VEHICLE SERVICE GROUP, LLC v. AUTO EQUIPMENT CO. INC.

Filing 75

ENTRY ON DISMISSAL OF COUNTERCLAIM - For the reasons set forth below, the Court concurs with the Magistrate Judge's recommendation and DISMISSES this action with prejudice. A separate judgment will accompany this entry. Signed by Judge Tanya Walton Pratt on 12/5/2011.(JD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

VEHICLE SERVICE GROUP, LLC,

)
)
Plaintiff/Counterclaim Defendant, )
vs.
)
)
AUTO EQUIPMENT CO. INC.,
)
)
Defendant/Counterclaimant.
)

NO. 1:10-cv-00986-TWP-DKL

ENTRY ON DISMISSAL OF COUNTERCLAIM
This matter is before the Court on the Magistrate Judge’s Report and Recommendation to
dismiss Auto Equipment Co., Inc.’s (“AEC”) counterclaim with prejudice. For the reasons set
forth below, the Court concurs with the Magistrate Judge’s recommendation and DISMISSES
this action with prejudice.
A brief background on the recent procedural history of this case is instructive. On
November 8, 2011, AEC’s counsel filed a motion to withdraw from this matter (Dkt. 63). On
November 10, 2011, Magistrate Judge Denise K. LaRue granted this motion, but ordered AEC, a
corporation, to obtain new counsel by November 17, 2011 (Dkt. 64). Otherwise, the case could
not proceed. See Rowland v. Cal. Men’s Colony, 506 U.S. 194, 201-02 (1993) (“It has been the
law for the better part of two centuries . . . that a corporation may appear in the federal courts
only through licensed counsel.”). A trial on the counterclaim is scheduled for December 12,
2011, so, obviously, time is of the essence.
On November 21, 2011, three weeks before the trial was scheduled to begin, the Court
presided over a final pretrial conference. At the conference, the Court intended to resolve any
pretrial issues relating to AEC’s counterclaim, thus paving the way for trial. Unfortunately, the
1

Court and the parties were unable to accomplish anything meaningful at the conference, because
AEC had missed a bevy of final pretrial filing deadlines and failed to comply with the Magistrate
Judge’s order to secure counsel by November 17, 2011. In its final pretrial order, the Court noted
that AEC “has disregarded numerous court orders by failing to secure counsel (Dkt. 64), failing
to file a comprehensive set of final pretrial filings in conformance with the Case Management
Plan (Dkt. 26 at 5-6), and failing to participate in filing joint jury instructions (Dkt. 58).” (Dkt.
72 at 1).
For this reason, Magistrate Judge LaRue conducted a show cause hearing on whether
AEC’s counterclaim should be dismissed. In doing so, the Court specifically instructed AEC
that “[i]f it has still failed to secure counsel as of this date, the Court will be inclined to dismiss
the counterclaim.” (Dkt. 72 at 2). On November 29, 2011, Magistrate Judge LaRue held a show
cause hearing. The Court’s earlier warnings notwithstanding, AEC failed to take any measures
to comply with its final pretrial filing obligations. More problematically, AEC also failed to
appear by counsel at the hearing; instead, AEC’s President, John Burt, appeared with his
personal counsel, Michael Alerding. Further, Mr. Alerding informed Magistrate Judge LaRue
that given AEC’s precarious financial condition, it did not intend to hire counsel. Magistrate
Judge LaRue noted that in light of this revelation, the Court’s options were exceedingly limited:
“Because AEC does not intend to retain counsel, it cannot prosecute its counterclaim.” (Dkt. 74
at 3). Given AEC’s various failures, Magistrate Judge LaRue recommended that the Court
dismiss AEC’s pending counterclaim with prejudice under Fed. R. Civ. P. 41(b) and (c). (Dkt. 74
at 4). The Court will heed Magistrate Judge LaRue’s well-reasoned recommendation.1 To
1

A point of clarification is necessary. Technically speaking, the Magistrate Judge’s order was not a formal “Report
and Recommendation,” since the undersigned never referred a motion pertaining to dismissal to the Magistrate
Judge. In other words, although the Court agrees with the Magistrate Judge’s reasoning and conclusion, the Court is
dismissing this action on its own volition. If this were a formal report and recommendation, the parties would have
14 days to file written objections. See 28 U.S.C. § 636(b)(1). But given the nature of the Court’s order, these
timelines do not apply.
2

reiterate, AEC has disregarded two orders requiring it to obtain counsel, has failed to file a
comprehensive set of pretrial filings as required by the Case Management Plan, and has failed to
participate in filing a joint set of proposed jury instructions. Worse still, AEC has conceded that,
going forward, it has no intention of securing counsel. See Opta Sys., LLC v. Daewoo Elec. Am.,
483 F. Supp. 2d 400, 406 (D.N.J. 2007) (dismissing action after corporate entity disregarded
numerous court orders to obtain new counsel). The trial in this matter is currently set to begin in
one week, on December 12, 2011. The Court has a strong interest in resolving this matter
expeditiously. To that end, the Court concurs with and adopts the Magistrate Judge’s
recommendation to dismiss this matter with prejudice. Accordingly, AEC’s counterclaim is
DISMISSED with prejudice. A separate judgment will accompany this entry.
SO ORDERED:

12/05/2011

________________________
Hon. Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana

Distribution to:
James F. Cann
KOLEY JESSEN P.C.L.L.O.
[e-mail]
Shannon D. Landreth
BINGHAM MCHALE LLP
[e-mail]
President of Company
John Burt
Auto Equipment Co., Inc.
518 Bufflehead
Johns Island, SC 29455

3