Glob. Tech. & Trading, Inc. v. Tech Mahindra Ltd. - 789 F.3d 730 (7th Cir. 2015)

Rule:

Fed. R. Civ. P. 6(b)(1)(B) provides that a judge may extend the time to do something, even after the deadline has passed, if the party failed to act because of excusable neglect. Some deadlines cannot be extended under any circumstances. Rule 6(b)(2). District judges have discretion when evaluating claims of excusable neglect.

Facts:

The Illinois Business Brokers Act of 1995 requires brokers for the sale of businesses in the state to register. Brokerage agreements must be in writing. Promises to pay unregistered brokers for their services are unenforceable. Plaintiff Global Technology & Trading Inc., apparently was unaware of this statute when it orally agreed with defendant Satyam Computer Services Limited, now known as Tech Mahindra Limited, to act as a broker in the purchase of Bridge Strategy Group, LLC, a business operating in Illinois. Plaintiff brokered the acquisition, but defendant refused to pay for its services. Plaintiff sued in state court, seeking a commission but defendant removed to federal court under the alien diversity jurisdiction. It contended that Bridge Strategy had compensated plaintiff for its services as an intermediary and that it had never promised any additional compensation. The lack of a writing, according to defendant, reflected the fact that there is no agreement, period. Defendant filed a motion for summary judgment with a new argument: that plaintiff was not registered under the Business Brokers Act and for this reason, as well as the oral nature of the promise plaintiff sought to enforce, the Act blocks any relief. Plaintiff was taken aback as it never heard of the Business Brokers Act. Plaintiff maintained that the Act was an affirmative defense, which under Fed. R. Civ. P. 8(c) had to appear in defendant’s answer to the complaint. By waiting four years to invoke the Act, plaintiff insisted that defendant has forfeited its benefit. The district court authorized to assert an affirmative defense despite its omission from the answer.

Issue:

Did the district court err in allowing the litigant to assert the affirmative defense despite its omission from the answer?

Answer:

No.

Conclusion:

The court affirmed the judgment and held that the district judge did not abuse the authority when it allowed to assert the affirmative defense despite its omission from the answer. The court ruled that whether or not a business broker's failure to register under 815 ILCS 307/10-10 and the lack of a written agreement under 815 ILCS 307/10-35, making an alleged oral agreement unenforceable under 815 ILCS 307/10-60, came within the requirement of Fed. R. Civ. P. 8(c) that all affirmative defenses must be included in the answer, the district court did not err in finding no prejudice and excusing a four-year delay because the district court had authority under Fed. R. Civ. P. 6(b)(1)(B) to extend time to allow the assertion of an affirmative defense omitted from the answer or, alternatively, the district court could have granted leave to amend the answer pursuant to Fed. R. Civ. P. 15(a)(2) to add affirmative defenses. Lastly, although the district court was not asked to exercise discretion under Rule 6(b)(1)(B) to find excusable neglect, the court ruled that it reasonably could have done so.