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Vincent J. Schmidt, Diane Schmidt, Randall J. Braun, Tina Braun v. Ameritank

December 5, 2011

VINCENT J. SCHMIDT, DIANE SCHMIDT, RANDALL J. BRAUN, TINA BRAUN, WILLIAM DUREN, CHRIS DUREN, AND JEREMY V. HICKS, PLAINTIFFS,
v.
AMERITANK, INC., BRUCE JULIUS, AND STEPHEN YOUNG, DEFENDANTS.



The opinion of the court was delivered by: Stiehl, District Judge:

MEMORANDUM & ORDER

This matter is before the Court, sua sponte, for docket control.

BACKGROUND

The pertinent proceedings in the case are set out below. This case was opened on February 1, 2007 (Doc. 1). In their complaint (Doc. 2), plaintiffs allege that defendants, Ameritank, Inc. ("Ameritank"), Bruce A. Julius ("Julius"), and Stephen Young ("Young"), collected health and dental insurance premiums from plaintiffs and then failed to pay the health insurer and failed to notify plaintiffs that the health and dental insurance was cancelled. Plaintiffs request damages equal to all claims which would have been paid had payment been remitted to the benefits provider; damages equal to the difference in cost for premiums under the cancelled policy and the replacement policy plaintiffs will be required to obtain; attorney's fees, litigation expenses and costs; and other relief the Court deems appropriate (Doc. 2). The Court initially set a presumptive trial month of May, 2008 (Doc. 17).

On October 5, 2007, defendants filed a suggestion of death, stating that defendant Stephen Young had died (Doc. 44). On January 30, 2008, this Court dismissed plaintiffs' demands for compensatory and extracontractual relief as legal in nature and therefore barred under § 1132(a)(1)(B) and § 1132(a)(3)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA") (Doc. 52). Plaintiffs' demands for consequential damages (i.e., attorney's fees, litigation expenses, and costs) remained under § 1132(g) of ERISA, which specifically authorizes the Court, in its discretion, to grant such relief (Doc. 52). The Court directed the plaintiffs to file an amended complaint complying with these rulings (Doc. 52). Plaintiffs filed their first amended complaint (Doc. 53) on February 19, 2008, requesting the cost of deductions for premiums which were not paid; attorney's fees, litigation expenses and costs; and other relief the Court deems appropriate (Doc. 53). After defendants filed a motion for extension of time (Doc. 55), the Court reset the trial month for June, 2008 (Doc. 57).

On May 30, 2008, defendants Ameritank and Julius filed a suggestion of bankruptcy, notifying the Court that each had filed a Chapter 7 Bankruptcy Petition in the United States District Court for the Southern District of Illinois (Doc. 62). An Order of the Court dated June 2, 2008 (Doc. 63), stayed this case pursuant to 11 U.S.C. § 362, until the Bankruptcy Court lifts its stay as to defendants Ameritank and Julius.

From June 2, 2008, until April of 2011, nearly three (3) years, nothing was filed with this Court by either the plaintiffs or the defendants. An Order of the Court dated March 25, 2011 (Doc. 64), directed the parties to file status reports.

On April 18, 2011, defendants*fn1 Ameritank and Julius filed a status report (Doc. 67), stating:

(1) both of defendants' separate bankruptcy cases have been fully adjudicated and closed by the Bankruptcy Court; (2) defendants believe that plaintiffs' claims in this cause of action were discharged by the respective bankruptcies filed on behalf of defendants; (3) defendants' counsel sent a letter to plaintiffs' counsel of record, Mr. Hubbs, to discuss the status of the case and potential dismissal, but Mr. Hubbs advised that he had changed law firms and was no longer responsible for plaintiffs' file, which remained with his former law firm; (4) Mr. Hubbs told defendants that he believed that Katherine Collins-Whittaker of the law firm of Brown & Crouppen was responsible for plaintiffs' file, and defendants then sent a copy of the letter to her, but she has not responded; and (5) defendants believe the matter should be dismissed with prejudice.

To date, neither plaintiffs, nor their counsel of record, Mr. Hubbs, have filed anything in response to the Court's Order directing them to file a status report, nor have they filed anything in response to defendants' status report. On October 19, 2011, this Court directed plaintiffs to show cause, why the cause of action should not be dismissed for want of prosecution pursuant to Fed. R. Civ. P. 41(b).Plaintiffs failed to respond to this order, let alone, show cause, and the period within which the plaintiffs could respond has expired.

In its Order to show cause (Doc. 68), the Court noted that Earl W. Hubbs, a member, at the time, of the law firm of Brown & Crouppen, P.C., entered his appearance as counsel for all plaintiffs in this case on July 25, 2007 (Doc. 41).Pursuant to Local Rule 83.1(g), "[a]n attorney may not withdraw an entry of appearance for a party without leave of court and notice to all parties of record." No motion to withdraw as counsel of record was filed by Mr. Hubbs, nor did any attorney from the law firm of Brown & Crouppen file an entry of appearance or a motion for substitution as counsel for plaintiffs. As of this date, Earl W. Hubbs remains on the Court's docket as lead attorney for the plaintiffs.

LEGAL STANDARD

Under Fed. R. Civ. P. 41(b) a district court may, sua sponte, dismiss an action for lack of prosecution. James v. McDonald's Corp., 417 F.3d 672, 681 (7th Cir. 2005). "A dismissal with prejudice is a harsh sanction which should usually be employed only in extreme situations, when there is a clear record of delay or contumacious conduct, or when other less drastic sanctions have proven unavailing." Webber v. Eye Corp., 721 F.2d 1067, 1069 (7th Cir. 1983). Before dismissing an action for want of prosecution, the district court should give "due warning" to plaintiff's counsel. Matter of Bluestein & Co., 68 F.3d 1022, 1026 (7th Cir. 1995). In light of the fact that "a plaintiff is deemed to be culpable for the actions of, and to have notice of all facts charged to, a freely selected agent" due warning directed at counsel is sufficient, and the court need not warn plaintiff directly. Id. (citing Link v. Wabash R.R. Co., 370 U.S. 626, 633-34 (1962).

Due warning need not consist of repeated warnings, nor must it be formalized in a rule to show cause. Matter of Bluestein & Co., 68 F.3d at 1026. "Similarly, the district court's responsibility to warn does not require the firing of a 'warning shot,' i.e., levying less severe sanctions prior to resorting to dismissal for want of prosecution." Id. Due warning must be "direct and explicit," and a mere "standing order that failure to abide by the court's ...


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