Wausau Underwriters Insurance Company v. Reliable Transportation Specialists, Inc. et al
Filing
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ORDER denying 64 Wausau's Motion to Stay proceedings, denying Holt's request for sanctions and granting 66 Motion to Extend scheduling order. Signed by District Judge George Caram Steeh. (MBea)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
WAUSAU UNDERWRITERS
INSURANCE COMPANY,
Plaintiff,
Case No. 15-12954
vs.
HON. GEORGE CARAM STEEH
RELIABLE TRANSPORTATION
SPECIALISTS, INC., AMARILD
USHE and BURT HOLT,
Defendants.
____________________________/
ORDER DENYING WAUSAU’S MOTION TO STAY
PROCEEDINGS [DOC. 64] DENYING HOLT’S REQUEST FOR SANCTIONS
AND GRANTING MOTION TO EXTEND SCHEDULING ORDER [DOC. 66]
This case stems from an underlying lawsuit (the AHolt Litigation@) filed by Burt
Holt against Reliable Transportation, Amarild Ushe and a co-defendant who is not a
party to this action, related to injuries sustained by Holt when he was struck by a tractor
trailer operated by Ushe. The present litigation arises out of plaintiff Wausau
Underwriters Insurance Company=s (AWausau@) declaratory judgment complaint seeking
a declaration from this court that it is responsible for no more than the $1,000,000 policy
limit under the commercial insurance policy issued to Reliable. Reliable Transportation
and Ushe filed a counterclaim alleging that Wausau acted in bad faith against its
insured by refusing to negotiate a settlement within the policy limits in the Holt Litigation.
Wausau denies that it acted improperly in its analysis and settlement strategy
with respect to the Holt Litigation. However, according to Wausau, the information
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necessary to prove its position in response to the bad faith counterclaim includes
reports from defense counsel analyzing the strengths and weaknesses of the claims
and defenses, and Wausau’s own analysis of the settlement value of the underlying
case. Wausau contends that if it is required to go forward with this action now and
provide defense and settlement information to Mr. Holt while the underlying lawsuit
remains pending before the Michigan Court of Appeals, Wausau and Reliable will suffer
irreparable hardship and inequity due to the risk of prejudice to their defense of that
case. Wausau’s primary concern is that the Holt Litigation may result in a new trial and
Mr. Holt would have an unfair advantage if he has access to the confidential settlement
information.
In an effort to protect its interests as well as those of Reliable, Wausau brought
two motions for protective orders in this case, both of which were denied. On February
19, 2016, Wausau filed a motion for protective order (Doc #22) requesting that Mr. Holt
be excluded from discovery due to the prejudice that could result to Wausau and
Reliable if defense information pertaining to the Holt Litigation was disclosed to him.
Magistrate Judge Stafford denied the motion and on May 3, 2016 this court overruled
Wausau’s objections to the denial. On June 7, 2016, Wausau filed its second motion for
protective order (Doc #48) seeking to restrict the confidential discovery disclosed in this
case from being used or referenced in other litigation, including the Holt Litigation.
Magistrate Judge Stafford denied the motion. On August 3, 2016 this court denied
Wausau’s motion to stay the magistrate’s order and on October 21, 2016 this court
overruled Wausau’s objections to the denial of its second motion for protective order.
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Now Wausau seeks entry of an order staying the proceedings in this action until
the Holt Litigation is resolved. Reliable does not oppose Wausau’s request for a stay,
but Mr. Holt does. Mr. Holt points out that Wausau made a deliberate decision to initiate
this action and include him as a defendant while the underlying action remained
pending. Therefore, Wausau should not be permitted to argue that it will be prejudiced
if the lawsuit it brought proceeds in a timely fashion.
A district court’s “power to stay proceedings is incidental to the power inherent in
every court to control the disposition of the causes on its docket with economy of time
and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248,
254 (1936). A party who moves for a stay of proceedings “must make out a clear case
of hardship or inequity in being required to go forward if there is even a fair possibility
that the stay for which he prays will work damage to someone else.” Id. at 255.
The appeal in the Holt Litigation has now been fully briefed, so Wausau
recognizes that any confidential information turned over in this lawsuit cannot be
included in any briefs. Nor could such information be discussed during oral argument
because it is not part of the lower court record. A potential outcome of the appeal is a
remand for new trial, which is most concerning to Wausau from the standpoint of giving
Mr. Holt access to its attorney’s trial and settlement strategy in the first trial. While
handing over a case file to opposing counsel is not something any attorney would relish,
the court does not give the contents of the discovery as much weight as Wausau’s
counsel does. Both parties learned a lot as a result of the first trial and because of that
would undoubtedly approach the case differently in a retrial.
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On the other hand, Mr. Holt has a clear interest in minimizing any delay caused
by a stay in a case he is forced to defend. Nobody can predict the outcome of the Holt
Litigation in state court, but Wausau made the decision to bring this action before the
underlying litigation was concluded and the court does not find good reason to issue a
stay to protect Wausau from the consequences of its chosen strategy. Wausau’s
motion to stay is DENIED.
Mr. Holt requests sanctions against plaintiff’s counsel for costs and attorney fees
incurred in filing the response and attending this hearing. As stated by the court on the
record at oral argument, the request for sanctions is DENIED.
Reliable and Ushe filed a motion to extend the scheduling order deadlines if the
motion to stay is denied. Wausau concurs in the motion to extend and Mr. Holt does
not oppose the motion. The motion to extend scheduling order dates is GRANTED.
The scheduling order is amended as follows:
Discovery cutoff - May 30, 2017
Dispositive motion cutoff - July 31, 2017
Final Pretrial Order due - November 6, 2017
Final Pretrial Conference – November 13, 2017 at 10:00 a.m.
Trial Date – November 28, 2017 at 9:00 a.m.
So ordered
Dated: January 19, 2017
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
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CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
January 19, 2017, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk
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