United States District Court, E.D. Michigan, Southern Division
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]
CARAM STEEH UNITED STATES DISTRICT JUDGE
case stems from an underlying lawsuit (the ''Holt
Litig''tion'') 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
(''Wausau'') 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
denies that it acted improperly in its analysis and
settlement strategy with respect to the Holt Litigation.
However, according to Wausau, the information 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
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.
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
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.
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
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.
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.
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.
scheduling order is amended as follows:
Discovery cutoff - May 30, 2017
Dispositive motion cutoff - July 31, 2017
Final Pretrial Order due - November ...