ProDriver Leasing Systems Inc v. The Cincinnati Indemnity Company

Filing 94

ORDER signed by Judge J.P. Stadtmueller on 9/29/2017 DENYING without prejudice: 34 Pro-Driver's Motion to Dismiss Cincinnati's Counterclaims; 36 PDL's Motion to Dismiss Cincinnati's Third Party Complaint; 60 Cincinnati's Motion for Summary Judgment; and 84 Pro-Driver's Motion for Summary Judgment. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
PRODRIVER LEASING SYSTEMS, INC.,
Plaintiff,

Case No. 16-CV-995-JPS

v.
THE CINCINNATI INDEMNITY
COMPANY,

ORDER

Defendant and
Third-Party Plaintiff,
v.
PDL, INC.,
Third-Party Defendant.
The plaintiff, Pro-Driver Leasing Systems, Inc. (“Pro-Driver”), filed
this action in July 2016 seeking a declaration as to the liability of its
insurance

carrier,

defendant

Cincinnati

Indemnity

Company

(“Cincinnati”), to defend Pro-Driver in an underlying lawsuit, EB IP
Holdings LLC, and Professional Drivers of Georgia, Inc. d/b/a ProDrivers v. ProDriver Leasing Systems, Inc. and PDL, Inc., Case No. 4:16-cv-01659, pending
in the District Court for the Southern District of Texas, Houston Division
(the “Texas Litigation”). (Docket #1, #4). Cincinnati counterclaimed for,
among other things, a declaration that it is not obligated under the
governing insurance policy to defend or indemnify Pro-Driver in the Texas
Litigation. (Docket #12). Cincinnati also filed a third-party complaint
seeking declaratory and other relief against PDL, Inc. (“PDL”), Pro-Driver’s

subsidiary and a co-defendant in the Texas Litigation. (Docket #13).1
Cincinnati has since accepted the defense of Pro-Driver and PDL in the
Texas Litigation under a reservation of rights. See (Docket #61 at 2).
The parties have engaged in significant motion practice in this case,
some of which was resolved or withdrawn as a result of progress in the
underlying Texas Litigation as well as the parties’ efforts at mediation. Still
pending before the Court are two fully briefed motions to dismiss and two
fully briefed motions for summary judgment. (Docket #34, #36, #60, #84).
On February 22, 2017, after those motions were fully briefed, the
parties informed the Court by a joint report that because of ongoing issues
related to the Texas Litigation that could affect this case, this Court need
not address the pending motions. On September 25 and 26, 2017, Pro-Driver
informed the Court that it still desires that the Court postpone addressing
the pending motions until the Texas Litigation proceeds further, but
Cincinnati indicated that it is ready for a decision on coverage based on the
current briefing.2
The Court finds the most prudent course is to deny the pending
motions, (Docket #34, #36, #60, #84), without prejudice. Some of the issues

Cincinnati also filed third-party complaints against EB IP Holdings, LLC
and Professional Drivers of Georgia, Inc., the plaintiffs in the underlying Texas
Litigation, but those parties have since been voluntarily dismissed from this case.
See (Docket #87, #88).
2It appears that Pro-Driver’s counsel misrepresented, in its September 25,
2017 e-mail to the Court, Cincinnati’s agreement with its position that the Court
delay a ruling on the pending motions. As of the time of the issuance of this Order,
Pro-Driver’s counsel has not defended himself against the accusation of falsehood.
Making misrepresentations to the Court is, of course, proscribed by the rules of
civil procedure and of professional conduct. See Fed. R. Civ. P. 11; American Bar
Association Model Rules of Professional Conduct 3.3, Candor Toward the Tribunal.
Such behavior will not be tolerated in the future.
1

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presented in the pending motions are or might be mooted by progress in
the Texas Litigation, as has already been the case during the course of the
litigation in this Court.
Further, the Texas Litigation is still in its early stages; discovery is
not yet complete. See EB IP Holdings LLC, and Professional Drivers of Georgia,
Inc. d/b/a ProDrivers v. Pro-Driver Leasing Systems, Inc. and PDL, Inc., Case
No. 4:16-cv-01659, Docket #56 (setting the discovery deadline as October 16,
2017). Under Wisconsin law, which the parties agree governs the coverage
issue in this case, see (Docket #4 at 2, #61 at 8), the coverage determination
can be made before liability in the underlying case is established only if the
facts bearing on coverage are undisputed. See Olson v. Farrar, 809 N.W.2d 1,
9 (Wis. 2012); Oddsen v. Henry, 878 N.W.2d 720, 729 (Wis. Ct. App. 2016).
Without a more complete record from the underlying litigation establishing
the nature and proof of the claims pending against Pro-Driver and PDL, a
decision from this Court on Cincinnati’s duty to indemnify those claims
would be premature.
If and when the need arises for this Court to decide coverage liability
or other claims in this case, the parties are free to refile their motions and
present the Court with issues that are ripe for adjudication.
Accordingly,
IT IS ORDERED that Pro-Driver’s motion to dismiss Cincinnati’s
counterclaims (Docket #34) be and the same is hereby DENIED without
prejudice;
IT IS FURTHER ORDERED that PDL’s motion to dismiss
Cincinnati’s third-party complaint (Docket #36) be and the same is hereby
DENIED without prejudice;

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IT IS FURTHER ORDERED that Cincinnati’s motion for summary
judgment (Docket #60) be and the same is hereby DENIED without
prejudice; and
IT IS FURTHER ORDERED that Pro-Driver’s motion for summary
judgment (Docket #84) be and the same is hereby DENIED without
prejudice.
Dated at Milwaukee, Wisconsin, this 29th day of September, 2017.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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