Les Mutuelles du Mans Vie v. Life Assurance Co.

128 F.R.D. 233, 1989 U.S. Dist. LEXIS 12117, 1989 WL 132683
CourtDistrict Court, N.D. Illinois
DecidedOctober 4, 1989
DocketNo. 87 C 10014
StatusPublished
Cited by3 cases

This text of 128 F.R.D. 233 (Les Mutuelles du Mans Vie v. Life Assurance Co.) 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
Les Mutuelles du Mans Vie v. Life Assurance Co., 128 F.R.D. 233, 1989 U.S. Dist. LEXIS 12117, 1989 WL 132683 (N.D. Ill. 1989).

Opinion

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Les Mutuelles du Mans Vie (“MDM”)1 has made several aborted efforts, then finally a successful one, to state a number of claims against Life Assurance Company of Pennsylvania (“LACOP”) — all stemming from a reinsurance contract (the “treaty”) between the parties. MDM’s attempts exemplify the maxim “If you don’t succeed, try, try again”:

[236]*2361. This Court’s January 14, 1988 oral ruling dismissed the original Complaint (“C”) on LACOP’s motion.
2. This Court’s June 14, 1988 memorandum opinion and order (“Opinion I,” 688 F.Supp. 386) dismissed the Amended Complaint (“AC”), again on LACOP’s motion.
3. This Court’s December 15, 1988 memorandum opinion and order (“Opinion II,” 1988 WL 139415, 1988 U.S.Dist. LEXIS 14590) dismissed the Second Amended Complaint (“SAC”), once more on LACOP’s motion.
4. After having retained new counsel, MDM voluntarily withdrew its Third Amended Complaint (“TAC”) after LA-COP had moved (together with a supporting memorandum of law) for its dismissal.
5. This Court’s June 14, 1989 memorandum opinion and order (“Opinion III,” 1989 WL 68357, 1989 U.S.Dist. LEXIS 7617) sustained three of the four counts in the Fourth Amended Complaint (“FAC”) over LACOP’s motion to dismiss. During the course of that checkered history MDM has also sought to prohibit LACOP from drawing down on letters of credit (“LOCs”) issued pursuant to the treaty. For its part LACOP has submitted a motion for a stay of discovery, which was granted over MDM’s objections.

Now LACOP has moved under Fed.R. Civ.P. (“Rule”) 11 for sanctions: attorneys’ fees, costs and other out-of-pocket expenses incurred in response to (1) the C, AC, SAC and TAC, (2) MDM’s LOC-related motions and (3) MDM’s objections to LA-COP’s discovery motion. For the reasons stated in this memorandum opinion and order,2 LACOP’s motion is granted in part and denied in part.

Rule 11 Standards

By this time every federal practitioner must know what he or she certifies by filing any paper with the court:

[T]o the best of the signer’s knowledge, information and belief formed after reasonable inquiry [the paper] is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law, and ... it is not imposed for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation.

And it is also old hat to state the twofold standard that such a certification establishes: the objective one via the first-stated “frivolousness clause” and the subjective one via the later “improper purpose clause” (see such cases in our Court of Appeals as Brown v. Federation of State Medical Boards, 830 F.2d 1429, 1435-36 (7th Cir.1987) and, most recently, Tabrizi v. Village of Glen Ellyn, 883 F.2d 587, 592 [7th Cir.1989] ).3

Rule ll’s first (objective) branch in turn has two sub-branches: whether the party or attorney made a reasonable inquiry into the facts and whether the party or attorney made a reasonable inquiry into the law (Brown, 830 F.2d at 1435). Here LACOP’s arguments focus on MDM’s legal rather than its factual inquiry. That focus is hardly surprising, given the detailed (of[237]*237ten too much so) recitals contained in MDM’s pleading efforts.4

Brown, id. (citations omitted) lists several factors to be looked at in ascertaining the objective reasonableness of the legal inquiry:

To determine whether the attorney in question made a reasonable inquiry into the law, the district court should consider: the amount of time the attorney had to prepare the document and research the relevant law; whether the document contained a plausible view of the law; the complexity of the legal questions involved; and whether the document was a good faith effort to extend or modify the law.

And once a Rule 11 violation has been thus established, this Court most frequently adopts a “but-for” standard for sanctions, shifting to the violator the economic burden of all fees and expenses reasonably generated in response to the frivolous argument or pleading (see this Court’s opinion in Wielgos v. Commonwealth Edison Co., 123 F.R.D. 299, 302 (N.D.Ill.1988)).5 Against that set of ground rules, this opinion turns to the individual documents for which sanctions are claimed.

Complaint

All eight counts in the C, which was signed by MDM’s original New York counsel Kroll & Tract (“K & T”), were dismissed in this Court’s initial oral ruling. Frantz v. United States Powerlifting Federation, 836 F.2d 1063, 1067 (7th Cir.1987) dictates the Rule 11 approach to a multicount pleading:

Each claim must have sufficient support; each must be investigated and researched before filing.

Accordingly the C’s several counts will be evaluated separately.6

New York counsel K & T argue in their defense that many of- the ultimately-dismissed counts were justified based on their knowledge of general common law principles. But Rule 11 does not give a lawyer special leeway in venturing onto foreign soil (either literally or figuratively). As Hays v. Sony Corp. of America, 847 F.2d 412, 419 (7th Cir.1988) (citations omitted) puts it:

There is no “locality rule” in legal malpractice, ... and while a legal specialist may be held to an even higher standard of care than a generalist, ... the generalist acts at his peril if he brings a suit in a field or forum with which he is unacquainted. A lawyer who lacks relevant expertise must either associate with him a lawyer who has it, or must bone up on the relevant law at every step in the way in recognition that his lack of experience makes him prone to error.

Hence K & T are held to no different standard as to the knowledge and application of Illinois law (which provides the rules of decision in this case) than any member of the Chicago bar.

It is clear from the C itself, the transcript of the oral ruling dismissing it and later developments in this case that K & T initially tendered absolutely no foundation [238]*238in Illinois law to support Count 4 (negligent misrepresentation), Count 5 (substantial breach of contract)7 or Count 8 (negligent underwriting) (see, e.g., Opinion I at SOS-OS, 400 dismissing AC counts corresponding to C Counts 4 and 5; Jan. 14, 1988 Tr. 5-6, finding no basis for Count 8). It was objectively unreasonable for any attorney to have brought those claims here on the basis of what K & T then offered (or failed to offer) in their support.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Fujimoto v. Au
19 P.3d 699 (Hawaii Supreme Court, 2001)
Jandrt Ex Rel. Brueggeman v. Jerome Foods, Inc.
597 N.W.2d 744 (Wisconsin Supreme Court, 1999)

Cite This Page — Counsel Stack

Bluebook (online)
128 F.R.D. 233, 1989 U.S. Dist. LEXIS 12117, 1989 WL 132683, Counsel Stack Legal Research, https://law.counselstack.com/opinion/les-mutuelles-du-mans-vie-v-life-assurance-co-ilnd-1989.