BENTON - Senior U.S. District Judge Phil Gilbert scrapped a settlement agreement that owners of Pete’s market in Troy signed without counsel on the eve of a trademark trial with Pete’s Fresh Markets of the Chicago area.
The plan called for Gilbert to dismiss the complaint without prejudice and enter an order stating he’d convert it to dismissal with prejudice on July 1.
He rejected the plan on Nov. 7.
He found it would have made more sense to continue the trial, and he did just that.
“Given the defendants in this litigation have been unable to acquire counsel, such irregular methods that serve only to restrain the parties and the court are suspect,” he wrote.
Pete’s Fresh Markets sued the Troy market and owners Pete Patel and Chirag Patel of Edwardsville in 2021.
The Chicago group sought to recover the profit that the name produced in Troy.
Patel and Patel retained Jason Schmidt, Jonathan Soifer and John Gilbert of the Sandberg Phoenix firm.
The parties requested a settlement conference last year; and Magistrate Judge Reona Daly held one, but no settlement resulted.
At a conference this May the parties told Judge Gilbert that trial would take three days.
He set trial to start on June 20.
On June 5, Soifer, Schmidt, and lawyer John Gilbert moved to withdraw.
Schmidt stated the client wouldn’t follow their advice or direction in this matter.
He stated the client “expressed in no uncertain terms that it does not intend to proceed with our continued representation.”
He wrote that the client named itself Pete’s Hometown Grocery, “which obviates the need for an injunction of its use of Pete’s Market.”
“Plaintiff has been unable to make a case for damages, which is to be expected considering the nature of the alleged infringement,” he wrote.
Schmidt claimed the Chicago group was unable to support a claim of willfulness and withdrawal would cause no prejudice to Pete’s Fresh Market.
Pete’s Fresh Market counsel Julianne Hartzell of Chicago opposed withdrawal on June 6, claiming it would delay trial and her client would unquestionably suffer prejudice.
“Defendant’s alleged renaming does not obviate the need for trial,” she wrote.
She claimed the store continued to advertise on Facebook as PetesMarketTroy.
She added that Schmidt seemed to argue that the court might grant the motion because plaintiff failed to prove its case.
“Plaintiff is entitled to disgorgement of defendant’s profits and need only support the disgorgement with evidence of defendants’ sales,” she wrote.
Hartzell claimed evidence of willfulness was plentiful as Patel and Patel were put on notice of trademarks prior to opening their store.
Judge Gilbert heard argument on June 15, granted withdrawal, and set trial to start Aug. 7.
He held a final pretrial conference on July 25.
At a conference on Aug. 3, he continued trial until Sept. 25.
Then at a conference on Sept. 12, he continued it until Oct. 24.
On Oct. 23, the parties stipulated that they entered into a confidential agreement.
They didn’t attach the agreement or submit it for Judge Gilbert to inspect in chambers.
They asked him to dismiss the complaint without prejudice now and with prejudice later.
Judge Gilbert immediately held a hearing, and Hartzell told him a dispute might arise before July 1.
She cited cases where judges viewed similar stipulations as valid.
Judge Gilbert read her citations, but he disagreed.
He found Seventh Circuit precedent that conversion to dismissal with prejudice without opportunity to withdraw might be an onerous consequence.
“Plaintiff may not believe dismissal with prejudice on July 1 will be onerous,” he wrote.
“While the court generally refrains from hypothesizing, conditions may become onerous before July 1,” he added.
Judge Gilbert found the stipulation contemplated motions after dismissal but prior to conversion.
“Beyond twisting the rules of civil procedure into a gordian knot, this approach appears inefficient and unnecessary,” he wrote.
He found concern about a possible dispute hypothetical and premature.
“The court cannot incorporate a settlement agreement into its judgment without knowledge of his terms,” he wrote.
He found no reason why conversion would be preferable to simply continuing the trial to allow for negotiation.
He continued trial until July 8.