AKH Company, Inc. v. Universal Underwriters Insurance Company

Filing 75

MEMORANDUM AND ORDER: AKH Company, Inc.'s Motion for Partial Summary Judgment 7 is denied. Universal Underwriters Insurance Company's Motion to Bifurcate 68 is denied, and the Court makes no finding pursuant to 28 U.S.C. § 1292(b) with respect to this order. UUIC's Motion to Stay the Deadline for Universal Underwriters Insurance Company to Respond to AKH Company, Inc.'s Motion for Partial Summary Judgment 21 is denied as moot. UUIC's Motion to Strike the Decla rations of Michael Schaeper and David Gauntlett filed in Support of Motion for Partial Summary Judgment 40 ; UUIC's Motion for Leave to File Sur-reply in Opposition to AKH Company, Inc.'s Motion for Partial Summary Judgment 60 ; and UUIC 's Motion to Strike the Supplemental Declaration of Michael Schaeper Filed in Support of Motion for Partial Summary Judgment 61 are denied. AKH Company's Request for Judicial Notice in Opposition to Universal's Motion to Strike 51 ; Plaintiff AKH Company's Request for Judicial Notice in Support of its Motion for Partial Summary Judgment 54 ; and SEALED Plaintiff AKH Companys Second Request for Judicial Notice in Support of its Motion for Partial Summary Judgment 59 are granted. Signed by District Judge Julie A. Robinson on 7/9/2013. (ms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
AKH COMPANY, INC.,

)
)
Plaintiff/Counter-Defendant,
)
)
v.
)
)
UNIVERSAL UNDERWRITERS
)
INSURANCE COMPANY,
)
)
Defendant/Counter-Claimant.
)
____________________________________)

CIVIL ACTION
No. 13-2003-JAR

MEMORANDUM AND ORDER
This case comes before the Court on Plaintiff AKH Company, Inc.’s Motion for Partial
Summary Judgment (Doc. 7) and on Defendant Universal Underwriters Insurance Company’s
Motion to Bifurcate (Doc. 68). The motions are fully briefed, and the Court is prepared to rule. For
the reasons explained in detail below, the Court denies both motions.1
I.

Standards
A.

Summary Judgment

Summary judgment is appropriate if the moving party demonstrates that there is “no genuine
issue as to any material fact” and that it is “entitled to judgment as a matter of law.”2 In applying
this standard, the court views the evidence and all reasonable inferences therefrom in the light most
favorable to the nonmoving party.3 “There is no genuine issue of material fact unless the evidence,

1

The Court also rules on a number of motions, filed by both parties, which relate to Plaintiff’s motion for partial
summary judgment.
2

Fed. R. Civ. P. 56(a).

3

City of Herriman v. Bell, 590 F.3d 1176, 1181 (10th Cir. 2010).

1

construed in the light most favorable to the nonmoving party, is such that a reasonable jury could
return a verdict for the nonmoving party.”4 A fact is “material” if, under the applicable substantive
law, it is “essential to the proper disposition of the claim.”5 An issue of fact is “genuine” if “‘the
evidence is such that a reasonable jury could return a verdict for the non-moving party.’”6
The moving party initially must show the absence of a genuine issue of material fact and
entitlement to judgment as a matter of law.7 In attempting to meet this standard, a movant that does
not bear the ultimate burden of persuasion at trial need not negate the other party’s claim; rather, the
movant need simply point out to the court a lack of evidence for the other party on an essential
element of that party’s claim.8
Once the movant has met this initial burden, the burden shifts to the nonmoving party to “set
forth specific facts showing that there is a genuine issue for trial.”9 The nonmoving party may not
simply rest upon its pleadings to satisfy its burden.10 Rather, the nonmoving party must “set forth
specific facts that would be admissible in evidence in the event of trial from which a rational trier

4

Bones v. Honeywell Int’l, Inc., 366 F.3d 869, 875 (10th Cir. 2004).

5

Wright ex rel. Trust Co. of Kan. v. Abbott Labs., Inc., 259 F.3d 1226, 1231–32 (10th Cir. 2001) (citing Adler
v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998)).
6

Thomas v. Metro. Life Ins. Co., 631 F.3d 1153, 1160 (10th Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986)).
7

Spaulding v. United Transp. Union, 279 F.3d 901, 904 (10th Cir. 2002) (citing Celotex Corp. v. Catrett, 477
U.S. 317, 322–23 (1986)).
8

Adams v. Am. Guar. & Liab. Ins. Co., 233 F.3d 1242, 1246 (10th Cir. 2000) (citing Adler, 144 F.3d at 671);
see also Kannady v. City of Kiowa, 590 F.3d 1161, 1169 (10th Cir. 2010).
9

Anderson, 477 U.S. at 256; Celotex, 477 U.S. at 324; Spaulding, 279 F.3d at 904 (citing Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
10

Anderson, 477 U.S. at 256; accord Eck v. Parke, Davis & Co., 256 F.3d 1013, 1017 (10th Cir. 2001).

2

of fact could find for the nonmovant.”11 To accomplish this, the facts “must be identified by
reference to an affidavit, a deposition transcript, or a specific exhibit incorporated therein.”12 Rule
56(c)(4) provides that opposing affidavits must be made on personal knowledge and shall set forth
such facts as would be admissible in evidence.13 The non-moving party cannot avoid summary
judgment by repeating conclusory opinions, allegations unsupported by specific facts, or
speculation.14
Finally, summary judgment is not a “disfavored procedural shortcut”; on the contrary, it is
an important procedure “designed to secure the just, speedy and inexpensive determination of every
action.”15 In responding to a motion for summary judgment, “a party cannot rest on ignorance of
facts, on speculation, or on suspicion and may not escape summary judgment in the mere hope that
something will turn up at trial.”16
B.

Bifurcation

Courts have the discretion to order a separate trial of one or more distinct issues or claims
“for convenience, to avoid prejudice, or to expedite and economize.”17 “While separation of issues
for trial is not to be routinely ordered, it is important that it be encouraged where experience has

11

Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1197–98 (10th Cir. 2000) (quoting Adler, 144 F.3d at 671);
see Kannady, 590 F.3d at 1169.
12

Adams, 233 F.3d at 1246.

13

Fed. R. Civ. P. 56(c)(4).

14

Id.; Argo v. Blue Cross & Blue Shield of Kan., Inc., 452 F.3d 1193, 1199 (10th Cir. 2006) (citation omitted).

15

Celotex, 477 U.S. at 327 (quoting Fed. R. Civ. P. 1).

16

Conaway v. Smith, 853 F.2d 789, 794 (10th Cir. 1988).

17

Fed. R. Civ. P. 42(b).

3

demonstrated its worth.”18 A court should not order bifurcation if the issues are not clearly separable
or if doing so would be unfair or prejudicial to a party.19
II.

Uncontroverted Facts
The following facts are either uncontroverted or taken in the light most favorable to

Defendant.
Universal issued insurance policy number 268140 to AKH for the coverage period of May
1, 2007 to May 1, 2008. The policy was renewed for five consecutive one-year periods through May
1, 2013. The policy’s insuring agreement for Unicover V “Garage” Coverage Part 500 includes
coverage for liability for “DAMAGES” because of “INJURY.” Those terms are defined in relevant
part as follows:
“DAMAGES” means amounts awardable by a court of law.
“INJURY” means, with respect to: . . .
Group 4 – plagiarism, misappropriation of advertising ideas or style, infringement
of copyright, title, slogan or trademark.
The policy’s insuring agreement for Unicover V “Umbrella” Coverage Part 980 also
provides coverage for liability for “DAMAGES” because of “INJURY” and employs the same
definitions. The policy also includes certain exclusions, including the following:
EXCLUSIONS – This insurance does not apply to:

18

Fed. R. Civ. P. 42(b) advisory committee's note (quoted in Angelo v. Armstrong World Indus., Inc., 11 F.3d
957, 964 (10th Cir. 1993)).
19

Angelo, 11 F.3d at 964.

4

(b) any act committed by or at the direction of the INSURED with intent to cause
harm.
*

*

*

(m) INJURY, as defined in Groups (3) and (4) if the first injurious offense was
committed prior to the Coverage Part period.
Finally, the policy includes the following cooperation clause:
If there is an OCCURRENCE, the INSURED is sued, or a claim is made against the
INSURED:
*

*

*

(3) Each INSURED must cooperate and assist US in the investigation, settlement,
defense, enforcement of contribution or indemnification. . . .20
Although the parties agree that the policy says what it says–as they must because both sides
attached a copy of the policy–they agree on virtually no other facts surrounding the policy’s making
or performance. For example, UUIC asserts that in April of 2007 its account executive met twice
with AKH’s insurance broker at AKH’s California headquarters to discuss proposed coverage; AKH
denies that a broker acted on its behalf in negotiating and purchasing the policy. UUIC asserts that
its account executive hand-delivered to AKH’s headquarters both the original policy in 2007 and
the first renewal in 2008; AKH contends that it received both in the mail from UUIC’s Kansas
office. UUIC asserts that from May of 2007 through December of 2008, AKH mailed its premium
payments to UUIC in California; AKH contends it mailed those payments to Kansas.
On May 14, 2010, the Reinalt-Thomas Corporation d/b/a Discount Tire; Southern California
Tire Company, Inc.; and Bruce T. Halle (collectively, “R-T”) sued AKH in the District of Arizona
(the “R-T lawsuit”). The underlying dispute between R-T and AKH concerns the use of the

20

The capitalized words are also defined, but those definitions are not at issue.

5

“Discount Tire” mark on the internet. In 1991 those parties had settled a trademark dispute
concerning their brick-and-mortar operations, but with the advent of the internet they found
themselves at odds over AKH’s use of an internet domain to promote its nationwide mail-order
sales. R-T alleged that it was the first to have an internet presence when it created and registered
the domain name “tires.com” on April 30, 1995, and that AKH still had no such presence when on
May 13, 1997, R-T created and registered the additional domains “discounttire.com,”
“americastire.com,” and “discounttiredirect.com.” R-T further alleged that since December of 1996,
consumers had been able to use one or more of its websites to search online for and purchase tires
and wheels directly from R-T and its wholly-owned subsidiary, Discount Tire Direct. On July 20,
1997, AKH created and registered the domain “discounttires.com,” which R-T alleged was simply
the plural form of its own “disccounttire.com” domain and “DISCOUNT TIRE” mark.
Ultimately, the dispute came to a head with the May 14, 2010 filing of the R-T lawsuit. The
eight-count amended complaint sounds in trademark infringement and other related causes of action.
Five months later, AKH brought suit against R-T in the Central District of California (“the AKH
lawsuit”), alleging that R-T breached the 1991 settlement agreement between the parties. On AKH’s
motion, the R-T lawsuit was transferred to the Central District of California and the two were
consolidated (“the consolidated lawsuits”). In December of 2012, after extensive litigation, the
consolidated lawsuits were settled. UUIC asserts that R-T and AKH engaged in settlement
negotiations between late September and November 20, 2012, but that AKH did not notify UUIC
of these discussions until R-T had presented AKH with a settlement demand. AKH asked UUIC for
settlement authority, and UUIC authorized a $5 million payment on behalf of AKH to settle the R-T
lawsuit. In the second half of December, R-T and AKH settled the consolidated lawsuits. R-T

6

accepted UUIC’s $5 million offer. Simultaneously, R-T agreed to pay $13 million to AKH to settle
the AKH lawsuit.
In a letter dated December 28, 2012, UUIC stated that AKH would receive the $5 million
settlement check by December 31. UUIC repeated that the payment was subject to a reservation of
its right to file a declaratory relief action against AKH to seek reimbursement of the settlement
contribution, as well as a reservation of its right to seek reimbursement and defense fees and costs
it paid for claims never potentially covered and pre-judgment interest. On January 2, 2013, AKH
filed the instant action.
III.

Summary Judgment Discussion
Two weeks after serving its complaint and approximately one week before Defendant’s

answer was due, AKH filed this motion for partial summary judgment. The parties have not made
their initial disclosures and no discovery is underway. The factual record is therefore truncated.
Nonetheless, AKH seeks partial summary judgment that: (1) UUIC has duties to defend and settle
the consolidated lawsuits under the policy dated May 1, 2008 to May 1, 2009; (2) no exclusion bars
UUIC’s duties to defend or settle the consolidated lawsuits; and (3) UUIC has no right to
reimbursement of any of its expenses in the consolidated lawsuits despite its stated reservation of
rights.
A.

Duties to defend and settle

AKH contends that UUIC’s duties to defend and settle the consolidated lawsuits are capable
of declaration as a matter of law. AKH asserts that the law of Kansas should apply to UUIC’s duties
because there is no conflict between the laws of Kansas and California concerning the general

7

propositions regarding an insurer’s duty to defend and indemnify.21 UUIC does not dispute that the
law of the state where the insurance contract is made controls.22
Throughout its memorandum in support of its motion for partial summary judgment, AKH
speaks of UUIC’s duties vis-a-vis the consolidated lawsuits, which it refers to collectively without
distinguishing between the two. In the R-T lawsuit, AKH was the defendant. In the AKH lawsuit,
AKH was the plaintiff. By its joint reference, however, AKH is arguing that UUIC owes it the same
duties to defend and settle with respect to both lawsuits.
As UUIC points out, neither Kansas nor California law require an insurer to pay for an
insured’s offensive lawsuit as part of its duty to defend. AKH does not directly respond, but instead
asserts that UUIC is trying to confuse the issue of its duty to defend with the scope of the defense
it was required to provide.
At some point, this case may be in a posture whereby the Court is called upon to allocate fees
between covered and non-covered claims, or to determine whether the claims of the two suits were
inextricably intertwined such that no allocation is possible. AKH cites cases in which courts have
made these determinations as examples of secondary issues that the Court can consider at a later
time.23 For now, though, AKH continues to assert that UUIC has a duty to defend AKH in both

21

AKH cites Shutts v. Phillips Petroleum Co., 240 Kan. 764, 767, 732 P.2d 1286, 1291 (1987) (“[I]f the law
of Kansas was not in conflict with any of the other jurisdictions connected to the suit, then there would be no injury in
applying the law of Kansas.”).
22

Safeco Ins. Co. of Am. v. Allen, 262 Kan. 811, 822 , 941 P.2d 1365, 1372 (1997); see also Moses v. Halstead,
581 F.3d 1248, 1252 (10th Cir. 2009) (when question raised by contractual dispute goes to substance of obligation,
Kansas courts apply lex loci contractus, which calls for application of law of state where contract made; if manner and
method of performance is at issue, place of performance likely applies).
23

Doc. 57 at 37 n. 74 (citing Foxfire, Inc. v. New Hampshire Ins. Co., Nos. C-91-2940 MPH, C-91-3464 MHP,
1994 WL 361815 (N.D. Cal. July 1, 1994) and Ultra Coachbuilders, Inc. v. Gen. Sec. Ins. Co., 229 F. Supp. 2d 284
(continued...)

8

actions.24 On the state of the record, the Court cannot make that determination as a matter of law.
For that reason, the Court will not grant summary judgment on UUIC’s duties to defend both
lawsuits.
In addition, AKH specifically seeks summary judgment that UUIC had duties to defend and
settle the consolidated lawsuits under the May 1, 2008 to May 1, 2009 policy. AKH asserts that any
injury it may have caused to R-T arose after AKH changed its web presence in August of 2008 by
creating two separate websites to segregate its Southern California store sales from its nationwide
sales. UUIC points to the allegations of R-T’s Second Amended Complaint in which R-T alleged
that AKH’s injurious conduct began in October of 2007, when AKH began using discounttires.com
for its own online platform to sell wheels and tires online to consumers.25 As the parties’
submissions reveal, material facts are at issue with respect to when AKH’s allegedly infringing
conduct began. For this additional reason, the Court will not grant summary judgment on UUIC’s
duties to defend and settle.
B.

Policy Exclusions

AKH argues that it is entitled to judgment as a matter of law that the UUIC policy contains
no exclusion which would bar UUIC’s defense of AKH. UUIC contends that the prior publication,
intentional conduct, and cooperation clauses of the policy all apply, as well as the willful conduct
exclusion created by California Insurance Code Section 533. Although AKH has the burden to

23

(...continued)
(S.D.N.Y. 2002)).
24

Doc. 57 at 37.

25

Doc. 9, Ex. 4, at ¶ 57.

9

establish that a claim falls within the general coverage provisions of the policy, UUIC has the burden
to establish facts which bring the case within an exclusion.26
UUIC sets forth a number of exclusions, but the parties primarily focus their attention on
prior publication, which is exclusion (m) in both the Garage and Umbrella coverage parts of the
policy. The exclusion states as follows:
EXCLUSIONS – This insurance does not apply to:
*

*

*

(m) INJURY, . . . if the first injurious offense was committed prior to the Coverage
Part period.
The defined term “INJURY” includes trademark infringement, which R-T alleged in its second
amended complaint.

AKH asserts that R-T must have been injured by AKH’s trademark

infringement before the May 1, 2007 inception of UUIC’s policy for the exclusion to apply. That
is not necessarily so. In Kim Seng Company v. Great American Insurance Co. of New York, 179 Cal.
App. 4th 1030 (2009), a case which the parties discuss at length, the court held that a policy’s prior
publication exclusion applied to a trademark infringement claim because the infringer used the mark
before the policy period and then continued to use it in various iterations during the policy period.27
The court rejected the argument that marks adopted by the infringing party during the policy period
which had different words or logos than the marks used before the policy period–different because
they had more words–were not subject to the prior publication exclusion. The court wrote the
following:
But the test for the prior publication exclusion is whether the claimed actionable
26

Westchester Fire Ins. Co. v. City of Pittsburg, 768 F. Supp. 1463, 1468 (D. Kan. 1991).

27

179 Cal. App. 4th at 1042.

10

language or mark used during the policy period is substantially similar to the
language or mark used prior to the policy period. We do not deal with whether there
was infringement, but rather whether there is coverage.28
The language of Kim Seng does not support AKH’s argument that the prior publication
exclusion is inapplicable under the 2008-09 policy year. Recognizing that the Court may so
conclude, AKH alternatively argues that the Court should find coverage in the inaugural policy year,
2007-08, because “the AKH website was launched in October 2007, creating an entirely new use
for the phrase ‘discounttires.com’ and a new potential source of infringement.”29 AKH does not
dispute that the domain name was unchanged, which is the relevant inquiry under Kim Seng.
Moreover, as the Court explains in the following subsection, a determination as to which
policy year applies may have a dispositive effect on a contested choice of law issue. The facts
surrounding where the contract was made and performed may be different as between 2007 and
2008, because how the policy was delivered, where AKH made its payments, servicing the policy,
and other relevant details may have changed from one year to the next. Accordingly, the Court
denies AKH’s motion for partial summary judgment that no exclusion barred UUIC’s duties to
defend or settle.
C.

Right to reimbursement

AKH’s final argument is that Universal has no right as a matter of law to seek reimbursement
of any of its expenses, despite having reserved its right to do so, because the policy provides no such
right and because Kansas law applies to this action and Kansas does not recognize a right of

28

Id. at 1043.

29

Doc. 57 at 28.

11

reimbursement. UUIC asserts that California law applies, and under that state’s law an insurer is
entitled to obtain reimbursement of defense expenses paid for claims that are not potentially covered
by its policy, if the insurer reserves its right to do so, even absent an express provision in the policy
allowing reimbursement.30
Clearly, a choice of law decision is a necessary predicate to determining whether UUIC may
assert a claim for reimbursement. Not surprisingly, UUIC argues in its opposition to the instant
motion, as well as in other filings,31 that the Court should first decide which state’s law applies to
this insurance coverage dispute. As UUIC frames the argument, its right to reimbursement could
arise from policy exclusions as well as from lack of coverage. UUIC points to this as an additional
reason for the Court to decide choice of law before considering the issues upon which AKH seeks
partial summary judgment. This is an indication of how this case, in its current posture, is circular:
if the Court were to decide choice of law first, many other factual issues may fall by the wayside.
For instance, if the Court were to determine that Kansas law applies, there may be no need to
investigate facts relevant to an insurer’s right to reimbursement. On the other hand, if the Court first
focuses on the underlying facts of alleged trademark infringement in the R-T lawsuit to determine
which (if any) policy year applies, that could have a dispositive effect on choice of law because the
state where the contract was made and performed may be different as between the first and second
years of the policy.

30

E.g., Scottsdale Ins. Co. v. MV Transp., 36 Cal. 4th 643, 659-60, 115 P.3d 460, 469 (2005) (“California law
clearly allows insurers to be reimbursed for attorney’s fees and other expenses paid in defending insureds against claims
for which there was no obligation to defend.”).
31

Indeed, UUIC has most recently filed a motion to bifurcate the issue of choice of law for discovery and for
trial (Doc. 67), in which it explicitly asks the Court to allow discovery on the making and performance of the policy and
to then determine whether the law of Kansas or the law of California should apply as to that issue. Issues of liability
would follow. The Court considers and rules on that motion in this Memorandum and Order.

12

AKH disagrees that the Court has any reason to apply conflict of law analysis to any issue
other than the right to reimbursement.

The conflict of law with respect to an insurer’s

reimbursement right is that California recognizes the right, and to date Kansas does not.32 UUIC has
repeatedly reserved this right, challenging AKH’s coverage based on: the dates of the allegedly
infringing conduct, which UUIC asserts preceded the policy’s existence or at least preceded the
2008-09 policy year; the fact that the R-T lawsuit included a breach of contract claim which the
policy does not cover; an exclusion in the policy for “prior publication,” which excludes coverage
if the alleged trademark infringement began before AKH purchased the policy on May 1, 2007; an
exclusion for intentional conduct, which R-T asserted AKH engaged in; AKH causing loss to R-T
through willful conduct, as to which California Insurance Code Section 533 bars coverage; and
AKH’s alleged violation of the policy’s cooperation clause which precluded UUIC from
participating in settlement negotiations between AKH and R-T because AKH did not tell UUIC such
negotiations were ongoing, and once UUIC did learn of the talks and received a settlement demand,
UUIC was not afforded a reasonable amount of time to evaluate R-T’s demand.
Because this is a diversity action and Kansas is the forum state, the substantive laws of
Kansas will apply, including its choice of law rules.33 If a conflict of laws analysis is necessary, the
parties agree that the Court should apply the law of the state where the contract is made.34 At this
32

AKH originally agreed with UUIC’s position that California law allows an insurer to seek reimbursement for
defense costs for claims that are not potentially covered, but that Kansas would likely reject such reimbursement rights,
“thus creating a conflict.” Doc. 8 at 18. Most recently, however, AKH has shied away from identifying a conflict,
saying instead that there is no basis for UUIC to presume that Kansas would not permit reimbursement or that California
would. Doc. 70 at 6-7.
33

Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1169 (10th Cir. 2010).

34

The parties addressed this issue in greater detail in their briefs addressing UUIC’s motion to transfer. Doc.
18 at 24; Doc. 25 at 25. See Moses v. Halstead, 581 F.3d 1248, 1252 (10th Cir. 2009) (when question raised by
(continued...)

13

point, material facts relating to the making and performance of the contract are at issue, thereby
precluding a pronouncement as to which state’s law applies. And if it is premature to know which
state’s law applies, then the Court is likewise unable to determine as a matter of law whether UUIC
is entitled to pursue a right of reimbursement. Accordingly, the Court denies AKH’s motion for
partial summary judgment on the issue of right to reimbursement.
IV.

Motion to Bifurcate
In several of its filings, UUIC urges the Court to engage in choice of law analysis before

considering any other issues in this case. After the Court denied UUIC’s motion to transfer,35 UUIC
formally moved for an order bifurcating the issue of choice of law for discovery and for trial.36
(Doc. 67). UUIC contends that separating this issue for discovery and trial will greatly expedite and
economize future proceedings. AKH opposes the motion, arguing that UUIC has not demonstrated
that an actual conflict exists which would require a choice of law analysis. In its reply, UUIC points
out that its motion is limited to seeking a choice of law decision on the making and performance of
the policy.
The Court concludes that UUIC has not demonstrated that bifurcation would create
convenience, avoid prejudice, expedite, or economize the proceedings in this case. As the Court has
34

(...continued)
contractual dispute goes to substance of obligation, Kansas courts apply lex loci contractus, which calls for application
of law of state where contract made; if manner and method of performance is at issue, place of performance likely
applies). They address it further, including whether the location of the contract’s performance is relevant, in their briefs
on UUIC’s motion to bifurcate. Docs. 68, 70, 71.
35

See Memorandum and Order (Doc. 66).

36

UUIC moves pursuant to Fed. R. Civ. P. 26(d) for bifurcation of discovery and Fed. R. Civ. P. 42(b) for
bifurcation for trial.

14

discussed throughout this order, the issue of whether UUIC has a right of reimbursement is not
easily separated from other issues. Moreover, the Court observes that the parties have taken
inconsistent positions at various points throughout their multiple motions and lengthy briefs,
seemingly tailoring their positions for the sake of expediency. The Court is therefore reluctant to
shape these proceedings in a manner that could allow for even more selective posturing.
The Court recognizes that because AKH’s summary judgment motion was filed on the heels
of service of process and has been pending, the parties do not have a scheduling order and have not
engaged in case management discussions with Magistrate Judge Gale. The Court’s denial of
UUIC’s motion to bifurcate with respect to discovery is therefore without prejudice, as the parties
will appropriately look to Magistrate Judge Gale’s rulings throughout his supervision of the case.
Finally, UUIC includes in its motion to bifurcate a request that, if the Court denies its motion
but makes a choice of law determination, the Court make a finding pursuant to 28 U.S.C. § 1292(b)
so that the Court of Appeals would have discretion to grant an immediate appeal. The Court has
made no choice of law determination so the Court considers this request moot.
IT IS THEREFORE ORDERED BY THE COURT that AKH Company, Inc.’s Motion
for Partial Summary Judgment (Doc. 7) is denied.
IT IS FURTHER ORDERED BY THE COURT that Universal Underwriters Insurance
Company’s Motion to Bifurcate (Doc. 68) is denied, and the Court makes no finding pursuant to 28
U.S.C. § 1292(b) with respect to this order.
IT IS FURTHER ORDERED BY THE COURT that UUIC’s Motion to Stay the Deadline

15

for Universal Underwriters Insurance Company to Respond to AKH Company, Inc.’s Motion for
Partial Summary Judgment (Doc. 21) is denied as moot.
IT IS FURTHER ORDERED BY THE COURT that UUIC’s Motion to Strike the
Declarations of Michael Schaeper and David Gauntlett filed in Support of Motion for Partial
Summary Judgment (Doc. 40); UUIC’s Motion for Leave to File Sur-reply in Opposition to AKH
Company, Inc.’s Motion for Partial Summary Judgment (Doc. 60); and UUIC’s Motion to Strike the
Supplemental Declaration of Michael Schaeper Filed in Support of Motion for Partial Summary
Judgment (Doc. 61) are denied.
IT IS FURTHER ORDERED BY THE COURT that AKH Company’s Request for
Judicial Notice in Opposition to Universal’s Motion to Strike (Doc. 51); Plaintiff AKH Company’s
Request for Judicial Notice in Support of its Motion for Partial Summary Judgment (Doc. 54); and
SEALED Plaintiff AKH Company’s Second Request for Judicial Notice in Support of its Motion
for Partial Summary Judgment (Doc. 59) are granted.
IT IS SO ORDERED.
Dated: July 9, 2013
S/ Julie A. Robinson
JULIE A. ROBINSON
UNITED STATES DISTRICT JUDGE

16