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Civil Procedure Keyed to Cross
Nelson v. Schultz
Citation:
878 F.3d 236 (2017)Facts
Kenneth Nelson, Bruce Schultz, and Jon Rodgers formed an LLC in 2005 to develop the Ritz-Carlton Residences in Chicago. The operating agreement provided that development fees would be divided among the LLC’s managers “as they mutually agree.” Later in 2005, Schultz and Rodgers voted to remove Nelson Hotels, Inc. (Nelson’s company) as an LLC manager, allegedly causing Nelson to lose $1.13 million when the building was constructed. Ten years later, Nelson sued for breach of contract and various torts. During discovery, defendants sought Nelson’s tax returns and financial statements to support their defense that they removed his company for cause due to his poor financial condition. Despite three court orders and two explicit warnings that non-compliance would result in dismissal, Nelson failed to produce the requested documents or provide a satisfactory affidavit explaining his diligent search for them. The district court ultimately dismissed the case for want of prosecution.
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