Caterpillar Financial Services Corporation v. Turner
ORDER dismissing #37 Motion to Dismiss for Failure to State a Claim; dismissing #45 Motion to Dismiss for Failure to State a Claim; granting #62 Motion to Dismiss; dismissing #22 Motion to Strike. Signed by District Judge Michael P. Mills on 06/22/2017. (rmw)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
CATERPILLAR FINANCIAL SERVICES CORPORATION
CIVIL ACTION NO. 3:16-CV-089-MPM-RP
STEPHEN RAY TURNER D/B/A TURNER DIRT
STEPHEN RAY TURNER D/B/A TURNER DIRT
THOMPSON MACHINERY COMMERCE
CORPORATION and CATERPILLAR FINANCIAL
SERVICES CORPORATION THIRD PARTY
THIRD PARTY PLAINTIFF
This cause comes before the court on the motions of counter-defendants to dismiss the
counterclaims filed against them in this action. This court, having considered the memoranda and
submissions of the parties, is now prepared to rule.
This case is, by all appearances, a rather routine collection action, which was originally
filed by Caterpillar Financial Service Corporation (“Caterpillar”) against Stephen Ray Turner,
d/b/a Turner Dirt (“Turner”), for failure to make the payments required under the lease of certain
heavy equipment. Turner initially failed to respond to Caterpillar’s complaint, and a default was
entered by the clerk against him. However, Caterpillar later agreed to set aside the default after
Turner retained counsel in this matter. Turner’s new counsel initially mounted a rather
aggressive defense, asserting counterclaims against both Caterpillar and Thompson Machinery
Commerce Corporation (“Thompson”), a Caterpillar affiliate which sold the equipment at issue.1
In his counterclaims, Turner alleged that some of the equipment at issue in this case had
been defectively manufactured by Caterpillar and that Thompson had failed to repair it, rendering
them each liable for breach of warranty. In January and February 2017, both Caterpillar and
Thompson responded to Turner’s counterclaim with motions to dismiss, arguing that he had
failed to state a claim upon which relief might be granted. These motions to dismiss Turner’s
counterclaims on their substantive merits are still pending before this court, but they have since
been superseded by the question of whether he intends to prosecute his claims at all. From
reviewing the record, it appears that the first doubts in this regard were raised by Turner’s own
counsel, who filed motions to withdraw based on their client’s failure to communicate with them.
In a March 3, 2017 motion to withdraw, Turner’s then-counsel J. Hale Freeland wrote that:
For the last two months, the undersigned counsel has been unable to communicate
with Turner, though attempts have been made through repeated texting, phone
calls, emails and letters asking Mr. Turner to communicate. *** The undersigned
cannot represent a client he cannot communicate with, and Mr. Turner has not
complied with that and his other obligations he made in retaining the law firm.
[Docket entry 51]. Freeland attached to his motion copies of letters he had written to Turner,
which referenced numerous other unsuccessful attempts to contact him. In a February 20, 2017
letter, Freeland threatened to withdraw as counsel if Turner did not communicate with him, and
he warned his client in bold capital letters that:
PLEASE BE ADVISED THAT NOT HAVING COUNSEL IS LIKELY TO
RESULT IN A DEFAULT AGAINST YOU IN THE FULL AMOUNT
CATERPILLAR SAYS YOU OWE.
It appears that Thompson is more accurately regarded as a third party defendant, but this
court will refer to both it and Caterpillar as counter-defendants, for simplicity’s sake.
[Docket entry 51, exhibit A at 3].
In a March 22, 2017 order, Magistrate Judge Percy granted the motion to withdraw, and
he specifically warned Turner that his claims were subject to dismissal if he did not express an
intent to prosecute them. Specifically, Judge Percy wrote that:
J. Hale Freeland, Beth H. Smith, and the law firm of Freeland Martz, PLLC, are
permitted to withdraw as counsel of record for Stephen Ray Turner d/b/a Turner
Dirt. No later than April 21, 2017, Turner must do one of the following: (1) retain
other counsel, (2) notify the Court that he intends to proceed pro se [that is, to
represent himself], or (3) notify the Court that he does not intend to prosecute his
counterclaim and/or continue his defense of Cat Financial’s claim. Turner is
warned that failure to comply with Orders of this Court may result in
sanctions, up to and including dismissal of his claim, as failure to comply
with this Order or other Orders may lead to a presumption that he has
chosen not to proceed with this case.
[Docket entry 56 at 2 (emphasis in original)]. Judge Percy thus set a specific deadline of April
21, 2017 for Turner to clarify his intentions vis a vis his claim.
Turner failed to respond to this order, and, on April 28, 2017, Judge Percy issued another
order continuing a previously-scheduled settlement conference based upon Turner’s unexplained
silence. In that order, Judge Percy wrote that:
On April 27, 2017, counsel for Cat Financial contacted the Court, on behalf of Cat
Financial and Thompson Machinery, via e-mail requesting that the settlement
conference be cancelled due to Stephen Ray Turner d/b/a Turner Dirt’s (Turner)
failure to comply with the Court’s March 22, 2017 Order requiring Turner to
retain counsel or notify the Court of his intention to proceed pro se, or notify that
the Court that he does not intend to prosecute his counterclaim or continue his
defense of the claims against him. See Docket 56. The Court has considered Cat
Financial and Thompson Machinery’s position and reviewed the posture of the
case and will continue the settlement conference until further order of the Court.
[Docket entry 59 at 1-2].
On May 4, 2017, Judge Percy entered yet another order referencing Turner’s continued
failure to prosecute his claims or to even express his intention to do so. In denying Caterpillar’s
request to extend certain deadlines, Judge Percy noted that he would first need to have
clarification of whether Turner intended to proceed with his counterclaim at all, before making
scheduling decisions regarding the case. Specifically, Judge Percy wrote that:
Considering the current posture of this litigation as well as Cat Financial’s
representations that it intends to file a motion to dismiss as well as a motion for
summary judgment related to Turner’s failure to designate an expert to comply
with the Court’s March 22, 2017 Order, the Court declines to extend Cat
Financial’s deadline for designating experts at this time. The Motion to Extend
Deadline for Designating an Expert in Response to Turner’s Counterclaim is
DENIED. In the event that Turner notifies the Court that he intends to prosecute
his counterclaim and seeks leave to designate an expert, the Court will similarly
consider any request made by Cat Financial to designate an expert.
[Docket entry 61 at 1-2].
Taken together, these orders should have made it abundantly clear to Turner that the
litigation of the claim he chose to file had ground to a halt over his failure to take the simple step
of clarifying that he intended to go forward with his claim. Moreover, the simple fact that a
federal judge set a specific deadline for Turner to clarify his intentions, which has long since
passed, should have left no doubt regarding the necessity of prompt action. Nevertheless, the
docket reveals no response by Turner to any of these orders, and, on May 22, 2017, Caterpillar
and Turner filed the instant motion to dismiss for failure to prosecute. Consistent with his prior
actions in this case, Turner made no response to this motion, nor does the docket reveal any other
actions taken to prosecute his counterclaims (or, for that matter, to defend himself against
Caterpillar’s original claim).
A claim should be dismissed with prejudice for non-compliance with a court order where
there “is a clear record of delay or contumacious conduct by the plaintiff . . . and a lesser sanction
would not better serve the interests of justice.” Millan v. USAA GIC, 546 F.3d 321, 326 (5th Cir.
2008) (emphasis added). In arguing that this standard is met in this case, defendants write that:
Here, there is a clear record of delay and contumacious conduct. First, Mr. Turner
failed to timely respond to the Complaint and was defaulted. Second, he failed to
communicate with his attorney to such an egregious extent that his attorney was
forced to withdraw. Third, he failed to serve any written discovery or otherwise
attempt to prosecute his counterclaim. Fourth, he failed to designate an expert in
support of his product liability claim. Fifth, and finally, he failed to comply with
this Court's mandate to declare whether and how he intends to proceed with his
Dismissal with prejudice is therefore appropriate here, because at least two
aggravating factors are present, and only one such aggravating factor is needed to
support a dismissal with prejudice. Those aggravating factors are: “(1) delay
caused by the plaintiff himself and not his attorney; (2) actual prejudice to the
defendant; or (3) delay caused by intentional conduct.” Millan, 546 F.3d at 326.
First, much of the delay can be attributed directly to Turner, specifically (1) his
failure to timely respond to the Complaint, (2) his failure to communicate with his
attorney, (3) his failure to designate an expert witness, and (4) his decision to
willfully ignore this Court's simple, clear, and direct order to state whether he
intends to proceed.
Second, Cat Financial has been prejudiced. It has incurred needless expense and
delay in a simple collection action. It has also recently been denied an extension
of its expert deadline, thereby creating the risk that it will be forced to try the
issues presented in the counterclaim without an expert. . . . The Fifth Circuit, this
Court, and the Southern District have all recognized the propriety of dismissal
under circumstances similar to those presented here. E.g., Blakney v. Comm'r of
Soc. Sec., No. 1:12CV169-LG-JMR, 2013 WL 679552 at *1 (S.D. Miss. Dec. 20,
2013) (dismissing case with prejudice because plaintiff failed to respond to
magistrate's show cause order); E.g., Smith v. Tex. Dep't of Criminal Justice
Institutional Div., 79 Fed. App'x 61, 63 (5th Cir. 2003) (district court did not
abuse discretion in dismissing case with prejudice for failure to comply with court
order to file amended complaint). This Court should follow those prior decisions
and dismiss this case with prejudice.
[Defendants’ brief at 3-4].
This court agrees with counter-defendants’ arguments; indeed, it notes that Turner’s
failure to respond to the instant motion to dismiss constitutes yet another example of his “delay
and contumacious conduct” in this case. While this court is aware that more lenient standards
apply to pro se litigants, it can discern no good reason why Turner would repeatedly fail to offer
his attorney and Judge Percy even a cursory notification of his intention to proceed with his
counterclaim. Such a notification would not require any legal expertise whatsoever, and failing
to provide it clearly evidences disrespect for the legal proceedings which he chose to institute.
For this reason, this court concludes that any remedy short of the one specifically raised by Judge
Percy in his warning to Turner, i.e. dismissal, “would not better serve the interests of justice.” Id.
This court therefore concludes that counter-defendants’ motion to dismiss plaintiffs’
counterclaim is well taken and due to be granted.
This court will, however, make one qualification upon its ruling today. This court’s
ruling is based upon the assumption that Turner’s contact information, as stated on the docket, is
correct and that he actually received the communications and orders referenced in this order. If,
however, Turner can prove that he did not actually receive the previously-discussed warnings
from his counsel and Judge Percy, then this court will consider setting aside its order today and
allowing his counter-claim to proceed. With that caveat, this court does not believe that Turner,
or any other litigant, is entitled to simply decide that he had better things to do than respond to
repeated warnings and inquiries from attorneys and judges attempting to litigate the claim he
chose to file. This court also notes that its order today only relates to the counterclaim filed by
Turner, and not to his defense of the original collection action filed by Caterpillar. Turner
remains a defendant to that collection action, and this court emphasizes that he still has the
opportunity to defend himself against it, if he can bring himself to act. If Turner does not act,
however, then he will see default entered against him once again.2
As a final piece of judicial housekeeeping in this matter, this court notes that Caterpillar
has filed a motion to strike Turner’s jury trial demand, based upon its contention that the loan
agreements in this case waived that right. Caterpillar alternatively seeks to be allowed to conduct
discovery on the issue of whether that waiver is enforceable, and this court concludes that this is
the better approach. See Donnelley v. Branch Banking & Trust Co., 971 F. Supp. 2d 495, 509-10
(D. Md. 2013) ("Discovery and further development of the [facts] may provide relevant guidance
to the Court in deciding whether to strike Plaintiff's jury demand."). This court will therefore
allow discovery to be conducted on this issue, prior to making any formal determination
regarding whether a jury trial is available in this case. However, this court reiterates that, if
Turner does not take action to defend against Caterpillar’s collection action, then there will be no
trial of any kind in this case, whether it be a bench trial or jury trial. Once again, the ball is in
Turner’s court on this issue.
It is therefore ordered that counter-defendants’ motion to dismiss Turner’s counterclaims
for failure to comply with Judge Percy’s order [62-1] is granted. Counter-defendants’ prior
motions [37-1 and 45-1] to dismiss those counterclaims will be dismissed as moot. Caterpillar’s
motion [22-1] to strike Turner’s jury trial demand is dismissed without prejudice to its re-filing
after discovery on this issue has been conducted.
This court directs Caterpillar to give Turner additional opportunity to mount a defense to
the collection action before filing any renewed motion for default judgment.
So ordered, this, the 22nd day of June, 2017.
/s/ Michael P. Mills
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF MISSISSIPPI
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