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Minnesota Lawyers Mutual Insurance Co. v. Schulman

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

September 19, 2016

MINNESOTA LAWYERS MUTUAL INSURANCE COMPANY, Plaintiff,
v.
JERRY A. SCHULMAN, individually and d/b/a the Law Offices of Jerry A. Schulman, DARLENE M. KOPTA, DARSTAR ENTERPRISES, INC., an Illinois Corporation, AMERICAN SURGICAL INSTRUMENTS CORPORATION, d/b/a ASICO, and ASICO, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          AMY J. ST. EVE United States District Court Judge

         Before the Court is Plaintiff Minnesota Lawyers Mutual Insurance Company (“MLM”)'s motion for summary judgment on Counts I, III, and V of the Second Amended Complaint. (R.176). In particular, MLM seeks an order: (i) rescinding the professional liability policies that MLM issued to Defendant Jerry A. Schulman (“Schulman”), effective on or after January 1, 2012 (Count I); (ii) declaring that the claims-made provision of MLM's policies do not provide coverage for identified claims, suits, and disciplinary actions, and declaring that MLM owes no defense or indemnity obligation to Schulman arising from said matters (Count III); and (iii) declaring that Schulman breached the notice provision of MLM's policies with respect to said matters, barring any associated defense or indemnity obligation (Count V). (R.124, Second Am. Compl. for Declaratory Judgment). Defendant Schulman has opposed this motion.[1] For the following reasons, the Court grants MLM's motion for summary judgment as to Count I. The Court denies as moot its motion as to Counts III and V.

         BACKGROUND[2]

         I. The Parties

         Plaintiff MLM is a Minnesota insurance corporation with its principal place of business in Minneapolis, Minnesota. (R.178, Rule 56.1(a)(3) Stmt. Facts ¶ 1). Defendant Schulman is a patent and trademark attorney and a citizen of Illinois. (Id. ¶¶ 2, 16, 79). Defendant Darlene Kopta is a citizen of Illinois, and Defendant Darstar Enterprises, Inc. is an Illinois corporation with its principal place of business in Illinois. (Id. ¶ 3). Former named defendant American Surgical Instruments Corporation is a Delaware corporation with its principal place of business in Illinois, while ASICO, LLC is an Illinois liability corporation whose members-Ravi Nallakrishnan, Sagar Ghotavadekar, and Abishishek Gundugurti-are citizens of Illinois. (Id. ¶ 4).[3] Jurisdiction and venue are proper in this Court. (Id. ¶ 5). Kopta and ASICO were clients of Schulman.

         II. Northern District of Illinois Local Rule 56.1

         Because Schulman is proceeding pro se, [4] MLM served him with a “Notice to Pro Se Litigant Opposing Motion for Summary Judgment” as required by Northern District of Illinois Local Rule 56.2. (R.192). The notice explains the consequences of failing to properly respond to a motion for summary judgment and statement of material facts under Federal Rule of Civil Procedure 56 and Local Rule 56.1.

         Local Rule 56.1 “is designed, in part, to aid the district court, ‘which does not have the advantage of the parties' familiarity with the record and often cannot afford to spend the time combing the record to locate the relevant information, ' in determining whether a trial is necessary.” Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011) (citation omitted). Local Rule 56.1(a)(3) requires the moving party to provide “a statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to a judgment as a matter of law.” Petty v. City of Chicago, 754 F.3d 416, 420 (7th Cir. 2014). “The non-moving party must file a response to the moving party's statement, and, in the case of any disagreement, cite ‘specific references to the affidavits, parts of the record, and other supporting materials relied upon.'” Id. (citation omitted); see also L.R. 56.1(b)(3)(B). Local Rule 56.1(b)(3)(C) “requires specifically that a litigant seeking to oppose a motion for summary judgment file a response that contains a separate ‘statement . . . of any additional facts that require the denial of summary judgment.'” Sojka v. Bovis Lend Lease, Inc., 686 F.3d 394, 398 (7th Cir. 2012) (citation omitted). “The obligations set forth by a court's local rules are not mere formalities.” Zuppardi v. Wal-Mart Stores, Inc., 770 F.3d 644, 648 (7th Cir. 2014). District courts have discretion, therefore, “to strictly enforce local rules regarding summary judgment by accepting the movant's version of facts as undisputed if the non-movant has failed to respond in the form required.” Id.; see also Flint v. City of Belvidere, 791 F.3d 764, 767 (7th Cir. 2015) (“This Court has consistently upheld district judges' discretion to require strict compliance with Local Rule 56.1”).

         Although courts construe pro se pleadings liberally, see Ambrose v. Roeckeman, 749 F.3d 615, 618 (7th Cir. 2014), a litigant's pro se status does not excuse him from complying with the federal and local procedural rules. See Collins v. Illinois, 554 F.3d 693, 697 (7th Cir. 2009) (“even pro se litigants must follow procedural rules”); McNeil v. United States, 508 U.S. 106, 113, 113 S.Ct. 1980, 124 L.Ed.2d 21 (1993) (“we have never suggested that procedural rules in ordinary civil litigation should be interpreted so as to excuse mistakes by those who proceed without counsel”). In addition, because Schulman is a licensed attorney proceeding pro se, the Court does not grant him “the flexible treatment granted other pro se litigants.” Cole v. C.I.R., 637 F.3d 767, 773 (7th Cir. 2011); see also Hill v. Capital One Bank (USA), N.A., No. 14-CV-6236, 2015 WL 468878, at *4 (N.D. Ill. Feb. 3, 2015) (same).

         Here, Schulman's summary judgment submission consists of a Local Rule 56.1(b)(3)(B) response, along with a response brief. Schulman did not supplement the record with additional evidence or affidavits, or submit a separate statement of additional facts under Local Rule 56.1(b)(3)(C). His Local Rule 56.1(b)(3)(B) response expressly admits ¶¶ 1, 2, 3, 5, 6, 7, 9, 16, 22, 23, 28, 31, 34, 37, 49, 50, 52, 54, 55, 61, 69, 70, 74, 75, 77, 78, and 79 of MLM's Local Rule 56.1(a)(3) statement. (R.210). The response denies, in full or in part, the remaining paragraphs of the Local Rule 56.1(a)(3) statement. (Id.). Most of these denials, however, do not comply with Local Rule 56.1. In particular, Schulman's responses to ¶¶ 8, 10, 11-15, 17-20, 24, 27, 30, 33, 36, 38, 39-40, 41, 44, 56-59, 63-65, 67, 68, and 72-73 fail to include record citations demonstrating a factual dispute. See Bordelon v. Chicago Sch. Reform Bd. of Trustees, 233 F.3d 524, 528 (7th Cir. 2000) (Local Rule 56.1(b) “is not satisfied by evasive denials that do not fairly meet the substance of the material facts asserted. It is also not satisfied by citations to the record that support legal argument rather than controvert material facts”); see also Buttron v. Sheehan, No. 00 C 4451, 2003 WL 21801222, at *4 (N.D. Ill. Aug. 4, 2003) (striking response “for failure to provide a citation to facts that evidence a dispute”). To the extent Schulman includes record citations, he cites to deposition testimony bearing on his general “understanding” of the policy terms and the policy application process, and the general reasoning behind (i) his docketing and filing practices for ASICO, and (ii) his petition to revive Kopta's patent application. Given that MLM's asserted facts concern specific matters handled by Schulman, this response does not satisfy Local Rule 56.1(b)(3)(B)'s requirement to include “specific references” to the record “in the case of any disagreement, ” and/or Local Rule 56.1(b)(3)(C)'s requirement to set forth a separate statement “of any additional facts that require the denial of summary judgment, ” with supporting evidence. See L.R. 56.1(b); see also Buttron, 2003 WL 21801222 at *3 (non-movant must offer specific facts creating a genuine issue for trial and may not rely on general, conclusory statements); Bolden v. Dart, No. 11 C 8661, 2013 WL 3819638, at *2-4 (N.D. Ill. July 23, 2013). As the Court has previously recognized, “the purpose of Local Rule 56.1 statements and responses is to identify the relevant admissible evidence supporting the material facts, not to make factual or legal arguments.” Kelley v. Hardy, No. 14 C 1936, 2016 WL 3752970, at *1 (N.D. Ill. July 14, 2016) (citing Zimmerman v. Doran, 807 F.3d 178, 180 (7th Cir. 2015)). In responding to MLM's Local Rule 56.1(a)(3) statement ¶¶ 8, 10, 11-15, 17-20, 24, 27, 30, 33, 36, 38, 39-40, 41, 44, 56-59, 63-65, 67, 68, and 72-73, Schulman has failed to meet this standard. Accordingly, the Court deems the underlying statements of fact uncontested.[5]

         The relevant facts, stated as favorably to Schulman as the record and Local Rule 56.1 permit, are as follows.

         III. The Policies At Issue

         Beginning in January 2003, MLM issued to Schulman a series of claims-made Lawyers Professional Liability Policies, which were in effect for consecutive policy periods until January 1, 2015. (R.178, Rule 56.1(a)(3) Stmt. Facts ¶ 6). This case concerns three of those policies: (1) Policy No. 7557 10, effective January 1, 2012 to January 1, 2013 (the “2012 Policy”); (2) Policy No. 7557 11, effective January 1, 2013 to January 1, 2014 (the “2013 Policy”); and (3) Policy No. 7557 12, effective January 1, 2014 to January 1, 2015 (the “2014 Policy”) (collectively, the “MLM Policies”). (Id.).

         A. The MLM Policies

         The MLM Policies all bore the following caption:

         LAWYERS PROFESSIONAL LIABILITY POLICY (THIS IS A CLAIMS-MADE POLICY - READ CAREFULLY)

         (Id. at ¶ 7; see also R.1-2, 2012 Policy; R.124-3, 2013 Policy; R.124-4, 2014 Policy).

         The MLM Policies all contained the following “Coverage” provision:

         WE will pay, subject to OUR limit of liability, all DAMAGES the INSURED may be legally obligated to pay and CLAIM EXPENSE(S), due to any CLAIM, provided that:

(1) the CLAIM arises out of any act, error or omission of the INSURED or a person for whose acts the INSURED is legally responsible;
(2) the act, error, or omission occurred on or after the PRIOR ACTS RETROACTIVE DATE and prior to the expiration date of the POLICY PERIOD;
(3) the CLAIM results from the rendering of or failure to render PROFESSIONAL SERVICES;
(4) the CLAIM is deemed made during the POLICY PERIOD; and
(5) the CLAIM is reported to U.S. during the POLICY PERIOD or within 60 days after the end of the POLICY PERIOD.

         A CLAIM is deemed made when:

(1) a demand is communicated to the INSURED for DAMAGES or PROFESSIONAL SERVICES;
(2) a lawsuit is served upon an INSURED seeking DAMAGES;
(3) the INSURED receives any notice or threat, whether written or oral, that a person, business entity or organization intends to hold an INSURED liable for DAMAGES; or
(4) an INSURED first becomes aware of any act, error or omission by any INSURED which could reasonably support or lead to a demand for DAMAGES.
ALL CLAIMS arising out of the same or related PROFESSIONAL SERVICES shall be considered one CLAIM, and shall be deemed made when the first CLAIM was deemed made.

(Id.).

         The MLM Policies also contained a provision entitled “Notice of Claims and Disciplinary Actions, ” which provided:

         In the event of a CLAIM, disciplinary action, disciplinary investigation or notice to appear before a review board, the INSURED must:

(1) give immediate written notice to US; and
(2) forward every demand, notice, summons or other communication received by the INSURED or his or her representative to [MLM]
You must give U.S. notice during the POLICY PERIOD or within 60 days after the end of the POLICY PERIOD for ...

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