Rappaport v. Federal Savings Bank et al

Filing 52

ORDER: IT IS ORDERED that Defendants' motion to stay (Doc. 49 ) is denied without prejudice. (See attached Order for additional details). Signed by Judge Dominic W Lanza on 10/11/19. (JAMA) Modified on 10/11/2019 - added WO (JAMA).

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Jason E Rappaport,
Plaintiff,

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ORDER

v.

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No. CV-18-01404-PHX-DWL

Federal Savings Bank, et al.,

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Defendants.

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In May 2018, Plaintiff filed this lawsuit against the Federal Savings Bank (“FSB”)

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and Stephen Calk (collectively, “Defendants”). (Doc. 1.) In response, Defendants moved

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“for entry of an order staying proceedings in this case” because most of Plaintiff’s claims

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against FSB are governed by an arbitration agreement. (Doc. 12.) In July 2018, the Court

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issued an order granting the motion, staying the case, and ordering the parties to file status

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reports “every ninety (90) days . . . until the stay is lifted.” (Doc. 37 at 10.)

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Now pending before the Court is another motion to stay by Defendants. (Doc. 49.)

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In a nutshell, this motion asserts that Calk was recently indicted on criminal charges, those

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charges overlap in certain ways with the facts underlying this case, and it would be unfairly

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prejudicial to require Calk to engage in civil discovery while the criminal proceedings are

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ongoing. (Id.) Thus, Defendants ask for an order “staying this case pending the outcome

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of the Criminal Proceeding.” (Id. at 6-7.) Plaintiff opposes the stay request on the ground

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that the Court, having already stayed this case once, lacks jurisdiction to issue another stay.

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(Doc. 50.)

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As a threshold matter, the Court disagrees with Plaintiff’s assertion that it lacks

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jurisdiction over Defendants’ motion. The premise underlying Plaintiff’s jurisdictional

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argument is that, if the Court were to grant Defendants’ motion, the Court would somehow

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be interfering with the pending arbitration. (Doc. 50 at 3 [“Defendants, having requested

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and obtained a stay, cannot come running to this Court for interim rulings. JAMS has not

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completed the arbitration, and thus, jurisdiction to stay the arbitration remains solely with

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JAMS.”].) This is inaccurate. Defendants are only requesting a stay of this case. They

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are not asking for the Court to require the arbitrator to do anything.

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Nevertheless, on the merits, the stay request will be denied. Regardless of the reason

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a stay is sought, the requesting party must show “a clear case of hardship or inequity” if

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there is a possibility the stay might harm another party. Dependable Highway Exp., Inc. v.

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Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007) (quoting Landis v. North

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American Co., 299 U.S. 248, 255 (1936)). This case has been stayed since July 2018 and

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will remained stayed until the arbitration is complete. It is difficult to see how denying a

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second stay when a stay is already in place would result in hardship.

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Accordingly, IT IS ORDERED that Defendants’ motion to stay (Doc. 49) is denied

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without prejudice. If there comes a point in the future where the arbitration has been

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completed, yet the criminal proceedings remain unresolved, Defendants may file another

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stay request at that time.

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Dated this 11th day of October, 2019.

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