Tile World Corporation v. Miavana & Family, Inc.
Filing
70
ORDER denying 61 Motion to reopen discovery to take deposition of Plaintiff's president. Signed by Magistrate Judge Thomas B. Smith on 7/17/2017. (Smith, Thomas)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
TILE WORLD CORPORATION,
Plaintiff,
v.
Case No: 6:15-cv-919-Orl-28TBS
MIAVANA & FAMILY, INC.,
Defendant.
ORDER
Pending before the Court is Defendant’s Motion for Limited Relief from Scheduling
Order Deadlines (Doc. 61). I ordered an expedited response from Plaintiff (Doc. 65),
which has now been filed (Doc. 66). The motion seeks leave to take the deposition of
Roland Schneider, Plaintiff’s president, well outside the expiration of the discovery period.
The motion is DENIED; however, I recommend that the District Judge refer this case to a
United States Magistrate Judge for the purpose of a prompt settlement conference.
Background
“What we’ve got here is failure to communicate” 1
The discovery deadline expired February 10, 2017, and the case is set for an 8-10
day jury trial during the September 1, 2017 trial term (Doc. 47). Despite ample time for
discovery, the parties represent that little has been taken. Defendant served
interrogatories and requests for the production of documents on Plaintiff in March 2016,
and received responses to both. On April 1, 2016 and April 7, 2016 respectively,
Defendant served document subpoenas on Rafaela Stakemann and Anthony Veltri,
1
Cool Hand Luke (1967).
additional declarants in support of Plaintiff’s Urgent Motion for Preliminary Injunction
(Doc. 29). Defendant also subpoenaed documents from a number of Plaintiff’s
distributors. On November 28, 2016, the parties met in Miami for the corporate
representative depositions of Defendant and of one of Plaintiff’s distributors, nonparty
Conchita Foods, Inc. (Doc. 61, ¶ 15). No other witnesses have been deposed (Id.).
During and after the November 28th meeting, the parties explored settlement. This
is where their stories differ. Defense counsel, Gregory W. Herbert, Esq. and Plaintiff’s
counsel, Michael D. Crosbie, Esq., have both tendered Declarations (Docs. 66-1 and 661) setting forth their versions of events, complete with lengthy email chains. Mr. Herbert
believes he had an understanding with Mr. Crosbie that the discovery deadlines would be
extended, pending what both sides thought would be successful settlement negotiations.
He declares: “By way of example, on March 14, 2017, the parties mutually agreed to
extend the fact discovery deadline up to and including April 21, 2017 to permit further
settlement discussion.” (Doc. 61-1, ¶ 4). Mr. Herbert says the deposition of Mr. Schneider
was noticed on April 11, 2017, to occur on the mutually agreed date of April 20, 2017, but:
On April 19, 2017, the night before Mr. Schneider's scheduled
deposition, settlement discussions renewed in earnest, with
direct talks between the parties. Nonetheless, Defendant's
counsel did not agree to postpone the deposition until the
parties advised they had reached a complete settlement
agreement in principle, including monetary and non-monetary
terms confirmed in communications between counsel. At that
point, counsel for the parties agreed to continue the deposition
of Mr. Schneider and instead devote their energies to
formalizing the settlement in a fully-integrated document.
(Doc. 61-1, ¶ 5). Mr. Herbert says that the parties continued their attempts to finalize their
agreement, but “the parties' efforts at finalizing their settlement agreement abruptly ended
on or about June 22, 2017, when Plaintiff’s counsel informed Defendant's counsel that
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Plaintiff refused to honor the previously agreed to non-monetary terms of the parties'
settlement agreement” and “refused to honor the prior agreement to continue the
deposition of Roland Schneider.” (Id., ¶ 7). Thus, the deposition of Mr. Schneider was
never taken.
Mr. Crosbie acknowledges that he too thought the case would settle, but disputes
that he agreed to an “open ended” discovery period. Mr. Crosbie notes that both parties
“elected to conduct little discovery through deposition,” instead concentrating their efforts
toward settlement (Doc. 66-1, ¶ 5). He admits that, “during Spring 2017,” counsel for the
parties agreed to extend the discovery disclosure deadline to April 21, 2017 (Id., ¶ 10),
but he says, Defendant was “never precluded from deposing Mr. Schneider.” (Id., ¶ 11).
Mr. Crosbie advises that the parties spoke via telephone and reached a “tentative”
agreement to resolve their disputes, save for one issue, on April 19, 2017, and Mr.
Herbert sent Mr. Crosbie an email which reads:
From: Herbert, Gregory W. (Shld-Orl-LT-IP)
Sent: Wednesday, April 19, 2017 7:26 PM
To:
Michael Crosbie
Cc:
[omitted]
Subject: Miavana/Tile World- tentative settlement/depos
canceled
Mike,
Confirming our call just now that it appears the parties have
reached a tentative settlement in their negotiations by phone
today, subject to and conditioned on mutual execution of a
written settlement agreement. My team will work on
preparation of a draft agreement and aim to send that to you
in the next few days. In the meantime you and I have agreed
that the deposition of Mr. Schneider set for tomorrow and the
depositions of Mr. Angulo and Mr. Coronel set for next week
are hereby canceled.
We will be in touch soon.
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Regards,
~Greg
(Doc. 61-6 at 1). According to Mr. Crosbie, the parties continued to discuss settlement
and exchanged drafts and revisions to a settlement agreement and, during conversations
with Defendant's counsel that continued through May into June, there was no mention or
request by Defendant's counsel for deposition dates (Id., ¶ 15). He states that on June 13,
2017, nearly two months after the agreed extended discovery deadline, Mr. Herbert
“unexpectedly” emailed him that "settlement negotiations are off,'' and requested
deposition dates (Id., ¶ 16; Doc. 61-1 at 10). Mr. Crosbie says that a series of discussions
between counsel began on June 19, 2017, and that the focus was “solely and entirely on
settlement.” (Doc. 66-1, ¶ 17). He reports that on or about June 22, 2017, it became
apparent that the parties were not going to settle the final non-monetary issue and during
a call on that date, Defendant’s counsel requested to schedule depositions (Id., ¶ 18).
Plaintiff opposed the request, citing scheduling conflicts and the impending pretrial
deadlines (Id., ¶¶ 18-21). And so, here we are.
Legal Standard
Federal Rule of Civil Procedure 6(b)(1)(B) provides that “[w]hen an act may or
must be done within a specified time, the court may, for good cause, extend the time ...
on motion made after the time has expired if the party failed to act because of excusable
neglect.” Federal Rule of Civil Procedure 16(b)(4) provides that, after a scheduling order
is entered, it “may be modified only for good cause and with the judge's consent.” See
Abruscato v. GEICO Gen. Ins. Co., No. 3:13-CV-962-J-39JBT, 2014 WL 12616965, at *2
(M.D. Fla. May 30, 2014) (noting that in the Eleventh Circuit, “it is not entirely clear
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whether just Rule 16, or also Rule 6, governs a motion to re-open discovery filed after
discovery has closed,” and applying both rules).
To show good cause under Rule 16(b), a party must establish that, despite his
diligence, the deadline could not be met. Sosa v. Airport Sys., Inc., 133 F.3d 1417, 1419
(11th Cir.1998) (citing FED. R. CIV. P. 16 Advisory Committee's Note). “Excusable neglect
is an equitable determination that requires an examination into whether the moving party
had a good reason for not responding timely and whether the opposing party would be
prejudiced.” Foudy v. Saint Lucie Cty. Sheriff's Office, 677 F. App’x 657, 660 (11th Cir.
2017), citing In re Worldwide Web Sys. Inc., 328 F.3d 1291, 1297 (11th Cir. 2003). In
determining whether excusable neglect exists, courts utilize a four-factor balancing test:
(1) “the danger of prejudice to the [opposing party],” (2) “the length of the delay and its
potential impact on judicial proceedings,” (3) “the reason for the delay, including whether
it was within the reasonable control of the movant,” and (4) “whether the movant acted in
good faith.” Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd., 507 U.S. 380, 395 (1993).
Discussion
Mr. Herbert argues that, at all times, Defendant acted in good faith and “Plaintiff
should not be rewarded for reneging on its agreements and failing to comply with
obligations of professionalism and courtesy.” (Doc. 61 at 16). Mr. Crosbie counters that
Defendant has not acted in good faith and has manufactured an alleged agreement to
allow discovery to stay open indefinitely (Doc. 66-1, ¶22). Despite the unfortunate tone of
the filings (which is unusual in the Court’s experience with these lawyers), I find that
certain undisputed facts are determinative here and that Defendant cannot show good
cause or excusable neglect for failing to obtain the discovery within the allotted time.
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Good Cause
The Case Management and Scheduling Order provides that: “The parties may not
extend deadlines established in this Case Management and Scheduling Order without the
approval of the Court.” (Doc. 47 at 4); see also Doc. 47 at 3 (“The parties may agree by
stipulation on other limits on discovery within the context of the limits and deadlines
established by this Case Management and Scheduling Order, but the parties may not
alter the terms of this Order without leave of Court.”). It is undisputed that the discovery
deadline expired well before the “tentative settlement” was reached, and before Mr.
Schneider’s deposition was noticed. While I acknowledge defense counsel’s
representation that the parties informally agreed to an extension, believed the case would
settle, and did not wish to “burden” the Court, the fact remains that the parties had
attempted to do what is expressly prohibited by the Scheduling Order. Having chosen to
forego permission, counsel is now forced to seek forgiveness. On these facts, this is a
hard sell.
I know both of the lawyers involved in this dispute and do not view the papers
presented as evidence of bad faith on the part of either. Rather, the email exchanges
reflect busy attorneys who assumed the case would settle and directed their efforts
accordingly. Considering the expense of discovery, it is understandable that experienced
counsel might bend to the business needs of clients and limit vigorous discovery if a
settlement is in the offing. Usually, this strategy works; the case settles, costs are kept to
a minimum, and everyone is happy. But, this approach is not without risk. “Inadvertence
of counsel and an attempt to settle the dispute do not establish good cause for failing to
comply with a court ordered deadline.” De Gazelle Grp., Inc. v. Tamaz Trading
Establishment, No. 6:13-cv-1430-Orl-31TBS, 2016 WL 7664220, at *2 (M.D. Fla. Dec. 22,
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2016), report and recommendation adopted, 2017 WL 456970 (M.D. Fla. Jan. 6, 2017).
When, as here, the settlement turns elusive, the consequences of foregoing discovery
become real and immediate. While the situation is, indeed, unfortunate, it is not
unforeseen. As such, I cannot find that the circumstances presented serve as good cause
to excuse the lack of diligence in obtaining the deposition within the discovery period.
Excusable Neglect
Consideration of the four factors in the excusable neglect analysis reinforces my
conclusion. Considering the current posture of the case, allowance of a deposition at this
late date risks prejudice to Plaintiff, as counsel is focused on trial preparation. I also find it
likely that a deposition at this late stage, even assuming it could be scheduled
immediately, would have an impact on judicial proceedings, including the current
deadlines. Plaintiff represents that the parties have already met to prepare the pretrial
statement, due July 28th. Any new issues or matters raised by the deposition may create
a need to amend the statement, leading to further delay. As discussed above, I find the
reason for the delay was within the reasonable control of Defendant. Finally, while I do
not find that defense counsel acted in bad faith, the consequences of failing to obtain
discovery within the prescribed period, or to timely ask for an extension to complete
discovery, are foreseeable to seasoned counsel and I imagine that the Court’s ruling will
not be unexpected. In sum, while I believe I understand the reasons for the choices made
here, and I accept that good lawyers often make similar choices, defense counsel has
provided an explanation, not an excuse. Accordingly, the motion is denied.
Both counsel agree that the parties were very close to a settlement of this matter.
In view of the upcoming trial deadline, it is possible that they can yet obtain a settlement
satisfactory to both, if given an opportunity to try again, with appropriate assistance. I
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therefore respectfully recommend that the District Judge refer the case for a prompt
settlement conference before a Magistrate Judge.
DONE and ORDERED in Orlando, Florida on July 17, 2017.
Copies furnished to Counsel of Record
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