Client Is Bound By Judgment Entered As A Result Of Its Attorney's Misconduct
BAKERY MACHINERY & FABRICATION v. TRADITIONAL BAKING, INC. (June 29, 2009)
Bakery Machinery & Fabrication (BMF) retained attorney James Hinterlong to pursue Traditional Baking, Inc. (TBI) in a contract action in an Illinois court. TBI removed the action to federal court. Hinterlong failed to file an appearance, neglected to file Rule 26 disclosures on time, failed to respond to TBI's amended counterclaim, did not provide a copy of a sanctions order to his client as ordered by the court, and never answered a request for admission. The court ordered Hinterlong to file his appearance, pay a sanction, and pay past sanctions. The court warned Hinterlong that it would strike BMF's pleadings if he did not comply. He did not comply. The court struck BMF's pleadings, granted TBI's motion for default and entered judgment against BMF for $582,000. Some months later, BMF moved to substitute counsel and stay the proceedings. The court denied substitute counsel's motion to vacate the judgment. BMF appeals.
In their opinion, Judges Bauer, Ripple and Wood affirmed. The Court began by noting that a district court has substantial discretion in deciding a Rule 60 motion. Citing its prior jurisprudence, the Court stated that an attorney's misconduct is the problem of the client under the law of agency. Even when that misconduct rises above simple negligence or lack of diligence, it does not entitle the client to the "extraordinary" relief provided in Rule 60. Even here, where BMF sued Hinterlong and discovered he lacked malpractice insurance, the situation does not meet the exceptional circumstances test.
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select