Hassebrock v. Bernhoft
| Decision Date | 07 March 2016 |
| Docket Number | No. 14–2943.,14–2943. |
| Citation | 815 F.3d 334 |
| Parties | Orvil Duane HASSEBROCK and Evelyn Hassebrock, Plaintiffs–Appellants, v. Robert G. BERNHOFT, et al., Defendants–Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Dallas Craig Hughes, Attorney, Law Offices of D. Craig Hughes, Houston, TX, for Plaintiff–Appellant.
Daniel J. Treuden, Attorney, Robert G. Bernhoft, Attorney, Bernhoft Law Firm, S.C., Austin, TX, for Defendant–Appellee.
Before POSNER and SYKES, Circuit Judges, and SIMON, Chief District Judge.*
Orvil and Evelyn Hassebrock sued their former attorneys and accountants for professional malpractice, but they waited until after discovery closed to file their expert-witness disclosure. They belatedly moved for an extension of time, but the district court denied the motion and disallowed the expert. Without expert testimony, the Hassebrocks could not prove their claims against either the attorneys or the accountants. The court entered summary judgment for the defendants.
On appeal the Hassebrocks insist that the judge should have applied the disclosure deadline specified in Rule 26(a)(2)(D) of the Federal Rules of Civil Procedure rather than the discovery deadline set by court order. They also challenge the judge's summary-judgment ruling.
We affirm. The disclosure deadline specified in Rule 26(a)(2)(D) is just a default deadline; the court's scheduling order controls. And it was well within the judge's discretion to reject the excuses offered by the Hassebrocks to explain their tardy disclosure. Finally, because expert testimony is necessary to prove professional malpractice, summary judgment was proper as to all defendants.
Orvil Hassebrock and his wife, Evelyn, hired the Bernhoft Law Firm in 2005 to help with a host of legal problems. Most seriously, Orvil was then the subject of a federal criminal tax investigation.1 The Hassebrocks also believed they had a potential civil claim for investment losses in a company called Semper Libera and a claim against a previous set of lawyers over fees withheld from a settlement recovery.
In 2008 the Hassebrocks became dissatisfied with the firm's attorneys and fired them. In 2010 Orvil filed this suit against the firm in federal court, invoking the court's diversity jurisdiction. He initially proceeded pro se. Several years later he retained counsel, and in 2013 counsel filed an amended complaint adding Evelyn as a plaintiff and multiplying the number of defendants.
We take the following factual narrative from the amended complaint, remembering of course that these are only allegations. The first group of defendants is the Bernhoft Law Firm and two of its attorneys, Robert G. Bernhoft and Robert E. Barnes.2 The second group of defendants are accountants: John C. Noggle; Noggle's firm, John C. Noggle, CPA, Inc.; and Tim D. Brewer. The accountants came into the picture when the Bernhoft Firm hired Noggle to assist in preparing the Hassebrocks' delinquent tax returns. The Hassebrocks later complained about the quality of Noggle's work, so Bernhoft asked Brewer to help instead. The Hassebrocks were dissatisfied with his work too.
The Hassebrocks allege that the defendants failed to file accurate tax returns on their behalf, resulting in hundreds of thousands of dollars in penalties, interest, and legal and accounting fees. They also allege that the attorney defendants dropped the ball on the Semper Libera claim and the claim about the settlement proceeds.
The amended complaint states six claims for relief: (1) a negligence claim against all defendants; (2) a breach-of-contract claim against all defendants; (3) a legal malpractice claim against the law firm and the attorneys; (4) a claim for breach of fiduciary duty against the accounting firm and the accountants; (5) a claim for negligent misrepresentation against the accountants; and (6) a claim against the accountants for aiding and abetting the torts of the attorneys.
The substance of this appeal focuses largely on discovery deadlines, so we'll sketch the relevant procedural history in some detail. The case was litigated in fits and starts because Orvil was initially pro se and the case was twice judicially reassigned.
When Orvil filed his pro se complaint—on September 2, 2010—the case was initially assigned to Judge William Stiehl. It pended for nearly two years while the Hassebrocks secured counsel, which occurred sometime in late 2012. Newly retained counsel did not amend the complaint until March 2013. The defendants then moved to dismiss, and on February 2, 2014, the case was reassigned to Judge Phil Gilbert. By order dated May 2, 2014, Judge Gilbert granted the motion in part and denied it in part. Two weeks later (on May 19) the case was reassigned to Judge Nancy Rosenstengel.
As relevant here, the district court's local rules provide that "[t]he cut-off date for all discovery, including experts and third parties, shall not be later than 115 days prior to the first day of the month of the presumptive trial date." Uniform Trial Practice and Procedures, SDIL–LR Forms Appendix at ii-iii (Dec. 2009); Timetable and Deadlines Under Federal Rules and Civil Justice Reform Act, SDIL–LR at v (Dec. 2009) (emphasis added). On March 16, 2012, while Orvil was still pro se, the court clerk issued a scheduling order setting September 2013 as the presumptive trial month. Consistent with the local rules, this order established a discovery cut-off date by reference to the presumptive trial month:
The cut-off date for all discovery, including experts and third parties, shall not be later than 115 days prior to the first day of the month of the presumptive trial date. Disclosure of experts and discovery with reference to experts and other discovery dates will be set according to the Joint Report of the Parties following their initial meeting or at the schedule and discovery conference before the Magistrate Judge.
On August 20, 2013, the clerk rescheduled the presumptive trial month to December 2013. This order also scheduled a Rule 26(f) pretrial and discovery conference and instructed the parties to submit a joint report and proposed scheduling order.
A motion to reschedule the presumptive trial date followed, and the parties thereafter produced a joint report proposing this schedule for discovery and motions deadlines:
On September 18 the district court reset the presumptive trial month to September 2014. That timeframe obviously didn't mesh with the schedule proposed by the parties in their joint report. It's not entirely clear why the parties' proposed schedule was rejected, but it's reasonable to assume that the court simply wanted to get the case back on track and move it along more quickly.
The next discussion of discovery deadlines occurred on January 17, 2014, during a conference with Magistrate Judge Donald Wilkerson. At the conclusion of that conference, Judge Wilkerson entered the following minute order:
The magistrate judge declined to stay discovery.
Discovery then proceeded, with some hiccups. The defendant Robert Bernhoft did not make himself available for deposition until some 13 days after the May 10 deadline for completion of discovery, following a hearing in which the magistrate judge ordered him to appear. In addition, on April 9 the Hassebrocks asked the court to allow them to disclose the name of their expert witness without the expert's report as required by Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure. They explained:
Although the Hassebrocks have engaged their expert witness, he is awaiting the release and then review of IRS transcripts for tax years 1994–2008 in order to begin calculating expected damages, among other disclosures which his written report must provide. Because the Hassebrocks believe that information will be soon forthcoming, the delay will be minimal, and well before the discovery cutoff of May 10, 2014, set by this Court.
The court did not rule on this motion, and the May 10 discovery deadline came and went. The Hassebrocks did not disclose either their expert's name or his report before the cutoff, as they said they would. Instead, on May 13—after discovery closed—they filed a new motion identifying their expert but asking the...
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