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De Silva v. Cinquegrani

United States District Court, N.D. Illinois, Eastern Division

August 13, 2014

R. TAMARA de SILVA, Plaintiff,
v.
SALVATORE CINQUEGRANI, Defendant.

MEMORANDUM OPINION AND ORDER

THOMAS M. DURKIN, District Judge.

Defendant Salvatore Cinquegrani ("Cinquegrani") moves for attorney's fees and sanctions against Plaintiff R. Tamara de Silva ("de Silva") pursuant to Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927. For the following reasons, the motion is denied.

Procedural Background[1]

De Silva brought this suit against Cinquegrani alleging claims of breach of contract and promissory estoppel. R. 1. Cinquegrani is the CEO of Objectwave Corp., a software development company. R. 37 ¶ 7. De Silva knew Cinquegrani because the two were acquainted as neighbors. Id. ¶ 8. De Silva alleged that she and Cinquegrani entered into a contract in which Cinquegrani agreed to develop a financial markets software application. R. 1 ¶ 6. De Silva further alleged that she was in the process of developing the software, and "specifically changed programmers based upon Cinquegrani's promises to help develop it." Id. ¶ 13. De Silva asserted that had Cinquegrani not agreed to develop this software, she would have found someone else to develop it. Id. De Silva also alleged that she spent in excess of 100 hours of her own time in developing the software along with Cinquegrani. Id. ¶ 15.

At some point, the parties had a falling out, and Cinquegrani refused to return de Silva's information and the software he had developed to that point. R. 1 ¶¶ 17-18. On June 23, 2011, de Silva filed suit against Cinquegrani. R. 1. In the complaint, de Silva sought recovery for damages and equitable relief to prevent Cinquegrani from destroying the developed software and requesting he tender it to her. Id. Cinquegrani moved to dismiss de Silva's complaint. R. 18. The Court granted Cinquegrani's motion and dismissed de Silva's complaint without prejudice. The Court held that de Silva failed to allege consideration, a necessary element of a breach of contract claim, and further failed to allege that de Silva's reliance on Cinquegrani's promise was expected or foreseeable by Cinquegrani, a necessary element of her promissory estoppel claim. De Silva v. Cinquegrani, No. 11-C-4259, 2012 WL 1230763, at *4 (N.D. Ill. Apr. 12, 2012) (Leinenweber, J.). R. 24. De Silva filed an amended complaint once again alleging breach of contract and promissory estoppel, which Cinquegrani moved to dismiss. R. 26; R. 27. The Court allowed de Silva's promissory estoppel claim to stand, holding that unlike her previous complaint, her amended complaint adequately pled foreseeable reliance. De Silva v. Cinquegrani, No. 11-C-4259, 2012 WL 4017944, at *2 (N.D. Ill. Sept. 12, 2012) (Leinenweber, J.). Specifically, the Court pointed to de Silva's allegations that "[a]t all times, [Defendant] expected and could foresee that his promise to create the software based upon de Silva's algorithms caused her to chose [sic] Cinquegrani as a programmer rather than other programmers[, ]'" that she "stressed to [Cinquegrani] that time was of the essence because potential buyers were interested in the program" and "that the promise took her away from other potential programmers, " all of which she "explained" to Cinquegrani "at the time that the parties negotiated the matter, and through subsequent e-mail conversations." Id. As to the breach of contract claim, the Court again dismissed the claim because the amended complaint still failed to adequately plead consideration. Id. On November 14, 2012, Cinquegrani filed a two-count counterclaim against de Silva seeking a declaratory judgment and alleging a state law claim of unjust enrichment. R. 38.

On January 14, 2013, the case was reassigned to the undersigned Judge. R. 41. Cinquegrani later moved to compel de Silva to-among other things-respond to interrogatories and moved for sanctions related to these delays. R. 50. Judge Gilbert, the Magistrate Judge assigned to the case, largely granted Cinquegrani's motion to compel, awarding him $1, 040 in attorney's fees and costs associated with bringing the motion. R. 53; R. 54; R. 67. One of the interrogatories de Silva was ordered to respond to, interrogatory number six (6), asked de Silva to identify the potential buyers for her software. R. 86-10 at 2-3. De Silva stated "[p]otential buyers of market risk/volatility software are naturally every single market user." Id. at 3. On August 5, 2013, de Silva moved to dismiss her case voluntarily, and this Court granted her motion with prejudice. R. 78; R. 82. The Court also granted de Silva's motion to dismiss Cinquegrani's counterclaims. R. 84.

Analysis

Cinquegrani seeks attorney's fees as a sanctions against de Silva based on Rule 11 and 28 U.S.C. § 1927. R. 86. He claims that fees are warranted because: (1) de Silva filed two complaints pursuing a breach of contract claim while knowing there was no written contract; (2) de Silva pursued a promissory estoppel claim knowing that there were "no actual programmers or investors" interested in the software; and (3) de Silva refused to respond to, and delayed, discovery. R. 86 ¶¶ 24-27.[2]

A. Rule 11 Sanctions

Rule 11 gives counsel "a duty to make a reasonable inquiry in advance of filing to ensure that no action for any improper purpose' is filed." City of E. St. Louis v. Circuit Ct. for the Twentieth Judicial Circuit, 986 F.2d 1142, 1143 (7th Cir. 1993). Rule 11 provides that courts "may impose an appropriate sanction' for a violation of Rule 11(b)." Cooney v. Casady, 735 F.3d 514, 523 (7th Cir. 2013) (citing Fed.R.Civ.P. 11(c)(1)). Subdivision (b) of Rule 11 provides:

By presenting to the court a pleading, written motion, or other paper-whether by signing, filing, submitting, or later advocating it-an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;
(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity ...

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