Sustainable Pavement Technologies, LLC v. Holiday et al

Filing 50

ORDER signed by Magistrate Judge Kendall J. Newman on 10/10/2018 DENYING 41 without prejudice Defendant's Motion to Continue Discovery, and discovery is CLOSED, except as follows, described in this order; DENYING 47 without prejudice, Defendant's Motion to Compel; and DENYING 48 without prejudice, Defendant's ex parte application. (Reader, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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SUSTAINABLE PAVEMENT
TECHNOLOGIES, LLC,
Plaintiff,

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ORDER
v.

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No. 2:17-cv-02687-WBS-KJN

RICH HOLIDAY, et al.,
Defendants.

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Presently pending before the court is defendant JPMorgan Chase Bank, N.A.’s (“Chase”)

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motion to continue discovery. (ECF No. 41.) Plaintiff opposed this motion. (ECF No. 43.) This

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matter came on regularly for hearing on October 5, 2018, at 10:00 a.m. Mark Serlin appeared on

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behalf of plaintiff and Michael Lane appeared on behalf of Chase. On the eve of the hearing,

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Chase filed a motion to compel and an ex parte application. (ECF Nos. 47, 48.)
After carefully considering the briefing and the parties’ oral argument, the court DENIES

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Chase’s motions without prejudice, for the following reasons.

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I.

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RELEVANT BACKGROUND
Plaintiff Sustainable Pavement Technologies, LLC (“SPT”) initiated this action on

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December 26, 2017, alleging in relevant part that defendant Chase committed conversion by

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accepting checks that either included forged endorsements or were not endorsed at all. (ECF No.
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1 at 4.) On April 23, 2018, United States District Judge William B. Shubb issued the Status

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(Pretrial Scheduling) Order that ordered “[a]ll discovery shall be completed on or before

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September 28, 2018.” (ECF No. 24 at 2.) Also, while any requests to modify the scheduling

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order “may be heard and decided by the assigned Magistrate Judge[,] [a]ll requests to change the

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trial date shall be heard and decided only by” Judge Shubb. (Id. at 4.)

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Chase did not propound any formal discovery requests until August 13, 2018, when it

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served request for production set one, on SPT. (Declaration of Michael D. Lane, ECF No. 41-1

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[“Lane Decl.”] ¶ 8.) On September 14, 2018, Chase served a 30(b)(6) notice of deposition on

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SPT and a subpoena for the deposition of Jeffrey Wanic, set for September 28, 2018—the last day

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of discovery. (ECF No. 39 at 3; ECF No. 41 at 5.) Then, on September 21, 2018, Chase noticed

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the deposition of non-party Ever Maldonado for September 28, 2018. (ECF No. 41 at 5.)

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Chase filed its first motion to continue discovery on September 25, 2018, requesting a 60-

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day extension (ECF No. 37), which the court dismissed without prejudice because it would have

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extended discovery until 6 days before the final pretrial conference. (ECF No. 40.) On

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September 27, 2018, Chase filed the pending renewed motion to continue discovery, requesting a

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32-day extension (ECF No. 41), which SPT has opposed. (ECF No. 43.) At the same time,

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SPT’s attorney, Mr. Serlin has agreed to a limited extension of discovery so that the parties may

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conduct the 30(b)(6) depositions noticed prior to the end of discovery. (See Lane Decl., Exh. 1.)

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On October 4, 2018, the day before the hearing on the renewed motion to continue

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discovery, Chase moved to compel the production of documents from SPT, in response to

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Chase’s August 13, 2018 request for production. (ECF No. 47.) Chase simultaneously filed an

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ex parte application for an order to show cause why Ever Maldonado should not be held in

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contempt for failing to appear at his deposition. (ECF No. 48.)

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II.

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DISCUSSION
According to the Federal Rules of Civil Procedure, a pretrial scheduling order “may be

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modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). The Ninth

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Circuit has explained that “Rule 16(b)’s ‘good cause’ standard primarily considers the diligence

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of the party seeking the amendment. The district court may modify the pretrial schedule ‘if it
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cannot reasonably be met despite the diligence of the party seeking the extension.’” Johnson v.

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Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (citing Fed. R .Civ. P. 16 advisory

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committee’s notes (1983 amendment)). Importantly, “carelessness is not compatible with a

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finding of diligence and offers no reason for a grant of relief.” (Id.)

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Chase asserts that it has worked diligently to complete discovery in advance of the

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September 28, 2018 discovery cutoff date. (ECF No. 41 at 2.) Chase claims that its efforts were

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hampered by SPT, whose initial disclosures “failed to identify any of Plaintiff’s employees, or

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any non-parties with knowledge of salient facts, such as each of the alleged customer contacts

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from whom plaintiff later obtained declarations for use in this matter.” (Id. at 3.) Also, SPT

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allegedly “waited until the final week of discovery to provide declarations from multiple non-

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parties—including Ever Maldonado—that Plaintiff had obtained weeks or months before.” (Id.)

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SPT counters that in a June 4, 2018 document production, Chase included copies of

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checks payable to SPT from SPT’s vendors, including Ever Maldonado. (ECF No. 39 at 2.) SPT

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asserts, therefore, that “not later than June 4, 2018, Chase had actual knowledge of each of the

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vendors who had issued checks payable to [SPT] which had been [allegedly] improperly diverted

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into a Chase account.” (Id.)

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While discovery in this matter was scheduled for only five months, Chase was well aware

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of this shortened timeframe. The scheduling order was issued on April 23, 2018, but Chase failed

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to propound any written discovery in April, May, June, or July, without explanation. Indeed,

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while Chase asserts that plaintiff’s initial disclosures were insufficient, Chase did not move to

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compel additional responses or otherwise address this issue, until it served the mid-August

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requests for production. Additionally, Chase did not notice the 30(b)(6) deposition for nearly

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four and a half months after the scheduling order was issued. And, while it appears that Chase

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had notice of SPT’s vendors by at least June 4, 2018, Chase did not move to depose any of these

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vendors until September 21, 2018—one week before the close of discovery.

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Except for a conclusory assertion from Chase, the record before the court does not

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demonstrate that Chase acted with due diligence. “[C]arelessness is not compatible with a finding

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of diligence” and Chase has carelessly failed to ensure that discovery was timely completed, as it
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failed to propound any formal discovery requests until there were only 46 days remaining in

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discovery. Johnson, 975 F.2d at 609.

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Therefore, Chase has failed to demonstrate good cause to continue discovery. At the same

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time, SPT has agreed to a limited extension of discovery so that each party may conduct its

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30(b)(6) deposition, which the court finds to be reasonable.

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However, even if there were cause to continue discovery more generally, the undersigned

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finds that such an extension would disturb the trial date and “[a]ll requests to change the trial date

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shall be heard and decided only by” Judge Shubb. (ECF No. 24 at 4.)

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III.

CONCLUSION

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Accordingly, IT IS HEREBY ORDERED that:

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1. Defendant’s motion to continue discovery (ECF No. 41) is DENIED without

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prejudice, and discovery is closed, except as follows:

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a. Unless the parties stipulate otherwise, on October 18, 2018, Chase shall

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conduct the 30(b)(6) deposition of plaintiff and the deposition of Jeffrey

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Wanic; and on October 22, 2018, plaintiff shall conduct the 30(b)(6) deposition

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of Chase. The parties shall meet and confer to arrange the details of these

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depositions.

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b. Any renewed motion to continue discovery—except for a limited, and well-

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supported, motion to compel the deposition of Ever Maldonado—shall be

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noticed before Judge Shubb, along with a motion to change the trial date.

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2. Defendant’s motion to compel (ECF No. 47) is DENIED without prejudice.

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3. Defendant’s ex parte application (ECF No. 48) is DENIED without prejudice.

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IT IS SO ORDERED.

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Dated: October 10, 2018

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14/17-2687.sustainable pavement.discovery order

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