United States District Court, N.D. California, Oakland Division
AIX SPECIALTY INSURANCE COMPANY, a Delaware corporation, Plaintiff,
FERRATEX, INC., a Virginia corporation; SPINIELLO COMPANIES, a California corporation; and JASON GILMER, Defendants.
ORDER DENYING PLAINTIFF’S MOTION TO STAY
Saundra B. Armstrong Judge.
AIX Specialty Insurance Company (“Plaintiff”)
brings the instant declaratory relief and equitable
reimbursement action against Defendants FerraTex, Inc.
(“FerraTex”), Spiniello Companies
(“Spiniello”) and Jason Gilmer
(“Gilmer”). Plaintiff seeks a determination that
it has no duty to defend or indemnify FerraTex and Spiniello
against Gilmer in an underlying personal injury action.
See Am. Compl., Dkt. 41. The parties are presently
before the Court on Plaintiff’s motion to stay
discovery. Dkt. 34. FerraTex and Spiniello (collectively,
“Defendants”) oppose the motion. Dkt. 38. Having
read and considered the papers filed in connection with this
matter and being fully informed, the Court hereby DENIES the
motion, for the reasons stated below. The Court, in its
discretion, finds this matter suitable for resolution without
oral argument. See Fed.R.Civ.P. 78(b); N.D. Cal.
Civ. L.R. 7-1(b).
issued FerraTex a commercial general liability insurance
policy, which was in effect from April 15, 2013 to April 15,
2014 (the “Policy”). Am. Compl. ¶ 8. On or
about November 20, 2015, Gilmer filed a personal injury
action against FerraTex and Spiniello, styled as Gilmer
v. Spiniello Companies, et al., Case No. C15-02112 (the
“Underlying Action”), in Contra Costa County
Superior Court. Id. ¶¶ 7, 9. Gilmer
alleges that he suffered a severe injury on November 22,
2013, while walking on a mobile “wet-out”
conveyer that Ferratex leased from Spiniello. Id.
agreed to defend FerraTex in the Underlying Action subject to
a reservation of rights to deny defense and indemnity
coverage. Am. Compl. ¶ 10. In addition, Spinello
tendered its defense of the Underlying Action to Plaintiff as
a purported additional insured under the Policy and an
indemnitee of FerraTex. Id. ¶ 12. Plaintiff
denied Spinello’s tender. See McCaslin Decl.,
¶ 7 & Ex. D, Dkt. 36.
to Federal Rule of Civil Procedure 26(b)(1), “[p]arties
may obtain discovery regarding any nonprivileged matter that
is relevant to any party’s claim or defense and
proportional to the needs of the case.” Fed.R.Civ.P.
26(b). This principle is subject to limitation. “The
court may, for good cause, issue an order to protect a party
or person from annoyance, embarrassment, oppression, or undue
burden or expense, ” including forbidding discovery or
limiting the scope of discovery to certain matters.
Fed.R.Civ.P. 26(c)(1). “The burden is upon the party
seeking the order to ‘show good cause’ by
demonstrating harm or prejudice that will result from the
discovery.” Rivera v. NIBCO, Inc., 364 F.3d
1057, 1063 (9th Cir. 2004). The motion must also
“include a certification that the movant has in good
faith conferred or attempted to confer with other affected
parties in an effort to resolve the dispute without court
action.” Fed.R.Civ.P. 26(c)(1).
asserts that it intends to file a motion for partial summary
judgment to determine its duty to defend. Plaintiff requests
a stay of discovery “until the Court rules on the duty
to defend, ” at which time the Court can
“reassess the scope of discovery.” Mot. at 6.
According to Plaintiff, a stay is warranted because
“the duty to defend is a question of law” to be
decided “based on the facts alleged in
Gilmer’s complaint, the terms of [the Policy] and any
extrinsic evidence known to [Plaintiff] at the time of
tender.” Id. at 4. Plaintiff argues that it
will suffer prejudice absent a stay because it will continue
paying the costs of defending the Underlying Action.
Id. at 5.
threshold matter, the instant motion is procedurally
defective because Plaintiff failed to certify that the
parties met and conferred before its filing. In addition to
the certification requirement of Rule 26(c)(1) of the Federal
Rules of Civil Procedure, this Court’s Standing Orders
require that parties meet and confer prior to filing any
motion or request. Standing Order No. 4 states:
Meet and Confer Requirement. All parties
shall meet and confer before filing any motion or
other non-stipulated request. Any motion or request shall
include a certification, which may be submitted separately or
included in the body of the document, that the parties have
complied with the meet and confer requirement. The Court may
disregard and/or strike any papers submitted that do not
comply with this rule.
meet-and-confer requirement is essential to ensure that there
is, in fact, a dispute requiring judicial intervention. It
also conserves the limited time and resources of the Court
and parties by obviating the filing of unnecessary motions.
Based on this procedural defect alone, the Court may properly
deny Plaintiff’s motion. See Tri-Valley CARES v.
U.S. Dept. of Energy, 671 F.3d 1113, 1131 (9th Cir.
2012) (“Denial of a motion as the result of a failure
to comply with local rules is well within a district
the Court finds the substance of Plaintiff’s motion
unpersuasive. Although Plaintiff seeks a stay of
discovery, it is apparent that the parties’ current
dispute actually concerns the scope of
discovery. A complete stay of discovery may be
appropriate in limited circumstances, e.g., when meaningful
attempts at mediation are underway. In this case, however,
Plaintiff urges a swift judicial determination of its duty to
defend. The Court finds that the parties should therefore
complete all discovery necessary to the resolution of that
issue straightaway, and declines Plaintiffs invitation to
"reassess" the scope of discovery at a later date.
See Texas Partners v. Conrock Co., 685 F.2d 1116,
1119 (9th Cir. 1982) (proceeding on a motion for summary
judgment without providing a reasonable opportunity for
discovery is disfavored).