1ST Class Legal (I.S.), Ltd. v. Niro, et al.

Northern District of Illinois, ilnd-1:2016-cv-06793

MOTION by Plaintiff 1st Class Legal (I.S.), Ltd. for leave to file First Amended Complaint

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Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 1 of 9 PageID #:605 MARC S. MAZER WEILL & MAZER, A Professional Corporation 90 New Montgomery Street Suite 1400 San Francisco, CA 94105 Telephone: (415) 421-0730 STEVE M. VARHOLA LYMAN LAW FIRM, LLC 227 West Monroe Street, Suite 2650 Chicago, Illinois 60606 Attorneys for Plaintiff 1st CLASS LEGAL (I.S.), LTD. UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION 1st CLASS LEGAL (I.S.), LTD., a foreign) Case No.: 16-cv-6793 corporation,)) Plaintiffs,)) Honorable Robert. M. Dow, Jr. v.)) RAYMOND NIRO, individually and doing) business as NIRO, HALLER & NIRO, an) Illinois Law Partnership, NIRO LAW, LTD.,) an Illinois Corporation, formerly known as) NIRO, HALLER & NIRO, LTD.,)) Defendants.)) and related Counter Claim)) MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT Plaintiff, 1ST CLASS LEGAL (IS) LTD., by and through its attorneys, moves this Court to allow it to file an amended complaint pursuant to F.R.C.P. 15, and in support, states as follows: MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 1 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 2 of 9 PageID #:606 1. Plaintiff seeks leave to file a First Amended Complaint, a copy of which is attached hereto as Exhibit A. The purpose of the amended complaint is to significantly clarify its causes of action for breach of contract and accounting, to join additional individual defendants, and to plead a new cause of action for misrepresentation. 2. For the reasons stated herein and in the interests of justice, this amendment should be permitted pursuant to Federal Rule of Civil Procedure 15 and the policy of freely giving leave to amend. "In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be'freely given.’ " Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); Barry Aviation Inc. v. Land O'Lakes Mun. Airport Comm'n, 377 F.3d 682, 687 (7th Cir. 2004). 3. Although Raymond Niro, Niro Haller & Niro, a partnership (as a separate entity) and Niro Law, Ltd. were initially named as defendants in the complaint, only Niro Law, Ltd. appeared and responded to the complaint by answering and filing a counterclaim, which is the subject of a pending Motion for Summary Judgment. Neither Raymond Niro nor Niro Haller & Niro, a partnership, were ever served with process or appeared in this action since Plaintiff always intended to amend the complaint to join additional parties and clarify the pleadings after the initial cycle of discovery was complete. In addition, shortly after the commencement of the action and prior to being served in early August, 2016, counsel for Niro Law, Ltd. informed the court by notice that Raymond Niro had died as described with more detail below. 4. During the status conferences prior to the commencement of discovery, Plaintiff informed the Court of its intention to file an amended complaint once this initial discovery was MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 2 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 3 of 9 PageID #:607 completed and also informed the Court and counsel for Niro Law, Ltd.’s counsel of Plaintiffs intention to pursue claims against the shareholders of Niro Law, Ltd., including Raymond Niro’s Estate. Raymond Niro was the primary contact for Niro Law, Ltd. with respect to the negotiation and implementation of the contracts which are the subject of this action, as well as a primary participant in the misrepresentations alleged n the attached First Amended Complaint. The Court responded by indicating that it was acceptable to wait until Plaintiff was ready to amend and after gathering necessary information in order to avoid multiple amendments to the complaint (to the extent possible). 5. Although this action commenced in June, 2016, the initial discovery did not commence until late October, 2016 and was completed only after motions to compel were filed and the Court Ordered further production of documents and written responses from Defendant Niro Law, Ltd. 6. During the initial status conference in September, 2016, Defendant Niro Law, Ltd. filed and served a notice of death indicating that Raymond Niro (an unserved party who has never appeared in this action) had died. During that conference, Defendant’s counsel was asked to informally provide the names of the shareholders of Defendant Niro Law, Ltd. and identity of the personal representatives of Raymond Niro’s estate and trustee of a related trust, if any, since Plaintiff intended to join them in any amended complaint. Mr. Tanner, counsel for Defendant Niro Law, Ltd., refused to provide the information and stated on the record that so long as Plaintiff was seeking claims against shareholders of Defendant Niro Law, Ltd. he would not cooperate in providing any information informally and would not agree to any mediation process. Discovery commenced in late October, 2016 after the second status conference. During that status conference as well, the Court was again informed of Plaintiff’s intention to MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 3 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 4 of 9 PageID #:608 amend the complaint but only after the initial phase of discovery was completed and Plaintiff was able to review documents from Defendant Niro Law, Ltd. The Court appeared to agree that it was prudent to obtain the discovery first and then amend the complaint, so as to mitigate the possibility of having to have additional amendments to the complaint. 7. In late November, 2016, Defendant Niro Law finally disclosed the identity of the executors of the Niro will, but did not inform Plaintiff of the identity of the estate or the personal representative or the trustee of any trust involving Raymond Niro and instead, provided the following information which was not sufficient for the purpose of substitution of parties under FRCP 25: Notwithstanding and without waiving this objection, Niro Law states that pending anticipated court formalization, the executors of Mr. Niro's estate will be Dean D. Niro and Raymond P. Niro, Jr., both of whom can be contacted through undersigned counsel. Notwithstanding and without waiving this objection, Niro Law states that to the best of its knowledge, no such trust exists. 8. In late February, 2017, Plaintiff became aware of the pending estate proceeding in Florida for the estate of Raymond Niro. Plaintiff could not have access to online information about the proceeding without first retaining Florida counsel who could then appear in the proceeding and have access online. Contrary to the representations made by Defendant Niro Law, Plaintiff became informed that a trust indeed exists which is related to the estate and the identity of the trustee is one of the individual defendants named in the proposed amended complaint. Moreover, Plaintiff was also subsequently informed of the confirmation of Dean Niro and Raymond Niro, Jr. as the personal representatives of the Estate in the Florida Probate proceeding. Plaintiff timely filed a probate claim in the Florida probate proceeding on March 2, 2017 which was based upon the claims in the instant action pending in this Court since Florida MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 4 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 5 of 9 PageID #:609 probate rules require the commencement of a separate proceeding against the personal representatives and trustee in order to secure the probate claim. 9. It is anticipated that Defendant Niro Law will object to this motion (at least to the extent it seeks to join defendants in their capacity of either personal representatives of the Estate of Raymond Niro or trustee of the Niro Trust) claiming that, as to the joinder of both of the personal representatives and the trustee, that the amendment constitutes a late attempt of substitution of parties under Fed.R.Civ.P., Rule 25. However, Plaintiff is not seeking a "substitution" of parties (which joinder would relate back to the date of commencement of the action) and, instead, merely seeks to amend the complaint to join several new parties and causes of action. Moreover, the August 16, 2016 notice of death in the present case is defective for purposes of triggering the 90-day time limit for substitution of a deceased party under Rule 25, because it did not provide the names of the personal representatives or the trustee as in this instant case. See, Kessler v. Se. Permanente Med. Grp. of N. Carolina, P.A., 165 F.R.D. 54, 56 (E.D.N.C. 1995) ("the suggestion must identify the successor to the estate who may be substituted for the decedent"); Rende v. Kay, 415 F.2d 983, 986 (D.C. Cir. 1969) ("Counsel's construction would open the door to a tactical maneuver to place upon the plaintiff the burden of locating the representative of the estate within 90 days"). The facts here suggest exactly such a "tactical maneuver." The August 16, 2016 notification of death does not name a successor. Counsel for Defendant Niro Law, Ltd. refused to cooperate in providing the names of the successors, requiring Plaintiff to obtain this information through discovery and did not provide any such information until 90 days after the notification of death was served. Discovery could not be commenced until October. Defendant Niro Law, Ltd.’s discovery responses confirm these tactics; in its November responses to requests for production of documents, it stated "pending MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 5 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 6 of 9 PageID #:610 anticipated court formalization, the executors of Mr. Niro’s estate will be Dean D. Niro and Raymond P. Niro, Jr." Plaintiff has since learned that the personal representatives submitted their oaths as personal representatives on September 14, 2016. 10. However, if the Court considers this motion as an untimely attempt to substitute the trustee and personal representatives of the Estate of Raymond Niro for Raymond Niro deceased, Plaintiff seeks an extension of time to do so under Rule 6, and requests that with respect to the personal representatives and trustee, that the Court consider this Motion also to be a motion to substitute under Rule 25(a) and in support thereof, restates the facts set forth above and points out the following: a. FRCP 6 authorizes the Court to extend the time to file a motion to substitute parties upon death even if the motion is made after the stated 90 day period. See, Yonofsky v. Wernick, 362 F. Supp. 1005, 1014 (S.D.N.Y. 1973); Staggers v. Otto Gerdau Co., 359 F.2d 292, 297 (2d Cir. 1966) (amendment to substitute successor allowed one year after death where no prejudice shown). b. If the court were to dismiss the claims against Raymond Niro, it would have to be without prejudice and allow the Plaintiff to refile the claim. Rowland v. GGNSC Ripley, LLC, No. 313CV00011DMBSAA, 2016 WL 4136486, at *5 (N.D. Miss. Aug. 3, 2016) ("Rule 25(a) does not require dismissal with prejudice"); United States v. Bahr, 275 F.R.D. 339, 341 (M.D.Ala.2011); Gutierrez v. Gunderson, No. 04–2627, 2008 U.S. Dist. LEXIS 3487, 2008 WL 170009, at *4–5 (D.Minn. Jan.16, 2008); Sydow v. Weyerhaeuser Co., No. 14-CV-219-WMC, 2015 WL 6962698, at *1 (W.D. Wis. Nov. 10, 2015). MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 6 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 7 of 9 PageID #:611 c. The statute of limitations for all causes of action have not yet expired as breach of written contract is 10 years (735 ILCS 5/13–206, King v. Ashbrook, 313 Ill. App. 3d 1040, 1043, 732 N.E.2d 621, 625 (2000)) and misrepresentation is 5 years from discovery (Kinsey v. Scott, 124 Ill. App. 3d 329, 339, 463 N.E.2d 1359, 1366 (1984)). d. No prejudice will result for Defendant Niro Law, Ltd. since it was informed of the intention to so amend the complaint, no unnecessary discovery has taken place, no depositions have been taken, discovery deadlines have not even been established, no trial date has been scheduled, and the pleadings are not yet finalized. The only discovery which has commenced has been document requests, interrogatories and requests for admission. Moreover, the personal representatives and the trustee (Dean Niro and Raymond Niro, Jr.) have been and continue to be shareholders of Niro Law, Ltd. and will be joined in that capacity in this amended complaint anyway. Presumably they have been involved with and fully apprised of the litigation in this action since it was commenced. e. Raymond Niro (deceased) was never served with the original complaint and has never appeared in this action and has not participated in any discovery since his death occurred prior to the commencement of discovery. f.'The 90 day period was not intended to act as a bar to otherwise meritorious actions." Staggers v. Otto Gerdau Co., 359 F.2d 292, 296 (2d Cir. 1966). g. If Plaintiff misunderstood the Court’s comments as meaning that it could delay joinder until the filing of this amended complaint, so as to avoid MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 7 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 8 of 9 PageID #:612 duplicative efforts and premature involvement of parties, Plaintiff did so in good faith and it may only constitute its excusable neglect and the Court should still allow it under FRCP 6 (b)(1)(B) since there would be no prejudice to either the joined parties or Niro Law, Ltd. in doing so. If the action was not allowed, Plaintiff would be free to file an independent action against them which would clearly cause prejudice to the parties and the Court for having to litigate the same issues in two different courts. 11. No statutes of limitations on any of the claims asserted have expired as to the claims against the parties who will be joined (including the personal representatives and trustee). 12. This Motion is not brought in bad faith or with dilatory motive or intent. The initial discovery cycle is finally coming to an end (although there remain some discovery disputes which will require resolution). In response to a set of document requests served in October, 2016, Defendant Niro Law, Ltd. finally completed its production of documents on March 30, 2017. WHEREFORE, Plaintiff, 1ST CLASS LEGAL (IS) LTD., respectfully requests that this Court grant it leave to file the attached First Amended Complaint. Dated: April 13, 2017 Respectfully submitted, 1ST CLASS LEGAL (I.S.), LTD. By:/s/Marc S. Mazer Marc S. Mazer WEILL & MAZER, A Professional Corporation 90 New Montgomery Street, Suite 1400 San Francisco, CA 94507 Attorneys for Plaintiff 1st Class Legal (I.S.), Ltd. MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 8 Case: 1:16-cv-06793 Document #: 53 Filed: 04/13/17 Page 9 of 9 PageID #:613 CERTIFICATE OF SERVICE The undersigned, an attorney, certifies that on April 13, 2017, he caused the foregoing Plaintiff’s, 1st CLASS LEGAL, LTD., Motion for Leave to File First Amended Complaint to be served upon all counsel of record via the court’s electronic docketing system. Dated: April 13, 2017 1ST CLASS LEGAL (I.S.), LTD. By:/s/Steve M. Varhola Steve M. Varhola LYMAN LAW FIRM, LLC 227 West Monroe Street, Suite 2650 Chicago, Illinois 60606 (312) 762-9517 Attorneys for Plaintiff 1st Class Legal (I.S.), Ltd. MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT CASE NO. 1:16-cv-06793 9