Broaddus v. Shields

Filing 369

CORRECTED MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 4/5/2012: The Court's April 4, 2012 Memorandum Opinion and Order 367 has been corrected to reflect the correct date of the Court's January 3, 2012 Stipulation and Order 327 .Mailed notice(kef, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BRET A. BROADDUS,
Plaintiff/Counter-Defendant,
v.
KEVIN SHIELDS,
Defendant/Counter-Plaintiff.

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No. 08 C 4420

CORRECTED MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
Before the Court is Plaintiff/Counter-Defendant Bret Broaddus’ Motion to Strike Lake
Forest Bank’s Response and Vacate Two Orders of January 5, 2011.1 For the following reasons,
the Court denies Broaddus’ motion.
BACKGROUND
Broaddus asks the Court to vacate its January 5, 2012 Memorandum Opinion and Order
as well as the Stipulation and Order that the Court entered on January 3, 2012 (the “Stipulation
and Order”). (R. 327, 329.) The January 5 Order contains a detailed discussion of the relevant
facts. See Broaddus v. Shields, No. 08 C 4420, 2012 WL 28694, at *1-3 (N.D. Ill. Jan. 5, 2012).2
I.

The Stipulation and Order
After Shields filed its motion for turnover of Broaddus’ assets held by citation

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Despite the title of Broaddus’ motion, the orders at issue were entered on January 3,
2012 and January 5, 2012. (R. 327, 329.)
2

Unless otherwise noted, all defined terms in this Order shall have the meaning ascribed
to them in the January 5 Order.

respondents Wintrust Wealth Management Company (“Wintrust”) and Lake Forest Bank &
Trust Company (“Lake Forest”) on November 15, 2011, the Court set a briefing schedule
pursuant to which responses were due on December 2, 2011. (R. 317.) Wintrust and Lake
Forest filed a response in opposition on December 1, 2011 (the “Wintrust Response”), arguing
that they were entitled to set off certain of the funds at issue from any turnover amount because
Broaddus had defaulted on his loan obligations to them. (R. 320.) Lake Forest and Wintrust
also claimed that they were entitled to set off attorney’s fees and costs that they had incurred in
connection with a foreclosure action they filed against Broaddus in Illinois state court. They
attached a number of documents to their response, including various agreements, account
records, and email correspondence. (Id.)
The next day, on December 2, 2011, Broaddus filed his response in opposition to Shields’
motion for turnover, in which he asserted four arguments: 1) the funds at issue do not belong to
Broaddus, but rather belong to Stanley, LLC (“Stanley”); 2) Shields cannot not summarily
execute against the assets of a revocable trust; 3) the motion for turnover is untimely; and
4) Shields applies the wrong post-judgment interest rate. (R. 321.)
Twenty days later, on December 22, 2011, Shields filed his reply in support of his motion
for turnover, in which he addressed Broaddus’ arguments. (R. 323.) Along with his reply, he
filed a motion to approve a stipulation into which he entered with Lake Forest and Wintrust.
(R. 325.) The motion represented that although Shields disputed whether Lake Forest and
Wintrust had priority over him with respect to the funds at issue, he agreed to stipulate to their
priority in an effort to resolve the issue. (R. 324, ¶ 10.) On January 3, 2012, the Court approved
the stipulation and entered an order regarding the same. (R. 327.) Pursuant to the Stipulation

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and Order, Wintrust and Lake Forest 1) were entitled to set off $1,307,396.19 from the assets in
the Wintrust Investment Account; and 2) were to hold the balance in that account, as well as the
balance in Stanley’s checking account, pursuant to pending citations until further order of the
Court. (Id.)
II.

January 5 Order
In the January 5 Order, the Court granted Shields motion for turnover, ordering

(1) Associated Bank to turn over to Shields $1,500.41 from Broaddus’ checking account by
January 31, 2012; (2) Lake Forest to turn over to Shields $11,745.47 from Stanley’s checking
account number *****587 to Shields by January 31, 2012; and (3) Wintrust to turn over to
Shields $147,318.00 from the Wintrust Investment Account (number ***1110) by January 31,
2012. See Broaddus, 2012 WL 28694, at *11.
LEGAL STANDARD
I.

Rule 59(e)
Rule 59(e) permits parties to file, within twenty-eight days of the entry of judgment, a

motion to alter or amend the judgment. See Fed. R. Civ. P. 59(e). Motions under Rule 59(e)
serve the limited function of allowing the Court to correct manifest errors of law or fact or
consider newly discovered material evidence. See Seng–Tiong Ho v. Taflove, 648 F.3d 489, 505
(7th Cir. 2011); United States v. Resnick, 594 F.3d 562, 568 (7th Cir. 2010). “It is well
established that a motion to reconsider is only appropriate where a court has misunderstood a
party, where the court has made a decision outside the adversarial issues presented to the court
by the parties, where the court has made an error of apprehension (not of reasoning), where a
significant change in the law has occurred, or where significant new facts have been discovered.”

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Broaddus v. Shields, 665 F.3d 846, 860 (7th Cir. 2011). Rule 59(e) “does not provide a vehicle
for a party to undo its own procedural failures” or “introduce new evidence or advance
arguments that could and should have been presented to the district court prior to the judgment.”
Resnick, 594 F.3d at 568 (citation omitted); see also County of McHenry v. Insurance Co. of the
West, 438 F.3d 813, 819 (7th Cir. 2006). “To support a motion for reconsideration based on
newly discovered evidence, the moving party must show not only that this evidence was newly
discovered or unknown to it until after the hearing, but also that it could not with reasonable
diligence have discovered and produced such evidence.” Caisse Nationale de Credit Agricole v.
CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996) (citation and internal quotation marks
omitted). Whether to grant a Rule 59(e) motion “is entrusted to the sound judgment of the
district court.” Matter of Prince, 85 F.3d 314, 324 (7th Cir. 1996); see also Resnick, 594 F.3d at
568 (appellate court reviews denial of Rule 59(e) motion for abuse of discretion).
II.

Rule 60
“[R]elief under Rule 60(b) is ‘an extraordinary remedy and is granted only in exceptional

circumstances.’” Eskridge v. Cook County, 577 F.3d 806, 809 (7th Cir. 2009) (quoting
McCormick v. City of Chicago, 230 F.3d 319, 327 (7th Cir. 2000) (citations omitted)). See also
Bakery Mach. & Fabrication, Inc. v. Traditional Baking, Inc., 570 F.3d 845, 848 (7th Cir. 2009);
Cash v. Ill. Div. of Mental Health, 209 F.3d 695, 698 (7th Cir. 2000) (in general, Rule 60 only
lets courts “overturn decisions where ‘special circumstances’ justify an ‘extraordinary
remedy.’”) (quoting Russell v. Delco Remy Div. of Gen. Motors Corp., 51 F.3d 746, 749 (7th Cir.
1995)). When deciding whether to grant relief under Rule 60(b), district courts have “great

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latitude ... because that decision ‘is discretion piled on discretion.’” Bakery Mach., 570 F.3d at
848 (quoting Swaim v. Motan Co., 73 F.3d 711, 722 (7th Cir. 1996) (citations omitted)).
ANALYSIS
Broaddus raises several arguments in support of his motion. The Court addresses each in
turn.
I.

Broaddus Provides No Persuasive Reason Why the Court Should Vacate the
Stipulation and Order
Broaddus first argues that the Court should vacate the Stipulation and Order because the

stipulation was not signed by all of the parties to this case–namely, him–and because neither he
nor Stanley were allowed an opportunity to respond to Shields’ motion to approve the
stipulation.3 (R. 345 at 2.) He further contends that the Court’s Stipulation and Order “found
that (a) Stanley’s accounts do not really belong to Stanley; (b) $159,063.47 of Stanley’s money
should be distributed to Shields; (c) Wintrust is owed $1,261,494.20 in various debts; and
(d) Wintrust is owed $45,901.96 in attorneys’ fees and costs.” (R. 345 at 2.) Broaddus’
argument misses the mark.
As an initial matter, Broaddus grossly mischaracterizes and misunderstands the
implications of the Stipulation and Order. Despite Broaddus’ assertions, the Court did not find
that any of Stanley’s money should be distributed to Shields in the Stipulation and Order, nor did
the Court determine that Wintrust was owed any amount of money or that “Stanley’s accounts do

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Two weeks expired between the time Shields filed the motion to approve and when the
Court approved the stipulation. Broaddus does not contend that he did not receive notice of the
motion to approve. Broaddus neither responded to the motion nor moved the Court to set a
briefing schedule on the motion, despite knowing that Shields’ motion for turnover was fully
briefed.
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not really belong to Stanley.” Moreover, the Court did not adjudicate Broaddus’ rights with
respect to his alleged debt to Wintrust or Lake Forest in the Stipulation and Order. Rather, the
Stipulation and Order resolved a dispute between Shields on the one hand and Lake Forest and
Wintrust on the other hand as to their respective priority to the money that was subject to
Shields’ citation. Specifically, the Stipulation and Order resolved the issue of how much
Wintrust and Lake Forest were entitled to set off from the amounts that were potentially subject
to turnover to Shields in the citation proceeding. The sole issue before the Court was whether
Wintrust and Lake Forest had priority over Shields with respect to the money that Wintrust and
Lake Forest held in accounts that were subject to the citation proceeding. Therefore, the dispute
was between Shields, Wintrust, and Lake Forest, and did not involve Broaddus. The issue as to
whether Broaddus actually owes money to Lake Forest or Wintrust was not before the Court
then, nor is it before the Court now. Indeed, nothing in the Stipulation and Order precludes
Broaddus from disputing, in the appropriate forum, the amount that Wintrust and Lake Forest
contend he owes them.
Broaddus contends that had he been allowed to respond to Shields’ motion to approve the
stipulation, he would have “strenuously opposed many of the allegations contained in the
Stipulation.” (R. 345 at 2-3.) Notably, he does not identify which specific “allegations” he
would have opposed or why those “allegations” are inaccurate. Instead, he contends that the
stipulation is based on facts, documents and assertions contained in the Wintrust Response, to
which he argues he also did not have a chance to respond. Again, he does not meaningfully

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contest any facts, documents, or assertions in the Wintrust Response.4 But even if he had, his
argument fails. Wintrust and Lake Forest filed their response to Shields’ motion for turnover on
December 1, 2011. (R. 320.) Broaddus filed his four and one-half page response the following
day, in which he did not dispute any of the factual evidence attached to Shields’ motion or the
Wintrust Response. (R. 321.) He could have, but did not, seek an extension of time from the
Court within which to file his response brief. He also could have sought leave to file a response
to the Wintrust Response at any point before the Court issued the January 5, 2012 Order, but he
elected not to do so.5 Despite Broaddus’ argument to the contrary, his decision not to file a
response does not equate to an inability to respond or a deprivation of due process.
II.

Broaddus Had the Opportunity to, But Did Not, Respond to Shields’, Wintrust’s,
and Lake Forest’s Filings
Broaddus next argues that the Wintrust Response, which he characterizes as an

“unauthorized filing,” should be stricken. For the reasons stated above, the Court rejects
Broaddus’ contention that the Court should strike the Wintrust Response because Broaddus did
not have the opportunity to respond to it. Broaddus’ contention that he also was not given a
chance to respond to the “unsupported assertions” in Shield’s court filings is preposterous given
that Broaddus indeed filed a response to Shields’ motion for turnover on December 2, 2011.
(R. 321.)

4

Although Broaddus now argues that the Court relied on an inaccurate copy of Stanley’s
Operating Agreement in the January 5 Order, Broaddus did not raise this argument during the
pendency of Shields’ motion for turnover, despite having the opportunity to do so.
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Additionally, as Lake Forest, Wintrust, and Shields point out, Broaddus had notice as
early as April 2011 of Lake Forest’s and Wintrust’s asserted rights to the money in the accounts
at issue because he received service of Lake Forest and Wintrust’s answers to Shields’ citations
to discover assets. (R. 292, 293.) Yet, Broaddus never contested those assertions.
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III.

Broaddus Waived His Right to Dispute the Facts On Which the Court Relied in the
January 5 Order
Finally, Broaddus contends that the Court should reconsider and vacate the January 5

Order because the documents on which the Court relied in that Order are not “admissible
evidence” as required by Rule 56(c)(2). (R. 345 at 4.) Broaddus submits that there are factual
disputes regarding Stanley’s operating agreement and the amounts Wintrust claims Broaddus
owes to it. (Id.) Broaddus, however, did not raise this argument, or any other argument related
to the documents that Shields, Wintrust, and Lake Forest submitted to the Court, in his response
to Shields’ motion for turnover.6 (R. 321.) Indeed, the Court expressly noted in its January 5
Order that “Broaddus does not dispute any of the factual assertions set forth in, or evidence
attached to, Shields’ motion for turnover or Lake Forest’s and Wintrust’s response to that
motion.” Broaddus, 2012 WL 28694, at *4. Because his arguments were available to Broaddus
at the time he filed his response but were not raised in his response, the Court need not
reconsider its January 5 Order on this basis. See Resnick, 594 F.3d at 568; County of McHenry,
438 F.3d at 819 (a Rule 59(e) motion “is not appropriately used to advance arguments or theories
that could and should have been made before the district court rendered a judgment”) (quoting
LB Credit Corp. v. Res. Trust Corp., 49 F.3d 1263 (7th Cir. 1995)). For the same reasons, the
Court rejects Broaddus’ belated request for an evidentiary hearing. Broaddus did not raise any
factual disputes in his response brief, nor did he request a hearing, despite his opportunity to do
so.

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As explained above, any dispute Broaddus and Wintrust may have over the amounts
Broaddus owes to Wintrust are not properly before the Court.
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CONCLUSION
For the reasons set forth above, the Court denies Broaddus’ motion.
Dated: April 5, 2012
ENTERED

AMY J. ST. EVE
United States District Judge

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