OOIDA Risk Retention Group v. Burts et al

Filing 170

ORDER denying ECF No. 164 Motion to Stay. Signed by Judge Robert C. Jones on 5/2/2017. (Copies have been distributed pursuant to the NEF - KR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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______________________________________
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OOIDA RISK RETENTION GROUP,
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Plaintiff,
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vs.
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MARC A. BORDEAUX et al.,
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Defendants.
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3:15-cv-00081-RCJ-VPC
ORDER

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This case arises out of an alleged breach of a policy of insurance by an insured in a state

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court lawsuit, which in turn arises out of a truck crash. Pending before the Court is a motion to

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stay an impending hearing on a sanctions motion before the Magistrate Judge.

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I.

FACTS AND PROCEDURAL HISTORY

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In May 2014, Robert Burts sued Marc Bordeaux (“Bordeaux”), Joan Bordeaux, and Marc

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and Joan Bordeaux’s business Graphic Concepts in Nevada state court (“the Lawsuit”) to recover

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for injuries Bordeaux sustained in a 2013 Pennsylvania truck crash. (Am. Compl. ¶ 12, ECF No.

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30; Lawsuit, ECF No. 1-3). Burts alleges in the Lawsuit that Bordeaux fell asleep while driving

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a truck in which Burts was a passenger. (Id. ¶ 13). Bordeaux asked OOIDA Risk Retention

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Group, Inc. (“OOIDA”) to defend the Lawsuit and indemnify him under a policy of insurance

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issued by OOIDA to Bordeaux, d.b.a. Graphic Concepts (“the Policy”). (Id. ¶¶ 7, 15). Pursuant

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to a reservation of rights, OOIDA defended Bordeaux in the Lawsuit. (Id. ¶ 16).
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In October 2014, OOIDA sued Bordeaux and Burts in this Court for a declaration that the

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Policy does not cover the claims made by Burts in the Lawsuit and for a judgment against

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Bordeaux to recover monies OOIDA paid to defend the Lawsuit. On or about July 1, 2015,

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while OOIDA was still defending the Lawsuit, Burts and Bordeaux entered into a settlement

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agreement (“the Settlement”) without OOIDA’s consent or knowledge, providing for a stipulated

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judgment against Bordeaux. (Id. ¶¶ 18–20). The Settlement also provides that Burts will not

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seek to enforce the resulting judgment against Bordeaux, and Bordeaux assigned to Burts any

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claims he may have against OOIDA. (Id. ¶¶ 21). Burts then filed a motion in the Lawsuit to

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asking the court to fix damages under the Settlement. (Id. ¶ 22). In the Amended Complaint

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(“AC”) filed in August 2015, OOIDA alleges that coverage is excluded under up to four separate

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exclusionary provisions in the Policy, (id. ¶ 33), that Bordeaux breached conditions precedent

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under the Policy by settling Burts’s claim without OOIDA’s consent and failing to cooperate

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with OOIDA’s defense of the Lawsuit, (id. ¶ 34), and that the Settlement and any resulting

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judgment are unenforceable against OOIDA, (id. ¶ 35). Burts filed a Counterclaim for breach of

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contract, insurance bad faith, and unfair trade practices.

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In February 2016, the Magistrate Judge granted in part Burts’s motion to compel,

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denying production of certain documents as work product, ordering certain documents to be

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provided to Burts without redactions, and ordering certain documents to be submitted for in

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camera review. 1 The Magistrate Judge denied Burts’s separate motion for a protective order

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against discovery of certain documents. Judges Du and McKibben recused in turn when Burts

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moved to disqualify OOIDA’s local counsel (from a law firm with which those judges were

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1 The Magistrate Judge ruled later that month that the documents submitted in camera had been
properly withheld.
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formerly associated). Burts argued that OOIDA had retained the law firm for the sole purpose of

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causing a recusal. The Magistrate Judge denied the motion to disqualify as moot.

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In September 2016, the Magistrate Judge granted OOIDA’s motion to stay all deadlines

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and ordered briefing on the effect of a stipulation to vacate the judgment in the Lawsuit (filed in

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the Lawsuit). While briefing was ongoing, Burts filed a motion for partial defensive summary

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judgment against the AC and a motion for partial offensive summary judgment on the

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Counterclaim. In December 2016, after a hearing on the briefings, the Magistrate Judge struck

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the motions for summary judgment because they violated the stay order, continued the stay, and

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requested additional briefing.
In January 2017, OOIDA asked the Magistrate Judge to sanction Burts and his counsel

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under 28 U.S.C. § 1927 and the Court’s inherent power by improperly using discovery and other

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processes in the present case to obtain an advantage in the Lawsuit. The Magistrate Judge has

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set a hearing for May 3–4, 2017. Burts and his attorneys have now asked the Court to stay that

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hearing.

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II.

DISCUSSION

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Movants argue that they believe the Magistrate Judge “intends to effectively try the facts

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of OOIDA’s underlying case in an extended ‘evidentiary hearing,’ purportedly in the posture of

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‘sanctions’ hearing.” The motion is denied. If the Magistrate Judge enters an order on the

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sanctions motion that one or more parties believes is in excess of her authority under § 636 or

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contrary to law generally, they may make an appropriate motion under Rule 72(a) or 72(b), as

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appropriate. But the Court will not disturb the Magistrate Judge’s discretion to manage the

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sanctions motion—which Movants do not argue she does not have the statutory authority to

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determine as a general matter—based on such speculation. Certainly no jury rights will be

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imperiled by any order resulting from the hearing. Any findings of fact will only be law of the
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case as to the sanctions issue and subject to objection under Rule 72(a). The findings will not

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bind the Court or the parties as to any claims or defenses, whether or not jury rights have been

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preserved thereto, and any sanctions imposed that are determinative of any claim or defense will

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not be in the form of an order but a recommendation subject to de novo review after briefing

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under Rule 72(b).
CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Stay (ECF No. 164) is DENIED.

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IT IS SO ORDERED.

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Dated this 2nd day of May, 2017.

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_____________________________________
ROBERT C. JONES
United States District Judge

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