Houston Casualty Company v. B&H Freight, Inc. et al

Northern District of Illinois, ilnd-1:2016-cv-05201

MEMORANDUM by Houston Casualty Company in support of motion to stay {{40}}

Interested in this case?

Current View

Full Text

Case: 1:16-cv-05201 Document #: 41 Filed: 02/16/17 Page 1 of 5 PageID #:184 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS HOUSTON CASUALTY COMPANY) CASE NO.: 1:16-cv-05201 Plaintiff,)) JUDGE AMY J. ST. EVE v.)) B&H FREIGHT, INC., B&H SYSTEMS,) INC., MIDWEST STAR GROUP, INC., AND) SOMPO JAPAN INSURANCE COMPANY) OF AMERICA, AS SUBROGEE OF CANON) U.S.A., INC.) Defendants.) BRIEF IN SUPPORT OF MOTION OF PLAINTIFF HOUSTON CASUALTY COMPANY TO STAY PROCEEDINGS I. INTRODUCTION On May 13, 2016, HCC filed its Complaint for Declaratory Judgment seeking a declaration that it has no duty to defend or indemnify B&H Freight, Inc. ("Freight") and/or B&H Systems, Inc. ("Systems") for the litigation filed by Sompo Japan Insurance Company of America ("Sompo"), as subrogee of Canon ("Sompo Litigation"). (Doc. #1.) On February 16, 2017, HCC filed its Motion for Judgment on the Pleadings arguing that coverage under the Policy is not afforded for the Sompo Litigation such that HCC has no duty to defend or indemnify Freight or Systems. HCC seeks a stay of proceedings pending the Court’s ruling on its Motion for Judgment on the Pleadings in the interest of judicial and party economy as a ruling may terminate this litigation and obviate the necessity for the parties to engage in costly discovery. Accordingly, HCC respectfully moves this Court to stay proceedings pending a ruling on its Motion for Judgment on the Pleadings. 734016 1 Case: 1:16-cv-05201 Document #: 41 Filed: 02/16/17 Page 2 of 5 PageID #:185 II. THE PROCEEDINGS SHOULD BE STAYED PENDING THE COURT’S RULING ON HCC’S MOTION FOR JUDGMENT ON THE PLEADINGS This Court has broad discretion to stay proceedings. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) ("the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with the economy of time and effort for itself, for counsel, and for litigants"); In re Sulfuric Acid Antitrust Litig., 231 F.R.D. 331, 336 (N.D. Ill. 2005) (the District Court has "extremely broad discretion in controlling discovery"); Bilal v. Wolf, 2007 WL 1687253, *1 (N.D. Ill. Jun. 6, 2007); DSM Desotech Inc. v. 3D Sys. Corp., 2008 WL 4812440, *1 (N.D. Ill. Oct. 28, 2008). Although stays are not automatically granted when dispositive motions are pending, "they are granted with substantial frequency". Bilal, 2007 WL 1687253 at *1; DSM Desotech Inc., 2008 WL 4812440 at *2; Sulfuric Acid Antitrust Litig., 231 F.R.D. at 336. A stay is appropriate where a motion can resolve a threshold issue, where discovery is likely to be burdensome and costly, or where a decision on the motion will dispose of the entire case. Desotech Inc., 2008 WL 4812440 at *2 ("Stays are often deemed appropriate where the motion to dismiss can resolve a threshold issue such as jurisdiction, standing, or qualified immunity or where, in cases such as this one, discovery may be especially burdensome and costly to the parties."); Coss v. Playtex Products, LLC, 2009 WL 1455358, *1 (N.D. Ill. May 21, 2009) ("The court may grant a motion to stay discovery for a number of reasons, including the filing of a motion to dismiss."); In re Sulfuric Acid Antitrust Litig., 231 F.R.D. at 337 ("Stays are often deemed appropriate where the motion to dismiss can resolve the case-at least as to the moving party"); accord Institut Pasteur v. Chiron Corp., 315 F.Supp.2d 33, 37 (D.D.C. 2004) ("it is well settled that discovery is generally considered inappropriate while a motion that would be thoroughly dispositive of the claims in the Complaint is pending."). HCC respectfully submits that each of these factors warrants a stay in this case. 734016 2 Case: 1:16-cv-05201 Document #: 41 Filed: 02/16/17 Page 3 of 5 PageID #:186 This case involves an insurance coverage dispute, which at this stage1 requires an evaluation of the allegations of the Sompo Litigation and an interpretation of the insurance policy. The interpretation of the insurance policy is a question of law for the Court. United Nat'l Ins. Co. v. Fasteel, Inc., 550 F.Supp.2d 814, 821 (N.D. Ill. 2008) ("Construction of an insurance policy is a question of law to be determined by this Court, with the purpose of ascertaining and effectuating the intent of the parties through interpretation of the policy as a whole."); Chandler v. Doherty, 299 Ill.App.3d 797, 801, 702 N.E.2d 634, 638 (1998) ("It is the law of this state that in determining whether it has a duty to defend a suit, an insurer is limited to comparing the bare allegations of the complaint with the face of the policy of insurance."); see also Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill.2d 384, 391, 620 N.E.2d 1073, 1077 (1993) ("The construction of an insurance policy and a determination of the rights and obligations thereunder are questions of law for the court"). A stay is also appropriate as discovery will not produce any additional facts necessary to rule on HCC’s Motion for Judgment on the Pleadings. Sprague v. Brook, 149 F.R.D. 575, 577 (N.D. Ill. 1993) ("A plaintiff's right to discovery before a ruling on a motion to dismiss may be stayed when the requested discovery is unlikely to produce facts necessary to defeat the motion."); see also Sulfuric Acid Antitrust Litig., 231 F.R.D. at 338. The facts of this case and allegations of the Sompo Litigation are not in dispute. Moreover, the Motion for Judgment on the Pleadings may dispose of the entire case and obviate the need for the parties to engage in costly and burdensome discovery. Sprague, 149 F.R.D. at 578 ("the court will grant a motion to stay discovery pursuant to Rule 26(c) in order to secure the'just, speedy and inexpensive determination of every action.’"); accord Coastal States 1 The Sompo Litigation is pending and a final judgment has not been rendered. 734016 3 Case: 1:16-cv-05201 Document #: 41 Filed: 02/16/17 Page 4 of 5 PageID #:187 Gas Corp. v. Dep’t of Energy, 84 F.R.D. 278, 282 (D.Del. 1979) (recognizing that a stay of discovery pending ruling on a dispositive motion is "an eminently logical means to prevent wasting time and effort of all concerned, and to make the most efficient use of judicial resources"). As the interpretation of the Policy is a question of law for the Court, further discovery is unnecessary. In fact, a ruling on the Motion for Judgment on the Pleadings may dispose of the entire case. Thus, if proceedings are not stayed, the depositions sought will do nothing more than increase costs and inconvenience which will prove burdensome to the Court and the parties. Accordingly, HCC respectfully submits that a stay of proceedings pending a ruling on its Motion for Judgment on the Pleadings is warranted. III. CONCLUSION For the foregoing reasons, HCC respectfully moves the Court to stay proceedings in this matter pending a ruling on its Motion for Judgment on the Pleadings. Respectfully submitted,/s/Crystal L. Maluchnik______________ STEVEN G. JANIK (0021934) CRYSTAL L. MALUCHNIK (0077875) JANIK L.L.P. 9200 South Hills Blvd., Suite 300 Cleveland, Ohio 44147 Tel: 440-838-7600 * Fax: 440-838-7601 Email: Steven.Janik@janiklaw.com Crystal.Maluchnik@janiklaw.com Mail: Janik L.L.P. P.O. Box 470550 Cleveland, Ohio 44147 Attorneys for Plaintiff Houston Casualty Company 734016 4 Case: 1:16-cv-05201 Document #: 41 Filed: 02/16/17 Page 5 of 5 PageID #:188 CERTIFICATE OF SERVICE The undersigned hereby certifies that a copy of the foregoing was filed electronically this 16th day of February, 2017. Notice of this filing will be sent to the Parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system./s/Crystal L. Maluchnik One of the Attorneys for Plaintiff Houston Casualty Company 734016 5