United States of America v. Sierra Pacific Industries et al
Filing
473
STIPULATION and ORDER signed by Judge Kimberly J. Mueller on 05/22/12 ORDERING that Indemnity will be BIFURCATED and tried, if necessary, after the liability and/or damages phase(s) of the Moonlight Fire Case has/have been completed; landowner Defend ants and Sierra Pacific all retain their rights to a trial by jury of the Indemnity Claims, if a trial is necessary; the issues pertaining to the Indemnity Claims that would otherwise need to be included in the joint pretrial statement that is due to be filed in the Moonlight Fire Case on 05/31/12, need not be briefed at this time; briefing of these issues shall be deferred until after trial of the plaintiff's Claims concludes and it is determined whether trial of the Indemnity Claims will be required, or until such time as the Court directs. If the resolution of the plaintiff's Claims in the Moonlight Fire Case does not obviate the need to try the Indemnity Claims, or Landowner Defendants and Sierra Pacific are not otherwise able to resolve the Indemnity Claims informally, they shall work cooperatively together and with the Court to set a date for filing a joint pretrial statement that includes issues pertinent to the Indemnity Claims. (Benson, A.)
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Law Offices of
MATHENY SEARS LINKERT & JAIME, LLP
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RICHARD S. LINKERT, ESQ. (SBN 88756)
KATHERINE E. UNDERWOOD, ESQ. (SBN 249308)
3638 American River Drive
Sacramento, CA 95864
Telephone:
(916) 978-3434
Facsimile:
(916) 978-3430
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Attorneys for Defendants and Crossclaimants, ANN
MCKEEVER HATCH, AS TRUSTEE OF THE HATCH
1987 REVOCABLE TRUST; et al.
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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Case No. 2:09-CV-02445-KJM-EFB
UNITED STATES OF AMERICA,
STIPULATION FOR BIFURCATION OF
INDEMNITY AND ORDER
Plaintiff,
v.
SIERRA PACIFIC INDUSTRIES, et al.,
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Defendants.
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___________________________________
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ANN MCKEEVER HATCH, AS
TRUSTEE OF THE HATCH 1987
REVOCABLE TRUST, et al.,
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Crossclaimants,
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v.
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SIERRA PACIFIC INDUSTRIES,
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Crossdefendant.
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Pursuant to Local Rule 281(b)(18) and Rule 42(b) of the Federal Rules of Civil Procedure,
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Landowner Defendants and Sierra Pacific Industries (“Sierra Pacific”), by and through their
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undersigned counsel, hereby submit the following Stipulation and Proposed Order (1) bifurcating
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the Landowner Defendants’ crossclaims for Express Contractual Indemnity – Breach of Contract,
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STIPULATION AND ORDER
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Duty to Defend – Breach of Contract, Total and Partial Equitable Indemnity and Contribution,
Negligence, Implied Contractual Indemnity, and Declaratory Relief against Sierra Pacific
(collectively, the “Indemnity Claims”) from Plaintiff United States of America’s (“United
States”) underlying claims of common law and statutory negligence against all defendants (the
“Plaintiff’s Claims”); and (2) deferring pretrial briefing of issues relating to the Indemnity Claims
until trial of the Plaintiff’s claims concludes in the above captioned Moonlight Fire Case.
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RECITALS
1.
On or about August 31, 2009, the United States commenced the Moonlight Fire
Case by filing a Complaint alleging that Beaty, Landowner Defendants, and Sierra Pacific,
together with Eunice Howell, individually and doing business as Howell’s Forest Harvesting
Company (collectively “Defendants”) are jointly and severally liable for damages resulting from
the Moonlight Fire, which ignited on September 3, 2007, in Plumas County.
Defendants
answered the United States’ Complaint and denied liability, and also asserted affirmative
defenses.
2.
On or about January 15, 2010, Landowner Defendants filed their Indemnity
Claims alleging that Sierra Pacific must defend and indemnify Landowner Defendants for, inter
alia, any judgment entered against Defendants with respect to the Plaintiff’s Claims. On or about
February 22, 2010, Sierra Pacific answered Landowner Defendants’ crossclaims and denied
liability, and also asserted affirmative defenses.
3.
On February 13, 2012, Judge Mueller ordered the parties to the Moonlight Fire
Case to file a joint pretrial statement by May 24, 2012. Local Rule 281(b)(18) requires the parties
to determine whether separate trials of any issues in the case is feasible and advisable.
4.
Bifurcation promotes efficiency and fairness, and could significantly reduce time-
demands on the Court and the jury in the Moonlight Fire Case. Regardless of the outcome of the
Plaintiff’s Claims, that disposition will affect the claims at issue in the Indemnity Claims. At that
point, either the United States will not have prevailed and the Indemnity Claims may not need to
be pursued, thereby rendering further proceedings unnecessary, or the United States will have
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STIPULATION AND ORDER
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prevailed and a finding will be entered regarding how the Moonlight Fire was caused, which will
enable Landowner Defendants and Sierra Pacific to determine whether the Indemnity Claims can
be settled or resolved pursuant to a stipulated resolution or, alternatively, whether an indemnity
trial will be necessary.
5.
In addition, Landowner Defendants and Sierra Pacific further agree that
bifurcating the trial of the claims will also avoid prejudice that would be caused to Defendants
during trial of the Plaintiff’s Claims by forcing Defendants to discuss insurance issues in front of
the jury while it is considering liability for the Moonlight Fire, in violation of Rule 411 of the
Federal Rules of Evidence. This is because insurance issues are linked with the indemnity
provision in the TSA, and the Federal Rules of Evidence Advisory Committee Notes explain that
this information is prejudicial insofar as it “would induce juries to decide cases on improper
grounds.” Fed. R. Evid. 411 Advisory Committee’s Notes 1972. In comparison, bifurcating the
claims would permit the jury in the Moonlight Fire Case to evaluate liability issues regarding the
Plaintiff’s Claims without regard to the indemnity issues and insurance issues related to the
Indemnity Claims. Bifurcation would also avoid further prejudice that Defendants may suffer by
being forced to use time in an already complex case on indemnity issues that may never need to
be litigated following resolution of the Plaintiff’s Claims in the Moonlight Fire Case.
6.
For the foregoing reasons, Landowner Defendants and Sierra Pacific agree that
pursuant to Local Rule 281(b)(18), bifurcating and trying separately the Indemnity Claims from
the Plaintiff’s Claims in the Moonlight Fire Case will be both feasible and advisable, and
pursuant to FRCP 42(b), will be more convenient, expeditious, and economical for the parties and
the Court, and will avoid prejudice for Defendants.
7.
If the Indemnity Claims are bifurcated, Landowner Defendants and Sierra Pacific
further agree to postpone pretrial briefing of the indemnity issues until it is determined whether a
trial on those claims will be necessary. Doing so is more efficient and expeditious for the parties
and the Court because these issues may never need to be briefed if trial of the Indemnity Claims
becomes unnecessary.
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STIPULATION AND ORDER
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Pursuant to the foregoing recitals, the parties hereby agree and stipulate to the following:
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STIPULATION
Based on the foregoing recitals, the parties hereby STIPULATE that:
1.
Indemnity will be bifurcated and tried, if necessary, after the liability and/or
damages phase(s) of the Moonlight Fire Case has/have been completed;
2.
Landowner Defendants and Sierra Pacific retain their rights to a trial by jury of the
Indemnity Claims, if a trial is necessary;
3.
The issues pertaining to the Indemnity Claims that would otherwise need to be
included in the joint pretrial statement that is due to be filed in the Moonlight Fire Case on May
24, 2012, need not be briefed at this time, and Landowner Defendants and Sierra Pacific agree to
defer this briefing until after trial of the Plaintiff’s claims concludes and it is determined whether
trial of the Indemnity Claims will be required, or until such time as the Court directs. Defendants
will work cooperatively together and with the Court to set a date for filing a joint pretrial
statement that includes issues pertinent to the Indemnity Claims.
IT IS SO STIPULATED.
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DATED: May 15, 2012
MATHENY, SEARS, LINKERT & JAIME LLP
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By: /s/ Richard Linkert
RICHARD S. LINKERT
Attorneys for Defendants/Crossclaimants,
W.M. BEATY & ASSOCIATES, INC. AND
LANDOWNER DEFENDANTS.
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DATED: May 15, 2012
DOWNEY BRAND LLP
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By:
/s/ William R. Warne
WILLIAM R. WARNE
Attorneys for Defendant/Crossdefendant
SIERRA PACIFIC INDUSTRIES
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STIPULATION AND ORDER
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DATED: May 15, 2012
KEKER & VAN NEST LLP
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By:
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/s/ Steven P. Ragland
STEVEN P. RAGLAND
Attorneys for LANDOWNER DEFENDANTS
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STIPULATION AND ORDER
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ORDER
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This matter came before the Court on the parties’ Stipulation to bifurcate trial of
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Landowner Defendants’ Indemnity Claims from trial of the Plaintiff’s Claims in the Moonlight
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Fire Case, as those terms are defined in the parties’ Stipulation. For the reasons stated in the
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Stipulation and good cause having been shown, the Court ADOPTS the Stipulation and GRANTS
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the relief requested as follows:
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1.
Indemnity will be bifurcated and tried, if necessary, after the liability and/or
damages phase(s) of the Moonlight Fire Case has/have been completed;
2.
Landowner Defendants and Sierra Pacific all retain their rights to a trial by jury of
the Indemnity Claims, if a trial is necessary;
3.
The issues pertaining to the Indemnity Claims that would otherwise need to be
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included in the joint pretrial statement that is due to be filed in the Moonlight Fire Case on May
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31, 2012, need not be briefed at this time; briefing of these issues shall be deferred until after trial
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of the Plaintiff’s Claims concludes and it is determined whether trial of the Indemnity Claims will
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be required, or until such time as the Court directs. If the resolution of the Plaintiff’s Claims in
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the Moonlight Fire Case does not obviate the need to try the Indemnity Claims, or Landowner
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Defendants and Sierra Pacific are not otherwise able to resolve the Indemnity Claims informally,
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they shall work cooperatively together and with the Court to set a date for filing a joint pretrial
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statement that includes issues pertinent to the Indemnity Claims.
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IT IS SO ORDERED.
DATED: May 22, 2012.
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UNITED STATES DISTRICT JUDGE
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STIPULATION AND ORDER
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