Gustafson et al v. Travel Guard Group, Inc. et al

Filing 50

MEMORANDUM AND ORDER granting 46 Motion to Stay Pending Determination of Defendants' Motions to Dismiss and Strike. Signed by Magistrate Judge Kenneth G. Gale on 3/31/21. (aw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
PAUL and DEBRA GUSTAFSON, et al.,

)
)
Plaintiffs,
)
)
v.
)
)
TRAVEL GUARD GROUP, INC., et al., )
)
Defendants.
)
____________________________________)

Case No.: 20-2272-KHV-KGG

MEMORANDUM & ORDER GRANTING MOTION TO STAY
Now before the Court is Defendants’ “Motion to Stay Pending
Determination of Defendants’ Motions to Dismiss and Strike.” (Doc. 46.) Having
reviewed the submissions of the parties, Defendants’ motion is GRANTED.
FACTUAL BACKGROUND
Plaintiffs filed the present class action on May 29, 2020. (Doc. 1.) Their
Amended Complaint was filed on November 13, 2020. (Doc. 14.) The case seeks
restitution, declaratory relief and statutory damages against Defendants “arising
from the uniform practice and policy of Defendants in refusing to refund and return
unearned insurance premiums and other amounts to their policyholders when
planned travel that Defendants insured under separate coverages is canceled before
departure, and thus, will not occur.” (Doc. 14, at 1-2.)

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Plaintiffs allege the District of Kansas has original jurisdiction over their
claims, both individually and on behalf of the policyholder Class as hereinafter
defined pursuant to 28 U.S.C. § 1332, as amended by the Class Action Fairness
Act of 2005. (Id., at 5.) Plaintiffs allege that subject matter jurisdiction is proper
because “(1) the matter in controversy is reasonably expected to exceed the sum or
value of $5,000,000, exclusive of interest and costs; (2) there are more than 100
members of the Class; (3) at least one member of the Class is diverse from
Defendants; and (4) no Defendant is a government entity.” (Id., at 5-6.) Plaintiffs
further allege that personal jurisdiction is proper because Defendants
have purposefully availed themselves of the privilege of
conducting business within the state of Kansas and have
each submitted to the jurisdiction of the courts of this
state for the claims for relief that Plaintiffs are asserting
because the stated claims for relief arise from the acts of
Defendants, individually or through an agent or
instrumentality, by: (a) contracting to insure Plaintiffs
and other persons and entities located in Kansas at the
time of contracting, (b) entering into express or implied
contracts, by mail or otherwise, with Plaintiffs and other
residents of Kansas, to be performed in whole or in part
in this state, and (c) otherwise transacting business,
committing tortious acts, and causing injury to Plaintiffs
and other persons in this state while engaged in
solicitation or service activities in Kansas, as alleged
herein.
(Id., at 6.)
Defendants filed their Motion to Dismiss on December 17, 2020. (Doc. 15.)
The motion argues that the Court lacks subject matter jurisdiction pursuant to
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Article III and their claims are moot because there is no injury as Plaintiff’s
premiums have been refunded. (Doc. 16, at 15-17.) Defendants argue that the
dismissal should be with prejudice. (Id., at 17-18.) Defendants also argue that
Plaintiff’s have failed to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). (See
generally id., at 18-25.)
Concurrently with the Motion to Dismiss, Defendants also filed a Motion to
Strike the class allegations in the Amended Complaint. (Doc. 17.) That motion
generally argues that 1) Plaintiff’s cannot satisfy the typicality, adequacy,
predominance, and superiority requirements for class certification under
Fed.R.Civ.P. 23 and 2) the “individualized issues” in the causes of action dictate
that class-wide resolution is improper. (See generally Doc. 18.)
The Motion to Dismiss and Motion to Strike are ripe and currently pending
before the District Court. Defendants bring the present Motion to Stay pending a
decision on their Motion to Dismiss and Motion to Strike.
ANALYSIS
I.

Motion to Stay (Doc. 32).
“The decision to stay discovery and other pretrial proceedings is firmly

vested in the sound discretion of the trial court.” Toney v. Harrod, No. 15-3209EFM-TJJ, 2018 WL 5830398, at *1 (D. Kan. Nov. 7, 2018) (citing Pet Milk Co. v.
Ritter, 323 F.2d 586, 588 (10th Cir. 1963); McCoy v. U.S., No. 07-2097-CM, 2007
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WL 2071770, at *2 (D. Kan. July 16, 2007)). That stated, Tenth Circuit has
concluded that “the right to proceed in court should not be denied except under the
most extreme circumstances.” Commodity Futures Trading Comm’n v. Chilcott
Portfolio Mgmt., Inc., 713 F.2d 1477, 1484 (10th Cir. 1983). Thus, the District of
Kansas generally does not favor staying discovery pending a ruling on a
dispositive motion. McCoy, 2007 WL 2071770, at *2.
It is well-established in the District of Kansas that a discovery should not be
stayed merely because a dispositive motion has been filed. Wolf v. United States,
157 F.R.D. 494, 495 (D. Kan. 1994). However, there are recognized exceptions to
this policy. “[A] stay pending a ruling on a dispositive motion is appropriate
where the case is likely to be finally concluded as a result of the ruling, where the
facts sought through the remaining discovery would not affect the ruling on the
pending motion, or where discovery on all issues in the case would be wasteful and
burdensome.” Toney, 2018 WL 5830398, at *1. See also Citizens for Objective
Public Educ. Inc. v. Kansas State Bd. of Educ., No. 13-4119–KHV, 2013 WL
6728323, *1 (D. Kan. Dec.19, 2013); see also Kutilek v. Gannon, 132 F.R.D. 296,
297–98 (D. Kan. 1990). If one of these circumstances is present, a stay may be
appropriate. Wolf, 157 F.R.D. at 495. See also Watson v. Unified Sch. Dist. No.
500, No. 19-1044-EFM-JPO, 2019 WL 2174132, at *1 (D. Kan. May 20, 2019).

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Defendants argue that all three of these circumstances are present – “(1)
their motions are dispositive if granted; (2) resolution of the motions would not be
affected by the discovery sought by Plaintiffs; and (3) discovery would be
burdensome and wasteful.” (Doc. 47, at 8 (citing Fattaey v. Kansas State Univ.,
No. 15-9314-JAR-KGG, 2016 WL 3743104, at *2 (D. Kan. July 13, 2016).) As to
the first circumstance, Plaintiffs concede that “the case theoretically could end if
the Court grants Defendants’ motions,” but argue that “the issues are such that that
the Court may fairly resolve this basis for a stay order in [Plaintiff’s] favor.” (Doc.
48, at 9.) The undersigned Magistrate Judge does not and need “not state an
opinion as to the validity of defendant's motion to dismiss … .” Watson, 2019 WL
2174132, at *2. Rather, the Court must merely be “satisfied that the case would
likely be concluded should [Defendants] prevail on [their] dispositive motion.” Id.
This is not in dispute. If the District Court concludes that the case lacks subject
matter jurisdiction, the lawsuit must be dismissed with prejudice.
Plaintiffs contend that Defendants failed to show that such discovery would
be wasteful and burdensome, but rather Defendants have offered “generalization
and conclusory arguments are insufficient to support the extraordinary relief they
seek.” (Doc. 48, at 11.) The fact remains, however, that Defendants’ dispositive
motion is fully briefed and pending before the District Court. In deciding a motion
to dismiss, the “court should consider no evidence beyond the pleadings.”
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Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007). Because it is
uncontested that the case could be resolved through the dispositive motion – for
which no evidence beyond the pleadings will be considered – the Court finds that
discovery at this stage would be burdensome and wasteful.
Plaintiffs also argue that the fact that Defendants did not move to stay the
case earlier in the process indicates that Defendants’ motivations for the stay are
improper. (Doc. 48, at 11.) The Court finds this argument to be unpersuasive.
Defendants requested the stay approximately five weeks after their Motion to
Dismiss became ripe. The Court sees nothing suspicious or nefarious about the
timing of the filing of the present motion.
As such, Defendants’ Motion to Stay (Doc. 33) is GRANTED until the
District Court rules on Defendants’ Motion to Dismiss and/or Motion to Strike. In
reaching this determination, the Court makes no inference or findings as to the
potential validity of the arguments raised in Defendants’ motions.
IT IS THEREFORE ORDERED that Defendants’ Motion to Stay (Doc.
46) is GRANTED.
IT IS SO ORDERED.
Dated this 31st day of March, 2021, at Wichita, Kansas.

S/KENNETH G. GALE

HON. KENNETH G. GALE
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U.S. MAGISTRATE JUDGE

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