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Pace v. Timmermann's Ranch and Saddle Shop, Inc.

United States District Court, Seventh Circuit

December 11, 2013

JEANNE PACE, DAN PACE, Plaintiffs,
v.
TIMMERMANN'S RANCH AND SADDLE SHOP, INC.; DALE TIMMERMANN; CAROL TIMMERMANN; TAMMY RIGSBY; DAWN MANLEY, Defendants.

MEMORANDUM OPINION AND ORDER

JAMES B. ZAGEL, District Judge.

Plaintiffs Jeanne Pace ("Jeanne") and Dan Pace ("Dan") have filed a complaint against Defendants Timmermann's Ranch and Saddle Shop, Inc. ("Timmermann's"), Dale Timmermann ("Dale"), Carol Timmermann ("Carol"), Tammy Rigsby ("Tammy"), and Dawn Manley ("Dawn") for false imprisonment, abuse of process, intentional infliction of emotional distress, conspiracy, in concert activity, aiding and abetting, and loss of consortium. Currently before the court is Defendants' motion to dismiss Plaintiffs' complaint with prejudice pursuant to Federal Rules of Civil Procedure 12(b)(6) and Rule 13(a). For the following reasons, Defendants' motion is granted.

I. BACKGROUND

Jeanne and Dan Pace, citizens of Wisconsin, are husband and wife and reside in Lake Geneva, Wisconsin. Timmermann's is a corporation with its principal place of business in Island Lake, Lake County, Illinois. Dale Timmermann, Carol Timmermann, Tammy Rigsby, and Dawn Manley are each citizens of Illinois, residing within the jurisdiction of this court.

Dale and Carol own and operate Timmermann's. In April 1997, Jeanne was hired by Carol to be an in-house bookkeeper of Timmermann's. On or around February 15, 2011, Timmermann's terminated Jeanne's employment due to Jeanne's allegedly unlawful conduct, and asked the Lake County Sheriff to conduct an investigation. This investigation resulted in Jeanne's arrest, during which she spent a night in jail. On March 3, 2011, Timmermann's filed a complaint against Jeanne for conversion, abuse of fiduciary duty, and related claims based on allegations that Jeanne stole merchandise, converted corporate checks and used the corporate credit card for personal purchases. ECF/ECM Docket, Case No. 1:11-cv-01509. On April 5, 2011, Jeanne filed an answer, affirmative defenses, and a counterclaim in Case No. 1:11-cv-01509.

On March 13, 2012, the State's Attorney of Lake County charged Jeanne Pace with committing the offenses of theft, forgery, and unlawful use of a credit card. The criminal proceeding instituted by the State's Attorney against Jeanne is currently pending.

On February 1, 2013, Jeanne and her husband Dan filed a seven-count complaint to commence the present action, Case No. 1:13-cv-00818, against Defendants Timmermann's and four Timmermann's employees, Dale, Carol, Tammy, and Dawn. The complaint, which included a loss of consortium claim by Dan, was based on the alleged false arrest of Jeanne by the Lake County Sheriff's department. On April 2, 2013, this Court consolidated Case No. 1:11-cv-01509 and the present action, Case No. 1:11-cv-00818, for the limited purpose of discovery and pretrial practice. ECF/ECM Docket in Case No. 1:11-cv-01059, Docket Entry #94.

On May 2, 2013, Defendants filed a motion to dismiss the present action, 1:13-cv-00818, arguing that Plaintiffs' complaint contains allegations that should have been brought as compulsory counterclaims to the previous suit, Case No. 1:11-cv-01509. On May 13, 2013, Plaintiffs moved to (1) amend its counterclaims in Case No. 1:11-cv-01509, and (2) consolidate pending cases, Case Nos. 1:11-cv-01509 and 1:13-cv-00818, for trial.

II. DISCUSSION

Under Federal Rule of Civil Procedure 13(a), a counterclaim is compulsory if it: (1) exists at the time of the pleading; (2) arises out of the same transaction or occurrence as the opposing party's claim; and (3) does not require for adjudication parties over whom the court may not acquire jurisdiction. Burlington Northern Railroad Co. v. Strong, 907 F.2d 707, 710-11 (7th Cir. 1990); Fed.R.Civ.P. 13(a). A claim is not compulsory, however, if at the time the original action commenced: 1) the claim was the subject of another pending action; or 2) the opposing party brought suit upon his claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under Fed.R.Civ.P. 13. Fed.R.Civ.P. 13(a)(2)(A) and (B); Warshawsky & Co. v. Arcata Nat'l Corp., 552 F.2d 1257, 1261 (7th Cir. 1977).

If a counterclaim is compulsory and the party does not bring it in the original lawsuit, that claim is thereafter barred. Baker v. Gold Seal Liquors, Inc., 417 U.S. 467, 469 n. 1, 94 S.Ct. 2504, 2506 n. 1, 41 L.Ed.2d 566, 572 (1974); see Asset Allocation & Management Co. v. Western Employers Inc. Co., 892 F.2d 566, 572 (7th Cir.1989). Because it balances competing interests, Rule 13(a) may sacrifice the convenience of the party with a compulsory counterclaim in the interest of judicial economy. Martino v. McDonald's Sys., Inc., 598 F.2d 1079, 1082 (7th Cir. 1979), cert denied, 444 U.S. 966 , 100 S.Ct. 455, 62 L.Ed.2d 379 (1979).

1. Claims Existence at the Time of the Pleading

For a counterclaim to be compulsory, it must exist at the time of the original pleading. Burlington, 907 F.2d at 712. As such, even if a party's counterclaim involves the same transaction as the original pleading, a party need not assert it as a compulsory counterclaim if it has not matured when the party serves his answer. 6 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure ยง 1411, at 81 (2d ed. 1990).

Plaintiffs' claims were in existence at the time of the original pleading and should have been brought as compulsory counterclaims. Plaintiffs argue that Jeanne's abuse of process claim was not in existence until she was indicted by the Lake County State's Attorney in March 13, 2012, claiming that there could be no abuse of process without the "process" of indictment. Plaintiffs' Complaint, however, alleges that Defendants committed an abuse of process by providing law enforcement false information and by "urg[ing] the arrest and/or indictment" of Jeanne. Complaint at 23, Jeanne Pace v. Timmermann's Ranch and Saddle Shop, No. 1:13-cv-00818 (2013). The abuse of process claim, ...


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