Horvath v. Apria Healthcare LLC et al, No. 1:2019cv04894 - Document 20 (N.D. Ill. 2019)
Court Description: MEMORANDUM Opinion and Order: The court: (1) grants plaintiff Kurt Horvath's motion (Doc. 17 ) to strike reply and amend complaint; (2) strikes the reply and exhibits (Doc. 15 ) filed by defendants Apria Healthcare, LLC, and Apria Hea lthcare Group, Inc.; (3) grants plaintiff leave to amend his complaint to add a spoliation claim; and (4) denies Apria's combined motion (Doc. 7 ) to compel arbitration and to dismiss based on claim preclusion. Plaintiff may amend his complai nt to add a spoliation claim on or before November 25, 2019. All defendants must answer the amended complaint on or before December 16, 2019. The parties are directed to file a joint status report using this court's form on or before December 30, 2019. Status hearing set for November 21, 2019 is stricken. This matter is set for a report on status on January 8, 2020, at 9:10 a.m. Signed by the Honorable Robert W. Gettleman on 11/5/2019. Mailed notice (cn).
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Horvath v. Apria Healthcare LLC et al Doc. 20 IN THE UNITED STATES DISTR ICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVIS ION KURT HORVATH, Plaintif, v. APRIA HEALTHCARE, LLC, APRIA HEALTHCARE GRO UP, INC., and APRIA HEALTHCARE, INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) Case No. 19 CV 4894 Judge Robert W. Gettleman MEMORANDUM OPINION A ND ORDER Plaintif Kurt Horvath alleges that oxygen tanks were negligently delivered to his home, injuring him. In state court, plaintif sued three companies allegedly responsible for delivering the tanks: (1) Apria Healthcare, LLC; (2) Apria Healthcare Group, Inc.; and (3) Apria Healthcare, Inc. he irst two Apria companies (“Apria”) removed to this court based on diversity jurisdiction. Apria now moves to compel arbitration. In the alternative, Apria moves to dismiss based on claim preclusion. Both motions are denied. 1 Motion to compel arbitration A court should compel arbitration when there is “a written agreement to arbitrate, a dispute within the scope of the arbitration agreement, and a refusal to arbitrate.” Zurich American Insurance Co. v. Watts Industries, Inc., 417 F.3d 682, 687 (7th Cir. 2005), citing 9 U.S.C. § 4. Courts review a motion to compel arbitration under a summary judgment standard. Tinder v. Pinkerton Security, 305 F.3d 728, 735–36 (7th Cir. 2002). To avoid arbitration, a party “must identify a triable issue of fact concerning the existence of the agreement.” Id. at 735. Dockets.Justia.com here is no evidence that plaintif agreed to arbitrate disputes with Apria. He signed a rental agreement authorizing various payment terms. hat twelve-page rental agreement has no arbitration clause. It never once uses the word “arbitration.” Apria nonetheless asserts that the rental agreement “contained” an arbitration clause. But if the agreement incorporated some other document by reference, Apria must show “an intention to incorporate th[at] document and make it a part of the contract.” 188 LLC v. Trinity Industries, Inc., 300 F.3d 730, 737 (7th Cir. 2002), quoting Arneson v. Board of Trustees, McKendree College, 210 Ill. App. 3d 844, 850–51 (Ill. App. 1991). Apria has not tried to make that showing. Apria points to nothing in the rental agreement that even refers to an arbitration clause—much less to a “clear and speciic” incorporation, which Illinois law demands. 188 LLC, 300 F.3d at 736. Apria instead points to a separate form titled, “Terms and Conditions / Authorizations / Consents.” hat form has no signature and no date. It does not mention plaintif’s name. But unlike the rental agreement, the form has an arbitration clause. Apria proclaims that this three-page form “appeared on the back” of the signed rental agreement. Apria argues that by signing the rental agreement, plaintif agreed to the terms-and-conditions form—and thus to the arbitration clause. hat argument is procedurally inappropriate. It relies on two aidavits submitted with Apria’s reply. In those aidavits, Apria’s employees state that: (1) the terms-and-conditions form “appeared on the back” of plaintif’s rental agreement; and (2) Apria retains only the irst and last pages of signed rental agreements—and those pages do not include the terms-and-conditions form. he aidavits are untimely. hey were not served with Apria’s motion to compel arbitration. See Fed. R. Civ. P. 6(c)(2) (“Any aidavit supporting a motion must be served with the motion.”). 2 Even worse, by waiting until its reply to submit new evidence and new arguments based on that evidence, Apria denied plaintif a fair chance to respond. “A reply brief is for replying”— not for sandbagging. Hussein v. Oshkosh Motor Truck Co., 816 F.2d 348, 360 (7th Cir. 1987) (Posner, J., concurring); Murphy v. Village of Hofman Estates, No. 95 C 5192, 1999 WL 160305, at *2 (N.D. Ill. Mar. 17, 1999) (“[I]t is established beyond peradventure that it is improper to sandbag one’s opponent by raising new matter in reply.”). A lawyer who plays dirty by sneaking in new evidence disserves his clients and tarnishes his credibility. As a sanction, the court strikes not only Apria’s belated aidavits, but Apria’s reply brief in its entirety. Because a reasonable jury could ind that the terms-and-conditions form lacks any connection to the rental agreement plaintif signed, Apria’s motion to compel arbitration is denied. Plaintif’s motion to strike Apria’s reply is granted. Plaintif is granted leave to ile an amended complaint that adds a spoliation claim for any evidence that Apria may have destroyed. 2 Motion to dismiss based on claim preclusion Next, Apria moves to dismiss based on res judicata—or, more precisely, claim preclusion. Dookeran v. Cook County, Illinois, 719 F.3d 570, 574 n.2 (7th Cir. 2013). Claim preclusion is a doctrine that bars people from litigating a claim more than once. Plaintif iled an earlier suit against Apria that was involuntarily dismissed for want of prosecution. Horvath v. Apria Healthcare, LLC et al., 18 CV 6726, Docs. 26–27 (N.D. Ill. Jan. 15, 2019) (Weisman, M.J.). “Federal common law governs the claim-preclusive efect of a dismissal by a federal court sitting in diversity.” CFE Group, LLC v. Firstmerit Bank, N.A., 809 F.3d 346, 351 (7th Cir. 2015) (citation and quotation marks omitted). Under federal common law, a federal court exercising diversity jurisdiction applies the preclusion principles of the state. Id. Claim 3 preclusion under Illinois law requires a court to have entered a “inal judgment on the merits.” Nowak v. St. Rita High School, 197 Ill. 2d 381, 390 (Ill. 2001). Apria argues that two of Judge Weisman’s orders operate as inal judgments on the merits: (1) a minute entry dismissing plaintif’s suit without prejudice for want of prosecution; and (2) a subsequent order denying plaintif’s Fed. R. Civ. P. 60(b) motion to reinstate the case. hose arguments are frivolous. Apria’s motion to dismiss based on claim preclusion is denied. 2.1 Preclusive effect of minute entry dismissing plaintiff’s suit without prejudice Judge Weisman did not enter a inal judgment on the merits when he involuntarily dismissed plaintif’s suit. An involuntary dismissal is not a inal judgment on the merits when “the dismissal order states otherwise.” Fed. R. Civ. P. 41(b). Judge Weisman’s minute entry dismissing plaintif’s suit “states otherwise”: “[P]laintif has not iled a response to defendants’ motion to compel arbitration. he Court therefore dismisses this suit without prejudice for want of prosecution.” Horvath, 18 CV 6726, Doc. 26 (Jan. 15, 2019) (emphasis added). he judgment also “states otherwise”: “Case dismissed without prejudice for want of prosecution.” Id., Doc. 27 (Jan. 15, 2019) (emphasis added). A dismissal without prejudice is not a inal judgment on the merits. It has no preclusive efect. E.g., CFE Group, 809 F.3d at 351 (7th Cir. 2015) (“[A] dismissal ‘without prejudice’ is not inal, and a non-inal decision is not subject to preclusion defenses.”) (citation omitted); Disher v. Information Resources, Inc., 873 F.2d 136, 139 (7th Cir. 1989) (“Since the dismissal here was without prejudice, the judge’s indings have no possible preclusive efect.”). Apparently realizing that the law is not on his side, Apria’s lawyer, Anthony Goldner, resorts to omitting inconvenient facts. Not once in his motion does he mention that the dismissal was without prejudice. And he spuriously asserts that the minute entry “became a inal judgment 4 on the merits” because it “did not state whether the dismissal was an adjudication on the merits.” hat fails “even the laugh test.” Reed v. Town of Gilbert, Arizona, 135 S. Ct. 2218, 2239 (2015) (Kagan, J., concurring). Any competent lawyer knows that “an ‘adjudication upon the merits’ is the opposite of a ‘dismissal without prejudice.’” Semtek International Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001). he minute entry dismissing plaintif’s suit without prejudice plainly had no preclusive efect. 2.2 Preclusive effect of order denying plaintiff’s Rule 60(b) motion to reinstate Apria’s litigation conduct smacks of a bad-faith (if clumsy) attempt to deceive the court. When plaintif responded that the dismissal was without prejudice, Apria’s lawyer had an opportunity. He could have conceded defeat. He could have apologized for iling a brief that had a misleading omission. Instead, he doubled down. In his reply, Apria’s lawyer pivots to Judge Weisman’s denial of plaintif’s motion to reinstate the case. Apria argues for the irst time (which is forbidden for the reasons already discussed) that the denial of plaintif’s motion to reinstate was a inal judgment on the merits. It was not. Plaintif moved to reinstate under Fed. R. Civ. P. 60(b). A Rule 60(b) motion “does not afect the judgment’s inality or suspend its operation.” Fed. R. Civ. P. 60(c)(2). he operative judgment was and continued be that entered on January 15, 2019—the judgment dismissing the case “without prejudice for want of prosecution.” Horvath, 18 CV 6726, Doc. 27. And that judgment was not a inal judgment on the merits. Even if refusing to reinstate the case somehow superseded the earlier judgment, Apria’s lawyer would still be wrong. Just like the minute entry, the order denying plaintif’s motion to reinstate was without prejudice. hat order concludes, “If plaintif wants to pursue his cause of action, he must ile a new suit.” Id., Doc. 39 at 2 (May 22, 2019). Inviting plaintif to “ile a new 5 suit” is logically incompatible with dismissing with prejudice; dismissing with prejudice would have “preclude[d] the plaintif from bringing a new suit on his claim.” Disher, 873 F.2d at 139 (7th Cir. 1989). Judge Weisman’s order denying plaintif’s Rule 60(b) motion to reinstate the case was not an adjudication on the merits and had no preclusive efect. Not once in Apria’s reply does Apria’s lawyer mention that the order denying reinstatement included the words, “If plaintif wants to pursue his cause of action, he must ile a new suit.” hat omission—along with the omission that the dismissal was “without prejudice”— leaves the court in serious doubt that Apria’s lawyer has been candid with the court. Mr. Goldner should take great care to ensure that his future ilings comply with professional standards and with his duties as an oicer of the court. CONCLUSION he court: (1) grants plaintif Kurt Horvath’s motion (Doc. 17) to strike reply and amend complaint; (2) strikes the reply and exhibits (Doc. 15) iled by defendants Apria Healthcare, LLC, and Apria Healthcare Group, Inc.; (3) grants plaintif leave to amend his complaint to add a spoliation claim; and (4) denies Apria’s combined motion (Doc. 7) to compel arbitration and to dismiss based on claim preclusion. Plaintif may amend his complaint to add a spoliation claim on or before November 25, 2019. All defendants must answer the amended complaint on or before December 16, 2019. he parties are directed to ile a joint status report using this court’s form on or before December 30, 2019. his matter is set for a report on status on January 8, 2020, at 9:10 a.m. ENTER: November 5, 2019 __________________________________________ Robert W. Gettleman United States District Judge 6
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