Rocha v. Rudd
| Citation | 826 F.3d 905 |
| Decision Date | 22 June 2016 |
| Docket Number | No. 15–1538,15–1538 |
| Parties | Carlos G. Rocha, Plaintiff–Appellant, v. J. Gordon Rudd, Jr., Anne T. Regan, Patricia A. Bloodgood, Zimmerman Reed PLLP, Gregory J. Meyers, Susan Ellingstad, and Lockridge Grindal Nauen PLLP, Defendants–Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Lisa Diane Johnson, Attorney, Anchor Law Offices, PLLC, West Palm Beach, FL, for Plaintiff–Appellant.
Kimberly A. Jansen, Justin Michael Penn, Attorneys, Hinshaw & Culbertson LLP, Chicago, IL, for Defendants–Appellees.
Before Kanne, Rovne r, and Syk es, Circuit Judges.
Kanne
, Circuit Judge.
Defendants, a group of law firms and several of their attorneys, had previously represented Plaintiff Carlos Rocha and other FedEx delivery drivers in an employment misclassification case against FedEx. The employment misclassification case ultimately settled, but Rocha was excluded from the settlement. Just before the settlement was finalized, Rocha retained Johnson, his current spouse, and discharged Defendants as his counsel. Rocha later sued Defendants in federal district court, alleging several theories of harm, including legal malpractice and fraud, in association with the case against FedEx. The district court dismissed Rocha's amended complaint, and Rocha appealed. We affirm.
Although not a party here, much of this case's background involves FedEx, which includes FedEx Corporation (“FedEx Corp.”) and its subsidiary FedEx Ground Package System, Inc. (“FedEx Ground”), a business that provides package delivery and pick-up service.
From late 2005 until November 2010, “Rocha delivered packages for FedEx's Chicago terminal, acting at various times as an employee and an independent contractor.” Rocha v. FedEx Corp. , 15 F.Supp.3d 796, 800 (N.D. Ill. 2014)
. Rocha is also the owner of Arize 11, an Illinois corporation formed in 2008, through which he contracted with FedEx. Id.
On April 20, 2005, a group of FedEx delivery drivers, represented by Defendants, filed a putative class action lawsuit against FedEx in the Northern District of Illinois. Fluegel v. FedEx Ground Package Sys., Inc. , No. 1:05-cv-02326, (N.D. Ill. dismissed Sept. 17, 2012). Their key allegation was that FedEx had misclassified them as independent contractors, thereby denying them protections under the Illinois Wage Payment and Collection Act (“IWPCA”), 820 ILCS 115/1 et seq.
Later that year, Fluegel was consolidated with other cases in a multidistrict litigation (“MDL”) proceeding in the Northern District of Indiana. In Fluegel , the MDL court denied class certification but granted partial summary judgment in favor of the plaintiffs, holding that they were employees under the IWPCA. In re Fedex Ground Package Sys., Inc. Emp. Practices Litig. , 2010 WL 2243246 at *1 (N.D. Ind. 2010)
. In the fall of 2010, the MDL court remanded Fluegel to the Northern District of Illinois, and litigation on the case continued.
On July 20, 2011, Rocha joined the Fluegel action. His retainer agreement with Defendants expressly limited the scope of Defendants' representation because he was pursuing other claims against FedEx on behalf of Arize 11, with separate representation by Johnson (his spouse). The retention agreement also affirmed Rocha's “absolute right to accept or reject any settlement” with FedEx negotiated by Defendants.
By 2012, over 100 additional plaintiffs had joined the Fluegel action. In April 2012, the parties in Fluegel agreed to mediation. A month later, on May 25, 2012, the parties notified the court that they had reached a tentative settlement. Soon after, Defendants were notified by Rocha, through Johnson, that he would object to the settlement if it required release of his Arize 11 claims.
On June 5, 2012, Defendants explained in a letter to Rocha the material terms of the proposed settlement, including the total settlement amount, each individual plaintiff's portion, and attorney's fees. Furthermore, this letter stated that for the settlement, FedEx required “from every Plaintiff a release of all claims against FedEx both individually and on behalf of any associated corporation.” This letter concluded by reiterating Rocha's ability to make the final determination of whether to join the settlement. Throughout the summer of 2012, on multiple occasions, Defendants discussed with Rocha the proposed settlement terms, including the required release of all claims by Rocha and Arize 11 against FedEx.
The parties in Fluegel filed a joint motion to approve the settlement agreement, and on August 7, 2012, the district court approved it.
On September 10, 2012, Johnson filed a notice of appearance as counsel for Rocha in Fluegel . On September 14, 2012, Defendants filed a motion to withdraw as counsel for Rocha, and on September 17, 2012, the district court granted this motion, stating, “Ms. Johnson has informed Plaintiffs' Counsel on behalf of Mr. Rocha, that she does not oppose their withdrawal from representation of Mr. Rocha.” Also on September 17, 2012, the Fluegel court dismissed the case with prejudice for all named plaintiffs except Rocha, whose case was voluntarily dismissed without prejudice. Defendants confirmed that Rocha would not have to pay any attorney's fees or other expenses.
On October 30, 2012, Rocha and Arize 11, represented by Johnson, filed a 518-paragraph, 16-count complaint against FedEx and numerous FedEx executives, which included allegations of violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Sherman and Clayton Acts, and Illinois law. Rocha eventually amended the complaint to 17 counts. In response, FedEx filed a motion to dismiss.
The district court dismissed Rocha's amended complaint on January 17, 2014, finding it to be “an egregious violation of Rule 8(a).” Rocha , 15 F.Supp.3d at 805
(internal quotation omitted). The dismissal of Rocha's amended complaint was without prejudice, and Rocha was granted leave to file an amended federal complaint if he “can address the fundamental deficiencies set forth in this opinion in no more than 300 clear paragraphs that are not repetitive, speculative, or conclusory.” Id. at 813. The court suggested, alternatively, that Rocha “proceed in state court instead of trying to establish federal jurisdiction for this dispute where none may exist.” Id.
On January 16, 2015, Rocha and Arize 11, represented by Johnson, filed a complaint in state court against FedEx, alleging breach of contract, fraud, promissory estoppel, Illinois statutory violations, conspiracy to defraud and aiding and abetting of fraud, unjust enrichment, and conversion. Rocha v. FedEx Corp. , No. 2015–L–00506, 2015 WL 515612 (Ill. Cir. Ct. filed Jan. 16, 2015)
. This action is still ongoing.
Before filing his state-court complaint against FedEx, on June 27, 2014, Rocha brought the present action by way of an amended complaint against Defendants, claiming breach of contract, breach of fiduciary duties, fraud, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), and legal malpractice. Defendants moved to dismiss this lawsuit for failure to state a claim, pursuant to Rule 12(b)(6).
Over the next several months, the court held multiple hearings in which it repeatedly asked Rocha to provide evidence on what it deemed to be a dispositive issue—to show that his Fluegel claims against FedEx were not viable at the time that he substituted Johnson for Defendants as his counsel.
Rocha failed to make such a showing, and on February 11, 2015, the district court granted Defendants' motion and dismissed Rocha's amended complaint with prejudice. In doing so, the court found that Rocha had chosen to be excluded from the 2012 Fluegel settlement. (Sent. Tr. 9–10, Feb. 11, 2015.)
Then, the court ruled that under Illinois law, (Id. 13.) The court concluded by stating that “your claim against FedEx in the State Court system, ... you are entitled to do that ... I make no comment on that.” (Id. 16.) Rocha's appeal followed.
“This court reviews a dismissal under Rule 12(b)(6) for failure to state a claim de novo ,” and it “may affirm on any ground contained in the record.” Brooks v. Ross , 578 F.3d 574, 578 (7th Cir. 2009)
.
On appeal, Rocha makes a number of scattered factual and legal arguments. We elect to examine what we understand to be Rocha's three primary contentions: that the district court erred by (1) dismissing his legal malpractice claim, (2) dismissing his fraud claim, and (3) dismissing his amended complaint with prejudice. Because we find these sufficient to resolve the case, we need not address Rocha's other arguments. See id. at 578
.
To state a claim for legal malpractice under Illinois law, a plaintiff must plead the following elements: “(1) an attorney-client relationship that establishes a duty on the part of the attorney; (2) a negligent act or omission constituting a breach of that duty; (3) proximate cause establishing that ‘but for’ the attorney's malpractice, the plaintiff would have prevailed in the underlying action; and (4) actual damages.” Mitchell v. Schain, Fursel & Burney, Ltd. , 332 Ill.App.3d 618, 266 Ill.Dec. 122, 773 N.E.2d 1192, 1193–94 (2002)
.
“[I]n assessing the damage inflicted by legal malpractice, prime consideration must be given to the situation in which the client was placed at the time of the termination of the legal services.” Id. , 266 Ill.Dec. 122, 773 N.E.2d at 1194
. This is because an attorney's duty to his client ceases upon the attorney's discharge. Land v. Greenwood , 133 Ill.App.3d 537, 88 Ill.Dec. 595, 478 N.E.2d 1203,...
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