Arries v. University OB/GYN LLC et al

Filing 78

ORDER: Plaintiffs/Counterdefendants' 58 Motion to Stay Discovery Pending the Outcome of a Parallel Criminal Proceeding is denied. See order for details. Signed by Judge Neil V Wake on 3/16/12. (NKS)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiffs/Counterdefendants, )
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vs.
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University OB/GYN, LLC, et al.,
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Defendants/Counterclaimants.)
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Bobbie E. Arries, et al.

No. CV 10-08219-PCT-NVW
ORDER

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Before the Court is Plaintiffs/Counterdefendants’ Motion to Stay Discovery
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Pending the Outcome of a Parallel Criminal Proceeding. (Doc. 58.) Plaintiffs were
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subsequently ordered to file a supplement to their motion that addressed in detail why the
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pendency of the criminal case warrants staying proceedings on Plaintiffs’ complaint in
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addition to proceedings on Defendants’ counterclaim. In addition to the motion, the
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Court has considered Plaintiffs’ supplement, Defendants’ response, Plaintiffs’ reply, and
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oral argument heard on March 16, 2012. (Docs. 64, 65, 67.)
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I.

Background

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On November 12, 2010, Plaintiff Bobbie Arries initiated this lawsuit. Defendants
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filed a counterclaim with their answer. On July 25, 2011, Mrs. Arries and her husband
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Paul Arries filed a First Amended Complaint. They allege that on July 2, 2008, a
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confrontation occurred between Mrs. Arries and Defendant William Tindall, which
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formed the substance of a complaint Mrs. Arries filed on July 3, 2008. They further

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allege that in November 2008 her job was eliminated in retaliation. The First Amended

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Complaint alleges violation of COBRA laws, intentional interference with a contractual

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relationship, and intentional infliction of emotional distress. In addition to damages,

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Plaintiffs seek declaration of whether Mrs. Arries has an enforceable right to arbitration.

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Defendants’ First Amended Counterclaim alleges conversion and breach of

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fiduciary duty. It alleges Mrs. Arries wrongfully took company assets of University

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OB/GYN LLC in excess of $10,000.00, among other things. At oral argument counsel

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for University OB/GYN LLC stated that the loss claimed exceeds $80,000.

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On October 18, 2011, the Navajo County Attorney’s Office obtained a 27-count

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indictment against Mrs. Arries. The charges arise out of the same set of circumstances

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from which Defendants’ counterclaim arises.

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On November 9, 2011, Plaintiffs moved to stay discovery pending the outcome of

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the criminal proceeding, State of Arizona v. Bobbie Arries, Case No. CR-2011-00821.

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Plaintiffs contend that a stay is necessary to protect Mrs. Arries’ Fifth Amendment

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privilege against self-incrimination and because she cannot adequately testify in the civil

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proceeding without revealing her defense strategy. In supplemental briefing, Plaintiffs

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state that not only will discovery related to the counterclaim involve evidence related to

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the criminal charges, but also discovery related to the complaint will involve evidence

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related to the criminal charges because Defendants have alleged affirmative defenses

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“closely tied” to the allegations of their counterclaim. Defendants’ affirmative defenses

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include fraud, misrepresentation, unclean hands, and comparative fault or negligence.

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Plaintiffs further state that there “is virtually no doubt that Plaintiff will be deposed and

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that she will be asked to give testimony about the facts surrounding Defendants’

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affirmative defenses and counterclaims.” The motion to stay focuses solely on staying

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the deposition of Mrs. Arries and does not address staying any other discovery.

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Defendants agree that the “facts underlying the counterclaims form the basis of the
recent criminal indictment of Ms. Arries.” They further state that they “have requested
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the deposition of Mrs. Arries and intend to prosecute their counterclaim regardless of the

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pendency and outcome of the recent indictment.”

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II.

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Legal Standard
The Constitution does not ordinarily require a district court to stay civil

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proceedings pending the outcome of parallel criminal proceedings. Fed. Sav. & Loan Ins.

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Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989); Keating v. Office of Thrift

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Supervision, 45 F.3d 322, 324 (9th Cir. 1995). “A defendant has no absolute right not to

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be forced to choose between testifying in a civil matter and asserting his Fifth

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Amendment privilege.” Keating, 45 F.3d at 326.

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In deciding whether to stay civil proceedings pending parallel criminal

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proceedings, a district court must consider the particular circumstances and competing

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interests involved in the case. Id. at 324; Molinaro, 889 F.2d at 902. The factors to be

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considered will vary, but generally will include (1) the extent to which the requesting

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party’s Fifth Amendment rights are implicated, (2) the opposing parties’ interests in

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proceeding expeditiously with this litigation or any aspect of it, (3) the burden that any

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particular aspect of the proceedings may impose on the requesting party, (4) the

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convenience of the district court in managing its cases, (5) the interests of non-parties,

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and (6) the public interest. Molinaro, 889 F.2d at 902-03; Keating, 45 F.3d at 324-25.

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III.

Analysis

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The two Keating/Molinaro factors most relevant here are the extent to which Mrs.

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Arries’ Fifth Amendment rights are implicated and the prejudice a stay would impose on

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Defendants. It is undisputed Mrs. Arries’ Fifth Amendment rights will be implicated in

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this civil proceeding if she is questioned in deposition or at trial regarding the facts

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relevant to Defendants’ affirmative defenses and counterclaim. It is also undisputed that

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the facts relevant to Defendants’ affirmative defenses overlap facts relevant to their

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counterclaim, and therefore one part of the lawsuit cannot be stayed without staying the

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other.

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Staying this lawsuit pending resolution of the criminal case against Mrs. Arries

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would seriously prejudice Defendants’ ability to collect any civil judgment they may

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obtain and would increase the risk of witnesses or evidence becoming unavailable. The

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events that spawned this litigation occurred in 2008, more than three years ago. Mrs.

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Arries filed her initial complaint nearly sixteen months ago, and the parties exchanged

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their initial disclosures more than nine months ago. At oral argument, Mrs. Arries’

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counsel reported that the criminal case has been designated complex, has experienced

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some delay already, and may possibly be tried within six months. But if Mrs. Arries is

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convicted of criminal charges and exercises her right to appeal the conviction, her Fifth

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Amendment rights could be implicated for much longer. The longer this case is stayed,

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the more likely that any resources Mrs. Arries has will no longer be available to satisfy

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any judgment Defendants may obtain in this lawsuit.

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At the time Mrs. Arries initiated this lawsuit, she had not been indicted, but knew

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that it was possible that she would be indicted because she had been arrested on charges

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related to Defendants’ affirmative defenses and counterclaim. She made the choice to file

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her Complaint against Defendants even though it was possible that her Fifth Amendment

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rights would be implicated in these civil proceedings. And she will be able to exercise

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her Fifth Amendment rights in this case as it proceeds.

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Upon weighing the prejudice that a stay would impose on Defendants against the

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burden to be imposed on Mrs. Arries by proceeding with this case, the Court concludes

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that this case should not be stayed pending the outcome of the criminal proceeding, State

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of Arizona v. Bobbie Arries, Case No. CR-2011-00821.

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IT IS THEREFORE ORDERED that Plaintiffs/Counterdefendants’ Motion to Stay
Discovery Pending the Outcome of a Parallel Criminal Proceeding (Doc. 58) is denied.
DATED this 16th day of March, 2012.

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