Willert, Gary et al v. Andre, Bruce et al

Filing 166

ORDER denying 135 Motion for Sanctions; denying 151 Motion for Sanctions. Costs Taxed in favor of Defendant in the amount of $14,872.77. Signed by District Judge James D. Peterson on 02/01/2019. (cak)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

GARY WILLERT, LISA WILLERT,
LASERMASTERS, LLC, and GPS HOLDINGS, LLC,

v.

Plaintiffs,

BRUCE ANDRE and LIBERTY PARTS TEAM, INC.,

OPINION and ORDER
17-cv-496-jdp

Defendants.
This case involves a complex business dispute that the court resolved on summary
judgment in defendants’ favor. Dkt. 137. All that remains are two motions for sanctions and a
bill of costs, all filed by defendant Liberty Parts Team, Inc.
A. Bill of costs
Liberty’s bill of costs, Dkt. 141, seeks $14,872.77, a modest amount in view of the
stakes of this litigation and the amount of discovery conducted. Plaintiffs’ objection, Dkt. 184,
is groundless. Their main argument is that I should deny the costs of transcripts because Liberty
did not inform the court of the per-page rate for the deposition transcripts. Liberty is correct
that its bill of costs complies to the letter with the requirements of 28 U.S.C. § 1924. Liberty
submitted documentation of its costs and attested that they were necessarily incurred in
defense of the case. The individual amounts are eminently reasonable, as is the total request.
The clerk of court is instructed to tax costs in favor of Liberty in the amount requested in Dkt.
141.
B. First motion for sanctions
Liberty’s first motion for sanctions, Dkt. 135, relies on 28 U.S.C. § 1927. According to
Liberty, plaintiffs’ counsel knew that they did not have evidence to support their claims for

misappropriation of trade secrets and for breach of contract and yet failed to abandon them,
forcing Liberty to incur unnecessary litigation expenses. I am not persuaded.
As for the trade secret claim, Liberty contends that plaintiffs should have withdrawn
the claim immediately after the March 12, 2018 deposition of Gregory Kastenmeier (a former
GPS employee who went to work for Liberty) who denied all of plaintiffs’ allegations related
to their trade secret claim. But Liberty tells only part of the story: in an earlier deposition,
Kastenmeier admitted that he had taken and disclosed the information alleged to be a trade
secret. Dkt. 60 (76:8–77:2; 78:8–19). Plaintiffs’ trade secret claim was never a strong one, but
it was not definitively foreclosed by Kastenmeier’s March 12 deposition. So I will not impose
a sanction for plaintiffs’ pressing on with the trade secret claim despite Kastenmeier’s denials.
As for the breach of contract claim, Liberty contends that it was foreclosed by a June
15, 2017 email from Liberty to plaintiff LaserMasters, followed by Liberty’s payment of the
amount owed by means of a check that LaserMasters cashed on July 11, 2017. Ultimately
plaintiffs conceded that the so-called “swap” payment in 2017 resolved the contract dispute,
but not before Liberty spent 10 months defending the claim.
Plaintiffs contend that the breach of contract issue was not resolved until a Liberty
employee sent an email to LaserMasters on March 20, 2018, explaining that the swap payment
had been completed in July 2017. And even then, LaserMaster’s management (and by
extension, its lawyers) did not know about the Liberty email. So, plaintiffs argue, they didn’t
know that the matter had been resolved until Liberty adduced its March 20, 2018 email in
support of its motion for summary judgment. Until then, plaintiffs pressed their breach of
contract claim on the basis that Liberty’s debt was still on the LaserMaster books.

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I agree with Liberty that plaintiffs should have abandoned the breach of contract claim
before Liberty moved for summary judgment. I reject plaintiffs’ attempt to put the blame on
Liberty for failing to “disclose” the March 20, 2018 email until April 6, 2018. The March 20
email was a response to a March 14 email from a LaserMasters employee proposing a swap
payment to address the outstanding balance. The bottom line is that LaserMasters could have
discovered the swap payment if it had looked more carefully at its own books. But section 1927
sanctions are available only against an attorney, and there is no evidence that plaintiffs’ counsel
knew before Liberty moved for summary judgment that the swap payment had been completed
and that the breach of contract claim was baseless. So the court will deny this motion for
sanctions in full.
C. Second motion for sanctions
Liberty’s second motion, Dkt. 151, seeks sanctions under Federal Rule of Civil
Procedure 37(c) for plaintiffs’ failure to admit facts that Liberty later proved. Under Rule
37(c)(2), the court must order a party who failed to admit facts later proven to pay the
requesting party’s reasonable expenses, subject to several exceptions. The main question “is not
whether a party prevailed at trial but whether he acted reasonably in believing that he might
prevail.” United States v. Pecore, 664 F.3d 1125, 1137 (7th Cir. 2011).
Plaintiffs responses to Liberty’s requests for admission are not ideal, but I decline to
impose sanctions. The form of Liberty’s requests makes it hard to determine whether the
proposition has been proven. Instead of asking plaintiffs to admit simple facts, Liberty’s
requests are phrased like negative contention interrogatories, asking plaintiffs to admit that
they have no admissible evidence to support a contention in the complaint. There is no rule
barring such requests for admission. But they are not all the helpful in narrowing the factual

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disputes. It will be hard to show that all the facts underlying such a complex request for
admission have been definitively proven, and it will be even harder to show that counsel was
not acting reasonably in denying such a complex, compound fact.
Liberty has not made the required showing here because Liberty has not matched up
each request for admission with a specific determination by the court that the pertinent fact is
undisputed. For example, Liberty’s Request 40 asked:
Admit that you have no admissible evidence to support the
allegation contained in paragraph 16 of the Second Amended
Complaint that “Andre undertook a series of activities designed
to move his former employees – and their expertise – to Liberty.”
In the summary judgment opinion, in the context of analyzing plaintiffs’ tortious interference
claims, the court concluded that “there is no evidence that Reinke and Andre cooperated to
induce Global Printer employees to move to Liberty.” Dkt. 137 at 24. But that conclusion does
not quite square up with Liberty’s Request 40. Without matching up the purportedly
objectionable request with a clear-cut conclusion by the court, I am not persuaded that the
denied fact has really been proven. As for Request 40, which I cite only as an example of the
pervasive problem, the court also acknowledged that “Liberty did offer positions to several
Global Printer employees while they were still working for Global Printer,” id., and there was
abundant evidence of social communication between Andre and GPS employees, id. at 4–11.
So I am not persuaded that the propositions underlying Request 40 have been proven, and I
am not persuaded that plaintiffs’ counsel might not have reasonably believed that they might
prevail on that point.
Sanctions under Rule 37(c)(2) do not flow automatically from Liberty’s victory on
summary judgment. Liberty prevailed across the board, but I am not persuaded that plaintiffs’
responses to Liberty’s requests for admission warrant sanctions.

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ORDER
IT IS ORDERED that:
1. The clerk shall tax costs of $14,872.77 in favor of defendant Liberty Parts Team,
Inc.
2. Defendant Liberty Parts Team, Inc.’s motions for sanctions, Dkt. 135 and Dkt. 151,
are DENIED.
Entered February 1, 2019.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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