Vesta Strategies, LLC v. Estupinian et al

Filing 200

ORDER by Judge Beth Labson Freeman denying 199 Motion to Relate Case. (blflc3, COURT STAFF) (Filed on 5/14/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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VESTA STRATEGIES, LLC,

Case No. 07-cv-06216-JW (BLF)

Plaintiff,
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v.

ORDER DENYING ADMINISTRATIVE
MOTION TO RELATE CASES

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ROBERT E. ESTUPINIAN, et al.,

Re: Dkt. No. 199

Defendants.

United States District Court
Northern District of California

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Before the Court is a Motion to Consider Whether Cases Should Be Related brought by

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Plaintiff Thomas A. Dillon, as court-appointed receiver for Plaintiff Vesta Strategies, LLC. The

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Motion asks whether the following four cases should be related to a newly-filed matter, Dillon v.

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Murphy & Hourihane (“Dillon”), Case No. 5:14-cv-1908-HRL:

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1. Vesta Strategies, LLC v. Estupinian et al., Case No. 5:07-cv06216-JW (“Vesta v. Estupinian”).
2. USA v. Terzakis, et al., Case No. 5:09-cv-01212-DLJ (“USA v.
Terzakis”).
3. United States Fire Insurance Company v. Samuel Henka, Case
No. 5:09-cv-2388-JW (the “U.S. Fire Coverage Case”).
4. Dillon v. Continental Casualty Company, Case No. 5:01-5238EJD (the “Continental Coverage Case”).
After reviewing the Plaintiff’s Administrative Motion and the relevant statutory law, the

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Court hereby DENIES the Motion.
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A motion to relate cases is governed by Civil Local Rule 3-12, which states that:
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An action is related to another action when:
(1) The actions concern substantially the same parties, property, transaction,
or event; and
(2) It appears likely that there will be an unduly burdensome duplication of
labor and expense or conflicting results if the cases are conducted before
different judges.

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Both prongs of the Local Rule 3-12 test must be met for the relation of cases to be
appropriate.

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In 2010, Judge James Ware denied a Motion to Relate three of these cases with one

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another: Vesta v. Estupinian, Case No. 07-cv-06216, with USA v. Terzakis, Case No. 09-cv-01212,

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and the U.S. Fire Coverage Case, Case No. 09-cv-02388. (ECF Docket No. 198). These three

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cases are now closed – Vesta v. Estupinian resulted in a default judgment against Defendant, USA

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v. Terzakis resulted in a guilty plea by Defendant, who is currently incarcerated, and U.S. Fire

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Coverage resulted in judgment on the pleadings against several parties and a stipulated dismissal

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as to U.S. Fire Insurance Company. Consistent with Judge Ware’s 2010 Order, the Court finds that
since these actions are now closed, it is unlikely that an unduly burdensome duplication of labor

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United States District Court
Northern District of California

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and expense, or conflicting results, is likely to apply if the Dillon case proceeds in front of a

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different judge.

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The only other case before the Court for relation is the Continental Coverage Case, which

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is currently pending on appeal before the Ninth Circuit, after Judge Edward J. Davila granted

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Defendant’s Motion for Summary Judgment. This case concerns a suit by Dillon as Plaintiff

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against Continental Casualty Company in relation to insurance policies that covered the theft or

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exchange of funds by Vesta’s owners. Judge Davila found that enforcement of these policies

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violated California public policy, specifically Insurance Code § 533.

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Though the Dillon case also involves the same Plaintiff, and actions taken by the owners,

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partners, and employees of Vesta, it is a legal malpractice case, alleging that Vesta’s attorneys at

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the Murphy & Hourihane law firm committed negligence in rescinding insurance coverage issued

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by U.S. Fire Insurance Company. The legal claims and Defendants differ in both cases – one

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Defendant is an insurer, the other a law firm. There is no indication that the suits arise out of the

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same transaction or event, as the Dillon malpractice action concerns insurance rescission from a

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different insurance company than is being sued in the Continental Coverage Case. Thus, the cases

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do not meet the requirements of Local Rule 3-12(1). Even if the cases did meet the Rule 3-12(1)

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prong, however, it is unlikely that there would be an “unduly burdensome duplication of labor” as

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required under Rule 3-12(2), merely due to the cases having the same plaintiff and generally
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arising from the actions taken by Vesta’s owners and employees.
Accordingly, the Court DENIES the Plaintiff’s Motion to Consider Whether Cases Should
Be Related.
IT IS SO ORDERED.
Dated: May 14, 2014
______________________________________
BETH LABSON FREEMAN
United States District Judge

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United States District Court
Northern District of California

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