The 7th U.S. Circuit Court of Appeals affirmed the ruling of a district judge, who refused to reconsider his decision to grant a default judgment against the Federal Hockey League in a case in which the league was sued by one of its players. The court was unsympathetic to the league, which had delegated the litigation brought by a professional hockey player, who was injured in a game, to an attorney, who failed to adequately pay attention to the case.
Kyler Moje, while playing for the league’s Danville Dashers lost an eye in a high-sticking incident during a game against the Akwesasne Warriors. He sued Oakley, Inc., which made the visor for “offering inadequate protection,” and the League.
“Instead of notifying its liability insurer and letting it defend the tort suit, the League hired John A. LoFaro, of Syracuse, New York,” wrote the court. “LoFaro promised to represent the League’s interests but did not do so.
“The League learned about potential trouble a month after the suit began, when Oakley’s attorney called Dan Kirnan, the League’s President, to ask why it had not filed an answer to the complaint. Kirnan asked LoFaro what was up, and LoFaro said that an answer had been filed. He sent the League a purported copy. The court’s docket did not reflect any filing, however, and Moje asked the judge to enter a default. LoFaro did not respond—nor did he do anything after the district court entered the default and permitted Moje to prove up his damages. On June 11, 2014, four months after the suit began, the district court entered a final judgment of $800,000 against the League.”
Kirnan maintained that he first learned about the problem in October 2014, after Moje commenced collection proceedings. It was at that point that Kirnan notified the League’s insurer, which undertook to defend under a reservation of rights (the League’s delay in notification, and the entry of a final judgment, had an obvious potential to prejudice the insurer), according to the court. In December 2014, a lawyer hired by the insurer entered an appearance for the League and filed a motion under Fed. R. Civ. P. 60(b)(1) to set aside the judgment. The district court’s denial of that motion led to this appeal.
On appeal, the league argued that “excusable neglect” led to the default judgment. The district court saw “neglect” but did not think it “excusable.” The appeals court added that LoFaro “has never offered an explanation for the combination of inaction and deceit.”
It continued:
The League wants us to bypass the question whether LoFaro’s conduct is excusable and concentrate on its own knowledge and conduct. Relying on Pioneer Investment Services Co. v. Brunswick Associates L.P., 507 U.S. 380, 396-97, 113 S. Ct. 1489, 123 L. Ed. 2d 74 (1993), the court noted that a litigant in such situations “must show that both its own conduct and its lawyer’s fit the category of ‘excusable’ neglect.
“Usually this concentrates attention on counsel, for most errors will be chalked up to counsel alone. There is one potentially important exception to this norm, however. As the Supreme Court discussed in Maples v. Thomas, 132 S. Ct. 912, 922-23, 181 L. Ed. 2d 807 (2012), and we repeated in Choice Hotels, a lawyer’s abandonment of the client ends the agency relation. Abandonment leaves the client responsible for its own conduct, but not for the lawyer’s—and then the question becomes whether the litigant’s conduct constituted excusable neglect.”
The appeals court noted that “the thin record that the League built in the district court does not compel a ruling in its favor. Two things dominate: first, the league failed to tender the defense of Moje’s suit to its insurer when it received the complaint; second, the league failed to act prudently after being alerted by Oakley that there was a problem.
“Instead of turning to its insurer, which any sensible business should have done, it hired LoFaro. Why? The only reason the League has given is that he had provided satisfactory legal services to Kirnan (and perhaps the League) in earlier years.” But the court questioned whether he had sufficient experience in the instant litigation.
“Even if he were a wizard of tort defense, why keep the insurer in the dark? The league has never offered a reason. After a co-defendant told the league that no answer had been filed on its behalf, it did not take precautions such as notifying the insurer, engaging counsel in Chicago, or checking the district court’s docket (which can be done from any desktop computer). A check of the docket would have revealed that LoFaro did not file an appearance as the league’s attorney and did nothing to protect its interests. Because LoFaro had not filed an appearance, Moje’s lawyer would have sent all filings, such as the request for a default judgment and his proof of damages, directly to the League, which sat on its hands. The league cannot escape a substantial share of the responsibility for the outcome.”
Kyler Moje v. Federal Hockey League, LLC,; 7th Cir.; No. 15-1097, 2015 U.S. App. LEXIS 11647; 7/7/15
Attorneys of Record: (for plaintiff) Dean Caras, Attorney, Chicago, IL. (for defendant) James R. Branit, Attorney, Litchfield Cavo LLP, Chicago, IL.
