Amari Company, Inc. et al v. Burgess et al

Filing 983

WRITTEN Opinion entered by the Honorable Elaine E. Bucklo on 10/26/2011: Mailed notice(mpj, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Elaine E. Bucklo

CASE NUMBER

07 C 1425

CASE
TITLE

Sitting Judge if Other
than Assigned Judge

DATE

10/26/2011

Amari, et al. Vs. Burges, et al.

DOCKET ENTRY TEXT

Defendants’ motion [948] to clarify is denied, except to the extent that it seeks a ruling that there is no
genuine, material dispute on the issue of IPA’s insurance coverage. Defendants’ motion [950] for entry of
judgment pursuant to Rule 54(b) is denied. Plaintiffs’ motion [964] to amend the complaint is denied.
Plaintiffs’ motion [965] for reconsideration of my dismissal of count II is also denied.

O[ For further details see text below.]

Notices mailed by Judicial staff.

STATEMENT
Defendants’ motion [948] to clarify is denied, except to the extent that it seeks a ruling that there is no
genuine, material dispute on the issue of IPA’s insurance coverage. Plaintiff does not assert that any plaintiff
sought to avail itself of any protection it was purportedly misled into believing it had under IPA’s insurance
policy. Plaintiffs make much of the statement in IPA’s form contract (and similar representations by IPA
employees), that “[a]ll IPA staff, without exception, are under contract with IPA and bonded to the extent of
$2,000,000 for the protection of the client,” apparently on the theory that they relied upon this statement as a
guarantee of IPA’s “integrity,” “reputation,” and “financial strength,” and against “dishonesty” by its employees.
E.g., Kao Decl., Pl.’s SOF, Exh. 13 [DN 933-16], ¶ 5.A. But even assuming–generously–that such reliance
would be reasonable based on the statements in question, plaintiffs’ theory is undermined by their apparent
acknowledgment that they understood IPA’s insurance to cover losses arising out of the “improper disclosure
or misuse of financial information supplied to IPA personnel.” Id. Plaintiffs’ claims here are for violations of
RICO based on mail and wire fraud; not for losses resulting from improper disclosure or use of plaintiffs’
financial information. Any dispute about whether IPA did, or did not, have the coverage it represented is simply
not material to their claims, and it does not make sense for either the parties or me to devote further resources
to this issue.
Defendants’ motion [950] for entry of judgment pursuant to Rule 54(b) is denied. Defendants have cited
no authority to persuade me that entry of a final judgment against the dismissed defendants is appropriate at this
stage, and I decline to do so as a matter of “housekeeping.”
Plaintiffs’ motion [964] to amend the complaint is denied. As I have stated in previous orders, my order
[381] of January 22, 2009, explicitly granted plaintiffs leave to file the third amended complaint that was attached
to their motion [314] for leave to file, not some other hypothetical complaint. After noting “the difficulty and
frustration that any counsel for defendants feels in trying to deal with a moving target,” as well as the drain on
judicial resources of having to “examine, and reexamine, lengthy complaints, and motions dealing with them,”
I stated unequivocally that the proposed third amended complaint was to be the “final complaint in this case.”
07C1425 Amari, et al. Vs. Burges, et al.

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STATEMENT
Order [381] of January 22, 2009. Once leave was granted, all plaintiffs needed to do was to file the document
attached to their motion [314] as the Third Amended Complaint, which would then have been reflected as such
in an independent entry on the docket. Instead, they proceeded vis-a-vis defendants and in hearings before the
magistrate judge as if they intended to file some other, further revised, “third amended complaint.” When they
had not done so by July of 2009, defendants moved to strike the third amended complaint that was attached to
plaintiffs’ motion [314] for leave, which my order [381] had allowed them to file. I initially denied the motion
to strike, expressing the view that the third amended complaint had effectively been filed on November 20, 2008
as exhibit 1 of plaintiffs’ motion [314] for leave. Order [590] of July 21, 2009. It later became clear, however,
that the parties did not understand the third amended complaint to have been filed at that time. In response [599]
to my order [594] of July 24, 2009, asking plaintiffs to explain why the third amended complaint that I had
granted them leave to file had not, in their view, been filed, plaintiffs misrepresented that I had required them
to file a different complaint (including detailed schedules), and blamed defendants and the magistrate judge for
their failure to file what they apparently intended to file as this third amended complaint. I expressed my
confusion as to how plaintiffs could have interpreted my order [381] granting leave to file the specific document
attached to their motion [314] for leave (and further stating that that document would be the “final complaint”
in the case) as leave to file some other, unseen complaint at some unspecified point in the future, much less as
a mandate to file a complaint including detailed schedules. Order [607] of August 10, 2009. Nevertheless, I
acceded to plaintiffs’ belief that the complaint I had granted them leave to file back in January never became the
operative complaint. Id. Indeed, the parties proceeded from that point on, through and including their briefing
of defendants’ March 18, 2011, motion [869] for summary judgment, on the Second Amended Complaint, and
at no point did plaintiffs raise the issue of whether the counts of that complaint named the appropriate defendants.
While I am not insensitive to plaintiffs’ argument, now, that their previous counsel’s decision to name
different defendants in counts I and II of the Second Amended Complaint is questionable, I note that the attorney
now moving for leave to amend the complaint is the same attorney who chose not to proceed on the third
amended that I granted leave to file back in January of 2009, and who presumably was aware of the consequences
of proceeding on the Second Amended Complaint, including that not all defendants were named in each of the
two counts. The parties have insisted on litigating this case in a completely unmanageable fashion, and already,
over two years ago, I noted that “[t]his case has generated more briefs, paper and time for both lawyers and two
judges than makes sense for the progress in this case,” and that “it would not be a good use of judicial or counsel
resources at this stage to again amend the pleadings.” Order [607] of August 10, 2009. The situation has only
worsened since then. Although plaintiffs argue that evidence developed in discovery supports the assertion of
both their § 1962(c) claim and their (now dismissed) § 1962(d) claim against all defendants, they do not go so
far as to suggest that the complaint could proceed as amended without the need for additional discovery. Enough
is enough. Contrary to plaintiffs’ argument, this is not a case in which “one misstep by counsel” will have
determined the outcome of the case. To excuse the plaintiffs from reaping the consequences of the confusion
they have sown (though far from single-handedly) throughout this litigation would merely cause this action to
spin further out of control.
Finally, plaintiffs’ motion [965] for reconsideration of my dismissal of count II is denied. Plaintiffs
acknowledge that reconsideration is appropriate only to correct “manifest errors of law,” Conway Corp. v.
Ahlemeyer, 754 F. Supp. 604, 606 (N.D. Ill. 1991), which they claim I have committed in dismissing their RICO
conspiracy claim. As I noted in my summary judgment opinion, plaintiffs’ entire discussion of this claim was
contained in a single paragraph, did not identify any evidence of an agreement by anyone, and cited only one
case, Damato v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 878 F. Supp. 1156 (N.D. Ill. 1995), which clearly
did not support their theory of liability. That theory, in plaintiffs’ words, is that the defendants named in count
II are liable for a RICO conspiracy because they “sat at the top of [a] pyramid of filed (sic) and office employees
who perpetrated the sales scheme which they conceived and controlled.” Plaintiffs have now filed additional
authority and hundreds of heretofore unidentified pages of the record which they claim support a § 1962(d) claim
(as well as a § 1962(c) claim against the defendants the Second Amended Complaint does not name in that
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STATEMENT
count). Even assuming that these items might have influenced my § 1962(d) analysis on summary
judgment–though it is far from clear that they would have changed the outcome–the time to identify them was
while that motion was pending, not after it has been decided.

07C1425 Amari, et al. Vs. Burges, et al.

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