Schramm et al v. Peregrine Transportation Company, LLC et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
MAXWELL H. SCHRAMM and
ALEXANDRIA ZIEGLER SCHRAMM,
Plaintiffs,
v.
THE PEREGRINE TRANSPORTATION
COMPANY, LLC, and PAMELA KIDD,
Defendants.
Case No. 3:22-CV-161-NJR
MEMORANDUM AND ORDER
ROSENSTENGEL, District Judge:
This case, a run-of-the-mill negligence action against a trucking company and its
driver, settled in principle in early 2025 after three years of discovery, motion practice, and
trial workup. Little did the Court know, preparing the case for trial would be the easy part.
As it turns out, since nearly the inception of the case, the Plaintiffs—unbeknownst to
the Court—were going through a contentious divorce. Their attorney, Brian Wendler, knew
about the divorce proceedings but continued to jointly represent them. This potential conflict
of interest was not revealed until June 2024 when, on the eve of trial, the parties appeared
before a magistrate judge for a settlement conference. 1 	Shortly after the settlement
conference, the Court received notice that Plaintiff Maxwell Schramm fired Attorney
Wendler 	and 	hired 	new 	counsel. 	(See 	Doc. 	156). 	Attorney 	Wendler 	continued 	his
representation of Plaintiff Alexandria Ziegler Schramm.
1 The Court provides an abbreviated factual background here, as the details of this case are well
documented throughout the Parties’ numerous filings and the Court’s previous orders.
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This arrangement continued for nearly eight months while Maxwell Schramm’s new
attorney, Ed Hershewe, prepared Maxwell’s case for trial. 2 Then, on February 10, 2025,
Maxwell Schramm filed a Motion to Disqualify Attorney Wendler from continuing his
representation of Alexandria Ziegler Schramm. (Doc. 172). Attorney Wendler filed a Motion
to Withdraw as Attorney for Alexandria Ziegler Schramm on February 21, 2025. (Doc. 175).
The Court held an evidentiary hearing on the Motion to Disqualify on May 5, 2025.
Far from simply discussing the disqualification motion, the testimony at the hearing
addressed attorney fee arrangements, the divorce matter, division of settlement proceeds,
and various audio recordings by Maxwell Schramm, including one recording of the
magistrate judge without the judge’s knowledge. (Doc. 212). After allowing the parties to
submit closing briefs (Docs. 206, 207), the Court entered its Order on the Motion to Disqualify
on July 17, 2025. (Doc. 218). The Court determined that Attorney Wendler was disqualified
from representing Plaintiffs Maxwell Schramm and Alexandria Ziegler Schramm as of July
18, 2024, the day of the settlement conference with the magistrate judge, due to his violation
of Rule 1.7 of the Illinois Rules of Professional Conduct. The Court also denied several
motions as moot and entered judgment, effectively closing the case. (Doc. 219).
Now pending before the Court are competing motions to alter or amend the judgment
filed by Plaintiff Maxwell Schramm (Doc. 222) and Attorney Brian Wendler (Doc. 224).
Maxwell Schramm has asked the Court to amend its Order to: (1) remove its finding on
Attorney Hershewe’s right to a fee; (2) remove its finding on Attorney Wendler’s right to a
fee; (3) no longer refer to Attorney Wendler as an Intervenor; (4) no longer dismiss this action
2 Due to the change in counsel, trial was continued from June 24, 2024, to May 27, 2025. (Doc. 168).
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with prejudice until the Court apportions the settlement funds between the co-Plaintiffs;
(5) correct the date the conflict arose to June 17, 2024, rather than June 18, 2024; and (6) remove
any discussion of Maxwell Schramm having committed a criminal offense by surreptitiously
recording a federal magistrate judge during settlement proceedings.
Attorney Wendler has asked the Court to amend its Order to: (1) reflect that the
underlying Motion to Disqualify was moot at the time of the evidentiary hearing, only
requested prospective disqualification, and should not have been used to make retroactive
declarations of ethical fault; (2) clarify that the Order is not a disciplinary finding and carries
no collateral implications under the Illinois Rules of Professional Conduct; (3) correct the
applicable legal standard to Rule 1.9, governing duties to former clients; and (4) either define
the “first settlement offer” to state the amount was the last offer extended prior to Maxwell’s
current counsel’s representation referenced or strike that limitation entirely in favor of
governing Illinois law on quantum meruit, attorney lien enforcement, and/or contract law.
Rule 59(e) of the Federal Rules of Civil Procedure allows a party to move to alter or
amend a judgment within 28 days of the entry of judgment. A Rule 59(e) motion may be
granted only if a party can “clearly establish” either newly discovered evidence or a manifest
error of law or fact warranting relief. Harrington v. City of Chicago, 433 F.3d 542, 546 (7th Cir.
2006). A “manifest error of law” “is not demonstrated by the disappointment of the losing
party. It is the ‘wholesale disregard, misapplication, or failure to recognize controlling
precedent.’ ” Oto v. Metropolitan Life Ins. Co., 224 F.2d 601, 606 (7th Cir. 2000).
Having considered the motions and the respective responses, as well as the hearing
transcript, the Court agrees that certain manifest errors of law warrant relief. Thus, the Court
GRANTS in part and DENIES in part both motions.
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Disqualification
The Court AMENDS its Order to GRANT the Motion to Disqualify (Doc. 172), which
requested 	disqualification 	of 	Attorney 	Wendler 	from 	“continued 	representation 	of
Alexandria Ziegler Schramm” to “eliminate the ongoing conflicts of interest.” The Court
mistakenly went beyond the relief requested in the motion and found Attorney Wendler
retroactively disqualified. Instead, Attorney Wendler should have been disqualified from
representing either Plaintiff on the date of the Court’s Order: July 17, 2025. See Freeman v.
Chicago Musical Instrument Co., 689 F.2d 715, 721 (7th Cir. 1982) (“Disqualification is
commonly referred to in the Seventh Circuit as a ‘prophylactic device for protecting the
attorney-client relationship.’”).
The Court further CLARIFIES that its Order was not a disciplinary finding, but rather
a discussion of Rule 1.7 3 for the purposes of the disqualification motion. Additionally,
contrary to Attorney Wendler’s argument, the Motion to Disqualify was not moot at the time
of the evidentiary hearing. Although Attorney Wendler had filed a Motion to Withdraw, the
Court had not yet ruled on it with regard to Alexandria Ziegler Schramm.
Attorney Fees
The finding that Attorney Hershewe may petition the divorce court for an appropriate
quantum meruit fee is STRICKEN. The finding that Attorney Wendler is entitled to his
attorney’s fee, which shall be his contractually agreed percentage of the first settlement offer
3 Attorney Wendler asserts that the Court improperly applied Rule 1.7, which governs concurrent client
conflicts, because Maxwell Schramm was no longer his client at that point. Rule 1.7, however, states: [A]
concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another
client; or (2) there is a significant risk that the representation of one or more clients will be materially limited
by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest
of the lawyer. ILL. S UP. CT . R. 1.7 (emphasis added).
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made by Defendants, is also STRICKEN. Plaintiffs’ current and former counsel shall submit
their fee claims for adjudication in the divorce proceeding.
Criminal Offense
The Court AMENDS its Order to state: “By recording Magistrate Judge Beatty
without his consent, Maxwell Schramm potentially violated Illinois state law.”
Other Matters
The remainder of Maxwell Schramm’s motion is DENIED.
Attorney Wendler entered his appearance on May 9, 2025, on behalf of his firm as an
Intervenor. (Doc. 194). No objection was raised at that time; therefore, the Court finds the
issue was forfeited.
The Court also declines to reopen this case in order to apportion the settlement funds
between the co-Plaintiffs. Maxwell Schramm argues that the Court must “resolve the claims
before it,” but there are no longer any pending claims before the Court. The settlement funds
have been transferred by Defendants to Plaintiffs, and the funds are currently in the Trust
Account of Paul J. Schafer, Schafer Law LLC. (Doc. 227). Thus, as far as this federal district
court is concerned, there is no need to retain jurisdiction to enforce the settlement agreement.
With regard to the funds in the Trust Account of Paul J. Schafer, Schafer Law LLC, the
funds shall be distributed as determined by the Circuit Court of Williamson County.
IT IS SO ORDERED.
DATED: 	February 3, 2026
____________________________
NANCY J. ROSENSTENGEL
United States District Judge
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