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Orgler Homes, Inc. v. Chicago Regional Council of Carpenters

March 26, 2009


The opinion of the court was delivered by: Magistrate Judge P. Michael Mahoney


I. Introduction

Before the court is Plaintiffs' motion to present additional evidence relating to the court's award of fees and costs entered on November 24, 2008. The factual and procedural histories related to this motion are complicated. Parties have briefed the issues at length, have submitted affidavits, declarations, and other evidence, and have engaged in multiple hearings. Because the court's decision is based upon a renewed understanding of the facts, a detailed account of the events leading to this motion is necessary.

II. Background

In March 2007, an attorney for the plaintiffs, Gerard Smetana ("Smetana"), began discussing with Michael Beilman ("Beilman"), a partner at Mueller Consulting, LLC ("Mueller"), the possibility of Mueller providing expert witness services for Plaintiffs. (Defs.' Resp. to Pls.' Mot. to Reconsider Ex. D.) A series of letters between Smetana and Beilman in late March 2007 discussed the possible relationship, and Beilman began enlisting the help of his employee, Gary Meade ("Meade"), as a "gofer" to obtain information and data for the expert report. (Id. at Ex. D--G; Kleeman Aff. ¶ 5, Feb. 4, 2008 (hereinafter "Kleeman Aff.").)

Mueller drafted an Engagement Agreement ("Agreement") and sent it to Smetana on April 4, 2007, who then assisted in drafting the final version. (Defs.' Resp. Ex. H; Smetana Decl. ¶ 4.) A final copy of the Agreement was sent to David Orgler ("Orgler") on April 16, 2007, through his attorney, Smetana. (Defs.' Resp. Ex. K.) The Agreement designated Beilman as the principal investigator, directly supervising and managing the data base. (Kleeman Aff. ¶ 5.) Robert Kleeman ("Kleeman"), of the OnePointe Financial Valuation Group, LLC, would serve as an expert consultant to Mueller, and would be the testifying expert should Plaintiffs need one. (Id; Meade Decl. ¶ 1, Jan. 30, 2009 (hereinafter "Meade Decl.").) Also on April 16, 2007, Beilman wrote a second letter to Orgler, which was also sent through Smetana, that listed information he would need to complete the expert analysis. (Defs.' Resp. Ex. L.) Finally, an addendum to the Agreement was sent the following day outlining the required retainer fees for various phases of the analysis. (Id. at Ex. M.) Although the letters were sent to Smetana as well as Orgler, all decisions regarding the signed Agreement, fees, and payment terms were agreed upon solely between Orgler and Mueller (Meade Decl. ¶ 6), and all of Mueller's fees were paid directly by Orgler Homes, Inc. (Meade Decl. ¶ 37).

On May 10, 2007, Beilman wrote a letter to Smetana and Orgler explaining that he had received the signed Engagement Agreement from Orgler, but had not yet received the initial retainer fee. (Defs.' Resp. Ex. O; Meade Decl. ¶ 4.) Again, on May 22, 2007, Beilman wrote a letter to Smetana and Orgler requesting the initial retainer fee. (Defs.' Resp. Ex. P; Meade Decl. ¶ 5.)

Also on May 22, 2007, Beilman sent a fax directly to Orgler stating that he was mailing a copy of the signed Agreement to him. (Defs.' Resp. Ex. Q.) On May 24, 2007, Meade faxed a request to Orgler for the information referenced in the April 16, 2007 letter, which was necessary to prepare for the analysis. (Meade Decl. ¶ 8, Ex. D.) From May 24, 2007 on, Mueller communicated on a day to day basis directly with Orgler. (Id. ¶ 9.)

On June 15, 2007, Beilman sent a letter to Smetana and Orgler confirming that Beilman, Orgler, and Meade had met on June 8, 2007 to discuss the project, and that Orgler had delivered the initial retainer fee at that time. (Defs.' Resp. Ex. R.) Also, in June, Meade began compiling data and making field visits to local government and realty agencies to gather information that was necessary to understand the demographic and building trends in Union, Illinois and the surrounding area. (Meade Decl. ¶ 10.)

On July 12, 2007, Meade visited Railway Estates and met with Orgler. (Id. ¶ 11.) On July 17, 2007, Meade sent Smetana a status report and requested a meeting to review the initial analysis. (Defs.' Resp. Ex. S.) Smetana wrote a letter back to Meade on July 19, 2007 in which he agreed to a meeting between him, Meade, and Orgler to review the preliminary report, and which he indicated was scheduled to occur during the week of July 30, 2007. (Defs.' Resp. Ex. T.)

On August 2, 2007, Meade met with Orgler in Mueller's St. Charles office, and discussed information that he would need to complete the report. (Meade Decl. ¶ 11; Defs.' Resp. Ex. U.) Meade then faxed a letter to Smetana confirming the needed information discussed at the August 2 meeting. (Defs.' Resp. Ex. U.) On August 14, 2007, Meade met with Orgler in Union and Marengo to file a freedom of information request with the local building department, and to tour the local housing developments in Marengo. (Meade. Decl. ¶¶ 11, 15.) On August 24, 2007, Meade again met with Orgler in Union to collect cost data. (Id.) Meade stated in his declaration that he did "not consult the attorneys for Orgler Homes Inc. about any" of the July or August visits, either "before or after the visits." (Meade Decl. ¶ 16.) Meade did, however, occasionally send status reports to Smetana. (see Defs.' Resp. Exs. S, V.)

During August 2007, Mueller "compiled an MLS data base for relevant transactions in the area, and prepared an initial assessment of housing market trends in the Union [and] Marengo area[s]." (Meade Decl. ¶ 12.) "This assessment described housing trends prior to and after the start of Union picketing." (Id.)

On August 29, 2007, the court entered an expert discovery schedule. Plaintiffs' disclosure under Federal Rule of Civil Procedure 26(a)(2) was due November 1, 2007, with corresponding depositions to take place by November 30, 2007. Defendants' rebuttal expert disclosure was due December 31, 2007, with corresponding depositions to take place by January 30, 2008. (Court Doc. 227.)

In early September, Meade, Beilman, Kleeman, and Orgler met to discuss the initial work. (Meade Decl. ¶ 13.) According to Meade, "Smetana attended this meeting for informational purposes only in his role as attorney for Orgler Homes[,] Inc." (Id.) At the meeting, Orgler provided Mueller with insight into the housing market and suggested data sources for further investigation. (Id.) After the meeting, Meade, Beilman, and Kleeman met and determined the future direction of the analysis. (Id. ¶ 14.)

On October 4, 2007, Kleeman met with Beilman in St. Charles, IL to plan the completion of the expert report. (Kleeman Aff. ¶ 6.) Tragically, Beilman was diagnosed with brain cancer on October 17, 2007. (Id.) On October 22, 2007, Beilman had surgery. (Id.) Kleeman stated in his affidavit that he "was unable to communicate effectively with Mr. Beilman and update [himself] as to the work that [Beilman] had performed[.]" (Id.) "A decision was made very late in October that Mr. Beilman could no longer be part of this project, and that [Kleeman] would have to take over." (Id.)

Meanwhile, during October, Meade again visited the Orgler Homes development, and met with Orgler to review his internal accounting data. (Meade Decl. ¶ 20.) At that time, Meade began work on the cost analysis portion of the report, and requested more information from Orgler. (Id.) On October 23, 2007, Meade sent an email to Orgler following up on a discussion that had occurred the week prior, in which Meade discussed the need for a some more information. (Id. ¶ 17, Ex. E.) On October 25, 2007, Meade sent Smetana a status report. (Defs.' Resp. Ex. W.) On October 29, 2007, Orgler emailed Meade back with some of the needed information, which Meade forwarded on to Kleeman to aid in Kleeman's expert report. (Meade Decl. ¶¶ 18, 20, Ex. F.)

On November 1, 2007, Kleeman issued the expert report. (Id. ¶ 20.) Prior to issuing the report, Kleeman and Meade met with Smetana to ensure that the report was in the proper format under the court's rules. (Id. ¶ 21). According to Meade, "Mr. Smetana did not provide any direction or opinion regarding the content of the report." (Id.) Smetana's declaration confirms that he did not ...

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