7th Circuit faults attorney in decision against Illinois company
June 29, 2009
The U.S. Court of Appeals for the 7th Circuit on Monday upheld a default judgment against an Illinois baking machinery manufacturer that suffered when its attorney ran afoul of a lower court.
The court, in a 3-0 decision written by Judge William Bauer, opened its opinion with the sentence: "This case is an example of how the sins of a lawyer can be visited upon the client." The appellate court said that the company, Peru, Ill.-based Bakery Machinery & Fabrication Inc. was ultimately responsible for its attorney, James Hinterlong of Grand Ridge, Ill., missing court filing deadlines, skipping court dates, and failing to file electronically as required. Bakery Machinery & Fabrication v. Traditional Baking, No. 08-1967.
The case grew out of a 2006 complaint that Bakery Machinery filed in U.S. District Court for Northern Illinois against Traditional Baking Inc. over non-payment for an oven delivered to the Bloomington, California-based cookie baking company. Traditional Baking counter-claimed that the oven arrived later than specified by the contract and resulted in lost profits. After months of Hinterlong's missteps detailed in the 7th Circuit opinion, the U.S. District Court entered a default judgment of $582,000 in Traditional Baking's favor.
Bakery Machinery then hired a new lawyer, David Novoselsky of Chicago, and contended in its appeal to the 7th Circuit that the client shouldn't be held responsible for the misdeeds of its attorney, partly because Hinterlong had told the client repeatedly over nine months that the litigation was "going well," according to the decision. Novoselsky based the argument on Federal Rule of Civil Procedure 60 (b) (6), saying a party can be granted relief from a final judgment in "exceptional circumstances."
Novoselsky said in an interview that he will encourage his client to appeal the case to the Supreme Court because the 7th Circuit has consistently declined to allow the rule to be applied in cases such as this one.
"This lawyer kept the client totally out of the loop," Novoselsky said. "The court acknowledged that it was not the client's fault."
Still, the court said in its opinion that the only "exceptional circumstance" in this case was that Bakery Machinery hired a lawyer without legal malpractice insurance and noted that the company now can't recover its losses from Hinterlong. The company has a malpractice case pending against Hinterlong in Cook County Circuit Court, but there's little to pursue other than Hinterlong's personal assets, Novoselsky said.
Phone calls seeking comment from Hinterlong weren't returned.
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