United States District Court, S.D. Indiana, Indianapolis Division
Jane Magnus-Stinson, Chief Judge.
Shroyer Bros., Inc. (“Shroyer”) is a
corporation engaged in the demolition contracting business in
Delaware County, Indiana. Defendants Craig Nichols, Terry
Whitt Bailey, James Lee, Doug Marshall, Aaron Wood, Brad
King, and Debra Malitz all hold various positions with the
City of Muncie, Indiana. This action stems from two separate
incidents: (1) Shroyer performed demolition on a Budget Inn,
discovered a concrete slab, and Defendants allegedly refused
to perform a final inspection on the property and retained a
portion of the owner's bond that Shroyer alleges it is
entitled to; and (2) Shroyer contracted with the City of
Muncie to perform demolition on a residential structure, had
to stop mid-demolition due to a court order, was told after
the order was lifted to resume demolition, but by then was
working on another project and could not resume demolition
that day so Defendants allegedly hired another entity to
complete the project.
asserts claims against Defendants for violation of 42 U.S.C.
§ 1983, conversion, and business defamation. Presently
pending before the Court are several motions, including: (1)
Shroyer's Application for Judgment by Default,
[Filing No. 51]; (2) Defendants' Motion to
Dismiss Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(6),
[Filing No. 54]; (3) Shroyer's Motion to Strike
Immaterial and Surplus Matter from Defendants' Motion to
Dismiss for Failure to State a Claim, [Filing No.
58]; (4) Shroyer's Motion for Leave to Reply to
Defendant's Response in Support of Dismissal, [Filing
No. 66]; and (5) Shroyer's Request for Oral
Argument, [Filing No. 69].
for Default Judgment
filed its initial Complaint in this matter on April 1, 2016,
[Filing No. 1], and Defendants acknowledged that
they received the Complaint on April 2, 2016, through Waivers
of Service, [Filing No. 11; Filing No. 12;
Filing No. 13; Filing No. 14; Filing
No. 15; Filing No. 16; Filing No. 17.]
Sixty days later, on June 1, 2016, Defendants filed a Motion
to Dismiss. [Filing No. 26.] On August 31, 2016, the
Court granted in part and denied in part Shroyer's Motion
for Leave to Amend, requiring Shroyer to file an Amended
Complaint within five days of the Order. [Filing No.
40.] Shroyer filed its Amended Complaint on September 2,
2016, [Filing No. 41], and Defendants filed their
responsive pleading - the pending Motion to Dismiss - on
September 19, 2016, [Filing No. 54].
Motion for Default Judgment, Shroyer argues that Defendants
were required to respond to the Amended Complaint within
fourteen days of service or the balance of their original 60
days to respond to the initial Complaint, whichever was
longer. [Filing No. 51 at 1-2.] Shroyer contends
that the 60-day period to respond to the initial Complaint
had expired on June 1, 2016, so Defendants had fourteen days
to respond to the Amended Complaint under Fed.R.Civ.P.
15(a)(3). [Filing No. 51 at 2.] It asserts that the
fourteen-day period expired on September 16, 2016, but
Defendants did not file their Motion to Dismiss until
September 19, 2016. [Filing No. 51 at 2.] Shroyer
requests a money judgment in its favor of $60, 000 against
Defendants Nichols, Lee, Marshall, Wood, Malitz, and King; a
money judgment in its favor of $10, 545 against Defendant
Bailey; judgment on the issue of liability against Ms.
Bailey; an injunction prohibiting Defendants from
“depriving [Shroyer] of the compensation already due it
and the right to be treated equally with other demolition
contract bidders, under applicable law, including an Order
requiring the Plaintiff be regarded as a responsive bidder so
long as it meets objective and applicable statutory or
regulatory criteria”; and a judgment declaring that
Defendants are liable to Shroyer “for financial losses
resulting from treatment more onerous than other demolition
contractors with which the City of Muncie
contracts….” [Filing No. 51 at 2-3.]
respond that September 19, 2016 (the day they filed the
Motion to Dismiss) was actually the deadline for filing their
responsive pleading to the Amended Complaint because they
were afforded three additional days since they were
“responding to a pleading via the Court's CM/ECF
system.” [Filing No. 53 at 2 (citing and
discussing Fed.R.Civ.P. 5).]
did not file a reply.
of the Federal Rules of Civil Procedure sets forth a two-step
process for a party seeking default judgment. McCarthy v.
Fuller, 2009 WL 3617740, at *1 (S.D. Ind. 2009); see
also Lowe v. McGraw-Hill Companies, Inc., 361 F.3d 335,
339 (7th Cir. 2004) (“The Federal Rules of Civil
Procedure make a clear distinction between the entry of
default and the entry of a default judgment.”). First,
the plaintiff must obtain an entry of default from the Clerk.
Fed. R. Civ. Pro. 55(a). Second, after obtaining that entry,
the plaintiff may seek an entry of default judgment. Fed. R.
Civ. Pro. 55(b). The plaintiff “is not permitted to
bypass the necessary step of obtaining an entry of
default” before seeking an entry of default judgment.
Proassurance Indemnity Company, Inc. v. Wagoner,
2016 WL 231315, *1 (S.D. Ind. 2016) (citation and quotation
has not moved for a Clerk's entry of default pursuant to
Federal Rule of Civil Procedure 55(a), and its Motion for
Default Judgment can be denied on that basis alone. But the
motion also fails substantively. The parties appear to agree
that Defendants' responsive pleading was originally due
September 16, 2016 under Fed.R.Civ.P. 15(a)(3) (“Unless
the court orders otherwise, any required response to an
amended pleading must be made within the time remaining to
respond to the original pleading or within 14 days after
service of the amended pleading, whichever is later”).
[SeeFiling No. 51 at 2 (Shroyer arguing that
“[t]he fourteen-day period for response under Rule
15(a)(3) expired no later than midnight on Friday, September
16, 2016….”); Filing No. 53 at 1-2
(Defendants arguing that responsive pleading was due three
days after original due date, and using September 16, 2016 as
original due date).]
are correct, however, that they were entitled to an
additional three days to file their responsive pleading
because the Amended Complaint was served electronically.
SeeFed. R. Civ. P. 5(b)(2)(E) (allowing service by
“sending it by electronic means if the person consented
in writing - in which event service is complete upon
transmission, but is not effective if the serving party
learns that it did not reach the person to be served”);
Fed.R.Civ.P. 6(d) (version of the rule in effect before
December 1, 2016 providing that “[w]hen a party may or
must act within a specified time after service and service is
made under Rule 5(b)(2)(C), (D), (E), or (F), 3 days are
added after the period would otherwise expire under Rule
6(a)”). Accordingly, Defendants timely filed their
Motion to Dismiss on September 19, 2016 - seventeen days
after they received electronic service. Shroyer's
Application for Judgment by Default, [Filing No.
51], is DENIED.
considering the substantive arguments Defendants raise in
their Motion to Dismiss, the Court will consider three other
motions - Shroyer's Motion to Strike Immaterial and
Surplus Matter from Defendants' Motion to Dismiss for
Failure to State a Claim, [Filing No. 58],
Shroyer's Motion for Leave to Reply to Defendant's
Response in Support of Dismissal, [Filing No. 66],
and Shroyer's Request for Oral Argument, [Filing No.
69]. This is necessary because the motions relate to the
scope of information that the Court could consider in
deciding the Motion to Dismiss.
Motion to Strike
moves to strike portions of Defendants' Motion to
Dismiss, raising several arguments. First, Shroyer argues
that Defendants discuss allegations they made in a state
court proceeding, and then contradict themselves through
arguments made in this case. [Filing No. 58 at 5.]
Second, Shroyer asserts that Defendants “persistently
inform the court what [it] must prove at trial, ” and
that “the only issue arising under Rule 12(b)(6) is
what must be pleaded to state a claim.” [Filing No.
58 at 5-6.] Third, Shroyer argues that in their Motion
to Dismiss Defendants rely on facts which contradict the
facts pled in the Amended Complaint - which must be accepted
as true at the motion to dismiss stage. [Filing No. 58 at
6-7.] Finally, Shroyer contends that Defendants
mischaracterize the facts that are pled in the Amended
Complaint. [Filing No. 58 at 7-10.]
response, Defendants argue that material can only be stricken
from a pleading, not a brief, as Shroyer requests here.
[Filing No. 65 at 1-2.] They assert that the Motion
to Strike simply rehashes arguments that are raised in
Shroyer's response to the Motion to Dismiss, and go on to
specifically address each of Shroyer's arguments.
[Filing No. 65 at 4-9.]
Rule 56-1(i) states that “[t]he court disfavors
collateral motions - such as motions to strike - in the
summary judgment process. Any dispute over the admissibility
or effect of evidence must be raised through an objection
within a party's brief.” While this rule applies in
the summary judgment context, the Court finds it appropriate
in the motion to dismiss context as well. The arguments that
Shroyer has raised in its Motion to Strike are all arguments
it could have - and in some cases, did - raise in response to
Defendants' Motion to Dismiss. Shroyer is not entitled to
another brief in which to raise arguments against dismissal.
Additionally, Shroyer's arguments relate to the facts the
Court should consider in deciding the Motion to Dismiss, and
in most cases relate to Defendants not following the correct
standard. The Court is capable of applying the correct
standard to the facts discussed by the parties, and deciding
which of those facts are properly considered based on the
motion to dismiss standard. It will not nit-pick the way that
Defendants have characterized facts through a Motion to
Strike, but rather will only consider the well-pled facts in
the Amended Complaint when considering the Motion to Dismiss.
Shroyer's Motion to Strike Immaterial and Surplus Matter
from Defendants' Motion to Dismiss for Failure to State a
Claim, [Filing No. 58], is DENIED.
Motion for Leave to File Surreply
also moves to file a surreply to Defendants' reply brief
in support of their Motion to Dismiss. [Filing No.
66.] It argues that “the Federal Rules of Civil
Procedure neither explicitly require nor prohibit the
Plaintiffs' [Surreply], [and] justice demands the
Plaintiff be permitted to correct misstatements of law and
fact to be found in that Memorandum.” [Filing No.
66 at 1.] Shroyer submits its proposed surreply, which
focuses on allegations in the Amended Complaint and argues
that those allegations support the claims that Shroyer has
asserted. [Filing No. 66-1 at 1-2.]
respond that the Local Rules do not provide for a surreply on
a motion to dismiss, and that leave to file a surreply should
only be given when new matters are argued in a reply brief.
[Filing No. 67 at 1.] Defendants argue that
Shroyer's proposed surreply does not address new matters
raised for the first time in a reply brief. [Filing No.
67 at 1-3.]
are correct that the Local Rules do not give the non-movant
an opportunity to file a surreply in opposition to a motion
to dismiss. And while the Local Rules do provide for a
surreply in connection with a motion for summary judgment,
one can only be filed “if the movant cites new evidence
in the reply or objects to the admissibility of the evidence
cited in the response, ” and “must be limited to
the new evidence and objections.” L.R. 56-1(d). Here,
even if a surreply were permitted in the motion to dismiss
context under the same circumstances as it is in the summary
judgment context, Shroyer's proposed surreply would still
be inappropriate. In the proposed surreply, Shroyer does not
address any new matters raised by Defendants in their reply
brief - indeed, it makes no attempt to argue that Defendants
raised new matters. [Filing No. 66-1.] It appears
that Shroyer simply seeks another bite at the apple, to
rehash its arguments in opposition to dismissal, and this is
not permitted. Shroyer's Motion for Leave to Reply to
Defendant's Response in Support of Dismissal, [Filing
No. 66], is DENIED.
Request for Oral Argument
Request for Oral Argument states that “a hearing is the
most time-efficient means of resolving disputes on the
issues” raised in the Motion to Dismiss. [Filing
No. 69.] Defendants oppose the request. [Filing No.
parties' briefs have afforded the Court an adequate basis
on which to rule on the pending Motion to Dismiss without the
assistance of oral argument. The Court, therefore,
DENIES Shroyer's Request for Oral
Argument, [Filing No. 69].
Motion to Dismiss
Standard of Review
Rule of Civil Procedure 8(a)(2) “requires only ‘a
short and plain statement of the claim showing that the
pleader is entitled to relief.'” Erickson v.
Pardus, 551 U.S. 89, 93 (2007) (quoting Fed.R.Civ.P.
8(a)(2)). “Specific facts are not necessary, the
statement need only ‘give the defendant fair notice of
what the…claim is and the grounds upon which it
rests.'” Erickson, 551 U.S. at 93 (quoting
Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)).
12(b)(6) motion to dismiss asks whether the complaint
“contain[s] sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Twombly, 550 U.S. at 570).
In reviewing the sufficiency of the complaint, the Court must
accept all well-pled facts as true and draw all permissible
inferences in favor of the plaintiff. See Active
Disposal, Inc. v. City of Darien, 635 F.3d 883, 886 (7th
Cir. 2011). The Court will not accept legal conclusions or
conclusory allegations as sufficient to state a claim for
relief. See McCauley v. City of Chicago,
671 F.3d 611, 617 (7th Cir. 2011). Factual allegations must
plausibly state an entitlement to relief “to a degree
that rises above the speculative level.” Munson v.
Gaetz, 673 F.3d 630, 633 (7th Cir. 2012). This
plausibility determination is “a context-specific task
that requires the reviewing court to draw on its judicial
experience and common sense.” Id.