Bd. of Trs. of Pipe Fitters' Ret. Fund, Local 597 v. Commercial Cooling & Heating, Inc, 13 C 7731

BOARD OF TRUSTEES of the PIPE FITTERS' RETIREMENT FUND,LOCAL 597, et al., Plaintiffs, v. COMMERCIAL COOLING AND HEATING, INC, an Indiana Corporation,and JEANNIE ANDERSON, an Individual, Defendants.

No. 13 C 7731

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

May 28, 2019

Magistrate Judge Jeffrey Cole

MEMORANDUM OPINION AND ORDER

"O, what a tangled web we weave,

when first we practice to deceive!"

Walter Scott, Marmion

INTRODUCTION

The present case inauspiciously began with a Complaint in October 2013, alleging that the defendants breached a collective bargaining agreement and sought relief under ERISA and the LMRA. [Dkt. #2]. An Answer was filed later that year [Dkt. #12], and the case was settled on February 16, 2016. [Dkt. #70]. The parties then consented to jurisdiction here. [Dkt. #68]. At the request of the parties, the case was dismissed without prejudice, with jurisdiction retained to enforce the settlement agreement. [Dkt. #72].

On January 31, 2018, the plaintiffs moved to reinstate the case and to file a First Amended Complaint, contending that the defendants had breached the settlement agreement. [Dkt. ##73, 75]. The parties then began negotiations on an updated audit, which was desired by the Plaintiffs. At a scheduled hearing on July 23, 2018, defense counsel, Mr. Art Johnson, simply did not appear. Nor had the Defendants submitted the additional documents required for a complete audit. [Dkt. #81]. A First Amended Complaint was served on Defendants. [Dkt. #82]. The time to Answer or otherwise plead was August 16, and it came and went with no Answer by either Defendant - at least so far as the docket reflected. Fed. R. Civ. P. 15(a)(3) and 12(a)(1)(A)(I), Also, no courtesy copy was provided to the court as required by Local Rule 5.2, and no notice of any filing in the case was provided by the court's automatic electronic docketing system either to this court or to any of the attorneys who were listed on the docket, and would have gotten notice had there been a filing.

Thus, on August 24, the Plaintiffs moved to default the Defendants and sought the entry of judgment against them jointly and severally in the aggregate amount of $2,538,383.21. [Dkt. #85]. And here is where the quite astonishing duplicity that is the subject of this Opinion begins.

On August 27, an obviously late Answer was filed with the Clerk's office by the Defendants' lawyer, Mr. Arthur Johnson. [Dkt. # 87]. No Motion was made for leave to file the out of time Answer, and it was filed without leave of court. Often, late, unauthorized filings like this will not be considered. See Seaton v. Jabe, 992 F.2d 79, 81 (6th Cir. 1993)(" We also agree with the district court that Seaton's late filing, without leave of court upon a showing of good cause, means that there was no viable removal petition before the federal court and, as a result, the state court was never divested of jurisdiction over the matter."); Howard v. MMK Enterprises, LLC, 2018 WL 1941679, at *1 (E.D. Cal. 2018)("Finding no justification for the delay, the court will not consider this late filing."); Thomas v. Maryland, 2017 WL 6547733, at *9 (D. Md. 2017)("Having received no request for leave of court to excuse the late filing, or an explanation for the late filing, the Court will strike Plaintiffs' Opposition.").

On the same day, the Defendants' page and a half Response To The Motion For Default was also filed. [Dkt. #88]. It was signed by Mr. Johnson and claimed that to the best of the Defendants' lawyer's knowledge at the time, the responsive pleading had been "properly filed," although it was claimed that no one from the defense lawyer's office clicked had on the link "to obtain a filed marked copy." [Dkt. # 88, ¶¶ 3-4]. No reason was given for this odd omission. The Defendants' Response said that it was only after receiving notice of the Plaintiffs' Default Motion that "counsel for Defendants clicked on the link and received an error message, indicating that the 'file cannot be found.'" [Dkt. # 88, ¶ 5]. The Response cited, but did not attempt to explain Exhibit 1, which was an email dated August 27 from Brittaney Stevenson, defense counsel's paralegal, to my courtroom deputy stating that on August 15 the Answer to the Amended Complaint was filed. Indeed, Ms. Stevenson included what purported to be a screenshot of a CM/ECF receipt, reflecting that the Answer was indeed filed on 8/15/19 at 4:30 p.m. The purported screenshot also was alleged to reflect that notice of the filing of the Answer was electronically mailed to nine people, whose names appeared on the docket. See Ex. 1 at 2. Later events would reveal that it was a manufactured document.

Her email claimed that when she recently clicked on the appropriate link an error message appeared stating "file cannot be found." Her email said that Ms. Stevenson was reaching out to the court "due to this error," and she concluded by saying that the Answer has just been "refiled," and she wanted to make the court aware of this system "error." There then followed an almost page-long notice she said she received apparently on the 26^th - certainly not on the 15^th - indicating from the CM/ECF system that notice of the filing was now being electronically mailed to the counsel shown on the attached list. [Dkt. #88, Ex. 1].

Paragraph 9 of the Response concluded by saying that to prevail under Rule 60(b), a defendant must show good cause for the default, quick remedial action and a "meritorious defense to the complaint." [Dkt. #88, ¶ 9]. The terse Response insisted that "Defendants acted quickly upon discovery of the filing error to remedy same prior to the entry of default." (Emphasis supplied).¹

If the allegations in the Response were true, there would seem to have been good cause for the late filing and quick action to correct it. The difficulty, as shown by later events, was that the Response was false and manufactured. As we shall discuss, the behavior of defense counsel and his Firm set in motion a complicated - and ultimately needless and costly - exploration of the mechanics of the court's electronic filing system and demonstrated the astonishing lengths to which people will go to escape the consequences of their own behavior. Not only were the parties needlessly affected, but so too were the interests of other litigants. Unnecessary disputes "sap the time of judges, forcing parties with substantial disputes to wait in a longer queue and condemning them to receive less judicial attention when their cases finally are heard." Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1077 (7^th Cir. 1987). See also Channell v. Citicorp Nat. Services, Inc., 89 F.3d 379, 386 (7^th Cir. 1996). Each hour needlessly spent on a dispute is an hour squandered. See Chicago Observer, Inc. v. City of Chicago, 929 F.2d 325, 329 (7th Cir.1991) ("Litigation is costly not only for the litigants but also for parties in other cases waiting in the queuefor judicial attention.").²

But, none of this was certain in August, 2018, and thus, the Motion For Default was denied. [Dkt. #90]. Then on September 26, the Plaintiffs filed their Memorandum In Support Of The Motion for Sanctions that ominously said that counsel wished "to alert the Court that this matter is far from resolved." [Dkt. #92 at 9]. The Memorandum stated that Plaintiffs' counsel was professionally and ethically obligated to continue her inquiry into the claimed filing of the Answer, and it insisted that counsel for the Defendants "intentionally misrepresented information to this court" and Plaintiffs' counsel regarding the default judgment and the claimed filing of the Answer on August 15 - a filing which, it bears repeating, did not appear on the docket. [Dkt. #92 at 6]. The twelve-page Motion explained why the Plaintiffs believed the Defendants and their lawyer had acted unethically, and why counsel felt she was required to bring these concerns to the court's attention. The Memorandum concluded with a demand that Arthur Johnson pay attorneys' fees and costs arising from the August 27 response. [Dkt. #92 at 12].³

On October 2, I entered a detailed Order explaining the history of what my office had been told by the Defendants' counsel's office were the circumstances surrounding the claimed (unsuccessful) filing of the Answer on August 15. [Dkt. #93]. In light of the importance of the issue and the significance of the factual dispute between counsel, I ordered counsel to appear on October4 to explain what had occurred in connection with the alleged filing of the Answer on the 15th and the problems that allegedly had been encountered by defense counsel. [Dkt. #93]. On October 3, the Plaintiffs filed an addendum to their Memorandum In Support Of Their Motion For Sanctions And In Opposition To Defendants' Response To Plaintiffs' Motion For Default Judgment. [Dkt. #94].

On October 9, I entered the following minute order:

Although the defendant's lawyer claimed that the '"error message" was previously attached, It was not. The error message forwarded to me today by Ms. Stevenson is completely and materially different from the error message quoted in defendant's brief. [88-1]. In the brief, the "error message" was quoted as "file cannot be found." [88-1]. In contrast, the error message sent by email today states: "Security violation: You do not have access rights to this program (iqquerymenu.pl). Please contact the Systems Administrator if you feel this is in error..." The long and the short of all this is that a serious question has been raised as to whether there has been a significant misrepresentation to the court. Accordingly, I have asked Mr. Larry Chen of the court's Systems Department to be in attendance at the hearing on 10/25/18.

Thereafter, on October 25, I held a day-long evidentiary hearing regarding the parties' conflicting positions. [Dkt. #101]. The plaintiffs called Mr. Chen of the Clerk's office, who testified at some length regarding...