Requests to Admit in Illinois: How and When To Respond (The 28-Day Rule)


I once read a tongue-in-cheek article that said if you’re ever served with a Request to Admit Fact (RTA), you should staple it to your forehead. (Ouch!)

That way, you won’t forget about the RTA and miss the 28-day deadline to send your sworn responses to the opposing side.  And while some recent cases may have softened Illinois’ draconian RTA rules, the hyperbolic sentiment expressed in the “staple statement” endures: a failure to timely respond to an RTA can have grave consequences for your case.  The main one being that the facts (or documents) contained in the RTA can be deemed admitted against you.

Once that happens, the party sending the RTA can move for summary judgment and win all or most of his case.

Armagan v. Pesha, 2014 IL App (1st) 121840 examines the question of when the 28-day timing requirement starts and ends and when the service of and response to an RTA is deemed complete under Illinois law.

The plaintiff deposited over 250 gold coins with the defendants who operated a rare coin shop.  Plaintiff alleged he placed the coins with the defendants temporarily with the understanding that plaintiff could always get them back.  Several months later when plaintiff asked for the coins back, defendants apparently refused and plaintiff sued for conversion, breach of bailment and other claims.

During discovery, plaintiff mailed an RTA on defendants on November 18, 2010.  Defendants filed their response with the court on December 17, 2010 (29 days later) and mailed the response to plaintiff that same day.  Plaintiff then moved to deem the RTA facts admitted on the basis that defendant missed the 28-day deadline by one day.

The trial court agreed (November 18 service is complete November 22, 2010; December 17, 2010 service is complete on December 21, 2010 – 29 days after November 22, 2010), deemed the facts admitted and entered summary judgment for plaintiff for almost $500,000.  An expensive, one-day mistake to be sure.  Defendants appealed.

Held: Trial Court reversed.  Defendants’ RTA response was timely under Illinois Supreme Court Rule 12.

The First District found that defendants timely responded to the RTA.  In doing so, the Court discussed the interplay between Supreme Court Rules 216, 12 and 11 which govern RTAs and the manner of serving documents. The key rules:

the purpose of Rule 216  is to narrow issues for trial and only requires the responding party to serve his responses within the 28-day deadline; as opposed to filing them with the court within 28 days;

– Rule 216 requires only that the RTA responses be served (by the responding party), not received (by the requesting party) within 28 days;

– failing to comply with Rule 216’s requirements can result in a judicial admission of the facts contained in the RTA;

– Under Rule 12(c), service is complete four (4) days after mailing;

– the method of service differs from proof of service;

– serving a document by U.S. mail is an acceptable method of service; 

– Rule 11 specifically allows a party to serve documents (other than complaint) by U.S. mail (“regular” mail);

¶¶ 16-20.

Application: Plaintiff mailed his RTA on November 18, 2010.  Under Rule 12, service of the RTA was complete on November 22, 2010 – four days later.  Defendants then had 28 days – through December 20, 2010 – to serve their response.  Since defendants served their RTA response by placing it in the mail on December 17, 2010, they complied with the 28-day deadline (with three days to spare). ¶ 23.

Policy concerns also motivated the Court’s reversal.  It noted that Illinois has a broad policy of cases being resolved on the merits instead of technicalities and that discovery is not designed for tactical gamesmanship or a trap for the unwary.  Accordingly, the Court would have allowed the defendants response even if it was late under Rule 183 (which governs extension of time for “good cause”).  ¶¶ 25-26.

Take-aways: A Request to Admit is the quintessential “gotcha” discovery device.  The serving party hopes you will blow the 28-day deadline and then do exactly what the plaintiff did here: try to get the facts deemed admitted against you.

This case seems to strike a fair balance between giving teeth to a discovery tool while at the same time being willing to look at the realities of litigation practice, where the exigencies of the moment practically dictate last-minute responses.

In hindsight, the defendants’ attorney probably should have hand-delivered and faxed (and e-mailed) his response instead of mailing it.  That would have saved him a lot of time and (I imagine) frantic energy trying to undo the $500,000 judgment against his client.

 

Illinois Court Gives Liquidated Damages Tutorial in Shopping Center Spat

Illinois’ First District provides an exhaustive analysis of liquidated damage principles in GK Development, Inc. v. Iowa Malls Financing Corporation, 2013 IL App (1st) 112802.

Here are some useful bullets:

  • In Illinois, contracting parties are free to pre-set damage amounts; but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss.
  • A liquidated damages clause must be for a specific amount and for a specific breach.
  •  A clause that penalizes a party for non-performance or that works as a threat to secure performance, violates public policy and is unenforceable. 
  • Three elements of an enforceable liquidated damages provision include whether: (1) the parties intended to agree in advance to the settlement of damages that might arise from the breach; (2) the amount of liquidated damages was reasonable at the time of contracting, bearing some relation to the damages which might be sustained, and (3) actual damages would be uncertain in amount and difficult to prove.
  •  “The element common to most liquidated damages clauses that get struck down as penalty clauses is that they specify the same damages regardless of the severity of the breach.” (i.e. If tenant breaches 10 year lease at year 9 or year 1, damages are the same.
  • Courts will guard against giving the non-breaching party a windfall recovery that places it in an even better position than it would be in if the other party performed.
  • Where liquidated damages dwarf the actual damages (here, $4.3 M vs. $150K) likely to result from a minor breach, it will likely signal an unenforceable penalty to punish non-performance.
  • Parties distinguish between (1) a total breach of contract and (2) a minor delay in performance. If they fail to do so, there’s a real risk the liquidated damages term gets struck down as punitive.

 

 

 

Tortious Interference With Prospective Economic Advantage – An Illinois Case Note

In Davidson v. Schneider, 2014 WL 656780 (N.D.Ill. 2014), the Court describes the quantum of proof required for a plaintiff to survive summary judgment on both the damages element of a breach of contract claim and the “reasonable expectancy” prong of a tortious interference claim.

The plaintiff and defendant were competitors in the baseball vision testing business.  They were also parties to prior patent infringement litigation that culminated in a written settlement agreement that contained broad non-disparagement language.

 When the plaintiff found out that one of defendant’s employee’s was bad-mouthing the plaintiff to a college softball coach and prospective client, he sued in Federal court.  After discovery finished, the Court entered summary judgment for defendants on plaintiff’s breach of contract and tortious interference claims.

An Illinois breach of contract plaintiff must show (a) existence of a contract, (b) performance by the plaintiff, (c) breach by the defendant and (d) compensable damages resulting from the breach.  Davidson, *3, Asset Exch. II, LLC v. First Choice Bank, 2011 Ill.App. (1st) 103718. 

Damage to reputation or goodwill resulting in a diminished ability to make money as a result of a breach can be recovered in a breach of contract suit.  However, where a party shows a breach but no damages, the contract claim is “pointless” and must failDavidson, *5.

Here, the plaintiff established a contract (the settlement agreement) and defendant’s breach (by disparaging plaintiff’s products and services).  However, the plaintiff was unable to pinpoint any measurable money damages resulting from the defendants’ denigrating the plaintiff’s vision training services.

 Plaintiff cited no lost clients or business opportunities traceable to the defendants disparaging comments.  Without any damages evidence, the plaintiff’s breach of contract claim failed as a matter of law.  Davidson, *4.

The Court also granted summary judgment on plaintiff’s tortious interference with prospective economic advantage claim.  Plaintiff’s tortious interference count was based on derogatory comments defendants’ employee made to another baseball coach and prospective customer of plaintiff. 

The elements of tortious interference with prospective economic advantage are: (1) a reasonable expectation of entering a valid business relationship, (2) defendant’s knowledge of the expectation, (3) purposeful interference by the defendant that prevents plaintiff’s expectation from ripening into a business relationship, and (4) damages to the plaintiff resulting from the interference.  *5

The mere  hope for or possibility of a future business relationship is insufficient to show a reasonable expectancy. 

Here, plaintiff’s evidence showed only a nebulous hope of a future business pairing with the baseball coach to whom defendants trashed plaintiff’s product.  He didn’t show any specific business arrangement that was in the works.  As a result, plaintiff failed to raise a triable fact question on whether he had a reasonable expectation of a future business relationship with the baseball coach.

Take-aways: A breach of contract plaintiff’s failure to prove damages with tangible evidence of financial loss at the summary judgment state will doom his case. 

To survive summary judgment on a tortious interference with prospective economic advantage claim, the plaintiff must offer tangible evidence that he had a specific, proposed business arrangement with an identified third party – instead of a wish or hope for one – to meet the tort’s reasonable expectancy test.