ALERDING CASTOR HEWITT LLP v. FLETCHER et al
Filing
208
ORDER DENYING DEFENDANTS MOTION TO CORRECT ERROR AND REINSTATE COUNTERCLAIMS -On April 18, 2019, the Court granted Alerding Castor Hewitts motion for partial summary judgment on Defendants counterclaims. Dkt. 172. Defendants have filed a motion to correct error and reinstate their counterclaims. Defendants motion to correct error and reinstate counterclaims is DENIED. Dkt. #189 (SEE ORDER FOR ADDITIONAL INFORMATION). Signed by Judge James Patrick Hanlon on 2/14/2020. Copy sent to Paul Fletcher and Carole Wockner via US Mail. (DWH)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
ALERDING CASTOR HEWITT LLP,
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Plaintiff,
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v.
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PAUL FLETCHER,
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CAROLE WOCKNER,
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Defendants.
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WAYNE GOLOMB,
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GRACEIA GOLOMB,
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Interested Parties. )
No. 1:16-cv-02453-JPH-MJD
ORDER DENYING DEFENDANTS’ MOTION TO CORRECT ERROR AND
REINSTATE COUNTERCLAIMS
On April 18, 2019, the Court granted Alerding Castor Hewitt’s motion for
partial summary judgment on Defendants’ counterclaims. Dkt. 172.
Defendants have filed a motion to correct error and reinstate their
counterclaims. Dkt. [189]. For the reasons stated below, Defendants’ motion
is DENIED.
I.
Facts and Background
On April 18, 2019, the Court granted Alerding Castor’s motion for
summary judgment on Defendants’ counterclaims for breach of contract (Count
I), legal malpractice (Count II), and breach of fiduciary duty (Count III). Dkt.
172. The Court found, among other things, that Defendants could “not show
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that Alerding Castor failed to exercise due care and diligence in their handling
of the Forgery Lawsuit, or that the outcome of the Forgery Lawsuit would have
been different ‘but for’ Alerding Castor’s alleged failure to do the things
complained of by Defendants.” Id. at 11. The Court further held that since
Defendants could “not prove a case of legal malpractice against Alerding
Castor, Alerding Castor [was] entitled to summary judgment on the breach of
fiduciary duty and breach of contract claims.” Id. at 14. 1
II.
Applicable Law
Defendants’ motion is construed as a motion to reconsider. Rule 54(b) of
the Federal Rules of Civil Procedure “governs non-final orders and permits
revision at any time prior to the entry of judgment. . . .” Galvan v. Norberg, 678
F.3d 581, 587 n.3 (7th Cir. 2012). Under Rule 54(b), the Court may exercise
its inherent authority to reconsider or revise its interlocutory orders. Bell v.
Taylor, 2015 WL 13229553, at *2 (S.D. Ind. Dec. 4, 2015). Motions to
reconsider “serve a limited function: to correct manifest errors of law or fact or
to present newly discovered evidence.” Caisse Nationale de Credit Agricole v.
CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996). They may be used “where
the Court has patently misunderstood a party, or has made a decision outside
the adversarial issues presented to the Court by the parties, or has made an
error not of reasoning but of apprehension.” Bank of Waunakee v. Rochester
On November 20, 2019, the Court directed the clerk to terminate the counterparties. Dkt.
177. Defendants argue that this was the first time they were informed that their counterclaims
were dismissed. Dkt. 189. However, this Order was solely administrative.
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Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (citation omitted). But
they should not serve as a vehicle to introduce new legal theories for the first
time. See Caisse Nationale de Credit Agricole, 90 F.3d at 1270; Publishers Res.,
Inc. v. Walker-Davis Publ’ns, Inc., 762 F.2d 557, 561 (7th Cir. 1985).
III.
Analysis
Defendants contend the Court erred by granting summary judgment on
their counterclaims. Dkt. 189. They argue the Court should have recognized
that the counterclaims included fraud-based claims and that the claims for
breach of contract and breach of fiduciary duty should have been allowed to
proceed. Id. at 2.
A. Counterclaims based on fraud, fraud in the inducement,
fraudulent misrepresentation
Defendants argue that the Court erred in granting summary judgment
because it did not recognize that the counterclaims included claims for fraud,
fraudulent inducement, and fraudulent misrepresentation. See dkt. 189; dkt.
201. In response, Alerding Castor contends that “[n]o interpretation of the
[counterclaim], regardless of how favorable the interpretation is in Defendants’
favor, could possibly lead to the conclusion that Defendants plead fraud with
particularity.” Dkt. 191 at 3. 2
Because Alerding Castor’s response briefs, dkt. 191 and dkt. 194, together do not exceed the
page limit, S.D. Ind. L.R. 7-1(e), and because Defendants have responded to the arguments in
both response briefs, the Court declines Defendants’ request to strike the second-filed response
brief, dkt. 201 at 2 (reply brief ¶ 4).
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Although plaintiffs are not required to plead legal theories, Vidimos, Inc.
v. Laser Lab Ltd., 99 F.3d 217, 222 (7th Cir. 1996), they must raise them in a
timely manner, see Chessie Logistics Co. v. Krinos Holdings, Inc., 867 F.3d 852,
859 (7th Cir. 2017). Generally, courts “should not hold plaintiffs to their
earlier legal theories unless the changes unfairly harm the defendant or the
case’s development—for example, by making it more costly or difficult to defend
the case, or by causing unreasonable delay.” Chessie Logistics Co., 867 F.3d at
859 (internal quotations omitted); see also Reed v. Columbia St. Mary’s Hosp.,
915 F.3d 473, 484 (7th Cir. 2019).
Here, Defendants claimed for the first time, eight months after summary
judgment was granted on their counterclaims, that their counterclaims
included fraud-based claims. See dkt. 189. However, throughout the course of
this litigation, Defendants pled and identified only three counterclaims: breach
of contract; legal malpractice; and breach of fiduciary duty. See dkt. 14 at 29–
31 (counterclaim); dkt. 27 at 2 (approved case management plan); dkt. 127 at 3
(statement of claims ¶ 6).
On September 28, 2018, Alerding Castor moved for summary judgment
on “Defendants’ Counter Complaint”. See dkt. 129. Defendants’ response brief
was initially due on October 29, 2018. See dkt. 132. The Court gave
Defendants two extensions of time to file their response brief. See dkt. 149;
dkt. 156. Each Order stated, “No further enlargement of this deadline will
be granted.” See dkt. 149 at 5 (emphasis in original); dkt. 156 (emphasis in
original). Then, one day before the filing deadline, Defendants filed a third
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motion for an extension of time. Dkt. 159. The Magistrate Judge denied that
motion, dkt. 160, and later denied as moot Defendants’ motion for leave to file
an oversized response brief, noting that any brief submitted would be untimely,
dkt. 165.
On February 14, 2019, 42 days after the filing deadline had passed,
Defendants filed a motion for leave to file a tardy and oversized response. Dkt.
168. The proposed brief attached to their motion was 85 pages long. Id. The
Magistrate Judge denied Defendants’ motion, outlining the procedural history
and noting the importance of deadlines. Dkt. 169. The Court overruled
Defendants’ objection to the Magistrate Judge’s denial of leave, noting that
“[t]he procedural history demonstrates a pattern of delay by Defendants that is
accurately and succinctly recounted in the Magistrate Judge’s order.” Dkt. 173
at 7–8.
The point of all this is that, having been given multiple extensions,
Defendants had over three months to file a response brief and present their
arguments. Then, when Defendants finally tried to file a response brief, it did
not comply with the Local Rules or Court Orders, dkt. 129. See Dkt. 169; S.D.
Ind. L.R. 5-4 (“A document due on a particular day must be filed before
midnight local time of the division where the case is pending.”); S.D. Ind. L.R.
7-1(e) (response briefs may not exceed 35 pages).
On April 18, 2019, the Court granted Alerding Castor’s motion for
summary judgment, which was unopposed because Defendants did not file a
response. Dkt. 172. It would be unreasonable to now allow Defendants to
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proceed on their new legal theories based on fraud. Defendants had the
opportunity to raise these additional claims at the summary judgment stage
but did not. See Dkt. 149 (first extension granted); dkt. 156 (second extension
granted); dkt. 160 (third extension denied); dkt. 165 (motion for leave to file an
oversized response brief denied as moot); dkt. 169 (motion for leave to file a
tardy and oversized response denied); dkt. 173 (overruling objection); dkt. 172
(granting partial summary judgment). Defendants raised this issue for the first
time eight months after summary judgment was granted. See dkt. 189. This
case has been pending since 2016 and allowing Defendants to proceed on their
fraud claims now would cause unreasonable delay.
Defendants have not shown that the Court committed a manifest error
when it did not recognize that their counterclaims included claims based on
fraud. “A ‘manifest error’ is not demonstrated by the disappointment of the
losing party.” Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000).
B. Counterclaims for breach of contract and breach of fiduciary
duty
Defendants contend that their counterclaims for breach of fiduciary duty
and breach of contract should be reinstated because the Court failed to
recognize that they are different than their legal malpractice counterclaim.
Dkt. 189 at 1. Citing the Restatement (Second) of Torts § 299A (a type of
negligent act), Defendants assert that Mr. Alerding “represented himself as a
seasoned, well-experienced trial litigator with an exceptional memory that had
successfully conducted dozens of trials by jury and countless bench trials.”
Dkt. 189 at 6 (¶ 8). But that goes to legal malpractice, see
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Hinshaw & Culbertson, 235 F.3d 1028, 1031 (7th Cir. 2000), as do the other
allegations:
•
“The facts show that [Mr. Alerding] never learned [Defendants’]
case to any appreciable extent and assigned a parade of staff
attorneys to run up [Defendants’] bill to ‘earn’ or grab,
[Defendants’] budget of $120,000 well before trial so that
[Alerding Castor] could extricate itself before its inexperienced
attorneys had to demonstrate [Alerding Castor’s] grosslyexaggerated mettle at trial.”
•
“[Defendants] were ultimately damaged by [Defendants’] loss at
trial after [Alerding Castor] failed to provide a replacement
attorney equivalent to what was promised.”
•
“Alerding did not live up to his touted experience and ability level
and caused Fletcher’s loss at trial by disengagement throughout
[Alerding Castor’s] representation and withdrawal just before
trial, substituting an inexperienced attorney that had never
presented a civil trial…The inexperienced attorney, [Anthony
Roach], did not effectively present [Defendants] evidence, and in
a confusing, discombobulated presentation lost [Defendants’]
matter by involuntary dismissal, a performance in an of itself
worthy of legal malpractice, resulting in [Defendants] loss of over
$300K in retirement accounts through his opponent’s forgery…”
Dkt. 189 at 5–6 (¶ 7); dkt. 201 at 7 (¶ 12); dkt. 201 at 8 (¶ 15) (emphasis in
original and internal citations omitted).
Complaints about an attorney’s care, skill, or diligence in representing a
client implicate the duty of ordinary care and sound in the type of negligence
that is legal malpractice. Flatow v. Ingalls, 932 N.E.2d 726, 729 (Ind. Ct. App.
2010) (“In Indiana, an attorney’s duty is generally ‘to exercise ordinary skill and
knowledge.’”); see also Beal v. Blinn, 9 N.E.3d 694, 700 (Ind. Ct. App. 2014)
(“To establish causation and the extent of harm in a legal malpractice case, the
client must show that the outcome of the underlying litigation would have been
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more favorable but for the attorney’s negligence.”). Defendants’ breach of
contract and breach of fiduciary duty counterclaims are based on the same
operative facts as a legal malpractice claim and result in the same injury, so
they are duplicative. See, e.g., Hoagland v. Sandberg, Phx. & Von Gontard, P.C.,
385 F.3d 737, 744 (7th Cir. 2004).
Moreover, Defendants did not respond to Alerding Castor’s arguments
that these counterclaims were duplicative. A motion to reconsider is not a
platform to address new arguments. See Oto, 224 F.3d at 606 (“A party may
not use a motion for reconsideration to introduce new evidence that could have
been presented earlier.”).
Defendants have not shown that the Court patently misunderstood its
arguments, made a decision outside the adversarial issues presented by the
parties, or failed to apprehend their legal authorities. Bank of Waunakee, 906
F.2d at 1191. Accordingly, Defendants’ motion to reinstate the breach of
contract and breach of fiduciary counterclaims is denied.
IV.
Conclusion
Defendants’ motion to correct error and reinstate counterclaims is
DENIED. Dkt. [189].
SO ORDERED.
Date: 2/14/2020
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Distribution:
PAUL FLETCHER
1203 E. Cota Street
Santa Barbara, CA 93103
CAROLE WOCKNER
1203 E. Cota Street
Santa Barbara, CA 91303
Michael J. Alerding
ALERDING CASTOR LLP
malerding@alerdingcastor.com
Michael E. Brown
KIGHTLINGER & GRAY, LLP (Indianapolis)
mbrown@k-glaw.com
George M. Plews
PLEWS SHADLEY RACHER & BRAUN LLP
gplews@psrb.com
Anthony Roach
ALERDING CASTOR HEWITT LLP
aroach@alerdingcastor.com
Joanne Rouse Sommers
PLEWS SHADLEY RACHER & BRAUN LLP
jsommers@psrb.com
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