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LEIGH v. ENGLE

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


October 30, 1989

CHARLES W. LEIGH, et al., Plaintiffs, GEORGE JOHNSON, et al., Intervenors,
v.
CLYDE WILLIAM ENGLE, et al., Defendants

Brian Barnett Duff, United States District Judge.

The opinion of the court was delivered by: DUFF

MEMORANDUM OPINION

BRIAN BARNETT DUFF, UNITED STATES DISTRICT JUDGE

 The intervening plaintiffs in this case have moved under Rule 59(e), Fed.R.Civ.P., to alter or amend this court's judgment order entered June 15, 1989 -- demonstrating that the court was not unduly pessimistic when it predicted that it had not spoken the last word on this case. See Leigh v. Engle, 714 F. Supp. 1465, 1467 (N.D.Ill. 1989). In their Rule 59(e) motion, the intervenors submitted a laundry list of errors. By the time they filed their memorandum in support of their motion, the intervenors gained wisdom, and grouped their objections into three categories. The court will address only those points discussed in the intervenors' memorandum, and disregard the intervenors' initial jeremiad. *fn1"

 Rule 59(e) has two purposes in situations such as this one. First, it allows the intervenors to ask the court to reconsider its prior judgment and correct errors of law. See United States Labor Party v. Oremus, 619 F.2d 683, 687 (7th Cir. 1980). Second, it allows the court to grant relief to the intervenors on those claims which the court has found have merit, but which the court's judgment order has ignored. See Continental Cas. Co. v. Howard, 775 F.2d 876, 883-84 (7th Cir. 1985). The decision whether to alter or amend the judgment under Rule 59(e) is left to the sound discretion of the court.

 The intervenors have three areas of disagreement with the court. First, they want the court to require Libco Corporation, Clyde Engle, Nathan Dardick, and Ronald Zuckerman to reimburse the Reliable Trust -- something which the court ordered previously -- with interest. Second, they reject the court's wisdom in the handling of the Trust's affairs. Third, they want the court to award their attorney, Richard Moenning, higher compensation on account of inflation.

 Reimbursement of the Trust with Interest

 In the court's previous ruling, it ordered Libco and Engle to pay the Reliable Trust $ 44,763.45. It ordered Dardick and Zuckerman to pay the same amount, although the court afforded them a limited opportunity to reduce their liability. *fn2" The intervenors do not contest the principal amount of these judgments; rather, they ask the court to order the defendants to make these awards with interest.

 The intervenors' request comes too late. As the court noted in its prior opinion, briefing on the reimbursement and attorneys fees issues in this case began in November 1987 and extended for over one and a half years. See Leigh, 714 F. Supp. at 1467 n. 2. At no time during that period did the intervenors ask the court to consider whether Libco, Engle, Dardick, and Zuckerman had to reimburse the Trust with interest. In fact, the only pleading to which the intervenors direct the court *fn3" is their complaint, filed over nine years ago while this case was pending before Judge Leighton of this district, which the intervenors ignored until now.

 This court would have considered whether the Trust was entitled to interest had someone raised the issue in a timely manner, but no one did. In the interest of finality of judgments, the court will not amend its prior order to compel the defendants to pay interest on amounts for which they must reimburse the Trust.

 Administration of the Trust

 The intervenors' second category of complaints about this court's prior ruling really should be labelled "Miscellany." The intervenors' arguments appear, disappear, and resurface like loons in a lake, although they are not as attractive. The court has reduced these objections to three; if the court has run roughshod over the intervenors' arguments, it is not in spite of the intervenors' clear presentation.

 The three objections are:

 

(1) The court failed to make findings about a litigation reserve created by the Trust.

 

(2) The court's order that the Trust pay some of the legal fees of the Trustee, Dardick, and Zuckerman results in double compensation; the court should order Aetna Casualty & Surety Company of Illinois to pay these fees, or alternatively, prohibit Dardick and Zuckerman from paying Aetna any of the amounts which the Trust owes them.

 

(3) The court did not order the Trustee to distribute to the intervenors their fair share of the Trust.

 The court will address these objections in turn.

 1. The court has made all of the findings which were necessary to support the court's judgment as to the Trust's liability for attorneys fees, see Leigh, 669 F. Supp. at 1413-14, and the amount of that liability, see Leigh, 714 F. Supp. at 1471. As the court noted in its prior ruling, see id., how much the Trust retained as a reserve for litigation costs and whether this amount was reasonable is inconsequential to the issues which are properly before the court. The court will not make further findings about the reserve.

 2. The court acknowledged the existence of an Aetna policy which insured the Trust's fiduciaries in its earlier ruling. See id. at 1468. While the intervenors' argument about who -- Aetna or the Trust -- ultimately must write the checks for these fees is inartfully presented, it is not frivolous. The court ordered the Trust to "reimburse" the Bank for $ 5,755.00 and Dardick and Zuckerman for $ 116,984.74. See id. at 1470, 1472. The intervenors' contention, put in a way which they have not, is that the Trust already has reimbursed these defendants, via the Aetna policy.

 While the intervenors' argument is not frivolous, it is untimely. The legal issue of whether the Trust had to reimburse the Trustee, Dardick, and Zuckerman was before the court in Leigh, 669 F. Supp. at 1393, 1414-15. The time for the Trust, the Trustee, or the intervenors to plead satisfaction of this obligation was then. They did not do so, even though they knew about the Aetna policy at trial. See Trial Exhibit 400. The Trust and the intervenors thus could not have raised the issue of satisfaction on a Rule 59(e) motion then, and they certainly cannot raise the issue on such a motion now. See Federal Deposit Ins. Corp. v. Meyer, 781 F.2d 1260, 1268 (7th Cir. 1986) (party cannot use Rule 59 motion "to raise arguments which could, and should, have been made before the judgment issued").

 The intervenors suggest that the circumstances surrounding the Aetna policy indicate that the defendants and the court are tricking them out of an opportunity to avoid reimbursing the Trustee, Dardick, and Zuckerman for attorneys fees. The intervenors base this contention on the defendants' delivery in camera of their agreements with Aetna and with the original plaintiffs in this case to the court. The intervenors believe that were they to see these agreements, they would unmask a grand plot to bilk them of what little is left in the Trust.

 The court will not decide if the intervenors' allegations about the Aetna agreements are true. The court asked the defendants to provide these agreements because at one time the court believed that the agreements could assist the court in settling this tiresome matter. The court abandoned that hope long ago, and as a consequence, the court has ignored the Aetna agreements. Every ruling which the court has made to date is based on documents which are in the public record, and to which the intervenors have had access at least as far back as 1987. See, for example, Leigh, 669 F. Supp. at 1413-14 (findings of fact regarding Restated Reliable Manufacturing Corporation Employees' Profit Sharing Plan and the Trust Agreement for the Restated Plan). The intervenors should examine their own house to find out why they cannot prevail on this issue at this time. Their counsel has performed inadmirably, or at least clumsily, throughout the litigation of this matter, perhaps with deleterious results for his clients.

 The court thus will not explore the Aetna matter further. *fn4" As for the question of what Dardick and Zuckerman can and cannot do with their judgment, that issue too is not properly before the court on this motion. The court merely has granted judgment to Dardick and Zuckerman. They have not moved to enforce it. Until they do, this issue is not ripe for resolution.

 3. The intervenors' third argument is frivolous. That this court has rendered judgments involving the Trust does not make this court the administrator of the Trust. If the intervenors wish to get money from the Trust, they should ask the Trustee. If the Trustee denies them their money wrongfully, they should sue the Trustee. The issues before this court for trial and for post-trial resolution were narrow and specific. See Leigh, 669 F. Supp. at 1393 (discussing issues for trial); id. at 1414-17 (setting forth proper issues for post-trial motions). If the intervenors believed that the court omitted to try certain critical issues or had ignored certain matters for post-trial resolution, they should have included that contention when they appealed this court's decision in Leigh, 669 F. Supp. 1390. *fn5" It is too late to present the issue of future administration of the Trust in this case.

 Attorneys Fees

 In this court's prior opinion, the court ruled that the intervenors' attorney, Richard C. Moenning, had spent a reasonable 807 hours in prosecuting the intervenors' claims. Mr. Moenning had asked the court to multiply this figure times $ 150.00, his current hourly rate, to obtain the "lodestar" amount of attorneys fees for the intervenors. Mr. Moenning spent more time justifying this figure as a risk multiplier, rather than arguing that it was a proper adjustment for inflation. The court rejected Moenning's request for a risk multiplier, and with it went Moenning's prayer for fees at his current hourly rate. See Leigh, 714 F. Supp. at 1473-76.

 Four days after this court rendered its decision, the Supreme Court issued its ruling in Missouri v. Jenkins by Agyei, 491 U.S. 274, 109 S. Ct. 2463, 105 L. Ed. 2d 229 (1989). There the Court held that in awarding attorneys fees under 42 U.S.C. ยง 1988 (1982), it was appropriate to adjust for a delay in payment by awarding interest on attorneys fees incurred several years prior to an award of attorneys fees. See id. at 2468-69. The care which the Court took in discussing this issue suggests that it would be an abuse of discretion not to adjust for inflation in cases where a significant period of time has passed between the incurring of legal costs and the awarding of fees.

 The court thus holds that the intervenors are entitled to an adjustment for inflation, since more than three years has passed between the time their attorney worked for them (March 1984) and the time they petitioned for fees (December 1987). *fn6" That an adjustment is appropriate does not mean that the prevailing party is entitled to whatever adjustment he or she puts forth, however. As usual, the intervenors put forth a figure ($ 150.00, their counsel's current hourly rate) and assume that this accurately compensates them for the inflation that prevailed in 1980-87. While the court's calculations confirm that it does, *fn7" this appears to be an entirely fortuitous result. The court encourages parties to justify their rates better than the intervenors have, for the court is not inclined to do work which is clearly the responsibility of the party which petitions for fees.

 The court will award the intervenors $ 121,050.00 in attorneys fees. *fn8"

 SUMMARY

 The court grants the intervenors' motion in part and denies it in part. The court enters final judgment (1) in favor of National Boulevard Bank and against the Reliable Trust in the amount of $ 5,755.00; (2) in favor of the Trust and against Libco Corporation and Clyde Engle in the amount of $ 44,763.45; (3) in favor of the Trust and against Nathan Dardick and Ronald Zuckerman in the amount of $ 44,763.45; (4) in favor of Dardick and Zuckerman and against the Trust in the amount of $ 116,984.74; and (5) in favor of the intervening plaintiffs and against Dardick, Zuckerman, Libco, and Engle in the amount of $ 126,850.54. The court directs the clerk to file the documents submitted in camera to the court under seal.


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