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Bielfeldt v. Graves

United States District Court, C.D. Illinois, Peoria Division

January 19, 2017

DAVID L. BIELFELDT, et al., Plaintiffs,
v.
LEE C. GRAVES, et al., Defendants.

          ORDER

          Jonathan E. Hawley U.S. MAGISTRATE JUDGE

          Before the Court are the Defendants, Lee Graves‘s and Graves Law Office, P.C.'s, Motion to Sever Count XI of Plaintiffs' Third Amended Complaint (D. 91)[1]and Motion to Dismiss Count XI of Plaintiffs' Third Amended Complaint (D. 93). Plaintiffs, David Bielfeldt and Karen Wales, have filed responses in opposition to both motions. (D. 99, 100). For the reasons stated, infra, Defendants' motions are DENIED.[2]

         I

         In October 2015, Plaintiffs David L. Bielfeldt and Karen Wales filed their Complaint as individuals and on behalf of Elm One Call Locators, Inc. against Defendants James Bourazak, Lee Graves, and Elm One Call Locators, Inc. (Elm One). (D. 1). Plaintiffs filed their First Amended Complaint three days later, curing diversity jurisdiction allegations identified by the Court but otherwise making no substantive changes. (D. 6).

         In March 2016, the Court held a Rule 16 Scheduling Conference with the parties and set the deadline to amend pleadings/join parties for May 18, 2016. On that date, the Plaintiffs filed their Second Amended Complaint against the original Defendants which included the following 11 counts: Count I Federal Securities Law; Count II Illinois Securities Law; Count III Breach of Fiduciary Duties; Count IV Mandamus; Count V Breach of Contract; Count VI Unjust Enrichment; Count VII Fraud; Count VIII Conspiracy to Commit Fraud; Count IX RICO; Count X Conversion; and Count XI Legal Malpractice. (D. 46). Plaintiffs also added Graves Law Office, PC as a Defendant. Id.

         In May 2016, Defendant Elm One filed a Motion to Dismiss the Eleventh Count of Plaintiffs' Second Amended Complaint, arguing, inter alia, the Complaint failed to state a claim upon which relief could be granted. (D. 48 at pg. 1). Defendants Bourazak and Graves joined in this motion in June 2016. (D. 54). Defendant Graves Law Office, PC, did not. The Court granted Defendants' Motion to Dismiss Count XI with respect to Plaintiffs' legal malpractice claims brought against Defendants Graves and Graves Law Office, PC, individually. (D. 61 at pg. 7). The Court further found, however, Plaintiffs had sufficiently alleged a derivative legal malpractice claim against Defendants Graves and Graves Law Office, PC. Id.

         Plaintiffs filed their Third Amended Complaint (D. 62) and Defendants Lee Graves and Graves Law Office, P.C., ultimately filed the motions presently before the Court. Defendants' Motion to Sever Count XI of Plaintiffs' Third Amended Complaint alleges that without severing Count XI from the rest of Plaintiffs' claims, the eventual jury in this case will be confused, potentially resulting in prejudice to the parties. (D. 92 at pg. 2). Defendants' Motion to Dismiss Count XI of Plaintiffs' Third Amended Complaint asserts that Plaintiffs' legal malpractice claim fails to state a claim upon which relief can be granted for a variety of reasons. (D. 93-1 at pg. 5). Defendants further argue, in the alternative, that the Court should order Plaintiffs to provide a more definitive and concise statement of Count XI. Id. at pg. 11. The Court addresses each of Defendants' arguments in turn.

         II

         A

         First, Defendants argue Count XI should be severed from the remaining counts in Plaintiffs' Third Amended Complaint because they present separate questions of law that are likely to confuse the jury and result in prejudice to the parties. (D. 92 at pg. 7). In response, Plaintiffs aptly highlight that Defendants' motion relies heavily on an argument for separate trials. (D. 99 at pg. 1). Indeed, Defendants' sole rationale for severance-jury confusion resulting in prejudice- pertains only to the trial phase of litigation. Defendants argue there is a strong risk of jury confusion in assessing Graves' actions in his separate roles as an attorney, a corporate officer, and a shareholder. (D. 92 at pg. 10-11). The Plaintiffs do not oppose a separate trial for Count XI. They argue, however, that granting severance before the trial phase is inefficient. Plaintiffs cite Federal Rule 20, arguing that the Court should deny Defendants' motion for severance. Fed.R.Civ.P. 20.

         B

         Defendants bring their motion to sever pursuant to Federal Rules of Civil Procedure 21 and 42(b). Fed.R.Civ.P. 21, 42(b). Rule 21 gives the Court “broad discretion” in deciding whether to sever a claim. Rice v. Sunrise Express, Inc., 209 F.3d 1008, 1016 (7th Cir. 2000). Rule 42(b) states, in relevant part, “For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims.” FRCP 42(a) specifically permits separation where the court determines that separate trials would avoid prejudice to a party or promote judicial economy. Houseman v. U.S. Aviation Underwriters, 171 F.3d 1117, 1121 (7th Cir. 1999). Only one of those criteria must be met for a court to order separation. Id. Neither criteria is met in the case at bar at this stage of the litigation.

         C

         The Court agrees with the Plaintiffs that Rule 20 applies. Fed.R.Civ.P. 20. “The purpose of Rule 20(a) in permitting joinder in a single suit of persons who have separate claims, albeit growing out of a single incident, transaction, or series of events, is to enable economies in litigation . . . .” Elmore v. Henderson, 227 F.3d 1009, 1012 (7th Cir. 2000). The Court is further guided by the notion that the tests of Rule 20(a) are “to be read as broadly as possible whenever doing so is likely to promote judicial economy.” 7 Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam N. Steinman, Federal Practice & Procedure § 1653 (3d ed. 2015); see also United Mine Workers of America v. Gibbs, 383 U.S. 715, 724 (1966) (“Under ...


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