Bituminous Casualty Corporation v. Hartford Casualty Insurance Company

Filing 117

ORDER. ORDERED that the Motion [#103] is GRANTED in part and DENIED in part. To the extent the Motion seeks a stay, it is DENIED. To the extent the Motion seeks extension of the deadline to respond to the Motion to Amend [#95], it is GRANTED. ORDERED that Defendants deadline to file a response to the Motion to Amend [#95] is extended to September 30, 2013 by Magistrate Judge Kristen L. Mix on 09/19/13.(jjhsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 12-cv-00043-WYD-KLM
BITUMINOUS CASUALTY CORPORATION, an Illinois corporation,
Plaintiff,
v.
HARTFORD CASUALTY INSURANCE COMPANY,
Defendant and Third Party Plaintiff,
v.
CANAL INSURANCE COMPANY,
Third Party Defendant.
_____________________________________________________________________
ORDER
_____________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Defendant Hartford Casualty Insurance
Company’s Motion to Stay the Briefing of, or Extend the Deadline to Respond to,
Plaintiff Bituminous Casualty Corporation’s Motion for Leave to Amend to Seek
Exemplary Damages [Docket No. 103; Filed August 15, 2013] (the “Motion”). On August
23, 2013, Plaintiff filed a Response [#106]. On September 6, 2013, Defendant filed a Reply
[#112]. Pursuant to 28 U.S.C. § 636 (b)(1)(A) and D.C.COLO.LCivR 72.1C, the Motion has
been referred to this Court for disposition [#104]. The Court has reviewed the Motion, the
Response, the Reply, the entire docket, and the applicable law, and is sufficiently advised
in the premises. For the reasons set forth below, the Motion [#103] is GRANTED in part
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and DENIED in part.
I. Background
This is an insurance coverage dispute brought by one insurer against another
insurer regarding the same insured. See. Am. Complaint [#30] at ¶ 3. In short, Plaintiff
seeks to recover amounts it expended in the defense of the common insured in a state
court proceeding. See id. at ¶¶ 3, 16-19, 21.
On July 30, 2013, Plaintiff filed its Motion for Leave to Amend to Seek Exemplary
Damages Pursuant to Fed.R.Civ.P. 15 and C.R.S. § 13-21-102 [#95] (the “Motion to
Amend”), which is pending before the Court. On August 5, 2013, Defendant filed its Notice
of Withdrawal of its Forty-First Affirmative Defense (Release) with Prejudice [#97] (the
“Notice of Withdrawal”). Also on August 5, 2013, Defendant filed its Motion for Leave to
File its Motion [for] Summary Judgment on Plaintiff Bituminous Casualty Corporation’s
Amended Complaint [#100] (the “Motion for Leave”), which was granted on September 9,
2013. See Order [#113] at 2. Thereafter, on September 11, 2013, Defendant filed its
Motion for Summary Judgment on Plaintiff Bituminous Casualty Corporation’s Amended
Complaint [#115] (the “Motion for Summary Judgment”).
In the Motion, Defendant asks the Court to “extend the deadline for [Defendant] to
respond to [the Motion to Amend], until after this Court enters a ruling [ ]on [the Motion for
Leave]1 (and [the] Motion for Summary Judgment).” Motion [#103] at 5. Defendant argues
that the Motion to Amend “relates to Counts 3 and 4 of its Amended Complaint, which

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At the time the Motion was filed, the Court had not ruled on the Motion for Leave [#100].
However, because the Court has now granted the Motion for Leave [#100], the Court will only
address Defendant’s reliance on the pending Motion for Summary Judgment [#115] as a basis for
the Motion.

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plead claims for Intentional Interference with Contractual Obligations and Civil Conspiracy,
respectively.” Id. at 2. Defendant argues that its Motion for Summary Judgment “asserts,
in part, that Counts 3 and 4 of [Plaintiff’s] Amended Complaint are subject to dismissal as
a result of [Defendant’s] withdrawal of the sole predicate for the assertion of these counts,”
which Defendant alleges is Defendant’s forty-first affirmative defense which was withdrawn
in the Notice of Withdrawal. Id. at 3. As a result, Defendant argues that the Court should
suspend briefing on the Motion to Amend [#95] until after it issues a determination
regarding the Motion for Summary Judgment because “to the extent it is determined . . .
that Counts 3 and 4 are no longer viable as a result of [Defendant’s] withdrawal of its
release affirmative defense, it will be entirely unnecessary for the parties to engage in any
briefing of [the] Motion to Amend and for this Court to consider and rule upon that motion.
. . . [because that] Motion to Amend would be rendered moot.” Id. at 3-4.
In the Response, Plaintiff argues that the Motion to Amend “simply seeks leave of
Court to allow a punitive damages instruction to go to the jury if the quality of evidence at
trial in support of the existing causes of action warrants the same.” Response [#106] at 3.
Plaintiff further argues that the Motion is based on Defendant’s “erroneous assumption that
its strategic decision to withdraw a defense premised upon an unenforceable Release
procured from [the insured], in conjunction with [the Motion for Summary Judgment], will
somehow render [Plaintiff’s Motion to Amend] moot.” Id. at 3. Further, Plaintiff claims that
Defendant “is not absolved from its tortious conduct and conspiracy simply by virtue of its
unilateral declaration that it will not assert the Release as a defense to this action.” Id.
Plaintiff also points out that “staying any facet of this case at this time will mean that the
discovery needed to proceed to trial will be delayed beyond the current discovery cutoff.”
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Id. at 5.
Defendant filed a joint Reply which addresses both the Motion [#103] and the Motion
for Leave [#100]. In support of the Motion, Defendant argues that the Motion to Amend
[#95] is “an effort to avoid the clear effect of [Defendant’s] withdrawal of its defense.” Reply
[#112] at 2. Defendant also argues that Plaintiff will suffer no prejudice if the Motion is
granted. Id. at 5.
II. Analysis
The Court has the discretion to stay proceedings, because the power to stay is
“incidental to the power inherent in every court to control the disposition of the causes on
its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis
v. N. Am. Co., 299 U.S. 248, 254 (1936)). “How this can best be done calls for the exercise
of judgment, which must weigh competing interests and maintain an even balance.” Id. at
254-55. However, stays are generally disfavored in this District. See Wason Ranch Corp.
v. Hecla Mining Co., No. 07-cv-00267-EWN-MEH, 2007 WL 1655362, at *1 (D. Colo. June
6, 2007) (unreported decision) (“A stay of all discovery is generally disfavored in this
District.” (citation omitted)). “Nevertheless, a stay may be appropriate if resolution of a
preliminary motion may dispose of the entire action.” Id. (internal quotation omitted); see
String Cheese Incident, LLC v. Stylus Shows, Inc., No. 1:02-cv-01934-LTB-PAC, 2006 WL
894955, at *2 (D. Colo. Mar. 30, 2006) (unreported decision) (finding that a thirty day stay
of discovery was appropriate when a motion to dismiss for lack of personal jurisdiction was
pending); Nankivil v. Lockheed Martin Corp., 216 F.R.D. 689, 692 (M.D. Fla. 2003) (A stay
may be appropriate if “resolution of a preliminary motion may dispose of the entire action.”);
8 Charles Alan Wright, et al., Federal Practice and Procedure § 2040, at 521-22 (2d ed.
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1994) (“[W]hen one issue may be determinative of a case, the court has discretion to stay
discovery on other issues until the critical issue has been decided.”); Vivid Techs., Inc. v.
Am. Sci. & Eng’g, Inc., 200 F.3d 795, 804 (Fed. Cir. 1999) (“When a particular issue may
be dispositive, the court may stay discovery concerning other issues until the critical issue
is resolved.”); Gilbert v. Ferry, 401 F.3d 411, 415-16 (6th Cir. 2005) (finding that ordering
a stay of discovery is not an abuse of discretion when a defendant has filed a motion to
dismiss challenging the court’s actual subject matter jurisdiction); Chavous v. D.C. Fin.
Responsibility & Mgmt. Assistance Auth., 201 F.R.D. 1, 2 (D.D.C. 2005) (“A stay of
discovery pending the determination of a dispositive motion is an eminently logical means
to prevent wasting the time and effort of all concerned, and to make the most efficient use
of judicial resources.” (internal quotation omitted)). Here, Defendant seeks a stay of the
briefing schedule because it believes that its Motion for Summary Judgment will dispose
of two of the four remaining causes of action. Motion [#103] at 3-4.
When exercising its discretion, the Court considers the following factors: (1) the
interest of the plaintiff in proceeding expeditiously and the potential prejudice to the plaintiff
of a delay; (2) the burden on the defendants of proceeding; (3) the convenience to the
Court of a stay; (4) the interests of nonparties in either staying or proceeding; and (5) the
public interest in either staying or proceeding. String Cheese Incident, 2006 WL 894955,
at *2 (citing FDIC v. Renda, No. 85-2216-O, 1987 WL 348635, at *2 (D. Kan. Aug. 6,
1987)).
First, the Court notes that Plaintiff opposes a stay and expresses an interest in
proceeding expeditiously with briefing the Motion to Amend [#95]. With regard to the first
factor, Plaintiff argues that “staying any facet of this case at this time will mean that the
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discovery needed to proceed to trial will be delayed beyond the current discovery cutoff.”
Id. at 5. In contrast, Defendant argues that “there is no prejudice to [Plaintiff] . . . [because]
the amendment, if allowed, would be limited to what issues and facts [Plaintiff] can present
to a jury in relation to Counts 3 and 4,” Motion [#103] at 4, implying that the request for
punitive damages has no bearing on the scope of discovery in this matter. Even though
Plaintiff’s proposed Second Amended Complaint [#95-1] does not seek to add any claims,
rather it only seeks to add exemplary damages to its request for relief and delete a claim
dismissed by the Court, see Order [#77] at 22 (dismissing fifth claim for relief), such a
request must be supported by evidence.
Pursuant to C.R.S. § 13-21-102(1)(a), exemplary damages are available when the
defendant’s wrongful act is attended by fraud, malice, or willful and wanton conduct.
Colorado law defines “willful and wanton” conduct as “conduct purposefully committed
which the actor must have realized as dangerous, done heedlessly and recklessly, without
regard to consequences, or of the rights and safety of others.” C.R.S. § 13-21-102(1)(b).
This standard is satisfied “[w]here the defendant is conscious of his conduct and the
existing conditions and knew or should have known that injury would result.” Stanton v.
Emcompass Indemnity Co., No. 12-cv-00801-PAB-KLM, 2013 WL 2010829 at * 9 (D. Colo.
May 14, 2013) (quoting Coors v. Sec. Life of Denver Ins. Co., 112 P.3d 59, 66 (Colo.
2005)). Further, pursuant to C.R.S. § 13-21-102, inclusion of a claim for punitive damages
is prohibited in the initial pleading and only allowed after the plaintiff establishes prima facie
proof of a triable issue of punitive damages. C.R.S. § 13-21-102(1.5)(a). That does not
mean that a plaintiff cannot utilize discovery to bolster the prima facie evidence on which
it relies when seeking to amend the complaint.
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Because the Motion for Summary Judgment was filed on September 11, 2013, the
briefing will not be complete until mid-October at the earliest and may not be ruled on for
several months thereafter. Accordingly, if the Motion were granted, briefing of the Motion
to Amend [#95] would not commence for many months, potentially after the January 31,
2014 discovery deadline. See Scheduling Order [#90] at § 9(a). Further, Plaintiff has a
strong interest in knowing what version of the Complaint is operative in this case as
discovery progresses and other motions are filed. Taking all of these considerations into
account, the Court finds that the first String Cheese Incident factor weighs against staying
briefing of the Motion to Amend.
The second factor is whether denying a stay would present an undue burden on
Defendant. Defendant does not suggest any undue burden in proceeding with the case.
The ordinary burdens associated with litigating a case do not constitute undue burden. See
Collins v. Ace Mortgage Funding, LLC, 08-cv-1709-REB-KLM, 2008 WL 4457850, at *1 (D.
Colo. Oct. 1, 2008) (unpublished decision). The Court therefore finds that the second
String Cheese Incident factor weighs against a stay.
The third factor concerning convenience to the Court weighs against a stay. The
Motion for Summary Judgment was recently filed, on September 11, 2013. As a result, the
briefing will not be complete until mid-October at the earliest. As a result, it is likely that a
variety of deadlines may have to be reset if the stay is granted. “Motions having the effect
of delaying proceedings and adversely affecting schedules are not favored in this District.”
Wildearth Guardians v. Pub. Serv. Co. of Colorado, No. 09-cv-01862-ZLW-MEH, 2009 WL
3296103, at *2 (D. Colo. Oct. 13, 2009) (denying request to stay discovery). Consequently,
the Court must acknowledge the general interests of controlling the Court's docket and the
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fair and speedy administration of justice. The Court therefore finds that the third String
Cheese Incident factor weighs against a stay of briefing for the Motion to Amend.
With regard to the fourth factor, the parties have not alluded to any nonparties with
significant particularized interests in this case. Accordingly, the fourth String Cheese
Incident factor neither weighs in favor nor against staying the case.
With regard to the fifth and final factor, the Court finds that the public’s only interest
in this case is a general interest in its efficient and just resolution. Thus, the fifth String
Cheese Incident factor weighs against a stay.
Weighing these factors in light of the present posture of this case, the Court
concludes that a stay of briefing for the Motion to Amend [#95] pending resolution of the
Motion for Summary Judgment [#115] is not appropriate.
III. Conclusion
For the reasons set forth above,
IT IS HEREBY ORDERED that the Motion [#103] is GRANTED in part and DENIED
in part. To the extent the Motion seeks a stay, it is DENIED. To the extent the Motion
seeks extension of the deadline to respond to the Motion to Amend [#95], it is GRANTED.
IT IS FURTHER ORDERED that Defendant’s deadline to file a response to the
Motion to Amend [#95] is extended to September 30, 2013. If Plaintiff wishes to file a reply
in further support of the Motion to Amend [#95], such reply shall be filed in accordance with

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D.C.COLO.LCivR 7.1.
Dated: September 19, 2013

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