Eclipse Mfg. Co. v. M and M Rental Center, Inc., 06 C 1156.

• Decision Date: 09 February 2007
• Docket Number: No. 06 C 1156.,06 C 1156.
• Citation: 496 F.Supp.2d 937
• Parties: ECLIPSE MANUFACTURING CO., an Illinois corporation, individually and as the representative of a class of similarly-situated persons, Plaintiff, v. M AND M RENTAL CENTER, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

496 F.Supp.2d 937

ECLIPSE MANUFACTURING CO., an Illinois corporation, individually and as the representative of a class of similarly-situated persons, Plaintiff, v. M AND M RENTAL CENTER, INC., Defendant.

No. 06 C 1156.

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

February 9, 2007.

Brian J. Wanca, Ryan M. Kelly, Anderson & Wanca, Rolling Meadows, IL, Phillip A. Bock, Diab & Bock, LLC, Chicago, IL, for Plaintiff.

Michael J. Kelly, Charles W. Webster, Marc H. Kallish, Freeborn & Peters, Chicago, IL, for Defendant.

AMENDED MEMORANDUM OPINION AND ORDER

BUCKLO, District Judge.

A plaintiff identified as Eclipse Manufacturing Co. ("Eclipse") has brought a class action complaint¹ against defendant M and M Rental Center ("M and M") alleging that M and M violated the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227 (2005) ("TCPA"). M and M has filed a motion under Federal Rule of Civil Procedure 37 to dismiss plaintiffs complaint or to strike plaintiff's answers to discovery and requests to admit, and deem those requests admitted. For the following reasons, I deny M and M's Rule 37 motion and give plaintiff leave to substitute or join the real party in interest to the litigation, which appears to be Robert Hinman ("Hinman"), a former owner of Eclipse. However, because M and M's motion raises the issue of whether TCPA claims are assignable, and therefore whether I have jurisdiction over Hinman's claim, I further order the parties to provide additional briefing addressing whether Hinman has standing to assert his claim.

I.

Plaintiff's first amended class action complaint alleges that on June 23, 2005, M and M transmitted an unsolicited advertisement to Eclipse's telephone facsimile machine. Defendant purportedly sent similar unsolicited advertisements to at least 39 other recipients. Eclipse's complaint alleges that these advertisements violated 47 U.S.C. § 227.

M and M has brought its current motion to strike because during the course of discovery it learned that the party actually prosecuting this action is not Eclipse or its current stockholders, but instead Hinman, the former owner of Eclipse. Hinman was the sole owner and shareholder and President of Eclipse prior to November 30, 2005, when he entered into an agreement with Mark Wiener ("Wiener") and Dennis Crounse ("Crounse") to sell them all his shares of stock and his ownership interest in Eclipse (the "stock sale agreement"). Hinman has alleged that the facsimile M and M sent to Eclipse's facsimile machine on June 23, 2005 was addressed to him.

On November 14, 2005, while Hinman was still the owner and shareholder of Eclipse, Eclipse filed suit in Illinois state court against what it believed was M and M. M and M subsequently removed the case to federal court. Hinman then entered into the stock sale agreement with Wiener and Crounse transferring his interest in Eclipse to them. According to the stock sale agreement, the parties agreed that Hinman would "retain the right to proceed with all litigation concerning unsolicited faxes received through the date of closing in the name of Eclipse Manufacturing Co." and would be "entitled to retain the settlement proceeds of any suit so prosecuted."

After the stock sale agreement, Hinman continued to prosecute the suit against M and M in the name of Eclipse. At some point, Hinman realized that he had misidentified M and M in the complaint, so he dismissed the action and relied it the next day naming M and M as the defendant, and still proceeding with Eclipse as the named plaintiff. Hinman, proceeding as Eclipse, issued Rule 26(a)(1) initial disclosures identifying himself as the "President of Eclipse during the relevant time period," and identified himself as the sole individual likely to have discoverable information that Eclipse would use to support its claims or defense.

M and M subsequently issued discovery requests to Eclipse. Those requests went to Hinman, apparently because at that time M and M did not know that Hinman was no longer employed by or associated with Eclipse. Hinman responded to these discovery requests in Eclipse's name; the current owners of Eclipse were unaware of the discovery requests and had not seen them. In answering M and M's request to admit, interrogatories, and first supplemental interrogatories, Hinman included a verification in which he certified as "President of Eclipse Manufacturing Co." that he was "authorized to make this verification." In responding to M and M's first and second requests for the production of documents, Hinman included an affidavit of compliance that the materials he provided were "the only materials I possess or have control over of those requested."

On November 29, 2006, Hinman, still acting in Eclipse's name, issued amended verifications to plaintiffs response to M and M's request to admit and to plaintiffs answers to M and M's interrogatories and first supplemental interrogatories. Each of these amended verifications stated that Hinman was the "authorized representative of Eclipse Manufacturing Co. on the claims in this case" and that he was the "president of Eclipse Manufacturing Co. during the relevant time period" and was authorized to make the verification.

M and M took Hinman's deposition on October 27, 2006. When asked during his deposition whether he was employed, Hinman stated that he was retired and had previously worked for Eclipse. He also stated that he did not know if the current owners were aware of the litigation. M and M subsequently deposed Wiener. Wiener testified that he believed that Hinman had the authority under the stock purchase agreement to file a complaint in Eclipse's name against M and M, and that Wiener had no objection to Hinman's complaint.

II.

M and M argues that I should strike plaintiffs complaint as a sanction under Rule 37 because Hinman misled the court and the defendant about the identity of the proper party in interest, and farther filed "false" verifications in response to plaintiffs discovery. Federal Rule of Civil Procedure 17(a) requires that suits must be prosecuted "in the name of the real party in interest." The Seventh Circuit and numerous other courts have concluded that the assignee of a cause of action is the real party in interest under the meaning of Rule 17(a). See, e.g., Perry v. Globe Auto Recycling, Inc., 227 F.3d 950, 954 (7th Cir.2000) (internal Citations omitted); see also C. Wright, A. Miller & M. Kane, 6A FEDERAL PRACTICE AND PROCEDURE § 1545 (2d ed.1990). It is true, therefore, that if Eclipse has assigned its cause of action to Hinman, and both sides appear to agree that it has, that Hinman is the real party in interest...