Elliot v. Mission Trust Services, LLC

82 F. Supp. 3d 829, 2015 U.S. Dist. LEXIS 32030, 2015 WL 1138265
CourtDistrict Court, N.D. Illinois
DecidedMarch 11, 2015
DocketNo. 13 C 7770
StatusPublished
Cited by1 cases

This text of 82 F. Supp. 3d 829 (Elliot v. Mission Trust Services, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elliot v. Mission Trust Services, LLC, 82 F. Supp. 3d 829, 2015 U.S. Dist. LEXIS 32030, 2015 WL 1138265 (N.D. Ill. 2015).

Opinion

MEMORANDUM OPINION AND ORDER

JEFFREY COLE, UNITED STATES MAGISTRATE JUDGE

The Mission Parties have filed a motion for $17,720.60 in attorneys’ fees occasioned [831]*831by their September 19, 2014 motion for sanctions. [Dkt. # 155]. The Plaintiffs do not agree that the amount is reasonable, and at best, might be willing to entertain a fee of half that amount. (Mission Parties’ Reply Brief at 5, [Dkt. # 188 at 5]). The motion seems straightforward enough. It turns out it is anything but.

This case began with the Plaintiffs, holders of beneficial interests in Mission Mill-brook Trust, which held title to a 368-unit apartment complex in North Carolina, seeking a declaratory judgment that the trustees had failed to comply with the terms of the Trust. Under those terms, should the Trust default on its loan, the trustees were obligated to convert the Trust into a Delaware limited liability company. Sure enough, the Trust defaulted on its whopping $19 million loan. Foreclosure would mean that the Plaintiff beneficiaries would be robbed of not only their investment but the beneficial tax consequences of that investment. The LLC conversion dictated under the Trust agreement would mean that additional capital could be secured — not allowed under the original form of the Trust — thereby offering lender and investors some protection. But when the Plaintiff beneficiaries called for the trustees to cancel the Trust and make the required conversion to a Delaware LLC, the trustees refused, preferring to convert the Trust into a form of LLC that suited them. Judge Norgle found the salient facts all beyond dispute, and when the Plaintiff beneficiaries moved for summary judgment in November 2013, he necessarily granted the motion and ordered the Defendants to comply with their obligations on September 30, 2014. [Dkt. # 126],

Thus, the case was a simple one, and would have been over then and there. But, in addition to responding to the Plaintiffs’ summary judgment motion, the Defendant trustees also filed counterclaims against the Plaintiffs for having taken steps to protect their investment when the defendants had refused to comply with the terms of the Trust: breach of contract, negligence, and defamation. These claims may or may not be well-founded — a matter on which we express no opinion — but, reading between the lines, it would seem that the Defendants had no interest in bringing such claims against the Plaintiffs until faced with their summary judgment motion; they had lodged nothing against the Plaintiffs in the preceding four months.

But the proverbial cherry on the sundae is the fact that, on February 25, 2014, seven months before Judge Norgle ruled on the summary judgment motion, the Defendants cancelled the Trust and failed to inform the court or the Plaintiffs that they had done so. Thus, “[t]he doom of mere sterility was on the [summary judgment proceedings almost] from the beginning.” Clark v. United States, 289 U.S. 1, 11, 53 S.Ct. 465, 77 L.Ed. 993 (1933). That appeared to be a matter of indifference to the Defendants who waited until October 8, 2014, to file a motion for reconsideration, finally informing Judge Norgle and the Plaintiffs of the cancellation. This behavior makes a mockery out of the duty of candor lawyers owe to the tribunal before which they are appearing. Cleveland Hair Clinic, Inc. v. Puig, 200 F.3d 1063 (7th Cir.2000); Beam v. IPCO Corp., 838 F.2d 242, 249 (7th Cir.1988). A violation of this duty can, itself, lead to sanctions even more severe than payment of an opponent’s fees and costs. Id.

On reconsideration, on December 16, 2014, Judge Norgle had no choice but to reverse his ruling granting Plaintiffs’ summary judgment and find that the Plaintiffs’ action to enforce the Trust was moot because the Trust no longer existed. [Dkt. # 145],

[832]*832The upshot of all this is the Defendants violated the terms of the Trust, forced Plaintiffs to come to court to enforce them, and then cancelled the very Trust that formed the basis of this litigation unbeknownst to the court or the Plaintiffs. By concealing the cancellation from everyone, instead of informing the court — at any point in the seven months before the court ruled on the motion for summary judgment, the Defendants drove up the costs of this litigation and squandered scarce judicial resources. No matter how indifferent the lawyers may have been to what was going on in the case, they could not have been blind to the fact that a federal district judge was spending time to understand and resolve the motion for summary judgment.

Every hour Judge Norgle spent was an hour squandered. “Litigation is costly not only for the litigants but also for parties in other cases waiting in the queue for judicial attention.” Chicago Observer, Inc. v. City of Chicago, 929 F.2d 325, 329 (7th Cir.1991). The Defendants’ lawyers were indifferent to his labors and the effect their silence necessarily was having on the due administration of justice in this court. What came next, however, is even more audacious and offensive. After having unsuccessfully gambled on the outcome of the summary judgment motion, the Defendants’ counsel said to Judge Norgle in effect, “oh by the way, you have to vacate your decision because the Trust is no longer in -existence and has not been for the last seven or eight months, and you have no jurisdiction. “Heads I win, tails you lose.”1

But justice is not a game, United States v. Paglia, 190 F.2d 445, 447 (2nd Cir.1951)(L.Hand, J.), and membership in the bar is a privilege burdened with conditions. “[A lawyer is] received into that ancient fellowship for' something more than private gain. He [becomes] an officer of the court, and, like the court itself, an instrument or agency to advance the ends of justice.” People ex rel. Karlin v. Culkin, 248 N.Y. 465, 470-71, 162 N.E. 487 (1928)(Cardozo, C.J.). The conduct of the Defendants was not faithful to these precepts.

The Mission Parties’ Reply Brief inexplicably asserts as a point in their favor that they were forced to “focus[ ] extensive resources contesting with [sic] [Plaintiffs’] motion and brief for rehearing or reconsideration, which motion was granted by Judge Norgle on December 16, 2014.” [Dkt. # 188 at 11]. Ignored is the fact that the Defendants’ months of silence in informing Judge Norgle of the Trust’s dissolution caused them to expend those resources. “[I]t does not ‘come with very good grace’ for the [Mission Parties] to ... [complain] of the injury which [they] ha[ve themselves] ... inflicted.” J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 566-567, 101 S.Ct. 1923, 68 L.Ed.2d 442 (1981). Being the cause of the harm of which they complain, their protestations are unpersuasive. See Crowe ex rel. Crowe v. Zeigler Coal Co. 646 F.3d 435, 444 (7th Cir.2011); Crowe ex rel. Crowe v. Zeigler Coal Co.,

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Related

Elliot v. Mission Trust Services, LLC
104 F. Supp. 3d 931 (N.D. Illinois, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
82 F. Supp. 3d 829, 2015 U.S. Dist. LEXIS 32030, 2015 WL 1138265, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elliot-v-mission-trust-services-llc-ilnd-2015.