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Seaga Manufacturing, Inc. v. Intermatic Manufacturing Ltd.

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

March 16, 2015

Seaga Manufacturing, Inc., Plaintiff,
v.
Intermatic Manufacturing Ltd., Defendants.

MEMORANDUM OPINION AND ORDER

IAIN D. JOHNSTON, Magistrate Judge.

For the reasons stated below, based on the unusual circumstances of this case, this Court exercises its broad discretion and takes the admittedly unusual step of assigning counsel under U.S. District Court for the Northern District of Illinois Local Rules 83.35, 83.36 and 83.37 to represent David Clements - a defendant - in this case.

This case was filed on February 8, 2013. At that time, the only defendants were corporate entities: Intermatic Manufacturing Limited and Intermatic Manufacturing, Inc. (the "Intermatic companies"). (The Plaintiff's position is that the Intermatic companies were held out as being one and the same. Dkt. #182, p. 3.) When the case was filed, the Plaintiff immediately moved for injunctive relief. A central point of that motion and the evidentiary hearing that followed was that injunctive relief was needed because the Intermatic companies were insolvent. Dkt. #6 at p. 18. The Intermatic companies were represented by counsel at that time. Eventually, the motion for injunctive relief was denied. Dkt. #29.

After the order denying the injunctive relief, the case scuffled along, but the Intermatic companies continued to be represented by counsel. The Intermatic companies were not particularly timely in responding to discovery and when they did it was often inadequate - an unsurprising circumstance when a party is either insolvent or on the verge of insolvency. The parties also filed various pretrial motions, which were ruled upon by the District Court, with each side winning some issues and losing some issues.

During discovery, David Clements, an employee of at least one the Intermatic companies, was deposed. David Clements testified that he had not been paid for over one year.

On January 24, 2014, the Plaintiff filed a first amended complaint. Dkt. #149. In the first amended complaint, the Plaintiff added David Clements as a defendant, asserting claims against him individually. Dkt. #149. David Clements moved to dismiss. Dkt. ##162, 163. The Plaintiff then filed a second amended complaint. Dkt. #182. The second amended complaint again asserted claims against David Clements in his personal capacity for work he performed on behalf of the Intermatic companies. Dkt. #182 at pp. 10-12. Count II of the second amended complaint alleged fraud in the inducement against David Clements and the Intermatic companies. Dkt. #182, at p. 10. The previously filed motion to dismiss was allowed to stand as David Clements' response to the second amended complaint. Dkt. #181. That motion was filed by David Clements' retained counsel.

After a series of various motions to compel, all counsel for all defendants moved to withdraw. Dkt. ##208-211. It was clear that counsel sought to withdraw because they were not being compensated. The Court granted the motions to withdraw. Dkt. #213.

On August 19, 2014, the District Court denied David Clements' and the other defendants' motion to dismiss. Dkt. #218.

Less than one week later, the Court received notice that Intermatic Manufacturing Limited was filing a "petition for winding up" (essentially seeking bankruptcy) in the United Kingdom. The notice stated that Intermatic Manufacturing Inc. was a solely owned subsidiary of Intermatic Manufacturing Limited. Dkt. #219.

For good or bad, the Plaintiff's theory of its case - that the Intermatic companies were insolvent - proved to be true. Accordingly, the Plaintiff could not have been surprised by this turn of events. In fact, the Court was surprised that the petition was not filed previously.

On September 26, 2014, David Clements filed his pro se appearance. Dkt. #232. On October 3, 2014, David Clements filed his answer and affirmative defenses to the second amended complaint. Dkt. #239.

After the Plaintiff filed various motions for entry of default judgment against the Intermatic companies, those motions were stricken. Dkt. #249.

On October 15, 2014, the Plaintiff sought a default judgment against the Intermatic companies and Robert Hawthorne. The Court has repeatedly stated that it could not enter a default judgment against these other defendants pursuant to In re Uranium Antitrust Litigation, 617 F.2d 1248, 1262 (7th Cir. 1980). The Court has also repeatedly stated that if the Plaintiff were to voluntarily dismiss David Clements, it would enter a report and recommendation that default judgment be entered against these other defendants. See Domanus v. Lewcki, 742 F.3d 290, 304 (7th Cir. 2014). To date, for whatever reason, the Plaintiff has steadfastly refused to voluntarily dismiss David Clements. Dkt. #253. (The Court has since denied the motion without prejudice so that the Plaintiff to file an objection to this ruling with the District Judge.)

In October 2014, David Clements suffered a series of small strokes. According to his physician, "A direct precipitant of this stroke... was the extreme stress regarding this lawsuit." Dkt. #266. According to the physician, David Clements suffers from some mild cognitive impairments and memory loss. These ...


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