Rigsby, Rodney v. American Family Mutual Insurance Company et al

Filing 103

ORDER granting in part and denying in part 77 Motion for Reconsideration; granting 79 Motion for Attorney Fees; granting 80 Motion for Attorney Fees; granting 76 Motion for Attorney Fees; and denying 93 motion to stay discovery. America n Family Mutual Insurance Company, Kristine Burck, Marilyn Wetley and Levine Wetley awarded attorney fees in the amount of $3328.42. Chris Miscik and Axley Brynelson awarded attorney fees in the amount of $9337.50. Progressive Casualty Insurance Company awarded attorney fees in the amount of $10,444.60. Signed by District Judge Barbara B. Crabb on 7/8/2014. (jef),(ps)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - RODNEY RIGSBY,
OPINION AND ORDER
Plaintiff,
14-cv-23-bbc
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY,
PROGRESSIVE CASUALTY INSURANCE COMPANY,
CHRIS MISCIK, BRUCE BERNDT, BERNDT, CPA,
MICHAEL RILEY, AXLEY BRYNELSON, LLP,
KRISTINE BURCK, MARILYN WETLEY, LEVINE WETLEY
and UNITED HEALTH PLANS INSURANCE CORPORATION,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This lawsuit arises out of events that occurred after defendant Chris Miscik was
injured in a car accident. Although plaintiff Rodney Rigsby is not a lawyer, he says that he
helped Miscik in a lawsuit against defendants Marilyn Wetley and Levine Wetley (the
alleged tortfeasors in the car accident) and that Miscik agreed to give plaintiff half the
amount he recovered from the case. However, after plaintiff provided assistance, such as by
drafting Miscik’s complaint and some discovery requests, Miscik hired lawyers (defendants
Michael Riley and Axley Bynelson, LLP), who allegedly used plaintiff’s work product to
obtain a settlement, which Miscik did not share with plaintiff. Plaintiff asserts claims for
copyright violations, breach of contract, breach of fiduciary duty, fraud and conversion.
In an order dated April 17, 2014, I granted motions by various defendants to dismiss
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all of plaintiff’s claims, with the exception of the claims that (1) defendants Axley
Brynselson, Riley and Miscik infringed plaintiff’s copyright that he owns related to litigation
documents that he drafted for Miscik’s state court case; and (2) defendant Miscik breached
his contract with plaintiff to pay plaintiff for his legal assistance. In addition, I granted
motions for sanctions brought by many of the defendants on the ground that plaintiff
violated Fed. R. Civ. P. 11 by bringing claims that are legally frivolous.
In response to the April 17 order, the defendants that were awarded attorney fees as
a sanction have submitted affidavits in support of a particular amount. Dkt. ##76, 79 and
80. For his part, plaintiff has filed a motion for reconsideration of the decision to dismiss
many of his claims and to sanction him. Dkt. #77. Finally, defendants Miscik, Riley and
Axley Brynelson have filed a motion to stay discovery on damages until after any motions
for summary judgment on liability are resolved by the court. Dkt. #93. For the reasons
discussed below, I am awarding the amount of attorney fees requested, denying plaintiff’s
motion for reconsideration except as it relates to plaintiff’s breach of fiduciary duty claim
against defendants Bruce Berndt and Berndt, CPA, and denying the motion to stay discovery
on damages issues.

OPINION
A. Plaintiff’s Motion for Reconsideration
With respect to most of the defendants, plaintiff’s motion for reconsideration does
not raise issues that require additional discussion. However, I am granting plaintiff’s motion

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as it relates to plaintiff’s claim for breach of fiduciary duty against defendants Bruce Berndt
and Berndt, CPA.
In the April 17 order, I dismissed plaintiff’s breach of fiduciary duty claims on the
ground that plaintiff had not identified a fiduciary relationship that he had with any of the
defendants. However, I overlooked plaintiff’s allegations that defendants Bruce Berndt and
Berndt, CPA, were plaintiff’s accountants at the relevant time and that those defendants had
breached their fiduciary duty to plaintiff by helping defendant Miscik hide from plaintiff the
settlement that Miscik received related to the car accident.
Wisconsin courts have assumed in multiple cases that accountants have fiduciary
duties to their clients. E.g., Krier v. Vilione, 2009 WI 45, ¶ 58, 317 Wis. 2d 288, 323, 766
N.W.2d 517, 534; Fears v. Brill, 2009 WI App 174, 322 Wis. 2d 573, 776 N.W.2d 287.
In this case, defendants Bruce Berndt and Berndt, CPA, have not raised any argument for
rejecting the view that they owed a fiduciary duty to plaintiff. Although I do not hold that
defendants had a fiduciary duty to plaintiff, the lack of such a duty is not so obvious that
it would be appropriate for the court to dismiss the claim in the absence of any argument
from defendants.
In opposing plaintiff’s motion for reconsideration, defendant Bruce Berndt and
Berndt, CPA, argue that plaintiff “fails to establish jurisdiction” for his state law claim
against these defendants, but that argument is misguided. Defendants simply ignore 28
U.S.C. § 1367, which allows federal courts to exercise jurisdiction over a state law claim
when it is part of the same case or controversy as a federal claim in the same case. That

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standard seems to be met in this case because plaintiff’s copyright and breach of fiduciary
duty claims all relate to the lawsuit and subsequent settlement in state court related to
defendant Miscik’s car accident. Baer v. First Options of Chicago, Inc., 72 F.3d 1294, 1299
(7th Cir. 1995) (“A loose factual connection between the [the federal and state] claims is
generally sufficient [to support an exercise of jurisdiction under § 1367.]”) (internal
quotations omitted). Although plaintiff is proceeding on copyright claims against different
defendants, that is not a bar to an exercise of supplemental jurisdiction. 28 U.S.C. §
1367(a) (“[S]upplemental jurisdiction shall include claims that involve the joinder . . . of
additional parties.”).
To the extent that plaintiff is seeking to proceed on any other claim against
defendants Bruce Berndt and Berndt, CPA, I am denying that request. In his motion,
plaintiff says that Berndt breached his fiduciary duty to plaintiff when Miscik and plaintiff
dissolved their business relationship, but any connection between that allegation and the
federal claim is too attenuated to provide a basis for jurisdiction under § 1367. In addition,
plaintiff says that defendants Bruce Berndt and Berndt, CPA, breached a contract with
plaintiff, but this claim was not included in plaintiff’s complaint, so I cannot consider it.
Dkt. #72 at 16 (“Plaintiff’s breach of contract claim is against defendant Miscik only.”).

B. Defendants’ Requests for Attorney Fees
In response to the April 17 order, three groups of defendants have filed affidavits in
which they itemize their requests for attorney fees. Defendants American Family Mutual

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Insurance Company, Kristine Burck, Marilyn Wetley and Levine Wetley have asked for
$3328.42; defendants Miscik and Axley Brynelson ask for $9337.50; and defendant
Progressive Casualty Insurance Company asks for $10,444.60. (In accordance with the April
17 order, the request by defendants Miscik and Axley Brynelson is limited to the work
counsel performed on claims other than copyright and breach of contract. I did not award
sanctions to defendants Bruce Berndt and Berdnt, CPA, because they did not file a sanctions
motion.)
Although plaintiff has objected to each of these requests, he focuses on the question
whether sanctions are appropriate; he does not object to the reasonableness of the amounts
defendants have requested.

Because plaintiff has raised no persuasive arguments for

reconsidering the decision to sanction him and defendants’ fee requests appear reasonable
on their face, I am awarding the requested amounts.

C. Motion to Stay Discovery on Damages
Defendants Miscik, Riley and Axley Brynelson have filed what they call a “motion to
bifurcate discovery,” which is more accurately called a motion to stay any discovery on
damages until after any motions on summary judgment related to liability are resolved.
Although I am sympathetic to defendants’ concerns, they have not shown that they are
entitled to the relief that they seek.
To begin with, the requested stay is not one that ordinarily is granted by this court.
In fact, defendants do not cite any case in which this court stayed discovery on damages

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issues until after liability was resolved. One reason for this is the delay that such a stay could
cause. If the court granted a stay, it could require additional rounds of summary judgment
motions to address damages issues. Even if defendants agreed to forgo a summary judgment
motion on damages, the trial would have to be postponed to allow adequate time for
discovery on damages if the court denied any summary judgment motion on liability. The
current scheduling order, dkt. #101, does not account for either of these issues, so granting
defendants’ motion would require striking the schedule.
Defendants argue that the schedule would not be affected because it is likely that they
will prevail on a motion for summary judgment. That may be so, but I cannot make that
determination until after any summary judgment motions are before the court. It is not
unusual for defendants to believe that they have strong arguments for obtaining summary
judgment, but the court cannot simply take their word for it that their summary judgment
motion will be successful.
Defendants also argue that a stay is needed to prevent plaintiff from filing abusive or
overbroad discovery requests. At this point, however, I believe it is too early to tell whether
defendants need special protection from the court. Defendants did not rely on any conduct
by plaintiff in previous cases to justify their concerns, so I cannot consider that issue. With
respect to this case, defendants list approximately 25 requests for production that plaintiff
has submitted, but neither side has developed an argument as to whether the requested
materials are discoverable under Fed. R. Civ. P. 26, so it would be premature to address
those issues.

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Even if I assumed that plaintiff will serve defendants with overly broad discovery
requests, the limitation defendants request would not necessarily solve the problem. The
line between evidence relevant to liability and the evidence relevant to damages is not always
a clear one, so granting defendants’ motion could create more problems by encouraging
disputes about the purpose of a particular request.
Although I am denying defendants’ motion, plaintiff should not interpret that ruling
as permission for him to engage in burdensome or irrelevant discovery. Before he serves any
discovery request, he should consider whether the request is likely to lead to relevant
information and whether the request is unduly burdensome. If plaintiff serves defendants
with a discovery request that defendants believe is improper, they are free to object to the
request. Further, if plaintiff files a motion to compel that is not substantially justified, he
may be subject to sanctions under Fed. R. Civ. P. 37. If plaintiff continues to serve improper
discovery requests after that, additional sanctions may be appropriate, including limitations
on the discovery plaintiff may request.

ORDER
IT IS ORDERED that
1. The requests for attorney fees filed by defendants American Family Mutual
Insurance Company, Kristine Burck, Marilyn Wetley and Levine Wetley, dkt. #79,
defendants Chris Miscik and Axley Brynelson, LLP, dkt. #80, and defendant Progressive
Casualty Insurance Company, dkt. #76, are GRANTED. Plaintiff Rodney Rigsby is directed

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to pay $3328.42 to defendants American Family Mutual Insurance Company, Kristine
Burck, Marilyn Wetley and Levine Wetley; $9337.50 to defendants Miscik and Axley
Brynelson; and $10,444.60 to defendant Progressive Casualty Insurance Company.
2. Plaintiff’s motion for reconsideration, dkt. #77, is GRANTED with respect to
plaintiff’s claim that defendants Bruce Berndt and Berndy, CPA, breached their fiduciary
duty to plaintiff by hiding the settlement money that defendant Miscik received for his car
accident. Plaintiff’s motion is DENIED in all other respects.
3.

The motion to stay discovery filed by defendants Chris Miscik and Axley

Brynelson, LLP, dkt. #93, is DENIED.
Entered this 8th day of July, 2014.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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