A man accused of using inside information against a company he at one point sought to do business with has asked a federal judge to dismiss the case and award him attorneys’ fees.
Cottrell Inc. filed a federal lawsuit in February in Chicago against J. Nigel Ellis, founder of Ellis Litigation Support and head of fall safety design companies Dynamic Scientific Controls and Ellis Ladder Improvements in Delaware.
The car hauler manufacturer first sued Ellis and his companies in August 2012 in the Madison County Circuit Court. The matter was then removed to federal court in East St. Louis, where Cottrell voluntarily dismissed it in January before filing the suit in Chicago’s federal court less than two weeks later.
The suit accuses Ellis of using information he learned while trying to sell his companies’ designs to Cottrell against it in court as an expert witness for Edwardsville attorney Brian Wendler, who represents injured truckers and has sued Cottrell on behalf of several plaintiffs.
The company claims that Ellis breached his promise not to communicate with plaintiffs’ attorneys while in discussions with it over his designs. His testimony as an expert witness, Cottrell contends, has caused it to lose hundreds of thousands of dollars in settlements, attorneys’ fees and other costs.
The suit includes counts against Ellis and his companies for breach of contract, negligence, fraudulent and negligent misrepresentation, fraud via omission, civil conspiracy and a violation of the Deceptive or Unfair Practices Act. Each count seeks $1 million in damages.
Ellis, however, asserts in a May 6 memorandum supporting his motion to dismiss that Cottrell’s “claims are completely without merit, both factually and legally.”
“As an expert witness on behalf of several plaintiffs, Mr. Ellis has offered criticisms of Cottrell and its products,” the memo states. “Not satisfied with the usual methods of cross-examination and motion practice, Cottrell has chosen to take the extraordinary approach of attacking its opponents’ expert by suing him.”
Ellis claims that Cottrell has not said how long this alleged oral agreement not to communicate with plaintiffs’ attorneys was to last and asserts that he only had to cease communication with the company once he began to work with an adverse party.
“What is more, nowhere does Cottrell allege that it ever disclosed any confidential information to Ellis, or that Ellis otherwise obtained or disclosed any such information,” Ellis’ memo states.
Ellis asserts that after he first approached Cottrell about selling his designs in August 2005, the company raised concerns about the feasibility of his designs sometime between November 2005 and May 2006.
Following that, Ellis claims that the only communication he had with Cottrell was in two letters he sent the company in May 2006 and March 2007.
Ellis asserts that Cottrell’s suit should be dismissed based on improper venue. In the alternative, his motion seeks the transfer of the suit to the Southern District of Illinois.
He claims that Cottrell told the federal court in East St. Louis that none of the conduct that gave rise to its claims occurred in Illinois, but then told Chicago’s federal court that a substantial part of the alleged conduct occurred in the Northern District of Illinois.
“It is perfectly clear that [the] suit was not filed in this district as a result of the obscurity or elusiveness of a proper venue for this case,” he asserts. “The history of this case suggests that suit was filed in this district very purposefully, not by mistake. The proper penalty for Cottrell is a heavy one - dismissal.”
Saying that the facts alleged by Cottrell don’t give rise to a claim for relief, Ellis contends that the suit “relies solely on bluster, innuendo, and misdirection.” He adds that “while the complaint “clearly states Cottrell’s animosity toward Ellis, it fails to set forth any facts of legal theories that constitute a valid claim.”
Among other arguments he makes in his motion to dismiss, Ellis asserts that he enjoys absolute privilege as a witness in underlying lawsuits and that this privilege precludes the company’s claims.
In addition, Ellis earlier this month filed a motion for attorneys’ fees and costs, claiming that he is entitled to these fees and costs since Cottrell “acted in bad faith” in voluntarily dismissing the suit, “knowingly filing its claims in an improper venue and inflicting unnecessary costs” on him.
“Cottrell’s voluntary dismissal and re-filing demonstrate the vexatious litigation, forum shopping, avoidance of court-imposed deadlines and unfavorable rulings that Rule 41(d) seeks to prevent,” Ellis asserts.
This rule of the Federal Rules of Civil Procedure allows courts to order the plaintiff to pay for part or all of the costs of a previously dismissed action.
“Cottrell will have to pull a rabbit out of its hat in order to demonstrate that it was not perfectly clear at the time the Complaint was filed that venue was improper, and that its conduct is not in bad faith, vexatious, wanton, and harassing,” Ellis claims in his motion for fees.
He adds, “All of the time, effort, and costs Defendants have incurred or will incur in defending this case are unneeded, as venue is improper.”
St. Louis attorneys W. Jeffrey Muskopf and John Bradford Goss submitted the motions on behalf of Ellis and his companies.
Court records show that Cottrell is represented by Chicago attorneys John Joseph Bullaro Jr. and Scott R. Sinson, as well as Edwardsville attorneys Christopher W. Byron and Christopher John Petri.
Following a May 14 status and motion hearing, U.S. Judge John Z. Lee set a June 4 deadline for Cottrell to respond to Ellis’ motions. He gave the defendants until June 18 to submit their reply briefs and both parties until that same day to exchange disclosures.
Lee set a July 19 deadline for initial written discovery requests and an August 28 status hearing.