Opinion
No. 99 C 5230
July 24, 2000
MEMORANDUM OPINION AND ORDER
Clemente Martinez, Jr., ("Martinez") brought a personal injury action against Baldwin Steel Company — Chicago Division and Sterling Steel Services, Ltd. ("Baldwin Steel") for an injury sustained on the premises of Baldwin Steel. Before this court is Baldwin Steel's motion for summary judgment. For the reasons stated herein, summary judgment is denied.
I. Factual Background
Consider The Source Corp. ("CSC") procures and furnishes prospective employees for other employers. On June 8, 1998, CSC assigned Martinez to work at Baldwin Steel. In his complaint, Martinez claims that on July 20, 1998, he sustained an injury to his hand while working at the premises of Baldwin Steel.
On August 11, 1999, Martinez filed suit against Baldwin Steel. His complaint sounded in negligence and demanded damages in the amount of $925,000. At the Rule 16(b) scheduling conference, this court set forth the following deadlines: any amendments to pleadings were to be filed on or before February 28, 2000; discovery was ordered closed on April 15, 2000; dispositive motions were due on June 1, 2000, and a jury trial was set for November 6, 2000. See Docket Entry 11/12/99.
Baldwin Steel's Answer to the complaint, submitted to the court on October 7, 1999, did not assert any affirmative defenses, On April 12, 2000, however, Baldwin Steel requested leave to file affirmative defenses. On April 18, 2000, Baldwin Steel moved for summary judgment on the basis of an affirmative defense. Upon presentment of the motion for leave on April 19, 2000, this court denied Baldwin Steel's motion for leave to file affirmative defenses. See Minute Order of 4/19/00 [Doc. # 11]. On May 1, 2000, Baldwin Steel moved for a rehearing. On May 10, 2000, Baldwin Steel's motion for rehearing was denied. See Minute Order of 5/10/00 [Doc. #14].
II. Summary Judgment Standard
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories and admissions on file, together wit the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ. p. 56(c); Cox v. Acme Health Sew., Inc., 55 F.3d 1304, 1308 (7th Cir. 1995). A genuine issue of material fact exists for trial when, in viewing the record and all reasonable inferences drawn from it in a light most favorable to the non-movant, a reasonable jury could return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986); Eiland v. Trinity Hosp., 150 F.3d 747, 750 (7th Cir. 1998).
The movant bears the burden of establishing that there exists no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986); Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995). If the movant meets this burden, the non-movant must set forth specific facts that demonstrate the existence of a genuine issue for trial. Rule 56(e); Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. Rule 56(c) mandates the entry of summary judgment against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and in which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. at 2552-53. A scintilla of evidence in support of the non-movant's position is not sufficient to oppose successfully a summary judgment motion; "there must be evidence on which the jury could reasonably find for the [nonmovant]." Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. Weighing evidence, determining credibility, and drawing reasonable inferences are jury functions, not those of a judge deciding a motion for summary judgment. Anderson, 477 U.S. at 255, 106 S.Ct. at 2515.
III. Discussion
Federal Rule of Civil Procedure 8(c) requires a defendant to set forth in her answer to a complaint certain enumerated and other affirmative defenses. The purpose of Rule 8(c) is to "avoid surprise and undue prejudice to the plaintiff by providing her notice and the opportunity to demonstrate why the defense should not prevail." Venters v. City of Delphi, 123 F.3d 956, 967 (7th Cir. 1997). Accordingly, the defendant is obligated to assert its defenses in a timely manner. See id. at 968 (defendant should "promptly" seek leave to file an amended answer); Davis v. Bryan, 810 F.2d 42, 44 (26 Cir. 1987) (statute of limitations defense must be raised "at the earliest possible moment"). As a general rule, an affirmative defense that is not pleaded in a timely manner is deemed waived. Brunswick Leasing Corp. v. Wisconsin Central. Ltd., 136 F.3d 521, 530 (7th Cir. 1998); DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 334 (7th Cir. 1987).
Baldwin Steel wishes to assert against Martinez the affirmative defense of accord and satisfaction. Namely, Baldwin Steel claims that Martinez was awarded $30,000.00 in settlement of the injuries he sustained on July 20, 1998. Baldwin Steel was, at the time of Martinez's injury, an employer operating under and subject to the provisions of the Illinois Worker's Compensation Act ("Act"). Martinez's $30,000.00 award arose under rights conferred to him by the Act, and as such, the settlement constituted his exclusive remedy, argues Baldwin Steel. Thus, defendant's theory goes, Baldwin Steel is immune from the instant personal injury suit pursuant to the Act, which extends immunity to "borrowing" employers. See Belluomini v. United States, 64 F.3d 299, 302 (7th Cir. 1995) (citing 820 ILCS 305/1 (a)(4)).
Accord and satisfaction is an enumerated affirmative defense. Fed.R.Civ.Pro. 8(c).
The defendant's argument sounds promising. However, the court declines to address the merits of the affirmative defense because it has been waived. The defendant's Answer, filed nearly two months after the filing of the complaint, did not include any affirmative defenses. Pursuant to Federal Rule of Civil Procedure 16 (b), this court entered a scheduling order on November 12, 1999, which set February 28, 2000, as the deadline for the amendment of pleadings. On April 12, 2000, approximately six months after the submission of the Answer, and six weeks after that deadline, Baldwin Steel filed a motion for leave to file affirmative defenses ("motion for leave").
The motion for leave to file a defense was presented to this court on April 19, 2000, four days after the close of discovery. When asked to explain the excessive delay, defense counsel claimed that she had not become aware of the affirmative defense until "recently," noting that the judgment from the Worker's Compensation claim had not been rendered until July 1999. The court observed that the parties had been aware of the deadlines in this case, including that for amendment of pleadings, since November 1999. At that point, defense counsel admitted that she had "no response." Expressing concern that the affirmative defense had been asserted at the close of discovery, the court denied defendant leave to file the affirmative defense.
The defendant's motion for leave to file defenses was filed on April 12. Discovery closed on April 15. The defendant's motion was presented to the court on April 19.
On May 5, 2000, Baldwin Steel filed a motion for rehearing which was presented to the court on May 10. When asked to justify defendant's belated assertion of the accord and satisfaction defense, defense counsel cited Martinez's refusal to appear for his deposition. See also Def.'s Mot. for Rehear. The court rejected this "tit for tat" explanation. If the defendant wished to seek sanctions for discovery violations, it could do so, this court reasoned, but the ruling on the affirmative defense would not be contingent on that wholly unrelated matter. Again, the court admonished the defendant for asserting its defense upon the eve of the closing of discovery. The defendant's motion for rehearing was denied.
The defendant maintains that this court denied its motion for leave to file affirmative defenses under the erroneous assumption that "the deadline for amending pleadings had passed approximately six (6) months ago." Def. Reply at ¶ 2. The defendant misconstrues the court's statements at the April 19 motion call. The court noted that Baldwin Steel's Answer had been filed six months ago, and that the deadline for amendments had passed.
The defendant may have anticipated that its weak excuses would not satisfy the court, for it filed its motion for summary judgment — which is based solely on the accord and satisfaction defense — the day before presenting the motion for leave to this court. The court's prior denials must not have satisfied the defendant, however, for even after being denied leave to file the affirmative defense and being denied a rehearing, the defendant insists in its Reply to Plaintiff's Response to Defendant's Motion for Summary Judgment that its affirmative defense has not been waived. For the third time, the court finds that Baldwin Steel unjustifiably delayed its assertion of the affirmative defense to the detriment of the plaintiff Thus, the court finds that the affirmative defense is waived. See Venters, 123 F.3d at 968 (stating that if the defendant fails to raise an affirmative defense at the outset, the court, in its discretion, may deem the defense to be waived).
The defendant's Reply was filed on May 30, 2000 — almost a month after the court denied the defendant's motion for rehearing.
Pursuant to Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend a pleading is to be given "freely when justice so requires." However, leave is inappropriate when, among other things, there has been undue delay or undue prejudice to the opposing party. See Villa v. City of Chicago, 924 F.2d 629, 632 (7th Cir. 1991). Baldwin Steel had plenty of time to discover and plead its affirmative defense. As the court noted previously, the defendant had more than six months after the filing of Martinez's complaint to amend its Answer. Once it filed the Answer, the defendant had four and a half months remaining to assert an affirmative defense. Yet the defendant did not seek to assert its defense until six weeks after the amendment deadline. In light of the generous time allowed to the defendant to amend it Answer, the court concludes that their delay was undue. See Thomas Betts Corp. v. Panduit Corp., No. 93 C 4017, 1999 WL 92894, at *2 (N.D. Ill. Feb. 17, 1999) ("Whether a delay is undue is determined by the circumstances, not simply by the length of time at issue.") (collecting cases).
Some circumstances may justify the belated amendment of a pleading. When a particular defense becomes apparent after discovery, for example, it would be reasonable for the court to grant leave to file an affirmative defense. Venters, 123 F.3d at 967. In the instant case, however, defense counsel does not claim that the accord and satisfaction defense first became apparent nine months after the issuance of the July 1999 judgment of Martinez's Worker's Compensation claim. See Orix Credit Alliance v. Taylor Maheine Works, 125 F.3d 468, 480-81 (7th Cir. 1997) (affirming district court's denial of leave to amend pleading where defendant did not explain why it failed to act earlier).
Baldwin Steel's only explanation is that Martinez failed to appear for his deposition within the deadline imposed by this court for discovery. If discovery of the affirmative defense was possible only through information available exclusively from Martinez, the court would have granted the defendant leave to file its defense. But that was not the case here. After all, Baldwin Steel was a party to the prior settlement of Martinez's injury claims. There was no justification for Baldwin Steel's belated actions. See Venters, 123 F.3d at 967 ("Once the availability of an affirmative defense is reasonably apparent, the defendant must alert the parties and the court of his intent to pursue that defense.") See also Thomas Betta, 1999 WL 92894, at *3 (rejecting argument that opposing party's dilatory tactics in discovery merited favorable consideration of moving party's motion to amend pleading).
Not only was the defendant's delay unjustified, it was also prejudicial to Martinez. Rule 8(c) may be relaxed where the plaintiff was given adequate notice of the affirmative defense and was not deprived of the opportunity to respond. Blaney v. United States, 34 F.3d 509, 512-13 (7th Cir. 1994). The circumstances presented in the instant case, however, do not compel the court to make an exception to Rule 8(c). Baldwin Steel flied the motion for leave to file affirmative defenses on the eve of the closing of discovery, effectively depriving the plaintiff of the opportunity to explore the merits of the defense through discovery. Accordingly, Baldwin Steel's affirmative defense of accord and satisfaction has been waived. See Sterling v. Riddle, No. 99 C 2678, 2000 WL 198440, at *4 (N.D. Ill. Feb. 11, 2000) (finding affirmative defense waived where defendant initially raised the defense one day before the close of discovery).
The court must not let the merits of the affirmative defense sway its decision. As the Seventh Circuit observed:
We recognize that the [affirmative] defense may have been meritorious; and [plaintiff's counsel should have had some inkling that the defense might be raised . . . [but] if Rule 8(c) is not to become a nullity, we must not countenance attempts to invoke such defenses at the eleventh hour, without excuse and without adequate notice to the plaintiff.Venters, 123 F.3d at 969. See also Maul v. Constan, 928 F.2d 784, 786 (7th Cir. 1991) ("We . . . will not speculate as to how the case would have proceeded had the correct procedure been followed.").
The defendant's affirmative defense was the sole basis for its' motion for summary judgment. Therefore, the motion is denied.
IV. Conclusion
For the foregoing reasons, Baldwin Steel's motion for summary judgment is denied.