United States District Court, D. Nevada
C. JONES United States District Judge.
case arises out of an alleged breach of a policy of insurance
by an insured in a state court lawsuit, which in turn arises
out of a truck crash. Pending before the Court is a motion to
stay an impending hearing on a sanctions motion before the
FACTS AND PROCEDURAL HISTORY
2014, Robert Burts sued Marc Bordeaux
(“Bordeaux”), Joan Bordeaux, and Marc and Joan
Bordeaux's business Graphic Concepts in Nevada state
court (“the Lawsuit”) to recover for injuries
Bordeaux sustained in a 2013 Pennsylvania truck crash. (Am.
Compl. ¶ 12, ECF No. 30; Lawsuit, ECF No. 1-3). Burts
alleges in the Lawsuit that Bordeaux fell asleep while
driving a truck in which Burts was a passenger. (Id.
¶ 13). Bordeaux asked OOIDA Risk Retention Group, Inc.
(“OOIDA”) to defend the Lawsuit and indemnify him
under a policy of insurance issued by OOIDA to Bordeaux,
d.b.a. Graphic Concepts (“the Policy”).
(Id. ¶¶ 7, 15). Pursuant to a reservation
of rights, OOIDA defended Bordeaux in the Lawsuit.
(Id. ¶ 16).
October 2014, OOIDA sued Bordeaux and Burts in this Court for
a declaration that the Policy does not cover the claims made
by Burts in the Lawsuit and for a judgment against Bordeaux
to recover monies OOIDA paid to defend the Lawsuit. On or
about July 1, 2015, while OOIDA was still defending the
Lawsuit, Burts and Bordeaux entered into a settlement
agreement (“the Settlement”) without OOIDA's
consent or knowledge, providing for a stipulated judgment
against Bordeaux. (Id. ¶¶ 18-20). The
Settlement also provides that Burts will not seek to enforce
the resulting judgment against Bordeaux, and Bordeaux
assigned to Burts any claims he may have against OOIDA.
(Id. ¶¶ 21). Burts then filed a motion in
the Lawsuit to asking the court to fix damages under the
Settlement. (Id. ¶ 22). In the Amended
Complaint (“AC”) filed in August 2015, OOIDA
alleges that coverage is excluded under up to four separate
exclusionary provisions in the Policy, (id. ¶
33), that Bordeaux breached conditions precedent under the
Policy by settling Burts's claim without OOIDA's
consent and failing to cooperate with OOIDA's defense of
the Lawsuit, (id. ¶ 34), and that the
Settlement and any resulting judgment are unenforceable
against OOIDA, (id. ¶ 35). Burts filed a
Counterclaim for breach of contract, insurance bad faith, and
unfair trade practices.
February 2016, the Magistrate Judge granted in part
Burts's motion to compel, denying production of certain
documents as work product, ordering certain documents to be
provided to Burts without redactions, and ordering certain
documents to be submitted for in camera
review. The Magistrate Judge denied Burts's
separate motion for a protective order against discovery of
certain documents. Judges Du and McKibben recused in turn
when Burts moved to disqualify OOIDA's local counsel
(from a law firm with which those judges were formerly
associated). Burts argued that OOIDA had retained the law
firm for the sole purpose of causing a recusal. The
Magistrate Judge denied the motion to disqualify as moot.
September 2016, the Magistrate Judge granted OOIDA's
motion to stay all deadlines and ordered briefing on the
effect of a stipulation to vacate the judgment in the Lawsuit
(filed in the Lawsuit). While briefing was ongoing, Burts
filed a motion for partial defensive summary judgment against
the AC and a motion for partial offensive summary judgment on
the Counterclaim. In December 2016, after a hearing on the
briefings, the Magistrate Judge struck the motions for
summary judgment because they violated the stay order,
continued the stay, and requested additional briefing.
January 2017, OOIDA asked the Magistrate Judge to sanction
Burts and his counsel under 28 U.S.C. § 1927 and the
Court's inherent power by improperly using discovery and
other processes in the present case to obtain an advantage in
the Lawsuit. The Magistrate Judge has set a hearing for May
3-4, 2017. Burts and his attorneys have now asked the Court
to stay that hearing.
argue that they believe the Magistrate Judge “intends
to effectively try the facts of OOIDA's underlying case
in an extended ‘evidentiary hearing, ' purportedly
in the posture of ‘sanctions' hearing.” The
motion is denied. If the Magistrate Judge enters an order on
the sanctions motion that one or more parties believes is in
excess of her authority under § 636 or contrary to law
generally, they may make an appropriate motion under Rule
72(a) or 72(b), as appropriate. But the Court will not
disturb the Magistrate Judge's discretion to manage the
sanctions motion-which Movants do not argue she does not have
the statutory authority to determine as a general
matter-based on such speculation. Certainly no jury rights
will be imperiled by any order resulting from the hearing.
Any findings of fact will only be law of the case as to the
sanctions issue and subject to objection under Rule 72(a).
The findings will not bind the Court or the parties as to any
claims or defenses, whether or not jury rights have been
preserved thereto, and any sanctions imposed that are
determinative of any claim or defense will not be in the form
of an order but a recommendation subject to de novo review
after briefing under Rule 72(b).
HEREBY ORDERED that the Motion to Stay (ECF No. 164) is