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Kennedy v. Allstate Insurance Co.

United States District Court, E.D. Michigan, Southern Division

May 23, 2018

LEON KENNEDY, Plaintiff
v.
ALLSTATE INSURANCE COMPANY, Defendant

          John Corbett O'Meara District Judge.

          REPORT AND RECOMMENDATION TO GRANT DEFENDANT'S FEBRUARY 13, 2018 MOTION TO DISMISS WITH PREJUDICE (DE 21) AND IMPOSE SANCTIONS FOR FAILURE TO SHOW CAUSE (DE 28)

          ANTHONY P. PATTI UNITED STATES MAGISTRATE JUDGE.

         I. RECOMMENDATION:

         Due to repeated instances in which Plaintiff Leon Kennedy (Kennedy) and/or his counsel have failed to abide by this Court's orders and deadlines and have failed to participate in the litigation process, as explained in significantly greater detail below, this case should be dismissed pursuant to Fed.R.Civ.P. 41(b), or alternatively, under Fed. Rules Civ. P. 37(b)(2)(A), 37(c)(1)(C) and/or 37(d)(3). If the Court agrees with this recommendation, then it should, as outlined in Defendant's prayer for relief, “enter an Order dismissing Plaintiff's Complaint, with prejudice, and award Defendant costs and attorney's fees incurred for the necessity of having to bring this Motion[, ]” (DE 21 at 10), not including those already addressed by the Court's March 20, 2018 order (DE 37 at 3).

         II. REPORT:

         A. Introduction

         Although the Court recognizes from the outset that involuntary dismissal for failure to comply with deadlines and discovery orders and failure to prosecute the case is a harsh remedy, generally of last resort and which is rarely granted, the egregiousness of the conduct displayed here and the lack of candor displayed by Plaintiff and his counsel toward both his opponent and the Court merit dismissal in this instance. The docket sheet in this case tells a sad and extraordinarily frustrating tale of unnecessarily wasted energy and costs engendered by a lack of participation by either Plaintiff or his counsel, repeated failures to keep the Court or defense counsel informed, admitted failure to even read several of this Court's orders at the time they were filed (let alone comply with them), and overall bungling legal representation.[1] Indeed, the series of events which has transpired demonstrates that both Plaintiff and his attorneys have been “moving targets” from before the lawsuit was filed until after discovery had closed. Recent efforts to suddenly feign half-hearted (and late) compliance with this Court's discovery orders can best be characterized as “too little, too late.”

         B. Procedural History

         1. Background and initiation of litigation

         This first party no-fault benefits case stems from an auto accident in which Plaintiff was allegedly involved on July 11, 2016. (DE 1-2 ¶ 5.) Apparently lacking any auto insurance of his own, Kennedy's claim was assigned to Defendant Allstate Insurance Company (Allstate) through the Michigan Assigned Claims Plan. (DE 1 ¶ 6; Mich. Comp. Laws 500.3171 et. seq.)[2] Allstate denies that Kennedy was even in the vehicle at the time of the accident, alleging instead that he jumped into the car after the crash for the purpose of making a bogus insurance claim. (See DE 3 ¶ 5, Affirm Def. ## 6-7; DE 43 at 34-35.) Consistent with Defendant's theory, Plaintiff's name is not readily discernible on the State of Michigan Traffic Crash Report as either a driver or a passenger. (DEs 9-2, 10-2.) Moreover, Defendant's Insured apparently claims that he never even met Plaintiff, although Plaintiff states that the Insured is lying, because they both lived together at the Insured's address. (DE 42 at 4.)[3] Although this case was first filed in state court on May 15, 2017 (DE 1-2) and removed to this Court on June 12, 2017 (DE 1), Allstate has been attempting to obtain an examination under oath (EUO) from Kennedy as part of the claims adjustment process since before suit was even filed in state court. (DE 43 at 35, 40.)

         2. Adherence to the Court's schedule and discovery

         The state court complaint was a joint effort between attorneys Thomas Quartz and Richard Finch, the former of whom appears to have signed the first page certifying that there were no other pending or resolved civil actions arising out of the same transaction or occurrence (although this signature seems to have been initialed with “RF”), and the latter of whom signed the bottom of the complaint, over the names of both attorneys. (DE 1-2 at 2, 5.) On August 21, 2017, a little over two months after the case was removed to this Court, the parties filed their joint discovery plan, with Attorney Finch electronically signing as Plaintiff's representative. (DE 6 at 9.) The plan called for initial disclosures by September 22, 2017, witness lists and disclosure of experts by mid-December 2017, fact discovery to be completed by February 23, 2018, expert discovery to be completed by March 23, 2018, and dispositive motions to be filed by April 27, 2018. (DE 6 at 5-6.) The Court accordingly issued a scheduling order on August 28, 2017, which, in all pertinent respects, adopted the dates supplied by the parties. (DE 7.)

         Defendant claims that Plaintiff failed to make his initial disclosures, as required by Fed.R.Civ.P. 26(a)(1), and when asked about it at the hearing, Mr. Quartz could not say for sure, because he “wasn't handling the case at the very beginning . . . .” (DE 43 at 29, 46.) Yet, in Plaintiff's most recent, post-hearing reply brief, which is electronically signed by Attorney Dundon over both his and Attorney Quartz's names and electronically filed by Attorney Quartz following his substitution (DE 42 at 6), Plaintiff admits that “[t]he initial disclosures are clearly late . . .[, ]” and represents that they “are being filed concurrently” with the reply. (DE 42 at 3.) It is unclear which of the approximately 40 pages of attachments, if any, are meant to serve as even partial initial disclosures, as most of these attachments consist of medical releases and email strings in support of the brief itself. (See DE 42 at 7-47.) With the exception of the accident report (which Defendant insurer likely had long before the litigation began), there is certainly nothing which appears to comply with Fed.R.Civ.P. 26(a)(1)'s mandate that a party identify individuals with discoverable information, descriptions of documents by category and location, or computation of damages. (See DE 42 at 7-47.) Of course, it is entirely possible that Plaintiff's reference to “filing” the initial disclosures (which would be prohibited) may have just meant “serving” them, as required by the Rule 26(a)(1).

         Little did the Court or defense counsel know that: Plaintiff and his attorneys would repeatedly lose contact with each other during what should have been the active discovery period (DE 43 at 16-19); one of Plaintiff's attorneys (Finch) would leave the firm at the end of September 2017, abandon the case and admittedly make no effort to withdraw (DE 43 at 4-9); and, the other attorney (Quartz) would be in Cambridge Massachusetts, studying at Harvard and otherwise unavailable, until January 7, 2018 (DE 43 at 29-33, DE 31-1). According to defense counsel (and not refuted by Mr. Quartz at the hearing), an email sent to Mr. Quartz received a bounce back message which read:

I am currently out of the office attending Harvard until January 2018. My assistant will be reading and responding to emails during this time. If you have an immediate issue that can't be handled by my assistant, please contact my office manager Christopher Hite at chite.maapllc@gmail.com.

(DE 31-1; see also DE 43 at 31, DE 31 at 2.)

         Apparently in conjunction with Attorney Finch's September 2017 departure from the firm (DE 43 at 4), and notwithstanding the appearance of Thomas Quartz's name on the first and last pages of the original complaint (DE 1-2 at 2, 5), Attorney Quartz clarified that he would be responsible for this case by filing his own formal appearance in the federal matter on November 14, 2017 (DE 8). He confirmed that he started receiving ECF notices from the point at which his appearance was filed. (DE 43 at 18.) He now admits that he was in Cambridge at the time and remained so for the fall semester, although he explained that his secretary filed the document but acknowledged that “it's not an excuse.” (DE 43 at 30-31.) Remarkably, Attorney Quartz admits that his office lost contact with its client that same month. (Id. at 17.) As he explained at the hearing: “I retained counsel, federal counsel, for every case in the firm except for this case. No. other counsel would take this because there was lack of contact with the client. But going forward, we are consulting with a lawyer with more experience in Federal Court on every case.” (Id. at 10-11 (emphasis added).) This was apparently necessary, because “there was confusion, ” in that, “[w]hen Mr. Finch left the case, it was transferred to another associate attorney who, unfortunately, the secretary thought was barred in Federal Court.” (Id. at 20, 17-18.) All of this should have been of no import, however, because Attorney Quartz admittedly holds himself out as being “licensed in Federal Court[, ]” and acknowledges that, at least as of March 12, 2018, he was the only attorney listed on the firm's website. (Id. at 10, 33.)

         Yet, notwithstanding Attorney Quartz's formal appearance in this matter and his January 2018 return from Harvard, the secretary or office manager from his firm would claim in writing to the Undersigned's case manager and defense counsel on January 26, 2018 that, “Tom Quartz does not handle any cases. Brent Ingram [an attorney who has never filed an appearance in this matter] is the handling attorney on this case.” (DE 31-7 at 2; see also DE 10-5 at 3 (Oct. 25, 2017 email identifying Attorney Ingram as the “handling attorney”).) Mr. Quartz would later tell the Court, again in spite of his formal appearance as counsel of record, that “at my firm, and it's not an excuse, I'm more of an administrator. I don't litigate often.” (DE 43 at 25.) This is seemingly contradicted by: (a) a February 2, 2018 email from Janet Sprung to defense counsel, in which Ms. Sprung states that Mr. Quartz “is the only one [in their law firm] sworn into Federal Court[, ]” (DE 31-8 at 3); and, (b) this Court's own records, which show that Mr. Quartz has appeared in five other cases in this district since 2016, at least one of which recently met a similar fate to the Undersigned's recommendation herein.[4] Mr. Finch, who also appeared in some of these cases, for his part (and in an apparent understatement), explains that the law firm had “several organizational difficulties[, ] which is one of the reasons I left . . . .” (DE 43 at 31.)

         Soon after the August 2017 submission of the joint discovery plan, Defendant again sought Plaintiff's testimony, issuing notice on September 27, 2017 for a deposition to take place on October 26, 2017 at 10:00 a.m. (DE 10-3 at 1-2.) Defendant simultaneously served notice of its intention to take the deposition of Ronnie Kennedy, Plaintiff's apparent relative and alleged caregiver, for 1:00 p.m. on the same day. (Id. at 3-4.)[5] The cover letter which accompanied these notices, as well as interrogatories and document requests, also stated, “Further, please advise if you are not willing to produce Mr. Ronnie Kennedy for the above deposition as soon as possible, so that I may have him served with the appropriate Subpoena.” (DE 10-4 (all emphases in original).) Two days before the depositions were scheduled to take place, defense counsel's legal assistant reached out to Plaintiff's counsel's law firm to inquire: “Will these depositions be going forward as scheduled?” (DE 10-5 at 4.) She sent another email the following day. (DE 10-5 at 3-4.) One day before the depositions were supposed to take place, October 25, 2017, Janet Sprung, who holds the titles “Legal Secretary Supervisor” and “Assistant to Brent L. Ingram, Esq.[, ]” responded by email to explain that, “We can set this up - we are having issues with this case being in federal court . . . .” (Id. at 3.) But, she assured defense counsel that, “[i]f you want to send me some dates[, ] we can get it scheduled.” (Id.) Within minutes, Defendant's counsel responded by email, requesting “new dates as quickly as possible[, ]” in order to avoid having to file a motion to compel. (DE 10-5 at 2-3.) Defense counsel also noted that signed medical authorizations were owed, that a stipulated order compelling them had been prepared, and that an appearance would need to be filed for Mr. Ingram if he planned to “appear[] on behalf of” Plaintiff. (Id. at 2.) Ms. Sprung responded by email six days later, inviting Defendant to “send over the stip for the authorizations and the authorizations that you need signed and I will get our client in this week to sign[.]” (Id. at 2.) Defendant's attorney responded by again requesting that Mr. Ingram's appearance be filed in federal court “before we head down the path of continued discovery[, ]” and stated that her side would “be happy to send over the proposed stipulation and work on dates.” (Id. at 1-2.) Later that day, Ms. Sprung promised to “get with Brent in the am and we will file it[, ]” although this was never done. (Id. at 1.)

         3. Non-dispositive motion practice

         Five days later, on December 5, 2017, Defendant filed motions to compel executed authorizations and the depositions of Plaintiff and his service provider, Ronnie Kennedy. (DEs 9 & 10.) Attorney Quartz admits that at least one of the motions to compel was served on him electronically and that he “should have” reviewed it, but, apparently, he did not. (DE 43 at 18-19.) The motions were referred to me, and I set them for hearing on January 25, 2018. (DEs 11-12.) Defendant subsequently filed a motion for an order to have two of Plaintiff's alleged healthcare providers show cause as to why they should not be found in contempt of court for failing to respond to medical record subpoenas, which was also referred to me and which the Court set for hearing on March 6, 2018. (DEs 14, 15 & 17.)

         Because Plaintiff never responded to either of the motions to compel, the Court granted them as unopposed on January 22, 2018 and canceled the hearing noticed for January 25, 2018. (DE 16.) Specifically, the Court ordered Plaintiff to produce executed authorizations no later than February 1, 2018 and to be deposed and to produce Ronnie Williams for deposition no later than February 22, 2018, although it denied the requests for costs and attorney's fees without prejudice and directed that the costs associated with the motions to compel may be revisited at the hearing on the show cause order. (DE 16 at 2-3.) Although this order was served on all counsel of record through the CM/ECF system, Attorney Quartz would later admit that he did not “personally” see it “come through[, ]” but, believed he first reviewed it “a few weeks” prior to the show cause hearing. (See DE 43 at 17, March 12, 2018 hearing transcript, in which Mr. Quartz states that “I['ve] reviewed it now, Your Honor.”)

         On January 25, 2018, the Court issued a text order, which read as follows:

Defendant is HEREBY ORDERED to serve copies of the pending Motion for Order to Show Cause (DE 14) and this Court's Notice of Hearing (DE 17), along with a copy of this text order, upon non-parties Rose Pain Management and Advanced Central Labs. Within 14 days of this order, Defendant shall file a Certificate of Service with the Court, certifying that service of these three items upon the non-parties has been achieved. At the hearing scheduled for March 6, 2018, Rose Pain Management and Advanced Central Labs SHALL APPEAR and SHALL SHOW CAUSE why they should not be held in contempt for failing to comply with the identified subpoenas issued by this Court. ALL COUNSEL OF RECORD FOR PLAINTIFF SHALL likewise appear at the show cause hearing to: (a) sort out the issue of who is actually representing Plaintiff; (b) address the status of this case; and, (c) discuss Defendant's prior request for costs and attorneys fees, as addressed in the Court's previous order compelling discovery (DE at 4)[.]

         (Bolded emphasis added.) Neither of these two orders was read by Plaintiff's counsel at or near the time it was filed, and, referring to the January 22, 2018 order, Attorney Quartz later told the Court that “I - I did not review it, your Honor, and I agree that it ordered me to be here.” (DE 43 at 19, 24.)

         C. Defendant's February 13, 2018 dispositive motion

         On February 13, 2018, Defendant filed the instant motion to dismiss on the basis of Plaintiff's “failure to comply with discovery, failure to comply with Court Order, failure to comply with Court Rules, and failure to prosecute his case.” (DE 21 at 1.)[6] Defendant filed its first supplemental brief in support of its dispositive motion on February 27, 2018. (DE 25.)[7]

         D. Plaintiff's counsel's failure to appear on March 6, 2018

         On March 5, 2018 - the day before the scheduled hearing on Defendant's motion for an order for the healthcare providers to show cause (DE 14), Plaintiff filed a response (DE 26). In its March 7, 2018 post-hearing order, the Court struck Plaintiff's response as being several weeks tardy under E.D. Mich. LR 7.1(e)(2). (DE 27 at 2.) Also, the Court noted: “Despite having been served with the notice of hearing, neither Rose Pain Management nor Advanced Central Labs appeared. Moreover, contrary to the express terms of my text-order, counsel of record for Plaintiff did not appear.” (Id. at 2-3 (footnote omitted).)

         E. The March 7, 2018 show cause order

         That same day, the Court issued a six-page order which remarked upon Plaintiffs counsel's failure to appear on March 6, 2018, noted the lack of an appearance by Attorney Ingram, and directed Attorneys Finch and Quartz to appear and show cause as to:

• Why they should not have to pay Defendant's costs associated with the December 5, 2017 motions to compel (DEs 9, 10);
• Why the depositions of Plaintiff and Ronnie Williams have not occurred in accordance with my January 22, 2018 order (DE 16), and consequently, why they or their client should not be sanctioned and/or held in contempt and/or why this case should not be dismissed pursuant to Fed.R.Civ.P. 37(b)(2) and/or (d)(3);
• Why attorneys Finch and Quartz should not be held in contempt for their failure to appear at the March 6, 2018 hearing (as ordered on January 25, 2018);
• Why they should not have to pay Defendant's costs for attending the March 6, 2018 hearing;
• Why this case should not be dismissed for Plaintiffs failure to prosecute.

(DE 28 at 4-5.) That order was issued on Wednesday, March 7th, and required Plaintiffs counsel to personally appear the following Monday, March 12th.

         On Thursday March 8th, Mr. Quartz filed a notice that he planned to take the depositions of Leon and Ronald Kennedy on Friday, March 9th. (DE 29; see also DE 31 at 6.)[8] In other words, Mr. Quartz proposed to take the depositions of his own client and his client's brother (and/or caregiver) fifteen days after the previously imposed February 22, 2018 deadline, two weeks after the then-February 23, 2018 fact discovery cut-off, and on one day's notice to his sister counsel. This was obviously not “reasonable written notice to every other party.” Fed.R.Civ.P. 30(b)(1). Compare, e.g., Burket v. Hyman Lippitt, P.C., No. CIV.A. 05-72110, 2008 WL 718180, at *2 (E.D. Mich. Mar. 14, 2008) (Majzoub, M.J.) (“Notice of a few days is too little for a deposition scheduled in a foreign country and in complex actions such as these.”), and Freeman v. City of Detroit, No. 09-CV-13184, 2011 WL 1298174, at *2 (E.D. Mich. Apr. 5, 2011) (“the Court finds that three days['] notice for a Rule 30(b)(6) deponent and seven additional deponents is not the ‘reasonable written notice' required of Fed.R.Civ.P. 30(b) (1).”), with Smith v. Stephens, No. 2:10-CV-13763, 2012 WL 899347, at *3 (E.D. Mich. Mar. 16, 2012) (4 days was “reasonable written notice” where Plaintiff was a prisoner and examination topics were not complicated). When defense counsel predictably protested, Quartz persisted. (DE 31-11 (emails dated 03/08/18-03/09/18.)) Notwithstanding the deposition notice (filed under seal in violation of Local Rule 5.3(b)(1) and also stricken by the Court as prohibited discovery in violation of Local Rule 26.2), Attorney Quartz ...


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