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Winter Enterprises, LLC v. West Bend Mutual Insurance Co.

United States District Court, S.D. Ohio, Western Division

July 29, 2019

WINTER ENTERPRISES, LLC, Plaintiff,
v.
WEST BEND MUTUAL INSURANCE CO., Defendant.

          ORDER DENYING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS (Doc. 83) AND REOPENING DISCOVERY FOR A PERIOD OF SIXTY DAYS

          TIMOTHY S. BLACK UNITED STATES DISTRICT JUDGE.

         This civil action is before the Court on the following nine pending motions: (1) Defendant's motion for summary judgment (Doc. 51), (2) Plaintiff's partial motion to deny, or alternatively, extend time to respond to Defendant's motion for summary judgment (Doc. 63), (3) Plaintiff's motion to strike Defendant's motion for summary judgment (Doc. 65), (4) Defendant's motion for leave to file sur-reply (Doc. 81), (5) Defendant's motion for judgment on the pleadings (Doc. 83), (6) Plaintiff's motion for sanctions (Doc. 84), (7) Defendant's motion to strike supplemental expert report of Richard Graman (Doc. 100), (8) Defendant's motion for sanctions (Doc. 104), and (9) Defendant's motion for leave to reopen discovery (Doc. 106). Each motion has been fully briefed and is ripe for adjudication.

         I. BACKGROUND

         Plaintiff Winter Enterprises, LLC (“Winter”) owns and operates a business in Hamilton County, Ohio that includes a roller rink and related goods and services (“the Property”). (Doc. 22 ¶ 2). Winter purchased a commercial insurance policy from Defendant West Bend Mutual Insurance Co. (“West Bend”) insuring the Property from covered losses in exchange for premium payments (“the Policy”). (Id. ¶ 11). A storm consisting of heavy rain and strong wind caused damage to the Property on or around August 28, 2016, including a partial collapse of the roof and the collapse of an exterior wall, resulting in significant water infiltration. (Id. ¶¶ 12-15). As a result of the damage, Plaintiff asserts losses exceeding $1, 215, 000, which it claims are covered by the Policy. (Id. ¶¶ 16-17).

         Plaintiff made a claim of coverage to the Defendant, and, in response, Defendant authorized only a partial repair of the roof and did not authorize any repairs related to collapsed wall. (Id. ¶¶ 18-20, 44). Plaintiff's second amended complaint alleges the “partial repair is ineffective, diminishes the value of the building, impacts the integrity of the roof and does not fulfill Defendant's obligations under the Policies.” (Id. ¶ 21). Based on these factual allegations, Plaintiff asserts the following three counts: (1) breach of contract, (2) declaratory judgment, and (3) bad faith. (Id. ¶¶ 26-47). Defendant has asserted a counterclaim seeking a declaratory judgment that (1) by failing to cooperate in the investigation of the claims, Plaintiff breached the terms and conditions of the Policy, disentitling Plaintiff to any coverage under the policy, and (2) Defendant has no duty to cover claims related to the collapsed wall. (Doc. 27 at 18).

         On November 19, 2018, Defendant West Bend filed a motion for summary judgment arguing that it did not breach its insurance contract with Winter or engage in bad faith when handling Plaintiff's insurance claim. (Doc. 51). In response, Plaintiff filed two motions: (1) a partial motion to deny, or alternatively extend time to respond to Defendant's motion for summary judgment, requesting the Court to defer ruling on Defendant's motion for summary judgment until discovery on the bad faith claim is completed (Doc. 63), and (2) a motion to strike Defendant's motion for summary judgment (Doc. 65).

         Before the Court adjudicated Defendant's motion for summary judgment and Plaintiff's subsequent, related motions, Defendant next filed a motion for judgment on the pleadings. (Doc. 83). Defendant's motion for judgment on the pleadings seeks judgment in its favor on Plaintiff's claims related to the collapsed exterior wall. (Id. at 1). More specifically, Defendant argues that because a 2016 report by Plaintiff's expert, Richard Graman, attached to Plaintiff's second amended complaint, states that surface water was a potential factor, (along with wind and a tree collapse), contributing to the collapse of the wall, the damage is not covered because of the Policy's water-exclusion provision and “anti-concurrence” clause.[1] (Id. at 5-6).

         In response, Plaintiff seeks - to the extent Defendant's motion for judgment on the pleadings is considered - to further amend its complaint by attaching an updated report of Richard Graman, in which Graman employs a different method to calculate the force of the tree collapse to conclude that “there are three factors [wind, tree collapse, and surface water] that may have contributed to the collapse of the [wall];” however, “but for the impact of the tree . . . the wall would not have collapsed.” (Doc. 94 at 2-3, 7; Doc. 94-1 at 3) (emphasis added). Defendant proceeded to file a separate motion to strike the supplemental expert report of Graman on the ground that the report is an untimely rebuttal expert report. (Doc. 100).

         Moreover, both parties have filed motions for sanctions (Doc. 84; Doc. 104), and Defendant has filed a motion for leave to reopen discovery. (Doc. 106).

         II. DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS

         Before the Court can address the merits of Defendant's motion for judgment on the pleadings, the Court must first determine whether Defendant has demonstrated good cause to excuse its untimely filing of the motion. The initial calendar order entered in this case set a deadline of May 31, 2018 for motions directed to the pleadings and a dispositive motions deadline of October 31, 2018. (Doc. 25). On October 1, 2018, at the parties' joint request, the Court extended the dispositive motions deadline to November 15, 2018. (Doc. 37). The amended calendar order did not extend the already-expired deadline for motions directed at the pleadings. Defendant timely filed a motion for summary judgment by the dispositive motions deadline, then proceeded to file the instant motion for judgment on the pleadings on January 21, 2019 - over seven months after the deadline for motions directed to the pleadings and over two months after the deadline for dispositive motions. (Doc. 83).

         Federal Rule of Civil Procedure 12(c) provides that a party may file a motion for judgment on the pleadings “[a]fter the pleadings are closed-but early enough not to delay trial.” Moreover, once a scheduling order deadline passes, a party must demonstrate good cause under Federal Rule of Civil Procedure Rule 16(b) for failure to adhere to the deadline. See, e.g., Stillwagon v. City of Del., 175 F.Supp.3d 874, 892 (S.D. Ohio 2016) (finding motion for judgment on the pleadings timely because the motion would not delay trial and was filed “considerably in advance” of the dispositive motions deadline); Christian v. Mich. Dep't of Corr., No. 13-13416, 2014 U.S. Dist. LEXIS 89959, at *2-3 (E.D. Mich. July 2, 2014); Birge v. Dollar Gen. Corp., No. 4-2531, 2006 WL 133480, at *1 (W.D. Tenn. Jan. 12, 2006); cf. Leary v. Daeschner, 349 F.3d 888, 909 (6th Cir. 2003) (applying Rule 16(b)'s good cause standard to an untimely motion for leave to amend despite otherwise wide latitude for amendments under Rule 15(a)).

         Defendant's motion fails under both standards, as the motion has delayed the case, and Defendant has not demonstrated good cause for its failure to adhere to the case calendar.

         Defendant asserted in its reply brief that the motion for judgment on the pleadings filed on January 21, 2019 would not delay trial, scheduled for April 8, 2019. Time has proven that to be wishful thinking. On February 26, 2019, the Court vacated the trial date, in light of the parties' scheduled settlement conference and the litany of pending motions, including defendant's motion for summary judgment and motion for judgment on the pleadings. The trial date has not yet been rescheduled. Filing a dispositive motion aimed at a substantial portion of Plaintiff's damages approximately two months away from trial, after having already filed motion for summary judgment, has certainly contributed to the delay in this case.

         West Bend has also failed to demonstrate “good cause” for its failure to comply with the calendar order. “The primary measure of Rule 16's ‘good cause' standard is the moving party's diligence in attempting to meet the case management order's requirements.” Inge v. Rock Fin. Corp. 281 F.3d 613 (6th Cir. 2002). Courts also consider possible prejudice to the opposing party. Id. Here, despite acknowledging the applicability of Rule 16(b), Defendant offers no explanation whatsoever for filing its motion for judgment on the pleadings seven months after the deadline for motions directed at the pleadings and two months after the deadline for dispositive motions. Nor does Defendant acknowledge having already filed a motion for summary judgment, in which Defendant could have seemingly raised its water-exclusion/anti-concurrence clause argument.[2] In addition, permitting Defendant to seek a ruling on a substantial portion of Plaintiff's claims after the close of discovery and submission of expert reports, based solely on the second amended complaint and the attached 2016 report of Richard Graman, which has since been supplanted by a 2017 expert report, would prejudice the Plaintiff. Thus, because Defendant has not so much as alleged diligence in attempting to comply with the calendar order, and because considering the motion at this stage would prejudice Winter, the Court finds that Defendant has failed to demonstrate good cause for its belated motion for judgment on the pleadings.

         Rather than attempt to show diligence, Defendant argues the Court should consider its untimely motion for the sake of efficiency, as the motion presents a purely legal issue that will have to be resolved before or in the course of trial. (Doc. 99 at 3-4) (citing Eischeid v. Dover Const., Inc., 217 F.R.D. 448, 455 (N.D. Iowa 2003)). However, the Court does not find that considerations of efficiency warrant excusing West Bend from the dictates of Rule 16. Doing so would undermine the purpose of the scheduling order, exemplified by the haphazard progress of this case.

         In addition, Defendant presents its water exclusion argument as a cut-and-dry inquiry, arguing that because Plaintiff's 2016 expert report states water contributed to the wall's collapse, the damage is not covered. However, the Court is not convinced that the precedent cited by Defendant, which involves multiple, undisputed causes of property damage, is conclusive here (at least as to the damage to the wall itself) where three forces - wind, water, and a tree collapse - simultaneously acted on the wall, with the parties' experts disagreeing on the water's contribution. The parties have failed to fully brief the causation issue, and the Court is reluctant to make a ruling at this late stage in the litigation based solely on the Plaintiff's expert's 2016 report. Therefore, Defendant's motion for judgment on the pleadings is dismissed as untimely.

         III. CROSS MOTIONS FOR SANCTIONS AND DEFENDANT'S MOTION TO REOPEN DISCOVERY

         Also pending before the Court are the parties' cross-motions for sanctions (Docs. 84, 104) and the parties' responsive briefing (Docs. 93, 101, 109, 114). In addition, Defendant filed a related motion to reopen discovery (Doc. 106), which has been fully briefed (Docs. 110, 115).

         Both sides come before the Court with unclean hands; and thus, the Court declines to grant the severe sanctions sought by the Plaintiff. To the extent both sides engaged in misconduct in the course of discovery, an extension of the period of discovery will sufficiently alleviate prejudice to either party and get the case back on track for a timely resolution on the merits.

         Plaintiff seeks sanctions pursuant to Federal Rules of Civil Procedure 26(g) and 37, as well as the Court's inherent authority based on alleged misconduct relating to two categories of discovery: (1) written discovery and (2) depositions. (Doc. 84). Plaintiff argues that West Bend did not fully comply with Plaintiff's discovery requests, withholding relevant, non-privileged information - exemplified by a belated disclosure of its “Claim Activity Log” and 263 pages of documents prior to a December 2018 discovery call with the Court. (Id. at 13-16). Plaintiff ...


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