Stewart V. Caterpillar, Inc.

Filing 43

MEMORANDUM Opinion and Order Signed by the Honorable Maria Valdez on 4/18/2014:Mailed notice(lp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
KAREN J. STEWART,
Plaintiff,
v.
CATERPILLAR, INC.,
Defendant.

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No. 12 C 5328
Magistrate Judge
Maria Valdez

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiff Karen J. Stewart’s Combined
Rule 60(b) Motion for Relief from a Final Judgment and Rule 15 Motion to Amend
the Complaint [Doc. No. 32]. For the reasons that follow, Plaintiff’s motion is
denied.
BACKGROUND
Plaintiff’s complaint alleged that Defendant breached its fiduciary duty to
her, in violation of the Employee Retirement Income Security Act (“ERISA”), 29
U.S.C. § 1104(a)(1). Caterpillar, the former employer of Plaintiff’s ex-husband,
administered a pension benefit plan in which Plaintiff had an interest following her
divorce. Plaintiff claimed that Defendant misstated the amount of her ex-husband’s
pension before she signed pension election authorization forms. After receiving
monthly benefits of $1,225.17 for over three years, Caterpillar informed her that the
original amount was calculated using an incorrect actuarial reduction factor, and
thus she had been receiving an overpayment of $1,058.32 per month. Plaintiff’s

complaint sought to reinstate the original amount of benefits based on the theory
that Defendant’s miscalculation was an affirmative misrepresentation, on which
Plaintiff reasonably relied when purchasing a home and deciding to forego further
education and training. On November 30, 2012, this Court granted Defendant’s
motion to dismiss the complaint with prejudice because it alleged facts
demonstrating that Plaintiff’s claim under 29 U.S.C. § 1104 was time-barred as a
matter of law.1 See Stewart v. Caterpillar, Inc., No. 12 C 5328, 2012 WL 6019287, at
* 2-3 (N.D. Ill. Nov. 30, 2012).
Plaintiff filed a notice of appeal of that decision on December 31, 2012.2 On
September 20, 2013, before any appellate briefing had occurred, Plaintiff’s motion to
voluntarily dismiss the appeal was granted. She then filed the present motion on
November 29, 2013, within one year of the original judgment.
Plaintiff argues that this motion is not an effort to seek another bite of the
apple in relation to her breach of fiduciary duty claim. Instead, she contends that
she is seeking judicial review of Caterpillar’s underlying determination that its
original calculation of benefits due was incorrect. According to the proposed
amended complaint, the original calculation was correct, and there should not have
been an actuarial reduction to her benefits. She therefore seeks relief for benefits
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In her response to the motion to dismiss, Plaintiff voluntarily dismissed three
state law claims for breach of contract, negligence, and negligent infliction of emotional
distress. See Stewart v. Caterpillar, No. 12 C 5328, 2012 WL 6019287, at *1 n.1 (N.D. Ill.
Nov. 30, 2012).
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Plaintiff did not file a motion to extend the time for filing her notice of appeal. See
Fed. R. App. P. 4(a)(5).

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due under the pension plan pursuant to 29 U.S.C. § 1132, which provides that a
participant or beneficiary may bring a civil action “to recover benefits due to him
under the terms of his plan, to enforce his rights under the terms of the plan, or to
clarify his rights to future benefits under the terms of the plan.”3 29 U.S.C. §
1132(a)(1)(B). The proposed complaint also includes a common law cause of action
for estoppel and adds the plan as a defendant.
DISCUSSION
A party may be relieved from a final judgment due to “(1) mistake,
inadvertence, surprise, or excusable neglect; . . . or (6) any other reason that
justifies relief.” Fed. R. Civ. P. 60(b)(1)-(6). “A motion under Rule 60(b) must be
made within a reasonable time – and for reasons (1), (2), and (3) no more than a
year after the entry of the judgment or order or the date of the proceeding.” Fed. R.
Civ. P. 60(c)(1). The Seventh Circuit has “characterized the district court’s
considerable latitude in making its decision [on a Rule 60(b) motion] as ‘discretion
piled on discretion.’” Wehrs v. Wells, 688 F.3d 886, 890 (7th Cir. 2012) (citation
omitted). Plaintiff’s motion argues that she should be relieved from the dismissal of
her complaint with prejudice due to mistake, excusable neglect, and also pursuant
to the “catch-all” provision in subsection (6).

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In dicta, this Court explained that the statute of limitations for a claim under 29
U.S.C. § 1132 is ten years. See Stewart, 2012 WL 6019287, at *3 n.5.

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A.

Mistake
Plaintiff first argues that her Rule 60 motion should be granted due to

mistakes made by the Court in dismissing the action with prejudice, without leave
to replead.4 Plaintiff does not contest the Court’s determination that the breach of
fiduciary claim (the only claim not voluntarily dismissed) was time-barred, nor does
she allege that a curative amendment could have salvaged that claim. See Sroga v.
De Jesus, No. 12 C 9288, 2013 WL 2422869, at *7 (N.D. Ill. June 3, 2013)
(explaining that time-barred claims should be dismissed with prejudice because
they “cannot be cured by repleading”). The Court’s alleged mistake was in not
recognizing that certain allegations in the breach of contract section, along with
statements in attached exhibits, could have supported a claim under 29 U.S.C. §
1132. Because the deficiency was “one of form, and not of substance,” she should
have been allowed to amend the complaint to clarify that the breach of contract
relief was brought pursuant to 29 U.S.C. § 1132(a)(1)(B). (Pl.’s Mem. at 1-2.)
Plaintiff states that in her (voluntarily dismissed) breach of contract claim,
she alleged that she received benefits pursuant to contractual terms. Moreover, in
her prayer for relief under the breach of contract claim, she sought retroactive
benefits as previously calculated, a declaration that she continue to receive benefits

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Plaintiff also alleges that a mistake was made by her prior counsel, who “appears
to have mistakenly believed he properly presented a benefit claim when he responded to
the motion to dismiss arguing under § 1132(a)(1)(B), though the complaint did not specify
it sought relief under that section.” (Pl.’s Mem. at 6.) Any mistakes or failures on the part
of Plaintiff’s attorney, however, are more appropriately discussed infra in relation to her
claim of excusable neglect.

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as previously calculated, and prejudgment interest on the past-due benefits. In her
administrative appeal documents, attached as exhibits to the complaint, she
asserted that she was eligible to receive the contractual benefits previously agreed
to. Therefore, according to Plaintiff, the “complaint clearly alleged that Caterpillar’s
recalculation of benefits in 2009 was contrary to the terms of the plan, and she
requested relief of benefits due, the proper vehicle for which is § 1132(a)(1)(B).”
(Pl.’s Mem. at 3.) She argues that she should be allowed to reinstate the case and
amend the complaint “because the exhibits, which trump the allegations, indicated
she sought to enforce her rights under the Plan,” (Pl.’s Mem. at 4), and “when
written instruments attached to a complaint are inconsistent with the text of the
allegations in the complaint, the documents attached control for purposes of
dismissal under Rule 12(b)(6),” (Pl.’s Mem. at 6). The case Plaintiff cites for this
proposition, however, held merely that a court need not credit unsupported
allegations in a complaint when they are negated by exhibits. See N. Ind. Gun &
Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 454-55 (7th Cir. 1998)
(explaining that “‘[a] plaintiff may plead himself out of court by attaching
documents to the complaint that indicate that he or she is not entitled to
judgment’”) (citation omitted).
Plaintiff’s reliance on McDonald v. Household, Int’l, Inc., 425 F.3d 424 (7th
Cir. 2005) is also misplaced. In that case, the Seventh Circuit held that a complaint
alleging only state law claims should not be dismissed on a Rule 12(b)(6) motion
based on preemption, when the complaint alleges sufficient facts to support an
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ERISA claim. Id. at 429-30. Plaintiff has not established that the Court should have
cobbled together a series of allegations from a dismissed count and attached
exhibits, identified a potential § 1132 claim, and then allowed her to amend the
complaint in order to “clarify” that new claim. See Graue Mill Dev’t Corp. v. Colonial
Bank & Tr. Co., 927 F.2d 988, 991 n.1 (7th Cir. 1991) (refusing to consider, in an
appeal of a motion to dismiss, other terms in an attached agreement that allegedly
violated a statute when those provisions were not challenged in the complaint). This
is particularly true when the § 1132 allegations Plaintiff alleges the Court should
have gleaned from the complaint are directly contrary to the allegations of
misrepresentation in the only cause of action at issue in the motion to dismiss.
Moreover, even if the Court had made a mistake of law in dismissing the
complaint without leave to replead, the proper procedural avenue for addressing
that issue was an appeal, not a Rule 60(b) motion. See Gleash v. Yuswak, 308 F.3d
758, 760 (7th Cir. 2002) (“If [Plaintiff] wanted to contest the validity of the district
judge’s decision – either on the merits or on the ground that [s]he should have been
allowed to replead – [s]he had to appeal.”); Parke-Chapley Constr. Co. v.
Cherrington, 865 F.2d 907, 915 (7th Cir. 1989) (“‘If plaintiff believed the district
court was mistaken as a matter of law in dismissing the original complaint, he
should have appealed . . . or he might have filed a timely motion under [Rule] 59 to
vacate the judgment of dismissal and for leave to amend his complaint.’”) (citation
omitted); see also Stoller v. Pure Fishing Inc., 528 F.3d 478, 480 (7th Cir. 2008) (“A

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Rule 60(b) motion is not a substitute for appeal, and thus [Plaintiff’s] attempt to use
it as such was appropriately rejected.”); Bell v. Eastman Kodak Co., 214 F.3d 798,
801 (7th Cir. 2000) (“To allow a ground that can be adequately presented in a direct
appeal to be made the basis of a collateral attack would open the door to untimely
appeals . . . . The losing party could reserve the ground until he had presented it
unsuccessfully to the district court in the form of a Rule 60(b) motion.”).
B.

Excusable Neglect
Plaintiff next argues that the motion should be granted because prior

counsel’s failure to move to amend the complaint or to seek a reconsideration under
Rule 59 amounted to excusable neglect. Factors relevant to the equitable
determination of whether neglect is excusable include: “the danger of prejudice to
the [opposing party], the length of the delay and its potential impact on judicial
proceedings, the reason for the delay, including whether it was within the
reasonable control of the movant, and whether the movant acted in good faith.”
Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395-97 (1993)
(explaining further that “clients must be held accountable for the acts and
omissions of their attorneys” and thus the focus must be on the neglect of both
litigants and their counsel); see Commodity Futures Trading Comm’n v. Lake Shore
Asset Mgmt. Ltd., 646 F.3d 401, 405 (7th Cir. 2011) (“The stronger the excuse and
the graver the adverse consequences of rejecting it relative to the adverse
consequences to the opposing party if the excuse is allowed, the more the balance
leans toward granting.”); see also United States v. Cates, 716 F.3d 445, 448 (7th Cir.
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2013) (noting that Pioneer, which involved bankruptcy rules, “applies whenever
‘excusable neglect’ appears in the federal procedural rules”).
Plaintiff contends that neither Caterpillar nor the plan has suffered any
prejudice as a result of Plaintiff’s neglect, because they have not been paying her
the higher amounts she claims are due her. Additionally, there has been no impact
on the judicial proceedings because “[t]here has been no further development of the
lawsuit at the district court level.” (Pl.’s Mem. at 8.) Setting aside the fact that
Defendant is now forced to litigate a closed case, “[t]he word ‘excusable’ would be
read out of the rule if inexcusable neglect were transmuted into excusable neglect
by a mere absence of harm.” Prizevoits v. Ind. Bell Tel. Co., 76 F.3d 132, 134 (7th
Cir. 1996); see also Link v. Wabash R.R. Co., 370 U.S. 626, 634 n.10 (U.S. 1962)
(“[I]f an attorney’s conduct falls substantially below what is reasonable under the
circumstances, the client’s remedy is against the attorney in a suit for malpractice.
But keeping this suit alive merely because plaintiff should not be penalized for the
omissions of his own attorney would be visiting the sins of plaintiff’s lawyer upon
the defendant.”); Eskridge v. Cook County, 577 F.3d 806, 810 (7th Cir. 2009)
(“Indeed, reinstating the [plaintiffs’] lawsuit under Rule 60(b) would only shift the
burden of their counsel’s error to the district court and the defendant.”).
Plaintiff acknowledges that the reason for the delay does not work in her
favor, as it was caused by prior counsel’s relative unfamiliarity with ERISA law.
Nevertheless, she feels this factor is outweighed by the others. Plaintiff is correct
that this factor weighs heavily against her. Counsel’s unfamiliarity with the
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relevant area of law does not give Plaintiff free rein to disregard the federal rules:
“If the lawyer’s neglect protected the client from ill consequences, neglect would be
all too common. It would be a free good.” Tango Music, LLC v. Deadquick Music,
Inc., 348 F.3d 244, 247 (7th Cir. 2003); see Wade v. Soo Line R.R. Corp., 500 F.3d
559, 564 (7th Cir. 2007) (“Attorneys’ actions are imputed to their clients, even when
those actions cause substantial harm. A litigant bears the risk of errors made by his
chosen agent.”). Plaintiff offers no real excuse for the delay, even admitting that
“[h]er lawyer could have and should have sought to amend the complaint sooner to
properly pursue the case under § 1132(a)(1)(B) . . . .” (Pl.’s Mem. at 9.) Ineffective
assistance of prior counsel is not a proper basis for a Rule 60(b) motion. See Bell v.
Eastman Kodak Co., 214 F.3d 798, 802 (7th Cir. 2000); Medrad, Inc. v. Sprite Dev’t,
LLC, No. 08 C 5088, 2012 WL 1520706, at *3 (N.D. Ill. Apr. 30, 2012) (collecting
cases “holding that an attorney’s negligence, gross negligence, or wilful misconduct
does not constitute grounds for relief under Rule 60(b)”); see also Huerth v.
Pressman, No. 10 C 5049, 2014 WL 688074, at *2 (N.D. Ill. Feb. 21, 2014) (quoting
Lobrow v. Vill. of Port Barrington, 406 Fed. Appx. 60, 61 (7th Cir. 2010)) (“‘[E]ven if
we assume that retained counsel had dropped the ball, a lawyer’s inattentiveness to
litigation is generally not excusable – and thus not a basis for relief under Rule
60(b) – no matter the consequences to the litigant or the attorney’s degree of
culpability.’”).

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Plaintiff contends that the final factor, whether she has acted in good faith,
weighs heavily in her favor because: (1) her administrative appeals of the benefit
determination were submitted timely; (2) she filed a timely complaint and
dismissed her state law theories as soon as Defendant moved to dismiss them on
state law grounds, thus saving the cost of a reply; and (3) she voluntarily dismissed
her appeal after retaining new counsel, preventing Caterpillar from having to
further litigate the breach of duty. The Court does not doubt that Plaintiff did not
act in bad faith when she failed to amend the complaint or file a Rule 59 motion,
but that alone does not merit reopening the case.5 See Raymond v. Ameritech Corp.,
442 F.3d 600, 607 (7th Cir. 2006) (“‘[T]he district court need not show repeated,
wilful and recalcitrant conduct’ to enforce its deadlines.”) (citation omitted).
C.

Catch-All Provision
Plaintiff finally argues that even if the delay is not excused, her motion

should be granted based on the “catch-all” provision in Rule 60(b), which provides
that a party may be relieved of a final judgment for “any other reason that justifies
relief.” Fed. R. Civ. P. 60(b)(6). According to Plaintiff, if her motion is not granted,
she will be left without a remedy, because the plan would argue res judicata applies
to any subsequent lawsuit she might file.

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The Court also notes that the complaint was not timely filed, and it is not
necessarily a show of good faith to dismiss claims after a defendant goes to the expense of
filing a motion to dismiss those claims based on well-settled law. Similarly, deciding to
forego an appeal of a dismissed claim that Plaintiff has since disavowed, especially when
the notice of appeal may have been belatedly filed, does not weigh heavily in her favor.

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The Court need not reach the merits of Plaintiff’s argument related to this
subsection, because it does not apply to this case. “Inherent in the structure of Rule
60(b) is the principle that the first three clauses and the catchall clause are
mutually exclusive. . . . Thus, if the asserted grounds for relief fall within the terms
of the first three clauses of Rule 60(b), relief under the catchall provision is not
available.” Wesco Prods. Co. v. Alloy Auto. Co., 880 F.2d 981, 983 (7th Cir. 1989).
Plaintiff’s arguments (mistake and excusable neglect) expressly invoke Rule
60(b)(1), and an attorney’s neglect is properly analyzed under that subsection. See
Brandon v. Chi. Bd. of Educ., 143 F.3d 293, 295-96 (7th Cir. 1998); see also Mendez
v. Republic Bank, 725 F.3d 651, 657 (7th Cir. 2013) (“To prevent parties from using
the subsection (6) catch-all to circumvent the one-year limit on relief under
subsections (1) through (3), courts read the Rule 60(b) subsections to be ‘mutually
exclusive,’ meaning if relief is available under a more specific subsection, it is not
available under subsection (6).”); Thomas v. Acevedo, No. 12 C 10329, 2013 WL
4506933, at *1 (N.D. Ill. Aug. 23, 2013) (“[T]he cases are legion that teach Rule
60(b)(6) is not intended to be a catchall escape hatch, available to rescue a party
who . . . has expressly failed one of the specific grounds for relief set out in Rule
60(b)(1).”).

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CONCLUSION
For the foregoing reasons, Plaintiff Karen J. Stewart’s Combined Rule 60(b)
Motion for Relief from a Final Judgment and Rule 15 Motion to Amend the
Complaint [Doc. No. 32] is denied.

SO ORDERED.

ENTERED:

DATE: __April 17, 2014__

___________________________
HON. MARIA VALDEZ
United States Magistrate Judge

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