Choice Hotels International In v. Anuj Grover
792 F.3d 753
| 7th Cir. | 2015Background
- Choice Hotels sued SBQI, Inc. and several managers/investors for breach of a franchise agreement; default entered after defendants did not answer; investors retained Chawla who performed poorly, prompting them to seek new counsel.
- Investors alleged signatures on the franchise agreement were forged and sought to vacate the default; Chawla failed to secure a timely vacatur or pursue damages-related discovery.
- Elton Johnson appeared for the investors but did not answer, file to vacate the default, or fully defend the damages phase; his communications were limited and non-substantive.
- District court set damages at $430,286.75 and entered final judgment on June 26, 2013.
- Investors hired new counsel who moved under Rule 60(b)(6) for relief from judgment more than a year after judgment; district court denied relief as not extraordinary.
- Court affirms ruling, holding that civil litigants bear the consequences of their own counsel’s neglect and that Holland/Maples do not apply to ordinary civil litigation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 60(b)(6) relief was appropriate | Investors argue extraordinary circumstances justify relief | Choice Hotels argues lack of extraordinary circumstances | No; relief denied |
| Whether counsel abandonment imputes to clients in civil cases | Investors claim abandonment by Johnson harmed them | Abandonment should not excuse clients’ default | Abandonment does not excuse clients; clients bear consequences |
| Whether district court abused its discretion in denying relief | Judgment should be reopened due to counsel neglect | Discretion to deny relief appropriate | No abuse of discretion |
| Whether Holland/Maples apply to non-capital civil litigation | Holland/Maples should permit relief in civil cases | These decisions do not govern ordinary civil litigation | Holland/Maples inapplicable to routine civil tort/contract actions |
| Whether plaintiffs had grounds to set aside judgment based on attorney conduct | Attorney misconduct justifies reopening | Misconduct not sufficient without extraordinary circumstances | Not warranted under Rule 60(b)(6) |
Key Cases Cited
- Link v. Wabash R.R., 370 U.S. 626 (U.S. 1962) (bound by agents’ acts and omissions; no relief for client due to lawyer’s bungling)
- Societe Internationale v. Rogers, 357 U.S. 197 (U.S. 1958) (intentional lawyer misconduct imputable to client)
- National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639 (U.S. 1976) (intentional lawyer misconduct imputable to client)
- Bakery Machinery & Fabrication, Inc. v. Traditional Baking, Inc., 570 F.3d 845 (7th Cir. 2009) (attorney misconduct falls on the client; labels do not matter)
- 7108 West Grand Avenue, 15 F.3d 632 (7th Cir. 1994) (inaction by counsel; duty to protect client's interests)
- Maples v. Thomas, 132 S. Ct. 912 (S. Ct. 2012) (abandonment by counsel can justify relief in collateral proceedings; not for ordinary civil cases)
- Holland v. Florida, 560 U.S. 631 (U.S. 2010) (abandonment can toll certain proceedings; capital-case context highlighted)
- Gibbs v. LeGrand, 767 F.3d 879 (9th Cir. 2014) (applies Holland/Maples to collateral attacks; not necessarily civil cases)
- Cadet v. Florida Department of Corrections, 742 F.3d 473 (11th Cir. 2014) (application of Maples/Holland principles to collateral challenges)