.) Plaintiff therefore requests the opportunity to
respond to this new argument within 14 days.
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The trustee already has the majority of these contemporaneous documents because he obtained them from
defendants’ own files (pursuant to a request he made to defendants before this case was filed.) See Pl. Appendix of
Exhibits in Support of His Response to Defs. Mot for Summary Judgment and Exhibit 1 therein; see also Pl. Resp.
to Defs. Rule 56.1 Stmt at Ans. No. 69.

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B. Defendants’ Second New Argument--That Some Of The Contemporaneous
Documents Contain Inadmissable Hearsay.
If defendants had filed a traditional summary judgment motion, it would make sense to
engage in a point by point analysis of defendants’ hearsay objections. In such an analysis, the
court would consider three questions as to each challenged portion of a contemporaneous
document:
(1)

Does that portion of the document contain a “statement,” defined by Rule 801(a)
as a “written assertion”;2

(2)

If that portion contains an assertive “statement,” is plaintiff offering that
statement to prove the truth of the matter asserted (see Rule 801(c));3 and

(3)

If the challenged portion contains a “statement” that plaintiff is offering to prove
the truth of the matter asserted--i.e., if the statement is “hearsay”--is there an
applicable hearsay exception?

As stated above, application of this three-part analysis would make sense if defendants
had filed a traditional summary judgment motion (at the close of merits discovery) directed at
one or more elements of the trustee’s claims. But defendants have not filed that type of motion.
Instead, defendants have filed a motion asking the Court to dismiss this case--before any merits
discovery--on the purported basis that the trustee should be policed under Maxwell for filing a
frivolous suit. Indeed, the introduction to defendants’ reply argues that the trustee’s complaint is
“contrived” (Reply at 1), and the conclusion to defendants’ reply argues that this is a “baseless
lawsuit.” (Reply at p. 25.)

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If the challenged portion of the document is not even an assertive “statement,” there would be no need to
go to step (2).
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If the challenged portion of the document is an assertive statement but is not offered to prove the truth of
the matter asserted, there would be no need to go to step (3) because the statement would not be “hearsay” as
defined in Rule 801(c).

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In this context, where the issue before the Court is whether the trustee has filed a
frivolous suit, it does not make sense to engage in that three-part analysis for defendants’ hearsay
objections because the contemporaneous documents as a whole readily demonstrate that this case
is anything but frivolous.

Moreover, most of the key contemporaneous documents were

authored by defendants and, accordingly, the admissions contained therein cannot be
inadmissible hearsay. Nevertheless, if this Court believes it necessary to address defendants’
hearsay objections, the trustee should be allowed to respond to those objections within 14 days.4
C. Defendants Third New Argument--That The Documents Produced From
Defendants’ Own Files Need Further Authentication In This Context.
As explained above, defendants filed a motion asserting that the trustee’s claims are
frivolous, and that he should therefore be “policed” by a dismissal before any merits discovery.
In response, the trustee used the contemporaneous documents produced (pre-lawsuit) from
defendants’ own files to demonstrate that he has an entirely reasonable basis to proceed with this
suit. Now, however, despite emphasizing that they are not attacking the elements of the trustee’s
claims, defendants want to challenge the authenticity of the very documents they produced to the
trustee. Plaintiff respectfully requests leave to file a sur-reply explaining why defendants’
authenticity objections do not apply in the context of defendants’ Maxwell-policing type of
motion. 5

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It is ironic that defendants are now asserting hearsay and authentication objections even though the
affidavits they rely upon are chock full of inadmissible lay opinions and hearsay. Regardless, the rules of evidence
are not relevant to the issue before this Court: whether the contemporaneous documents obtained by the Trustee prelawsuit demonstrate that this case is not “frivolous.”
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Defendants complain that Plaintiff did not produce “71 of the 109” exhibits to them during the Unclean
Hands discovery phase. But defendants do not deny that they produced those 71 documents to Plaintiff before this
lawsuit was filed. Plaintiff is not required to produce to defendants the very documents that defendants previously
produced to him. Nonetheless, most of those 71 documents were produced to defendants on a compact disc. The
production number of that disc is PL 00082. (The disc itself was Bate stamped, but the documents contained on the
disc were not individually Bate stamped.)

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II.

Alternatively, Merits Discovery Should be Opened For the Limited Purpose of
Giving Plaintiff the Opportunity to Authenticate the Documents Upon Which he
Relies
Defendants’ evidentiary objections should be overruled because they are based on the

false and unsupported premise that a bankruptcy trustee is required to rely only on non-hearsay
statements and authenticated documents when deciding whether to file a case. Nonetheless, if,
in the context of defendants’ Maxwell-policing type of motion, this Court is willing to allow
defendants to challenge the authenticity of the documents relied upon by plaintiff -- most of
which came from defendants’ own files -- then merits discovery should be opened for the limited
purpose of allowing plaintiff to respond to that challenge.
III.

Conclusion
For all of the above reasons, plaintiff respectfully requests leave to file (within 14 days) a

sur-reply to defendants’ new arguments. Alternatively, if this Court is going to allow defendants
to challenge the authenticity of the documents relied upon by plaintiff, most of which came from
defendants’ own files, then plaintiff respectfully requests that merits discovery be opened for the
limited purpose of allowing plaintiff to respond to that challenge.
Dated: August 25, 2009

Respectfully submitted,
DAVID GROCHOCINSKI, not individually, but
solely as the trustee in bankruptcy, for THE
ESTATE OF CMGT, INC.,

By:________/s/ Edward T. Joyce___________
Plaintiff’s attorneys
Edward T. Joyce
Arthur W. Aufmann
Robert D. Carroll
EDWARD T. JOYCE & ASSOC., P.C.
11 South LaSalle Street, Ste., 1600
Chicago, Illinois 60603

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