Although the 7th Circuit Court of Appeals agreed the party of investors did have a “poor lawyer,” the panel declined to overturn the nearly $450,000 judgment against them, saying “legal bungling … does not justify reopening a judgment.”
Three investors – Anuj Grover, Arjun Grover, and Dharam Punwani – challenged a default against them entered by the court clerk after Choice Hotels sued SBQI Inc. for breach of a franchise agreement and their first attorney did not answer the complaint. The trio got a new attorney, arguing their signatures on the franchise agreement were forgeries.
Their new counsel, Elton Johnson, said he would try to vacate the default, negotiate a settlement and defend against Choice Hotels’ demand for damages. However, Johnson did not answer the complaint, file a motion to vacate the default, engage in discovery or reply to Choice Hotels’ motion for summary judgment.
Consequently, the District Court set damages at $430, 286.75.
Again, the investors hired another lawyer and filed a motion to set aside the judgment. The District Court rejected the motion, observing the remedy for legal neglect is a malpractice suit against the lawyer rather than continuing litigation and upsetting the adversary’s legitimate expectations based on the final judgment.
The 7th Circuit agreed Johnson “unquestionably is a poor lawyer.” Following five disciplinary complaints against him, he was indefinitely suspended from practice in March 2014, less than four years after his admission to the bar.
But the panel noted although the litigants suspected Johnson was not protecting their interests, they did not replace him promptly. They took no action other than sending him emails and making unreturned phone calls. Also, they did not consult the court docket which would have shown Johnson was not filing essential documents.
“…the fact remains that civil litigants are responsible for their own choices and their own inaction,” Judge Frank Easterbrook wrote in Choice Hotels International, Inc. v. Anuj Grover, Arjun Grover and Dharam Punwani, 14-3294. “Litigants who know or strongly suspect that their lawyers are asleep on the job must act to protect their own interests by hiring someone else.”