Allied World Specialty Insurance Company v. Progressive Plumbing, Inc. et al

Filing 17

ORDER granting in part and denying in part 15 motion to stay. This action is STAYED as to Defendants William E. Lawson and Charlene H. Lawson for sixty (60) days, ending on November 8, 2015.. Signed by Judge Roy B. Dalton, Jr. on 9/9/2015. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
ALLIED WORLD SPECIALTY
INSURANCE COMPANY,
Plaintiff,
v.

Case No. 6:15-cv-1397-Orl-37TBS

PROGRESSIVE PLUMBING, INC.;
LAWSON INVESTMENT GROUP, INC.;
GRACIOUS LIVING DESIGN CENTER, INC.;
CENTRAL FLORIDA SUPPLY, INC.;
PROGRESSIVE PLUMBING SERVICES, LLC;
WILLIAM E. LAWSON; and CHARLENE
H. LAWSON,

Defendants.
ORDER
This cause is before the Court on the following:
1.

Order to Show Cause (Doc. 12), filed August 27, 2015;

2.

Motion to Stay Proceedings as Against William E. Lawson and Charlene H.
Lawson (Doc. 15), filed September 1, 2015; and

3.

Plaintiff’s Response to Order to Show Cause (Doc. 16), filed September 4,
2015.

On August 24, 2015, Plaintiff initiated this action to enforce an indemnity
agreement against Defendants. (Doc. 1.)
On August 27, 2015, this Court stayed the proceedings only as to Defendants
Progressive Plumbing, Inc., Gracious Living Design Center, Inc., and Progressive
Plumbing Services, LLC (“Debtor-Defendants”), each of whom are involved in Chapter 11
bankruptcy proceedings. (Doc. 11); see also In re Progressive Plumbing, Inc., No. 6:15-

bk-07275-KSJ, Doc. 1 (Bankr. M.D. Fla. Aug. 24, 2015), In re Gracious Living Design Ctr.,
Inc., No. 6:15-bk-07277-KSJ, Doc. 1 (Bankr. M.D. Fla. Aug. 24, 2015), In re Progressive
Servs., LLC, No. 6:15-bk-07276-KSJ, Doc. 1 (Bankr. M.D. Fla. Aug. 24, 2015).
Additionally, the Court issued a show cause order as to why this action should not
be dismissed for want of subject matter jurisdiction, ordering Plaintiff to allege the
citizenship of non-debtor Defendants William E. Lawson and Charlene H. Lawson (“the
Lawsons”) so that the Court could determine if there was complete diversity. (Doc. 12.)
Plaintiff responded to the show cause order with allegations that the Lawsons are
citizens of Florida. (Doc. 16, ¶ 10.) Given that (1) Plaintiff is a citizen of Delaware and
Connecticut (Doc. 1, ¶ 4), (2) the Lawsons are citizens of Florida (Doc. 16, ¶ 10), and (3)
all other non-debtor defendants are citizens of Florida (Doc. 1, ¶¶ 6, 8), complete diversity
exists,

and the Court

has

subject-matter jurisdiction over the action. See

28 U.S.C. 1332(a) (2012); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005).
Plaintiff requests that the Court exercise its discretionary power to stay
proceedings as to the Lawsons in light of Plaintiff’s contentions that the Lawsons are
insiders of the Debtor-Defendant companies. (Doc.15.) Plaintiff argues that a stay of this
action is necessary to protect it from running afoul of the automatic stay provisions of the
Bankruptcy Code. See 11 U.S.C. § 362 (2012). Although Plaintiff acknowledges that the
Lawsons, Lawson Investment Group, Inc., and Central Florida Supply, Inc. are nondebtors and thus not subject to the automatic stay, Plaintiff argues that the relationship
between the Lawsons and Debtor-Defendants is sufficiently close to warrant a stay of
proceedings against the Lawsons. (Doc. 15.) Specifically, Plaintiff alleges that: (1) William
E. Lawson’s role as the president of Defendants Progressive Plumbing, Inc. and

2

Progressive Services, LLC and Charlene H. Lawson’s role as the chief executive officer
of Defendant Gracious Living Design Center, Inc. deems them “insiders” of these
organizations under the Bankruptcy Code, see 11 U.S.C. § 101(31); and (2) Plaintiff runs
the risk of enjoinment by counsel of the Debtor-Defendants if it proceeds with litigation
against the Lawsons. (Doc. 15, pp. 2–3.)
Federal district courts possess “general discretionary power” to stay proceedings
“in the interests of justice and in control of their dockets.” See Wedgeworth v. Fibreboard
Corp., 706 F.2d 541, 544–45 (11th Cir. 1983); see also Clinton v. Jones, 520 U.S. 681,
706–07 (1997) (noting that a district court has “broad discretion to stay proceedings as
an incident to its power to control its own docket”). The proper exercise of such
discretionary power requires a weighing of competing interests. See Landis v. N. Am. Co.,
299 U.S. 248, 255 (1936). Courts should not enter an indefinite stay absent “a pressing
need.” See id.
The Court agrees that the interests of Plaintiff and the Lawsons would be served
by a limited stay, and finds that Plaintiff’s request for a sixty-day stay is due to be granted.
See, e.g., In re Steven P. Nelson, D.C., P.A., 140 B.R. 814 (Bankr. M.D. Fla. 1992)
(granting a two-month stay of proceedings as to a non-debtor defendant who was the
president, 100% shareholder, and sole executive of a debtor).
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.

The Court’s August 27 Order to Show Cause (Doc. 12) is DISCHARGED.

2.

Plaintiff’s Motion to Stay Proceedings as Against William E. Lawson and
Charlene H. Lawson (Doc. 15) is GRANTED IN PART and DENIED IN
PART.

3

a. To the extent that Plaintiff requests a stay of the proceedings as to the
Lawsons, Plaintiff’ Motion is GRANTED.
b. In all other respects, the motion is DENIED.
3.

This action is STAYED as to Defendants William E. Lawson and Charlene
H. Lawson for sixty (60) days, ending on November 8, 2015.

4.

On or before November 9, 2015, Plaintiff is DIRECTED to provide a status
report regarding Defendants William E. Lawson and Charlene H. Lawson’s
posture in the aforementioned bankruptcy proceedings.

DONE AND ORDERED in Chambers in Orlando, Florida, on September 9, 2015.

Copies:
Counsel of Record

4