Experience Based Learning, Inc., an Illinois Corporation v. The Hanover Insurance Company

Filing 87

MEMORANDUM Opinion and Order; Before the Court are a motion to modify by defendant Hibbs-Hallmark & Company and Robert Monaghan and a motion to quash by plaintiff Experience Based Learning. Dkts. 80, 81. For the following reasons, the defendants moti on to modify 80 is denied, and the plaintiffs motion to quash 81 is granted. A telephonic status is set for July 11, 2019 at 9:00 a.m. By July 8, 2019, counsel shall provide direct dial telephone numbers to the Courts operations specialist, who will initiate the call. (See attachment for full detail.) Signed by the Honorable Iain D. Johnston on 6/24/2019:(yxp, ) Modified on 6/24/2019 (yxp, ).

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
WESTERN DIVISION
EXPERIENCE BASED LEARNING, INC.,
Plaintiff,
v.
THE HANOVER INSURANCE COMPANY,
ET AL.
Defendants.

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No. 17 CV 05133
Magistrate Judge Iain D. Johnston
District Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER
Before the Court are a motion to modify by defendant Hibbs-Hallmark & Company and
Robert Monaghan and a motion to quash by plaintiff Experience Based Learning. Dkts. 80, 81.
For the following reasons, the defendants’ motion to modify [80] is denied, and the plaintiff’s
motion to quash [81] is granted. A telephonic status is set for July 11, 2019 at 9:00 a.m. By July
8, 2019, counsel shall provide direct dial telephone numbers to the Court’s operations specialist,
who will initiate the call.
BACKGROUND
Plaintiff alleged that former defendant Hanover Insurance Company breached the parties’
insurance contract by failing to honor a claim for damage to plaintiff’s trees caused by a beetle
infestation; alternatively, plaintiff alleged breach of contract and professional negligence against
its insurance agents, defendants Hibbs-Hallmark & Company and Robert Monaghan, for failing
to obtain insurance coverage that would have covered the tree damage. Dkts. 44, 45.
At the April 10, 2018 status hearing, the Court directed the parties to file a joint proposed
case management order. As it does in every civil case, the Court provided the parties with a
plethora of warnings about the failure to meet deadlines. For example, in the proposed case
management order, which was signed by defendant’s counsel, the parties are warned of the
following:
These dates will not be amended absent a showing of good cause. The parties
understand that motions for extensions of time should be brought as soon as
possible, but at a minimum before the cut-off date, and a party’s failure to do
so runs the risk that the motion will be denied.
Dkt. 47 at 3 (emphasis in original). Further, the Court told the parties to propose reasonable
deadlines to allow themselves enough time to complete all fact discovery. Additionally, the
Court advised that if the parties had difficulty resolving discovery disputes, they should file a

motion as soon as possible so the Court could keep them on track to meet the discovery
deadlines. After reviewing the parties’ proposed case management order, the Court adopted the
very deadlines the parties had proposed: 26(a)(1) disclosures to be exchanged by May 18, 2018,
amended pleadings by October 19, 2018, fact discovery completed by March 14, 2019, and
expert and dispositive motion deadlines reserved. Dkt. 49.
The parties later exchanged 26(a)(1) disclosures on May 18, 2018. As part of its
disclosures, plaintiff identified Hannover claims adjusters Michael Duggan and Jason Marrero as
possible witnesses with discoverable information. Dkt. 85 Ex. A at 2. Defendants disclosed
Michael Duggan, Jason Marrero, and Hanover insurance underwriter Valarie Garren as witnesses
with possible discoverable information. Id. Ex. B at 2. On November 15, 2018, plaintiff
dismissed Hanover from this suit by stipulation, leaving Hibbs-Hallmark & Company and Robert
Monaghan as the remaining defendants. Dkts. 60, 61.
On January 25, 2019, plaintiff moved for leave to file its Third Amended Complaint,
which dropped all claims against former defendant Hanover and kept the breach of contract and
professional negligence claims against remaining defendants Hibbs-Hallmark and Monaghan.
Dkt. 71. The Court granted the motion at a hearing on January 31, 2019. 1 Dkts. 67, 72.
Defendants’ counsel also indicated at the hearing that she wished to depose three witnesses
located in California and that she foresaw no issues with meeting the impending fact discovery
cutoff date of March 14, 2019. Defendants’ counsel made no mention of any desire to depose
any witnesses identified as Hanover employees. The parties deposed plaintiff’s principal Steve
Gustafson on February 25, 2019 and completed the three California depositions by March 1,
2019. Dkt. 85 at 4. The March 14 fact discovery deadline passed with neither party seeking to
extend the deadline.
Thereafter, during a telephonic status hearing on March 21, 2019, defendants indicated
for the first time that they wished to depose two additional out-of-state fact witnesses and now
former employees of Hanover: 2 specifically, a claims adjuster and an underwriter who worked
for Hanover on the insurance claim at issue in this case. Defendants claimed that these
depositions became necessary after information came to light during Gustafson’s deposition on
February 25, 2019, and that they would need 45 days to complete these depositions. The Court
asked defense counsel why Gustafson was not deposed until two weeks before the end of fact
discovery. Defense counsel replied that scheduling issues and settlement negotiations delayed
Gustafson’s deposition. Plaintiff objected to the oral request for an extension, and the Court
directed defendants to file a written motion to seek leave to take the two depositions. 3
At the hearing, defense counsel indicated she did not object to the motion.
Apparently, the underwriter and claims adjusters have stopped working for Hanover. Dkt. 83 at 1.
3
The Court notes that it is unclear whether defendants seek leave to take two (the underwriter and one
claims adjuster) or three (the underwriter and two claims adjusters) depositions. Defendants indicated
their desire to depose two Hanover witnesses at the March 21 status hearing, and the instant motion seeks
leave to depose only two additional fact witnesses. Dkt. 85 at 1. But in the argument section of
defendants’ brief, they mention their “wish to depose one or both of the [Hanover] claims professionals”
who denied plaintiff’s insurance claim. Id. at 4. Additionally, defendants served subpoenas to three, not
two, Hanover witnesses in anticipation of the Court granting their motion to modify. Dkt. 81 Ex. A.
Regardless, because the Court denies defendants’ motion to modify, it need not address this issue.
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Defendants filed the instant motion to modify on March 28, 2019, seeking 30 days to complete
the depositions. Dkt. 81.
Two weeks later, plaintiff filed a motion to quash. Dkt. 81. According to the motion,
defendants had served subpoenas 4 to both Hanover claims adjusters and the underwriter before
plaintiff responded to defendants’ motion to modify the deadline to take those depositions. 5 Id. at
2. Thus, plaintiff asks the Court to quash the subpoenas because they seek discovery after the
fact discovery deadline in violation of Local Rule 16.1(4).
ANALYSIS
The parties focus their briefs analyzing whether an extension is warranted under Fed. R.
Civ. P. 6(b)(1)(B). 6 However, for the reasons discussed below, the motion to modify is properly
analyzed under Rule 16(b)(4)’s “good cause” standard. Because the Court would deny the
motion to modify under either standard, the Court will address both.
I. Rule 6
Generally, where a party seeks to extend a discovery deadline after it expires, “the court
may, for good cause, extend the time . . . if the party failed to act because of excusable neglect.”
Fed. R. Civ. P. 6(b)(1)(B); McCann v. Cullinan, 11 CV 50125, 2015 LEXIS 91362, at *20–21
(N.D. Ill. July 14, 2015); Naud v. City of Rockford, 9 CV 50074, 2013 U.S. Dist. LEXIS 116078,
at *13 (N.D. Ill. Aug. 16, 2013). The movant bears the burden to prove excusable neglect.
McCann, 2015 U.S. Dist. LEXIS 91362, at *20–21 (internal citations omitted). To determine
whether excusable neglect exists under Rule 6, courts weigh the factors identified by the
Supreme Court in Pioneer Investment Services Co. v. Brunswick Associates, Ltd., 507 U.S. 380
(1993). Raymond v. Ameritech Corp., 442 F.3d 600, 604 (7th Cir. 2006). These factors include
(1) danger of prejudice to the nonmovant, (2) length of delay and its impact on the judicial
proceedings, (3) the reason for the delay, and (4) the movant’s good faith. Id. at 605. Courts also
consider whether a movant was previously dilatory. Blue v. Hartford Life & Accident Ins. Co.,
698 F.3d 587, 593–94 (7th Cir. 2012).
a. Danger of Prejudice to Nonmovant

Plaintiff attached copies of the subpoenas to the motion. Dkt. 81 Ex. A.
Defendants explain in their response that they served these subpoenas in the event the Court granted
their motion “to make sure the potential deponents were at least served with subpoenas as of the date of
this court’s anticipated ruling.” Dkt. 83 at 1.
6
Although the parties’ focus on Rule 6 implies they agree that Rule 6 controls, the Court notes that
parties may stipulate to which set of laws will apply, but they may not stipulate to the meaning or scope
of the law which applies. See Twohy v. First Nat'l Bank of Chi., 758 F.2d 1185, 1190 (7th Cir. 1985)
("Illinois law, as well as Wisconsin law, recognizes the enforceability of choice of law clauses in
contracts, and is similarly silent on the issue of the effectiveness of choice of law stipulations by litigants.
These choice of law stipulations must be distinguished from the clearly invalid stipulations of parties as to
the meaning or scope of the law itself." (citations omitted)).
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Defendants argue plaintiff would not be prejudiced by an additional 30 days of fact
discovery. Dkt. 80 at 4. However, plaintiff would be burdened with the cost of attending out-ofstate depositions scheduled after the close of fact discovery which it otherwise would not need to
incur. See, e.g., Agrigenetics, Inc. v. Pioneer Hi-Bred Int’l, Inc., 1:08-CV-802-TWP-TAB, 2010
U.S. Dist. LEXIS 131812, at *3 (S.D. Ind. Dec. 10, 2010) (noting complicated scheduling issues
associated with taking out-of-state depositions). Additionally, it is doubtful two out-of-state
third-party depositions could be scheduled and completed in 30 days. Thus, this factor weighs
slightly against finding excusable neglect.
b. Length of Delay and Impact on Proceedings
Although defendants briefly argue that a 30-day extension to complete fact discovery is
insignificant, Dkt. 80 at 4, the Court disagrees. Defendants waited a week after fact discovery
closed before orally requesting an extension during the March 21, 2019 status hearing. The
March 21 status hearing also represents the first time defendants expressed a desire to take the
two depositions sought. The time that has passed since fact discovery closed could have been
spent either engaging in expert discovery or drafting dispositive motions. Additionally,
unnecessary delays tend to have “a cascading effect on the rest of the cases and motions pending
in a busy court.” Brown v. Kelly Servs., 16 CV 11152, 2018 U.S. Dist. LEXIS 4089, at *8 (N.D.
Ill. 2018). And nothing precluded defendants from filing a timely motion for an extension as
discussed below. Although the Court has not set the remaining case management deadlines, the
motion to modify has delayed the start of expert discovery and drafting dispositive motions.
Therefore, this factor weighs against finding excusable neglect.
c. Reason for Delay
The movant’s reason for the delay is the most important factor when determining
excusable neglect under Fed. R. Civ. P. 6(b)(1)(B). Knapp v. Evgeros, Inc., 322 F.R.D. 312, 315
(N.D. Ill. 2017). Defendants have given two different reasons for the delay in completing fact
discovery. 7 First, at the March 21, 2019 status hearing, defense counsel indicated that
information elicited during Gustafson’s deposition, which was taken on February 25, 2019,
prompted a new desire to take the two depositions sought here. Second, defendants add a new
reason in their written motion: that plaintiff’s settlement with Hanover removed Hanover’s
representatives from compulsory process for deposition purposes, that defendants previously
sought Hanover’s cooperation with deposing those representatives, and Hanover’s counsel
previously agreed to cooperate, but that on March 14, 2019, Hanover indicated it would not
cooperate. Dkt. 80 at 2, 5. However, neither of these reasons justify extending the expired fact
discovery deadline.
The first reason given by defendants at the March 21, 2019 status hearing is insufficient.
Plaintiff Gustafson’s deposition occurred on February 25, 2019, over two weeks before the fact
discovery deadline of March 14, 2019. If information elicited from Gustafson’s deposition
prompted defendants’ newfound desire to take two more depositions, defendants had ample time,
Shifting justifications are often viewed with a fish eye. See Applebaum v. Milwaukee Metro. Sewerage
Dist., 340 F.3d 573, 579 (7th Cir. 2003) (one can reasonably infer pretext from shifting or inconsistent
explanations).
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over two weeks, to file a motion to ask the court’s leave to extend the fact discovery deadline to
allow them enough time to take the depositions. Defense counsel should have known after
Gustafson’s deposition that they would need more than two weeks to take two additional out-ofstate depositions, and defense counsel identifies no reason why they could not have filed a
motion for an extension before the deadline passed. See Brown, 2018 U.S. Dist. LEXIS 4089, at
*5–6. The intervening period between February 25 and March 14, 2019 was the most opportune
time to seek an extension, yet defendants never timely sought an extension or otherwise raised
the issue with the Court.
Defendants’ second reason is also unavailing. Hanover settled with plaintiff and was
removed from this case by stipulation on November 15, 2019, approximately four months before
the March 14, 2019 fact discovery deadline. Dkt. 61. Defendants claim they requested and
acquired Hanover’s cooperation to take the two depositions sometime before the fact discovery
deadline, but do not identify when these requests were made. Dkt. 80 at 5. Regardless of when
they sought Hanover’s cooperation, defendants do not indicate that they took any other action to
take the depositions or that they were somehow unaware of the existence of the out-of-state
Hanover witnesses at that time. 8 And although Hanover purportedly notified defendants on the
fact discovery cutoff date that they would not cooperate in taking the depositions, id., this fact
cuts against defendants’ attempt to establish excusable neglect. As the March 14, 2019 deadline
approached, the likelihood of completing two out-of-state depositions before the fact discovery
deadline expired diminished, even assuming Hanover cooperated. At some point, defense
counsel should have realized that the depositions could not be completed before the deadline and
that they would need to seek leave from the Court for more time.
However, instead of filing a timely motion, defendants waited a week after the fact
discovery deadline to mention to the Court or opposing counsel any desire to take these
depositions. The Court notes that, assuming Rule 6 applied here, although defendants’ given
reasons may have supported granting a motion to extend if made before the expiration of the fact
discovery deadline, defendants shirked their opportunity to have their request reviewed under the
more lenient “good cause” standard of Fed. R. Civ. P. 6(b)(1)(A) by waiting to request leave
until a week after the deadline had already passed. See McCann, 2015 U.S. Dist. LEXIS 91362,
at *6. Defendants have identified no good reason for their delay; therefore, this factor weighs
against finding excusable neglect.
d. Movant’s Good Faith
Defendants argue that this factor supports granting the motion because they believe that
the desired depositions “will provide necessary, material facts [regarding the reasons Hanover
Indeed, Hanover was a defendant from July 2017 until its dismissal from this case in November 2018,
and the witnesses defendants seek to depose were disclosed in the summer of 2018. See Dkt. 85 Ex. A at
2, Ex. B at 2. Additionally, in the Court’s experience with insurance contract claims, the insurance
company’s claims adjusters and underwriters are generally prime targets of discovery. Defendants would
be hard pressed to argue that they were surprised by the existence of these witnesses and that their
importance came to light only after Hanover was dismissed from the case or during Gustafson’s
deposition. Indeed, defendants never explain how or why information obtained in Gustafson’s deposition
caused the epiphany to take these other depositions.
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originally denied plaintiff’s insurance claim] for their anticipated motion for summary judgment”
and “[b]ecause cases should be decided on their merits . . . .” Dkt. 80 at 4. Plaintiff responds that
defendants’ shifting justifications between the March 21, 2019 status hearing and their instant
motion implies bad faith. Plaintiff also points out that defendants waited to begin scheduling any
depositions until only one month before the fact discovery deadline. Dkt. 85 at 10. However,
there is no indication that defense counsel acted out of ill-will or to cause delay. But there is also
no indication of any attempt to take these depositions at an earlier date, to notify the Court or
plaintiff’s counsel of the desire to take these depositions on or before the March 14, 2019 fact
discovery deadline, or to otherwise seek a timely extension.
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Thus, if the Court were to apply Rule 6, it would deny defendants’ motion to modify. But
as mentioned at the outset, Rule 16, rather than Rule 6, applies here. Regardless, defendants fail
under either standard.
II. Rule 16
Rule 6 is “a gap filler that allows for extensions when other more specific rules do not
apply.” McCann, 11 CV 50125, at *28. And when multiple Federal Rules of Civil Procedure
apply to any given circumstance, federal courts should apply the more specific rule. Id. at *28–
29 (collecting cases and examples). 9 Once a court enters a specific scheduling order with its own
deadlines, that schedule “may be modified only for good cause and with the judge’s consent.”
Fed. R. Civ. P. 16(b)(4); Id. at *29; see also 3 JAMES WM MOORE ET AL., MOORE’S FEDERAL
PRACTICE § 16.37 [3] (3d ed. 2019) (“[S]cheduling orders may not be modified except on a
showing of good cause . . . .”) (citing Fed. R. Civ. P. 16(b)(4)). In this case, the Court entered a
scheduling order, Dkt. 49, and the motion seeks to modify that scheduling order. Thus, the
motion to modify is properly analyzed under the rule that specifically contemplates schedule
modification, Rule 16(b)(4). 10 Johnson v. City of Rockford, 15 CV 50064–5, 2016 U.S. Dist.
LEXIS 182433, at *16 (N.D. Ill. Dec. 27, 2016); McCann, 11 CV 50125, at *29.
As with extensions of time under Rule 6(b), the proper method to seek extensions of
discovery deadlines under Rule 16(b)(4) is to timely file a motion before the deadline passes.
McCann, 2015 U.S. Dist. LEXIS 91362, at *30. Additionally, Rule 16(b)(4)’s “good cause”
As another example, Rule 4(m) requires a plaintiff to serve process on defendants in any civil action
within 90 days after a complaint is filed. Fed. R. Civ. P. 4(m). If a plaintiff moves after that 90-day
deadline for more time to serve process, the plaintiff must meet Rule 4(m)’s “good cause” standard, not
Rule 6(b)(1)(B)’s “excusable neglect” standard, because Rule 4(m) specifically addresses service of
process. See United States v. McLaughlin, 470 F.3d 698, 700 (7th Cir. 2006); see also 1 JAMES WM
MOORE ET AL., MOORE’S FEDERAL PRACTICE § 6.06[4] (3d ed. 2019) (“This more specific provision of
Rule 4(m) controls the issue, and a demonstration of excusable neglect is not required.”).
10
The Seventh Circuit’s decision in Hassebrock v. Bernhoft, 815 F.3d 334, 341 (7th Cir. 2016) is
distinguishable. There, although the Seventh Circuit applied Rule 6, the parties did not discuss and the
Seventh Circuit did not address whether Rule 6 or Rule 16 applied. Therefore, the Hassebrock court’s
reliance on Rule 6 is not controlling. United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 38
(1952).
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requirement is a more demanding standard than Rule 6(b)(1)(B)’s “excusable neglect”
requirement. Id. at *31 (collecting cases).
The primary consideration when making a good-cause determination is the diligence of
the party seeking to extend the deadline. Alioto v. Town of Lisbon, 651 F.3d 715, 720 (7th Cir.
2011). “Lack of undue prejudice or surprise to the nonmoving party is insufficient to establish
good cause under Rule 16(b).” Downing v. Abbott Labs., No. 15 CV 05921, 2017 U.S. Dist.
LEXIS 168252, at *10 (N.D. Ill. Oct. 11, 2017). The movant bears the burden to establish its
diligence under Rule 16. McCann, 2015 U.S. Dist. LEXIS 91362, at *33.
Defendants have not shown diligence in seeking this schedule modification. At the status
hearing on January 31, 2019, defendants stated their intent to depose three California witnesses
and that they would have no issue meeting the March 14, 2019 fact discovery deadline.
Defendants otherwise made no mention of their desire to depose any Hanover witnesses to the
Court or plaintiff at any point before the March 21, 2019 status conference. Though defendants
at some point discussed the desired depositions with Hanover, there is no indication of when
these discussions occurred or that defendants took any other action to depose these witnesses.
Additionally, as discussed above, defendants had ample time to file a motion requesting
an extension on or before the March 14, 2019 cutoff date, and defendants offer no reason why
they were prevented from doing so. Assuming Gustafson’s deposition caused defendants’ desire
to depose the Hanover witnesses, defendants had over two weeks—from February 25, 2019 to
March 14, 2019—to ask to extend the fact discovery deadline. And assuming defendants were
relying on Hanover’s purported cooperation to take the depositions, Hanover was dismissed from
this case on November 15, 2018, approximately four months before the March 14 fact discovery
deadline. As the deadline approached, it became less feasible and then impossible to timely take
two out-of-state depositions, particularly when there is no indication anything was ever done to
take the depositions.
Ultimately, defendants requested an extension of time a week after the deadline had
passed. Diligent counsel would have brought the apparent need for more time to conduct
discovery to the Court’s attention before the discovery deadline. This is particularly true in light
of the Court’s multiple warnings to counsel at the outset of the case and throughout. The Court
recognizes the importance of deciding cases on the merits, but defendants were given the
opportunity to depose these individuals but failed to do so in a timely manner. Moreover,
defendants have presented no evidence that the absence of these individual’s deposition
testimony would prevent this case from being decided on the merits. Lots of cases are properly
decided on the merits without every single possible witness being deposed. Indeed, federal
criminal cases, in which liberty is at stake, are nearly always decided without a single deposition.
Therefore, because defendants’ counsel were not diligent in seeking a fact discovery deadline
modification, they have failed to show good cause under Rule 16(b)(4) to justify such a
modification.
Because the defendants have failed to show good cause under Rule 16(b)(4), or even
excusable neglect under Rule 6, the Court denies their motion to modify. However, defendants

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are reminded that nothing precludes them from interviewing third-party witnesses or filing sworn
affidavits in lieu of depositions.
CONCLUSION
For the foregoing reasons, the Court denies defendants’ motion to modify [80] and grants
plaintiff’s motion to quash [81]. A telephonic status is set for July 11, 2019 at 9:00 a.m. The
parties should be prepared to discuss expert discovery and dispositive motions.

Date: June 24, 2019

By:

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__________________________
Iain D. Johnston
United States Magistrate Judge