Nationwide Mutual Insurance Company v. Bushnell Landscape Industries, Inc.

Filing 26

MEMORANDUM AND ORDER signed by Chief Judge Morrison C. England, Jr. on 3/14/2016 GRANTING 18 Plaintiff's motion to amend the pretrial scheduling order; Discovery is EXTENDED to 5/15/2016, for the limited purpose of allowing Bushnell to take Shawn Roessler's deposition.(Reader, L)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
11
12

NATIONWIDE MUTUAL INSURANCE
CO.,
Nationwide,

13
v.

14
15

MEMORANDUM AND ORDER

BUSHNELL LANDSCAPE
INDUSTRIES, INC.,

16

No. 2:14-cv-2305-MCE-CKD

Bushnell.

17
Through this action, Plaintiff Nationwide Mutual Insurance Co. (“Nationwide”)

18
19

seeks to recover more than $350,000 under a compromise agreement (“Agreement”) it

20

made with Defendant Bushnell Landscape Industries, Inc. (“Bushnell”). Presently before

21

the Court is Bushnell’s Motion to Amend the Pretrial Scheduling Order (“PTSO”). ECF

22

No. 18. Specifically, Bushnell seeks to modify the PTSO for the limited purpose of taking

23

the deposition of Shawn Roessler (“Roessler”), the former Nationwide employee who

24

negotiated the Agreement. For the reasons that follow, Bushnell’s Motion is GRANTED.

25

///

26

///

27

///

28

///
1

1

BACKGROUND

2
From May 31, 2007 to May 31, 2008, Nationwide supplied Bushnell with

3
4

commercial property insurance. During that time, Bushnell suffered damage to its

5

nursery stock and submitted a claim pursuant to its policy with Nationwide. Nationwide

6

denied coverage. Eventually, the parties met to discuss a settlement of the coverage

7

dispute. Ms. Roessler was the only Nationwide employee who attended the meeting.

8

The parties ultimately settled that dispute in February 2010 by entering into the

9

Agreement. Pursuant to the Agreement, Nationwide was required to advance Bushnell

10

$300,000 so it could pursue litigation against the party actually responsible for the

11

damage. In return, Bushnell agreed to pay a portion of the proceeds it recovered in

12

litigation to Nationwide. ECF No. 18-5. Ms. Roessler signed the Agreement on

13

Nationwide’s behalf. In October 2014, Nationwide filed a Complaint against Bushnell for

14

Breach of Contract and Fraud. The meaning and effect of various negotiated terms and

15

provisions in the Agreement will ultimately determine the outcome of this case.
Pursuant to Federal Rule of Civil Procedure 26, Nationwide provided Bushnell

16
17

with its Initial Disclosure Statement and listed Ms. Roessler as a witness with knowledge

18

of the underlying coverage dispute and the Agreement.1 Nationwide’s Initial Disclosure

19

Statement also specifically provided that Ms. Roessler could be contacted through

20

Nationwide’s counsel.
On September 11, 2015, Bushnell served Nationwide with a deposition notice

21
22

under Rule 30(b)(6), setting forth three specific matters on which Nationwide was to

23

provide a knowledgeable witness or witnesses. Two of those matters directly related to

24

the underlying claim dispute and the approval of the Agreement. Although the

25

deposition was initially noticed for September 23, 2015, the parties agreed to continue

26

///

27
1

28

All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless
otherwise indicated.

2

1

that date to accommodate the availability of both Nationwide’s counsel and the

2

designated witness.

3

On November 18, 2015, however, during a subsequent deposition of Attorney

4

Irene Yesowitch on November 18, 2015, Bushnell learned for the first time that

5

Nationwide had not employed Ms. Roessler for several years. Ms. Yesowtich could not

6

even confirm whether Ms. Roessler was employed in California, and testified that she did

7

not have her phone number. Later that same day, Attorney Michael Melendez informed

8

Bushnell’s counsel that Nationwide would not produce Ms. Roessler as a witness in

9

response to Bushnell’s Rule 30(b)(6) deposition notice. Non-expert discovery was set to

10

close just over a week later, on November 25, 2015, and although Bushnell’s counsel

11

immediately requested that Mr. Melendez stipulate to an order reopening discovery so

12

Bushnell could take Ms. Roessler’s deposition, Mr. Melendez waited until January 7,

13

2016, to deny the request. As a result, Bushnell now seeks an order amending the

14

PTSO for the limited purpose of deposing Ms. Roessler.

15
16

DISCUSSION

17
18

Generally, the Court is required to enter a pretrial scheduling order within 120

19

days of the filing of the complaint. Fed. R. Civ. P. 16(b). The scheduling order "controls

20

the subsequent course of the action" unless modified by the Court. Fed. R. Civ. P.

21

16(e). Orders entered before the final pretrial conference may be modified upon a

22

showing of "good cause," Fed. R. Civ. P. 16(b), but orders "following a final pretrial

23

conference shall be modified only to prevent manifest injustice." Fed. R. Civ. P. 16(e);

24

see also Johnson v. Mammoth Recreations, 975 F.2d 604, 608 (9th Cir. 1992)

25

Rule 16(b)'s "good cause" standard primarily considers the diligence of the party

26

seeking the amendment. Johnson, 975 F.2d at 609. The district court may modify the

27

pretrial schedule "if it cannot reasonably be met despite the diligence of the party

28

seeking the extension." Fed. R. Civ. P. 16 advisory committee's notes (1983
3

1

amendment); Id. Moreover, carelessness is not compatible with a finding of diligence

2

and offers no reason for a grant of relief. Johnson, 975 F.2d at 609. Although the

3

existence or degree of prejudice to the party opposing the modification might supply

4

additional reasons to deny a motion, the focus of the inquiry is upon the moving party's

5

reasons for seeking modification. Id. (citing Gestetner Corp. v. Case Equip. Co.,

6

108 F.R.D. 138, 141 (D. Me. 1985)). If the moving party was not diligent, the Court’s

7

inquiry should end. Id.

8

If the Court concludes that the moving party was diligent, however, the district

9

courts generally allow amendments of pre-trial orders if three additional criteria are met.

10

Landes v. Skil Power Tools, No. 2:12-cv-1252, 2013 WL 6859837 at *3 (E.D. Cal. Dec.

11

30, 2013) (citing Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996)). Specifically,

12

courts look to whether: (1) amendment of the PTSO will result in substantial injury to the

13

opposing party; (2) refusing to allow the amendment might result in injustice to the

14

movant; and (3) amendment will inconvenience the court. Id. at *4-5.

15

As an initial matter, Nationwide’s argument that Bushnell was not sufficiently

16

diligent in seeking to depose Ms. Roessler lacks merit. While Nationwide is correct that

17

Bushnell could have avoided the need for this Motion by noticing Roessler’s deposition

18

individually instead of assuming she would be produced in response to a Rule 30(b)(6)

19

notice, that argument glosses over Nationwide’s role in creating Bushnell’s predicament.

20

First, Nationwide’s Initial Disclosure Statement was misleading. It represented

21

that Ms. Roessler could be contacted through Nationwide’s counsel when Nationwide’s

22

counsel did not even have her phone number. In the context of the information provided

23

about the other witnesses, this statement masked the fact that Ms. Roessler was not a

24

Nationwide employee at any time during the pendency of this case. This

25

misrepresentation, coupled with Ms. Roessler’s central role in negotiating the

26

Agreement, made it reasonable, indeed inevitable, that Bushnell would assume

27

Nationwide would designate Ms. Roessler as its Rule 30(b)(6) witness.

28

///
4

1

Second, when Bushnell’s counsel learned that that Ms. Roessler would not be

2

produced as a witness in response to Bushnell’s Rule 30(b)(6) deposition notice, he

3

immediately sought a stipulation from Nationwide to depose her as an individual. This

4

effort, especially in light of the representations in Nationwide’s Initial Disclosure

5

Statement, warrants a finding of diligence here. See id. at *3 (explaining that the plaintiff

6

acted with reasonable diligence in seeking a modification of the PTSO because he

7

began “searching for a new expert witness and conferring with Defendants immediately

8

upon learning that [the expert witness] would no longer adhere to his agreement . . . .”).

9

Having established the requisite level of diligence, Bushnell easily satisfies the

10

remainder of the good cause test. First, modifying the PTSO to permit Bushnell to

11

depose Ms. Roessler will not injure Nationwide. Nationwide identified Ms. Roessler as a

12

person with knowledge of the facts in dispute and represented that she could be

13

contacted through Nationwide’s counsel. Furthermore, Ms. Roessler was the

14

Nationwide employee who negotiated and signed the Agreement. These facts indicate

15

that Nationwide has always expected she would be deposed. Indeed, at no point in its

16

Opposition does Nationwide argue that it would be injured by allowing Bushnell to take

17

Ms. Roessler’s deposition.

18

Second, Bushnell will be severely prejudiced absent the opportunity to depose

19

Ms. Roessler. Given her role in the formation of the Agreement, Ms. Roessler will be a

20

key witness at trial as to the meaning of terms and provisions in the Agreement.

21

Requiring Bushnell to blindly examine her in court will result in a less efficient trial and

22

would make it significantly more difficult for Bushnell to squarely address Nationwide’s

23

claims. See Dienstag v. Bronsen, No. 68-Civ. 576, 49 F.R.D. 327, 329 (S.D.N.Y. Jan.

24

14, 1970) (depositions allow litigants to fairly and expeditiously prepare their cases, and

25

allow the Court to minimize “trial time spent in wasteful sparring unrelated to the merits

26

of the case.”).

27
28

Third, amending the PTSO to permit Roessler’s deposition would not
inconvenience this Court even slightly. Trial in this matter is more than six months away,
5

1

and the Final Pretrial Conference is set for July 28, 2016. Bushnell will depose

2

Ms. Roessler well before these deadlines. Indeed, absent the need to file the current

3

motion, she could have been deposed already.

4

To that end, Nationwide’s discovery games and sharp tactics have absolutely

5

inconvenienced this Court. Nationwide’s misleading Initial Disclosure Statement and

6

refusal to stipulate to an extension permitting Bushnell to depose the only Nationwide

7

employee present when the Agreement was discussed not only required the Court to

8

spend its extremely limited resources addressing a dispute that should have been easily

9

resolved without its involvement, but also speak to a troubling lack of professionalism

10

and courtesy. The Court will not tolerate such conduct in the future, and Nationwide and

11

its counsel are admonished that the Court will be paying close attention to the manner in

12

which they litigate this case going forward.

13
14

CONCLUSION

15
16

For the reasons stated above, Nationwide’s Motion to Amend the Pretrial

17

Scheduling Order (ECF No. 18) is GRANTED. The PTSO is hereby AMENDED to

18

extend the discovery completion date until May 15, 2016, for the limited purpose of

19

allowing Bushnell to take Shawn Roessler’s deposition.

20
21

IT IS SO ORDERED.
Dated: March 14, 2016

22
23
24
25
26
27
28
6