Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-14-03294/USCOURTS-ca7-14-03294-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 

---

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 14-3294

CHOICE HOTELS INTERNATIONAL, INC.,

Plaintiff-Appellee,

v.

ANUJ GROVER, ARJUN GROVER, and DHARAM PUNWANI,

Defendants-Appellants.

____________________

Appeal from the United States District Court for the

Northern District of Indiana, Hammond Division.

No. 2:11-CV-290-JVB — Joseph S. Van Bokkelen, Judge.

____________________

ARGUED MAY 28, 2015 — DECIDED JULY 7, 2015

____________________

Before BAUER, EASTERBROOK, and RIPPLE, Circuit Judges.

EASTERBROOK, Circuit Judge. Choice Hotels sued SBQI, 

Inc., plus several of its managers and investors, seeking 

damages for a breach of a franchise agreement. The defendants did not answer the complaint, and the clerk of court entered a default. One of the defendants, Tarranpaul Chawla, 

an attorney admitted to practice in Illinois, represented the 

others but did so poorly, which led to the default. Three of 

the defendants—Anuj Grover, Arjun Grover, and Dharam 

Case: 14-3294 Document: 35 Filed: 07/07/2015 Pages: 7
2 No. 14-3294

Punwani (collectively the Investors)—asked Chawla to find 

a new attorney. They assert that until this suit was filed they 

had been unaware that their signatures were on the franchise agreement as parties, which could make them personally liable, and they insist that the signatures are forgeries. 

Chawla told the Investors that Elton Johnson had agreed to 

represent their interests by trying to vacate the default, negotiate a settlement, and if necessary defend against Choice 

Hotels’ demand for damages.

Johnson filed an appearance and took some steps in the 

litigation, such as attending a conference under Fed. R. Civ. 

P. 16. But he did not answer the complaint or file a motion to 

vacate the default, engage in discovery concerning damages, 

respond to Choice Hotels’ request for admissions, or reply to 

its motion for summary judgment on damages. In response 

to email requests from Anuj Grover, Johnson insisted that he 

was trying to settle the litigation. But he did not say what he 

was doing or share with the Investors any documents he 

filed in the suit. He did not return phone calls. Eventually 

the district court set damages at $430,286.75, and on June 26, 

2013, the court entered a final judgment in that amount.

The default judgment led the Investors to hire a new 

lawyer, who filed a motion seeking to set aside the judgment. Because it was filed more than a year after the judgment, however, it fell into Fed. R. Civ. P. 60(b)(6), the residual clause, which covers “any other reason that justifies relief” 

(that is, any reason other than ones in Rule 60(b)(1) to (5)). A 

motion under Rule 60(b)(6) is addressed to the district 

court’s discretion, and appellate review is correspondingly 

deferential. See Metlyn Realty Corp. v. Esmark, Inc., 763 F.2d 

826 (7th Cir. 1985). As a substantive matter, relief under Rule 

Case: 14-3294 Document: 35 Filed: 07/07/2015 Pages: 7
No. 14-3294 3

60(b)(6) requires the movant to establish that “extraordinary 

circumstances” justify upsetting a final decision. See Gonzalez v. Crosby, 545 U.S. 524, 535–38 (2005).

The district court thought these circumstances to be short 

of “extraordinary.” Lawyers sometimes fail to protect their 

clients’ interests, and the district judge observed that the

remedy for legal neglect lies in a malpractice suit against the 

lawyer, rather than continuing the original litigation and upsetting the adversary’s legitimate expectations based on a 

final judgment. Litigants who choose a poor lawyer may 

bear the costs themselves, or shift them to the lawyer, but 

cannot shift them to an adversary who bore no fault for the 

problem. (Johnson unquestionably is a poor lawyer. The Supreme Court of Indiana suspended him from practice on 

March 20, 2014, less than four years after his admission to 

the bar, following five disciplinary complaints against him. 

His suspension—for failure to cooperate in the investigation 

of these grievances—is of indefinite duration, and he has 

been removed from the roll of attorneys authorized to practice in the Northern District of Indiana.)

The district court’s approach is well grounded in decisions of the Supreme Court and this circuit. Link v. Wabash 

R.R., 370 U.S. 626 (1962), holds that litigants are bound by 

the acts and omissions of their chosen agents, including lawyers, and that legal bungling therefore does not justify reopening a judgment. The Supreme Court added in Societe Internationale v. Rogers, 357 U.S. 197 (1958), and National Hockey 

League v. Metropolitan Hockey Club, Inc., 427 U.S. 639 (1976), 

that the intentional misconduct of lawyers likewise is imputed to their clients. And when a client aggrieved by counsel’s 

inept handling of a suit contended that “gross negligence” 

Case: 14-3294 Document: 35 Filed: 07/07/2015 Pages: 7
4 No. 14-3294

should be treated differently from ordinary negligence (Link) 

and intentional misconduct (National Hockey League), we rejected the argument and held that labels do not matter. United States v. 7108 West Grand Avenue, 15 F.3d 632 (7th Cir. 

1994). When lawyers fail, the remedy is malpractice litigation against the wrongdoer, not more litigation against an 

innocent adversary in the original litigation. We summed up 

in Bakery Machinery & Fabrication, Inc. v. Traditional Baking, 

Inc., 570 F.3d 845, 848 (7th Cir. 2009):

The rule is that all of the attorney’s misconduct (except in the 

cases where the act is outside the scope of employment or in cases of excusable neglect [and covered by Rule 60(b)(1)]) becomes 

the problem of the client. A lawyer who inexcusably neglects his 

client’s obligations does not present exceptional circumstances.

That conclusion cannot be avoided by calling an attorney’s failure to file critical documents “nonfeasance” rather 

than “misfeasance.” That would be just another exercise in 

labeling. Link and most of its successors involved one or 

more omissions—things not done at all—in addition to 

things done badly. Indeed, both 7108 West Grand Avenue and

Bakery Machinery were about inaction; the opinion in 7108 

West Grand Avenue arises from the sort of inaction that Johnson displayed. Our conclusion that labels do not matter applies to any other proposed relabeling. Tolliver v. Northrop 

Corp., 786 F.2d 316 (7th Cir. 1986), another case in which the 

lawyer did nothing to protect the client (and which the Investors therefore would call a case of nonfeasance), explains 

why it is important to visit the consequences on the bad 

lawyer rather than the innocent adversary:

Holding the client responsible for the lawyer’s deeds ensures 

that both clients and lawyers take care to comply. If the lawyer’s 

neglect protected the client from ill consequences, neglect would 

Case: 14-3294 Document: 35 Filed: 07/07/2015 Pages: 7
No. 14-3294 5

become all too common. It would be a free good—the neglect 

would protect the client, and because the client could not suffer 

the lawyer would not suffer either. The court’s power to dismiss 

a case is designed both to elicit action from the parties in the case 

at hand and to induce litigants and lawyers in other cases to adhere to timetables. A court cannot lightly excuse a litigant because of the lawyer’s neglect without abandoning the pursuit of 

these objectives.

Id. at 319 (citation omitted).

But the Investors tell us that the Supreme Court has

abandoned the pursuit of these objectives and disapproved 

the holdings of Bakery Machinery and the earlier decisions 

that we have cited. They rely on Holland v. Florida, 560 U.S. 

631 (2010), and Maples v. Thomas, 132 S. Ct. 912 (2012). Holland holds that abandonment by counsel can justify tolling of 

the statute of limitations for filing a federal collateral attack 

on a state conviction, and Maples holds that abandonment by 

counsel during a state collateral attack can constitute a justification for a procedural default, and thus permit federal review of an issue that was not properly presented in the state 

proceeding.

Both Holland and Maples were capital cases. Being put to 

death is a disproportionate penalty for having a bad lawyer—especially when as a practical matter persons on death 

row (and for that matter other prisoners) have only limited 

opportunity to choose their own counsel. They must accept 

volunteers, and if they fire a volunteer they cannot be sure 

that someone else will step in, for they lack funds to hire 

counsel. (Holland suggested that the prisoner had tried to discharge his lawyer but that neither counsel nor the state judiciary had honored his request.) A malpractice suit against a 

nonperforming lawyer is cold comfort to someone no longer 

Case: 14-3294 Document: 35 Filed: 07/07/2015 Pages: 7
6 No. 14-3294

alive. Abandonment severs the agency relation, see Maples, 

132 S. Ct. at 922–23; Holland, 560 U.S. at 659–60 (Alito, J., concurring) (a view adopted by a majority in Maples), so that 

counsel’s (in)action is not imputed to the client. In normal 

civil litigation a litigant whose lawyer has left him in the 

lurch can hire a new one, or represent himself, but people on 

death row can’t replace their lawyers so easily.

Although Maples and Holland were capital cases, we do 

not doubt that their holdings apply to all collateral litigation 

under 28 U.S.C. §2254 or §2255. See Gibbs v. LeGrand, 767 

F.3d 879, 893 (9th Cir. 2014); Cadet v. Florida Department of 

Corrections, 742 F.3d 473, 482 (11th Cir. 2014). All prisoners 

face difficulties in obtaining and monitoring the performance of counsel, and damages for malpractice are a poor 

substitute for time in prison, just as they are no substitute for 

one’s life. But these considerations are inapplicable to normal civil litigation, and the Supreme Court has not suggested that Holland or Maples has any bearing on suits about 

torts, contracts, and other economic matters.

For litigants such as the Investors, monetary compensation via a malpractice action is an adequate recompense for 

an adverse judgment. (Litigants who fear that lawyers may 

not have the wealth to pay for their mistakes can decline to 

hire counsel who lack adequate insurance.) Civil litigants

can hire replacement counsel freely, and it is much easier for 

them than for prisoners to monitor how their lawyers are 

performing (or not performing). And although abandonment by counsel ends the agency relation—a consideration 

relevant to all litigation, not just to collateral review, see 

Sneed v. Shinseki, 737 F.3d 719, 726–28 (Fed. Cir. 2013)—the 

fact remains that civil litigants are responsible for their own 

Case: 14-3294 Document: 35 Filed: 07/07/2015 Pages: 7
No. 14-3294 7

choices and their own inaction. 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.

The Investors recognized that Chawla was not protecting 

their interests, and they sensibly insisted that he find someone who would. When they began to suspect that Johnson 

likewise was not protecting their interests, they did not replace him. Sending him emails, and making unreturned 

phone calls, is no substitute for action. They readily could 

have consulted the docket in the litigation and learned that 

Johnson was not filing essential documents, but they didn’t. 

Johnson did not abandon the investors; he performed some 

legal tasks, though not enough, and responded to three of 

Anuj Grover’s inquiries. Unlike the attorneys in Thomas and 

Maples, he had not cut off all communication with his clients 

and walked away from the litigation. But even if we were to

treat the Investors as abandoned by Johnson, still they must 

bear the consequences of their own inaction. They were sued 

and did not defend the litigation, personally or by counsel. 

They were able to monitor the proceedings yet did not follow through. The district judge therefore did not abuse his 

discretion in denying their motion for relief from judgment.

AFFIRMED

Case: 14-3294 Document: 35 Filed: 07/07/2015 Pages: 7