Federal Insurance Company v. Fairbotham

Filing 15

ORDER Adopting 14 Report and Recommendation, Denying Defendant's 10 Motion for Summary Judgment, and Scheduling Status Conference. (Status and Scheduling Conference set for 5/24/2017 at 4:00 PM before District Judge Thomas L. Ludington. ) Signed by District Judge Thomas L. Ludington. (KWin)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
FEDERAL INSURANCE COMPANY,
Plaintiff,

Case No. 16-cv-11390

v.

Honorable Thomas L. Ludington
Magistrate Judge Patricia T. Morris

PENNY FAIRBOTHAM,
Defendant.
__________________________________________/
ORDER ADOPTING THE REPORT AND RECOMMENDATION,
DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT,
AND SCHEDULING STATUS CONFERENCE
On April 18, 2016, Plaintiff Federal Insurance Company initiated the above-captioned
action against Defendant Penny Fairbotham by filing its complaint. See ECF No. 1. Alleging
that Defendant Fairbotham pled no contest to embezzling $174,690.00 in insurance proceeds
from its subrogee, Jim Wernig, Inc., Plaintiff asserts that Fairbotham is liable to it for the
wrongful conversion of the funds. Plaintiff also asserts that it is entitled to treble damages and
attorneys’ fees pursuant to M.C.L. § 600.2919(a). After Defendant Fairbotham filed an answer
on May 13, 2016 the matter was referred to Magistrate Judge Patricia T. Morris for pretrial
management. See ECF No. 4.
On November 1, 2016 Plaintiff Federal Insurance Company filed a motion for summary
judgment. See ECF No. 10.

After the motion was fully briefed, on March 17, 2017 the

magistrate judge issued a report recommending that Plaintiff’s motion for summary judgment be
denied. See ECF No. 14.

While agreeing with Plaintiff’s assertion that Fairbotham was

prosecuted in 2015 for embezzlement, the magistrate judge noted that Fairbotham pled nolo
contendere to the charge of “EMBEZZLE – AGENT/TRUSTEE 0/$200 U/$1000.”

The

magistrate judge therefore determined that neither Fairbotham’s liability for embezzlement nor
the specific amount of the embezzlement was decided on the merits in the state criminal
proceedings. The magistrate judge also determined that the identity of the victim was not
established by the records related to Fairbotham’s prior criminal proceeding. She concluded that
Plaintiff had not met its burden of showing the absence of a genuine issue of material fact.
Although the magistrate judge’s report explicitly states that the parties to this action
could object to and seek review of the recommendation within fourteen days of service of the
report, neither party has filed any objections. The election not to file objections to the magistrate
judge’s report releases the Court from its duty to independently review the record. Thomas v.
Arn, 474 U.S. 140, 149 (1985). The failure to file objections to the report and recommendation
waives any further right to appeal.
Accordingly, it is ORDERED that the magistrate judge’s report and recommendation,
ECF No. 14, is ADOPTED.
It is further ORDERED that Plaintiff’s motion for summary judgment, ECF No. 10, is
DENIED.
It is further ORDERED that a status and scheduling conference is SCHEDULED for
May 24, 2017 at 4:00 PM.

s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
Dated: April 10, 2017

-2-

PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on April 10, 2017.
s/Kelly Winslow for
MICHAEL A. SIAN, Case Manager

-3-