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Piano Gallery Madison, LLC v. Create Music, LLC

United States District Court, W.D. Wisconsin

March 1, 2019

PIANO GALLERY MADISON, LLC, Plaintiff,
v.
CREATE MUSIC, LLC, BENJAMIN GARBER, and DEBRA GALLA, Defendants.

          OPINION AND ORDER

          JAMES D. PETERSON DISTRICT JUDGE

         The parties to this case accuse each other of failing to live up to their obligations under an asset purchase agreement related to a retail piano store. Several motions are before the court, but the main event is plaintiff's motion for partial summary judgment.

         The court will grant the preliminary motions. Plaintiff may file its belated answer to the counterclaims. Dkt. 53. The court will accept defendants' sur-reply. Dkt. 63. The court will grant plaintiff's motion for summary judgment in in part; most of this case will have to be resolved at trial.

         BACKGROUND

         From 2007 to 2014, Grant Billings owned and operated Piano Gallery Madison, LLC, a limited liability company that operated Billings Piano Gallery Madison. Defendants Debra Galla and Benjamin Garber were employees of Billings Piano Gallery.

         In spring 2014, Billings decided to move to Florida to run his father's piano store there. He negotiated sale of the assets of the Madison store to Garber, who had formed his own limited liability company, Create Music, LLC, to run the store. Piano Gallery Madison and Create Music executed an asset purchase agreement (APA) with an effective date of October 15, 2014 (although the APA was not executed until October 24, 2014). Galla stayed on to work as the office manager for Create Music, as she had for Piano Gallery Madison.

         Multiple disputes erupted over the next year, leading Piano Gallery Madison to file this suit, and for Create Music to assert counterclaims.

         Create Music, Garber, and Galla are all citizens of the state of Wisconsin. Billings is a citizen of the state of Florida. Billings is the sole member of Piano Gallery Madison, so Piano Gallery Madison is a citizen of Florida of Florida as well. See Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992 (7th Cir. 2007) (“the citizenship of an LLC is the citizenship of each of its members”). More than $75, 000 is in controversy, so the court has diversity jurisdiction under 28 U.S.C. § 1332.

         The court will set out the facts pertinent to the pending motions in the analysis section.

         ANALYSIS

         A. Motion for leave to file a late answer

          In the course of summary judgment briefing, defendants pointed out that Piano Gallery Madison had neglected to file an answer to Create Music's breach of contract counterclaims. Dkt. 46, at 7. Piano Gallery Madison then moved for leave to file a belated answer and affirmative defenses. See Dkt. 53; Dkt. 61-1 (proposed answer). Piano Gallery Madison says that its failure to file an answer was due to a clerical error and oversight on the part of its counsel. Dkt. 61, ¶ 9. It askes the court to exercise its discretion to accept the belated filing under Federal Rule of Civil Procedure 6(b)(1)(B), which permits extension of deadlines for good cause if a party failed to act because of excusable neglect. Piano Gallery Madison says that both sides have been proceeding as if it had already filed its answer by serving written discovery (see, e.g., Dkt. 61-8) and filing dispositive motions directed at the allegations underlying the counterclaims (see Dkt. 22 and Dkt. 35).

         Create Music opposes Piano Gallery Madison's request to file a belated answer, but the court is not persuaded that it should reject it, which would result in the counterclaims being deemed to be undisputed. Create Music has not demonstrated that it was meaningfully prejudiced by Piano Gallery Madison's omission, and Piano Gallery Madison's omission appears to have been inadvertent and made in good faith. The court will grant Piano Gallery Madison leave to file its belated answer and affirmative defenses. The court will treat the proposed answer, Dkt. 61-1, as the operative answer for the purposes of this opinion.

         B. Motion for ...


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