EAST ST. LOUIS – Dent repairman Wesley Huff and his former partners Charles Binkley, Eric Stokes, and Andy Clawson settled a fraud suit on June 29, in mediation with former U.S. magistrate judge Stephen Williams.
A docket entry on the settlement doesn’t indicate how it might affect a parallel case pending in St. Louis County.
Binkley, Stokes, Clawson, and Huff owned Car Medic, a business for repairing dents without painting.
Huff resigned from the partnership in 2015, to do business as Mirror Finish.
Binkley, Stokes, and Clawson sued him in St. Louis County in 2017, claiming he violated an agreement that he wouldn’t compete with them.
In 2020, Circuit Judge Ellen Ribaudo struck Huff’s pleadings as a sanction for discovery violations.
She entered default judgment for more than $700,000.
Huff’s counsel Sean Cronin of Belleville appealed.
He also sued Binkley, Stokes, and Clawson in St. Clair County circuit court, alleging fraud and breach of fiduciary duty under Illinois law.
He alleged racketeering under federal law.
Binkley, Stokes, and Clawson removed the suit to federal court as proper venue for a racketeering claim.
Cronin amended the complaint to remove racketeering, and on that basis he moved to remand it to St. Clair County.
Chief District Judge Nancy Rosenstengel denied remand.
She found the Seventh Circuit gave district judges wide latitude to exercise jurisdiction over state law claims when plaintiffs show signs of playing games.
Binkley, Stokes, and Clawson moved to dismiss the complaint as an attempt to reverse Ribaudo, but Rosenstengel found differences between the cases.
Last August, in Missouri, appellate judges mostly affirmed Ribaudo but directed her to reduce damages.
She requested and received briefs on the effect and meaning of the decision, and took them under advisement.
In December, in Illinois, the parties agreed to appoint Williams as mediator.
He set their session June 29.
On June 8, Binkley, Stokes, and Clawson moved to compel responses to interrogatories and requests for production and admissions.
Their counsel Shaun Broeker of St. Louis stated Huff didn’t produce evidence for an allegation that he discovered fraud after he resigned.
Broeker claimed his clients needed the information because a statute of limitations would bar Huff’s claim if misrepresentations occurred before he resigned.
He claimed Huff objected to production on the basis of attorney client privilege.
He claimed that on May 18, Cronin argued that privilege was proper because he discovered facts after Huff resigned and told them to Huff.
Broeker also claimed Huff didn’t describe the damages he sought to recover.
He claimed the suit had been pending more than two years, discovery would close on July 25, and defendants still couldn’t challenge Huff’s damages.
He claimed Huff didn’t produce articles of incorporation or operating agreements.
He claimed his clients needed the information because Huff accused them of operating a pyramid scheme in violation of state and federal laws.
He claimed the Missouri suit uncovered facts suggesting Huff’s business operated in a similar manner to Car Medic.
The motion needs no resolution because Williams mediated successfully.